“My word is my bond.”
You’ve probably heard this phrase at least once in your life. In fact, it’s been the London Stock Exchange’s motto since 1923. It exudes integrity, honesty, and above all, trust.
Now, we’re not suggesting that you should take everything that’s said during negotiation at face value. What it highlights is the importance placed on relationships in business and the negotiation process.
Businesses that set out to forge long-term relationships with counterparts are likely to benefit from ongoing value, repeat deals, and reduced need to monitor their partners. Relationships are built on mutual trust, which facilitates collaboration, leading to more creative win-win solutions.
Let’s take a look at some top tips for solid relationship building in negotiation.
Skilled negotiators understand the importance of communication when trying to reach an agreement. Not only do they choose their words carefully, but they’re also aware of (and largely in control of) their body language and non-verbal cues. Clear communication is imperative when there’s room for misunderstandings, like when negotiations span countries or industries.
How someone communicates influences our perception of that person, and it goes beyond the spoken words. What’s left unsaid has the potential to damage our relationships. If your negotiating partner believes that you’ve deliberately omitted information, distrust is on the horizon.
Sometimes, it’s out of your hands. Perhaps the information is under NDA and you simply can’t share. Be candid. Respect your co-negotiator and be upfront about limitations. Mutual respect goes a long way towards establishing a strong connection.
You can lay the foundation for a healthy relationship by building rapport. Even spending five minutes getting to know the negotiating party over the phone can help. Better still is an informal meeting, coffee or lunch, where the impending negotiation stays strictly off the topic of conversation.
Social studies suggest that people tend to reciprocate actions, like for like. Ever found yourself smiling at a stranger who just happened to be smiling as they passed by? The same principle applies in negotiation. Aggression will be met with aggression, whereas fairness and respect will be mirrored.
Trust is usually earned over time, through actions that demonstrate reliability and integrity. If you’ve promised to do something, follow through. If something prevents you from doing so, be open about it.
Trust needs to be nurtured. It’s all too easy to break trust, and once broken it’s even more challenging to rebuild.
Underpinning trust is empathy – the ability to understand, acknowledge and share the feelings of the interlocutor.
Everyone enters a negotiation with an agenda, but overly focusing on your interests jeopardizes your relationships. You may inadvertently make your deal party feel slighted or treated unfairly.
Practice active listening, frequently playing back the other side’s responses to ensure you understand their motivation. When you listen closely to someone, they’re more inclined to trust you and you may learn more about their interests, opening the door to alternative solutions if you’ve hit a deadlock.
Negotiation is rarely plain sailing. Not only are you likely to be up against conflicting interests but you may find issues arise later on, especially if you’re working on a contract deal.
How you manage conflict can earn you a degree of respect. Ignoring the problem won’t make it go away, and can make the other person feel frustrated. They may even believe you have contempt for them, putting them off from working with you again.
Acknowledge what happened from both perspectives, avoiding the blame game, which can strain already tense emotions. Recognizing those feelings will remind you that you’re both human, strengthening the relationship later. Deal with the issues promptly and fairly, so that you can get back to business as usual.
Longstanding value can be gained when you establish a collaborative relationship. Rather than focusing on extracting as much value as possible today, look to maximize your benefits over time.
By working together with your deal partners, you can create deals that benefit both sides. Everyone will feel more invested in the agreement and more prepared to accept the outcome. You’ll perceive the process as more equitable and thus, more likely to trust one another.
The experience will feel more positive, too, so you’ll be more prepared to get back in the ring for round two!
Relationships are key, not just in the immediate negotiation but over the long term. It’s unlikely that a relationship ends once the contracts have been signed. Rather, you’ll be working with the other party on an ongoing basis. It’s far easier to engage with partners that you trust than those you don’t.