Negotiation stages: Preparation with SMART framework

Negotiation Stages

• The key stages are preparation, opening, proposing, bargaining, and closing.

Prepare

• This stage is crucial for a successful negotiation
• Thorough preparation is essential in both business and personal negotiations to achieve goals
• Begin preparation with the desired end outcome in mind
• Objectives should be set, considering what is desired, what can be exchanged, and under what conditions.
• The SMART framework can be used to define objectives

SMART Framework

• Specificity is important regarding what you want, what exchanges you are prepared to make, and the conditions
• Meaningful negotiations create value
• Achievable outcomes should be the focus
• It is necessary to ensure the terms, conditions, and overall outcome are fair to the counter party
• A time frame should be set for the negotiation and the duration of the agreement

In Any Negotiation

• Preparation should happen around yourself, the other person, and the market

Preparing Yourself

• Requires self-reflection and planning
• Boosts confidence and performance
• Identify your strengths and weaknesses
• A personal, long-range game plan should be prepared ahead of time
• Be aware of your BATNA and your bottom line

Preparing for the Other Person

• Research the person
• Building rapport is built through comfort and knowledge
• Use public documents and search engines like Google, LinkedIn, Facebook
• Research is valuable, especially before a job interview
• It serves as an ice-breaker, show preparation, and provides insight into the other person
• Determine if they are reasonable, bottom-line focused, and what they value
• Determine their level of authority and who they need approval from

Preparing about the Marketplace

• Research your industry
• Understand the terminology, players, and who to talk to
• Determine your personal evaluation of what is being negotiated
• Develop the other party's values

Open

• Setting a positive tone is essential with opening remarks
• Show respect for the other side's experience and expertise
• The negotiation frames should be a joint endeavour, emphasizing openness to concerns and interests
• An agenda should be reviewed for agreement on the issues covered
• Expectations regarding the process should be discussed with the other party

Tactics for Getting off to a Good Start

• Actively listen to the discussion of process
• Note-taking is appropriate
• Avoid distractions and formulate responses carefully
• Body language should be paid attention to
• It is useful to ask questions

More Opening Tactics

• Ensure understanding by repeating what you've heard
• Voluntarily explain interests and concerns as a good-faith measure, but be cautious if the other side does not reciprocate
• It is useful to define the ground rules for the negotiation
• Important questions include the location, time constraints, limits, and specific processes to handle impasses
• Initial positions of the parties are exchanged

Propose

• This stage is also known as clarification and justification
• Both parties need to be on the same page
• Compromises should be considered for concessions
• Each party bolsters any position or demands
• This a good opportunity to educate the other side
• Strategies are reviewed to make sure that they're on track

Other Propose Info

• This shouldn't be confrontational
• Emotions are important to manage

Bargaining (and Problem Solving)

• This phase marks the beginning of true negotiation
• The verbal and non-verbal cues of your partner are important to pay attention to
• In difficult negotiations, this process must move back to problem solve until all parties are comfortable
• Each side will also define what they think will solve each of the issues
• The ultimate goal is to also keep a mutual agreement and mutual solutions

Bargaining Continued

• Use various negotiation strategies to achieve the established goals
• Argments, support positions and change position if the other party has a good case
• Communication skills of active listening and feedback are valued
• Emotions should be kept under control in order for the discussion to remain objective

Closure (and Implementation)

• All essential elements should be in place to officially establish the agreement
• It's important that everything is clear and fully understood before the execution
• In this stage, contracts are signed or legally enforced
• Follow-up steps are in place to ensure implementation produces the desired results
• The key is, ensure all the parties put the information in a format acceptable to both parties and formalize it

Closure Tips

• It can be everything from inking contracts to a handshake
• Allow the other negotiator some wiggle room, in case they don't have final say
• Don't create so much flexibility that the deal is rejected by the decision maker
• Do not allow the other side to make any more trades, it should be clear you reached the bottom line

How to Smoothly Close

• It's good to express your acceptance of the total package without changes
• In order to make an adjustment in their favor, that would need to be compensated by adjustment in your favor
• Agreements should always be in writing

Avoid Gloating

• It will cause them to find a way to weasel their way out of the deal, and increase their aggressiveness in future negotiations
• Closing is sometimes a difficult process and some people fear making a bad deal
• To resolve this, gather as much information as you can through questions and help them solve their problem

Postmortem Questions

• This can be asked after a failed deal
  • Was the loss or the win, good for business as a whole?
  • If losing, could it have been improved?
  • If winning, what kept the offer from taking place?
  • How could we have spotted the flaws?

Postmortem Questions For Successful Deals

• What would happen if success took place?
• What could've been improved?
• How can any problems be resolved with success?
• How does it compare to thought?