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As a new member of the BBG and also new resident in Dubai (following 20 years in Hong Kong), I am looking forward to sharing some insights on one of my favourite subjects; How to generate Negotiation Power.

For any reader who is an SME or sole proprietor, the chances are that like me, you are the ‘small potato in the room’ when negotiating with your clients. For the larger players reading this, you will still often find yourself in a position where you feel that your counterpart holds most of the cards and that you give away too much value. The concept of generating negotiation power and rebalancing the odds is therefore very relevant for most of us.

In this first article, I shall introduce negotiation formats; what they are and why it’s worth being able to consciously identify them.

There are five main formats in negotiation. At one extreme we have the hard negotiator who tries to use their power or position to bully people into submission. I am sure you have all experienced this approach; “if you want to deal with me these are the terms. Take it or leave it!”. At the other end of the theoretical extreme is the soft negotiator who wants agreement and peace and is ready to give in to most demands in order to achive this. Soft negotiators often operate under the illusion of ‘saving the relationship’ when in reality, if you have to constantly give concessions, the relationship probably isn’t worth saving.

However, most of us resort to what I term the default form of negotiation; positional bargaining. As the name suggests, this is where we take a series of steps and end up somewhere in the middle plus or minus 20% depending on who’s argued their position best.

So positional bargaining is about taking a series of positions and then giving a little so that you end up with agreement. It seems like a good way to negotiate because each party focus on what they’ve won, justify what they gave up, and accept the compromise.

The problem is that negotiation isn’t about compromise. If we have to compromise it probably means we’ve missed a big picture and left value on the table. So one of the first steps in generating negotiation power is during the preparation stage which we will talk about in the next article. We need to avoid being ready to compromise and not negotiate purely around positions. This takes us to Principled or Collaborative Negotiation, which we shall discuss in a later article.

In summary, there are no right or wrong negotiation styles and in fact, there are situations where each could be appropriate. However, recognising which style you are facing and how to respond to it is an important negotiation skill.

For those whio would like to know the fifth negotiation format, email me at [email protected] or connect with me on LinkedIn at www.linkedin.com/in/neilorvay.