Friday, 11 December 2009
Doing the deal
As the year comes to an end and at a time when I should be winding down, preparing for outrageous Xmas parties and generally getting demob happy, I find myself negotiating one last deal that we are trying to wrap up before the end of the year.
I wouldn't say that I am a brilliant negotiator but I am a disciplined and decent negotiator. This is because I still use that most basic of negotiating techniques - the Like, Intend Must (LIM) model.
Anyone who has had any sort of negotiation training will know this model, or variations of it, but if you haven't then you might find it useful. It's very simple and it has served me well over the past 20 years whether it's been negotiating my next meal or multi-million pound deals.
The key, in my experience, to negotiating a deal that you are likely to be happy with is to put in the effort up front to work out what that deal would look like. Some people jsut get straight into the action and start haggling. They haggle away on instinct, calculating the pros and cons of doing the deal in real time and arrive at whatever deal is doable with a view at the time as to whether it feels right.
I don't. I sit down and plan out up front what an acceptable deal looks like. Whether it's negotiating a job and salary package or a major investment, I know from the start what the deal I am looking for looks like. I will almost ceretainly have it actually written down on a piece of paper somewhere, so that I can look at it, sleep on it, wake up the next day and take another look and be sure that its the right deal for me.
I structure it using the LIM principal. What would I LIKE the deal to end up as, in an ideal world? What do I INTEND to aim for? What MUST I get, otherwise I am going to walk away?
Get a piece of A4 paper, draw two lines down the page and mark the columns Like (right), Intend (middle), Must (left). Okay, you are ready.
Start with LIKE. Write down a long, ambitious list of all the things that you would like to receive as part of the deal. Don't be ridiculous, but don't hold back either. If the sun was shining, birds were singing, small cockney lads were tipping their hat to you and saying "G'Day to yer, Guv" then what would you get? Write it all down. Add a couple more items. Okay, thats in your "LIKE column.
Next go to your MUST column. Be completely and utterly realistic. What would you put in this list that you MUST get otherwise you are going to walk away. Don't kid yourself. Don't add a bit extra. This is the real, absolute bottom line. Want a salary of £40k? What if it was £38k? Would you really walk away from the job? £37k? £35k? What is your real bottom line? That's what you write down in the MUST column. There shouldn't be more than a handful of items in this column. If there are, you are probably kidding yourself and that's not going to be helpful in your negotiation.
Finally, go to the middle INTEND column. The way you do this one is to pick items from your LIKE column and copy them across, perhaps modifying them a little, but still being optimistic. There will be less items in your INTEND column than your LIKE column but there will be a lot more than your MUST column.
When you start negotiating, when the other guy says "so what are you looking for?" you are going to judge where to pitch between your LIKE and your INTEND list. If you are feeling strong or lucky you will go closer to LIKE (perhaps even start there). If you want to get the deal done quickly you will list INTEND and make it clear that there is not much room for negotiation. Then you haggle away, between LIKE and INTEND. If you are luckly you will end up somewhere around INTEND with a few nice bits thrown in.
But if you get pushed you may fall below INTEND. That's okay. You sit on your MUST list. That is deep in your mind. It's your bottom line, so you know exactly how far you can be pushed before you walk. That gives you confidence and you can't possibly do a bad deal. You can't be talked into anything below your MUST list and if at the end of the day the only deal equals your MUST list, then you do it because it is what you said you MUST get and you've got it. So don't whinge, don't complain, do the MUST deal, take what you came for and move on. Did the world end? No, it's still going round. Take your deal and move on.
I don't have a lot of patience for negotiating. Some people will go on and on for months, squeezing out another drop to get a slightly better deal. I don't. I prefer speed and certainty. I draw up my Like, Intend, Must. I pitch, I haggle a bit, I get to the right place. I do a deal or walk away. It's done, move on. Can't lose. Can't go below Must, so it's always going to be bottom line or better.
Two weeks of haggling to go on the deal I'm in at the moment. Wish me luck. Merry Xmas!