You may know that I’m a little embarrassed about my negotiation approach of the past.

Negotiation is a bit like driving, isn’t it? 80% of people think they’re a better than average driver. Now, I’m no statistician, but that’s impossible.

I used to think that I was a great negotiator, like everyone does really, because I’d done so many of them.

How little did I know. I was never a student of negotiation while I was a practising Procurement specialist. I thought I knew what I was doing, but essentially I was haggling, and principally around a single variable. Guess what that variable was? Yes, you’re right. It was price.

It is humbling to think about those times, but I’d like you to learn from my ignorance.

The thing is, if you’re fixated around a single variable of price, you’re likely to encounter deadlock pretty quickly. 

The reason for this is because a £1 or $1 or €1 or whatever, is worth the same to your counterpart as it is to you. It’s zero sum, or win/lose. For you to gain £1, your counterpart has to lose £1. This is haggling.

Negotiation on the other hand involves exchanging items of value with your counterpart, to reach agreement.

The more items of value (AKA “variables” or “tradeables”) that you bring into your negotiation, the easier it will be for you to reach agreement, because these variables give you options and expand the negotiation playing field.

The characteristics of an ideal variable are that they can be traded (obviously) and they offer more value to one party than they do the other.

For example, your supplier might place a high value on a contract extension and be prepared to trade that with giving you longer payment terms (which they value as less important).

Another example could be a supplier wanting to trade a strategy session with your Marketing team in exchange for a smaller minimum order quantity.

Your variables can be anything, provided they are items of value to you and your counterpart and it’s really an opportunity to get creative.

But rather than getting creative and all “Taylor Swift” just in your own head (“I would like you to provide 15 white puppies with every delivery of widgets”) your variables should be based on the needs of your business.

What would provide value to your stakeholders (who you’re representing in the negotiation) the likes of finance, supply chain, planning, legal etc?

On the other side of the coin are the variables that you’re prepared to concede. Yes, concede. If you don’t offer up any movement, then neither will your counterpart. The result? Deadlock.

What’s important to the other party? What do they really value that you could offer them and which are easy (low cost / low pain) for you to give?

Once you get into the habit of taking a list of variables / tradeables into your negotiation, it really will transform the way you negotiate…and your results.