David T. Fagan: The #1 thing I learned at Harvard about Negotiation

If you are like most people, you feel a certain amount of stress when people use words like “sales” and “negotiations.” On the other hand, if you are like most people who follow me online then you would probably have loved the Harvard Negotiation course I took almost 10 years ago.

There are many aspects of that course that I have implemented into my life, like not having a “pie mentality,” understanding different types of negotiation personalities and how to communicate with them accordingly, and how to overcome objections. But there is one key to successful negotiation that has always stuck with me more than anything else. That number one key is preparation. Harvard teaches and emphasizes that the more prepared negotiator almost always gets what they want.

Now that doesn’t mean that the other parties negotiating won’t get what they want. After all, we always want the “win-win” or even the “win-win-win.” However, they say preparation will determine more than 90% of the outcome of any negotiation. Let’s reverse engineer this preparation process step-by-step. Here is what I have learned as I have implemented Harvard’s teachings into my own businesses and life:

1. First, you have to know what you want out of any given situation, deal, or potential agreement. There is nothing wrong with going on a fact-finding mission or doing a discovery call, but even in these situations you should know what success looks like in every communication. What you want to learn, what you want to understand, and what you want to communicate are fundamental elements in every encounter. When you don’t know what you want from a meeting you leave room for an ambush, to be caught off guard, to be posed questions you are not ready to answer, and to be in conversations you cannot intelligently maneuver. I regularly ask the leaders in my companies how they will define success before they go into meetings. It doesn’t matter if they are doing an employee review, interviewing a potential employee, or choosing a vendor for a new service. My team must know what success looks like at the start of every meeting. This is step one.

2. Next, you must have a pretty good idea of what the other party or parties would like to accomplish. There is nothing wrong with finding that out in the meeting to some degree, but a prepared negotiator and communicator already has at least some idea. To have some creative solutions and options in advance is paramount in negotiating a successful outcome. Case studies, examples of what other people have done in your negotiating scenario, can also be very helpful. Almost every industry has standard ways they barter, discount, and creatively offer various options. Knowing these things will also make you more prepared.

3. Almost as important as the first two points is to understand the limits to what you can agree to and ultimately do. So not only do you want to define best case scenario (success), but you also want to define worst case scenario. For example, I learned after my first couple car purchases that I needed to know exactly what I wanted to pay, exactly what I could afford in payments, and exactly what kind of vehicle I wanted. Otherwise I was unprepared and after a day at a dealership I was making decisions that I later regretted. In those situations I was the less-prepared party, and at least once I paid dearly for it. In the heat of the moment, when emotions are running high, it’s only the prepared negotiator that will attain success.

4. Finally, try not to be the victim of your own negotiating success. There are many times that I could negotiate a better initial deal or an outcome for myself, but then you have to ask if that’s what’s best in the long run. Taking advantage of people, creating extremely lopsided deals, and pulling fast ones will almost always come back to bite you. Ethics aside, it is just bad business to burn bridges and create a bad name for yourself. Sometimes you will have to look out for the other party because they are not as prepared as you. Sometimes you will have to think ahead and prepare for their best outcome too. If you can do this, then you are almost guaranteed ongoing successful negotiations in the future which will prepare you for the next encounter with that party.

These four things will put all the odds in your favor for more successful communications and negotiations. I hope you want nothing but the best for those around you as well as yourself, and I hope you get everything you want in your next negotiation. Just be careful what you negotiate for because you will most likely get it!