Taffy Williams, CEO of Concord, N.C.-based Colonial Technology Development Co., is a serial entrepreneur and biotech startup expert who has raised more than $100 million of investment capital. She talks about negotiating.
Q: How can we improve our negotiation skills?
A: A negotiation is a process that allows parties to engage in a relationship to obtain something they need or want in exchange for something they are willing to give in return. This occurs in everyday life, so we all have experience.
Tip 1: We learn negotiating skills very early in life, such as promising to be good to get a new toy, and try to improve them as we age. But not everyone realizes that negotiations start with first contact. The parties start to develop an understanding of each other’s personalities, likes and dislikes. They may learn something about how much one side is willing to give and how important the item or service is to that individual.
Negotiating requires the development of a relationship with the other party. The better you understand the other side and their needs, the better you can relate to them. Second, negotiations require a bit of salesmanship. The ability to communicate the positive attributes makes the item or service appear more attractive and thus worth more.
You are negotiating even before your start formal discussions. What you say and do provide the other side with information about you and your product or service.
Tip 2: Learning as much as possible about the topic helps you obtain more of what you want. For example, suppose you are selling something at a garage sale. The item may have some historical value and possibly is an antique. Someone expressing interest may view it as just something old and would attach a much lower value. Your knowledge can help demonstrate why they are offering too little.
The same goes for deals in the workplace. The more you can prove your point with data, the better your chances to win the other side over to your arguments; so do your homework.
Tip 3: Watch where you set your anchor. An anchor is a set point that sets perspective in the discussion. You can make an initial offer that will anchor the discussion. The key is to avoid offers that are unrealistically high or low, which may cause the deal to fall apart because the offer is not reasonable. So select an anchor that is advantageous to you, but fair.
Tip 4: Do not be afraid to walk away. Win-win deals last longer and work better. That’s why it is imperative that the parties take time to understand what constitutes a win for the other side. Be curious about the other party’s bottom line and make sure you understand their priorities for the negotiation.
But sometimes the other side is not willing to be reasonable and has a “winner take all” strategy of negotiations. You must always be prepared to walk away from a negotiation if the deal does not work for you. The other side might change its tactics if it sees you willing to walk away.