By Kunal Bhatia, Senior Global Account Director, Johnson & Johnson
Over the course of this year we’ve experienced tremendous change. Whether it’s the way we work, the way we socialize or the way we get around, the COVID-19 crisis has fundamentally changed pretty much everything. Having shifted mostly to the virtual arena, negotiation is no exception.
As both a global account director AND the parent of young children, I can’t overstate the importance of negotiation skill. Whether it is negotiating a multimillion-dollar contract, compensation particulars with a potential employer or appropriate screen time with your children, strong negotiating acumen is critical for survival.
While virtual negotiations might be perceived as time and cost efficient, if they’re not done right they can hinder social awareness, social interaction and cooperation. Having worked in different countries, cultures and roles, I’m cognizant that myriad nuances must be taken into consideration to promote smoother, less contentions negotiations. However, I have observed that the need to be a skilled negotiator is agnostic of culture, industry, profession and job level and that certain negotiating principles are near universal.
Here are my top five.
#1: Make the first offer. There is a widespread belief that it is wise and strategic to let the other person make the first offer. However, there is virtually no research that supports this claim. In fact, research shows a strong and powerful positive effect of making the first offer.
Admittedly, it does takes courage to make an offer, especially in situations of ambiguity or when you’re in a low-power position. However, first offers have a strong anchoring effect, which exert a strong pull throughout the rest of a negotiation. Even when people know that a particular anchor should not influence their judgments, they are often incapable of resisting its influence. As a result, they insufficiently adjust their counter-offer away from the anchor.
#2: Focus on differences. Conventional wisdom says that we negotiate to overcome the differences that divide us, so we look for win-win agreements by searching for common ground. Common ground is generally a good thing, yet some of the most overlooked sources of value arise from “differences” among the parties.
Differences of interest, priority or hierarchy-of-needs can open the door to unbundling different negotiation elements, leading to outcomes that potentially give each party what it values the most, possibly at the least cost to the other.
#3: Zoom-in on interests, not just issues. Three elements are at generally play in a negotiation:
• Issues: on the table for explicit agreement
• Positions: where each party stands on the issues
• Interests: each party’s underlying concerns.
Don’t just negotiate the issues. Great negotiators understand that the dance of opposing positions is only the surface game, and they focus instead on probing behind their counterpart’s positions to identify their full set of interests at stake. Before any negotiation begins, seek to understand the interests and positions of the other side, and weigh/measure them against your own interests and positions.
#4: Listen. There’s a widely held assumption in the business world that negotiation is mostly about talking and that the best negotiators are the best conversationalists. That view overlooks perhaps the most crucial aspect of the negotiation process: listening. In the words of de Callières, “one of the most necessary qualities in a good negotiator is to be an apt listener.” Your attention should be focused on the words and actions of the other side, your own words and actions, and the effect of your words and actions on the other side.
#5: Help your counterpart sell. The person on the other side of the table might agree that your offer is reasonable, but they will still reject it if they can’t sell it to others in their organization. Your job as a negotiator is not simply to convince the person with whom you’re negotiating but also to help them be an effective ambassador for you when they speak to their boss, their board, their partners or others who have a stake in the outcome. Keep an eye on all of the people who can influence the negotiation on their side and help craft a narrative that will allow your counterpart to get the buy-in he or she needs.
These are some key principles that have helped me negotiate large and complex contracts at work and also keep the peace with my young children at home. One bonus tip from personal experience: To be a good negotiator, you must practice patience.
Patience is difficult, especially when you have a deal that is constrained by a time limit imposed by a leader or a contract expiry. But if you’re impatient or time constrained by a deal that isn’t moving fast enough, you may make unnecessary concessions in order to get it over the finish line. This can have long-term consequences.
It can also be counterproductive, as the other side may be less satisfied with a concession made easily in quickly, as they will perceive it as being of low value. Practicing patience, whether with your customer’s Procurement team or with your children, encourages flexibility and provides time for the other side to accept otherwise-tough choices.
Kunal Bhatia is senior global account director at Johnson & Johnson, where he has worked for 16 years in a variety of sales, marketing and leadership roles. Connect with him on LinkedIn.