Negotiations are very important in the field of business. Although, most people, like managers have mastered the skills of leading and controlling but what they lack in are negotiation skills. It does not always work for managers to order and force their decisions onto their subordinates because it often leads to a negative attitude in work and demotivates employees. Obviously, a compromise on job responsibilities is unacceptable but keeping employees on a leash can lead to employee dissatisfaction and employee turnover in the longer term.
Importance of negotiation is also felt when finalizing business deals. It can either be on the executive level or on the operational level, with the suppliers and vendors, Logistics Company, warehouse companies etc. It is also very crucial to realize that negotiation always comes with power limits. These can be:
- Time as Power Limit
Time is a key factor in negotiations taking place at higher levels, like at board meetings or at the middle management level, for example: pitching ideas to a new client, budgeting for the coming quarter or year, production levels matched with demand forecast and marketing statistics, sealing a deal etc. Often, we are unable to make the right decision in time that costs us a major project.
Here the concept of “Time is Money” can be related. If we invest an appropriate amount of time in preparing for whatever project, we are working on then we can expect a positive outcome with more confidence.
- Money as Power Limit
Money is another important power limit. This means that money involved in a deal or quotation limits one’s ability to negotiate. This includes your ability to pledge a specific amount to an opportunity you are planning to approach which is going to be your cost as well as a margin of profit. In business, there is always competition and getting a project or signing a deal depends on how effectively your negotiator is performing in the meeting room. If during the meeting, you feel that you would not be able to seal the deal, then you can always use your knowledge to turn the negotiations in your favor.
It is worth knowing that nobody has a free reign during negotiations. Everyone has their power limits defined; It is a matter of quantity levels the different businesses allot to their power limits. It is also important that you understand what the other side thinks as important in negotiations. The key points include:
- Aim High & Hold Back On Some Ideas
- It Is Common That People Fear Other People Thinking That the Other Party Is Better
- There is A New Way of Acting Smart – Acting Dumb
- Understanding Human Psychology
There are three tips that can help you improve your negotiation abilities. These include:
- Studying the Body Language
- Start Keeping A Negotiation Journal (Record Your Experience)
There are also the 10 ways to negotiate a “Yes”
- Appeal to Human
- A Firm Stance
- Non-Negotiable Aspects
- Share Values
- Improve a Relationship
- Focus, Not on Problems but People
- Evaluation of Interests
- Generating Multiple Outcomes
- Being Objective
- Getting an Outside Opinion
SK Financial is your guide to improving business and negotiation skills.