Concessions

Negotiating is a process of bargaining by which agreement is reached between two or more parties. It is rare in negotiation for agreement to be reached immediately or for each side to have identical objectives. More often than not, agreements have to be worked out where concessions are given and received and this is the area where the profitability of the final outcome will be decided.

When preparing for negotiation, it is advisable to write down a realistic assessment of how you perceive the final outcome. Find out the limits of your authority within the negotiation and decide what you are willing and able to concede in order to arrive at an agreement, which satisfies all parties.

Concessions have two elements; cost and value. It is possible during negotiations to concede issues that have little cost to you but have great value to the other side. This is the best type of concession to make. Avoid, however, conceding on issues that have a high cost to you irrespective of their value to the other side.

When preparing for negotiations, ask yourself the following questions:

1. What is the best deal I could realistically achieve in this negotiation?

2. What is the likely outcome of the negotiation?

3. What is the limit of my authority? At which point should I walk away?

4. What concessions are available to me? What is the cost of each concession and

what value does each have to either side?

Strategy

Planning your strategy is important in negotiation. Once you know your objectives, you need to work out how you are going to achieve them. It is also useful to try and see the negotiation from the other side and try and work out what their strategy will be.

During the negotiation there will be opportunities to use various tactics and you need to decide on which of these you feel comfortable with and recognise the tactics being used by the other side. Ask yourself the following questions:

1. How am I going to achieve my objectives in this negotiation?

2. What is the strategy of the other side likely to be?

3. What tactics should I use within the negotiation?

4. What tactics are the other side likely to use?

Tasks

If you go into negotiation with a colleague or colleagues, you need to decide during the preparation phase:

1. What role will each team member take in the negotiation?

2. How can we work together in the most effective way?

Some teams of negotiators appoint team leaders, note takers, observers and specialists, each with their own clearly defined authority and roles to perform. Having a clear understanding of roles within the negotiation will make the team approach much more effective.

Preparing for negotiation

Effective preparation is vital if you are to achieve the best results. Successful negotiators have broad and specific objectives and have planned how to achieve these before sitting down at the negotiating table. They can then be proactive and direct the negotiators towards achieving these objectives rather than being merely reactive to the other party's proposals. Beware, however, of having tunnel vision about your objectives or strategy. Be flexible! Try to identify clearly the areas of agreement, and potential areas of conflict where co-operation and/or compromise can be used to reach agreement. If not, you may find yourself with very little room to manoeuvre during the negotia­tion itself, and this can result in either you or the other party feeling backed into a corner, or becoming frustrated. This leads to negative attitudes developing into non-co-operation and eventual refusal to reach agreement, because of perceived lack of consideration of arguments or feelings.

Do not, at the preparation stage, become too committed to some unchangeable action or policy. If the other party becomes aware of this, and that this is the only outcome that you are seeking and will accept, the negotiation will be compromised as soon as it begins. Synergy and successful negotiating situations are more likely to occur when you are willing (and able) to rethink your objectives and strategy during the negotiation itself in the light of information and attitudes revealed to you by the other party. A win/lose or lose/lose situation benefits no one: the winners and losers have to live with each other afterwards, and future negotiations may be prejudiced by either of these outcomes.

With time on your hands, try to get to know as much about the other negotiating party as possible:

• Is he/she independent or part of a team?

• Is he/she authorised to make decisions without referring back?

• Can he/she deliver, and if not, who can?

• What type of person is he/she? How experienced a negotiator?

• What type of approach is likely to achieve the best results?

• What are his/her interests likely to be and in what order of priority?

• What type of behaviour can you expect from this person?

Your bargaining power

Power, as it is perceived and used by both parties, can determine the outcome to a large extent. What are the offers or demands being made? What are the consequences to each party of rejection or acceptance of them? Does rejection (or acceptance) mean more to one party than to the other? How then should you react to the proposals? When you have assessed your bargaining power, go back and reconsider your original objectives.

Your negotiating strategy

The best strategy is the one which is effective in the context of the negotiating situation itself. If you fail to find the right strategy, you are unlikely to achieve your desired outcome.

• How can you change the other party's expectations?

• How can you get information from them, e.g. their commitment to their objectives, the importance to them of achieving them, their fall-back positions?

• How can you increase your bargaining power? By pre-negotiation conditioning? What strategies can you use to counter theirs?

• What sorts of strategies can you use?

• How can you best structure the agenda? For structuring the other party's expectations? Do you want to treat the items singly or as a package?

Brief your negotiating team

Brief them on the strategy, the roles and tasks you want them to perform during the negotiation: who takes notes, who acts as chairperson, who deals with interruptions, how to deal with conflict techniques (e.g. misquoting, discrediting, ignoring contributors, etc.) and who should control the pace of the negotiation.

This knowledge will enable you to plan your approach to the negotiation and make you aware of areas where you may have to give way, and other areas where you will be able to gain. It will also prepare you for likely 'dirty tricks' which might be introduced into the discussions. Make sure your team members are briefed on how to behave under pressure, and that they know the importance of non-verbal communication.