The Principles of Negotiation
With the proper skills and attitude, anyone can become a successful negotiator. But first, you'll need to learn the basics to prepare for, assess, and respond to offers for the best results. GLOBIS Unlimited can help.
Negotiation: Creating Value
Want to create more shared value between yourself and your negotiation opponent? Discover how cognitive bias affects the judgment of others. Try this course from GLOBIS Unlimited to master the value of negotiation.
Negotiations can be stressful—especially if you’re conducting them on behalf of your team. If you’re preparing to negotiate a bigger budget for your team, you’ll need to balance the needs of your teammates with the conditions laid out by management.
The Principles of Negotiation
With the proper skills and attitude, anyone can become a successful negotiator. But first, you'll need to learn the basics to prepare for, assess, and respond to offers for the best results. GLOBIS Unlimited can help.
Here are a few things to keep in mind during this process to get the most out of your negotiation.
Different Styles of Budgeting
Determining a budget may seem straightforward, but there are two different ways a corporation could approach the process: from upper management down, or from lower-level employees up. Each comes with its own pros and cons.
Top-down Budgeting
When a budget is determined by upper management alone, the process is known as top-down budgeting. There’s no need to consult the lower end of the company hierarchy, so the process goes quickly.
Although the process is fast, there’s no input from employees. This could mean that the final budget isn’t allocated as well as it could be. It could even cause friction between management and employees if one side feels underrepresented by the results of your negotiation.
If your company uses top-down budgeting, be ready to communicate with your team about how the decision was made so they don’t feel ignored or powerless.
Bottom-up Budgeting
A bottom-up budget starts with employees. Before presenting a proposal to senior management, they first compile their needs and agree on a new budget proposal. This is a great way to keep employees involved and ensure your budget is allocated properly.
Of course, too many cooks in the kitchen can cause issues, as well. Allowing boots-on-the-ground employees to weigh in keeps morale high, but too many budgetary opinions flying around at once can cause the process to stall.
As a team leader during bottom-up budgeting, it’s up to you to clarify parameters. Set deadlines for input and be transparent about what makes it into your final budget proposal—and why.
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Preparing to Negotiate a Bigger Budget for Your Team
Regardless of the budgeting style at your company, getting approval for a budget ultimately falls to the manager—you. To get the best budget possible on behalf of your team, there are certain things you should do to prepare.
Do Your Research
Make sure you’re prepared to enter negotiations with confidence. Proper research is essential. Documentation that backs up your team’s merits with data such as KPI reports or previous budgetary breakdowns can all come in handy. Be prepared to answer any questions about performance.
Set Goals
You know where you and your team have been, but where are you going? It’s a good idea to have clear goals set in place at least one fiscal year in advance. Think about what your team wants to achieve. How could a new budget enable that?
Shoot for the stars, but be prepared to land among the clouds. Back up your proposal with realistic expectations to secure the best results.
Identify Future Trends
We can’t predict the future, but we can make an educated guess.
Keep your finger on the pulse of your industry, especially within your team’s niche. What are other teams doing? What are the latest trends? While preparing your proposal, use this as inspiration for how your team can evolve in the long run.
Prepare a Cost-Benefit Analysis
You can shower your team with praise, but in the end, money talks. Use raw data to your advantage. Organize the numbers, and show a clear advantage to your company’s bottom line if your team gets the budget you’re asking for.
Keep in mind that it’s highly unlikely you’ll walk away with everything you ask for in a negotiation. Think about where you’re most flexible and where it’s impossible to compromise. If you’re forced to make concessions, try to barter away the least critical pieces. That way, you can still walk away with the crucial pieces of your proposal intact.
Negotiation: Creating Value
Want to create more shared value between yourself and your negotiation opponent? Discover how cognitive bias affects the judgment of others. Try this course from GLOBIS Unlimited to master the value of negotiation.
Stepping into Negotiating a Bigger Budget for Your Team
You’ve prepared. You’re ready to negotiate. Now what?
Principled Negotiation Strategies
As a starting point, it’s a good idea to be aware of the fundamentals of principled negotiation. Approaching the negotiation with a mutually beneficial and professional mindset will ensure everyone walks away feeling like they’ve won something.
Listen to Your Opponents
It’s easy to get so caught up in what you want from a negotiation that you forget that your opponents have their own goals, too. Don’t forget to listen. Try to understand where the opposing side is coming from. A successful negotiator isn’t always focused on winning. Try approaching your negotiation with a win-win attitude.
Demonstrate that with the right budget, your team will help the company reach its goals.
Patience Is a Virtue
In the West, there’s a tendency to want to close deals as quickly as possible. It’s fine to keep things moving along, but obsessing over efficiency can be detrimental in negotiations. Rushing to wrap things up may cause problems down the line.
You may be pushing for a bigger budget to accommodate a piece of equipment your team desperately needs. With too much focus on speed, you could end up settling for a lower-quality, cheaper tool that doesn’t last long, which will set you up for problems down the line when it breaks.
Take your time with a negotiation and earn the advantage.
Your Team Deserves a Better Budget
When negotiating a bigger budget for your team, the best thing you can do is ensure they have the tools they need to get the job done. Prepare thoroughly. Make sure your data is well-organized. Enter the negotiation with patience and confidence. Most importantly, aim for a mutually beneficial outcome, and you’re bound to come out ahead.
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