Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Six ways to blow a negotiation

Stanford expert Margaret Neale shows where the landmines are in dealmaking -- or any kind of bargaining.

Masterful negotiation is among the most valuable skills of the C-level executive. Negotiation is a critical part of a finance chief's dealings, whether with vendors, customers, or other external business partners, or with colleagues. Moreover, negotiation skills can be invaluable in career-related conversations.

This week's Stanford Knowledgebase newsletter features useful insights from Stanford Graduate School of Business professor and negotiation expert Margaret Neale. According to Neale, successful negotiation results from pursuing advantages in all possible circumstances. When executives lose sight of this big picture, they can fall prey to some common missteps in negotiation strategy. Here are some common pitfalls Neale cites:

Planning poorly. Pre-negotiation homework should be extensive and detailed. Things to consider before talks: your bottom line, your walkaway point, and time constraints. Don't forget to consider alternatives in case you fail to reach an agreement.

Assuming the "pie" is fixed. Usually it isn't, Neale says of the size of the complex pastry that your deal starts out to be. Approaching a negotiation with assumptions about pre-existing limits can cost you the outcome you most desire. In negotiation exercises in her executive-education classes, Neale says 20% to 35% of students assume "a fixed pie," and miss out on what both parties want.

Not listening to your opponent. Successful negotiation hinges on understanding your opponent's point of view and how he might evaluate your offer. Neale suggests "framing" your position to your opponent -- i.e., presenting your offer in such a way that your opponent understands your view. This technique allows you to influence the level of risk your opponent will accept.

Being insensitive to cultural factors. Cross-cultural negotiations are not always just like negotiations at home. Understanding cultural differences can create huge benefits; ignoring them, on the other hand, can result in big problems.

Paying too much -- or too little -- attention to "anchors." To reap the most benefit from the bargaining dynamic of "anchoring and adjustment" negotiators must begin the talks by clearly establishing the bases of negotiation. Lack of clarity at this crucial stage can cause missed opportunities.

Caving too quickly. Always negotiate -- even if the initial offer meets your requirements. If nothing else, accepting an offer right away makes the opponent feel he or she could have done better. "Never give anyone their first offer," Neale says; "it makes them crazy."

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

References show all

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: business issues, business negotiation, contract negotiation, negotiating, negotiation
Latest Blog Posts
Whitepapers
  • Focus & Invest in Business & Customers
    In an ever-changing economy, organisations are challenged to develop and maintain technology investment strategies that maximise process improvements and cost savings without compromising future growth. These organisations will emerge leaner and more competitive through economic cycles. And they will more likely have a firm technology foundation capable of adapting over time. Read more.
    Learn more »
  • Transforming Your Business by Transforming Your Processes
    In this white paper, we build on the “Intelligent Guide to Enterprise BPM: V olume One” in which we described the three entry points where you can begin to build true Enterprise BPM. In this white paper we explain the value of Process T ransformation, the entry point to strategy and design. Successful implementation of Process T ransformation will mean you have successfully documented, standardized, harmonized, managed—as well as analyzed and improved—your business processes. T he next two white papers will detail the other two entry points: Process Automation and Process Intelligence.
    Learn more »
  • HP ePrint Enterprise mobile printing solution
    The merger of mobile devices and cloud services has become one of the most significant enablers of business productivity and innovation in the past decade. We now hold the power of communicating and computing in the palms of our hands, nearly anywhere business or life takes us. However, one key business process has eluded the mobility movement: printing. Even the most technically enabled business travelers find themselves hunting down print services while on the road and interrupting IT managers when visiting a branch office simply to print a document. But finally, a truly mobile print experience is available—helping enterprises to drive business productivity further. Read more.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments