It’s common for most to describe business negotiations as a game of chess. After all, both involve practice and studying previous failures, strategies, and preparations to give you the patience and confidence you need for your future moves and reactions.
However, excelling at negotiations requires effective decision-making. Yet, a decision often skipped by negotiators and chess players is continuous research. Before even deciding to engage in negotiations, an investment in research can save you a tremendous amount of time, energy, money, and emotion.
To appreciate the role research plays in business negotiations, imagine you are a job seeker on the last round of interviews who is presented with an offer, which the hiring manager describes as “rather generous.” Because you’ve researched pay ranges for the position, you know the offer is much lower than it should be.
While you would really like to have the job, even if it means making less than standard pay, the manager’s comment makes you feel like you should say something. So, armed with your valid research, you speak up, suggesting, “I’m unable to accept at that level. As much as I believe in the company’s mission and would like to join the team, that amount does not work. What would you suggest as the next step?”
If the hiring manager is serious about bringing you on, you can rest assured he knows what industry standards are as well. At this point, you should expect a response signaling that he can do better or he simply needs some time to think about it and ends the interview with a promise to get back to you the next day.
In this case, your research empowered you to engage in what was potentially an emotionally charged exchange without fear. You were able to identify the negotiation’s key issue — the lower-than-average salary — and focus on it. You also created a situation in which you can see how a potential employer values its employees, especially when they challenge those in authority.
When considering how research influenced the negotiation, note that it could have been used just as effectively by the company conducting the interview. A hiring manager who does their research by calling an applicant’s references will know if the skills, strengths, and experiences presented on a resumé are overstated. Armed with that research, they may be able to effectively negotiate for a lower pay grade than the applicant expects for the position.
Using research to focus negotiations
Research allows negotiators to identify and prioritize the key issues they will need to resolve. It uncovers the real problems that stand in the way of the parties reaching a successful agreement. By coming to the table well-informed of those issues, negotiators can apply their limited time, energy, and attention to the issues that must be decided to move negotiations forward.
Without research, negotiations can involve days or weeks spent addressing secondary problems without ever moving things forward. A party seeking to deceive its adversary can hide real issues, especially if that party fears those issues would short-circuit negotiations. In either case, when that issue eventually surfaces, it will typically cause the negotiation to stall or break down completely.
Research can help negotiators identify potential problems, allowing them to better prepare in advance. This can help them gain a deeper understanding of the key issues that must be addressed and develop a strategy for resolving problems from the adversary’s point of view.
Using research to reduce fear
Parties entering into a negotiation can be fearful for several reasons, such as not knowing what demands their adversary will bring, the best way to respond to those demands, or where they will end up at the end of the negotiation. Research provides the potential to address each of those issues and more.
Parties that prepare with research have a better chance of identifying the key issues at play, which reduces the fear of not knowing how their adversary will engage. It also gives them the time to prepare a possible path forward from those issues, which makes it easier to bring up potentially contentious topics without the fear of derailing negotiations. While research will never give a negotiator the power to control the results or the actions of his adversary, it increases the likelihood that they will be prepared with a plan that can effectively move things forward.
Research can also help a negotiator to have the intel needed to know when “no deal” is the best deal. By identifying the key issues and the best path forward before sitting down to broker a deal, negotiators can avoid entering into a bad one based on the errant belief that they have no alternatives, as well as avoid settling for an alternative that doesn’t measure up to what they know is possible. For negotiators who have done their research, the worst thing that can happen is maintaining the status quo by accepting that an agreement can’t be reached.
Those who watch well-prepared negotiators engage with their adversaries can think they have a special sense that allows them to know what to do and say “in the moment.” The reality, however, is that the skill they bring to the negotiating table flows from the research they did to prepare, giving them what they need to make better decisions and reach better agreements.
