Lesson 9: Effective Negotiation
What You’ll Learn: A business negotiation requires a slightly different skill set than a personal one. In this lesson, we will look at how to effectively negotiate a contract or agreement so that both sides come out ahead.
Effective Negotiation
“Everything is negotiable. Whether or not the negotiation is easy is another thing.”
~ Carrie Fisher
Introduction
Negotiations are a regular part of life. So much so that you probably don’t even recognize that you’re doing it. Carrie Fisher isn’t far off. Everything is negotiable outside of death and taxes, and even taxes can be negotiated, especially if you are behind and penalties are involved.
Negotiating as a business and as an individual can seem very similar. You may start your day negotiating with your significant other about getting out of bed to feed the baby and move on to negotiating a big deal with a client. Then you tell yourself that you deserve a big lunch because you’re celebrating and promise to do an extra 10 minutes on the treadmill to work it off.
In its most basic form, a negotiation occurs when there is a desire to gain something. For you, it’s a new project that will fill your soul and your bank account. For the client, it satisfies a want or need.
The primary difference between a personal and professional negotiation is your approach and tone. Every negotiation is different. Some can be very cordial because you want to work together, and there’s very little difference in the price you want to charge and the price they are willing to pay. Others can feel like a nonstop arm-wrestling match where neither side has an obvious advantage.
As we look at the art of negotiation, remember that it’s essential to separate your attachment to eating regularly and the value of your work in the marketplace. Negotiations are never about you. It is business. You need to separate one from the other.
A negotiation is not war either. This is not a “go to the mattress” moment from The Godfather. Negotiation is a give-and-take dialogue where ideally, you land somewhere in the middle. This is the sweet spot where both sides walk away from the table satisfied, if not completely happy.
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Courses
Introduction: Are You Ready?
1. Thinking Like a Business
2. Business Structures
3. Access to Capital
4. Creating Revenue Streams
5. Marketing
6. Finding Customers
7. Pricing
8. Creating a Winning Pitch
9. Effective Negotiation
10. Intellectual Property
11. Managing Your Money
12. Going Global
Getting Personal
You and the person you’re negotiating with have something in common. You both bring your personal values to the party. There’s no way to avoid it. These values serve as guides in the world, helping us navigate daily life. Our personal values are a gathering place for our experiences, lessons learned, beliefs, curiosities, a range of forces, many beyond our control, others so ingrained in us that we don’t even realize they are there.
These values affect every aspect of our life, from how we raised children and what profession we choose to the neighborhood we live in and the friends we make. Perhaps more important, these personal values heavily influence who we are as a creative and what we create.
What do they have to do with your ability to negotiate a project deal? Recognizing these values are always there just under the hood is a good start, for they color our perceptions of the world around us, from the places we like to frequent to the people we like to hang around with. The values are in a constant state of flux. You don’t leave this world with the same values you had as a child. Throughout life, you evaluate and re-evaluate your values and who you are. This, in turn, changes the way you see yourself and how others see you.
This is why negotiations can either go really well or entirely off the rails. There are a lot of variables at play, including:
- The experiences each party brings to the negotiation along with the sum of all the inputs that have occurred in their lives. These all affect their perception of who they are and who others are. For instance, it can be fun to come up with a creative title for yourself in your company. But the person sitting across from you, the Senior V.P of Whatever, may have worked their entire life to earn that title, which they take very seriously. This can influence a negotiation from the get-go without you even knowing it.
- The same can be true of personalities. You may be the very essence of a creative – coming off as a bit carefree and even a bit cocky, only to find that the executive you’re meeting with buttons the top button of his shirt even on weekends. Be very aware of who you are meeting with and meet them at their level, at least in how serious you take the opportunity to work with them.
- The very nature of the negotiation itself may create additional pressures or tension. If the project is particularly high profile or high dollar, the negotiations may be much more difficult than a more routine project. Even if you worked with the person in the past, there might be pressure coming from above to deliver on expectations, your ordinarily friendly contact may have their job on the line, and you’re not aware of it (they may not be either).
- The absolutes in the negotiation may not be close. In other words, their final offer may not come close to yours, even though they seemed to be in alignment at the beginning. When one gets into the nitty-gritty of business negotiations, there can be a lot of players in the background, from bosses and attorneys to contracting teams that want to cover every angle of risk. A good example is insurance. They may insist that you carry additional insurance, such as an Errors and Omissions policy, which can be costly if you don’t regularly carry it. It may not even be relevant to the project you’re working on, but the powers that be – the ones behind the scenes – remain unbending, hoping you’ll blink to save the job.
None of this is meant to make you want to throw up your hands and walk away from learning business negotiation skills. Rather, it’s intended to demonstrate that professional and personal negotiations can happen at vastly different levels. While you may be rock solid negotiating bedtime with your kids, you need to be ready to go up against a seasoned negotiator who eats small businesses for lunch.