As leader you may be involved in many negotiations during your career. They would be all different in some ways, and alike in others.  Anthony Tjan, an entrepreneur, investor and CEO at Cue Ball, identifies five "golden rules" to be the most helpful towards productive negotiation outcomes. The rules parallel different stages of a negotiation:

1.Pre negotiation homework: Before any negotiation begins, understand the interests and positions of the other side relative to your own interests and positions. It means a pre-negotiation homework with an emphasis on understanding the specific interests and positions of the opposing side. Put these points down and spend time in advance seeing things from the other side.  Making a list of these points is the right starting place as it helps show where the biggest gaps might be. 


2.  Quantify the negotiation. The next step is to quantify the value of each negotiation point and of the negotiation in its entirety. According to Tjan,” while this seems obvious, it is not done as often as it should be. In most negotiations, people enter with pre-determined positions and then in the process allow emotion to override logic.” Having the discipline to assess and quantify the facts beforehand helps one to maintain rationality and perspective.

Here is a quick look at how best to quantify a negotiation:  1) Understand the big picture price / value you are trying to achieve; 2) Determine which of the negotiation points are quantifiable; 3) Bound the low and high values of each point. The big picture of the negotiation is critical to quantify. The most important number to remember is the total number you are trying to achieve. In the course of a negotiation many people end up negotiating on a point-by-point basis and without remembering the real value of any given point in the context of the broader ultimate goal. Making efforts to quantify the spread in a deal makes the negotiation much easier and can even eliminate points of negotiation. 

3. Don't negotiate against yourself. This is especially true if you don't fully know the position of the other side. Much is learned about what the other side really wants during the actual negotiation process. Stay firm on your initial set of positions and explain your rationale but don't give in too early on the points. Wait to better understand which points are more important to the other side. 

4. The stalemate: There will often come a point in a negotiation where it feels like there is zero room for either side to budge. Two sides are stuck on their positions and may have lost sight of the overall goals of the negotiation. Emotion may have overtaken logic at this point. If you recognize that you've reached this point, see if you can give in to the other side on their issue in exchange for an unrelated point that is relatively more important to you. Tjan illustrates this point with an example “during a friend's recent car purchase he negotiated the price to a level that the dealer did not want to move any more. My friend was going to leave when he asked if they would do the deal if he took the car price the dealer wanted, but give him a substantial discount on a brake job he needed on his second car. They said yes - likely since the discount on the brake job was an easier give (less profit on a job, but on a job they would not have gotten). Yet there was higher relative value of that discount for my friend who would have had to pay higher on the brake repair elsewhere.” Bottom line - there is usually negotiation currency outside of the last area you are focused on negotiating. Use different "currencies" and you might get there.

5. To close or not to close:  Sometimes you will need  let someone else walk away. Whether you drive too hard a bargain, cannot reconcile on key terms, or feel that the deal is just too rich for your blood, make the offer you want and let the other side walk if they don't want it. This is not to say to be offensive or to low ball, but rather to be honest, straightforward on what you are willing to do and explain that you understand if it does not work for them and that it is the best you can do. An example to end on is how Tjan’s friend John Hamel recently purchased his new home. He had found a unit in a townhouse complex that he liked and was ready to close on it at price x per square foot. That said, he thought he'd take a shot on a larger and more recently renovated unit by advising that owner (who he knew was interested in selling) that he was going to be accepting a price on the other unit in 24 hours, but would take their unit at an even more aggressive price per square foot if they were interested with an immediate close. Remarkable thing, he ended up with the larger unit and one of the best units in the complex.