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Knowing When to Walkaway From a Negotiation
The difficulty is determining the right circumstances to do so
The Weekly Walkaway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Issue No. 48 (5th October 2023)
What to expect?
Quotes of the Week - “Negotiating blindly, without a comprehensive understanding of ‘who’ sits on the other side of the table, is like stumbling around a strange dark room looking for a light switch while desperate for the loo!”
Tactic of the Week - The Walkaway
Thought of the Week - Knowing When to Walkaway From a Negotiation
Remember: You are a negotiator!
You are always managing some form of conflict, a difference of opinion or interest.
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QUOTES OF THE WEEK
“Increase your negotiation power is by improving your walk-away alternative. An attractive BATNA is a strong argument with which to persuade the other side of the need to offer more.”
Roger Fisher, Getting to Yes
“Be ready to walk away. Remember, you only want this deal, you do not need this deal.”
Jim Camp, Start with NO
“Negotiating blindly, without a comprehensive understanding of ‘who’ sits on the other side of the table, is like stumbling around a strange dark room looking for a light switch while desperate for the loo!”
Giles Morgan, Kahvay
TACTIC OF THE WEEK
The Walkaway is a tactic where one party firmly communicates their non-negotiables and readiness to leave the negotiation and reject the deal, if specific terms or demands are not met.
For the tactic to work, to be effective, you will need to deliver it with genuine intent, with precise timing (execute when the other party is invested but not fully committed), and have a well-defined alternative plan (BATNA) in case you are forced to actually Walkaway. You must be credible..
The tactic’s purpose is to create pressure. It shifts the perception of power and encourages ‘them’ to reconsider their position or behaviour, to make ‘them’ move or change. The fear of losing a deal encourages quick decision-making and can lead to concessions.
The Walkaway tactic's strength lies in its ability to reset the balance of power.
If the tactic is being used against you observe whether it has been delivered with ‘genuine intent’!
Was it communicated firmly and confidently or was there pillowing (soft words)?
Are they still sitting there? Make sure their non-verbal communication is connected with their verbal and tone. Often people close their books and say they are leaving but don't move… are they genuinely prepared to exit the negotiation or are they just bluffing?
Do they have a viable BATNA?
THOUGHT OF THE WEEK
Knowing When to Walk Away From a Negotiation
Negotiation is a delicate art, an intricate dance between conflicting interests, positions, values, and goals that demands clarity, confidence and unwavering control.
The ultimate aim is to reach agreement, but there are situations where walking away becomes not just an option, but a necessity.
A deal is better than no deal..?
‘A deal is better than no deal’ is a phrase used often and it is usually correct but walking away must always be an option too.
The difficulty is determining the right circumstances to do so.
This demands a deep, and I mean DEEP, understanding of various factors, including;
The value of the deal, the ZOPA (Zone of Possible Agreement) and whether you can do a deal outside of the ZOPA;
Knowing your counterpart. Who are you negotiating with and / or against? If you don't know who you are negotiating with you are probably being exploited;
Your BATNA (Best Alternative to a Negotiated Agreement). If your BATNA improves your situation then you must be prepared to ‘pull that trigger’. Don't just use it as a threat, you must be prepared to withdraw from your current negotiation and engage your BATNA;
Controlling the process and emotions. If you’ve lost control you will be exploited. Walkaway and re-set;
Yours and your organisation's values and ethics.
Mastering these principles is not just essential; it's the key to successful negotiation. So let's take a closer look at them;
Value of the Deal
The first consideration in any negotiation is analysing the value of the deal.
Both parties come to the table with specific expectations, and when these expectations are not met, the deal may not be worth pursuing.
Sometimes, the perceived value of the agreement diminishes during the course of the negotiation. It is essential to reassess the deal’s worth, constantly.
If the benefits no longer outweigh the costs, walking away will save valuable time, resources and cold hard cash!
This requires a deep appreciation of the ZOPA.
Identifying the ZOPA, the zone where both parties can agree, helps you gauge whether the negotiation has potential.
If yours and / or their expectations far exceed the ZOPA, reaching an agreement might become impossible without an exchange of ‘value’. And this is assuming there is in fact any value that can be exchanged.
Never give away for free! Always get something of equal or greater in return.
If there is no value that can be exchanged to cover your loss then walking away becomes necessary, no sorry, it becomes ESSENTIAL, to avoid financial loss.
Knowing Your Counterpart
Successful negotiation hinges on knowing your counterpart.
Negotiating blindly, without a comprehensive understanding of ‘who’ sits on the other side of the table, is like stumbling around a strange dark room looking for a light switch while desperate for the loo!
Who are you negotiating with?
Are they the decision makers, are they empowered?
What are their motivations and priorities?
Are they employed by the company or are they a 3rd party negotiating on behalf of the company?
You negotiate with people not organisations! So knowledge of the people is vital information.
Ignorance is not just a lack of knowledge; it's a perilous abyss.
If the identity and intentions of your counterpart remain veiled, the wise choice is to walkaway. If in doubt both feet out!
Negotiation is not a blind leap; it's a calculated approach with actions and counteractions based on information.
Without the knowledge of who you are negotiating with (Western Negotiation) or against (Eastern Negotiation), you risk stumbling blindly around that room, not finding the light switch and embarrassing yourself on the floor!
Consider your negotiation compass.
You might have a five year relationship with a company and with a counterpart. You might have solved problems together and grown because of a mutual (Western Negotiator) relationship.
Then a new Chief Procurement Officer joins seeking cost savings and enforces the RFQ / RFP process and uses an outside Procurement Consultancy.
If you continue to negotiate with an expectation of the Western Negotiator but are facing The Eastern Negotiator you will be exploited.
If you find yourself facing an unknown counterpart it is a strong indicator that walking away might be the most prudent course of action.
FACT: Engaging in negotiations without adequate information leads to unfavourable outcomes.
Take a step back. Gather more intelligence about your counterpart. And then re-engage.
Simples, it’s strategically the right move.
Understanding your BATNA is critical to your ability to walkaway. And understanding theirs is just as important.
Your BATNA represents the best alternative you have if the current negotiation fails. If the offer on the table falls below your BATNA, walking away is the logical and rational choice.
No BATNA? You are at risk!
It is essential that you develop and foster your BATNA’s to enable you to walkaway when the circumstances present themselves.
Walking away from a deal to form an agreement elsewhere doesn't mean the current negotiation is ‘dead’. You might return to ‘this’ negotiation months, years, later but now more empowered. You walked away..
If the value of the deal or if other circumstances discussed here make walking away the most appropriate course of action then you must walkaway and you therefore must have a BATNA to walkaway to.
Controlling the Process and Emotions
Negotiation is not just an external process; it’s an internal battle of emotions and impulses. The ability to maintain control over yourself is the mark of a true master.
Your control in negotiation is fragile, easily disrupted by unforeseen circumstances, emotional turbulence, or even manipulative tactics employed by ‘them’.
Once control starts slipping away, the negotiation process can quickly spiral into chaos, leading to irrational decisions and unfavourable agreements.
Recognizing this tipping point is crucial; it’s a signal that the negotiation dynamics have shifted unfavourably.
Emotions will run high in negotiations, and letting them take the wheel can lead to rash decisions and unfavourable results. When you allow them to control the process you risk losing control of not just the negotiation, your plan, but also your emotions.
In your head you have;
Lucy, The Chimp, which is all emotion;
Yourself, The Human, which is rational and logical thought;
and The Computer… the data and the action. (Thank you Professor Steve Peters, Chimp Management)
Therefore, it's imperative to be in control of your emotions, your actions, and the negotiation process itself.
Control the process and you will control your Lucy. If you remember, Lucy is a terrible negotiator! Don't let her near The Computer! She will make you do things and say things you will regret. You will lose control of the process.
The Master Negotiator is The Human controlling The Computer.
If you ever find yourself losing control, and Lucy is taking over, whether it's due to the process, frustration, anger, impatience, fear, or even loathing…. consider it a warning sign. Walking away in such instances is an act of self-preservation.
It allows you to regain control of The Computer, refocus your strategy, get back to your plan and ensure that the negotiation process remains on track.
And another thing - COMPETITION
In negotiation your competitive need to win, your ego, vanity and pride can cloud your judgement, blurring the perception of a deal's true value.
There are many games people play to exploit this human weakness.
The allure of competitive negotiation often succumbs to ego's seductive whispers…
In such cases, when you are being exploited, manipulated, the most appropriate action for you is to walkaway. To re-set, regain control of yourself and plan to re-start the negotiation when you are more in control.
If the fog of ego, vanity or pride shrouds the deal’s true worth, walking away becomes not just a choice but a necessity.
If you want to win… someone will exploit you for it!
Walking away, in this context, isn't a sign of weakness but rather a sign of wisdom;
Emotions, when unchecked, lead to hasty decisions, regrettable concessions, and shattered deals.
If you find your emotions spiralling out of control, if Lucy has taken over, the most prudent action for you to take is to walkaway.
A strategic withdrawal, not a retreat.
Values, Principles and Ethics
Negotiations often involve compromise, but you must have limits, dictated by yours and your companies values.
When the proposed agreement contradicts your fundamental values, walking away preserves yours and your companies integrity.
Sacrificing your core values for short-term gains will lead to regrettable outcomes and damaged relationships.
Upholding your principles in negotiations fosters long-term relationships built on trust and respect.
Consider negotiating the principles of your relationship up front and then you have an agreed set of values you can use to control them with.
Negotiating ethically is not just a moral imperative; it’s also a practical one.
Unethical tactics might secure you a deal in the short term but can lead to legal consequences, damaged reputations, and severed partnerships in the long run.
Its just not worth it!
We, Human Capital Negotiators, negotiate in a perpetual way.. You will meet them again!
When negotiations veer into ethically murky waters, it’s a clear sign to consider walking away.
Upholding your ethical standards ensures a principled approach to negotiations, preserving your integrity, dignity and long term reputation.
Walking away is therefore a necessary step in drawing your line in the sand. It creates respect and develop a strong foundation for your real power.
In essence, the decision to walkaway from a negotiation is as strategic as the decision to engage in one.
Although a deal is ‘usually’ better than no deal, sometimes considering a no deal to protect yourself or the value of the deal is the most appropriate and logical choice. Negotiation should not be about securing a deal at any cost…. if it is you’ve got your preparation wrong! Walkaway!
Knowing that you can walkaway empowers you! Walking away is not a sign of weakness but a symbol of integrity, logical/rational wisdom and control. It is not a sign of defeat but a strategic manoeuvre, a sign of strength.
Negotiations are not battles to be won or lost but strategic engagements where clarity, knowledge, and self control are essential.
Walking away to preserve your resources, your emotional, physical and mental energy and the cold hard cash required for future negotiations is an essential fact in mastering negotiation.
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