As the new year unfolds, it signals a time for new beginnings. Organizations have been busy the previous quarter outlining their strategies and objectives. Now, these objectives are being turned into individual targets and objectives. For those in commercial roles it is important to reflect and prepare for the challenges and opportunities ahead.
January presents an ideal time to establish and refine your negotiation approach for the upcoming year. Here are the key actions to undertake at the start of the year to enhance your negotiation effectiveness:
Review Past Performance
Examine the negotiations from the previous year. Identify where you had success and where you didn’t. Consider both your successes and challenges to comprehend the fundamental reasons behind them.
Prepare a Negotiation Calendar Map out the next 12 months. Which contracts need renegotiation? When are new agreements anticipated, and with whom? Ideally, start preparations six months ahead for strategic deals and 1-3 months for tactical ones. Set reminders for timely preparation.
Identify and develop stakeholders
Understand that negotiations involve people. Create a stakeholder matrix to recognize decision-makers and influencers on the other side. Find out your access to these individuals and, if lacking, begin establishing connections.
Research Counterparty Context
Information is power, public companies disclose their annual results in the first quarter. Investigate how your key counterparties are performing to anticipate potential demands and behaviors, and identify opportunities where you can help the counterparty with their challenges.
Align with Organizational Objectives Understand your organization's objectives, such as improving margins, increasing revenue, reducing costs, or enhancing operations. Translate these into specific negotiation goals for each counterparty. Consider creative approaches to meet these objectives, like negotiating for a price increase or cost reduction for improved margins.
Start Preconditioning Recognize that every interaction with a counterparty is an opportunity to begin shaping and influencing the negotiation. Each encounter allows you to influence their perspective. Craft a strategic preconditioning message and proactively communicate it to your counterparty, thereby setting the stage for a more favorable negotiation outcome.
Enhance negotiation skills Recognize that negotiation abilities can be cultivated. Allocate consistent time in your schedule for skill enhancement through activities such as reading relevant literature, training, engaging in practice sessions (including AI simulations), self-reflection, role-playing scenarios, and meticulous preparation for upcoming negotiations.
Obtain a Negotiation Mentor One of the significant risks in negotiation is the influence of personal biases. Engaging a negotiation mentor can help mitigate these biases and elevate your negotiation capabilities. Consider seeking guidance from a qualified individual within your organization or hiring a professional external coach.
Pinpoint Key Negotiation Behaviors to Improve Essential negotiation skills include active listening, thorough preparation, emotional control, non-verbal communication, and effective use of language. Determine which of these you wish to enhance over the next six months. Set regular reminders to focus on and practice this skill until you notice substantial improvement.
Every individual engages in negotiation, whether with friends, family, internal or external stakeholders. Investing in your negotiation skills yields substantial benefits. Begin the year on a positive note by implementing these tips and suggestions.