Hot Tips to Negotiation for Tax Pros!

Posted by Kelley Lear on Feb 16, 2012 | 0 comments

Hot Tips to Negotiation for Tax Pros!

A standard definition of Negotiation is “a conversation or dialogue between two or more people, attempting to reach an understanding or gain advantage of some sort, to resolve a point or competing perspectives, to produce an agreement upon courses of action, or to bargain for an individual or for your team. Negotiation is a process where each party involved in negotiating tries to gain an advantage by the end of the process”. Do any of these descriptions fit your day to day activities?  Or more fittingly perhaps, do you realize that on a regular basis  it is tough to get what you want?  Whether it be more money for the tax department to automate or add staff, to negotiate a tax position, or to argue for greater pay, bonus or benefits?  Perhaps to negotiate different tactics to reduce ETR, increase tax savings or free up cash flow?  Although all of us know skilled negotiators, who seemed to have been born negotiating up for the best toy, more video games, additional T.V. time, or a later bedtime…we also know that this can be a learned skill that can be studied, practiced and honed.  So, what does it take?

Tips for Successful Negotiation:

 1.     Do your homework!  As tax pros, this is a skill that is already in your nature.  You are great at studying, analyzing and trying to solve problems. So, let’s use that skill to your advantage here. Figure out what you are dealing with before going into any negotiation.  Determine the issues, goals, expected outcomes (including what is your “bottom line”), and what type of negotiation can you expect going in? 

In 1974, Thomas and Kilman (Ph.D.’s, consultants and globally read/studied authors) “built” the “Conflict Mode Instrument” which outlined five basic styles/responses to negotiation.  This model has been the leader in conflict resolution assessment for more than 30 years.  It is essentially saying that individuals can often have strong dispositions towards a certain styles, and that the style used during a negotiation depends on the context and the interests of the other participant in the negotiation. Which is always good to know when entering any type of negotiation…Here is the outline:

  • Accommodating: Individuals who operate on a more personal level and enjoy solving the other party’s problem, sometimes in a seemingly selfless manner. Accommodators are often more sensitive to the emotional cues, body language, and verbal signals of the others.
  • Avoiding: Individuals who do not like to negotiate at all and don’t participate unless forced. Although avoiders can be perceived as tactful and diplomatic, they tend to postpone or withdraw from the issues at hand.
  • Collaborating: These folks are the exact opposite of avoiders. Collaborators enjoy negotiations that involve solving tough problems creatively. They take time to understand the concerns and interests of all parties to come to a better solution. They can, however, make things more difficult by taking simple situations and making them much more complex.
  • Competing: Individuals who enjoy negotiations oftentimes purely for the “win”. Competitive negotiators are strategic, assertive and most often put their own interest and point of view before that of their “opponent”.
  • Compromising: Individuals who negotiate the deal by doing what is fair and equal for all parties. Compromisers are useful when there is limited time to complete the deal, but do not dig into the details as much as a collaborator, and may unnecessarily rush the negotiation process and make concessions too quickly.

2.     Make sure your “going in position” is securely backed with fact and supporting information.  Again, this should be a skill you can get your arms around.  You are already great a providing supporting information for your positions.  Let’s think about this from both sides of the equation however.  You need to know how your “opposing party” could benefit from supporting or negating your position.  What drives them and how can your position be a better one for the organization?

3.     Don’t forget body language.  Yours as well as theirs.  It is important to react verbally and visually when offers are made. You may have seen the more theatrical negotiators hang their heads in despair, accuse you of being unfair, or making you feel that you are greedy instead of wanting what’s best for the organization. Think carefully about human nature and the use of and responses to body language. Make sure that when you want to convey that you are solid on a particular point that your body is not telling the other party that you are willing to talk some more…

 4.     Stop talking!!!!  This is a highly effective and widely underused tactic.  Great sales people use this all the time. Other professions, not so much.  Have you ever heard the premise that “whoever talks first loses”?  I have seen this time and time again during negotiations.  During the negotiation, make a proposal and be quiet.  Wait for a response.  An experienced negotiator on the other side may make this very uncomfortable.  Seconds feel like minutes.  But, do not talk.  Let the other party tell you what they are thinking.  And make sure you LISTEN.  They will typically give you something on the negotiation or will tell you something very important for you to understand what it will take to get there.  Active listening is the key to negotiation.

 5.     Write down and present your negotiation.  This is sometimes quipped “the power of legitimacy”.  Believe it or not, people will be more apt to believe or buy into a concept when they see it in writing.  Many times if we see an offer written down, we less likely to believe that it is negotiable. 

 Hope these thoughts were mildly informative.  There are lots of other tips on negotiation.  What has worked for you?  We’d love to hear!

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