AS SINGAPORE’S business district echoed with the roar of Formula One racing cars last weekend, the event is a reminder that there are many business lessons from the death-defying exploits of top-line motor racing.
It might look like the drivers are just negotiating corners, but actually they are teaching us how to negotiate deals. These lessons can be summarised in four words: preparation, personnel, positioning and pacing.
The top teams are the best prepared. They understand their own strengths and vulnerabilities as well as those of the competition.
Negotiation today is much more sophisticated than the simple bargaining that worked in the past. Now, it is all about complex, inter-connected issues, perceived value and mutually beneficial agreement.
In this environment, the best prepared will generally negotiate the best. Your preparation should involve seeking the answers to these questions:
• Why are they negotiating with you?
• Is there someone else they could be negotiating with instead of you? (If so, why aren’t they?)
• What are they trying to achieve? What are their interests?
• What are your alternatives if this negotiation does not succeed?
• What do you know about them — especially their negotiating style? (That is, is it collaborative or competitive?)
• What do they value?
• What do they know about you?
• What do they need to understand about you and what you value?
• Which side is under the most time pressure? If it’s you, can you do anything to shift the pressure? The side under the most time pressure will generally find it necessary to concede the most.
You identify the issues that have the highest perceived value to the client and the lowest actual cost to you. Then you combine these issues into an integrated package and come prepared to sell the benefits to them.
Like the driver in pole position, you are prepared to take the lead and table your offer first; or you can reframe it as a counter-offer if they go first. The best work done by great negotiators is the work they do before they get to the negotiating table.
We all know that as important as the champion driver is, there is no way he could win without the team supporting him. In negotiation, the people you can call on — your network — provide confidence and authority. This is why the best networkers often make the best negotiators.
• Confidence: You need the confidence to look them in the eye and, without flinching, say, “That is the best possible price.” You can only say this if you can check with those you trust — either internally or externally.
The confidence you have in your preparation will be based on the confidence you have in the quality of your information. This, in turn, will be determined by the quality of your contacts.
• Authority: One of the proven influencing tools is authority. People are more likely to be swayed by you if they see you as having a position of authority or are associated with someone who has.
Of course, in motor racing, positioning is everything — and not just at the start and finish, but also in those tight manoeuvres that the street course is renowned for.
How you position yourself to the other side in negotiating determines whether you will get the best possible deal from them. Aim to position yourself to take advantage of opportunities. Here are some positions you should aim for:
• A position of influence: How well aware are you of the latest research on influence and persuasion? An understanding of these will allow you to frame your offer in the best light.
• A position of trust: How actively have you tried to build trust? Are you aware that finding common ground with someone is a fast way to build trust? Research shows that identifying common ground before negotiating can improve the chances of agreement from 55 per cent to 90 per cent.
The great drivers know how to pace themselves and their machine. They know it is the person leading at the finish who usually wins.
Great negotiators are also experts at pacing in two ways:
• They pace their communication to match the other party. This way they make them feel comfortable — not too slow, not too pushy.
• They pace their offers — not giving away too much too soon. They realise that by giving in too soon, the other party may undervalue the offer.
Like the great F1 drivers, be a better negotiator by being the best prepared, having the best personnel, positioning yourself for advantage and pacing yourself for a strong finish.
Article by Kevin Ryan, managing director of Training Edge Australia and an international speaker, workshop leader and author with Training Edge International. He is a business communication expert specialising in employee and client engagement, sales, humour intelligence and presentation skills. For more information, e-mail email@example.com or visit www.trainingedgeasia.com