I OFTEN hear people in my negotiation seminars lament that they do not have much power compared to the people they negotiate with. They feel weaker than their counterpart with a fancy title at a Fortune 500 company.
The fact is, there are all kinds of negotiating power.
Legitimate power refers to power associated with a position or office. For example, a vice-president of a major corporation or the head of a government department has power because of her position.
Impressive titles and luxurious conference rooms can be intimidating. But some titles are just a lot of hot air. Despite the title, you may be dealing with a weak negotiator.
You are painfully aware of your own deadlines, sales targets and other pressure points. You probably don’t know what pressures your counterpart is under. Most people tend to overestimate their own pressures and weaknesses, while assuming their counterpart has a stronger position than she really does.
When you face a seemingly powerful negotiating partner, remind yourself that she may have problems of her own. Perhaps she is under pressure to conclude a deal with you, and may not have as strong a hand as she is leading you to believe.
Expertise is a more important source of power than a title. In today’s complex world, there are all kinds of expertise. For example, I’ve had students help me with computer problems. Despite their youth and lack of a title, these youngsters have power over me due to their superior expertise in the field of computers.
Anyone can develop expertise. What type of expertise do you have? How can you develop more expertise in that area, or in complementary areas?
Competition is another form of negotiating power. Everyone has competitors. If you have ever bid on a government project, you know how powerful competition can be. Remind your counterpart that he has competition, or that you have other alternatives. Always have a Plan B.
Information is another source of negotiating power, especially information about the other party’s needs. Understanding the other party and his interests can give you a tremendous advantage. Find out everything you can about your counterpart, his company and his needs.
It is easier to gather information before you begin bargaining. Once you begin talking with your counterpart, you may find him reluctant to disclose much information, and he may be suspicious of your motives. Begin gathering information as soon as you realise you have an interest that you will have to negotiate to satisfy.
Let’s say you want to buy a new computer. Most people would simply go to a dealer, look at a few models, and buy one they think would be suitable. They may later find that it does not meet their needs, or that they paid too much for it.
A good negotiator will first determine exactly what her needs are. Then she will research various models that could meet those needs. She will then compare prices at different dealers for her top two or three choices. A really good negotiator will even research the dealers to learn about their business practices and negotiating styles.
You can find a lot of valuable information online, in industry directories and trade journals. Annual reports and other company publications are full of useful information. You might also talk to people who have previously dealt with the person or organisation you will be negotiating with.
Information is like gold. Begin gathering information as early as possible.
Time is yet another source of negotiating power. Most progress towards agreement occurs towards the end of a negotiation. Try to ascertain your counterpart’s time constraints. The party with the least time constraints has an advantage over the one with a tight deadline.
Also, remember that you can walk away if necessary. Negotiation is a voluntary process. Remind yourself that no deal is better than a bad deal.
Finally, negotiating power is largely a matter of perception. Be prepared, be confident and project a sense of power. If they think you have the power, then you really do have the power.