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What makes a win-win negotiation? Try conversation.
Linkage Principal Consultant Susan Healy knows first-hand that negotiation is a critical skill that, when done right, can lead to mutually beneficial outcomes or, when done wrong…. collateral damage. Here, Susan shares a valuable lesson about building trust and some tips on how to communicate effectively and negotiate with power.
Building trust in negotiations
“I was working on the acquisition of an oil and gas company from a mid-size international company that had been burned in an unrelated deal in the past,” she says. “As a result, they were highly distrusting, so, when our offer was accepted, they assembled quite a crowd of heavy hitters to discuss terms and conditions.
“But we also had an ace in our pocket: The agreement they’d drafted had a clause which created a $2.5 million purchase price reduction to us. As this realization became apparent to the chief counsel of the company, I could see that he was becoming very uncomfortable. He began to fidget, pull at his collar, and show signs of distress. I could see that he knew he was going to have to call his President and tell him that within the first hour of negotiations, he had lost $2.5 million.
“I had two real choices: continue to stick firm to the clause drafted or let the seller off the hook. We could have negotiated a compromise, but I wanted to set a tone of good faith right at the beginning. I called my two co-workers into the hall and advised that we were going to allow the company to fix the clause and retain the full purchase price. I got some push back from my peers but I felt it was the right thing to do. This happened within the first hour and instantly began to build a culture of trust, and we closed the deal later that night.
“A year and a half later, the same company came to us and offered us some additional assets at fair market value in an exclusive deal. They indicated that because we had been fair and created a win-win transaction in the first deal, they wanted to return the favor.”
Not all negotiations will have the same circumstances, but for Susan, all negotiations will have the highest chance for successful, mutually beneficial outcomes if:
- You try to find out as much as possible and understand the other side. The more one knows, the more successful the outcome will be. There is no rush. Take time to ask questions so you can really understand where the other side is coming from.
- You learn to read body language. I think that often what one is thinking is written on their face. I can adjust my position or influence the outcome when I can tell in advance where the conversation is going.
- Do not be afraid to leave the room and express your opinions or concerns to your counterparts. Open the discussion if you feel that the negotiation is going awry.
Susan goes on to report that the best piece of advice that she has ever received was from an old boss who told her to take a step back, listen to what she was about to say, and think about how the other person was going to hear it. “I think of this advice often,” she says, “especially when writing emails. There is no tone in an email, yet it is so easy to read tone into one. I really try to compose my emails using friendly language, even when I am frustrated. I figure that if I am upset, then making the recipient upset does not give me a leg up in reaching the desired outcome.
“This is also useful advice when I think about how a person hears a conversation. We need to be able to speak so that we make sense to the person we are addressing. Using acronyms is not helpful if the individual does not understand the terminology. Talking about next steps, when the base terms have not been agreed to, does not help the negotiation. Talking about my needs and not asking what is important to the other side does not result in a win-win.
“Thinking about what is important to the other side, how they need to hear what you have to say, and when to move the negotiation forward in a manner that reaches agreement are the key.”
Let’s hear it: How do you negotiate win-win deals? Have you been involved in negotiations that have gone wrong? What’s the best negotiation advice you’ve ever received?
Susan Healy has over 30 years of land and negotiating experience, holding management positions in large and intermediate oil and gas companies. At ARC Resources Ltd., she was the Vice President of Land and a founding member of the ARC team. Prior to retiring from ARC, she held the position of Senior Vice President, Corporate Services. She holds a Bachelor of Science in Business Management and Human Resources.
Women in Leadership Institute™
NOV. 13–16, 2023 | Orlando, Florida, or Virtual
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