QUOTE: “The foundation for success in negotiating is the planning that

takes place prior to the actual interaction process”

- As said in the quote, in order for the negotiation to be successful, we must
consider planning its steps before the negotiation starts, and heuristically think
about of what are the movements/objectives that should be with in order for a
deal to be a win-win scenario

Experts on negotiation generally agree that planning is perhaps

the single most important part of the negotiation process.
Unfortunately, many negotiators fail to prepare properly
before entering into a formal negotiation. A plan is a method or
scheme de-vised for making or doing something to achieve a
desired end.
- Negotiation planning involves a series of steps that prepare the parties for a
forthcoming negotiation. Many buyer-supplier negotiations are relatively
straightforward and may require only basic preparation and planning. Other
negotiations may be highly complex and require months of thorough and
detailed preparation. Regardless, supply managers who take the time necessary
to plan and prepare for a negotiation will usually experience better outcomes
than those negotiators who do not adequately plan and prepare. Planning is so
crucial to achieving desired negotiation outcomes that a later section addresses
this topic in greater detail.

STEP 1: READY YOURSELF FOR NEGOTIATION

1.Develop Specific Objectives

The first step of the negotiation planning process involves developing specific goals
and objectives desired from the negotiation. An objective is an aspiration or vision to
work toward in the future. For example, an obvious objective in a sourcing negotiation
would be to reach an agreement that covers the purchase of a good or service. Neither
a buyer nor a seller would commit scarce resources if the goal were to see a negotiation
fail. Before actual negotiations begin, the parties need to believe they can reach an agreement.
If the parties believed otherwise, they would not put forth the requisite time and
effort to prepare for and conduct a successful negotiation.
2. Rehearse with your entire team.
In movies and TV shows, a high-stakes negotiation always revolves around one pivotal moment.
One side throws out a question or introduces a new point that changes everything.
Generally speaking, that’s not how negotiations in the business world work.
But there is a way to head off surprises at the table. Instead of thinking only about what points
you’re going to make, get your team together ahead of time and do some role-playing.
Have team members throw out objections and difficult questions. Don’t let them go easy on
you. Make it as real and as challenging as possible.
Practicing different scenarios ensures you and your team are calm under pressure and capable
of thinking on your feet. And these practice sessions are always fun and memorable.
3. Make sure everyone knows their role.
When going into a negotiation with multiple individuals on either side — analysts, lawyers, lead
negotiators — it pays to have everyone understand their position.
For instance, some people may not speak at all. They may just sit and observe the other side,
taking notes on their body language, speech, and reactions.
When you role-play and rehearse the negotiation, you begin to understand how individuals on
your team respond emotionally or where discipline might break down. It also helps you clarify
who has the authority to make concessions and decisions.
But role-playing requires time and extensive knowledge of the other side. If your team lacks
either of those, you should concentrate on the next two tactics.
4. Hold training sessions.
Maybe you aren’t incredibly familiar with the other side’s interests and goals.
But there’s a very good chance they have negotiated something similar before. Look to the past
and use case studies to gather insight on what the opposition wants and what they may be
willing to give up.
This is easier than ever in the age of smartphones and instant internet access. It’s very simple to
put together audio or video training on a subject. Even listening to a recording while
commuting to work can help you understand some of the most important issues in the
negotiation.
5. Write out a brief.
You can never go wrong by writing down the key issues in a one-page brief.
At minimum, you should write down the issues, the interests of the individual parties, what’s at
stake, and what each party is trying to get.
The process helps clarify your own issues and interests. People often get those two things
confused, and they end up negotiating the issues without really thinking about the interests.
They don’t stop to consider what’s actually important to them in the negotiation, and they wind
up spending too much time and effort on details that don’t really matter.
 STEP 2: EXPLORING EACH OTHERS NEED

1. Analyze Each Party's Strengths and Weaknesses

Knowledgeable negotiators strive to understand their counterparts through research
and experience. This means understanding what is important to the other company
along with understanding the personality and history of the negotiator’s opposite
number. For example, when buyers negotiate with a supplier for the first time, they
must often commit substantial time and energy to additional research in order to more
fully understand that particular supplier and its needs, wants, and priorities.

Analyzing the other party requires a thorough assessment of the relative strengths
and weaknesses of the parties, as well as each individual issue to be negotiated. This
due diligence process can greatly influence the effectiveness of the strategy and tactics
employed at the bargaining table. Buyers cannot assume that they have power or influence
over the supplier or vice versa. Many times, a supplier holds a power position
over the buyer because of its financial size, or perhaps because the supplier does not
have a great need for the contract. A later section details various sources of power
that are part of the negotiation process.

2. Gather Relevant Information

The ability to analyze yourself and your negotiating counterpart requires sufficient, timely, and
accurate information. This process need not be complex, particularly if the buyer and seller
have previously negotiated together. When this is the case, the buyer may have already
answered a number of important questions. What happened between the parties? Were we
satisfied with the previous outcome of the negotiation? Are we negotiating with the same
people or different negotiators? What
are the important issues to this supplier? To us? What were the areas of disagreement? Is there
anything about the rules of the negotiation we would like to change?

Where does a buyer, who has no experience with a supplier, gather the required information?
One possible source may be contacting others who have experience with that supplier.
Published sources of information may also be available. These sources include trade journals,
other business publications, trade association data, government reports, annual reports,
financial evaluations (such as Dun 8r Bradstreet reports), commercial databases, inquiries
directly to personnel at the supplier, and
information derived through the Internet.

3. Recognize Your Counterpart’s Needs

The buyer and seller in a sourcing negotiation are, in many ways, mirror images
of each other. Each side wants to reach an agreement that is favorable to its longer-
term success. As a buyer gathers information about a supplier, it is important to identify those
key issues that are particularly critical to the supplier. For example, a sup-
plier may want to maintain or grow its market share and volume in its industry.
Therefore, receiving the entire purchase contract, rather than only a portion, may be
an important objective to that supplier
 STEP 3: SIGNALING FOR MOVEMENT
Show readiness to move
A signal is a subtle indicator to the other person that you may be willing to negotiate. This is
seldom done openly as this would contradict the opening and argument. Signaling is not
making a verbal statement and effectively saves face, providing an excuse to subsequently
move from your original position (or to backtrack if the other person is not ready to
collaborate).
Qualify statements
Add qualifiers that indicate how you might just be persuaded to do something that you would
not normally do, or that you may agree to something other than what you originally wanted.

I might be persuaded, but I'd have to think first.

I don't normally buy things on the same day.

Indicate possibility
Use words that indicate possibility, opening out the potential for a different future that you
may have painted in your opening statement.

I wonder if there is a way we can agree this?

There may be a way I could stay longer tomorrow.

Use open body language

Open body language sends even more subtle signals of readiness, with indications of welcome
(such as open arms) and relaxed, smiling face.
Body signaling can be enhanced by starting with closed body language and then moving to an
open position at the same time that you use verbal signaling. Use gestures that move in time
with your signals. Match the other person's movements to show empathy.

Wait for their signal

When you have signaled to the other person, the next step is to wait for them to signal in
return.
Watch their non-verbal response to your signal
Watch their face when you signal. Are there signs of hope appearing? Do they seem to have
recognized that you have gone from arguing your case towards moving towards them.
Also watch their body language. When you signal, does their stance change? When you move
from matching their body language to a more open position, do they follow you?
Hear the signals
Listen for their verbal signals. Hear the tone of voice that they use. Is it more relaxed? Are
they using qualifiers and indicating possibility?
Do not concede
If they do not signal, it can be tempting to try something more overt, such as conceding on
something. It can seem that they are blind to signals and if you move to concession, then they
will get this signal and concede in return. But what you have actually done by this is to show
that if you make a move and they do not reciprocate, then you will give something more. This
is simply encouragement for them to wait for more concessions.

Perhaps I could reduce the price a bit.

...
Well, ok then, how about if I knocked 10% off?
...
20%?

Do not reward intransigence with concession. If they do not signal (and maybe they do lack
the subtlety to recognize signals), then first try signaling again. If this does not succeed, be
more explicit: ask whether they are ready to make some trades. If they say no, then you
can probe for reasons why. If they refuse, then you may start to deploy your walk-away.

Move towards concession

When you have got a signal indicating they might also be prepared to negotiate, then there
may be a steady or even more rapid movement towards offering concessions or packaging.
Respond to their signals
When they signal in return (or maybe they signaled first), respond with open body
language and responding with a further encouraging signal. Show that you approve of their
movement by rewarding them with more attention and acceptance.
Frame togetherness
Start to frame the negotiation as a joint problem-solving situation, positioning the subsequent
activity as working together to find an equitable solution.