Saturday, April 22, 2006

Closing the deal

At business school negotiation techniques was an elective, filled with theories and excercises about game theory and the like. Unfortunately everyone knows about these, so there's no advantage to be gained from following this course now.

I've found the most successful negotiations are highly personal and tightly-bound to context, environment and situation. It's just a matter of what you can get away with to determine if you had a good deal or not. Generally everybody feels fine if they spend less of what they have and get more of what they want. There's really no strategy to that, so it all comes back down to the tactics.

The objective success of a deal is thus the degree to which you got what you wanted opposed to all other alternative outcomes. If your goal is to do exactly that, then here's some tactics I found which work:
  • Negotiations grow gradually more personal, the longer and the more conflictuous one gets; it also means that parties get closer to their limits, and they no longer see solutions within scope; use this knowledge to profit from.
  • Everyone knows and expects that all parties know the rules of engagement, zero-sum games, negotiation etiquette etcetera. People who don't know, are supposed to be taken advantage of. However, if you keep handling the rules haphazardly, but correctly, you keep the other parties on their toes. Eccentricity breeds uncomfortability. Uncomfortability becomes a commodity in the negotiation, which you can take advantage of.
  • Understanding the opposition is paramount. Sharing goals is much better than fighting for your own. Also, parties who are each other's worst enemies will go to the ends of the earth to mess each other - and their negotiation - up. (Just look at the Middle East) And that means that everyone will go much further in a destructive direction, than they would have during a cordial negotiation.

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