Negotiation is an art form that requires careful planning, strategic thinking, and a deep understanding of both your goals and the goals of your counterpart. One of the most powerful techniques to enhance your negotiation success is setting clear 'Rules of Engagement' at the very beginning. This approach, championed by experts like Keld Jensen, can make the difference between a negotiation that ends in conflict and one that creates lasting value for all parties involved.

What Are the Rules of Engagement?

The rules of engagement in negotiation refer to the predefined guidelines that both parties agree upon before the actual negotiation begins. These rules outline how the negotiation will be conducted, including whether it will take a collaborative or positional approach, how honesty and transparency will be handled, and what the expectations are regarding the disclosure of negotiable items.

By establishing these rules upfront, you create a clear roadmap for the negotiation, reducing the risk of misunderstandings and ensuring that both parties are aligned in their approach.

Why Are Rules of Engagement So Important? 

1. Building Trust Currency:

Trust is a crucial element in any negotiation. As Keld Jensen emphasises, trust is not just a soft skill but a “currency” that can significantly impact the outcome of the negotiation. When both parties agree on the rules of engagement, it fosters a sense of mutual respect and understanding, laying the groundwork for trust to flourish.

Trust reduces transaction costs, accelerates the negotiation process, and enhances the potential for long-term relationships. However, building trust doesn’t mean being naive. It’s about creating an environment where both parties feel secure enough to be open and transparent without fearing exploitation.

 2. Preventing Misalignment:

Negotiations can quickly go off track if the parties involved have different expectations or approaches. For example, one party might view the negotiation as a collaborative effort to find a win-win solution, while the other might approach it as a zero-sum game where only one side can win.

By setting the rules of engagement, you ensure that both parties are playing the same game. This alignment prevents unnecessary conflict and helps both sides focus on creating value rather than getting bogged down in misunderstandings.

 3. Strategic Flexibility:

The context of the negotiation often dictates the approach. In negotiations where long-term relationships are a priority, a collaborative approach might be most beneficial. However, in one-time transactions where both parties have multiple alternatives, a more positional stance might be appropriate.

Discussing and agreeing on the rules of engagement allows you to tailor your strategy to the specific circumstances of the negotiation. This flexibility increases the likelihood of achieving a successful outcome that aligns with your overall goals.

Practical Examples of Setting Rules of Engagement

• Commitment to Honesty: One of the simplest and most effective rules is agreeing that both parties will be honest and transparent throughout the negotiation. This might involve a mutual commitment not to withhold critical information or mislead the other party.
• Listing Negotiable Items: Another practical rule is to list all potential areas of negotiation upfront. This ensures that both parties know what’s on the table, making it easier to identify opportunities for value creation.
• Verbal Positioning: Starting the negotiation with clear statements like, “We are committed to a transparent and honest discussion,” sets the tone for the negotiation and signals your intent to engage in good faith.

When Might This Technique Be Less Effective?

While setting rules of engagement can be highly effective, it’s not a one-size-fits-all solution. In short-term, high-stakes negotiations, where the focus is on immediate gains rather than long-term relationships, the emphasis on collaboration and trust might not resonate as strongly.

Additionally, in industries where the pressure to deliver short-term results is intense, such as during financial downturns or in highly competitive markets, the immediate need to achieve quick outcomes might overshadow the potential long-term benefits of a collaborative approach.

The Role of Organisational Understanding

One of the key challenges in implementing rules of engagement is ensuring that all levels of the organisation understand the importance of negotiation as a strategic skill. Senior management and board members, in particular, need to appreciate the holistic nature of negotiation and how setting the right tone at the beginning can lead to better outcomes.

Negotiation is not just about winning the immediate deal; it’s about building relationships, creating value, and setting the stage for future success. By embedding these principles into the organisational culture, businesses can improve their overall negotiation outcomes and avoid the pitfalls of short-term thinking.

Just Remember

Setting the rules of engagement is a powerful technique that can transform the way negotiations are conducted. By agreeing on how the negotiation will proceed, parties can build trust, prevent misunderstandings, and create more value. However, as with any technique, it must be applied thoughtfully and with consideration of the specific context of the negotiation.

For those looking to master this technique, practice is key. Utilising tools like Negotiation Cards can help you refine your skills and gain the experience needed to know when and how to apply different negotiation strategies effectively. By practicing with purpose, you can build your negotiation toolkit and become more adept at navigating the complexities of negotiation.

Visit our website to explore the full range of Negotiation Cards and continue your journey to becoming a skilled negotiator.