Credit: Stephen Sauer
Ideas Made to Matter
5 tips for successful negotiations
Learning how to negotiate effectively is an important skill that requires equal parts preparation and follow-through. By planning ahead and accounting for all possible outcomes, business leaders stand a better chance of reaching the desired outcome and building partnerships that are designed to last.
At the recent MIT Sloan CFO Summit in Newton, Mass., top executives from Legal Sea Foods, Robert Half, and other companies spoke with Bruno Verdini, executive director of the MIT-Harvard Mexico Negotiation Program and the first candidate to receive MIT’s interdisciplinary and interdepartmental Ph.D. in negotiation, communication, diplomacy, and leadership.
The group discussed specific strategies for reaching a successful resolution in a negotiation:
1. Identify all possible scenarios
The first step to a successful negotiation is to hypothesize and plan for all potential outcomes, said Lucy McQuilken, chief financial officer at Whoop, a developer of wearable sports technology.
“Having enough conversations beforehand around what those scenarios really are and making sure that everybody understands what we are trying to accomplish is really important,” McQuilken said. “If everybody understands what the goal is and what the maximum and minimums are that we’ll accept, it helps with improvising during the negotiation.”
2. Take a break
Negotiations can get emotional — fast. Research from MIT Sloan associate professor Jared Curhan and others shows that it’s effective to take a break between negotiations. Robert Nealon, district president of professional staffing services at Robert Half, said taking a breather is especially helpful “in cases when it may get a little heated.”
“We strongly encourage not reacting to the other side’s emotion … and [instead] figuring out what our true differences are so we can negotiate on differences and not on emotion,” Nealon said. “You’ve got to make sure that you pull a team together that doesn’t want a win-lose outcome, but a partnership with the other side.”
3. Pay attention to body language
At the negotiation table, what isn’t being said actually says a lot. When Boston-based Legal Sea Foods negotiates deals, someone in the room maintains responsibility for watching and interpreting how the other side is behaving physically.
When the group breaks from the negotiation table, the observer shares details that others in the room may have missed. “You can figure out what the things were that people were saying but not saying,” said Kourtney Corcoran, the company’s senior vice president and chief financial officer. “We can [then] go back in and continue to negotiate and try to make things progress more quickly.”
4. Do a post-game replay
In today’s world, not all negotiations happen face-to-face, which can make it difficult to see someone’s emotional reaction or body language. Videoconferencing is common at Carbon Black, a cybersecurity company based in Waltham, Mass.; after a web meeting, the company replays video of the session and regroups to ask those watching what they heard or thought happened.
“Without a doubt, in every post-meeting, we will learn from each other about what they heard versus what we heard,” said Steve Webber, the company’s CFO. “When you’re talking, when you’re speaking, or when you’re in the heart of the negotiation, the two or three people next to you will hear and see the interaction in a different light.”
5. Focus on the outcome
In the thick of a negotiation when everyone is thinking about winning, it’s easy to lose sight of the benefits of a brokered agreement. McQuilken recalled a contentious meeting she had during her career with a top salesperson. It involved a lot of back and forth over commissions and quotas, but both parties were able to land on a deal by focusing on the mutual benefits in the final result.
“You have to paint a picture of what the situation’s going to look like after the agreement,” McQuilken said.
It’s also wise to stay humble, even if a negotiation goes perfectly to plan. While a little bit of confidence is good, Curhan’s research suggests leaders should guard against arrogance, which can raise risk in negotiations.
“A little bit of confidence is good, [but] it can also lead to hubris, and our results suggest hubris raises real risks for the next negotiation,” Curhan said.
Further reading: A classic negotiation framework, still applicable after 50 years