How to Turn Information into Power
In today's fast-paced business world, negotiations are a common occurrence. Whether it's a corporate merger, a salary negotiation or a real estate deal, having access to the right information can make all the difference in securing a successful outcome. As Sir Francis Bacon once said: Information is Power.
That's why obtaining information is a critical aspect of any negotiation process.
Gathering information enables you to understand your negotiation context and the other party's interests. With this knowledge, you can make informed decisions, craft effective negotiation strategies and ultimately achieve better results. Let's take a closer look at the value and benefits of obtaining information in negotiations.
First and foremost, obtaining information improves your understanding of the situation. By gaining insight into the other party's needs, goals and priorities, you can better anticipate their negotiation strategies and respond accordingly. This helps you to stay one step ahead of the counterparty and avoid any surprises during the negotiation process.
Next, having access to information enhances your negotiating power. Armed with information, you have the ability to negotiate from a position of strength, which can result in better terms or more favorable outcomes. This is especially important when dealing with larger or more established organizations, where information asymmetry can put you at a disadvantage.
Obtaining information also improves problem-solving skills. By identifying potential roadblocks or challenges, you can find creative solutions to overcome any obstacles that may arise. This helps you to maintain a clear and focused approach, and avoid getting bogged down by minor details during the negotiation process.
A great example of information leverage was used by French entrepreneur Michel Ohayon. With an estimated net worth of 350 million, he was trying to buy the mythical hotel called Grand Hotel de Bordeaux. He was however competing with another real estate billionaire: Clement Fayat who was worth significantly more (+-1,69 Billion). Michel Ohayon felt he had little leverage, until he read Clement Fayat’s biography, which stated that Clement Fayat always backed down from real estate investments if he was in competition with institutional investors. Michel Ohayan took this to heart and got his lawyer to make it look as if he was being backed by an institutional investor. The result: Clement Fayat withdrew back from the bidding and Michel Ohayon now owns the most prestigious 5-star hotel of Bordeaux.
Information is also key to better risk management. By gaining a deeper understanding of the other party's interests and motivations, you can better assess the risks associated with any potential agreements and make informed decisions about how to proceed. This helps you to avoid any potential pitfalls, and increase the likelihood of a successful outcome.
So how do you obtain information? There are many ways, consider the following:
- Prepare and ask relevant questions (that are open ended): Prepare a list of relevant questions to ask during the negotiation process, such as the other party's priorities, their decision-making process, and their goals for the negotiation.
- Research the other party: Gather information about the other party's business, goals, and priorities, as well as their past negotiation styles and strategies. This can be done through various sources such as the company's website, business reports, media coverage, predecessors and well, a biography, if your counterparty has ever written one.
- Network with industry experts and insiders: Connect with individuals who have experience in the same industry or field as the other party. This can provide valuable insights into their business practices, bargaining style, and key priorities.
- Use third-party sources: Utilize third-party sources such as market research reports, industry publications, and online forums to gather information about the industry, market trends, and key players.
- Observe the other party's behavior: Observing the other party's behavior, body language, and communication style can provide valuable information about their motivations, interests, and potential roadblocks in the negotiation process.
Information and acquiring it is an essential aspect of any successful negotiation. By gathering the right information, you can enhance your bargaining power, improve your problem-solving skills, and achieve better outcomes in any negotiation situation. So, the next time you find yourself in a negotiation, take the time to gather information, and reap the rewards of a more successful outcome.