How to negotiate like a champion | Ep. 29

When you step to the table for a negotiation, do you feel confident you can come to a solution that's mutually beneficial to all parties? We've got you covered. In this episode of The ROI Podcast, Kelley School professors Stephen Hayford and Tatiana Kolovou discuss the ins and outs of negotiation and how you can master the art.

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Show Notes:

Shane: It’s been said by Deborah Tannen that communication and dialogue is a dance, not a boxing match. What does that mean you might be asking? Well, in order to get what you want in business, or in life, you HAVE to be a great negotiator… And after listening to this episode of The ROI Podcast, you’ll have the tools of a powerful negotiator. Let’s do this!

(The ROI Podcast Music)

Shane: WELCOME BACK!!! Episode 29 of The ROI Podcast is here… 29 episodes, Phil… It’s hard to believe, isn’t it?

Shane: Phil… I want you to think of something… How important is a negotiation, and communication in general, in our lives? I mean, think about it. When you’re a kid you negotiate with your parents for that new toy or to stay out past curfew. At work, you negotiate a higher salary or an idea you’ve pitched. Even things we don’t think about like negotiating where you and your spouse will have dinner… We do this often times subconsciously.

11:05 Steve: In today’s dynamic business and professional world, you cannot predict outcomes - you can’t even predict relationships at all times. But if you master process, if you understand how to play the game of negotiations, then that process skill set emboldens you to realize that you’ll find the answer. 11:33 You don’t need to know the answer at the beginning - if you master process, you’ll recognize the answer when you find it.

Phil: You just heard from Stephen Hayford, Professor of Business Law at the Kelley School of Business. He’s an expert in negotiation and conflict resolution…

Steve: I’ve learned to recognize the people who do and don’t understand the process – those who don’t understand the process, when they find themselves in conflict, negotiating a contract, or solving a problem, tend to focus on arguments on who’s right and who’s wrong. They [also] tend to focus on overuse and overreliance on power – power and the merit of ideas are both very important aspects of negotiated decision-making, but when one recognizes and understands the importance of process, you have a playbook you can consistently use.

Can I add one thing here to what Steven is saying: sometimes we get in trouble or we do a bad job with negotiating or we don’t get as much out of it because we hurry up the process.

Phil: And that was Tatiana Kolovou, Senior Lecturer at the Kelley School of Business. Tatiana’s expertise also falls within negotiation and conflict management.

We’re not patient enough to try to learn more about the other person, to try to build rapport, and maybe be able to use the information, not in a bad way, but to use it to build the relationship further. If we try to hurry it up and think that it’s a transaction, like putting gas in your car at the gas station, you’re not going to be able to be successful. What Stephen teaches is all of those signs and signals and having faith in the fact that this process exists and you have to walk the path.

Shane: I’m going to pause there for a second and let’s talk about this process, which is so important. What is this process? Where do you start?

Phil: So Stephen and Tatiana say it starts before the negotiating ever begins.

Stephen: I think the real key at the front end is listening. This idea of diagnosing the relationship, for example, if I’m dealing with you as a supplier and you are my customer, and I know that you have three viable alternatives to working with me, that’s going to make a big difference in the way I present myself to you contrasted with the circumstance where I know that I am your only alternative. There is no what we call “BATNA”, Best Alternative to a Negotiated Agreement - if I know that you are an impatient negotiator, I understand from the beginning that I’m going to have to slow you down and show you the benefit of methodical approaches, as opposed to shooting from the hip. My experience has taught me that mindfulness, being alert, being patient, diagnosing the circumstance before I begin to act always pays off.

Phil: And from a communication standpoint…

Tatiana: First, you have to exude confidence, and I’m not talking about the over-confidence, sort of the aggressive “I’m going to take you down!” type of confidence, but a sense of calm and collectiveness that people have when you see them, you think, “This person has their act together”. It goes from how you sit at the table, how you make eye contact, how you learn and listen, or how you mirror the body language of the person you’re interacting with. If you are to be patient and calm, your body has to speak that as well. Sometimes our students don’t see that – they are in a certain channel of operation, and no one has stopped to say to them, “You tend to frown a little too much when you’re listening, and it may look like you’re not accepting what the other person is telling you!” I’ve done this quite often or videotaped people, and they have these big awareness “aha!” moments where they realize they may not be coming across as being open listeners to what the person is saying. Even from a body language - I’m reading a lot on power cues and in general, use of gestures – you want to be able to communicate that confidence, but you also want to read your audience.

Phil: So that’s step 1 of this negotiation process. The next step is starting the conversation and Steve: Focusing on process, I think the first substantive  step is to bifurcate the issues at play into what we call distributive issues, those that involve these resource allocations - zero-sum, thick sum kind of decision-making, like cost, time, the available technology perhaps - and separating or delineating them from what we call the integrative issues where the parties’ goals are not in a conflict where it’s not a zero-sum game where we can create value. In that first distributive side, those issues are all about claiming value, and that’s an important part of the negotiation. If I’m a supplier, I want to maximize the price I achieve for my product or service. At the same time, it’s important that we move the process toward the value-creation side, which is integrative bargaining; we create value by identifying our mutual, non-conflicting goals and the interests that underpin those goals for each of us, and then we focus the process on serving those interests.

Tatiana: As we’ve said earlier, at this point, listening, paraphrasing, and clarifying is important so that you show that you have invested interest in being there with your counterpart in the negotiation - that, again, is an opportunity to build rapport. How you do that is probably more with non-verbals than with verbals - you even want to nod and make strong and good eye contact. We talk about remembering people’s eye color, doing that intentional of eye contact so that you are not distracted by anything or people around you, obviously not any technology and being a good listener. In some cases, you want to show that depending on the situation or where you are, that you’re pacing with the person that you’re negotiating with. If the person seems to talk a little faster or seems to want to decide or speak to one specific topic, that you’re mirroring some of that, you don’t completely follow your style of communication. You dance with them, if you may say, so that you can be more in that equilibrium that Stephen was talking about. That doesn’t mean that you’re not direct or precise in your wording – as a good communicator, we recommend you pick your topic and your theme and you keep going back to that.

Phil: So we’ve got the trust being built, we’ve begun to use our non-verbal’s to move the conversation forward… Next, we have to look for the nonverbals the other person is giving us to let us know whether we can move and push the conversation even further.

Tatiana: The head-nodding, the eye contact, the open body language – all of that kind of tells me that I can move forward. If the person starts their shuffling papers, or if you start looking at your watch or distracted by what’s going on behind you, that just doesn’t give the signal that you have the patience to move forward to the next step with the person that you’re working with.

Phil: But as I’m sure we’ve all experienced… We are human and we make mistakes… So we asked Tatiana and Stephen what are some common mistakes they see in negotiation and how can we correct them?

Steve: I think inadequate preparation is one of the big ones that I see. I think the failure to manage the expectations of one’s constituency before you get to the table, so as to define was a truly acceptable outcome is.

Tatiana: I want to quote the author Deborah Tannen that talks about “communication and dialogue is a dance, it’s not a boxing match”. If you go into it thinking you’re going to shoot, they’re going to shoot, you’re going to be playing offense and defense all the time, you can’t be a good listener because you’re just waiting for them to slip so that you can get your point across.

you have to learn to flex your style if you’re going to be a good negotiator. When we don’t, that’s a big mistake – we have to adapt.

Phil: So to wrap this up – when you’re heading into a negotiation situation: Prepare, know the process and the agenda you’re wanting to accomplish, but also be flexible – because as Tatiana said: Negotiation is a dance, not a boxing match.

(ROI Music)

Shane: Negotiating can be one of those topics that can be uncomfortable for us in the beginning, but what I really picked up from Stephen and Tatiana is it’s not nearly as intimidating if you go in prepared and set some clear expectations.

Shane: And that’s going to do it for this episode of the ROI Podcast. Thank you to Kelley professors Tatiana and Stephen for sharing their expertise with us. And both of them will have a course opened up to the business community in the coming months. We’ll post more about that when it becomes available.

Phil: And don’t forget to subscribe to the podcast and leave us a review on iTunes.

Shane: And we’ll be right back here next week on the ROI Podcast!