Negotiations 101 - The answer will always be no if you don’t ask

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I could have used this.

That was my first thought as I sat in Clinical Assistant Professor Charlotte Westerhaus-Renfrow’s Effective Negotiations class. I could have used this for salary negotiations at past jobs, for negotiating contracts, for interviews, for—well—life in general.

So many moments in life are all about how you approach them. And there’s so much truth to the old adage: You won’t get what you don’t ask for.

But how do you get what you want in a business setting? Answer: It’s all about taking time to get to know someone. It’s about collaborating and building a lasting business relationship whenever possible.

“This is one of the most important things people need to do in negotiations, but most people fail to reap the benefits of doing it,” said Westerhaus-Renfrow, who is an expert in conflict management, dispute resolution, team performance, and cultural competencies.

Ah, yes. How quickly we forget.

Let’s start from the beginning.

The negotiations class, made up mostly of junior and senior Kelley Indy students, started bright and early at 8:00 that Monday morning. Not much chatter that early, but that changed pretty quickly.

Following introductions, Westerhaus-Renfrow started the class with an exercise called “Negotiations Bingo.”

Students received a simple sheet of paper and were tasked with talking to their classmates for several minutes, each trying to fill in a BINGO row by meeting someone who had one of the listed characteristics.

Soon, the classroom was buzzing. Who likes country music? Who ran track in high school? Who wears contact lenses? Who likes sushi, or who is the youngest child? Who is afraid of spiders?
The laughter was contagious, and it didn’t take long before someone called out, “BINGO.”

Suddenly, most members of the class knew who was wearing sandals, who was left-handed, who liked the color pink, and who was allergic to cats.

So why spend precious class time to do this? Answer: There’s a lesson here.

“I’m going to pair you up, and group you up, in all types of negotiations discussions this week,” Westerhaus-Renfrow told the class. “Some of you believe you’re extremely good at negotiations; maybe, you are. But what most people fail to do in negotiations is get to know the other person in order to find similarities. They automatically assume that ‘You are different than me. What is mine, I’m going to get. And what is yours, you’re not going to get.’ They fail to actually take the time to do what we just did—to find similarities between various people, to work to build trust.”

If you can find commonalities with people from the very beginning of a negotiation, research shows that you have an 82 percent chance of getting what you wanted in the first place.

Charlotte Westerhaus-Renfrow, IU Kelley School of Business clinical assistant professor of business law and management

“Do that first in negotiations, and you’ll have a much better success rate. Even if the negotiation fails, which it may in business, the other side may be more prone to want to work with you in the future," explained Westerhaus-Renfrow.

“That’s the best part of negotiations--getting to know people before you dig in,” she added. “But you cannot stereotype. You cannot assume. You have to ask questions to get beyond initial positions and into the heart of common interests. It is not always what people want that may determine the outcome. One key to a successful negotiation is ascertaining why people want what they want.”

And then she added my favorite line: “It’s like Marco Polo. You just have to find it [common ground, that is].”

Knowledge and confidence.

I listened to students conduct their first negotiations in class—a business negotiation over supplies.

Students presented their opening offers, their target price or goal, and the walkaway price.
Among those students was senior Alejandro Murillo, who will graduate in 2017 with a BS in supply chain management.

The image caption follows
Students Alejandro Murillo and Isaac Roy negotiate during their Effective Negotiations class.

“The most interesting part to me was all the different approaches and the different results everyone in class ended up with during the negotiations,” said Murillo. “Some people would bend the truth, and others wouldn’t give any information. So every negotiation was different than the one before."

Building relationships and solidifying trust.

“This gives people the confidence to ask. Ask for what you deserve; ask for your objectives. Be a little bit more assertive and confident with that knowledge. People in business typically respect a good negotiator, and they want that good negotiator on their team. I think that’s what the students get out of it,” Westerhaus-Renfrow told me later.

“In negotiations, there are two parties who can get a better deal if they negotiate. You get a better deliverable. You’re going to get a better business plan. You’re going to get a better product. You’re going to get better vendors. That’s why you negotiate: to get a better deal than you could by yourself,” she added.

“It’s all about building relationships in business and guarding trust. Many times a vendor or company will choose to do business when they may have to pay a little bit more money, because they know the quality of the product is there and the quality of the relationship is there. They know the trust is there. And negotiations will help you get to that place," said Westerhaus-Renfrow.

“The students who take this class have told me they immediately use what they’ve learned when negotiating something in a business context, in a personal context, in job interviews,” she explained. “I have a passion for this. I’ve seen how win-lose situations can de-escalate confidence. Just to know how to negotiate and how to get a win-win is so important. As a former litigator working at a law firm, I realized people were suing each other because they didn’t trust that they could even ask for the outcome they were hoping for. You have to ask.”

You have to ask. Build relationships and trust. Don’t just start negotiating before you try to find some common ground.

A lesson I’ll never forget.