Good negotiation skills can help make your career a success. By Alexa Michael, information specialist, CIMA.
Do you make deals with suppliers or customers? Hold team talks about resources? Discuss job priorities and workloads with colleagues? Recruit new people to the business?
All these situations involve negotiation. Negotiation has been defined as: 'the process through which two or more parties who are in conflict over outcomes aim to reach agreement'.
CIMA students don't study negotiation for their professional exams, but they will have to negotiate throughout their careers. It will be to your advantage to learn good negotiating skills early on.
The negotiation advantage
The benefits of learning to negotiate are:
' better outcomes
' resolving differences of opinion without bad feeling
' a better understanding of other people's aims, motivations and beliefs
' better business relationships.
Goals and outcomes
Remember that goals and outcomes are not the same thing. Goals are the needs, wants and preferences that people consider before they negotiate. Goals are the 'why' behind the 'want'. If outcomes represent what somebody wants from a negotiation, goals explain why they want it.
Possible outcomes of negotiation
Three outcomes are possible:
' win-win (both sides win)
' win-lose (one side wins, the other loses)
' inefficient but equitable (all items shared equally).
Negotiating styles
Negotiators can be either aggressive or cooperative. Either style can succeed or not, and you can adapt your style for different situations. Negotiators can also be factual, relational (building relationships), intuitive or logical in their approach.
Preparing to negotiate
Before negotiation starts, you need to:
' think carefully about what you want and why you want it
' set specific goals based on realistic and justifiable targets
' put your goals in writing and share them with another team member.
You should also think about the real reason for the negotiation: which issues matter to both sides, and how various issues affect one another.
Best alternative to a negotiated agreement (BATNA)
If negotiations fail, you should determine a best alternative to a negotiated agreement (BATNA). This is an alternative where agreement cannot be reached.
Options
After establishing goals, create suitable outcomes. Sharing information, keeping options open on both sides and giving the other party choices will help.
Reaching agreement
Ensure that the chosen outcome is the right one before you commit yourself. Ask yourself:
' does the outcome meet fully identified goals?
' have goals been compromised? What is the tradeoff?
' to what extent have the other party's goals been met?
' have all possible options been explored?
' is this the best possible deal that could have been obtained?
' if not, what factors justify accepting a worse deal?
Commitment
Commitment includes shaking hands, verbal agreements, public announcements, creating and signing documents, and agreeing to penalties for breaching the agreement.
There are ways to get back on track if negotiations stall. Revise goals or preferred outcomes, make small concessions, submit fresh information, changing personnel or offering an apology.
Jane Allan, of Jane Allan Associates, says that for management accountants the benefits of good negotiation will soon become apparent. 'It's all down to the three Rs: reputation, results and respect,' she says. 'When you negotiate well, you enhance your reputation and that of your team. This makes you more influential. Achieve a satisfactory win:win out of your negotiation and you get results. A good negotiator earns respect. Once you have the respect of your colleagues, they turn to you for advice and are more likely to do what you suggest.'
Related links
Negotiation topic gateway
Key persuasive techniques for accountants, a CIMA Mastercourse presented by Jane Allan
CIMA CPD Autumn Academy
Contact us
You can contact us with your feedback and suggestions for Velocity at velocity@cimaglobal.com.