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Entrepreneurial Negotiation
- Focusing totally on your own interests (self-centered). If you don’t work to recognize and understand the needs and priorities of those with whom you have to negotiate, you will be blind to clues that could lead to better outcomes for both sides. Remember that every business, and every relationship, must be a win-win one, rather than a win-lose.
- Passion making you overly optimistic and overconfident. Your conviction that your innovation cannot fail will lead to contingencies not discussed or documented, or failing to consider the possibilities that agreements could break down or people might act unreliably. Negotiation is more about mitigating risk and uncertainty, rather than selling.
- Winning defined as reaching an agreement - now. Sometimes no agreement or a future agreement is the best alternative. You must always consider the lasting impact of an immediate action on reputation, trust, future negotiations, and long-term relationships. Don’t allow yourself to become desperate, and always be willing to walk away for cause.
- Accepting a quick compromise to get things done. Most of you are “doers,” who are multitasking under a heavy workload, and measure success by how many things get done. You may have an aversion to conflict, or be willing to declare victory by signing on to a compromise that you later regret. Don’t ever sacrifice base principles or integrity.
- Approaching negotiation as an individual sport. As a business owner, you survive by lean operations, and value your independent spirit. Don’t confuse being responsible, in a heroic sense, with being an effective team leader. Perhaps coming up with the original idea required individual effort, but negotiation often requires utilizing the right expert.
- Negotiating as merely haggling over the price. Most business owners I know feel comfortable handling transactions with buyers, with the owner as the seller negotiating the price. More important for success are the complex transactions between partners, investors, and suppliers, where risk, long-term gain, and relationships are negotiated.
- Relying heavily on intuition versus prepared evidence. All negotiation involves some improvisation, but there is no substitute for advance preparation to support best case, acceptable compromises, and walk-away triggers. It doesn’t help to blame the other side when negotiations don’t go as expected, and you only have gut instinct to fall back on.
- Allowing biases, emotion, and ego to overrule logic. This mistake causes you to hear and see only what you want, and to react inappropriately when things don’t go your way. By keeping your emotions in check, understanding the other person’s position, and using logical arguments, you will find negotiation to be much more satisfying and successful.
