The most powerful person in any negotiation is the one who doesn’t need to do a deal. And the key to unlocking that power is to get yourself a great alternative.
The more thought you put into creating new, better alternatives to the deal that’s on the table, the more powerful your position will be. At the same time, the more you find out about your counterpart’s alternatives, the more confident decisions you can take.
Building your alternatives and understanding your counterpart’s will take time and effort, but here are three great perspectives you can use:
Alternative deal: There are lots of ways to skin a cat. Deals can be re-shaped to share risk, create security, reward growth, secure a level of service or even build dependency and partnership. Understand your counterpart’s priorities and their alternatives, and then create options that add important value for them and increase the profit for you.
Alternative partner: Imagine you can’t reach a deal, and you stop trading together. What do you do? How do you replace their business? Building a workable plan for the worst-case scenario is a liberating experience. It gives you time to put actions in place before the crunch comes; it produces options that you may well decide to do regardless of how the negotiation unfolds; and it invariably improves your position, and your confidence, at the negotiating table.
Alternative approach: When Rupert Lee-Brown couldn’t negotiate affordable funding, he re-wrote his business plan to set up Caxton-FX with no capital. It now employs 60 people and has a £400m turnover. The Arctic Monkeys, unable to get a record deal, used the Internet to build their fan-base, giving them amazing leverage when the labels finally started returning their calls.
Indeed, it’s never been easier to connect with new customers and potential business partners, so the only thing limiting your alternatives is your willingness to search them out.
BOTTOM LINE: Challenging yourself to create alternatives will not only help you in negotiations, it may well help you transform your business.