How to Negotiate

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October 21, 2006

Handling Bullies in a Negotiation

Elephants, gorillas and lions all posture as though they think they are all powerful. All it takes is one retort from your trusty elephant gun to shake their confidence!

Bullies are not just kids on the playground or lurking after school. Unchecked they grow up developing the interpersonal traits of the habitual bully. As grown-ups, bullying is often a characteristic of those not in power but close to it. Often powerful managers will have excellent hatchet men as assistants. These alter ego manifestations wield school yard bullying tactics in the name of their patron. Often the assistant is so afraid of failure that they exceed their authority. Such behavior, while effective much of the time, can be a buffered situation that hinders effective negotiations. If you are being 'handled' by such an assistant, find a way to deal directly with the principal.

Large developers are well known for training their leasing managers to negotiate from a “my way or the highway” perspective. This aggressive posturing is viewed as bullying by the many tenants who have to try to deal with them. Many tenant reps put up with this attitude because they are afraid not to make the deal. But it is necessary to be bullied. If the tenant rep takes the time to learn the facts surrounding the developer's financing, the vacancy rate in the center, and what other tenants are talking to the developer, they can determine whether the demands of the leasing manager are real or feigned. If feigned, tenants should be able to back the bully down and negotiate reasonable terms. If not, they should try to go around the leasing manager to someone willing to discuss the merits of the situation.

Some developers are bullies with power. That is, their developments are so strong that they are able to make the rules of the game. They should remember that when the time comes that they lose their power, and it almost always does, then they can expect retribution from the tenants they have abused in the past.

If you possess the power to dictate terms in a negotiation, do so in a way that does not appear to be bullying, autocratic or dictatorial. You want to structure an agreement that both parties want to keep. It is always good to have everyone leave the table with some self-esteem intact. In business, people change positions and companies a lot. You never know if the person you abused last week will be sitting across the table from you when the power equation is reversed. Build relationships as you meet and deal with people. The relationships you develop along the way will pay dividends in the future.

If the bullying is habitual in a personal or family relationship, you have the problem of not being able to get away to let things cool down or avoid future incidents. You need to consider your options. Determine if it is a real physical threat, in which case you need to get out and try to work things out after you are safe. Assess if the behavior can realistically be modified. Sometimes mediation and negotiation cannot change a situation and different professionals are needed. Sometimes there simply is no solution.

Posted by Bill at 4:52 PM | Comments (0)

October 19, 2006

The Currency of Negotiations

Having a good supply of beads and mirrors is wise if you are venturing into the jungle. That is unless you don't mind staying to be dinner.

Negotiation is about currency. Currency can be far more than the money involved in a discussion. Understanding the currency of a negotiation is essential in knowing how best to negotiate the situation. Currency differs depending on the situation. Always identify and consider alternate or ancillary currencies in a negotiation.

Examples of alternate or ancillary currencies might be:

In All Situations:
- Time: To everyone time is important. A negotiation takes time. Time away from other activities. Second to money, time may be the next most important currency in a negotiation.
- Ego: From birth we have been taught that to win is good; to lose is bad. While everyone can't always win, no one likes to lose. If you can make the other person feel like a winner, his actual monetary loss might be come acceptable.
- Opportunity: There are only so many hours in the day. Other opportunities will always be pressing. Future opportunities, however, may become part of the currency of the current transaction if presented as potential benefits of working something out. This adds value to the terms for the other party and can make the difference between acceptance and rejection of your offer.

In Business Settings:
- Missed Opportunities by Meeting: Everyone is pressed for time in corporate life. Going to one meeting usually is at the cost of attending another. Both parties at a meeting have already made an investment of precious time. They have also foregone another opportunity to attend. You can strengthen the other person's impression of your sincerity in meeting and trying to work things out by revealing what you have given up to attend this meeting.
- Recognition: Everyone needs to be recognized. If you make it a point to acknowledge the other person's contribution to the process, to the outcome, you are providing an inexpensive incentive for the person to continue on and try to reach an accord.
- Power: Powerful people to be reminded that they are powerful. By seeming to acquiesce to a powerful person can often extract concessions other lose at a small cost, some of your ego. Effective negotiators understand their goals and objectives and strategically give up some personal satisfaction to make a deal work or to cement an agreement that is marginally acceptable to the other person.
- Prestige: If the arena within which you are negotiating has a special intrinsic value to those able to participate, use that attribute as collateral to be involved. Some tasks have great PR value in the corporate or public arenas. Don't miss the opportunity to parlay ancillary benefits of a deal into tangible returns.
- Advancement: To many corporate negotiators success brings advancement. When casually discussing each other's background seek to find out if this particular discussion has special meaning to the other person. It may be that a successful session is as important as the primary terms to the other person. If you know this, you can extract value on other fronts in exchange for reaching a final agreement.
In Personal Relationships:
- Love: This currency in a relationship should not be put on the table cavalierly. It is the basis for the couple being together. Threaten the love in a relationship may destroy it.
- Respect: While sex is important, respect trumps sex every time. Men, women, parents, children all deserve and require the respect of those they love. It is a powerful currency in a conflict.
- Affection: This is far different than sex and can be just as powerful. Either the man or woman can use affection to shape behavior.
- Sex: Women have used this commodity since the first bite of the apple.
- Privileges/Responsibility: Children are eager to gain freedom and personal responsibility. These are valuable commodities the parents hand out in exchange for good behavior, specific performance (grades or chores), or as other rewards for the desired responses.

Opening the discussion up to these alternate or ancillary currencies gives the everyone involved the chance to come together on a myriad of terms rather than focusing on one point of disagreement. This makes the primary term less important and may convert a troubled situation into a mutually beneficial accord.

Ancillary currencies may seem to have little or no value to you but may be vitally important to the other person. Converting idle currencies in to valued commodities in a transaction is how negotiators create value. mediators are adept at bringing out the importance of public apologies, admissions of guilt, and mere recognition of another person's situation as a means of diminishing the importance of the primary matter being mediated. The process of mediation is based on the very human process of interaction. Typically the parties to a mediation have squared off and stopped communicating a long time before the mediation. The mediator brings them together and forces communication. This, in and of itself, facilitates the ultimate resolution.
By incorporating ancillary currencies, you will increase the opportunity to craft an agreement that yields a greater return on your investment than merely bartering dollars. Often it enables you to extract value from the other person for something that you intended to provide anyway.

Posted by Bill at 4:55 PM | Comments (0)

October 16, 2006

Negotiating the BOTTOM LINE

A Ruby-Throated Hummingbird must consume trice it’s body weight in food each day. This is not a goal or objective. It is the bottom line!

Mediators and negotiators by definition have different goals. Both are seeking to reach an agreement, that is the sole and absolute goal of the mediator. He has no vested interest in the terms of such an agreement. Conversely, the negotiator has the goal of accomplishing something above and beyond the terms being negotiated. Typically the negotiation is part of a large initiative. He or she must appreciate the parameters of the negotiation and where to stop and walk away or when to agree and move forward.

Knowing your bottom line is perhaps the most important aspect of being a great negotiator. The bottom line, the minimum that you can accept, is the point that you must decide whether to continue to try to hold things together or simply walk away and seek a new opportunity elsewhere.

Appreciate that the other person also has a make-or-break threshold. Look for the non-verbal signs that indicate you are getting close to that point. If you want to make the deal, you will strategically need to keep the negotiation just this side of the brink. If you press to hard, he may walk away costing you a good opportunity.

Signs that someone is being pressed close to their bottom line include:

- Increased nervousness including fidgeting, rapid blinking, folding of the arms, sitting back away from the table, and disengagement in the conversation.
- Increased animosity in the dialogue.
- More personalized attacks.
- Smaller increments in concessions.
- An attempt to interrupt, postpone or stop the discussion.

When you are pressed to your bottom line and still can't make the deal, you can consider bluffing as a final, desperate tactic. The word "no!" has great impact and can often save the day; or end it. Bluffing is a last resort tactic that should be reserved until all you now have at risk is failure itself.

Do not confuse your goal with your bottom line. They are vastly different. Your goals are what you want to achieve while your bottom line is what you need to achieve.

Posted by Bill at 4:54 PM | Comments (0)

BRACKETING tactics in Negotiations

When using heavy artillery against a grizzly bear, it is normal to shoot long, then short to establish the range and effect of the wind, then “walk” the rounds down until the grizzly is effectively de-clawed. Unless of course, if he is charging. In which case you should fire for effect without delay!

As a dispute resolution strategy, bracketing is an effective way to resolve differences. It is also the most heavily used approach in negotiations. It encompasses establishing “bid/ask” positions between the parties then working for a common ground, typically somewhere in the middle of the initial “bid/ask” parameters. The important aspect of bracketing is determining what your opening position should be.

A mediator's first challenge is to get the parties to open with reasonable offers to settle. This will likely be accomplished in private, working with one side then the other. While the objective of these breakout sessions is to generate an opening bid, the mediator will also be trying to learn what other issues are important to each party. It is these ancillary issues that often pose the greatest potential for settlement.

The initial offer or counter needs to be carefully considered. As most negotiations are not life and death situations, each party has the right to walk away and save time if they feel there is no chance of reaching an agreement. So the opening offer and counter need to either be within reality or one's bottom line if that is what is required to keep the discussions alive. By preparing and doing your research you should have a reasonably good idea of what it will take to reach an agreement. Your initial offer should reflect some reasonableness in that regard.

It is the number one tactic in bracketing to not make the initial offer. Getting the other person to make the first bid takes time, communication skills, and manipulation. The art of negotiation is not as much in the numbers as it is in the human skills of getting the other person to do what you want them to do. In this case, make the initial offer. That offer, when made, will tell you a lot. It establishes the expectations, knowledge, confidence and need for the deal of the other person. Take the time necessary to try to get the other person to make the first offer.

Once the opening bids are established, the mediator will need to formulate how he presents each bid to the other party in the best light so that the offer is not rejected but countered. This is where ancillary issues can be used. That is, when presenting a unusually high bid, the mediator may say to the other side, “While this may seem high, you have told me this is not really about money. So let’s see if we can resolve the other issues and then come back to the money.” What the mediator is doing is expanding the scope of the negotiations to their widest parameters. He will then work to bring the parties together by "horse-trading” issues and monetary considerations until both can justify accepting the final terms.

There is an art to bracketing. Moving too quickly will result in giving up too much. The amount of each concession also signals when the parties are getting close to their final positions. A mediator needs to be sensitive to this and work to always leave a door open for "just one more" concession if necessary.

Don't forget that time is a major commodity. The final concessions may have to be extracted by using the gambit, “We have so much invested in this session, one more small concession has got to be worth considering.”

There are those times when you know you have to make a ridiculously low or high initial offer. The goal is to keep the dialogue going so you can sway the other person toward your bottom line. When you have to make an unreasonable offer, use the following delivery techniques to preserve the dialogue:

- Prepare the other party up front for the offer.
- Establish a relationship through preparatory dialogue.
- Desensitize the number using some humor in the delivery.
- Do not tender the offer with equivocation; deliver it with confidence.
- Explain the merits of the offer during the delivery.

Remember, you don't know the other person's situation or knowledge base. While your offer may be seemingly ridiculous, the other person may have pressures or needs that make it viable.

Negotiations are not easy. They are interpersonal conflicts that need to be managed. If they were easy we would all be living happy, healthy, wealthy lives with perfect families, burgeoning bank accounts, and ideal career paths.

Posted by Bill at 2:49 PM | Comments (2)

October 15, 2006

Brainstorming as Part of the Negotiation Process

Man’s ability to dream, to think beyond the obvious sets him apart from the animal kingdom. This unique characteristic has resulted in bows, arrows, slings, knives, spears, black powder, guns, bombs, nuclear warheads and other tools needed to advance civilization!

Brainstorming how to solve a challenge is the crux of advanced negotiations. Until the parties at the table begin to work together to resolve their issues the confrontation is merely a brawl or barter. It does not create value.

Negotiations should yield incremental value in that both parties should be able to leave the table thinking they gained more than the other person.

Brainstorming goes hand and glove with the whole-pie theory of negotiations. Before focusing on the base terms of a negotiation take the time to get as many issues as possible on the table. Expanding the scope of the discussion should reveal areas of agreement that help to offset the compromises that will eventually be required to settle the primary point of dissension.

The globalization of the discussion, the brainstorming to add incremental issues, and the process of reaching ancillary agreements creates the groundwork for the final, major negotiation. The incentives provided to assuage the ancillary needs can help to justify the required concessions on the major issue.

It is the capacity to look beyond the issues at hand to come up with viable solutions that make negotiating an art form rather than mere bartering or brawling. Before you actually sit down to negotiate, seek to uncover the ancillary issues that may have a bearing on the discussions. Brainstorming prior to a negotiation or settlement conference could include:

-Other related or unrelated areas of opportunity to work together.
-Issues related to the specific topic at hand that have yet to be raised.
-Common goals and objectives the parties might have.
-Common acquaintances the parties might have that may add credibility to either's arguments.
-Common challenges the parties may be facing on a micro, macro and global level.

You won't know where the brainstorming might lead. The time it takes to discover related issues typically pays dividends once the final negotiations commence. Be patient. Be diligent. Be thorough. Doing something right makes it worth doing.

Posted by Bill at 2:36 PM | Comments (0)

October 1, 2006

Assume and Fail!

The difference between man and beast is that man assumes he is better than the beast. In the wild a man is only a match if he has the right equipment, is well trained, and knows the jungle. A camera on safari is no defense against a charging rhino!

In every dispute resolution one must assume certain things about the other person in order to make progress. As an example, you may be trying to measure when the other person has reached his limit in the discussion before you make your final concession. How you come to this conclusion must be based in part on an assumption on your part.

To assume is to presume or presuppose. Assume also means to imagine. This is dangerous territory in a negotiation. You need to limit your imagination as much as possible by turning to your communication skills and validating your assumptions. But, better still, you need to minimize your assumptions.

Assume less, listen more:

-Identify what you are assuming before a meeting, and when the meeting starts, ask questions to validate your assumptions.

-Seek third party input to validate an assumption. Don't make an assumption about something that can be researched.

-If you don't know, ask. You may be surprised at how open the other person is.

If the assumption is about a significant issue, don't rely on your gut. Investigate, question, brainstorm, network and research until you can assess the approximate accurateness of your assumption. No one said negotiating is easy.

Posted by Bill at 9:30 AM | Comments (0)