You are here Negotiating is an Art

Ray Zinn, Author, Tough Things First, Lessons On Management, Leadership and Entrepreneurialism from Silicon Valley’s Longest Serving CEO

You are here Negotiating is an Art

The longest afternoon you will spend is at a four-way stop in a small Southern town. Shared Southern politeness will cause everyone at the intersection to insist the other three people go first.

This is a failed negotiation.

Negotiation is a natural part of life, a daily occurrence. Yet even senior executives are often terrible negotiators. Some approach negotiation as warfare, determined in advance to win regardless of collateral damage. Others take an underdog role, even when not in a subservient position, and supplicate their way into poor deals. Some negotiations, mired in unnecessary detail, drag on longer than a four-way standoff at a Southern intersection.

Negotiating is mainly an art. Every CEO and each of his or her direct reports needs to know how negotiations work and how to get what you want in the process.

What it is and what it isn’t

Foremost, negotiations are seldom confrontations. Outside of divorce courts, the parties at the table are there because they want to be. Each is seeking a mutually satisfying agreement and plans to profit from it. The first and most vital mistake is entering any negotiation as if it were a duel.

Negotiations are also not a game of poker. Nobody is betting against the other hand and hoping to take the entire pot. If during a negotiation you wheedle every advantage you think you can, the other party has a growing motivation to fold their hand and leave your casino.

Instead, negotiations are two or more parties trying to better themselves through a cooperative arrangement. You win, they win, everyone wins. When you apply for a job as a dishwasher, you could demand several million dollars a year in salary, but this would create a losing situation for the restaurant. Finding mutuality without giving up what you need from the deal is the sacred center of the art known as negotiation.

How to make negotiation worth everyone’s time

A few simple rules frame every negotiation. Don’t be afraid to create a checklist. Doing so will improve your odds of getting what you want.

Know what you want from the deal: Compromise is part of negotiation, but compromising on what you need defeats the purpose. Make decisions about what cannot be negotiated away before you arrange the meeting. Your requirements should be laid out so as not to appear wishy-washy and indecisive. Doing this also sets the stage for the actual negotiation, and makes you appear as an honest participant. It might also save you a lot of time if your bottom-line requirements are instantly objectionable to the other parties.

Select an appropriate setting/venue: Some venture capital deals in Silicon Valley have been negotiated at Starbucks, but too few to mention. Likewise, having everyone sequestered in a foreboding lawyer’s office is an act of intimidation. Pick a place that disarms everyone yet is conducive to adult conversation.

Stay calm and in the right frame of mind: One downside to viewing negotiations as warfare is that it puts your mind in battle mode – agitated, aggressive, fearful. Great warriors can enter battle and keep their heads. You are not a great warrior. Skip your second cup of coffee, breathe often and deeply, and keep repeating that everyone at the table wants to be there.

Stay on script:  The worst negotiations and outcomes occur when arguing starts. You walked into the room with an objective in mind. Keep that objective in front of you at all times and don't deviate from the nature of the negotiation. If the negotiation starts falling apart, just wind it down and reset for another day.

Come across as sincere: Insincerity tells the other people that you have motives you are not willing to share. Any sane person would walk away since insincerity is an obvious warning. The best way to come across as sincere is to actually be sincere. Gut check your motivations. If you cannot convince yourself that everything you say and do in a negotiation is sincere, then odds are you won’t convince them either.

Be sincerely willing to compromise: No deal is born fully formed. Aside from your non-negotiable requirements, you will have to offer or do more than you anticipated before you called the meeting. If you enter the room unwilling to bend, the other party will become equally unwilling. Remember, blessed are the flexible because they shall not break.

Preventing a thousand mistakes

A CEO will negotiate thousands of agreements, small and large, throughout their career. Any defect in their approach harms the deal, as well as relationships with the other parties – be they employees, partners, or customers – and it ultimately hinders or hurts the company. Stepping into a negotiation in the proper frame of mind, knowing your necessary outcomes, and with the humility any honest person possesses, will transform each negotiation into a winning solution for everyone.

[Image courtesy: changeorder]

About the Author

Ray Zinn is an inventor, entrepreneur, and the longest serving CEO of a publicly traded company in Silicon Valley. Zinn co-founded semiconductor company Micrel (acquired by Microchip in 2015), which provides essential components for smartphones, consumer electronics and enterprise networks. He served as Chief Executive Officer, Chairman of its Board of Directors and President since the Company’s inception in 1978 through to its acquisition in 2015. Zinn led Micrel profitably through eight major downturns in global chip markets.

Ray Zinn is the author of Tough Things First, Lessons On Management, Leadership and Entrepreneurialism from Silicon Valley’s Longest Serving CEO.