By edith on 05-19-2010

About Our Guest Author Terry Hird is the founder of Negotiation-International and one of most recognized negotiation experts in the Bay Area. His clients include Google, Genentech, Wells Fargo, InterMune, The Port of Oakland, Lawrence Livermore Nuclear Lab, Advanced Global Communications, Waggener-Edstrom, and Bayer Healthcare just to name a few.

Selected as a UC Berkeley Extension Honored Instructor and with over 35 years of international business and negotiation under his belt, Terry’s work as a business owner, consultant and educator has brought him into contact with top businesses, organizations and learning institutions in over fifty countries around the world.

Five Habits of Highly Effective Entrepreneur Negotiators

Negotiation impacts every facet of the entrepreneurial process. Here are five practical tips for entrepreneurs that will help them become stronger and more effective negotiators.

First, view demands made upon you by your negotiation counterpart not as threats but rather as opportunities to trade out. Most negotiations are multi-faceted and as such, offer the opportunity to trade interests that the parties value differently. Do not enter into a negotiation with a notion of a fixed pie and assume that you know going in exactly what is to be divided up. This is a big mistake. Know what you want and need. Listen to what they want and need. Effective negotiators know what is most important to them. This requires a solid game plan going in and the flexibility to adjust the plan as the negotiation evolves.

Second, the best negotiators don’t just focus on price. What you should be doing is focusing on interests. Cash is, along with the management team, the single most critical thing in any start-up. It is a real mistake to immediately start negotiating price. How can you place a price on something when you have not spent the time to determine what the other side values? You need to determine their interests and then place a price on satisfying those interests. Negotiations that are centered immediately and only on price squander the opportunity for developing potential mutual gains.

Third, highly effective negotiators understand before they disagree. They walk in the other side’s shoes. They make your problems, their problems. You need to understand the issue from the other side’s perspective. The Japanese have a saying: “Even a sheet of paper has two sides.” Remember that rationality is relevant and that because the other side sees something from a different perspective does not automatically mean that their view is wrong. Listen to understand, not to refute.

Fourth, effective negotiators understand the power of a BATNA. They constantly work to strengthen their BATNA (Best Alternative to a Negotiated Agreement). This, of course, assumes you have a BATNA and if you do not, then my advice to you is to run and hide! A BATNA is what you would do if the deal you are negotiating cannot come to a satisfactory fruition. You need a strong BATNA. A big mistake is to not consider what the other side’s BATNA probably is. You need to constantly be in a deal versus BATNA mode. Often during a negotiation you may come to realize that your BATNA is a better deal for you then the one you are negotiating in which case you might choose to walk away from the negotiation table. The point is this: the BATNA empowers you. Understand it, strengthen it, and look for ways to weaken the other side’s BATNA.

Fifth, the best negotiators understand the power dynamics at the negotiation table. If you are feeling powerless or overwhelmed as they sit at the table with you and continue to negotiate you need to stop and think. If they are so powerful, why are they not just taking what you have? Why do they need to negotiate with you? The answer is because you have something they want and they need to negotiate for it. Yes, the fact that they are there beating you up should in fact, strengthen you resolve. At that point you should revert to the first tip I mentioned. Figure out what it is they want and trade it for what you want.

This is how to be a truly effective negotiator.

To learn more on negotiation, meet Terry Hird in person at BizTech Talks: Beyond Negotiation 101 for Entrepreneurs on June 3rd, 2010.

About edith

Edith Yeung is the Founder of BizTechDay and SFentrepreneur. She is also a lecturer at UC Berkeley International Program and committee member of the San Francisco Small Business Week. She has previously worked with AT&T Wireless, Oracle, Siebel, Autodesk, Cisco Systems, Symantec, American Management Systems (AMS), Telstra Australia, Matav Hungary Telecom and Taiwan Semi-Conductor.

Leave a Reply