CMI MBOTY 2019: there are three types of negotiation. Here's how to win

24 January 2019 -

Improve your negotiation skills by recognising three different situations

CMI Insights

Negotiations between two individuals are a normal part of working life. Managers might have to negotiate costs with suppliers; working hours with employees; or new business opportunities with clients. Each of these interactions needs a different approach, according to a new book that is nominated for CMI Management Book of the Year 2019.

In The Negotiation Book, author Nicole Soames outlines three types of business negotiation that managers might experience, and how to handle them.

THREE TYPES OF NEGOTIATION AND HOW TO SUCCEED

In a win-lose negotiation, the discussion is usually about what one party can provide and what the other is willing to accept. An example is a discussion between a supplier and client about the cost of a project.

This limits the amount of preparation you can do. In fact, you could argue the win-lose negotiation is not really about negotiating at all; it is about either getting or giving away concessions.

The win-lose negotiation can be appropriate for certain one-off scenarios but is not a good way of building long-term relationships.

In this situation you need to establish the balance of power. To do this, you need to be direct and use statements in a conversation that give you the upper hand. Examples of these are, ‘everybody else has said yes to this’; ‘we’re not asking for a lot’, or ‘if we do not get this agreed, the whole project is in jeopardy’.

By prioritising your own needs over others and being prepared to win come what may, you will shift the balance of power in your favour.

The win-win situation is about finding an agreement that satisfies both parties. For example, if you are selling a new ICT system you might offer to train a customer’s employees as part of the deal. This means they will be able to use the product correctly, and it also means they are more likely to see the benefits of the system and want to work with you in future.

In a win-win negotiation you should be clear on want you want from the other person. You should then prepare your variables (the things you can offer or can change such as cost, time and payment method). The more variables you can bring to the table, the more fruitful the negotiation is likely to be.

In this type of negotiation you must stay clear and confident – keep your ambition levels high. Soames recommends that for each variable you have a best or highest option, a high option and a low option that is still in your ‘happy zone’.

The we-win negotiation is a collaboration. An example of a potential we-win situation is the relocation of an employee abroad: both parties can benefit equally.

The secret to achieving a we-win situation is to stay open-minded, focus on the future rather than the past, and commit to building a strong relationship with the other party.

To do this, prepare with an open mind. Prepare questions that will open up the conversation and think about the opportunity from the other person’s perspective, as well as your own. Think about cost and successful outcomes in the long-term.

A we-win situation involves harnessing your emotional intelligence and being open with the other party about how you have arrived at different positions.

More information on other nominations for CMI Management Book of the Year 2019 is available here