Effective Planning and Preparation for your Negotiations

Effective planning and preparation for your negotiations

Over the next 5 posts we are going to explore how to maximise the outcome of your negotiations, and how to take a good deal to a great deal.  At advantageSPRING we follow our 5-step DEALS negotiation model:

• Discover
• Establish
• Ask
• Lead
• Seal

The initial focus of this model is on planning and preparation, and for those of you who like to wing it and shudder at the thought of preparation I’m afraid there are no short cuts to getting the best deal.  However, if you follow the stages and put the work in you will consistently elevate the quality, effectiveness and outcomes of your negotiations.

I shall be looking at each stage in turn, and this week is D for Discover.  The aim of this stage is to discover as much as you can about the landscape, the people, and the process that you will be operating in. We need to be asking who, what, when, where, and why regarding the negotiation in to gather as much information as we can.  For example:

Who are we negotiating with?  The Company, the team, the stakeholders, the policy?

What is the product or service?  Commoditised, seasonal, sole supply/dual supply?

When is the deadline? Am I better off acting quickly or I am more powerful if I delay the timings?

Where? Are we negotiating at their premises?  Does this affect the balance of power?

Why? Why are we even entering into this negotiation?

The more questions we can ask and information we can gather the easier it will be to plot a course through the negotiation.  Once we have gathered as much relevant information as possible we need to understand the type of negotiation we are in.

Negotiations tend to fall into two categories Value Claim, with its shorter-term focus, less emphasis on relationships and higher focus on price/cost/margin, and Value Create, longer term focus, emphasis on relationships/partnerships, and a much greater focus on value of price.  There are of course situations when you will straddle the line between both.  For example, as a business you may have a long term strategic partnership with a client which is very much Value Create, however issues in your supply chain may have led to business affecting issues in your clients stock levels, in which case you may find yourself having strong Value Claim conversations with your client.

At advantageSRING we use our ‘Five Factor Test’, for a simple and quick assessment of relationship between the parties.  The five factors are:

• Trust
• Dependency
• Complexity
• Relationship
• Risk

Generally, if these elements exist at a lower level you are in Value Claim and if they exist at a higher level then you are in Value Create.

Once we know the type of negotiation we are in, the final step in the Discover stage is to consider all the variables that can be negotiated as part of the deal, and then map them out.  In considering the variables make sure that you consider the deal from both your perspective and theirs and don’t rule out any variable just because it’s not been used before or you think they are not interested in it.  Make sure that you map every possible issue out because the more variables you have the more options you have to reach a great deal.

We can now look towards the second stage of planning.

• Discover
• Establish
• Ask
• Lead
• Seal

Next time we will continue our planning with the Establish stage.