Negotiating with Dragons

Negotiating with Dragons

Last night the BBC showed their latest guide to how to succeed on Dragon’s Den. The focus this week was on Negotiation, and a 5 point plan for success.

Here is the 5 point plan, with some sound theory behind it. Unfortunately, the programme presented the points out of sequence. I’ve re-ordered them so they are in chronological order;

1. Have a strategy

Presented last on the programme, the most crucial aspect of any negotiation is to plan  ahead and be clear on  your strategy and the tactics you may choose to use (don’t forget  to allow yourself to react to what happens in the negotiation, rather than be dogmatic). The programme showed Kate Castle as an example and her bold step of revealing her preferred Dragon (Theo). This was a high risk strategy as it effectively ruled out the other Dragons, but it paid off and she got a successful outcome. But was it pre-planned or reactive?

Good planning includes deciding what your choice of negotiating style is (competitive, relationship, collaborative or compromise).

2. Know your bottom line

This is part of point 1 really. Always be clear what your “walk-away” point is and stick to it. You need to know this before you go into the negotiation or you are likely to be disapppinted in the outcome.

3. Don’t be greedy

This starts in the planning phase, but carries on during the negotiation when you need to have flexibility. Look for a sensible level of investment and know what your WIN position is (what do I WANT? what is an IDEAL result? what do I NEED?). The example in the programme was Chinese entrepreneur Ling and her car leasing business. Ling’s expectations were unrealistic and she lost out.

4. Take (or keep) control

This is about keeping on top of your emotions and (if possible) your body language. Experienced tough negotiators will be looking for any opportunity to exploit your weaknesses, so you need to keep cool and detatched. the pitch for the mobile water refreshing unit managed to secure all 5 Dragons on board by using this tactic.

5. Know how to haggle

A crucial skill in negotiation that only works if you have clearly identified your WIN positions and you stick to them. The key thing here is that it is about give and take; don’t be inflexible, unless you stand to lose out, and never give something away for free. Know your “tradeables” in advance – those things that can get a deal moving. The ideal tradeable is something that is valued by the other side, but is of low value to you. Aim to identify tradeable that are valued by the other side as you go through back and forth negotiation (haggling).

So there you have it, a 5 point plan for successful negotiation, this time presented in the right, chronological order.