The Practice of Negotiation and Why It Matters
by Lydia Cheah
Years of following my elders to the food markets and watching them haggle for the absolute lowest price possible left me with the deep impression that negotiation was about fighting to have things my way and giving little consideration to the other party’s situation. This was what I expected as I walked into Samuel Kim’s workshop on The Practice of Negotiation.
Turns out, I have been misinformed all these years on what negotiation really means.
Samuel taught me that in reality, negotiation is about two parties (or more) entering into a dialogue to achieve a mutually beneficial outcome.
“Power and negotiation cannot go together.”
When we wield certain authority or power to exert influence over the other to do our bidding, it is no longer a negotiation. Real negotiation takes place with many uncertainties where neither side has the upper hand. Therefore, it is important to enter a negotiation with a list of next best alternatives to the ideal scenario, and also, a good, if not full, understanding of the other parties’ motives, even before negotiations begin. Our end objectives versus what the other party wants and values are likely to vary. Communication is absolute key if we want to end the discussion on a positive note.
There are many tools in negotiation. Narrating his personal anecdotes as a former public servant in foreign service, Samuel demonstrated the power of logic accompanied by emotions as one means to negotiate. He also shared other psychological human biases in negotiation contexts, such as the anchoring effect (planting a number or idea in the other party’s mind to create discussion around it) and the midpoint bias.
We, the participants, were then given the opportunity to put our newly acquired understanding of the art of negotiation to test. We were split into pairs and given a case simulation where we role-played as either Ryan, an agent representing an emerging boy band, or Billy from a record company, and the end goal was to negotiate for a signing bonus.
I was already relatively confident in my negotiation abilities before, and with the extra boost from what I had just learnt, I felt invincible. I played my role as Billy, a no-nonsense director of the record company and after negotiating, proudly signed on my new associate for a $55,000 bonus, far from the highest number I could have offered ($80,000) and only a little more than what was usually offered to new bands ($50,000).
One can easily imagine how far my jaw dropped when I discovered my partner had expected only $10,000. ‘Billy’ could have easily saved the company $45,000 if I had only asked the right questions. I felt sorely disappointed with my performance; I felt like ‘Billy’ had failed to negotiate for a good deal. However, as Samuel reviewed the case with us, his next words turned my thoughts around instantly.
“Your loss is my loss. Your gain is my gain.”
Samuel had raised his voice ever so slightly with this phrase, and even now, they still ring so clearly in my ears.
Constantly bombarded with warnings and reminders about watching my back in a world filled with deceitfulness, a call to build trust with another person who might possibly be a stranger does not come by often. From this short workshop, I came to realize that negotiation isn’t only all about creating a win-win for both and having constant communication, but also building trust and fostering a good relationship with the people around us. As Samuel put it:
“That is what leadership is fundamentally about – practicing effective negotiation that is in the best interest of everyone.“