There are three ways to negotiate: play hardball, work for a good, fair deal, or manage the situation and be willing to walk away.
Think about negotiation as a pendulum. You can pull the pendulum all the way to the left and try to take advantage of the situation to get the best deal possible for you and you alone. You can hold the pendulum all the way to the right, which would be to fold and give everything to the person on the other side of the aisle. You can also walk away from a person who refuses to yield the pendulum from their side.
The reality is that a good deal for both parties is the one where the pendulum is in the middle.
Option 1: Play Hardball
The first is to pull the pendulum all the way to the left and expect the other person to pull the pendulum all the way to the right. You then work through a process of elimination to erode the other person’s position and to hope that the pendulum ends up in the middle.
In these situations, typically, the pendulum gets stuck somewhere on either side, probably not all the way to the left or the right, but probably also not in the middle. It’s all about the aggressiveness and backbone that you go at the conversation with.
Option 2: Work for a Fair Deal
The other way to negotiate is to put everything on the table, to simply lay out your position, state what’s needed, and have a go. From the very beginning, you’re trying to come up with a deal that is fair. Typically, one side or the other will start that good faith effort with a deal that’s slightly left or slightly right, and there’s nothing wrong with that.
This process respects the dignity of the other side.
When do you use which technique?
In a very transactional situation, where the relationship between parties doesn’t matter, trying to get the absolute best deal is not a problem. In fact, it’s probably the right approach. For example, when you’re buying a car, it’s a transaction. The dealer’s trying to get the most money out of you, and you’re going to try to get the most money out of the dealer.
When the relationship between the two parties negotiating is an essential part of the deal, then this approach almost never works. It destroys trust. It creates hard feelings. It puts people in bad situations.
Take, for example, when you’re negotiating with a future employer or an employee you’re making an offer to. Simply put, that relationship is important, it’s essential to the employment. For that reason, it would be a lack of prudence for an employee to come in and try to squeeze every single penny out of an employer. It sets the tone wrong from the very beginning. At the same time, it would be inappropriate for the employer to try to take advantage of an employee and give them a low-ball offer.
What’s important is for the two parties to sit down, share information, and discuss what’s needed to be successful. Together, they need to craft something that is reasonable, makes sense, and is open and transparent.
Option 3: Be Willing to Walk Away
The difficult situation comes when you are attempting to establish a relationship, yet the other party wants to play hardball. They want to swing the pendulum from one side to the other. What do you do in this situation?
The most effective thing to do is to walk away. If you’re already in the midst of a relationship, that becomes harder. If, for some reason, you can’t walk away, it’s important that you don’t yield everything and simply back down. This damages the relationship in the same manner as if you played hardball and caved to their tactics.
Instead, it’s important to simply address the problem head-on, to talk about it and hold the person accountable to what is fair and right.