Successful Negotiations Start with Empathy
What does the other party want out of the deal?
Originally published: 10.01.12 by Michael Feuer
In developing a strategy, creating a new business, or introducing a new product, intensive preplanning can make the difference between success and failure. This same principle applies to negotiating.
No matter what you want to achieve — selling a new customer, buying a competitor, or hiring a superstar — you must determine what the desired result is before you put pen to paper or make that first introductory call.
We’ve all heard about the importance of “putting yourself in the other guy’s shoes.” Good basic advice, but do you really follow the suggestion?
In a win/lose transaction, one side is going to be very unhappy and the other side, albeit temporarily satisfied, could ultimately lose, too. In most instances, both sides have alternatives.
Unless you have found the Holy Grail that no one can live without, the other side always has choices. One of which can be to do nothing and take a hike.
Most negotiations begin with the thought: What’s in it for me? Instead, the first question should always be: How can we enable the other side to win (or feel as though they have won)?
Rather than start with figuring out how much you can make on the deal or the positive result you will accrue if you hire a particular superstar, ask yourself: What can I do to make the other side feel like the winner?
For your next initiative, start at the end and work toward the beginning. You might be pleasantly surprised with the road map you construct using this technique. Here are a few examples.
You want to buy a competitor because it has a product or service that will enhance your offering, but you don’t need all of this company’s assets. The traditional strategy would be to make an offer knowing that, if you succeed, you’ll scuttle all of the company’s other operations, cherry-picking what you want from the carcass.
This could work and might be the easiest way to achieve your goal, but this Machiavellian method likely won’t play well with the targeted company owner, who has spent years building the business and is emotionally invested in it and the employees.
When you look at the situation through the lens of the founder, you determine that a different approach — such as paying a good price for the entire business, plucking the item you want from the company, and then selling the rest of the company back to the employees — could be the ticket to getting discussions started.
This way the owner gets his money, he is a hero with his employees, and you acquire the product/service you need to grow.
Let’s say you want to hire the best salesperson in your industry, who, unfortunately, works for your competitor.
Instead of just going in and offering a big salary and bonus, which he most likely has already been offered by someone else, do your homework and try to determine the superstar’s hot buttons.
Maybe he has made it known that he would like to work remotely from a desert island while continuing to build his book of business. Looking at it from his perspective. You figure out that you can buy him his piece of sand somewhere with a beautiful view, obtain high speed Internet connectivity to his paradise, and allow him to work six months per year in his dream location.
Rather than just making a cash-rich offer, start the negotiations by providing a solution to your target’s fondest expectations.
Putting yourself in the other guy’s shoes is far from a new idea. However, too many executives forget that creating a win-win is preferable to having it only “your way.” Remember, many times, instead of just knowing the answers, you first have to figure out what questions to ask to ensure success.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before sellingthis retail giant for almost $1.5 billion in December 2003. Feuer’s columns appear courtesy of a partnership with Smart Business, www.sbnonline.com, which originally published this column.
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