Productivity//

The Art of Not Negotiating

In business, it doesn’t make sense to not strike a bargain, right? Wrong! Here’s why.

If you’ve been brought up in an Indian household, chances are you learnt how to haggle when you were a kid. At about the same time that you learned the alphabet, you also learned to develop an attitude of irreverence towards prices quoted by sellers—irrespective of the product, the price quoted, or the seller.

By the time I was 9, I could pretty much replicate my mother’s incredulous “What?!” in response to the brinjal-waving vegetable vendor who showed up in our middle-class colony three days a week. The rules were simple—you procured everything at a significant discount to what was quoted, and your sense of satisfaction was in direct proportion to the discount you’d wangled.

Negotiations are an intrinsic part of our daily lives (how else does a household decide who does the dishes?), and recent dealings taught me that I might have to layer on some nuances to those deeply-ingrained childhood learnings and methods. Specifically, that there are certain times when you might want to control the impulse, and choose to not negotiate

Ask yourself, is this simply a matter of habit? Few management degrees are complete without negotiation courses. It compels one to believe that we have to, and we must, negotiate in every situation—and that we must negotiate the other party down from their position—whatever that ask is.

I recently encountered a design expert when looking for someone to complement my team and after working through the scope, I realised his ask was precisely the fee I had in mind. I promptly said yes, and also agreed to pay 50 per cent upfront (which I rarely do when working with someone for the first time). Could I have managed to reduce his fee by 10-20 per cent? Possibly. But my true upside—no lengthy negotiations. The work started within 48 hours and I had a strong creative resource with the exact mind-set that I needed to combat a hefty work challenge.

Walk away (nicely): A 2018 HBR article (Women Ask for Raises as Often as Men, but Are Less Likely to Get ThemJun 2018) outlined interesting findings about the gender wage disparity (estimated to be 10 to 20 per cent). A common explanation had been that women are less likely to negotiate versus men. However, this particular study (statistically) argues that women do “ask” just as often, they just don’t “get.” I don’t believe there is an easy solve, but perhaps sometimes, we must be prepared to walk away.

A few years ago, I’d been approached by a firm for a short, two-week assignment. I had the capacity, and the work was interesting, but we were significantly off on the fee. The lower rate would not have significantly impacted my P&L, however, I realised that a lower price might signal lower value—something I was not comfortable doing for a new relationship. So I chose to walk.

We didn’t work together on that assignment, but a few months later, we did engage on something more substantial, at an appropriate fee.

In choosing to take this path you must (a) be ready to deal with the consequence of losing a deal (b) distinguish that you aren’t walking away from the relationship, but rather a specific instance. In letting an opportunity pass, you might lose something in the short term, but what you might receive in return, is respect and greater negotiation power for the next time you choose to engage.

Giving In is not = Giving Up: Often we define professional relationships with carefully crafted and negotiated contracts. And just as often, the carefully crafted assumptions the agreements were based on, shift.

Recently, I hired a consultant and agreed to a payment schedule based on a specific deliverable schedule. However, the output timeline shifted considerably and, as per the contract, I could have negotiated a delay in payments as well. However, I knew the consultant was exceptional at his job; that the delay was driven by some truly unforeseen circumstances; and most importantly, it was unlikely that he was going to abandon his commitments—in his business, reputation counts for a lot.

While that story is yet to play out fully, there’s no doubt that once I reaffirmed my end of the (original) bargain, he doubled his efforts to make up for lost time—although I technically no longer had leverage on him.

I realised that sometimes when you don’t negotiate a discount, you win yourself something better—goodwill… and that can make up for a lot. So, on occasion, you might just want to consider paying full price for the brinjal, for you never know, as he’s loading up your bag, the subzi-wala might just throw in a bundle of fresh coriander and two extra oranges—just for you.

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