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Business negotiations often feel like a seesaw of wins and losses. One day, you feel competent and on top of the world, and the next, you feel like you’ve missed something crucial. That cycle can feel brutal, especially because not a day goes by without negotiation. Every goal you set, every conversation you have—they are all forms of negotiating, and without them, the work wouldn’t get done.
Instead of focusing on the seesaw, I suggest that you shift your thinking. Negotiation isn’t about winning or losing. It’s about building long-term relationships that are good for both parties. When your mindset is focused on the long-term rather than immediate gains, it becomes much easier to find the right negotiation strategies.
Successful long-term strategies revolve around four principal factors, or “four Ps”: problem, process, people, and parameter. These influence every aspect of negotiation, from defining the business problem to reaching an agreement.
Read on to learn about these four Ps plus two bonus Ps that make negotiation easier. Find out how, taken together with the right mindset, they can help you build lasting business relationships through negotiation.
1. Problem
Problem refers to the situation that warrants negotiation. What is the central conflict, and what does each side need in order to resolve it? The problem has to be defined with the solution in mind. That can only happen once you truly understand what’s causing the problem for both sides. In order to maintain a long-term relationship, you will have to focus on resolving the problem at hand. Don’t worry about who is at fault or who will come out ahead in the negotiation.
Many negotiation training programs concentrate on strategies to win. They are outward-focused, looking at how to make trade-offs, resolve conflicts, or predict the outcomes of specific scenarios. A negotiator intimately knows their own perspective, but they often don’t stop to take the time to understand what’s at stake for the other person.
Most problems are multi-faceted. Take the time to understand all those sides before you enter a negotiation. It becomes much easier to find common ground and establish solutions once you know what’s really at stake.
“The most important trip you may take in life is meeting people half way.” – Henry Boyle
2. Process
Process is a set of sequential steps that begins with defining the problem and concludes with agreeing. This P is what commands the most attention in typical negotiation training—how is a phone negotiation different from an in-person one? What should you do if someone seems unreasonable? How do you make sure that your needs get enough attention in the conversation?
These are all important considerations, but it ignores a vital part of the negotiation process: the fact that it is a relationship-driven process. There are two sides (or more) to this negotiation, and the best negotiators take that into account. The process is interactive, and it will inevitably shift. You cannot use the same tools and techniques for every negotiation. There is no approach that works every time.
3. People
People includes everyone involved in the negotiation, either directly or indirectly, from start to finish. Negotiating is an interactive process where people matter and what influences them matters. A person’s work environment exerts a critical influence on his or her negotiation style.
Most teachings on tools, techniques, and tips overlook differences in people. Work experience and cultural backgrounds are critical factors that influence one’s approach to negotiation. Behaviors and communication styles vary around the globe, and people need to know of the differences and learn to adapt their negotiation styles to each country.
If people try to negotiate in a style that does not fit them, or if they are unaware of essential differences in the culture they are negotiating with, their negotiations can hit potholes.
“So much of life is a negotiation – so even if you’re not in business, you have opportunities to practice all around you.” – Kevin O’Leary
4. Parameter
Parameters are the boundaries that affect decisions. These are often more straightforward than the other three Ps, but they are no less impactful. A budget is an excellent example of a limiting parameter.
Sometimes parameters are clear-cut, but that doesn’t mean that people will react to them in a direct manner. The desire to win an argument can cloud a person’s judgment, and even the most reasonable parameters can become the target of negative emotions.
Two Bonus Ps
Politeness and being productive are two additional attributes that come into play along with the Four Ps in influencing negotiation strategies.
Being polite or courteous paves the way for smooth discussions. It keeps the topic on track and minimizes distractions. Additionally, there is no alternative to productivity, which means producing results. No matter how good your business relations are with the client, until you show productivity, no business relationship will be sustainable. Your performance, an outcome of your productivity, gives you credibility and offers leverage to present your options with confidence—we have done it, you know it, and you can trust us.
The Four Ps Keep You Flexible
Negotiators are accustomed to learning useful tactics and one-size-fits-all maxims, but depending on the cultural context or particularities of the situation, those tactics may not work.
Instead of accumulating a playbook of tips and tricks, negotiators would be better served by thinking of negotiation as a flexible, long-term process focused on success. Long-term relationships and results are true measures of success. The four Ps offer a framework for understanding effective negotiation in precisely those terms.
The four Ps govern negotiation strategies, regardless of context. If there is a breakdown in the process, you might have a different solution than if the breakdown has to do with people or parameters. This framework is more inward-focused, helping negotiators develop an intuitive sense of their surroundings and the situations at hand.
With the right mindset, the four Ps give you an opportunity to maintain a balance between pleasing the client and doing what is right for everyone at the table in a negotiation.