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Negotiation framework development is an essential part of the strategic negotiation process. Developing a negotiation framework forces discipline into your negotiation and it gives you the structure you need to deliver repeatable excellent results.
A disciplined and formulaic approach to negotiation sounds counter-intuitive, but it’s the only way to create repeatable success. Negotiation is a skill and an art, but the skill development comes before the art. You can’t learn to paint the Mona Lisa unless you learn how to colour within the lines first. Maintaining discipline within a negotiation will anchor you and keep you in check when you get emotional (and you will). It will stop you from making stupid decisions and it will give you the ability to recreate success repeatedly. So how do you create an environment where discipline and positive habit formation can thrive?
Much of the discipline in negotiation is about developing a framework that forces you to stay disciplined.
What do you Want?
As strange as it sounds, not many people stop to consider what they want out of a negotiation and in what order of priority they want things. Do you want a reduction/increase in price? Do you want a reduction of risk? Do you want to enter a new market? Do you want to grow the account? Do you want a quick win? What are your business goals? How does this negotiation align to your overall business goals? What is most important to you to attain?
Really quickly I want you to think of your next negotiation. It doesn’t have to be work related, it could be at home or where you volunteer or with a friend. What is it that you want to get out of that negotiation? Create a quick bullet list of your needs and want that will come out of that negotiation. And, Go!
Target Outcome Development
Once you’ve established what it is you want out of the negotiation, you need to determine your target outcome. We’ll go through the application of this target outcome in negotiation framework development, but it’s important to think about what your target outcome would be in a negotiation. Ultimately you will be stewarding towards achieving that outcome within the negotiation. Do you have a realistic target outcome? We’ve all been guilty of shooting too high or too low in a negotiation and screwing up the negotiation because we got stuck on the positional outcome of the ‘best case’ scenario in the negotiation. Can you recall a time where you shot too high or too low and either screwed up a negotiation or left money on the table?
Negotiation Framework Development
Remember that bullet point list of your wants and needs that you created. Take that list and prioritize it from most important to least important. Go!
Now take some time to think about what your low outcomes, target outcomes and ideal outcomes are to each of those wants/needs. For example, let’s say you’re a software company and you’re selling your keystone product. Your first need/want may be that you hit the sales price of that product. That sales price has a range. What is the absolute lowest that you can accept for that product? What’s the most target price you’ll get for that product? What’s the ideal price that you’ll get for that product?
Having this framework developed will force discipline on your negotiations. You cannot go outside of the low and ideal barriers that you have created. Your negotiation flows within this framework and any deviation from the lows and ideals that you’ve developed should be avoided. This framework stops you from making stupid decisions like taking a price that is too low or putting your business into a high-risk scenario. Every single negotiation you do should have this developed and vetted by another party in your business (sanity test) prior to the negotiation.
Once you have a deal that fits within this framework, you have a deal. You can confidently stop negotiating knowing you got a good deal. Now, you can choose to negotiate further within that framework, of course, but know that anything you achieve within that deal is really just deal optimization and you should get stuck on any one position, because you already have a deal. It’s important to know when to stop grinding and close the deal.
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