Game of Stones: Examining the Foundational Elements of Effective Negotiation
Posted in: PSA Partnership
According to Mark Jankowski, founder of Amplified Learning, effective negotiation requires three things: attitude, tools, and skills.
“You can have any one, or even two of those things, but if you don’t put them all together, you won’t be effective,” he said at a recent PSA Partnership Event, “Game of Stones.”
Where did he first learn this lesson? Ten thousand feet in the air, as he was jumping out of a plane.
He told the story of when he went skydiving with a group of friends. “They taught you five basic things: how to let go of the wing, how to arch your back while you were falling, how to pull the rip cord, how to untangle your lines, and how to land,” he explained. “And they had you practice these things over and over.”
And that practice came in handy when Jankowski’s lines did get tangled. Fortunately, with the right attitude, tools, and skills, he was able to fix the lines and land successfully. Here’s how that lesson applies to successful business negotiation.
According to Jankowski, attitude is a vital element in the negotiation process. To demonstrate his point, he showed a video clip from the TV show Mad Men. In the clip, ad executive Don Draper believed in his value proposition so strongly, he was willing to walk away from a potential deal rather than compromise.
“When I talk about ‘attitude,’ what I really want to talk about is value propositions,” Jankowski explained. “Do you believe enough in what you’re doing and how you’re doing it to sell with confidence?”
If you don’t, it might be time to reexamine your value proposition. Often, Jankowski said, companies don’t communicate their mission and value in a way that appeals to what customers truly care about. For example, Sherwin Williams once explained its value proposition as, “2,000 stores to serve you better.”
But really, it wasn’t the number of stores that delivered value to the customers. Other paint suppliers delivered paint directly to construction sites, which often led to waste — paint would spoil, settle, or get stolen. The true benefit of Sherwin Williams stores is that they serve as inventory centers, where paint can be stored until customers actually need it. Once the company realized that, its value proposition became: “Local inventory centers providing just-in-time delivery to help you manage costs by reducing theft, spoilage, and over-ordering.” That was what spoke to their customers.
Now, apply that lesson to your company. “Write down your value proposition as it currently exists today,” recommended Jankowski. “Evaluate it, and think about if it really captures the essence of what your customers want, as well as that Don Draper-type attitude.”
However, Jankowski warned, attitude isn’t enough on its own. You must also have the right tools.
Jankowski explained that companies often do post-mortems (i.e., analyzing lost opportunities to determine what went wrong), but few do pre-mortems.
“Pretend it’s the day after you lost the deal,” Jankowski explained. “Discuss what caused you to lose the deal.” You can likely foresee the issues that will come your way, whether it’s your prices, products, processes, or people.
Then, Jankowski suggested working through a negotiation planning worksheet, which included the following elements:
- Leverage: Think about what gives you power within the scope of a particular negotiation. Are you the best available solution? That certainly drives power. Are you the incumbent vendor? That gives you leverage because the costs of switching can be high. Is there an internal champion at the company that’s pulling for you? When you start to think through these options, you may discover you have more power than you think.
- Alternatives: Before you enter a negotiation, you should think about the best- and worst-case scenarios. What is your highest goal? What is your walk-away point? And to get to a favorable agreement, what are the things you’d be willing to trade (e.g., would you agree to fewer years in a contract in exchange for a higher price?)?
- Network: Who’s involved in the sale? On average, 5.4 decision makers are involved in complex sales. To prepare for negotiation, you should identify those influencers and determine if they are supporters, blockers, or neutral.
- Frame: What is the negotiation truly about? In the Sherwin Williams example above, the company had to realize it wasn’t about the stores, it was about the inventory. They reframed the challenge. “When you change the frame, you change the game,” Jankowski said.
Working through these exercises will help you see the complete picture of the negotiation before it even happens — setting you up for a better chance at success. Of course, when you come to the actual negotiation, you’ll also need the skills to close the deal.
“You can have the confidence, you can have the preparation, but if you don’t have the skills, you won’t be effective when you get in there,” said Jankowski.
In particular, Jankowski recommends you learn how to ask effective questions. “The best negotiators are genuinely curious,” he said. “You should be asking, ‘What is important to you?’ But don’t stop there — then ask ‘What else is important to you? What else? What else?’ You want to get everything on the table before you begin negotiating, so you can tailor your offer accordingly.”
Another effective tactic is answering a question with a question. “When someone asks a question, they have a thought behind that question,” Jankowski explained. He gave an example: Once, he was negotiating with a potential client and he was asked, “What other gas companies do you work with?”
Rather than immediately providing an answer, Jankowski asked, “Why is that important to you?” It turned out, the client wasn’t looking for someone who worked for his competition; he wanted to make sure that Jankowski would only dedicate his expertise to his gas company. That response influenced the way Jankowski answered the question and ultimately helped him land the deal.
With attitude, tools, and skills, you’ll be able to expertly handle any negotiation. Learn more about Jankowski and negotiation training at Amplified Learning. Also, make sure to attend our next PSA Partnership event, “Survive an Active Shooting,” on September 26.