The Leadership Insider network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: How can you be a good negotiator? is written by Thomas Chaffee, CEO of ePublishing.com.
I was unexpectedly thrust into the CEO position at a deeply broken public company in an industry I knew little about. The day I parachuted in I called an emergency board meeting to get answers to a long list of questions and inconsistencies. My spider sense was definitely warranted as within 24 hours, all but one of the board members resigned. I was young, with no board guidance and zero continuity to rely upon … what could possibly go wrong?
After delving into the financials it became very apparent that the company was burning far more cash than generally understood, and given the internal turmoil and the general state of the capital markets – the only viable strategic move was to sell a division and reorganize. We quickly identified a division to sell and I picked up the phone to call the CEO of a Fortune 500 company to discuss a potential transaction. While we ultimately got to an excellent outcome for our shareholders, I got schooled by a master negotiator, 25 years my senior, and those lessons still endure.
Think before you act
Create demand pull prior to indicating the desire for a transaction. My first mistake was making the call directly to the CEO – it instantly revealed weakness. It is key to engage the influencers in an organization first, as they will champion a transaction and whisper in the negotiator’s ear. The best negotiating dynamic comes from a sense of balance between the two parties – even if you know that balance is more optics than reality.
Socrates was right: know thyself. Analyze your own strengths and weaknesses, from personality traits and relationship dynamics to your communication style. Success requires a genuine understanding of your goals. What are your musts vs. nice-to-haves? As things heat up (and they will), it is a trap to hyper-focus on one aspect of the negotiation. Momentum matters, so always keep moving — even if you need to skip a point and return.
Focus on the relationship
I have had the displeasure to sit across the table from bullies, liars, and manipulators. The outcome is always the same – me leaving. Your personal integrity and the relationships you create can overcome nearly any stumbling block. Get to know those you are working with on a personal level and connect emotionally. It makes the process far more enjoyable and expands your network of trusted business relationships.
Listen more than you talk
The best negotiators in my life had an innate talent of reading what was most important to the other side. Tactically, if you appreciate things from their perspective, you can decide whether to trade on big points early, or hold what you have identified as their hidden deal point. By holding, this hidden point becomes a lever to extract more at the end. I once negotiated a deal where I knew what the other side wanted but kept pushing it to the end of the meeting, watching their frustration rise. That frustration became a weapon allowing us to trade on a point we knew they did not like by easing their tension and giving in on something important to them.
Trust your gut
Conventional wisdom dictates that the best negotiations start with the bigger concepts and moves to the details. In some constructs this can be fine, but it often means the lawyers come in and negotiate the small stuff after the main business terms have been ironed out. Often times however, those “small” things can be meaningful. Trust your gut on all processes, including whether it works best to integrate both large concepts and small details as you negotiate.