What’s your most valuable resource? You might have said money, but I’m willing to bet that it’s really something else – time. You can always earn more money, but once you spend time on some task, it’s gone, gone, gone. That’s why when you are negotiating with someone it is critical that you quickly get an answer to the most important question: how much authority do they really have?
Why Authority Matters
The whole purpose of spending time negotiating with someone is so that you can reach a deal with them. So what is a deal? It’s a two-sided agreement: you promise to do something for the other side of the table and they promise to do something for you. Sounds simple enough, right?
However, as with all such things in life the reality is a bit trickier. That deal may require the other side to give up something or spend money or time doing something. This is all well and fine if the other side has the authority within their company to make this happen. You’ll run into problems if after the deal has been reached that you then find out that the other side does not have the internal authority to carry out their side of the deal.
Often times you’ll encounter this “lack of authority” problem when you are negotiating with salespeople. They may talk a good line, but when it comes down to it, deals can only be done by people who are higher up in their company.
In order to make the best use of your time, you are going to want to be able find a way to spot these folks who don’t have the authority to execute a deal that you’d reach with them. Your goal should be to bypass them and to try to deal only with people who can do what they promise during a negotiation.
5 Ways To Determine How Much Authority The Other Side Has
In a perfect world, every person that you started to negotiate with would be required to carry an “authority card” that they could show you in order to prove that yes, they had the authority to carry out any deal that was reached with you. We don’t live in a perfect world so we’re going to have to come up with a different approach.
Although there is no “silver bullet” technique that will allow you to instantly determine if the other side has the authority to reach a deal with you, there are 5 techniques that can help you uncover situations in which the other side is not going to be able to carry out their side of the deal:
Ask: Although it sounds too simple, asking the other side if they have the authority to execute a deal is often the best way to determine their status. When you ask this question you need to carefully listen to their answer: are they vague or evasive? If so, ask more questions and find out just how much authority they have.
Do Your Homework: The world in which we negotiate is actually very small. The person or persons that you are negotiating with have negotiated with others before. This means that you can find out how much real authority that they have simply by asking around. If they’ve over promised and under delivered in the past, then I’m sure that your peers will be more than willing to tell you about it.
Take An X-Ray: During a negotiation it’s always important to remember that you’re not just negotiating with the person who is sitting on the other side of the table. Instead, you’re really negotiating with that person’s entire management structure. If you want to know how much authority they have, then you need to understand what this structure looks like and where they fit in it.
Go Over Their Head: Instead of trusting the other side to tell you how much authority they really have, take the initiative and ask their boss how much authority they have been given. Often times their boss will be more direct with you – they’ve got nothing to hide and no face to save.
Get A Map: Just what does it take for the other side of the table to get a deal approved within their organization? The more authority that they have, the shorter the post-deal approval time should be. If it appears as though a large number of people or a great deal of time will be involved in getting final approval for the deal that you reach, then you’re going to have to assume that whom you are getting ready to talk with doesn’t have very much authority.
What All Of This Means For You
As sales negotiators we all have an obligation to ourselves to make the best use of our limited time. One of the most effective ways to do this is to take the time to ensure that the person that we’re negotiating with has the authority to do a deal.
The other side of the table will often be coy about the amount of actual authority that they have. This means that you’re going to have to take action to find out. This may include asking them directly, researching their reputation, talking with the other side’s boss, or finding out how the other side makes decisions.
The time that you invest in determining just how much of a commitment the other side can make to you will go a long way in making the most of your time. It will also mean that when you reach a deal with the other side of the table, you’ll know that they’ll be able to honor their side of the deal…
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: What should you do if you find out that the other side does not have enough authority to do a deal with you?
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