In this Part 2 of Negotiating Your Next Lease, we refer to the Information Exchange Stage (2) in this five-part series.
The Information Exchange Stage occurs when you begin to engage the other side, share information and explore options that address interests – what you each need, as opposed to positions – what you each ask for later in the Bargaining Stage. We will discuss the difference between interests and positions and how critical they are to successful negotiations in depth later, but here is a brief example:
It is critical here to focus on building rapport and trust, without which neither party will feel comfortable sharing interests. One way to build the relationship is to do your “social homework” in this stage by finding out and showing interest in the other party’s business culture, personality, outside interests and values.
Four Critical Assessments are made in the Exchange Stage:
- Trustworthiness – Are they honest and dependable?
- Competency – Are they credible and able?
- Likeability – Can you work well together?
- Alignment of Interests – Are your interests aligned with theirs?
A Go/No-Go Decision Time in Exchange
If your assessment in this stage of the negotiation process is negative, you make adjustments or implement your Best Alternative to a Negotiated Agreement (BATNA).
Establishing your BATNA (or the what if this?) is a very constructive exercise even before assessing the decision to start the exchange as it is a very powerful tool and confidence builder prior to entering the Bargaining Stage.
An example of a BATNA when negotiating your retail lease may include alternative premises (sometimes more than one), seeking to downsize or align your lettable area, not performing capital works such as a refurbishment if commercial terms don’t suit. In fact, you may have several (mini) BATNAs that cover varying outcomes along the path to a Negotiated Outcome.
The confidence derived from the exercise of researching, exploring and establishing your BATNA(s) will assist in providing the correct mindset prior to starting the “give – and – take” process.
And always remember that if you have remained proactive to the critical path of your lease (keeping time on your side) then your BATNA may be to not enter into negotiations, at least not at this particular time.
If your assessment in this stage of the negotiation process is positive, you move forward. With trust developed, you explore for creative solutions that address interests and see the potential to create real value.
Dive into Bargaining Now?
You will be eager at this point to dive into the Bargaining Stage. Pause to create one critical tool that will guide and protect you for the stages that follow. That is the development of a joint agenda.
Discuss and communicate this agenda amongst your own team and seek buy-in from these parties whether they be business partners, managers, advisors (accountants etc) as they may be called upon to provide further information or attendances and you need everyone to at least be available and understand what it is you are seeking to achieve and the plan to negotiate them, (even if you are not planning on bringing them to the negotiation table, you may need to call on their support during the process).
Too many times we see negotiations stall because a Partner is away or the Accountant is on holidays leaving the other party waiting for you to be prepared to continue in the negotiation process.