One thing I was taught early in my career is that everything is negotiable. That’s just not true! I wasted a lot of time trying to negotiate things that can’t be negotiated, and I missed opportunities to negotiate things that could. I wish I’d gotten better advice. Here’s what I’ve learned.
If everything is negotiable, then why aren’t you negotiating the price of fuel every time you fill up or the price of eggs at the grocery store? Some clever folks will say it’s because they don’t have the time and would simply rather pay the price. That’s just an excuse. The reality is, most of us can’t negotiate them because the conditions for negotiating don’t exist.
Three basic conditions must be met for a negotiation to be possible. The conditions themselves don’t guarantee an outcome; they just set the stage for the ability to have a negotiation. Without these basic conditions, getting a resolution through negotiation will be very difficult, and some other sort of resolution process might be better.
One of the conditions is that both parties must have an interest in negotiating with each other. If there’s no interest, then getting both parties to the negotiating table will be nearly impossible.
Sometimes the interest is obvious. For instance, a buyer-seller relationship in which one party wants to buy something from another party who has offered it for sale. It could also be two colleagues working together to complete a project, and they need to divvy up resources to make it happen.
Other times, interest isn’t obvious for both parties. For example, maybe you want to buy something that’s not listed for sale. In that case, you’d have to motivate the other party to want to sell. Or maybe you need a colleague’s assistance to complete a project. In which case, you may have to create interest for your colleague to want to get involved.
If you’re struggling to get someone to the negotiating table, ensure that you have a mutual interest to be there.
The second condition is that there must be something of value to trade. If you or the other party have nothing to give, then your “negotiation” is just an exercise in how to persuade someone out of what they have. Not an easy task, particularly when the other side realizes they’re doing all the giving!
The items to trade are not always of monetary value. For instance, you could be trading time, priorities, or information. However, they must be things that the other side values. If they see no value in your items, it will negatively impact their interest in negotiating.
For most negotiations, the items to be negotiated are inherently valuable to both sides. But sometimes, items or issues of indefinite value are negotiated. In these cases, it’s important to explore the value to the other side. Otherwise, you run the risk of discarding the items or giving them to the other side without getting any value in return.
The final condition needed is the authority to negotiate. If either side doesn’t have the authority to negotiate, then resulting agreements will be flimsy, requiring the support of people who do. When one has no authority, one has no decision-making power. Therefore, that individual will always be the gatekeeper for someone else.
In business, many individuals need to seek approval from others for their deals. However, in most cases they have the authority to negotiate, as they’re representing the interests of other stakeholders and the company. In those situations, it’s also not uncommon to have to seek approval before solidifying the deal.
To avoid authority issues, it’s always wise to understand the breadth of the other side’s autonomy. That should be in addition to understanding how the decision-making and approval process will work.
So, until there’s interest, value, and authority, we’ll have to keep paying the same as everyone else for a gallon of gas or a hand of bananas! Happy negotiating.
We Can Help You Determine if a Negotiation is Possible.
Is your team engaged in a negotiation of futility that can produce no resolution? Chances are, their talks lack the basic conditions required for a negotiation to even be possible. We can help! Drawing on nearly 50 years of real-world negotiating experience, we’ll assist you with getting better deals, saving time, and creating value for all involved — not to mention preserving and even strengthening relationships. Let us partner you with one of our advisers, ensuring that you’ve got the broadest view of your deal.