October 01, 2005

Decisions and Negotiating

Negotiators must be able to make decisions. Large decisions, small decisions, important decisions and mundane decisions. The process of making decisions is what advances a negotiation to its final outcome. Decision-making requires confidence, awareness, information, and courage. Most of all, it requires being prepared.

Prepare properly and agree to meet only when you are comfortable deciding what to do. Even though you may be meeting to gather information, the other person may present an opportunity for you to make an offer or accept a proposal. Being prepared to consider and act on such an opportunity enables you to take advantage of "The Moment". There are those times when things just seem to go right and an opportunity to act presents itself. Unless you know what you want and need from a given situation, you will not be in a position to respond. Failing to do so may cost the deal later when the other person discovers other options or rethinks his or her offer.

People naturally resist making decisions. This is especially true when they feel they are being pressured to do so. To be an effective negotiator one needs to know how to prepare others to make decisions and commit. The climate of the negotiation plays a significant role in making everyone comfortable with making important decisions. Mediators work hard at giving everyone at the table a sense of power. They also use caucus or breakout sessions to separate people when emotions become too volatile. A negotiator can assume the role of a mediator in any negotiation by being sensitive to the climate of the discussions. By subtly taking responsibility for the "comfort" of the others, the negotiator assumes the mantle of a small group leader and may gain the ability to direct the discussion without having to force the issues through confrontational tactics.

Preparing for the Moment of Decision Tactics:

- If tempers have flared during the discourse, seek ways to mend the personal fences before pressing for decisions. People need to feel in control to commit willingly.

- As you approach major decisions it is helpful if you have laid the groundwork with small decisions along the way. This gets everyone used to committing and following through on their word.

- Review the terms carefully and solicit edits form everyone. By incorporating their changes they are becoming invested in the agreement.

- Encourage everyone to read the document one final time. You are intentionally slowing the process to ease the stress. Watch how others react to reading the document. If you see a cloud of doubt on someone's face, stop them and ask what is bothering them. You want everyone as comfortable as possible before placing pens in their hands.

- Review the reasons the others are agreeing to the terms and reinforce why their decision is a good one.

- Take a break and suggest a beverage or something to interject a chance to relax before actually sitting down to sign documents. Well timed breathers are a great way to diffuse mounting tension.

Decisions are pivotal moments in negotiations. Treat each decision, even the small ones, with respect. This builds a degree of comfort on the part of the other person in the process. Once a decision is made, reinforce why it was a good decision. It does not hurt to intimate that you may have conceded more than expected to build up the other's ego a bit. You want each decision to become easier as you build toward the really important decisions.

Negotiation, like any other process, can be managed. Who chooses to manage the process will likely prevail at the end of the day.

Posted by Bill at 04:36 PM | Comments (0)

September 30, 2005

Problem Solving Skills and Negotiation

No one can negotiate until they understand the situation. Basically there is a problem to be solved that involves getting two or more people to agree on something. Basic problem solving is part of the skill set of any effect negotiator.

Defining a problem is critical. Often people fight over ancillary issues rather than the real problem. In a mediation the mediator takes the time to source, identify and quantify all the micro issues that create the underpinnings of the primary argument. Mediators are trained to resolve the ancillary issues so that the primary problem can be resolved.

Problem Identification Tips:

- Don't accept the obvious; seek out underlying issues or other problems. Often the other person or the parties may be unaware of the impact of these 'lesser' issues.

- Prioritize the issues and seek to resolve the minor ones first. This will create a more positive environment and may help lead to a global agreement.

- Seek to put emotional reactions in perspective. If you can diffuse any prevailing anger or distrust, you will have made a major advance toward reaching an agreement.

- Separate the "wants" from the "needs" and focus on satisfying the "needs" of each party. Often it is the "wants" that create the most separation. And they are the least important aspect of the problem once they are properly identified as "wants".

- Don't ignore or dismiss emotional needs or wants. Sometimes their satisfaction is more important to one of the parties than the monetary aspects of the situation.

Problem identification does not stop when you enter the fray. Listen carefully to what the other person is saying to identify additional irritants or issues. Listen for clues on how to satisfy a specific need using alternative consideration.

Problem solving is the meat of dispute resolution. By expanding the possible settlement options the mediator is seeking to solve the dispute by pairing unlikely party commodities so that both emerge feeling a sense of victory. Win/Win negotiating is not so much about appeasing both sides as it is about pairing needs and satisfiers so that both parties come away with more than they gave away in their minds.

Posted by Bill at 11:03 AM | Comments (0)

September 28, 2005

Debt Restructuring Before Buying a New Home

Nell Henderson, Washington Post Staff Writer, Tuesday, September 27, 2005 wrote an article, "Concerns Raised as Home Sales, Prices Rise Again". In the article he notes concerns about the high cost of real estate and the risk lenders are taking by granting creative financing to facilitate sales at such elevated prices. "One driver behind price appreciation, Greenspan said, is the popularity of new types of mortgages that enable many borrowers to buy houses at prices they could otherwise not afford -- and that may be hard for some borrowers to repay if interest rates rise and home prices stabilize or fall.".

The temptation of getting into the runaway housing market is understandable. Simple savings accounts are returning less than 2% per year. CDs and bonds are not much better. "Safe" funds are yielding 5% pre-tax. And real estate is surging, offering both equity appreciation and tax protection. However, if you are in debt, it's important to make sure you restructure it and consolidate it before taking the leap into the housing market.

So many see the risk of taking on a house that is beyond their means as worth taking in order to create value and build a financially secure future. The problem is that the lenders, once predominantly banks prone to conservative lending standards, now include pension funds, insurance companies and other investment entities eager to place loans to keep their money working. It is not the lenders who will be hurt. It is the borrower who gets burned. Bankruptcy laws are changing in October and it will no longer be convenient to file bankruptcy to avoid creditors. Individuals, once protected from forced liquidations, will find that to be the norm rather than the exception. So it is more important than ever to learn how to renegotiate or restructure debt before one is forced into bankruptcy court.

Renegotiating debt is best done before you are too delinquent. With a solid payment history with your lenders you are more likely to find them willing to work with you when you approach them. Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.

-Do not wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third party's only motivation is to make money off your bad situation.

-Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.

-Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue.

-Be persistent. "No" is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.

-Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse.
Debt restructuring is a basic form of negotiation. You have a need.

The lender also has a need. You have a solution to offer. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should gamble with your plan. Don't ask for a hand out. Ask for approval of a specific plan.

A plan that works for you should give them something as well. The two primary commodities are time, money and your credit rating.

-If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. Obviously you should be able to settle between 50% and 100%.

-If you offer to pay the full amount, but over time, you will be saving a lot in money and keep you credit rating from being impacted.

-Be sure to negotiate the interest. It does you no good to extend your payment period if you are also going to be paying a higher interest rate. Interest rates are negotiable.

-Finally, require that the lender not place this delinquency or restructuring of the loan on your credit report.

The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay. A good customer's case always sounds better than a plea from a habitual problem customer.

By successfully restructuring your debt you will have protected your credit rating for forays into the housing market.

Posted by Bill at 12:41 PM | Comments (0)

September 18, 2005

Iran's Stalling Tactic May Have Backfired

Dafna Linzer of the Washington Post on Monday, September 19, 2005 wrote an article, "Iran's President Does What U.S. Diplomacy Could Not" showing how Iran's new president bought his country some time. She wrote, "Facing mounting criticism after walking away from negotiations with Europe and restarting part of Iran's nuclear program, Mahmoud Ahmadinejad asked the world to withhold diplomatic pressure while he put together new proposals."">Iran's President Does What U.S. Diplomacy Could Not" showing how Iran's new president bought his country some time. She wrote, "Facing mounting criticism after walking away from negotiations with Europe and restarting part of Iran's nuclear program, Mahmoud Ahmadinejad asked the world to withhold diplomatic pressure while he put together new proposals."
We live in a fast-paced society. Between faxes, email, pagers and mobile telephones, there is precious little time taken to reflect on the negotiation once it begins. But the pace of the discussions is something that you can and should manage. Just because the other party is in a hurry is no reason for you to rush a response or even respond. Take your time, assess your options, and set your strategy carefully. Then respond. You gain power and authority by setting the pace of the negotiations.

Keeping the other person in the dark can also be useful. When you use delay as a tactic, you do not need to tell everyone. Sometimes the unknown can forestall an action that jeopardizes your position while you regain your composure. When you are fully prepared, go on the offensive.

Linzer postulates that when the Iranian president contined, "Ahmadinejad appeared to threaten as much when he warned from the General Assembly podium that in the face of U.S. provocation, 'we will reconsider our entire approach to the nuclear issue'."

But such tactics can backfire. "The effect of that speech will likely be a toughening of the international response to Iran because it was seen by so many countries as overly harsh, negative and uncompromising," Undersecretary of State R. Nicholas Burns said in an interview Sunday. "The strategic aim of a great many countries is to see Iran suspend its nuclear program and return to peaceful negotiations with the Europeans."

Posted by Bill at 08:00 PM | Comments (0)

September 15, 2005

Iranian President Mahmoud Ahmadinejad Does Little to Advance Negotiations

Visiting Washington this week Iranian President Mahmoud Ahmadinejad introduced himself to the U.S. media showing defiance at U.S. charges over Iran's nuclear program. Ahmadinejad went on to address the subject of Katrina and poke at the Bush administration's response. He compared the delivery of aid to victims in the Gulf Coast unfavorably with the response to natural disasters in the Islamic republic.

Whether you are negotiating, telling a joke or simply discussing a topic, you are partially responsible to make sure others are listening. The best way to stymie communication is to:

-Irritate the other person so he or she stops listening.
- Pepper your comments with blatant falsehoods.
- Intentionally put the other person on the defensive.
- Seek to raise issues that are sure to bring stress to the conversation.

Some people enter a negotiation with the intent to demonstrate their power and control. Unfortunately, in doing so they may actually undermine any chance of reaching an accord. But if your intent is not to negotiate at the moment, then such behavior becomes a justified stalling tactic.

Continuing he added, "We thought Americans would act more quickly and help their fellow Americans. We expected more." He added: "During the very first day of the hurricane, people could have brought more and limited the extent of the tragedy."

Ahmadinejad obviously has no intent of negotiating with the US about Iran’s nuclear program. His style and remarks are designed to thwart any productive conversation. Knowing that we are embroiled in Iraq and distracted by Katrina, this is a logical posture for him to take. He has little to lose and much to gain by pressing forward.

Read the news article "Iran's Leader Critical in First US Visit," by Glenn Kessler (at the UN) - the Washington Post, 16 Sept 2005 (registration required)

Posted by Bill at 07:45 PM | Comments (0)