The Art of Negotiation – A Toolkit for the Current Market

“The biggest challenge with any negotiation is how we deal with emotions” Dan Shapiro 

I attended a conference recently where one of the keynote speakers was Dan Shapiro. Shapiro is a Harvard Lecturer and probably one of the most experienced political negotiation experts/advisers of our time.

He explained to a room full of office and industrial brokers that the biggest challenge with any negotiation is how we deal with Emotions – both our own and those of our counter-party.

As you can see from image above, there’s a lot of emotions we can experience. The most successful negotiators tend to focus on the following 4 x key areas;

  1. Appreciation:
    • This can have a huge impact
    • Everyone likes to feel appreciated – play to that
    • No one likes to fee devalued/unheard/not understood – steer clear of that
  2. Autonomy:
    • The freedom to make decisions without ‘butting in’ from others
    •  Golden Rule: A.C.B.D “Always Consult Before Deciding” – never let raw emotion get in ahead of A.C.B.D
  3. Affiliation:
    • Another impactful area
    • The emotional connection (good or bad) between you and another plays a vital role in the negotiation process
    • Golden Rule: Try turn an adversary into a colleague
  4. Status/Role:
    • Your status/standing in relation to another
    • We all play pre-established roles in negotiation (You might be the Senior/Junior Agent or you might be the Client/Lawyer)
    • Golden Rule: Choose an effective role rather than a pre-defined ‘traditional role’

Taking all of the above into account, how is this relevant in the context of the current Dublin Office Market/Investment Market?

It’s a challenging market right now. Landlords/Sellers/Lenders are facing declining values (fact) across most of the commercial sectors. Occupiers/Buyers/Lenders are all aware of this and seeking best value. In this part of the property cycle, emotions can run high, particularly on the Landlord/Seller side as they seek the best price they can achieve for their asset (Rent/Capital Value) against a backdrop of limited activity and falling values.

An adversarial mindset is too often encountered when emotions replace an A.C.B.D type approach. How many times have you heard the following when negotiations “heat up”:

“Take it or leave it…….. that’s our final offer”.

The problem with this approach is that it invokes an emotional response from the counter-party. This can be anger/offense or a feeling of being down spoken to. Human nature can produce an instant fight or flight response. This means it’s more likely that the receiving party of such comments will “leave it” in order to maintain their status in the traditional negotiation role play. Silly we know, and best case, it will delay a deal and worse case, it will kill it.

Difficult as it sometimes can be, if we have the emotional intelligence/presence to focus on the problem/issue and try to see it from both sides (in an attempt to find common ground)  a successful outcome is more likely. No harm in trying the following when you are stuck in deadlock on your next office/industrial deal…..

“Hey X…I need your help on this…in the current market, there is no way I’m going to be able to sell your proposal/offer to my client based on what we both know is actually happening out there…where can we take this……… we both should really try our best to make a deal happen……….do you think we could agree on the following……….???”

If we can turn adversaries into colleagues (hard as that might be to fathom), check our emotions (really hard for some brokers), be realistic about market conditions and be brave enough to make tough calls when needed…we are more likely to drive more deal possibilities through these better negotiation techniques.

Author: James Mulhall

 

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