The Art of Negotiating ... Everything

By William J. Lynott

As a skilled professional, you may not think of yourself as a negotiator, but Harvard Business School professor Michael Watkins says you are. “Whatever your profession, a good part of your time is spent negotiating.”

He’s right, of course. Whether you’re dealing with prospects, clients, suppliers, your landlord, or employees, you are involved in the process we call negotiation. Developing this important skill can greatly increase the earning power of your practice.

In his book, Breakthrough Business Negotiations (Jossey-Bass, 2002), Watkins teaches his students to break the process down into four steps. Here’s how to put the “breakthrough” approach to work for you.

1. Diagnose the Situation

“The first step in preparing to negotiate from a position of strength is to diagnose the situation thoroughly,” Watkins says. In particular, you need to learn who are the players, what are the rules of the game, what issues are being negotiated, and what is your walkaway or bottom line?

Who are the players? Who will, or could, participate? The key parties to a negotiation may seem obvious, and sometimes they are, but not always. There may be players in the background who can influence the outcome, or new players may enter the discussions and influence the talks.

Also look for existing and potential coalitions, in support of your position or opposed to it. If you’re negotiating terms with a supplier or a new lease with your landlord, for example, the cast will probably consist of just the two of you. However, if you’re negotiating with an organization, you need to know if the person or persons you’re dealing with have the authority to make a deal.

What are the rules of the game? A clear understanding of the “rules of the game” will be a big advantage in your next negotiation. There are basic codes of conduct that apply to all business negotiations. While these rules deal largely with courtesy, diplomacy, and other aspects of behavior on the part of the participants, there are other important factors. These are the rules that vary according to the circumstances. Watkins suggests taking time to consider the following questions before entering into negotiations:

• Which laws and regulations might apply here?

• What social conventions will shape the other party’s behavior?

• Are there professional codes of conduct that apply?

• What other rules of the game may influence the other party’s behavior?

A clear understanding of these rules will help to start you off from a position of strength.

What are the issues that will be, or could be, negotiated?

“It’s easy, but dangerous, to treat the agenda as fixed,” Watkins says. To do so, he feels, risks failing to take action to shape the course of events in ways favorable to your objectives. “The agenda—the set of issues the parties will decide to negotiate—is itself subject to negotiation,” Watkins says. “No matter how simple and obvious the basic issues to be negotiated appear to be, it is worthwhile to probe beneath the surface.”

You should also identify what Watkins calls toxic issues. These are the potentially volatile issues that have a high emotional content. “It may be prudent to defer a toxic issue until the other issues are worked out,” he says.

Define your bottom line. The next step is to define your walkaway position. What is the least you are willing to accept to enter into an agreement? Establishing this value as a benchmark and keeping it clearly in your mind will help you avoid getting so caught up in the heat of negotiations that you turn down an alternative deal that was better than your walkaway position.

Negotiating experts Roger Fisher and William Ury, authors of Getting to Yes (Penguin, 1991) call the walkaway position your Best Alternative to a Negotiated Agreement (BATNA), a planned course of action you can take in case you are unable to reach agreement. Depending on what’s at issue, it could be to go to court, refuse to renew your lease, or change suppliers. Taking time to think through your BATNA will clarify your alternatives and strengthen your negotiating position.      

2. Shaping the Structure

Once you have diagnosed the situation, it’s time for you to shape the structure of the negotiations. “Like most negotiators, people in business focus too much on what will happen at the table and not enough on influencing the context in which deliberations take place. You should pay more attention to who is, or could be, involved, as well as what’s at issue and how the situation should be framed.”

Watkins calls this step “design work.” Following are some key things he feels should be addressed before negotiations begin.

Self-assessment. In past negotiations, have you tended to accept the situations and structures as the other party presented them? If so, you should determine not to fall victim to that pitfall again.

One simple way to shape the game is to invite other players into the negotiation. For example, in negotiating with your landlord for a new lease, you might invite your lawyer or your accountant to join in. You must also take great pains in building, maintaining, and improving your BATNA. Knowledge of your walkaway position will add hidden power to your position.

Setting the agenda. Influencing the makeup of the agenda is a crucial step in successful negotiations. By helping define the issues to be discussed and setting their priorities, you put yourself in a position of strength when the discussions begin. “Good negotiators don’t just play the game, they shape the game,” Watkins says.

Control the information. Knowledge is power. Arguably, there is no other activity where this old axiom is truer than in negotiations. Exerting control over who gets access to what information is another way to gain a position of strength in discussions. In negotiating a new lease with your landlord, for example, you would probably want to share the fact that you have been looking at another location. On the other hand, if you knew of a potential tenant who would like to move into your building, sharing that information would be poor strategy.

3. Managing the Process

The third step in breakthrough negotiations is determining the best way to handle the actual face-to-face negotiations. There are several important steps in this phase:

Sensitivity to early interactions. “How a negotiation begins tinges everything thereafter,” Watkins says. “Initial impressions, based on limited information, persist and are resistant to change.” He stresses that mutual respect at the beginning of the process increases the likelihood of eventual agreement, but bad blood at the beginning of discussions can poison all that follows.

Tipping points. You should keep yourself aware of thresholds in negotiations that Watkins calls tipping points—the sensitive points in negotiations where even tiny concessions or refusals can lead to major shifts in positions. “You should always be aware of your own emotional thresholds and coping mechanisms to avoid being pushed over the edge. Be very careful when raising issues that are hot buttons for the other side.”

Emotions. Emotions play a part in most negotiations. “A timely display of anger, for example, can demonstrate resolve, so long as it is employed infrequently,” Watkins says. Yet, you must keep any display of anger under careful control. Emotional outbursts of any sort can easily escalate, generating emotional conflicts that make rational judgments all but impossible. However you do it, keeping your emotions under control during negotiations will give you an important advantage. As one negotiator puts it, “When you lose your temper, you lose.”

4. Assessing Results

Once negotiations have begun, Watkins suggests stepping back periodically to evaluate how well you’re doing. While it’s natural to do this between negotiating sessions, he says you should also take score in the heat of battle.

Ury calls this “going to the balcony,” or the ability to look at your situation from a distance. “Appraising an ongoing negotiation is partly about whether you’re meeting the goals you set for yourself,” Watkins says. “Clearly identifying your goals while preparing to negotiate is only half the battle; you have to keep those objectives firmly in mind as you go forward.”

Every negotiation is an opportunity to learn. However, learning does not come automatically, simply because you went through a negotiation. “Learning takes place only when you take the time to reflect on your experience,” Watkins says. “When negotiations are over, ask yourself what went well? What could I have done better? What did the other side do well, and what did I learn from them?”    

 William J. Lynott has an extensive background in management consulting, marketing, and finance. He’s written more than 900 articles appearing in a wide range of consumer magazines, trade publications, and newspapers in 17 countries. Contact him at