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 Negotiation Hazards

Negotiation is a complex topic fraught with potential pitfalls. And as you're no doubt aware, most of the pitfalls come from what you're trying so hard to avoid: confrontation. That's why it's important to be fully aware of the hazards that can arise when conducting a negotiation. If you can avoid them, your negotiations will go much smoother and you'll often end up with better terms in the end.

This post will walk through ten particularly common negotiation hazards, and how to steer clear of them successfully.

Hazard #1: The Worst Offer in the World

It's common knowledge that you should never start a negotiation by making your "opening offer". But many people misunderstand why this is so important. To understand why you don't want to make an opening offer, consider the scenario where your negotiation partner makes their opening offer, expecting some kind of counter-offer or at least some kind of reaction. You can see how awkward things could get if you don't have a strategy to avoid this type of situation.

To avoid this, take the time to think about the worst offer in the world you would be willing to accept. Then, when you make your first offer, you have an anchor point that's less than the worst scenario in your head. By offering a counter-offer "above" this anchor point, your negotiation partner will still feel some sense of victory – they got more out of you than they were expecting, and chances are they won't even realize what happened.

Hazard #2: A Counter-Offer Is Actually An "Opt-Out" Offer

In many negotiations, the goal is to get your counterpart to accept a specific proposed offer. But what's often forgotten is that sometimes, even if one person has made an initial offer, it doesn't mean the other side will automatically accept it. It could just be a negotiation tactic – playing hardball and trying to get your counterpart to weaken their stance.

But this tactic often works too well, and the counterpart has effectively "opted out" of the negotiation by rejecting your initial offer. At that point, it's difficult to get them to come back to the table, because they feel like you've already made your best offer. So if that's what they think is on the table, then why bother negotiating further?

To avoid this scenario, it's important to prevent an "opt out" counter-offer when you are making an initial offer. After you've made your opening offer, you should immediately enter into the conversation with your counterpart by letting them know that they can accept, reject or amend this initial offer. If they opt out of the negotiation, that's fine. But even though they opted out, they should still have some sense of what a best response might be – something that would be worthy of consideration. Otherwise, they're left wondering why you even bothered making an initial offer in the first place.

Hazard #3: You Rely Too Much On Negotiation Tactics

One of the first things you should do when entering into a negotiation is to make sure your counterpart knows how much value you place on a specific negotiation tactic. For many people, this is difficult because their goal is to be more aggressive than their counterpart – but that doesn't always lead to an outcome where both parties end up better off.

This can be particularly problematic when your counterpart is using tactics to manipulate you into a negotiating situation that's not in your best interest. Or you're spending most of the time on a negotiation tactic because it happens to be fun, but again, not necessarily pursuing a strategy that will actually increase the value of your outcome.

To avoid this hazard, when you begin the negotiation with your counterpart, verbally commit to letting them know how you direct each step of the negotiation process. Make sure they know that you are fully committed to following through on their proposal and that you're not just trying to game the tactics.

Hazard #4: They Want To "Win, But Not At Your Expense"

A common negotiating tactic for both parties is to declare a position as something like "I want to win, but not at your expense". This is often a misrepresentation of the other party's true position. "Winning", sometimes, doesn't necessarily equate to getting the most value from a particular negotiation. It could just mean your counterpart gets something they want, while you get nothing – which is simultaneously not winning and not a good outcome for you.

To avoid this hazard, spend some time talking about why it's important that everybody wins in the negotiation. Define what "winning" means, and make sure it's something that's valuable to both sides. If you do this, it becomes difficult for the other party to misrepresent their position as "I want to win, but not at your expense".

Hazard #5: Unrealistic Expectations Of The Negotiation Process

Negotiations often take longer than people anticipate. Even if everyone enters into a negotiation with the best intentions and good faith, there are still many issues that can arise along the way.

Conclusion: When the other party is ready to accept, you're prepared with a final offer. If they're not ready to accept, you can begin working out the details that still need to be worked out.

You'll know it's time to stop negotiating when the other person says "that's as far as I'm willing to go". At that point, it's important for you to indicate that you are also done negotiating. If they don't say anything at all, then ask them directly if they'd consider the terms of your offer.