I am writing this on the night of my third failed negotiation in a short period of time. I do this because the cuts are still fresh and I am aware of my own mistakes.
Direct negotiations come with tension and bear the risk of disproportionate losses for all sides.
The most important decisions are made before the actual negotiation takes place:
- Optimal outcome: What combination is most valuable for all parties?
- Minimum requirements: What are things that I won’t compromise on? What are my walk-away values for each?
- BATNA: What are my Best alternatives to a negotiable agreement?
- Mechanics: In what form do you need the agreement and by when? What about the others?
These points seem straightforward but they need to be carved in stone early on.
If asked to sum up what went wrong in the aforementioned negotiations, it would boil down to this: I care too much about the outcome.
“Negotiations are won by whoever cares less.” (Naval Ravikant)
In my case, this is amplified by being too agreeable.
Listen more than you talk. Not only prefer people generally to hear themselves talk but talking bears the risk of saying something stupid. Negotiations are generally situations of increased tension and it helps to limit the attack surface where possible.
Stick with the plan. I cannot emphasize enough how important it is to stick firmly to the decisions made before. Unless truly new information is being presented during the negotiation, the conditions need to be met.
Work on increasing the pie – for both. Most negotiations don’t have a pre-determined outcome and it should be in the interest of all parties to reach an agreement that optimizes utility.
There are a few tricks on how to nudge the discussion in the right direction. I am no fan of applying these tricks as they tend to leave a bitter taste and backfire eventually. But game theory suggests that the other side is likely to apply such tactics, here are a few:
Listening > talking. Your objective is to This is more of a universal principle than a simple tactic for negotiations
There is only one exception to what was laid out above: One side acts out of necessity. This rarely ever happens in raw form and when it does, the outcome should not be regarded with regret due to the initial lack of options.
However, even in desperate situations, there are ways to give the discussion a different spin and it puts even more emphasis on finding them during the preparation.
By all means, I am not the first to write about negotiations. This is an area where I still can learn, so this reading list is in part a reading list for myself.
- Never split the difference