as well as considering your own position.
2.3 Use a framework to guide you
From your preparation in 2.1 you have a framework which tells you how many variables you have – how many items there are on which you can give and take. You have an idea of what are the most important items to you and to the other party.
Use your framework throughout the negotiation, to allow you to control the result. Here are some of the ways you can do this:
1 Focus early discussions on the variables you are more likely to agree on. This sets a constructive tone, but does not mean you agree on one or two items – see 4.5 ‘Don’t get salami-ed’.
case study I helped in a negotiation that involved providing consignment stocks of fans for a customer building air-conditioning units (consignment stocks are buffer stocks, usually held on a customer’s premises, but only invoiced when the customer draws the stock out). On the face of it, the variables on which we could give and take were the number of items, the quantity, the price and payment terms. The more we prepared, however, the more variables we identified – the period of the agreement, obsolete stock/write off arrangements, carriage, currency changes, insurance costs, ownership of goods, and how to control damage. We considered the value of each of these variables, and this allowed us to negotiate with confidence.
2 You have identified the most valuable variables. Use this framework to calculate the value of any concession that you might be about to make.
3 Use the framework to assess the cost of concessions on one variable with the cost of concessions in another area.
4 Use your framework to decide whether you will hold back discussion on any of your variables. In other words, hold back on one item and use it as one of your final cards when you are wanting to come together and agree.
5 When you negotiate, be prepared to use this framework to re-assess what variables are most important to your negotiating partner. Remember, you want to do repeat business with them.
6 Be ready to use your framework to assess the value of any new variable that crops up in the negotiating process.
Don’t leave your preparation at home! Build on your prepared framework throughout the negotiation.
2.4 Decide on the most important issues
We have already considered the importance of preparation and using that preparation to carry you to a successful conclusion. You now need to be absolutely clear about what is important both to you and to the other party.
The case study below illustrates how the importance of an issue can be assessed – and re-assessed. The crux of the negotiation is the realization that a ‘principle’ that at first seems so important that it is non-negotiable turns out to be nothing of the kind.
case study A UK-based supplier of weighing machines wanted to expand into France with a new system targeted at bakeries. They were in discussion with an agent who wanted exclusive rights to sell the product into the French market. This exclusivity was very important to the agent. Unfortunately, the chairman of the UK company always refused to consider giving exclusive rights to anybody on anything. To him it was a principle. The UK company was not geared up to sell to French bakeries, so there was a stalemate. Through the sales manager, common sense prevailed. The chairman was persuaded that what was ‘important’ to him was not important at all. The agent was given exclusivity for three years based on delivering a certain amount of business, and both parties benefited from the relationship.
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