April 3rd, 2017

The Importance of Relationships in Negotiation

Before beginning or even entertaining a negotiation, thought should be given to understanding the other party, a social media search, building a relationship, listening to the other party and educating the other party. These are all elements that are needed before beginning the actual process of negotiating to enhance the chances of success.

I have been asked to be a speaker twice at the Harvard Club of Boston. In each instance I addressed issues related to negotiations and working with the IRS. Whether working with the IRS or with others related to a negotiation the same rules apply.

There are those that are oriented towards an emphasis on promoting friction and an emphasis towards litigation. Sometimes litigation is the way to go, but realizing for example that less than 3% of all audits by the IRS end up in court, some 97% were negotiated to a successful solution along the way. I am of the school that recommends trying to resolve the issue at the lowest level possible, whether that is with the IRS or whoever is the other party.

At one point in my career I was an expert witness and I managed a group of up to 21 other experts with up 10 to 12 cases docketed for court at any given time. I understand demonizing the other side, promoting our position and going for the kill to win the case. That was then. I can easily still go there, and my animal instincts may initially call me to go that direction. However, I think I have found a much better way for my clients and for me. I think the way to proceed is to try and really understand where the other side is coming from and work with the other side to resolve the issue. You have to discover interests.

Having worked business issues with differences up to $1 Billion to community issues for example in public housing or police community issues as a volunteer, I know this can and does work. However, it doesn’t just happen. It takes planning and forethought to minimize negative influences and maximize positive influences to the negotiation.

I see the virtues of working with the parties related to dispute resolution. This can be as a disclosure witness, a member of the negotiation team or as a true neutral as a mediator. Regardless, I find there are four keys to a successful negotiation. These are:

  • Relationship building,
  • Active listening,
  • Educating the other party constructively,
  • Negotiation by focusing on interests.

These were the key points of my presentations to the Harvard Club of Boston and to other associations, organizations and firms I have spoken to internationally.

Find out who is on the other negotiating team. Do some research on social media including Facebook and LinkedIn. Check out their web page and learn as much about each of the other team members as possible. Learn all you can about them from other sources on line too.

Call the other party ahead of time and learn all you can on that initial call. Knowing something about their background on social media, their web site and other sources, expand on your knowledge and ask them where they grew up, where they went to school, what do they like to do for fun, are they married or single, do they have any children, do they have any pets, are they a morning or afternoon person, do they drink coffee and if so do they have any preferences?

This is all a way of gaining insights and intelligence about the other party prior to the meeting so that you can expand on relationships during the meeting. Knowing what you have learned you might plan for a potential one hour meeting, by actually scheduling it for two hours so that you can build on what you know to develop the relationship for possibly a half hour or so at the start of the meeting. Don’t underestimate building on the relationship regarding expansions on small talk during a walk down the hall for a rest room break or similarly during a working lunch break should that be appropriate for a longer meeting.

We know from neuroscience that we are hard wired to look for food, shelter and sex.  You can do more research on this on your own. I have, and I have worked with and stay attuned to the work of neuroscientists that have reaffirmed this with me. How can this be helpful? Address all three of these areas related to relationship building. Some foods make our brains more receptive towards listening. Why not capitalize on this knowledge.

  • Have antioxidants such as blue berries, cut up fruit, celery sticks, carrots and dark chocolate with water and their favorite type of coffee if they have one.
  • Have a pleasant, quiet, professional and yet friendly meeting location.
  • Have a good looking person of the opposite sex to the decision maker as part of your team.

All three of these techniques will help with the relationship building and through the process of listening, educating and negotiating.

When the parties come together have informal conversation and ensure the mood and ambiance are appropriate regarding all three of the items listed above if possible. Leave time for small talk. Make sure you take some of the food and drink even if the other party does not. Simply smelling the dark chocolate, coffee if they are coffee drinkers, and dark chocolate can help. As the meeting progresses, be sure and offer these again to the participants. If they partake this is a good sign. If they don’t that is not necessarily a bad sign. Your hospitality and openness to share and be friendly can certainly help.

As an additional resource I would like share this article by the Harvard Law School Program on Negotiation written by Jeswald Salacuse, where he stresses that even a few moments of “small” talk can go a long way related to a negotiation. The research from others as documented in the article verifies this. I would like to request that you read it (It is a very good article).

The purpose of this commentary was to share a great article with you and then offer you some specific ideas related to relationship building. It does not always work, but it works often enough and well enough most of the time, that you should consider these types of ideas in your negotiations going forward.

Michael Gregory, ASA, CVA, MBA is an international speaker, that helps organization overcome conflict and enhance effectiveness. Mike is dedicated to making individuals, organizations, thought-leading entrepreneurs and executives more successful. Michael’s books, including The Servant Manager, How to Work with the IRS, Second Edition and his most recent book, now also available as an eBook, Peaceful Resolutions are available at this link.  On point resources are available online at www.mikegreg.com and check out the blog. Contact Mike directly at mg@mikegreg.com or call (651) 633-5311. 

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