Ep # 10: The art of better negotiation.

Hello! and welcome back to yet another episode of my podcast. Today's episode talks about the top three mistakes we make when negotiating a deal with an employer, i.e., a job offer, or negotiating with a vendor or partner. Apart from this, I'll also talk about one most important aspects of striking the best deal possible in terms of negotiation. I guarantee that by the end of this episode, you will be much better at negotiating a deal and understanding various dimensions of negotiation.

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Transcript

 Hello, and welcome back to yet another episode of my podcast. Our this week's topic is negotiation, but before we move ahead, you know the drill. It's time to have a word with me. Rajive Dhavan, see you on the other side of this intro music.

Negotiation is an art that most people don't really analyze or study. It's a life skill. Every person uses negotiation, even in the most basic scenarios of life. So it's evident how important negotiation is for each one of us. We can look at the smallest of episodes where we are talking to somebody who's house help.

We are talking to our children. We are talking to a vendor. We are talking to so many people around us, and we are negotiating something or the other on a day-to-day basis. So you know how important it is. But do we know how we can negotiate the best possible deal every single time? I bet you do. But let me give you some heads up on this.

In this podcast, we'll talk about three big mistakes we make when negotiating. Apart from this, we will also look at certain ways to improve various aspects of our negotiation. So let's begin with the definition. What does the dictionary read? Negotiations involve two or more parties who come together to reach some end goal through compromise or resolution that is agreeable to all those involved.

One party will put its position forward while the other will accept the conditions presented or counter with its own position. Now that is the dictionary meaning of the word negotiation. But there's life beyond dictionaries as well, isn't it? So let's jump in to see what these three big mistakes are. The first one only looks at money as an important aspect of negotiation.

Two, not understanding leverage, and. Or misusing it. Three, get emotions to drive your negotiation. So let's look at the first one, which is money being the only objective or saving money being the only objective behind every negotiation that you do. What happens when you do this? Most of us negotiate in our day-to-day lives with vendors, partners, et cetera, and almost always, we think getting a good deal from a money standpoint is the best negotiation technique.

Unfortunately, that's not true. There's an intangible value that every deal brings along, and this value is way beyond. In most cases, it's also way greater than money. You can always make money at a later date. You can make up for lost money as well. But this intangible value in a lot of scenarios can be priceless.

So not focusing on the intangible value and limit your thought process only to make sure that you save yourself. It is not a great negotiation tactic. Picture this; you've applied for a job, the salary's great, and you are being paid what you'd asked for. You feel you're winning, and then one fine day, you don't receive your salary, and that's because you didn't care to understand.

Whether the company was in a financially sound position or not, the great money you dreamt off remains unpaid. So on paper, you've negotiated a great deal, but that's great only in terms of money. But the intangible value of joining a company that's financially sound is something you missed analyzing Complet.

And in the process, you ended up in a badly negotiated deal, so if you had looked at other aspects of this deal, you would've saved yourself a ton of trauma. Let's look at another example this time around. You are a client who's looking for a service provider, and you spoke with multiple companies, as usual, before you finally decided to negotiate a supposedly good deal with one of the service providers.

You managed to get them at a great price and saved a lot of. But what you don't realize is that the service provider will eat into your time instead of freeing you up off your time and giving you unmatched convenience. They will make things tough for you, and because you also over-negotiate the deal, the service provider doesn't give their best shot either.

Hence, you just made the worst possible. In reality. So I'm sure these two examples will give you enough understanding of why money should not be the only focus when you're negotiating any deal, whether it's a big vendor, a job, a client, or even somebody who's working at your place, a house help. The second mistake that most of us make is not understanding leverage, or sometimes we understand the leverage, but we misuse it.

So negotiation is where two parties are discussing a subject where they want to come to a common ground. There is a poll in the centre, and each party keeps giving supporting statements to make sure that the pole is moved to their side. In negotiation, leverage is the power that one side has to influence the other side to move closer to their pole.

A party's leverage is based on its ability to award benefits or impose costs on the other side. That's roughly what the dictionary says in terms of leverage. Leverage is an important aspect of negotiation. However, a lot of people also bluff their leverage. Sometimes they don't have anything to support the leverage.

Perceive or make the other party perceive that they have. In this scenario, what happens is sometimes people get an unfair, one-sided advantage. And then begins the loop to not just explore but exploit relationships and associations and negotiate cutthroat deals that will only be beneficial to one party and might end up squeezing in the other party big time.

This is never a win-win situation. It's always a one-sided approach, and this is not great for any deal because the steam will soon run. The moment the other person understands or realizes that he's into a deal that is not at all beneficial to them and he's gotten an opportunity to move ahead and look for something else, which is even slightly better, they will just follow.

So overusing your leverage or the bluff of your leverage might make you believe or feel that you're. Immediately, but in the long run, you will always lose. The third point is getting emotional about the deal or getting emotional about the negotiation that we are making. They say that the best businessmen or the best negotiators are the ones who can keep their emotions at bay.

But it's easier said than done. We can't always just look at data and statistics and numbers and come to a conclusion about a deal. There's always a bias. There's always an emotion that drives some aspect of every negotiation or every deal. For example, we are generally. Okay. For other people to get some advantage in every negotiation or every deal when we typically like that person.

And on the other hand, when we dislike that person, we are less willing to compromise or sacrifice in any kind of negotiation or deal. So emotions will always be there. The only thing we can do, however, is cut down on these emotions, try to keep them at bay and look at things in a more logical fashion.

So those are the three big mistakes we make when we negotiate a deal. Now, what are the good things? What is it that we can do instead? One of the most important things is to make sure that whenever we are negotiating, at least on a perception basis, it's always a win-win scenario. The person on the other side also feels equally a winner, if not more.

These are the kind of deals and negotiations that will last the test of time. These are the kind of deals and negotiations that will always give you an unmatched advantage for the time to come. A one-sided deal will never help you in the long run. I do understand that by design. Some deals tend to be very one-sided.

However, even in this scenario, you can always make an effort to make sure that the other person at least gets a perceived sense of victory. The sense of victory is what will keep the negotiation and the deals alive. What also matters is that the world is a small place, and you might have to come face to face with this person sometime in the future to negotiate yet another.

And that's exactly why. It's always good to give a sense of victory to the other person as well so that you don't burn your bridges for life. So whether it's a job, your career or a business that you're running, Or anything else, if you are completely invested in it, if you're in it for life, then always look at the big picture.

Always look at the long-term scenario and see how you can get the best bang for your buck. But if you're trying to do that at the cost of exploiting somebody on the other side, that's not going to last long for. That's all we have for the week. I hope you liked this analysis. I hope you liked this piece of content, and if you did, please do share.

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