If you have five minutes to cut down a tree, spend the first three sharpening your axe. Negotiation is like theatre: everyone focuses on opening night, but the show will only run smoothly if everyone has planned, prepared, drilled, and practiced until the outcome could only be optimal. You would never “wing it” on Broadway. Your preparations for any negotiation should exceed the time spent negotiating, sometimes by orders of magnitude. Indeed, with sufficient preparation, you may not need to negotiate at all.
Once you’ve convinced yourself of the necessity of preparation, it’s time for empathy. Yes, empathy. Your ability to see the world through the eyes of those across the table from you will either give you vast and valuable insights, or blind you to both opportunities and deal-scuttling hazards. Do everything you can to gain and fully appreciate their perspective. Start by asking, then listening to the answer.
The discipline of “adversarial empathy” is difficult, valuable, and should be constantly in use. Hone it.
To prepare for the tactical aspects of a negotiation, consider the following:
Building your options and reducing theirs
What’s your “best alternative to a negotiated agreement” (BATNA)? What is theirs? How can you make yours better? How can you make theirs worse? Optionality is a fundamental and powerful concept in business, and especially in entrepreneurship. Build your options!! A simple example: if you’re selling an asset, consider an auction. Most would argue the value of the asset is the median of the gaussian histogram ofindependent bids. But of course, it is not the middle, but the highest value on the tail that wins the auction. This is wonderful for the seller… unless there’s only one bidder.
Increasing your information and controlling theirs
What do you know? What do they know? What do they think you know? What do you need to know? How can you create information asymmetries? What information should you share in advance, and with whom? Might there be a public aspect? If so, what to do about it? Do you have the financial models down? Are they flexible enough to modify and use in real time?
Leak-testing your logic and poking holes in theirs
Are your arguments, plural, sound, strong, and supported by layers of facts? What are their arguments? What assumptions are weak? What arguments are weak?
Are there emotional appeals to be made? To be expected? To be avoided?
Building your team and hamstringing theirs
Who’s on your team? Who else do you need on the team? Is there anyone you could add to your team that would have a big impact on the outcome? What is everyone’s role? Are they all prepared? Who is leading? What does leading mean? Who’s on their team? What do we know about them? How are they likely to proceed? How else might they proceed? Scenario plan!
The home forum advantage
Where and when will the discussions take place? Might there be a better time or place? How to agree on forum? Fallback fora?
Sufficiently in advance of the opening discussions that you can have thoughtful answers to each of these questions.
People wish to project skill and expertise, but in reality, preparation dominates natural ability. It all matters, but you are 100% in control of the quality of your preparation.
Familiarity with typical negotiation strategies, tactics, and best practices.