Are you a professional negotiator? According to Mladen Kresic, Founder and CEO of K&R Negotiation Associates LLC, everyone is an experienced negotiator in some level or form. We are all engaged in some form of negotiations every day. Whether that's with your customers, your family, your peers, or a colleague. On the other hand, effective negotiating requires specific skills and a certain level of experience.
"Most mistakes are made by people who open their mouth too much. They over promise and under deliver." - Mladen Kresic
But before we can start getting better at negotiating, we first have to recognize that we are negotiating. Most people don't realize that they do this every day. Negotiation is defined as an interaction between or among people to reach a certain outcome, which occurs throughout your interaction with them
The concept of value-based negotiations revolves around leverage.Positive leverage is about understanding the other party's motivations and creating an opportunity where they move voluntarily. Negative leverage, on the other hand, is risk-based. People don't move voluntarily in this scenario, but they move with more urgency.
These are all important concepts as you try and form the Risk-Reward-Matrix. This is what Mladen uses to assess how much leverage he has in negotiations properly. The Risk-Reward Matrix is about identifying the risk associated with the action that you want them to take and the risks they incur if they don't act. This means understanding the other party's business and what they will gain or lose from negotiating with you.
To populate the said matrix, you need patience and the ability to listen intently. Often, people are too immersed in their deals that they almost always forget to listen. Patience and listening will help you gather information and boost your knowledge about the other side, which eventually boosts your confidence.
Managing your confidence is also another skill that you need to develop. The only way you can prevent your confidence from turning into arrogance is through empathy. It is crucial to have empathy to cultivate good relationships with the other party.
Lastly, you need to have the discipline to manage the agenda. Keep the ball moving forward and never forget why you are negotiating in the first place.
According to Mladen, most people in sales tend to struggle with negotiations because they are people pleasers. Their top priority is creating relationships with their clients, which compels them to say yes to almost anything. They find it difficult to say no, which is a big problem when it comes to negotiating.