Take the 12 steps to become a master negotiator

The topic of negotiations is a very important one that touches all aspects of business and life, and a lot of literature and educational courses have been developed covering the topic.

Arabs, by definition, have the right character and personality to become good negotiators versus other cultures, since some of us originated as traders [like the Lebanese]. Negotiation is a part of the daily activity of buying and selling goods and services as well as our daily life routines [such as taking a taxi in Egypt]. So negotiation has became a part of the culture and so prices are always overstated, expecting the other side to negotiate. Many tourists receive a shock in Egypt, as they are expected to negotiate or haggle while buying souvenirs and taking a taxi – an activity they are not used to in their own countries. Nevertheless, negotiation is like any other activity or skill; it needs preparation, practice and the use of best practices to make you better at it – it is not enough to be Arab.

I took negotiation classes when I was doing my MBA at Insead, where I naturally excelled being an Egyptian. Here are my top 12 learning points on negotiations. Of course, they do not all apply to every negotiation.

1. There is no one right way to negotiate

You have to adapt your style to your opponent. If you are negotiating with a person with whom you will have a long-term relationship such as a colleague at work, or a friend, you need to be honest in terms of information sharing and you need to be transparent in order to create value for both parties to create a healthy environment for future collaboration.

On the other hand, one should be very careful in hit-and-run negotiations, in which you do not care about the opponent and you are only trying to get the maximum benefit out of the one-off deal. In Egypt we have a lot of good hit-and-run negotiators since a lot of parties we negotiate with on a daily basis are not a part of our repetitive life. It is very important we watch out for this point, since negotiations with partners/ suppliers/clients with whom we have a long-term relationship are more sensitive and need to be done in a win-win situation where we have to build credibility and trust; and where we have to build mutuality.

2. Information and preparation is key

You must always have all information, research as much as possible, and prepare different scenarios in your head before the negotiation. This will allow you to have other alternatives and to know whether your opponent is lying, and how much. Despite the difficulty of obtaining accurate information, research will give you good ranges and will build your sense of numbers and estimations before negotiation. A shrewd opponent will test the waters at the start of the negotiation to see how much knowledgeable and aware you are as an opponent. This stage is really critical since the opponent sets his initial offer accordingly. This is a point a lot of us lack in the Middle East.

3. Reputation and first impressions matter

It is very important to leave a good first impression, and build your reputation as a fair, honest, win-win type of negotiator. This helps a lot in further negotiations with the same party, versus hit-and-run negotiations, where you try to squeeze the maximum benefit out of the opponent, since you are not going to meet them again.

4. Think outside the box

One very successful technique I used was to always think outside the box. To create a new factor during the negotiation (an extra element that I do not really need), request it really hard, then give it away during the negotiation as a big concession to generate concessions from the opponent's side as well. The opposite also holds, by always hiding your real needs, or how strongly you need them to avoid the opponent overpricing the product. This position allows you to keep an upper hand during the negotiations.

5. Initial offers always harm

Going against the herd, I am one of the believers that an initial offer always harms. Therefore, I avoid making initial offers in most of my negotiations and go straight into details. Even when pushed hard I try to stick to ranges to avoid a figure. My reasoning goes as follows: As a seller, a low initial offer anchors you low and enables the opponent to take advantage of you while a very high initial offer can either de-motivate your opponent from pursuing the deal, or affect your reputation and credibility as the deal goes down to half the value you first proposed. This, of course, depends on whom you negotiate with. For example, while negotiating with a Northern European, a starting point range for the offer needs to be close to reality not to discourage them, versus negotiating with an Egyptian who would usually not get offended with your first range of offer and will get back to you offering half what you asked for, even in the sophisticated sectors such as M&A.

6. No guts, no glory

To be a good negotiator, you have to be willing to take some risk. Fear of not closing a deal makes you more willing to give away parts of the deal to the opponent only for the sake of closing a deal. This makes you a weaker player. On the other hand, if you go into a negotiation with a cool attitude not letting your fears take over, you are likely to come out with a better deal. There is a myth that says, "If an animal smells your fear, it is more likely to attack you". I think it is also applicable to negotiations where your opponent would totally change his attitude if he discovers your fear or urgency to close the deal.

7. Leave your feelings outside the room

If you show your feelings during a negotiation a good opponent will play on them and manipulate you. Once you focus on yourself, you automatically stop focusing on your opponent and you cannot even think straight about your output. In my efforts to be a better negotiator, I learnt how to control the tiniest sign of feelings that could reveal my position, while I became very receptive at reading others' feelings through their actions and expressions.

8. Patience

No need for elaboration!

9. 'If talking is worth silver than silence is worth gold'

This Arab proverb is very applicable to negotiations since you learn most by listening rather than talking. The more you talk, the more you reveal information and feelings and the less you are receptive to the changes in your opponent as well as the situation. We are used to do a lot of talking in the Middle East, which is counter-productive to negotiations since you reveal much more of your own situation and weaknesses, versus focusing on your opponents information that would help you to better gauge their position and understand their priorities.

10. A smaller share of a big pizza is sometimes better than a bigger share of a smaller pizza

In integrative negotiations, it is very important to maximise the benefit of the deal before fighting over the slices. This is only doable through good open transparent communication. To do that you only need to disclose the critical marginal information that would help optimise the deal, while understand the same from your opponent's point of view. In a lot of negotiations, we tend to revolve around one main element (usually the price) while other elements might be as important to both buyer and seller such as payment terms, other benefits given with the main product/service, after service. Those elements, once integrated into the negotiation, give both buyer and seller more chances to close a deal while each party gets some benefits.

11. Do not burn all the bridges

Relying on some background information, proper research and some sense as covered already in the article, one has to give a reasonable initial range for the offer. An offer that is too ridiculous might repulse the opponent and discourage them from reaching any deals. Sun Tzu's principle of "burning all bridges" is very dangerous to apply in normal negotiations; always leave some space for negotiation and give yourself some space to change your opinion as well while saving face. A lot of business deals in the Middle East fail because of the ego of either the buyer or the seller.

12. When in Rome, understand the behaviour of the Romans, and thus become an even more complete Japanese

To put this concept into perspective, a Mediterranean/Arab opponent would expect more social, personalised and relaxed environment around the negotiation, and can easily close a deal over lunch/dinner/or even a shisha with someone they trust versus a North European opponent who would expect you to be blunt and straight forward with him, and professional about the negotiation along the way.


- The writer is co-founder and MD of Enmaa Financial Services, an Egypt-based financial services and consulting firm

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