Cup of Joe

If you want to bring all you have to any negotiation, you must be prepared to walk away from the deal. Let them catch a whiff of your desperation, and you quickly lose your edge in the negotiation process.

Conducting due diligence includes many things, from researching the personality of your counterpart (as I discuss in Part 2), to gathering information about the company you are dealing with.  Part of that due diligence should also include your ‘deal breaker’ scenario, or, what factors would cause you to walk away from the deal.

In the current economy, it is harder to sell, partner, or draw people’s interest in your business.  Unfortunately, this means that people can act desperate. They come in with one good idea and no alternatives, which probably means they come in unwilling to walk away.  This puts them at a major disadvantage and makes them appear desperate.  It is just as necessary now, if not more so, to come up with alternative plans and proposals, or you will certainly find yourself in a more desperate situation.

If you have nagging doubts about a partnership or a deal, you need to listen to them.  Are you prepared to walk away?  Have you laid alternate plans?

[Negotiating topics from Caruso Leadership Institute’s The Winning Hand training program.]

Cup of Joe blog articles available for reprint with permission.

You negotiate with a person.  They have a personality.  If you leave their personality out of your considerations in the negotiation you will probably not fare well.

I was recently talking with a friend who is a manager in the retail industry, and his story best illustrates the importance of considering personality in a negotiation.  The lease for the clothing store he managed was about to run out, so the store owner told my friend his plan for renegotiating the terms of the lease with the property owner.

When asked what he thought of the owner’s strategy my friend replied, “What are you going to do when the property owner kicks you out of his office?”

The owner immediately dismissed his response as ridiculous and committed to going ahead with his strategy.

The next day, the owner sheepishly reported back to his manager that half way into the negotiation he indeed got kicked out of the property owner’s office.

“How did you know that was going to happen?” asked the humbled owner.

“Because your strategy—while reasonable to you—insulted his personality,” replied the store manager.

Learn everything you can about your counterparts before you walk into the room or get on the conference call: their likes, dislikes, negotiation style, background, history, hobbies, etc.  Get your information from more than one source whenever possible. Just as with any information, consider the source when using the information to form your personality assessment to balance out your view. [See also: Psychology of Sale: It’s All About Them]

Here are a few questions to help you do your research before your next negotiation:

1. What motivates or drives them?
2. What is their personality style? How do they define themselves?
3. What are they most afraid of?
4. What is the reason they want to talk to you?
5. What are their goals?

Of course it is important to know your subject matter and come in with a winning strategy, but never forget that to get to the profit, you have to go through the personality.

[Negotiating topics from Caruso Leadership Institute’s The Winning Hand training program. Read Part 1.]

Cup of Joe blog articles available for reprint with permission.