Earlier this month Tony Blair earned $1 million for three hours’ work.
The former Prime Minister helped to broker a deal between mining companies Glencore and Xstrata, helping the two parties to come to mutually acceptable terms for a merger.
Mr Blair’s negotiation skills have placed him in high demand since the end of his tenure at Number 10, and his latest success highlights the value of those skills.
We might not all be hammering out multi-billion dollar mergers, but good negotiation abilities remain vital for any entrepreneur. We have compiled some top tips to help you navigate negotiations successfully.
1. Know what you want
It is vital that you go into the negotiation with a clear understanding of exactly what you want to get out of it. Preparation is key, and will likely take much longer than the negotiation itself. Make sure that you have as firm a handle as possible on all aspects of the negotiation in advance, and that you understand the potential implications of all the potential outcomes.
2. If you don’t ask…
Timidity is not much of a qualification for negotiation. The old adage is true: if you don’t ask, you won’t get. Of course, you won’t win every point, but without setting out your position clearly you can’t hope to have your requirements met. The best negotiators are those who are able to explain their wants in a way that makes them also seem sensible and desirable to the other party.
3. Set your ‘red lines’
There are likely to be some positions that you will not be willing to compromise. Depending on the nature of the negotiation, it may or may not be sensible to explain these to the other party before you begin. Regardless, it is important that you identify your red lines in advance.
A good negotiator will spend as much time listening as they do speaking, if not more. Much of the skill of good negotiation is in determining what it is that the other party wants, what their limits are, and what they are likely to be willing to cede. In order to work these things out, you need to be prepared to listen to as hard as you bargain.
5. Stick to the problem
It is very easy for negotiation to slip into personal confrontation. Make sure that you stick to the problem at hand, and that you avoid any tendency for proceedings to get personal. Keep calm, and try not to take difficult negotiations as an affront.
6. Offset sacrifices
Don’t give something away unless it is reciprocated. At every stage, ask yourself what you are getting out of the exchange. It is important that you do not offer concessions from which you will gain nothing – and, of course, in order to achieve this it is important that you are able to remain calm under pressure.
7. Learn when to walk away
Finally, it is vital that you understand when it is in your interest to simply abandon the negotiation altogether. This is one of the most important judgement calls any negotiator can make, and it is also one of the most difficult. Don’t trick yourself into thinking that it is worthwhile making a deal simply for the sake of making a deal. Instead, keep in mind that there will always be other opportunities, and don’t get panicked into agreeing to something with which you are not comfortable.