Never accept no Featured

12:40pm EDT May 15, 2006
Business people who do not negotiate effectively with suppliers, customers, staff members and other parties who can affect their operations over what at times can seem like seemingly insignificant points put themselves at significant competitive disadvantages. Their inability or unwillingness to negotiate can force them to accept business costs, labor terms, settlements, etc., that are not in their best interests.

Their alternative in such cases is to hire attorneys. That drives up their costs, cuts into their profits, places their fates in the hands of third parties who might not have their best interests at heart — and still does not guarantee them favorable settlements.

Business people can avoid negative outcomes in such situations by developing effective negotiating skills.

Smart Business spoke with Donald E. Godwin, founder, chairman and CEO of Godwin Pappas Langley Ronquillo LLP to learn more about how business owners and key personnel can learn to negotiate successfully and gain a competitive advantage in the process.

Why should business people learn the fine art of negotiating?
They can substantially reduce their business risks and legal fees, lower costs from suppliers, increase sales and resolve issues that might arise with employees without resorting to the courts for settlements.

To be successful, business owners should spend a significant amount of time negotiating many aspects of their businesses.

Isn’t it more practical for business people to hire legal counselors to do their negotiating for them?
Not always. In fact, they should allow attorneys to intercede only as a last resort.

For one thing, relying on attorneys increases their legal costs, which is contrary to the purpose of negotiations.

For another, many of the issues involved in the negotiations might eventually end up in court, rather than be resolved directly between parties.

Over the years, people have learned that — even though they think they have facts and the law on their side — jurors and judges might not see the issues the same way the parties involved do. That could lead to adverse results in the form of unwanted and costly settlements.

Direct negotiations between parties can often eliminate these outcomes.

What are the goals of negotiations?
The goals are to make sure all the parties involved get something, that the negotiations end on a high note, and that everyone has been treated fairly. It is unproductive to draw a line in the sand or make the other side feel like they’ve been taken advantage of.

Are there any hard and fast rules to negotiating?
One rule to follow in every negotiation is to be willing to consider both sides of an issue. Be open minded, and be willing to listen more than talk. When you are listening, you are learning. The more you learn about your adversary’s position, the more effective you will be in your negotiations.

How do people learn to negotiate?
The best way is to actually do it. There is some training involved. For example, watching and emulating competent people who are experienced in the practice. Listening carefully to the other side’s wants and needs is critical.

Negotiating is just like learning to swim or ride a bike. You actually have to practice them to develop and retain your skills. The same is true in learning to negotiate. Over time, you will learn to negotiate effectively.

What are the keys to successful negotiating?
Among the most important are learning as much as you can about your adversary, keeping an open mind, understanding that not everyone is coming into the negotiations with the same mindset, determining the other side’s wants and needs, personalizing your negotiations, never accepting ‘no’ for an answer, exercising patience and perseverance, being organized and refraining from putting all your cards on the table too early in the process.

Should negotiators treat the other side as adversaries?
Adversary has a negative connotation. Often, business people involve themselves in negotiations with people with whom they have ongoing relationships. Therefore, it is important that they be as fair as possible in their negotiations, without making the other side think that they are out to win at all costs.

Approaching negotiations in that vein can lead to strained relationships with the same people who are a constant part of their business dealings, which can hurt them in the long run.

Should business people approach negotiations with a sense of empathy, rather than power?Always negotiate from a position of strength, rather than empathy. Never let anyone think that you use power as a part of your thinking process. People are offended by the term ‘power.’ People should always negotiate from a position of being informed, well advised and fair.

DONALD E. GODWIN is the founder, chairman and CEO of Godwin Pappas Langley Ronquillo LLP. He specializes in commercial litigation, environmental issues, labor, employment and mass tort litigation. Reach him at (214) 939-4412.