Are your Negotiation Skills Good Enough?

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Succeeding at Real Estate Joint ventures

For most people, negotiating is the process of trying to get the highest possible price/fee for a commodity or service being sold or pay the least possible fee for a commodity/service being bought through haggling or bargaining. A better way to view negotiating will be, a process aimed at getting the interests or positions of parties to a transaction/deal aligned or reconciled in order to reach an agreement that makes everyone happy.

The negotiation process does not begin when people sit behind round tables in a closed room to “negotiate”, rather it involves a good deal of preparations, skills and strategy.

We will look 4 skills/qualities during this series. Let’s get started with number 1

INDUSTRY KNOWLEDGE

The importance of having rich knowledge of the industry cannot be overemphasized. Being up to date on prevailing market values, construction processes and costs, legal processes and other industry trends puts you in a commanding position during negotiations. It aids preparation, which is perhaps the most important aspect of negotiating. The more knowledge you have of the industry, the better you are able to articulate and present your position, and unravel stalemates.

How do you gain industry Knowledge?

This requires dedication and usually comes with experience over time. Here’s how to go about it.

1. Networking - Associate with experienced professionals in the field

2. Reading - or attending courses or conferences

3. Industry publications - Subscribe to industry/trade magazines, blogs and newsletters like JV Pulse

PEOPLE SKILLS

Having industry knowledge may count for naught if one does not have the right set of people skills. These are attributes or traits that help an individual maximize effective and productive interactions with others.

Honing your people skills means that you understand yourself. You are able to read and connect with people and their perceptions. You can subtly influence their thought lines and change their mind as well as resolving conflicts.

To do this, you need active listening, open mindedness, persuasiveness, sensitivity.

Active Listening and Open Mindedness:

Actively listening to the other party with an open mind, means that you are not just listening but also engaging. You are not waiting to get the chance to counter the others point.

Active listening requires one to be able to decode both the obvious and the subtle “messages” being passed. The negotiator has to ensure that he is sending the message and signal he wants the other party to receive. Building on this skill requires the following:

1. Focus on the conversation and the moment

2. Make conscious effort to complete the message being communicated rather than just hearing words being said.

3. Aim to decode ambiguity and achieve clarity by paraphrasing or restating what the other has said to confirm assumptions.

4. Avoid forming counter-arguments while the other person is still speaking

5. Make conscious effort, particularly through body language and gestures which can be as simple as a nod, to let the other person know you are abreast of the discussion. Where things are not clear, ask questions.

Persuasivenes

Persuasiveness refers to the power or ability to induce or get someone else to take a course of action, make a decision or embrace a point of view through the use of “persuasive messages”. The key elements to persuasion include:

1. A deliberate attempt to influence the action, decision or point of view of others.

2. An atmosphere of free choice devoid of coercion

3. The use/transmission of persuasive messages/argument.

Mastering the art of persuasion is a huge edge for any negotiator. Below are some tips to help improve your persuasiveness while negotiating:

1. Use knowledge, experience and expertise to improve your credibility.

2. Understand the other negotiator's ideas, position or arguments.

3. Appeal to the other’s reason through the use of logic, valid/factual arguments, as well as proof and rhetoric.

4. Maintaining a balance between logic and emotion gives you a better chance at persuading the other person.

5. Present your arguments with passion, conviction, dynamism while at the same time seeking out their warm/soft side.

Sensitivity

Good negotiators are able to relate or show sensitivity to the needs and feelings of others, this requires/encompasses empathy and emotional awareness. Sensitivity generally brings about sociability and likability which in turn aids persuasion.

The willingness to put yourself in the others peoples shoes or image, a role reversal during negotiation is perhaps the easiest way to adopt sensitivity.

COMMUNICATION SKILLS

Whether you are communicating verbally or in writing, you need to understand people and situations, create an atmosphere conducive for sharing of ideas and solving problem by putting people at ease and building trust.

Being successful at negotiating also requires empathy, diplomacy and tact. Communication is a must for any form of engagement, however if communication is incoherent, unintelligible, or entangled, conversations will yield no results at the end of the day.

Communicators need to be balanced in their thinking and the expression of their thoughts, egos must be kept in check and deliberate efforts put into understanding the priorities and interests of parties to the negotiation, these can be achieved through:

1. The use of simple language to reduce the risk of misunderstandings. Questions should be asked when in doubt.

2. Treating the other party with respect by being polite and courteous.

3. Creating rapport by putting them at ease and connecting with them.

In addition to these, one should also pay attention to non-verbal communication, this is in fact a crucial part of communication, and considering that communication is a two-way street, a good negotiator should be mindful of not only the other’s non-verbal messages but also the ones he sends out.

PATIENCE AND PERSISTENCE

Not many deals or transactions are straight forward. JV deals in particular, are known to involve a lot of divergent positions and interest. It is during these deadlocks that patience and grit come in handy. Patience and the ability to handle frustration are qualities found in successful negotiators.

Patience may however, be the number one icebreaker during deadlocks. Combined with persistence and determination, patience helps the negotiator get more information, unravel the other’s needs and wants, and aid realistic assessment of the deal.

It could take time to understand the issues, weigh options, test the other party’s resolve, find out what they want, influence or change their expectations. Patience and tenacity gives all parties the time to discover and come to grips with the fact that ideas or positions will have to be reconciled with the realities of what each party can really get.

A good example of how patience and persistence can yield better outcomes is the story behinds Facebook’s acquisition of Instagram in 2012.

Kevin Systom, Instagram’s CEO had first caught Facebook CEO Mark Zuckerberg’s attention owing to Kevin’s photobox service that allowed people to share large photo files prompting Mark to offer Kevin a job that the latter turned downed.

A couple of years later, alongside Mike Krieger, Kevin Systom had created Instagram, a social media platform that was fast gaining momentum and popularity. In 2011 Facebook, offered to purchase the platform but Kevin would rather hold out and focus on independent expansion.

By the time Instagram’s acquisition was finalized and announced in 2012, Instagram was already worth $500m, Facebook acquired the platform which had only 13 employees on its payroll for a whooping sum of $1bn.

This happy ending can among other things be attributed to Systom’s decision to exercise patience and hold out until what he believes to be the right offering is brought to the negotiation table.

In conclusion, to successfully navigate negotiation processes, one needs patience, persistence and the acumen to decipher and put the pieces together. One also needs to understand that disciplined behaviors alone will not make one an effective negotiator, rather patience, perseverance, and time are required to truly excel.