Getting What You Want At The Bargaining Table: Three Tips on Setting Goals
Jeanette Nyden, J.D.
Editor’s note: Jeanette Nyden is a frequent contributor to this blog
When is the last time that you sat down to think about your goals for an upcoming negotiation? If you are like many others, you have not considered this question beyond thinking about price. There is much more to setting negotiation goals than hitting a certain price point.
By setting a goal, you are creating your roadmap for success. Studies show that negotiators who take time to set a goal not only reach that goal, they are more financially successful than those who don’t set goals.
When setting goals, consider these three elements
- Specific — A specific goal is one that has a defined outcome or objective. You should know exactly what you want and need from the other party, and you should know exactly what you are going to tradeoff–or exchange–to reach your goals.
Some of my clients struggle to set goals. Some set goals that are too detailed, while others are too vague. Negotiators have to strike just the right balance. For example, when I work with clients I ask them to define not only price but also total cost of ownership. By looking at both sides of the equation, you will have a much more specific financial goal.
2. Objectively justifiable — An objectively justifiable goal is one that appears reasonable to those knowledgeable about the issue. It can also be supported by third party facts and figures.
For example, a client was about to negotiate a facilities management contract. An objectively justifiable goal would include market research about the market rates for various aspects of the contract. I see too many people base their pricing on internal budget mandates and inaccurate market data. That’s no way to establish a goal.
3. Related to your interests — Your interests are the positive, motivating factors for your being at the bargaining table. Your goal must get you closer to those motivating factors. While this appears obvious, I’ve seen really good people get pulled way off track when they lose focus on their motivations.
When setting a goal that includes a mandate to reduce total spend for a specific purchase, also consider the other interests your company might have. For example, you might also consider past performance issues or a new internal initiative.
The client mentioned above wanted to reduce spend and roll out “green” program at the same time. My client’s goal included reducing overall spend and a significant investment by the service provider in their sustainability program. If you were to lose sight of one of these interests, you would have either an expensive green contract, or a cost effective traditional contract.
At the end of the day, you need to have a specific, objectively justifiable goal that is related to all of your interests. Your goal creates a picture which acts like a guiding light. These three elements will help you stay on course.