Engaging in effective negotiation

Engaging in effective negotiation


The key to success is remembering that everything is negotiable, and that to get a deal you must ask for one. Many people stop right there because negotiating makes them uncomfortable. They view the process as a contest of wills in which power determines outcome, each party seeks to best the other, and the little guy doesn’t stand a chance.

That kind of positional bargaining may produce some short-term results, but it is a distasteful, win-lose process that can leave both sides exhausted, resentful and dissatisfied with the outcome.

It doesn’t have to be that way. Effective, principled negotiation will efficiently produce an agreement that meets the needs of both sides while improving or at least maintaining personal relationships. In negotiation the key is to focus on these three areas:

People
Separate the people from the issues to avoid personalising them. Make sure each party understands the others perception of what is involved. Identify the underlying emotions on both sides and acknowledge them. Listen actively and speak to be understood, not to argue a position. Don’t debate – cooperate.

Interests
Focus on interests instead of positions. Behind each position lie compatible interests as well as conflicting ones. To identify the interests, put yourself in the other person’s shoes. Why would they take such a position? Does any aspect of your proposal conflict with those interests?

Options
Work with the other party to generate a variety of options. Separate the brainstorming from the decision-making process. Look for areas of agreement by identifying shared interests. Look for ways to dovetail differing interests by exploring options that are of low cost to you and high benefit to the other party and vice versa.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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