Macca's Golden Rules of Negotiating

Negotiation Partners teach, consult and assist our clients with challenging negotiations.  Our colleague Ian Macdonald – Macca to friends and adversaries alike – negotiates in the often bare-knuckle, no holds-barred street brawl that is industrial relations and union negotiations.

Not for him the cosy world of commerce, where alumni in suits bicker over percentage points, yields and payout ratios between sips of barista coffee.

One of the attributes that make Macca such a formidable negotiator is his personal credibility at the table. Here are:

Macca’s Golden Rules of Negotiating:

1. Never make a promise you can’t or won’t keep.
2. Never make a threat you can’t or won’t carry out.
3. Never fail to carry out a threat, if it’s been ignored.
4. Never tell a lie or deliberately mislead the other side.

1. Promises, promises

Over-promising and under-delivering is a sure-fire way to wreck a long-term relationship. As a negotiator, you set the expectations at the negotiating table. If the other side can’t trust you to deliver on commitments during the negotiation, how will they trust you to deliver when it comes to implementing the deal?
Trust is the foundation for profitable long-term business relationships. Reliability and congruence of word and action are key to building trust.

2. Take it or leave it

Any six-year old will tell you that even the most impressive sanction is only effective if the other side knows you are prepared to carry it out and that you have the authority to do so.
Sanctions are an important aspect of your negotiation power, so make sure you use them effectively. Sanctions should always be presented judiciously and co-operatively. Making unexpected and dramatic threats may cause the other side to call your bluff.
Raise potential sanctions early in the negotiation in a non-threatening way. This sets the scene without creating conflict.

3. Be true to your word

If you have introduced a demand together with a potential sanction and the other side has ignored your demand, you must follow through on the sanction immediately. Be true to your word. If a sanction is threatened, but not followed through, it becomes ineffective and your credibility and power are eroded. How will they know when you do mean it?

4. Lies, bluffs and statistics…

It is true that a little bit of dishonesty can pay. Every once in a while, lying, bluffing and misleading can allow you to make an extra little margin in a negotiation. However, that gain often comes at a significant cost. Somewhere down the track, you may be caught out.
A single lie, once found out, could bring your career to an abrupt end. Even if you survive in your role, from then on, your reputation will be tainted. The loss of your credibility is a high personal price to pay.
Having lost your reputation for honesty, is the other side going to continue to be open, cooperative and creative to see if a more profitable deal can be done? Will they be more wary and cautious? Will they check and re-check everything you say?
Once exposed as untrustworthy, you will pay for that little margin ten times over when more lucrative and more creative deals are no longer available to you.

Some well-worn bluffs to be avoided:

• We have got other offers… (if you do, be specific)
• This is our final offer… (why close the door on a better deal?)
• I can’t accept any less than X… (could you, on other terms?)
• We are not making any money in this deal… (if so, why are you still here?)
• My boss/lawyer insists on that clause… (if they do, explain why)
• We have a policy… (if genuine, quote it)
• This is a conservative estimate… (if genuine, share your data)

Your personal credibility at the table is one of your greatest assets in business and as a negotiator.

If you follow Macca’s Golden Rules, the other side may not like you, but they will come to respect and trust you.

If you can achieve that, you will have built a strong foundation for success as a negotiator.

The ability to negotiate is a learnt skill.

On our professional negotiation skills program, we cover over 100 practical skills to help executives raise their game.

Do you negotiate effectively with monopoly suppliers? Do you know how to defend against aggressive tactics? How do you block a demand without offending the other side? What are the six most effective responses to a proposal?

Call us if you have questions about this article or any other aspect of extending your negotiation skills. We will be happy to help.

About Negotiation Partners

Negotiation Partners is a team of professional negotiators and negotiation skills coaches. Our clients trust us:

• to assist them actively with challenging negotiations,
• to advise and pressure-test preparation, strategy and tactics,
• to diagnose negotiation capability and identify skills gaps,
• to equip their teams with cooperative negotiation skills that deliver superior results, and
• to resolve disputes through negotiation or independent mediation.

Our point of difference:

We actually practise what we teach — and we only teach what actually works in practice.

Our skills training programs are unique: they combine intensive coaching with proprietary diagnostics and long-term coaching follow-up.

Schedule a call with us to explore how we can guarantee that your team will add value to the bottom line of your organisation.