Effective Negotiation Strategies from BYU Business School
Negotiation is an essential skill in business, and it’s something that can be learned and mastered with practice. The Marriott School of Business at Brigham Young University (BYU) is renowned for its expertise in business education, and its faculty members have shared valuable insights on negotiation strategies. Here are five negotiation tips from BYU Business School that can help you become a more effective negotiator:
1. Prepare, Prepare, Prepare
Preparation is key to successful negotiation. Know your worth and the value you bring to the table. This involves researching the market, understanding the other party’s needs and constraints, and setting clear goals for the negotiation. BYU business professor, Jim Stice, emphasizes the importance of preparation in his negotiation classes. He advises students to “know the other side’s walk-away point, and be willing to walk away yourself if the terms aren’t favorable.”
📝 Note: Make a list of your goals, the other party's goals, and potential areas of compromise before entering the negotiation.
2. Focus on Interests, Not Positions
In negotiations, it’s easy to get caught up in defending your position. However, this can lead to impasse and conflict. Instead, focus on understanding the underlying interests and needs of both parties. Ask open-ended questions to uncover the other party’s concerns and priorities. This approach helps to build trust and creates opportunities for creative solutions. BYU business professor, Hal Heaton, recommends using “what” and “how” questions to drill down to the underlying interests.
- What are your top priorities in this negotiation?
- How does this deal impact your business or organization?
3. Use Time to Your Advantage
Time can be a powerful tool in negotiations. Don’t rush to a deal if it’s not in your favor. Use time to create a sense of urgency or to allow the other party to reconsider their position. BYU business professor, Steve Glover, suggests using time to “create a sense of scarcity or to let the other party feel like they’re getting a good deal.”
⏰ Note: Be mindful of cultural differences in the perception of time. In some cultures, time is seen as a scarce resource, while in others, it's viewed as abundant.
4. Employ Anchoring Techniques
Anchoring involves setting a reference point that influences the negotiation. Use anchors to set the tone for the negotiation. This can be a specific number, a precedent, or a industry standard. BYU business professor, Bob Allen, recommends using anchors to “set the table” for the negotiation.
- “We’ve done similar deals in the past for $X. I think this deal should be similar.”
- “Industry standards suggest that this type of deal should be priced at $Y.”
5. Look for Mutual Benefits
Effective negotiation involves finding solutions that benefit both parties. Seek out mutually beneficial agreements that create value for both sides. BYU business professor, Brad Agle, emphasizes the importance of finding “win-win” solutions. He recommends looking for areas where both parties can benefit, such as a creative pricing structure or a partnership that drives growth for both companies.
| Negotiation Tip | Description |
|---|---|
| Prepare, Prepare, Prepare | Know your worth, research the market, and set clear goals for the negotiation. |
| Focus on Interests, Not Positions | Understand the underlying interests and needs of both parties to build trust and create opportunities for creative solutions. |
| Use Time to Your Advantage | Don't rush to a deal if it's not in your favor. Use time to create a sense of urgency or to allow the other party to reconsider their position. |
| Employ Anchoring Techniques | Use anchors to set the tone for the negotiation and influence the other party's perception of value. |
| Look for Mutual Benefits | Seek out mutually beneficial agreements that create value for both sides. |
In conclusion, negotiation is a critical skill for business success. By following these five negotiation tips from BYU Business School, you can become a more effective negotiator and achieve better outcomes in your business dealings. Remember to prepare thoroughly, focus on interests, use time to your advantage, employ anchoring techniques, and seek out mutual benefits.
