Consider this scenario: You are at a job interview. The interviewers like you. You want to work at the company. The office is close to your home. There is a great taco place right next to the building. Everything fits like a neat jigsaw puzzle! But then comes the most dreaded part of the interview: the salary negotiations.
If you aren’t already a genius negotiator, negotiation scenarios like this probably scare you (or at least make you uncomfortable). The problem is that living in a society means you will often be in a position where you will need something from someone and someone will need something from you. The good news is that fear comes from a lack of knowledge, so knowing a few basic principles of negotiations can help you navigate these situations confidently. So whether you’re buying a house, looking for a job, or even trying to decide who gets the last slice of pizza, these rules can be handy for making a better deal.
- Know Your Goals
What do you want? A job? That sounds fair. What do you want? Financial independence? Do you wish for challenging work? Or maybe you want to do some good for the world. The biggest mistake we make is not knowing what it is we want. This can often lead to us being side-tracked by trivial details and can lead to an unfavorable outcome. It is always best to take the time and write down your goals before entering a negotiation which will help you stay grounded and in tune with your desires, whether you desire a cheaper car or world peace.
It seems obvious but that doesn’t make it any less essential. Not knowing the industry rates for a job, not knowing what the other side wants/needs, not knowing the workplace culture of an industry can all lead to disastrous consequences. An imbalance of information is an imbalance of power. So it always helps to do your research and come prepared!
3. Be Aware Of the Anchor
The anchoring bias is a nefarious way of thinking we are prone to. In the context of a negotiation, what this means is that once a person makes the first offer, all the subsequent offers will be anchored to that first offer, even if the first offer is outrageous! Our brain will accept that first offer as an anchor and use it to make counters. Consequently, we may end up further away from our goal than we had planned! A great way to deal with an outrageous anchor is to reject it outright instead of making a counteroffer. Make it known that this offer is unacceptable and be aware of this while analyzing any future offers.
- Remember Your ‘BATNA’ Always
Be aware of your “Best Alternative to a Negotiated Agreement” (BATNA) or the best outcome you can expect if you fail to reach an agreement. Your BATNA will tell you when to walk away from an offer so that you know that the settlement you have arrived at isn’t a worse outcome than if you hadn’t negotiated at all.
- Be Ready to Compromise
Finally, the last thing is relatively simple. One of the hardest things to do is to let go of something you want. To do this we must let go of a pesky three-letter word called ‘Ego.’ In a negotiation, you have to be aware that you probably will need to give something up. This means knowing what you’re flexible about and what are your deal-breakers. Do not become a pushover but you have to know when it’s your turn to meet them halfway. Otherwise, you might end up missing the woods for the trees.
The best way to think of negotiation is to not think of it in terms of winners and losers. That makes it harder to reach a common ground. Negotiation is an act of collaboration. Parties are there to reconcile their interests with others in a way that ensures success for everyone involved. That may not be possible all the time but it is a worthy goal to have. So what are you waiting for? Go make them an offer they can’t refuse!