When you think of the word “negotiation,” it's easy to envision a bunch of argumentative attorneys sitting around a large conference table, engaged in a heated exchange. But the reality is that many business professionals must engage in negotiations, especially in industries such as the real estate field, the mortgage and lending industry and insurance industry.
When negotiating an insurance settlement (or any other settlement, for that matter), the process can get very heated because money is involved.
But negotiation doesn't necessarily need to be a stressful and adversarial process. Many focus on the element of conflict – the fact that each side has its own interests. But negotiation doesn't necessarily need to involve a “winner” and a “loser.” It's possible for both parties to walk away a winner.
Understand the Potential Negotiation Pitfalls
Negotiation can be associated with lots of different pitfalls and obstacles. When you're aware of these pitfalls, you can make a concerted effort to avoid them.
When negotiating a settlement or anything else, for that matter, you must understand the most common snares, which include:
- allowing emotional, knee-jerk reactions to interfere with or guide the negotiations;
- a failure to listen to the other party and his arguments;
- a failure to really understand the other party's goals and hopes for the negotiation process;
- a refusal to give and take during the negotiations; and
- working against the other party instead of working with the other party.
Maintain a Cooperative Focus on Working Toward a Solution
According to
Accredited Income Property Investment Specialist (AIPIS), maintaining a focus on problem-solving is key to successful negotiations, and, “as long as that is the focus, there's no reason it should get ugly....Keep in mind that everything hinges on quid pro quo, which means that, to get something, you have to give something.”
See also: The Rest Of The Story: In Defense Of Liens And Good Faith Negotiation
Instead of focusing on the conflict, it can be more beneficial to focus on the more cooperative aspects of negotiation. Instead of viewing the other party as an adversary, you can choose to view the other party as a partner who is also seeking a mutually agreeable resolution. When you take this approach to negotiation, you may find that the process is far more productive.
Daniel Shapiro, Ph.D., author of the book
Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts, says that you must maintain a non-threatening environment during the negotiations.
"The moment you feel threatened in a conflict, a whole set of emotional forces turn your conflict into an adversarial battle: It becomes you vs. them. Suddenly the problem feels nonnegotiable because you can't imagine working things out with the other side," he told Forbes.com.
Work to Listen, Learn and Understand the Other Side's Needs and Desires
AIPIS says that understanding the other side is the “primary factor in being able to solve a problem.... If you don’t know what they want (or need), what exactly are you doing except trying to force your will on someone else?”
So take the time to understand the others who are involved in the negotiations and be sure to clearly articulate your own needs and desires. In fact, a successful settlement negotiation session may begin with both sides indicating their position and their needs or desires for the process. Never assume to know the other party's objectives or hopes for the negotiations.
This also dovetails nicely with one of the most valuable skills that you'll see in the skill set of a professional negotiator, such as a hostage negotiator: listening.
“Everyone wants to feel heard, understood and appreciated,” Shapiro explained, adding, “As you listen, you gain the power of information and affiliation. The other side starts to trust you, and you start to understand what is motivating the other side to act.”
Shapiro also underscores the importance of learning, which is an integral part of a cooperative negotiation process. The opposite is true for conflict, where each side outlines their position and shuts out the other side's perspective. “In other words, there is no learning. But this approach to negotiation inevitably provokes a battle between sides – and to the loss of the potential value of working together. Learning is essential to collaboration,” Shapiro indicated.
Remain Willing to Compromise and Negotiate
A surprising number of people enter into insurance settlement negotiations with plans to convince the others that their demands are fair. With this attitude, you're destined for failure from the get-go because you're not actually willing to compromise, give and negotiate.
Negotiation is, by definition, a process of give and take. If you enter the process with a state of mind that is resistant to any sort of compromise or “give,” then you dramatically reduce your chances of arriving at an agreement. In fact, even when you negotiate a solution, you risk emerging as a “loser.”
See also: Bad-Faith Claims: 4 Ways to Avoid Them
AIPIS offered a word of caution to this end, indicating that “forcing someone to come around to your point of view only results in resentment and retaliation. You might not pay the price today or next week or next year even, but negotiating with hardball tactics will almost certainly result in damage to your side at some point.”
So when it comes time to negotiate an insurance settlement or anything else in your career, be sure that
you're truly ready, willing and able to negotiate!
