There are times in negotiations when we can be too focused on our own position. If we want to get the best outcome then we need to find out why the other side asks what it asks, offers what it offers, and wants what it wants. One of the most effective ways of doing this is by adopting an “investigative mindset” – and then actively listening to what is (or is not) said. Harvard Business School Professors Deepak Malhotra and Max Bazerman set out 5 key principles that underpin this method. This post provides a simple overview of the 5 principles, offers useful phrases for those looking to further improve their business English, and closes with some great suggestions for further reading.
Find out what your counterparts want – and why they want it
Asking questions to uncover needs and priorities is essential in any negotiation. The sooner you can find out what your counterparts wants AND WHY they want it, the sooner you can build solutions. Malhotra and Bazerman give the example of an US pharmaceutical company negotiating exclusive rights for an ingredient from a small European supplier. Despite the pharma company’s best offers, the supplier refused to agree to exclusivity. It was clear the smaller company had no chance of securing such a large order from any other customer – so what was going on?
With the negotiation in deadlock the American negotiator decided to ask a simple question “Why wouldn’t they grant exclusivity?” The reason was equally simple – the supplier was selling a small amount of the ingredient to a family member who needed it to manufacture a product sold locally. A new offer was made and quickly accepted – the European firm would provide exclusivity except for a small annual amount for the supplier’s cousin.
Discover your counterparts’ constraints – and then help them relieve them
Whenever we go into a negotiation we always have limits. In fact having your BATNA clear up front is a must if you don’t want to leave the negotiation with regrets. These limits are influenced and/or restricted by external forces – pricing, strategy, risk, relationships etc. And just as you have limits, so does your counterpart. When your counterpart’s limits seem to be unreasonable or rigid, ask investigative questions to better understand what is behind the scenes. What is going on? Why is somebody responding like that? How can you help them remove their constraints or concerns?
Understand what is behind a demand – and then look to interpret them as opportunities
When our negotiating partner makes “excessive demands” we feel attacked and can become defensive. We then focus on either avoiding, mitigating, or even combatting this demand. The response of an investigative negotiator is to understand what is behind the demand and what they can actually learn from it. How can they reframe the demand from a threat to an opportunity? Malhotra and Bazerman article illustrates this nicely with the story of a construction company closing a major deal. Just before the deal was closed the property developer introduced a game-changing penalty clause for late completion. In this case, reframing looked like “why was this penalty clause so important?” which led to “ timely completion was hugely important” which then led to “was the developer interested in completion ahead of schedule?“ . The negotiation concluded with the construction company agreeing to pay higher penalties than proposed and with a sizable bonus for early completion.
Look to create common ground
Despite the pervasive mantras of “partnership” and “win-win”, too often when we are in a negotiation it we end up with “”sides”. My side and your side, you are my competitor etc …This means that we miss out on opportunities to create value. Investigative negotiators focus on genuinely exploring areas of mutual interest to find real common ground. This can be especially important when negotiating across cultures.
When things don’t work out keep on investigating
Even after rejection, there is nothing to be lost, and actually much to be gained, by asking “What would it have taken for us to reach agreement?” or “Can you explain to me why we lost this business? … as I’d like to learn for next time”. It is much easier to get unguarded information when there is no deal to be done. If you don’t know what went wrong, how can you improve your approach in similar future negotiations? And of course there is always a chance of actually reopening negotiations based on the new insight.
Useful language and further reading for negotiators
As Deepak Malhotra wrote “In the end, negotiation is an information game. Those who know how to obtain information perform better than those who stick with what they know.”
Using investigative questions
- What is important to you?
- Why is this important?
- What is it you need?
- Which part of my suggestion can you accept? Not accept? And why?
- Why can/can’t you ?
Building and practising active listening skills
Active listening (as the name suggests) is when you actively and fully concentrate on what is being said, rather than just passively hearing the words. Communication theory breaks what is being said into two elements – the content and the context. Content is the what – the data, the facts, the information etc. Context refers to everything else that is going on when somebody speaks with you – the relationship, the background, the situation, the emotions etc. Active listening involves paying close attention to the content being shared AND the contextual components between the listener (the receiver) and the speaker (the sender). Skilled active listeners can hear the what PLUS interest, emotion, concern, energy and other contextual factors from the speaker’s perspective. And they can hear what isn’t being said.
How good are your listening skills?
Books on negotiations
- Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond (Malhotra and Bazerman)
- Never Split the Difference: Negotiating as if Your Life Depended on It (Chris Voss)
- Getting Past No: Negotiating in Difficult Situations: Negotiating with Difficult People (Ury)
- and the sequel Getting to Yes: Negotiating an agreement without giving in (Fisher and Ury)
Finally, as a training company, you just know we’re going to suggest organizing negotiation training for yourself or your team.