Theory vs Reality in Negotiation

Deep in our hearts, we want to be like “them“. We want to be like “that person” who keeps “winning” the deal. Someone who manages to get the job done in any negotiation, be it purchasing a new car at a gallery or bargaining used items at Mudah.my[1] site. It is a well-known fact that negotiation is the key to success. We even have to negotiate with our children on many occasions! That shows how important the negotiation skill in our life.

In reality – negotiation is not an easy feat. I bet that even a seasoned negotiator would not know whether they can achieve a desirable result before entering the battle-field. Leaders often disguise their fear when negotiating despite their stature and position. There is no doubt that a winning-negotiator can be an important asset for most organisations, especially in the era of economic turbulence. Only the best shall win and survive. We need to get everything at a bargain! Even millionaires do need the best deal, right?

Woman in a class
Learning is a beautiful process of sharpening your negotiation skills. One of the most important aspects of learning the negotiation skills is “practising” the theories we learnt at schools. Try bargaining a lime juice at a street-stall or market, and see how well you fare in those negotiations?

Recently, Katie Shonk[2] from Harvard Law School wrote that negotiation is essential to progress in our career because we need to negotiate with our peers, superiors and human resource department on capitalising the opportunities. This is very true because Asian or Malaysian particularly are less likely to “negotiate” with their superiors when there are opportunities available elsewhere. They usually just merely jump out of the ship and leave the organisation immediately without any negotiation what so ever.

Negotiation would require a reasonable understanding of the subject and information is a precious currency in any negotiation process. I can still remember the first professional negotiation task which was given to me to collect the unpaid penalty charges from a middle eastern trading company. I used my knowledge about their cultural sensitivities as my “negotiation-currency” to successfully persuade them to remit approx US$1.2 million of late payment charges into my company’s account in just a few days! Even the senior management was surprised because I was only a junior employee who had joined the company for a few months.

Later at the age of mid-20s, I participated in many high-impact negotiations of short term and long term contracts, worth millions of dollars. In those days, talks of trades and sales were quick, fast and efficient with a real sense of joy. Traders in the market always made themselves known to the market especially amongst the regional market analysts.

Winning negotiators
A delusional image of winning negotiator is that they go to the talks or meetings with certain attires and with some “standard” sitting or standing postures.

In theory, traders have a thick manual book to discover the essential beauty of negotiation. It is about manipulating the information you have to your advantages, without knowing the fact that there are other factors you are not in control of. Such an excellent example in this aspect is the black-swan theory.

Nassim Nicholas Taleb[3] wrote in a top-rated book called “Fooled by Randomness” that most successful traders do not associate their successes in negotiation to the element of randomness or what we call, pure-luck. I have read the book, and I find his arguments interesting, especially in the most important element in negotiation; “managing one’s emotion and ego!”

"Fooled by Randomness" and "The Black Swan"
“Fooled by Randomness” and “The Black Swan” were among the top books on my list of hardcovers which I regularly revisit. The most interesting fact that Prof. Taleb explains in the book is that we are too consumed in our ego that we believe all of our successes were attributed to our skills and not because of luck or randomness!

Most successful negotiators might fall into the trap of over-confidence where they could be beaten by just a junior negotiator. In my beliefs, this is what we call – a divine intervention. The reality that hurts because we always believe that according to data and information we have, the negotiation would be advantageous. Unfortunately, there are hidden forces that can disrupt the final outcome of the long process of negotiations!

With more than 15 years of experience in negotiations, I find it hard to boost my confidence in this area of expertise because, negotiation, in reality, is subjective and yet too abstract to master! At times, a very stubborn negotiator who uses temper and uncontrolled tantrum in a negotiation process get what he or she wants. At times, an unknown humble and truthful negotiator wins?!

Negotiation is about getting what we want and walking out from the whole process in a good spirit. A winning negotiator is someone who knows very well that he or she does not have a full control of the outcome of the negotiation. However, he or she must have more information and the ability to capitalise any weaknesses of the other party. But, the best negotiator does not mean he or she must always win.

The best negotiator is someone who puts long-term benefits on the top, even he or she had to lose the negotiation for that purpose! Nothing is more potent in long-term negotiation than honesty and the truth. Because the divine and long-term friendship genuinely value these attributes. As a result, the reality of negotiation is like a bitter pill to swallow. Once you consume the tablet, you can see that regardless of the consequences (of the negotiations), as long as you are honest and truthful, in the longer term, the negotiations would become more comfortable and lighter for you to win.

negotiation
When both parties smile, there is a bigger chance of winning another negotiation in the future. When both sides frown upon, then you better be ready for a tougher negotiation in the future!

That is because in negotiation there is no win-lose or lose-win result. The only outcome that always happens is either win-win or lose-lose. The moment that the other party started to feel they are cheated or losing in a negotiation with you, then there will be no more future for you in the negotiation arena. Unless if you are thinking that you will never be negotiating with them anymore in the future. But, who can stop words from spreading? Like the breezing wind?

In essence, my take on the negotiation experience is this. Be humble, kind and truthful even if you think that being frank might reduce your chance of winning. What more being sacked for not achieving the desired results (as set by the top management). Some might think that being honest is taboo in negotiation. But, think again. As a negotiator who hears accurate facts from the mouth of the opposing negotiator? What would you feel about him or her? Downright stupid or naive? Or sensible and fair?

I hope that you can choose wisely of which character of a negotiator you would want to become? As for me, I am selecting a “matured, colourful and yet humble” negotiator as my identity, and putting long-term relationship as my number one word in my negotiation vocabulary. And, how about you?

References:

[1] Muday.com.my is Malaysia’s largest online market for sellers and buyers (link: https://www.mudah.my/). However, Jack Ma came to Malaysia recently and launched a Digital Free Trade Zone initiative with the support of Malaysian government (link: http://www.scmp.com/week-asia/business/article/2119408/free-trade-minnows-how-alibaba-gave-malaysias-e-hub-hopes-boost).

[2] The Importance of Negotiation in Business and Your Career, by Katie Shonk. (link: https://www.pon.harvard.edu/daily/business-negotiations/the-importance-of-negotiation-in-business/)

[3] Fooled by Randomness, by Nassim Nicholas Taleb. (link: https://en.wikipedia.org/wiki/Fooled_by_Randomness)

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