Negotiation Stages

What is it?

A negotiation meeting is generally seen as having four stages: opening; testing; moving; and closing. However, in order to undertake successful negotiation, two additional stages are required before and after the negotiation itself: planning (pre-negotiation); and review (post-negotiation).

The planning stage is very important. What you do (or do not do) at this stage will determine the course and probably the outcome of the negotiation. It is important to understand the context of the negotiation: the requirement, the market, the relationship, the power balance, the other party, and establish the relative strengths and weaknesses of your positions. You should determine your objectives, set targets, identify variables, decide on strategies and tactics, and consider teaming issues and roles. This will require significant time and effort.

You should also spend some time planning the practical aspects of the negotiation: the location, seating arrangements, timing and notice of the meeting, and setting/distributing the agenda. Opening the meeting is key, therefore you should prepare your opening tactics, whether you should lead or follow, how the other party may respond, and any difficult questions and issues that may arise. It may also be useful to undertake a rehearsal, depending on the importance and complexity of the negotiation.

The objective of the opening stage of the negotiation is to establish a sense of control in a manner which is conducive to achieving the overall objective. Negotiation is between people, therefore you should adopt a warm and friendly approach, state the length of time available, establish agreement for the agenda, and generally build rapport. You should start with an ambitious yet credible position. This will enable you move and compromise later in the process. You should gather information from the other party by using open questions, encouraging them to talk and listening to their answers. At this stage it is important not to give away your true position.

The objective of the testing stage of the negotiation is to test the validity of the assumptions you made before the meeting, to see where movement from the other party is likely to come from, and to understand what is expected of you. Listening is again important. You should test your assumptions, investigate the negotiation variables, clarify, question and understand.  It is important to keep the other party talking in order to understand their position.

The objective of the moving stage of the negotiation is to achieve the maximum movement from the other party, whilst making minimum movement yourself, in relation to your objectives. This is the hard-bargaining part of the negotiation where proposals and counter-proposals are made and the two parties’ positions eventually come together. In complex negotiations this stage may last over a long period of time or may even require adjournment and another meeting. There are a number of different ways of encouraging movement, through persuasion, tactics, conditioning, and bargaining. These are discussed in other knowledge assets.

The objective of the closing stage of the negotiation is to conclude the discussions, reach a workable agreement, record what has been agreed, confirm the next steps, and ensure that the relationship is on a firm standing for the next time. It is important to agree what has been agreed.

The final review stage of the negotiation is to compare the actual results against the original plan and targets. What went well and what did not? What could have been done better? It is important to learn from the negotiation for the next time and to share information within the negotiation team.

What does it look like?

Negotiation Evaluation Checklist

Below is an example of a negotiation evaluation checklist. This can be discussed among the negotiation team at the review stage to assess the success of the negotiation. It is based on a commercial negotiation with a supplier.