Lewicki and Hiam’s Negotiation Matrix
Strong negotiation skills are essential for the successful business owner or manager. Without the ability to hold your own in a negotiation setting, you may find that you are taken advantage of more often than not. You don’t always have to drive a hard bargain in order to succeed – but you do need to know how and when you stand up for yourself and your organization.
One of the keys to being a quality negotiator is understanding the fact that you can’t take the same approach to each situation. Tailoring your technique to match the situation at hand is more likely to lead to positive results than simply going into each negotiation with the same line of thinking. You wouldn’t use a hammer when the right tool for the job is a screwdriver, and the story is much the same when it comes to negotiation. Pick the right ‘tool’ from your negotiation toolbox and you are more likely to come out on the other side with a satisfactory conclusion.
Lewicki and Hiam’s Negotiation Matrix is a helpful tool which can lead you to the right negotiating strategy for each situation. Using this matrix won’t automatically lead you to a successful outcome, but it will be a big step in the right direction. There are five negotiation styles contained within this matrix, each encouraging you to take a different tact depending on the stakes, the situation, and other factors. Below we will take a quick look at each of these five styles.
To get started, we find the ‘accommodating’ style of negotiation in the upper left portion of the matrix. This model suggests that you use this technique when you are involved in a negotiation where the underlying relationship is more important than the outcome of the deal. In other words, you are more concerned with making the other party happy than you are with ‘winning’ the negotiation. You don’t have to fight tooth and nail for every last penny in this situation because you are trying to foster a strong relationship. This can be thought of as a ‘lose-to-win’ technique, as you are willingly going to lose the negotiation in order to win the reward of a stronger relationship with the other party. You may take this approach with a valued employee who is looking for a raise, or with a long-time customer who you want to discourage from taking their business to the competition.
When you aren’t particularly concerned with the relationship or the outcome of a negotiation, it is best to simply avoid negotiating altogether. In this case, the process of sitting down to hammer out a deal isn’t worth your time or effort. With very little on the line, there is no point in investing significant time to come to a settlement. These kinds of negotiations are ‘lose-lose’, as nothing valuable is going to come from this process. Do your best to make a quick deal before getting into any kind of long, frustrating negotiation process.
This might be the most difficult segment in the matrix, as these are the negotiations where you care greatly about both the relationship you have with the other party, as well as the outcome of the deal. Likely, this would be a negotiation with your biggest customer, where you need to keep them happy yet also get a great price to support your bottom line. Or, this could be a discussion with union representation on a deal that is going to affect most of your employees. Whatever the case, working collaboratively with the other party is the ideal technique. They should have just as much to gain or lose as you do, so both sides have an incentive to work together. It takes skill to properly work through this kind of negotiation, but these are the deals that can take your business to a new level.
If you picture a confrontational negotiation in a typical business meeting room, this is what you likely imagine in your mind. These competitive negotiations are going to be appropriate when you need to get the best possible deal – even at the expense of the relationship you have with the other party. One example of this type of negotiation could be when you are working out a price with one of your suppliers. If there are other available suppliers for this same material, you don’t need to worry about your relationship, since the supplier could easily be replaced. Instead, you can drive a hard bargain and do your best to secure a low price.
In the real world, you may find that not all of your negotiations fit into one of the well-defined boxes above. When that is the case, you might need to move into the ‘compromise’ portion of the matrix. When you take this approach, you are going to blend two or more of the styles above to come up with a method that is appropriate. As you gain experience in the world of negotiations, you should see that you get better and better about developing hybrid tactics to come out as a winner in the end. The exact way you attack each negotiation is going to depend on the personalities involved, the history between the two sides, the stakes of the deal, and more.
It will always be important to develop strong negotiation skills in the business world. Regardless of what kind of business you own or operate, you are going to have to cut deals with customers and other companies in order to thrive. As you can see from the information provided above, using the Lewicki and Hiam Negotiation Matrix is a smart choice when you need to tailor your negotiation tactics to the situation in front of you. Get familiar with the five options within this matrix and pick out the right style to take with you into the meeting room for your next negotiation.
Time Management eBooks, Templates and Checklists
Our time management resources can help you to make the most of your time as well as making sure that you get the best out of your team. Download these free eBooks, checklists and templates for your PC, Mac, laptop, tablet, Kindle, eBook reader or Smartphone.