How do we undertake interactions in a way that allows both parties to look forward to subsequent negotiations and working together? We've gathered our three favorite tips for consistently arriving at successful outcomes without doing damage.
According to Commercial Investment Real Estate Magazine (CIRE),
“The outcome of commercial real estate transactions often hinges on the negotiating skills of the participants...Competent, polished negotiators achieve a careful balance among all parties to effectively close many successful transactions.”
Here are three of our favorite tips for achieving successful outcomes without laying waste to your opposition.
First, Do No Damage.
How do we undertake interactions in a way that allows both parties to look forward to subsequent negotiations and working together?
“Any method of negotiation may be fairly judged by three criteria: It should produce a wise agreement if agreement is possible. It should be efficient. And it should improve or at least not damage the relationship between the parties.”
― Roger Fisher
One of many elements of negotiating to mutual benefit is understanding how and whether to exert influence. Making a decision to be antagonistic or unsympathetic to the needs of the person or team with which you’re negotiating sets the tone for every action that follows. It is said of negotiation that “agreement begets agreement.” Taking an open and flexible posture may incline the same from your counterpart. At the very least, no one comes to the table intending to salt the earth.
Are you Creating Value in Your Negotiations?
Despite being nearly 30 years old, Getting to Yes: Negotiating Agreement without Giving In is still considered a benchmark in negotiating for the common good. A product of the Harvard Negotiation Project, the book addresses strategies for negotiation and conflict resolution at every level. The key to successful negotiation is balancing claiming value along with creating it.
Creating value is fundamental to commercial real estate. We acquire assets and invest in them with a goal of growing the value and returning dividends to investors and other stakeholders. We can apply the same principals to negotiation.
Creating and claiming value are two of the most fundamental aspects of negotiation strategy that exist in tension with one another. In any negotiation, the parties must decide whether to be competitive, cooperative or some of both. (David Lax and James Sebenius call this the "negotiator's dilemma.)
The difference between creating value and claiming it may be as simple as viewing the interaction as either win/win or zero/sum. Creating value allows each party to walk away having benefited on some level.
A win/win outlook begins with mutual respect and understanding. A collaborated approach makes inevitable but unanticipated roadblocks survivable. Negotiation built on shared information, as appropriate, and the primary goal of making the deal both parties are proud to accept sets a different set of expectations. The difference between claiming value, which requires denying the opposition, and creating it need not be significant. Often, it involves merely a bit of creative problem-solving. As opposed to outdated models that rely upon bravado and false formalities, co-collaborators address challenges as they arise, creating value for each side based upon their needs.
How Well Do You Understand the Other Side
Particularly when seeing the relationship from the longer term, it is important when negotiating to consider the implications and circumstances from the perspective of the other side. According to the Harvard Negotiation Project, the goal is neither “getting angry” nor “getting taken.” As much as each participant desires to maximize their advantage, no one wants to lose. Each side should consider what they can offer to remove obstacles while enhancing the actual or perceived value of the incentive. It might be the case that something of minimal value to you is of great importance to the team across the table. Seeing their perspective might make all the difference in closing this deal, along with those to come.
How well do you understand the other side? According to Lisa Shalett, former Head of Strategic Innovation, Brookfield Asset Management,
“Convey ideas in the language common to the team. People resonate with the things they know. They recognize it, and are more inclined to get behind it and give it their full support.”
Applying these three strategies might not win you every element on your wishlist, but it will challenge you to stretch beyond just “winning” to achieving desirable results for every party around the table.
Remember, almost anything can be negotiated once you build trust. Listen carefully for the things that matter greatly to them that do not matter to you. Smart trade offs result from active listening; you may hold something of inherent value to them that you can certainly live without. Be flexible, and open. Negotiation is more art than science. Bring an open mind to the meetings, and see what happens.