Quick negotiating tip – Challenging an opening bid

One of the golden rules in negotiation is – always challenge an opening bid – even if it seems attractive at first glance.

Many negotiators fail to challenge an opening bid as they fear aggravating the other party. On the other hand some hard ball negotiators relish diving in headlong and challenging the bid.

That is expensive. You will have to do much better than that!

If you do not challenge the bid, you are simply storing up problems for later in the negotiation, as the other party believes you have psychologically accepted the proposal/price. However challenging an opening bid aggressively head on might set the tone for the rest of the negotiation making life more difficult than it needs to be.

The key here is to challenge the bid without being overly aggressive. One possible way to do this is to ask the other party to justify their offer.

Tell me………How did you come to that valuation – assessment – price etc?

Do this with a mildly curious sounding voice and you can subtly challenge the bid without causing offence. The other party now has to justify their initial pitch. Done well the negotiation should enter into a phase of dialogue based around value propositions rather than positional statements.

The reason why we think our offer represents good value is…………………………

This justification of their opening offer is likely to release previously unknown information into the open.  This information can often be used to glean where the real value lies in any negotiation and can set a positive tone for subsequent discussion.

Remember, a good negotiator will challenge opening bids. Be prepared to justify your offer. Having a well prepared response to a challenge  will not only make you look professional but increase your chances of securing a good deal for both parties based on shared value.

Small is the new big, trust is the new competitive advantage

I came across this interesting article written by Peter Bregman on the Harvard Business publishing website.

It suggests that the concept of being big as a source of competitive advantage is on the wane. As more and more large organisations are laying people off, some of the decision making processes are being questioned by middle management. The climate of trust both inside and outside the organisation are impacting negatively on employees and customers alike.

We simply don’t trust companies anymore. We trust people. And in big companies, it’s hard to even find a person to trust as we scream “operator” into our telephones only to get transferred to another menu whose options have changed.

It makes for interesting reading. It raises the questions about leadership and trust at a time when most people are feeling insecure about their futures. If Bergman is right then small and responsive companies who can build strong relationships with their staff and customers could be in for a period of sustained growth despite the current economic situation.

I believe he has a valid point.

Link to the article