At times, we make obvious blunders in negotiations: we miscalculate our figures, point out our weaknesses to the other side when caution was called for, or mistakenly betray our bottom line. Frequently, though, our bargaining faults go unnoticed: we end up with a perfectly decent deal, but we don't realize that we might have received a better one if we hadn't fallen for typical pitfalls and mistakes. You may position yourself for even greater results by learning how to avoid these five typical negotiating blunders:
5 Common Mistakes To Avoid During Funding Negotiations
1. We Don't Prepare for Negotiations in-depth.
The most common error made by corporate negotiators is to enter a negotiation too soon without doing enough preparation. If you know exactly what you want to gain out of the trade, you may believe you've prepared well, but that's far from enough. Negotiators with wisdom know how important it is to take your time and thoroughly consider all of the relevant factors. To begin, consider your best alternative to a negotiated agreement (BATNA), as defined by Bruce Patton, William Ury, and Roger Fisher in their book Getting to Yes: Negotiating Agreement Without Giving In. If you are unable to come to a compromise during your discussion, your best alternative is to pursue your BATNA. It's also critical to determine your walkaway point, or reservation value, and to make an educated guess as to what the other party's best alternative is. Your decision-making will become more logical as a result of all these computations.
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2. Rather of working together, we prioritize competing.
Fearing to be taken advantage of, inexperienced negotiators—and some seasoned ones as well—make irrational, even outrageous requests and use threats and other forms of coercion to attempt to get their way. Prioritize generating and asserting value in your negotiations for more success. Building rapport and trust over time will make it easier for both parties to disclose their true interests in the discussion. With this understanding, you will be able to see possible compromises: if there is a topic you don't care about deeply, you could be prepared to give in in return for a concession on a subject you care about deeply. Astute negotiators understand that seeking out win-win solutions will provide more benefits.
3. We Rely on Cognitive Dictionaries.
Psychologists have shown that, while negotiating, we all resort to cognitive shortcuts, especially when we're ill-prepared or pressed for time. For example, we frequently have an unrealistic expectation about our chances of succeeding. Additionally, when it comes to information that might have a greater influence on our happiness but is less eye-catching, such the duration of our commute, we tend to pay more attention to vivid information (like income in a job negotiation). These typical negotiating blunders are discussed in the book negotiating Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond by Deepak Malhotra and Max H. Bazerman. By being well-prepared and giving ourselves enough of time to bargain, we may strengthen our negotiating abilities and lessen the harmful impacts of these biases.
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4. We Allow Our Feelings to Rule Our Decisions.
Negotiators are prone to emotional biases in addition to cognitive biases, which might hinder them from performing to the best of their abilities. Naturally, our feelings as well as those of our opponents may tell us a lot about how the negotiation is progressing. However, intense feelings can also prevent us from acting logically, which might result in poor negotiating judgments. A common ignorance among negotiators is the impact of emotions on negotiations. For example, anger might cause us to make extremely unsafe decisions. Jennifer Lerner, a lecturer at Harvard Kennedy School, has discovered that melancholy might cause us to overpay during negotiations. Try taking a break when talks become heated so that everyone can calm down. Talk about what happened when you've gathered again, allowing everyone to voice any worries.
5. We Use Ethical Expediencies.
It's a common misconception that only those who are extremely callous act unethically during negotiations. In truth, studies conducted by Francesca Gino, a professor at Harvard Business School, and her colleagues reveal that most individuals are prepared to sometimes cheat in negotiations and other situations when they have a financial incentive to do so and think they won't be discovered. We find methods to rationalize such actions, such as convincing ourselves that we've done nothing wrong or that the other person won't feel the loss. It's critical that we all be aware of the ethical traps that might arise during negotiations and do not absolve ourselves of responsibility for even the most little transgressions that violate our moral principles.