Successful negotiation

l,Tr,cortl.uoN IS A fact of life in I\familv business. When the word negotiation comes up, most PeoPle tend to think of external negotiations, like working out a better interest rate with your bank or securing a better price from a vendor.

There are also internal negotiations, such as working out a buy-sell agreement with a sibling partner, negotiating compensation for family members and employees, and deciding what deals to move forward on and which ones deserve a pass. Even small things must often be negotiated in family firms, like who gets dad's office when he retires, what your new logo should look like, or what color the new carpet should be.

Most family members recoil from the word negotiation. They prefer "conversation" or "reaching consensus," but the reality is that interfamily negotiation is among the most difficult and challenging types, and we have the scars to prove itl If closely held business negotiation is indeed a fact of life, it makes sense that you should work to improve your negotiating skills. Here are some of the techniques we have observed family members use to achieve negotiating success: yelling and bullying pouting

. making sweeping, unilateral decisions withdrawing and subjecting other family members to the silent treatment undermining and backbiting lobbying behind the scenes appealing to Mom, Dad or outsiders to intervene

. stalling or delaying meetings or discussions about important issues deciding not to decide

Okay, by this time you figured out that these negotiating techniques aren't legitimate at all, but, remember, we said "we have observed..." In all seriousness, since negotiating inside and outside the family business is so important, shouldn't you work to improve your "high road" negotiating skills? Wouldn't life be more harmonious if you had adult. positive, reasoned and fair conversations with siblings, parents and potential next-generation family business members?

A client related an insightful story about his own experience with negotiating and interpersonal conflict resolution. When he first came to work in the family firm as a young man, his father had a strong non-family executive who we'll call Mr. Collins. Our client struggled with the fact that Mr. Collins had so much authority in the company and served as a sort ofbuffer between him and his father. The relationship between our client and Mr. Collins was strained for years. The young executive, in a flash of maturity and sound decision-making, decided it was up to him to change and to work on improving and restoring their working relationship. He said it was a revelation to him that "it was up to me." Once he acknowledged his ownership of at least some of the issues and began to negotiate a path towards establishing better relations, things

Here are a few high road techniques for assuring your interfamily business negotiations serve to both preserve family harmony and produce outstanding business results.

L. Wia"n the Circle

The modern iteration of familY business planning says that all stakeholders' views are valuable and should be solicited. That means moms, dads, daughters, sons, in-laws, and key family business managers are all involved collectively in situation analysis, negotiation and conflict resolution.

2. S"t Up Ground Rules

A few simple ground rules can make a big difference in creating successful negotiating sessions. A couple of simple ones might be "discussions of the past are irrelevant; we're here to address the present and future only." Or "We won't use aggressive sPeech or body language with each other. If things become heated, we'll call timeout." Once the family has agreed on ground rules, they should be posted and placed around the meeting room so everyone can refer to them frequently as discussions take place.

3. B" s"lf-A*u."

Knowing what you want in a negotiation allows you to see that what other people want isn't necessarily mutually exclusive. It also lets you set up parameters, like behavioral changes, dollar amounts, terms and other potentially satisfying outcomes so you leave the negotiation feeling you've represented yourself adequately and not conceded unnecessarily.

4. Devote Advanced Planning to Your Meeting

Plan your own constructive behavior for how you'll act in the meeting. Ask yourself how you can satisfy the other party's interests. Find out if there's another way to get what it is that you want. Plan for delivering your message in a way that can helP the other side empathize with you and your wishes. Develop alternative plans A, B and C. Determine what's acceptmagically turned around, and Collins became a valuable resource and mentor. Successful negotiation in your family business-as is the case with most other change and improvement initiativesstarts with yoal able to you and what's not, and try to puzzle out what might be acceptable to others. Find the win-win and the common ground, and you're well on your way to a successful negotiation.

5. Gi"" in on Some Things

Use your willingness to give in as a negotiating tool: "If I give on this, would you give on that?" Giving in can be a wise strategy, and there is no shame in giving in order to get. There is a caution here; don't give in in an area where you may be rewarding intimidation or aggressiveness.

6. withdrut

In some conflict resolution or negotiating situations, it's okay to withdraw. The advantages of withdrawal are that you can do it unilaterally, and it may save time and nerves. The negative of withdrawal is that it generally happens as a result of frustration, and there may not be a win-win benefit. If withdrawal becomes a pattern, it's easy for negotiations to break down and foster resentment. While withdrawing can be an effective deal-making technique, it should not be done cynically or repetitively. Walking away is often a show of strength in your bargaining position and signals to the other side you not only don't need them, but also that you're quite confident in your position.

7 . Have Well-defined Parameters for Your Meeting

Undertake negotiating sessions in quiet, private places. Set well-defined beginning and ending times. If you can't make headway on your negotiation or your conflict resolution in the allotted time, agree on a date and time for continued discussion. If your negotiation becomes heated or you appear to be at an impasse, you may need an objective, third-party outsider to mediate the session. Ultimately, you'll want the main points of the negotiation to be reduced to writing for all parties to sign.

Interfamily business negotiation is a delicate art. You probably won't get it exactly right the first time. Be patient and continue to work on your negotiating skills and processes.

- Wayne Rivers is the co-founder and president of the Family Business Institute, Raleigh, N.C ., and author of such books as The Top Nine Reasons Family Businesses Fall. Reach him at wayne.rivers@familybusinessinstitute.com or (877) 326-2493.

Reprinted with permission of the Family Business Institute. No portion of this article may be reproduced without its oermission.

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