Jack Sprat and his wife had different needs, and meeting them required negotiations. The Nursery Rhyme leaves us believing that they were both satisfied. Like Jack Sprat and his wife, you want to come away satisfied when you negotiate deals either of small and large momentous ones. Despite your differences with others, it is possible to have successful negotiations on issues of any scale. Negotiations are something we do everyday at home, office at work, in our jobs and in our communities, and in the hospitality marketplace.
Inevitably, every hospitality professional will need to work through a conflict with a co-worker, vendors, customers, or suppliers. The nature of conflict could be large, small, brief or extended; eventually all will be resolved through negotiation or by considering alternatives to achieve mutually agreeable solutions. Hotel professionals, like all other people, use negotiating skills every day, though not all are effective negotiators. To become effective, hotel professional need to master the fundamentals and art of negotiations. Hospitality professionals just as any other industry leaders will have to learn how to deal with a wide variety of techniques and tactics to conquer the issues they face on regular basis. Successful hoteliers would discover that that negotiating is in not only a fundamental part of doing business in the hotel industry but also an opportunity to think creatively, strengthen business relationship, and resolve the conflicts that occur every day in the life of busy hotel professionals.
Successful Negotiations is both an art & science that requires patience & endurance, the ability to deal with conflict, and a willingness to take risks. The more skillfully you negotiate, the better your chances of reaching mutually beneficial agreements with the other party/clients and of closing the deals.
One of the first things we can do to increase our effectiveness as negotiators is to adopt "give/get" and "win/win" attitudes and to develop a collaborative style for dealing with conflict. Secret is to negotiate a win/win situation where both parties come satisfied. Only then can negotiations be effective. Successful Negotiations can not happen without successful communications. In every situation, we will see that highly successful negotiators are effective communicators. Active listening is a key communication in negotiation and this implies more than hearing. Negotiators who listen actively are keenly in tune with the other side's needs and concerns. This is all about our relationship that affects our success in negotiations. When you have an ongoing relationship with someone, your success in negotiations is frequently determined by the depth of your relationship. And quality of our relationship affects the negotiations, and the way we negotiate affects our relations. With this foundation, we are more likely to achieve mutually agreeable solutions, because we view negotiations as an opportunity to work together to strengthen relationships.
The first principle is to negotiate actively, honestly and fairly "Do unto Others, As You Would Have Them Do Unto You." Almost anything can be negotiated, but careful planning and a cooperative atmosphere are essential, and concessions are part of the game. Always remember that your objective in hotel business which is mostly customer centric and relationship driven is to be keep both parties have a win /win situation that can augur well for future. Ultimately, in every situation and negotiations our goal is to build a lasting relationship with the other party or our customers.
Leverage the Power to influence outcomes:
During negotiations, your primary focus should be on three interrelated elements of negotiations- information, time and power. Information enables you to think of alternatives, invent options, develop effective strategies, and deploy tactics. The more information you have, the better your basis of negotiations. Time pressure affects the outcome of a negotiation, because the party with the greatest time pressure usually has the weaker position. And power is an important element, because win/win solution is most likely to occur when both sides have equal power. In selling hospitality products and services, it mostly useful to begin to negotiate until you gets conditional buying agreement from the customers. Then agree of the differences to be discussed and the order in which to discuss them. In establishing the agenda, it is usually best to begin with the differences that you think will be easiest to resolve, this tactic would build momentum and increase our motivation to work through more difficult issues.
For each issue you negotiate, probe in detail to reveal the other party's position. First, make sure you understand which of the customers needs are not being met and why these are important to the other party. Then make the other party aware of your needs. This helps the other party in negotiations to understand why it may be difficult or impossible for you meet their certain needs. You have to be good at negotiating- Negotiating a compromise when things are not going as quickly or as well as they want. Negotiation is a process and not an event. The long-term and Short-term goals of your negotiations ultimately fits into schemes of your overall business objectives.
Strategies for Effective Communication:
Communication is very significant phase of the negotiation process. Since effective negotiations are essentially a dialogue and conversations you can certainly expect some communications barriers and need to change the use of communication strategies as you might do in any normal conversation. Good communication skills during negotiations include listening, providing feedback, observing body language, and using effective verbal skills. To resolve the differences through negotiation, explore what-if scenarios with the other party to help you find out the alternatives that are acceptable to both you and the other party. Try to test the validity of each alternative by asking the other party hypothetical questions such as:
What if we were to...?
Suppose we did things this way...?
Would it help you if we were to...?
How would you feel if we were to...?
Throughout your discussion with the other party, invite suggestions from the party or allow the other party to bring in colleagues, co-workers who can bring in new insights and who can contribute worthwhile ides or suggestions. You might want to invite others from your own company who are good at brainstorming or have experience in conducting similar negotiations. When you anticipate and plan for negotiations, you would minimize your surprises and increase the probability of achieving a win-win agreement. Here, creativity and flexibility are the keys to successful negotiations. While doing brainstorming, keep your mind open and think of as many alternatives & options as you possibly can. The more ways you are open and flexible, the more likely is your chances of finding workable alternatives and solutions that both the parties can agree to and live with.
Dealing with deadlocks and impasse:
In certain situations you might run out of alternative or ideas and reach an impasse, it would be worthwhile to take a break from negotiations and relax, think over other options, try to get back on track with renewed energy and composed mind. Yet another approach is to leave the troublesome, waxed issues unresolved for the time being, and move on to the less complex and contentious issues where there could be consensus. You may even want to try a problem solving or brainstorming techniques to recharge your creative juices. It is vitally important that you don't commit to final agreement until the other party and you have explored all differences. When an alternative proves acceptable to both parties, put it on hold until you can commit to a complete agreement. As effective negotiators you should always be positive and upbeat and continually try to offer more alternatives and ore distinctive yet mutually satisfying solutions that bring more value to the other party. In all situations, successful negotiations required you to be more solutions-oriented than problem oriented.
Inventing strategic Options:
In most difficult negotiations, you will have to take recourse to another strategy for successful outcomes. This strategy requires overcoming differences by making concessions to the other party without getting anything in return. However, you should be cautious and use concession as strategy to reach solutions sparingly. If you give to o much, you can jeopardize the profitability of the sales or set unfavorable precedents. And then it would weaken your position in negotiations as the other party's expectation would increase and they would expect similar concessions in future. Therefore, it is important and useful to avoid making concessions until you know the other party's needs and don't concede if it undermines your objectives. In these situations, split the difference and find finding a mutually acceptable middle ground would be a better choice to reach mutually satisfying outcomes. The second strategy is to make a trade off or give the other party something that they want in return for something comparable or greater value to you. The real secret to successful negotiations lies in understanding other party's needs and being flexible and able to respond to them in timely manner.
Shared Interests and Values:
When you negotiate, always seek time to prepare for negotiations beforehand by analyzing the situations and developing alternatives. Be prepared for spontaneous negotiations; always develop a negotiation plan along with your strategy. It is also important to establish that you don't begin negotiations until you have established that the other party has the authority to negotiate. Every party has some important needs and these needs are more important than other needs, you should focus on satisfying these needs. Define areas where possible concessions and or trade offs could be made to reach an amicable solutions. In negotiations, conduct internal negotiations that can help. As you act as other party's advocate by conducting negotiations internally. As one successful negotiator said about his proven strategy "when you are at other party's office, you represent your company, when you are in your company, you represent the other party". This help in evolving new solutions and understanding other party's perspectives and pressing needs.
Winning agreement for lasting relationship:
The ultimate objective of any negotiation is to gain agreement. An agreement that satisfies the needs of both parties is the ultimate goals of all negotiations. There is no easy way to accomplish this, but you can certainly improve your chances of success by finding shared values, using third party, buying time, establishing objective criteria, creating a working partnership, and identifying alternative options. However, in this regard, you must always have an exit strategy or walk-away position. When you are no longer willing to negotiate an agreement where you are spending too much time on negotiations that the sale or outcome is worth or when the concessions demanded are far outweigh the benefits you would receive as a result of that negotiations. When the ROI on time and resources are unacceptably low, you should be willing to call it quit. It is like singing a deal with the terms so unfavorable that you will live to regret the day you closed it.
There are several techniques and tactics negotiators use on each other to accomplish their objectives. You must be able to identify these techniques, and then learn how to respond appropriately to disarm your partner's intentions. When choosing which techniques to use you should always strive for honest and opens communication during negotiation session. With the increasing importance of relationship in today's hospitality industry, you can't afford to win a negotiation at the expense of losing an important business relationship.
Mahendra S. Rathore. M.B.A., C.H.A., C.H.E.,C.T.A.,C.T.C., FHCIMA.
President, Ultima Hospitality Management