‘No’ is a powerful word in business negotiations. If used wisely, it can help you (or the other party) achieve the target objectives. If misused or misinterpreted, it can crater (or at least hamper) a deal for the wrong reasons. ‘No’ is such a problem in business negotiations that the seminal book on the topic is called Getting to Yes.
One of the most effective ways to use the word is what I call “early and often”. If there is a critical issue of fundamental importance, it is generally best to put that on the table right up front, so there is no misunderstanding later on. Think of “no personal guarantees”. If you don’t make that ‘no’ an unequivocal condition of the deal at the beginning, two things may happen: first, you will probably face even more friction in the deal when the issue arises later; and second, you will probably need to trade something extra of value in order to prevail on the issue. In this instance, there is no word better than ‘no’.
On the flip side, sometimes ‘no’ is blurted out during the heat of a negotiation, as a means of rejecting a request of the other side that you view as unreasonable. Here, the precipitous word choice can damage trust and create an impediment to a necessary compromise. It would be more effective to say, “I’m sorry, I can’t do it that way due to ________, but do you have any other ideas?” The actual word ‘no’ can have the effect of shutting down an option, while a euphemism meaning much the same thing can open new options and help bridge a gap.
Perhaps the riskiest of all ‘no’s’ is the one that comes up at the end of a deal, when the negotiations are nearly complete and a new issue arises. Both sides may be suffering from deal fatigue at that point, so it may not be as easy to problem-solve. Finally, you decide that you need to draw a line in the sand, and you are sincerely prepared to kill the deal if the other party does not accept your position. This type of ‘no’ brings the negotiation to the brink of collapse, often on an issue that could have been addressed in a more favorable and constructive manner earlier in the process. This type of ‘no’ can also damage the longer-term relationship, because issues do start to look more like ‘zero-sum’ issues that late in the deal. Importantly, in order to prevail on the point you have to effectively declare that the value of the entire potential relationship is less than the value of that one final point. For this reason, I rarely recommend brinksmanship of this type except when the issue truly does have such pivotal importance.
My final thought about the word ‘no’ is that it is often best to simply ignore it when said by others. We can’t control when or how our counterparties use the word, but we can control how we respond to it. Whether it comes up ‘early and often’, as a result of blurting out, or on a sticky issue at the end of the deal, I find it helpful to assume the other side meant to say “I’m sorry, I can’t do it that way, but do you have any other ideas”. If they really mean ‘no’, they can always shut their notebooks and walk out the door. As long as the other person is at the table, I assume that he wants to do the deal. And ‘no’ is just an invitation for me to help him find a way to do it.