Saturday, September 6, 2008

One GM's tips for successful negotiating

Neil Smith, GM for the NHL's NY Rangers for a decade (including 1994 when the club won the Stanley Cup), shared his four principles of negotiation in a recent issue of Portfolio magazine.  I found it interesting to see how a GM approached the process.

Here's an abbreviated version of his tips for successful negotiation pulled from his article:

1. Don't Commit First:  If you can get the other side to state their position or proposal first, you may be pleasantly surprised at what they want. At the very least, you'll get valuable insight into what they're thinking before they know what you're thinking.  Getting the other side to commit to a position first allows you to use their proposal as the "high-water mark." 

2. Put Your Ego Aside:   Negotiations are about getting a deal done, so don't try to impress the other side with your intelligence and negotiating abilities. The stronger you look, the bigger the fight you'll have on your hands.

One tactic I use is to get the other side to help me during the process, asking questions that make them feel superior, such as "I'm not really sure, what do you think?" Or I might say, "I don't know the market nearly as well as you do." 

Ego-driven negotiators make mistakes like telling the other side that they don't have to check with anyone above them, or they don't need to check with experts before making a decision. 

3. Keep Your Eye on the Puck:  When Wayne Gretzky played for the Edmonton Oilers during their run of four Stanley Cups in five years in the mid-'80s, he was constantly harassed by role players, fans, and coaches, all trying to get him off his game.  But No. 99 knew that the only thing that mattered was putting the puck in the net more times than the other team. 

Just like Gretzky, an effective negotiator needs to focus on the issues and not be distracted by the actions of others.  No matter what the outcome of a single meeting or phone call, don't let the other side's moves or reactions take your eye off the puck.
4. Always Make the Other Side Feel Victorious:  When the deal is done, always congratulate the other side. You want them to feel like they won.

"Thank you, but please let me say that you did a fantastic job negotiating this deal" was a favorite phrase of mine. Even if you think the other side didn't do well, congratulate them and never gloat. 

The reason for this is simple: You never know when you're going to want to do another deal with that person, and you want them to feel good about you personally when you do. Be humble in a victory and you'll be sure to have more of them in the future.