Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (2024)

Planning, Startups, Stories Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

Seems like negotiation week for me. I published this post about Seth Godin’s take on business development, and then another on how win-win is the only win in business negotiations. That leaves me thinking about negotiations I’vebeen involvedin, things that have worked, and things that haven’t worked. And I end up wanting to post the three rules here, because it seems like they always work. Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (2)

Disclosure: I’ve never taken a negotiation course; not the ones they advertise in magazines, and not one in business school either. These rules are things I learned the hard way.

1. How does it feel to be them?

Call it empathy. “Walk a mile in their shoes” is a good old-fashioned saying. I know a lady who would say “see itthrough my eyes.” There’s no substitute for understanding the other side of the negotiation. What are they thinking? And, by far the most important, what do they want?

2. Find the win-win

There are no zero-sum games in long-term business deals. You have two winners or two losers, never just one winner and one loser. Sure, you might be able to get that kind of a victory (we win, you lose) in a negotiation sometimes, if you make that a goal … but that won’t last. Businesses wise up. Relationships that aren’t good for both sides don’t last.

So look for that in every negotiation. How can they get what they want, and you get what you want? Maybe both sides get slightly less, but both win. That’s the goal.

3. Negotiate before the contract, not with the contract

The most common mistake in negotiation is dealing with the legal contract. First, you have to realize that only a tiny minority of legal contracts ever determine anything. You have to sue for breach of contract to make a contract really matter, and if it comes to that, you already have a disaster. The vast majority of disputes are dealt with by discussion, revision, and, for the really hard ones, mediation.

I’m not an attorney, so don’t take this as legal advice. In practical experience, though, what I’ve seen that works is that you get all your terms straight first in simple memos (yes, definitely, written; just not legalese) and then do the contract. The contract is the last step.

(Photo credit: Dmitriy Shironosov/Shutterstock)

  • The conversation before the proposal – Jim Logan | B2B Copywriter & Consultant says:

    November 24, 2012 at 7:56 am

    […] prompted me to write about this is a post by Tim Berry titled Three Simple but Powerful Rules for Negotiation. The tip I share in this post is the same as the third one Tim offers. I can firsthand attest […]

    Reply

  • The conversation before the proposal | Saleskick | Sales Playbook says:

    October 22, 2012 at 5:47 am

    […] prompted me to write about this is a post by Tim Berry titled Three Simple but Powerful Rules for Negotiation. The tip I share in this post is the same as the third one Tim offers. I can firsthand attest […]

    Reply

  • The conversation before the proposal says:

    […] prompted me to write about this is a post by Tim Berry titled Three Simple but Powerful Rules for Negotiation. The tip I share in this post is the same as the third one Tim offers. I can firsthand attest […]

    Reply

  • Second Look: Netflix, Social Media Side Trips, Mobile Trends | Independent Thinking says:

    October 7, 2009 at 5:37 am

    […] Negotiating Tips: Three keys to good negotiations–empathy, win-win, and it’s not about contracts–by Palo Alto software founder Tim Berry. […]

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (3)george davis III says:

    October 2, 2009 at 8:26 am

    Tim. I spent many years negotiating across the desks and tables of the retail fashion industry. I learned early on that “It’s not a good deal unless both sides walk away believing they got a good deal”. Good preparation; knowing the history of the relationship and the numbers and their impact on the proposed deal, can go a long way in achieving your side of the equation.

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (4)Andee Sellman, One Sherpa says:

    October 1, 2009 at 5:28 am

    Great post Tim.
    Three great points that are really easy to apply.
    I so love a post that is simple and meaningful!

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (5)Team The Rise To The Top says:

    September 30, 2009 at 9:22 pm

    Love this post, especially the part about walking a mile in their shoes, trying to figure out what they want. Understanding the other side of negotiation is key to making your negotiation in the first place. Thanks for posting these Tim, I really enjoyed the post!

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (6)Jeff Gordon says:

    September 30, 2009 at 12:33 pm

    As a professional negotiator, I would love to agree that win-win is THE process to play by. The problem is that if you play win-win and your opponent is playing win-lose, guess who is going to lose? (Read more on win-win vs win-lose with Jim Camp and “Start with No!”)

    So rather than focus on which process I’m going to try to use, I focus on the Five Fundamental Skills for Effective Negotiation (shameless plug, since I’m one of the authors of the skills: ). But these Five Fundamentals do take information gathering and strategy into account (the first two skills, actually) – which are exactly what the 3 things you mentioned are really doing.

    The net result is that I’m thoroughly prepped for every negotiation and I have given due consideration to the other side’s needs. But ultimately, as a negotiator, I’m there to satisfy my client’s interests while really only seeking to give the other side JUST ENOUGH to meet their own needs. Is that win-win? Win-lose? Depends on how you look at it. 🙂

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (7)Vadim says:

    September 29, 2009 at 12:48 pm

    Thanks for a good post!

    The win-win mentality is actually described in length in Stephen Covey’s book “The Seven Habits of Highly Effective People”. Its a must read for all business owners

    http://en.wikipedia.org/wiki/Abundance_mentality

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (8)Robin Dickinson says:

    September 29, 2009 at 3:56 am

    Hi Tim, this is my first visit to your excellent site.

    Much of my time is spent helping clients negotiate large, complex deals that inevitably boil down to the fundamentals.

    To your points I would add a few of the things that constantly arise (in no particular order) …

    1) Determine their best-case outcome for the deal, and then determine yours;

    2) Clearly identify what your list of non-negotiable and negotiable parameters are, and if possible, determine theirs;

    3) Clearly understand their decision making process – including time-line and internal dependencies;

    4) Identify their ‘compelling event’ i.e. what’s driving them to want to ‘buy’. This is critical to ensure conceptual buy-in;

    5) Never, ever “lick the plate clean”. Screwing people backfires;

    6) Be exhaustive in your preparation. It pays off.

    There are many more, but I’m amazed how few people fail to even consider the above points – even with millions at stake.

    Best to you,

    Robin

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (9)jason says:

    September 28, 2009 at 8:30 pm

    great post. Too often I have dealt with clients who negotiate with a contract. Which really limits the amount of negotiating they can do. It seems with most people, as soon as most people need an attorney to assist them they basically close negotiations.

    Reply

  • The conversation before the contract says:

    September 28, 2009 at 7:54 am

    […] prompted me to write about this is a post by Tim Berry titled Three Simple but Powerful Rules for Negotiation. The tip I share in this post is the same as the third one Tim offers. I can first hand attest […]

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (10)Nils says:

    September 28, 2009 at 7:33 am

    Absolute! Walk the walk and talk the talk. After almost 25 years in retail and as a buyer I can agree with all what you write. You have to go into a partnership to get best possible deal in the long run. Sure you can screw them but they will never sell you again so what did you gain?

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (11)Strategic Growth Advisors says:

    September 27, 2009 at 8:52 pm

    Hey, Tim. This is one splendid post.

    I completely agree with item number 2. Most negotiation deals these days are played on an even playing field. The other person almost always wants a sweeter deal than the other but eventually end up with a very sour one.

    Keep those helpful articles coming!

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (12)Edin Shaba says:

    September 27, 2009 at 5:54 pm

    Great article!
    I would have titled it ‘Three Simple but Powerful Rules to prepare for Negotiation”. What i mean is you don’t want to ‘walk in their shoes’ and find the win-win the day of the negotiation (though some negotiations can stretch temporally).Strategy= ‘you’ve understand their pain’
    Tactics you are coming prepared with the “if i give you this,you give me that”, “if you do this, i’ll will do that”.

    Reply

  • Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (13)Kim says:

    September 26, 2009 at 7:19 pm

    Yes I agree 100% A good ole gentlemans handshake beats any type of leagalese.
    If we need that kind of contract then we do not need to be doing business .

    Reply

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Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories (2024)

FAQs

Three Simple but Powerful Rules for Negotiation - Planning, Startups, Stories? ›

Parties may not always reach their desired outcomes, but successful negotiations involve the same basic principles: preparation, persistence, and patience. No matter what industry you're in, the ability to negotiate effectively is one of the most valuable skills, and it begins with these three principles.

What are 3 rules for effective negotiation? ›

What Are The Three Key Rules to Negotiate?
  • First Key Rule: Preparation.
  • Tips for Effective Preparation.
  • Second Key Rule: Communication.
  • Tips for Effective Communication.
  • Third Key Rule: Flexibility.
  • Tips for Being Flexible.
Oct 20, 2023

What are the 3 P's of negotiation? ›

Parties may not always reach their desired outcomes, but successful negotiations involve the same basic principles: preparation, persistence, and patience. No matter what industry you're in, the ability to negotiate effectively is one of the most valuable skills, and it begins with these three principles.

What are the 3 keys to successful customer negotiation? ›

1st tip: don't let a negotiation be done in writing. 2nd cheat sheet: prepare each negotiation to win! 3rd tip: aim for a win-win situation during your negotiation.

What are the four golden rules of negotiation? ›

These golden rules: Never Sell; Build Trust; Come from a Position of Strength; and Know When to Walk Away should allow you as a seller to avoid negotiating as much as possible and win.

What are the 3 C's of negotiation? ›

Most people know intuitively that if they are to be convincing, they need to be confident, and if they are to be confident, they need to be comfortable (comfortable, confident, and convincing are what I term the three C's of negotiation).

What are the 4 C's of negotiation? ›

The 4 C negotiation strategy is an approach that aims to create a solid and lasting customer relationship while maximizing the results of a commercial negotiation. This method is based on four essential pillars to conduct an effective negotiation: Contact, Know, Convince, Conclude.

What are the 3 key elements of negotiation? ›

Elements in negotiation

In negotiation, the three key elements are often referred to as "The Three P's": People, Problem, and Process. People: People focus on the individuals involved in the negotiation. It encompasses their personalities, emotions, values, perceptions, and communication styles.

What are the 5 pillars of negotiation? ›

Based on his professional experience and academic background, he created a methodology based on five pillars: posture, preparation, communication, tactics and emotions.

What are the 3 steps to planning for negotiation? ›

Here are the three steps on how to properly plan for a negotiation:
  • Choose the best time and place when both parties are calm and on neutral ground.
  • Ensure that you know the facts and you have an understanding of the entire situation.
  • Plan and rehearse the things that you are going to say.

What are the three negotiation strategies? ›

Examples & Countermeasures
TacticDefinition
Future PromiseThe promise of future gain in exchange for concessions in the moment
ThreatsMaking drastic ultimatums to pressure concession.
Expose Competitive InformationOffering up a competitor's prices and/or information in the hopes of eliciting a better deal.

What are the four pillars of effective negotiation? ›

Negotiation may not be inborn but it is a skill that can be learned and practised, and these four pillars* provide a practical way to greatly improve negotiation success. There are four fundamental areas to focus on here: value, respect, warm, tough.

What is the core strategy in negotiation? ›

Negotiation Strategies

Individuals should come to negotiations ready to back up their position, including research and a commitment to reaching a deal. Consider the Other Side. Remember that the other side has things it wants out of the deal, too.

What are 3 guidelines for negotiating? ›

steps for successful negotiation are:
  • Separate the people from the problem.
  • Focus on interests, not positions.
  • Invent options for mutual gain, that is work together to create options that will satisfy both parties.
  • Insist on using objective criteria for judging a proposed solution.

What is the rule #1 of negotiation? ›

Golden Rule One: Information Is Power – So Get It

The first Golden Rule is essential to success in any negotiation: Information Is Power—So Get It! It's critical to ask questions and get as much relevant information as you can throughout the negotiation process.

What is the rule of three in negotiation? ›

The Rule of Three is simply getting someone to agree to the same thing three times in the same conversation. Personally when I first learned this skill my biggest fear was how I execute this without sounding like a broken record or coming off as being really pushy.

What is the rule of three negotiations? ›

The Rule of Three is simply getting someone to agree to the same thing three times in the same conversation. Personally when I first learned this skill my biggest fear was how I execute this without sounding like a broken record or coming off as being really pushy.

What are the five 5 rules of negotiation? ›

  • Information is Power — So Get It! Self-described "expert" lawyer-negotiators often enter negotiations with arguments intended to persuade the other side of the legitimacy of their positions. ...
  • Maximize Your Leverage. ...
  • Employ "Fair" Objective Criteria. ...
  • Design an Offer-Concession Strategy. ...
  • 5 Control the Agenda.

What are the three key elements of negotiation? ›

Elements in negotiation

In negotiation, the three key elements are often referred to as "The Three P's": People, Problem, and Process. People: People focus on the individuals involved in the negotiation. It encompasses their personalities, emotions, values, perceptions, and communication styles.

What is the principle 3 of principled negotiation? ›

3. Invent options for mutual gain. Negotiators often settle for the first agreement they reach, relieved to have hit upon an outcome that both sides can live with. In principled negotiation, negotiators devote significant time to brainstorming a wide range of possible options before choosing the best one.

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