Art of Negotiation

Chapter 04. Long-term working relationship

To attract attractive people, you must be attractive. — Jim Rohn

Relationships with a company

or an individual often start at job

and grow over time to become an important part of your financial

and personal life (intimate, personal, important)

if you know how to maintain it properly.

Gerard Nierenberg,

a guru in the field of negotiation,

once said,

the purpose of negotiation is:

“to reach an agreement in which the needs

of the parties are met

to the extent

that it becomes an intrinsic driving force,

they fulfill their commitments

and conduct subsequent negotiations

and transactions with that partner.”

Let’s analyze this definition piece by piece.

First, “reaching an agreement…” means

that the purpose of negotiation is not to win or lose,

or to defeat the opponent,

but to reach some kind of agreement.

When both sides begin a negotiation

with the sincere desire to find a way to an agreement,

their behavior will be different from

when negotiating a “one-off” style.

Of course, the results will be much better.

The second part of the definition

“… in which the needs of the parties are met…”

indicates that each party has different wants and needs.

That’s why one has to negotiate or discuss.

In a long-term deal,

meeting the other party’s basic needs is paramount.

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Need satisfaction from both sides

The third part of the definition,

“…to the extent that it becomes an intrinsic driving force

for them to fulfill their commitments…”

is understood that both parties are so satisfied

with the outcome of the negotiations

that they want a further cooperation agreement.

The follower must also be successful,

and willing to fully implement the commitments made in the negotiation

to enjoy the maximum benefits from that negotiation.

I once had the opportunity to speak

with a senior executive of a large organization

with a high spirit of learning.

He proudly told me that he had negotiated a very good deal

with a publisher.

He made them accept upfront payments

and royalties that were much higher than

they were paying other program authors and developers.

I also collaborated on product development with that publisher,

so I was surprised to hear this news.

This gentleman got a better deal than

I did during his many years with the publisher.

When I called, the publishing director explained

that the other partner was fierce

and demanding throughout the negotiation.

He is neither flexible nor willing to compromise.

Either the publisher has to agree to pay a higher price,

or the other party will not only walk away,

but also damage their reputation with other units.

The director said:

“In the past, we didn’t want to make our partners unpopular with us.

We politely agree to their terms and conditions.

We now have the exclusive right to publish

and distribute their work,

with no obligation to publish and distribute.

We had no intention of doing so.

But their product will stay in our warehouse indefinitely

until they come and claim it.

At that time,

we will accept and permanently terminate the business relationship

with them.”

The other senior executive had achieved

what looked like great

—a high market price for his product.

But because he didn’t realize the importance of doing business

for the long term,

he and his company ended up with only a contract that set prices

and terms for which the partner company was not responsible

or not performance motivation.

*******************

Law of indirect action

In negotiation, there is a principle called the Law of Indirect Action.

It assumes that when you act indirectly,

you will reap more results than when you act directly.

For example,

when negotiating,

the more you try to achieve your goal,

the further away you will be from success.

When too much effort is achieved,

the opponent will find it necessary

to retreat to the defense.

Conversely, the more you act like you’re trying

(the indirect method),

agreement ‘ll be worth both try to meet the other party’s conditions

as much as possible to come to an agreement

Ralph Waldo Emerson once said,

“In order to have a friend,

we must first be a true friend.”

By using the Law of Indirect Action,

focus on a deal that works for the other party,

put them at ease,

and start looking for ways to make a favorable deal “return” to you.

This is why I always say,

“No matter what we decide today,

I want you to be happy.

I’m open to any ideas and suggestions you come up with,

as long as you’re comfortable and in the future too.

Of course, I want the same thing,

but I find that if I focus on satisfying your satisfaction,

things will work in my favor as well.”

This method helps to clear up the negotiation

and leads to a satisfactory contract in case the other side

of the negotiation

is worthwhile for both parties.

*********************

Think of the future

The fourth and final part of Nierenberg’s definition is

“ and conduct further negotiations

and transactions with the counterparty.”

This is the important part

most important in a long-term business deal.

This means that both parties are satisfied with the terms

to the extent that

they are eager to move on to future agreements.

Today, leading businesses define themselves

as “partners” with customers,

sellers and suppliers.

Instead of expanding business with many different companies,

businesses will forge business relationships

with the most important and familiar suppliers,

with whom they expect to work closely

to develop new products by good relationship,

thereby creating the best benefits for both parties.

This is a strategy used by most business leaders in all fields today.

Type II negotiation is a process with no real beginning,

middle,

or end.

It goes on continuously.

The starting point is to build quality relationships based on trust

and credibility.

The best working relationship you can have

– whether it is a sales,

hiring,

financial,

or otherwise

– is based on a satisfying all-in-one contract beside.

This contract will continue in different forms for an unlimited time.

The worst type of negotiation is

when no one is satisfied at the end of the negotiation.

Neither side wants to negotiate further with the other.

Both find it uncomfortable and have no reason

to fulfill the agreed-upon commitment.

One of the major differences

between successful and unsuccessful people is

that the former look for problems to resolve,

whereas the latter make every attempt to avoid them. – Grant Cardone