The Four Phases of The Negotiation Process

“Let us never negotiate out of fear. But let us never fear to negotiate.” John F. Kennedy

If you sit down and analyze your negotiation preparation, specific patterns should begin to appear. It’s like putting a jigsaw puzzle together. Without consciously being aware, most of us realize that we are approaching negotiations inconsistently. Perhaps even haphazardly. There are many benefits to following a tried and tested formula for repeated success. Negotiation skills without a methodology tend to work on the simple deals, but fall short on the bigger, more complex deals.

People unknowingly perform and engage in negotiation, mediation, and dispute or conflict resolution practically every day of their lives. Often, people don’t consciously understand or know the process. Our approach as individuals varies according to our upbringing, culture, education, and life experience. Numerous factors influence our development as individuals. Our success or lack of success varies. Sometimes we zig when we should have zagged, but then again, “hindsight is 20-20.”

Here, we are going to consider the various phases of the negotiation process. Large companies’ procurement departments employ RFQ, RFP, RFT, and RFI processes to support talks. Similarly, many corporate clients on our sales negotiation courses have received training. At least, many read books on a variety of sales negotiation methodologies.

By visualizing the procedure, and what each phase entails, we might develop a broader understanding. We might then become more proficient at bargaining in both our professional and personal lives. It doesn’t matter whether you’re discussing your teenager’s curfew hour or a more realistic and flexible work schedule with your boss. In the end, it all boils down to the same thing—you want to be able to perform successfully.

The 4 Phases of the Negotiation Process

1. Pre-negotiation

Everything we do, if we are to perform the activity properly, requires a certain degree of preparation. No doubt, there are many occasions we have admonished ourselves when things didn’t turn out as well as we thought they would. Preparation is the key to any successful activity or endeavor. 

The first thing to determine is whether there is actually any reason to negotiate at all. Secondly, it’s essential to be clear on the specifics. We have to get “our ducks in a row” before we even make contact with the other side. Then, we need to establish some form of negotiation agenda before beginning our talks. We should identify the correct people who will be involved in the talks. It’s important to know their levels of responsibility and authority.

Where possible, we should attempt to obtain as much information about these people and their company. Intelligence gathering is crucial in obtaining a picture of the other side. That way, we can assess the other side’s needs, motivations, and goals with respect to our own.

Next, we need to set up a venue where we are going to meet and have adequate time to conduct the talks. It is a good idea to begin this process by establishing direct contact with the other person. We can begin by building some kind of rapport and set out the agenda. This is achievable through a variety of means: phone calls, faxes, e-mails, and even an informal personal get-together beforehand.

2. Conceptualization

This phase is where we develop the foundation of the agreement by framing the issues, without becoming bogged down in the small details. We need to put the building blocks together to understand the basic concept of the agreement we are seeking. It’s like two sides coming together to consider the blueprint design, or structure of the deal. We are attempting to formulate principles upon which we can both agree. For example: who will provide financing or the licensing aspects?

This is the phase where we define each other’s goals and objectives through fact-finding and by establishing some measure of compatibility. It’s not unlike an awkward first date. We begin to consider creative options and discuss negotiation concessions. We advance proposals and counter-proposals, back and forth, until both sides some manner of tentative agreement.

The terms of the partnership are re-framed until they reach the level where both parties are as satisfied as they can be, within the various parameters of what they bring to the table. This is how we arrive at the basic concept of our agreement.

3. Settling the Details

Simply put, this phase sees the completion of the agreement. Here, we use our external specialists to complete the details of the venture on which we are about to mutually embark. This phase discusses the problems of implementing the partnership realistically so that it is both viable and workable. We also hammer out the details as they relate to production, scheduling, handling delays, task responsibility, and authority. We will use our own technical and management people to streamline the process, so it works smoothly, and meets both our standards and requirements.

The final portion of this process is then left to the wordsmiths, usually our respective legal experts, to put our agreement into written form, and to describe the contractual obligations to which both sides have agreed.

This is not the “walk in the park” like it sounds. Settling the details correctly and meticulously is extremely important. Many talks have collapsed because the participants failed to devote the necessary time and work to address the details efficiently. Until these are properly ironed out, we can’t celebrate our success.

4. Follow-up

Just because we’ve signed on the dotted line doesn’t mean that it ends there. We cannot toss the contract into our files and forget about it. It seldom ends there as problems always arise. Any aspect of any contract may need to be re-negotiated, or the details altered to counter a wide variety of changing circumstances. Expensive and embittered legal battles can be circumvented simply by keeping the lines of communication open with our counterparts. We should be experienced enough by now to understand that things may not be as simple as they first seem.

Conclusion

If we properly apply the phases of negotiation effectively and efficiently, positive results will manifest themselves following our efforts. Anything worth doing is worth doing well, and as negotiation is something we can’t hide or run away from, we might as well do it right.