Did I get my value’s worth? 3 best practices when negotiating

I have always been interested in behavioral economics and in understanding why people behave the way they do in different circumstances - thank you Dan Ariely! It is critical to understand people and their incentives to get the best outcome in any given situation - be it professional or personal.

Who doesn't negotiate today? From the taxi driver on the streets of Delhi to the CEOs of large investment banks in New York, from the mother trying to get her child to stop watching TV to the heads of governments discussing peace treaties - everybody is negotiating on a daily and sometimes, hourly basis.

The bottom line is that none of us want to be pushovers. And we want some to give some.

There are many negotiation tactics - google will throw at least a 100 links at you as soon as you search for them. The 3 negotiation tactics I explain below are the ones which have worked for me in both professional and personal settings; they obviously need to be adapted to the specific situation:

1. Make the first offer

This seems counterintuitive. When I told my husband this, he looked at me funny. But hear me out. Adam Grant - the Wharton professor who pushes boundaries of leadership thinking in his new book “Give and Take” - talks about the first offerer “anchoring” the negotiation and how there is much research to prove that the one who makes the first offer has the upper hand in closing the negotiation with a desirable outcome. Harvard backs this tactic by calling it a “good offense and a good defense” as by making the first offer you are no longer vulnerable to someone else anchoring your negotiation. For example:

“A job applicant may state his/her belief that people with his/her qualifications tend to be paid between $85,000 and $95,000 annually, or he/she might mention that a former colleague just received an offer of $92,000. This assertion is not an offer; it’s an anchor that affects the other side’s perceptions of the zone of possible agreement”.

So, don't be coy, go ahead and make the first offer - make it a real one and not excessively aggressive.

    2.   Be transparent

Not about everything but about the key things which could drive the negotiation forward: why you're asking for what you're asking, why is it justified (better if you have some data points, like in the quote above) etc. Sometimes, it even helps to talk about your motivations, your passions - basically, make yourself human and put yourself out there..You can definitely avoid the Orange Quarrel situation through this tactic and perhaps even move to a “beyond win-win” situation.

Be genuine and open - preferably in all settings - not just while negotiating!

    3.   Avoid an impasse

Loosely translated to “let’s agree to disagree”. But that really doesn't help anybody, especially not the one who initiated the negotiation in the first place. Two great solutions to avoid an impasse are (a) 2 above - i.e. transparency in communication and (b) being creative in the negotiation. Creativity is extremely important. Know your end goal when going into the negotiation and if you feel the other side isn't budging start thinking of other ways in which you can get a deal. It may be that your creative solution is not relevant today but will be extremely beneficial to you sometime in the future. It may be non-financial in nature even when making a financial deal. Think outside the box.

The biggest driver for good negotiation? Keeping emotions at bay. I know first hand how hard this is. But it will keep you alert, aware and most importantly, creative. Let the emotions flow once you've got what you wanted.

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