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Issue 108

Product Management – The art of negotiation

Terezia Neagu
Product Owner @ Betfair Romania Development
MANAGEMENT

Negotiation is the process where a series of strategic discussions happen between two parties with the purpose to reach an agreement that satisfies all the stakeholders. By negotiating, all involved parties avoid a potential argument and find a common ground where they reach a consensus. Remember, in case one party must give up more than the other on its list of demands, then a compromise occurs in that negotiation versus a consensus where both parties give up and accept the outcome on the same level.

There are various factors which can determine the outcome of a negotiation like the audience (stakeholders) you are engaging, what is being negotiated and the stake raised, the knowledge is being exchange/shared between the two parties, the flexibility/openness to accept various solutions to different problems tacked in the discussions and the most important the attitude we adopt in the way we negotiate our terms and conditions to others.

In product management, negotiation comes useful when we take about requirement management, stakeholder engagement and risk assessment.

What are the success conditions we need to meet before engaging in a negotiation?

# Condition 1: Negation Mindset - "Everything is negotiable"

Remember everything is negotiable in terms of business and once you build up this mindset, we will be able to initiate negotiations from the smaller to higher stakes with various partners. We can make a habit of asking for a better deal every time we have this opportunity and we should not be afraid of not getting always what we ask but be surprised by how often we can achieve this.

We can beat ourselves at our own game if our mindset isn't in the "negotiation" mode and we will lose even before starting the discussions with our parties. We should not be afraid to always challenge the status of quo (current situation) or getting rejected in the process. The worst thing that can happen is for our parties to say "No" at an initial state but even then, we can continue to negotiate depending how quickly we adjust our terms to their reasons of rejection.

Let's start building up the "negotiation" mindset and get more of what we want in our life, at the end of day there isn't a price set in stone on the outcomes we want to achieve for ourselves.

# Condition 2: Really want to negotiate

This condition sustains wanting to negotiate and be ready to sell your idea as the best outcome there is for the deal we want to close.

To work on the will and selling skills what might help is to practice in having a personal motto where we : always ask for what we want, assume we will get it, explain why is the best deal/outcome our offer to the other side, be flexible to expect other outcomes, put ourselves in the other partner shoes, wait for the other half to make the first move and play hard to get.

Once we have the mindset and will of negotiation, we are half towards our goal and seal the deal with a win-win situation for us.

What are the steps in a negotiation?

There are a series basic steps which can increase the changes to have a successful negotiation no matter of the context we found ourselves:

# 1 Prepare for the negotiation

This is the first step in the negotiation process and implies having a deep understanding and kndolwedge of the domain/matter we want to negotiate. In case we aren't fully prepared for our discussion we can't negotiate properly, so be sure to get all the facts straight before any negotiation take place.

Afterwards, we need to ensure the basic setup for any negotiation takes place and know where, when, with whom and the duration of the future negotiation session.

Another action we can take in this stage is putting down in paper: what is top/least wanted outcome we can expect, what elements we are willing to trade on the table, the challenges/issues can be raised from the other parties and prepare our BATNA (best alternative to a negotiated agreement).

We can try to prepare various solutions and alternatives to the possible issues raised by the stakeholders and use them in our advantage to obtain the best deal in that negotiation.

Based on various statistics 80% of the time spent in the entire negotiation process, the planning/preparing is the essential key towards making the bargain a success.

# 2 Make a negotiation plan

After we completed preparation, we could aim to make a negotiation plan in case we know well our stakeholders, their Wishlist and the concessions they are willing to make to reach a good deal.

In the negotiation plan we can track the types of stakeholders we are engaging with, there and our expected outcomes after the negotiation, tactics/techniques we can use to facilitate better the bargain, back-up plan in case by the end of the discussions no conclusions to an agreed deal were reached.

Remember there is always a possible better deal than the one we plan before and be open to see the advantages and disadvantages of each proposal to agree on and invest time more in analyzing them as "THE BEST DEAL YOU COULD EVER GET" is right across the corner.

#3 Document all the negotiation process

After preparation and setting up a plan, we should make sure we document everything related to the negotiation process. To better understand this step, see below a proposed structure of how this can look like when negotiating between two parties:

#4 Meet and exchange information

This is the stage when both parties meet and exchange their list of desired outcomes after the negotiation and mention: what goals and results they would like to have in the end, why they want these goals and the issues they foresee during the negotiations. Each half should be able to express free their interests and how they feel towards the entire negotiation process to keep things as much as transparent as possible to align expectations during various crucial points in the discussion.

After sharing information, the next step is to put down all the outcomes we want to negotiate on and for each outcome set the expected results from all parties to be able to have an overview on where the deal can adjust to satisfy both parts.

# 5 Negotiate

This step is the essence of the entire negotiation, during which each side will have to give and take and propose different counteroffers for the conflicts of interests raised to reach agreement.

Some of the skills which can be useful during negotiation is to have good emotional intelligence skills like : self-awareness (the ability to identify own emotion and how to keep them in control), self-regulation (ability to identify emotions of others and how to manage them), empathy( patience, active listening) and social skills ( communication) and motivation ( ability to approach a problem solving mindset and to calibrate with the other side goals).

The purpose of the entire step to reach a win-win situation which is the positive outcome for both sides.

# 6 Conclude and Execute

Once an agreement was achieved, both sides needs to make sure they are held accountable of the agreement and setup a plan to put into action and execute.

No matter of the outcomes both sides should thank each other and maintain a good long-term relationship and build trust during this process. If there need of a written contract where all the parties need t sign off on it, that would "SEAL THE DEAL" officially.

A follow-up should be made to make sure everyone is sticking to their side of the deal and results are visible after conducting successful negations

What tactics can we use in our negotiation process?

There are various tactics we can use to have a successful negation depending of various circumstances

Take or Leave it Style

In this situation you will not accept other outcome except the one you are expecting, and you aren't willing to compromise anything in the process.

This falls into the Lose-Lose case in our Negotiation Matrix.

  1. Small compromise, big demands

In this situation, in comparison to the "Take or Leave It" tactic, where you are willing to make small concessions to reach the a deal with your other side .In this situation you are fully confident of your own goals, the demands of your side and the winning chances you are in advantage to win - here comes in place the BATNA ideology.

This falls into the Win-Lose case in our Negotiation Matrix.

Balanced Demands, Consensus

In this context, both yourself and the other side feel very strong on their list of goals but are not afraid to reach a common ground and let go on some of the demands, reaching in this context a consensus and a balance between the two parties.

This falls into the Win-Win case in our Negotiation Matrix.

D. Big compromises, low demands

In this situation, you might be needed to drop the entire list of demands just to reach a deal with your other half in the negotiation process. You just want to just get a decision taken and no unblock various stakeholders from dragging out unnecessary discussions when a clear outcome can be reached. However, even in this limited context, you can have small winnings that might setup a clear indication that you survivor in the negotiation world.

This falls into the Lose-Win case in our Negotiation Matrix.

Conclusion

Don't be afraid to negotiate and faces failure/success based on the outcome, the best negotiators are born by practice and to reach that level you need to constantly challenge things and seek a better deal for yourself.

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