Why We Negotiate
It is not a question of if but why we negotiate.All of us at some time or another negotiate.
Becoming more effective at it should help you to keep balance in your life. Negotiation is essential to healthy personal and professional relationships. Learning how to merge the wants and needs of the group and build mutually viable solutions is key to a healthy, happy life. It also makes you more effective in business and the world in general.
We spend almost every minute of every day and night negotiating with others simply to survive. So it makes sense that we can improve our personal and professional lives by learning better techniques of negotiating.
From birth we face a steady stream of challenges, struggles, and opportunities throughout life Conflict arises as we struggle to satisfy our personal interests and wants and needs in social circles, at school, at work, and with our mates and loved ones. This effort is typically in conflict with the needs and wants of others.
Conflict occurs naturally between parents and children, with medical and legal professionals, government officials, employees, retail clerks and others. The need to negotiate in our day-to-day situations or encounters permeates our very existence. Learning how to better handle such conflict is an important way to improve our personal situation. It leads to enabling us to enjoy life a lot more.
Handling conflict, that is negotiating is actually not an arduous process; but all too often that is exactly how we perceive it. Most people consider conflict bad. The truth is, since we can't avoid it, conflict shouldn't be feared or avoided...but embraced. Living in fear is not living; it is missing out on living our lives fully.
Many people consider negotiating to be a business or political activity. Just as many people view a negotiator as a manipulator or predator. Few realize that negotiating is not the last resort to resolve a bad situation. It is what causes the situation!
So why are we afraid whenever we have to sit down and work something out with another person? There are four reasons actually and they all start with fear: Fear of the unknown. Fear of rejection. Fear of losing. Fear of offending.
Knowing how to negotiate is less about understanding the nuances of the process than it is about understanding people, appreciating their wants, identifying their needs and learning about their history and what makes them who they are.
Six Basic Negotiating Tips
What to Avoid When Negotiating
How We Negotiate
The Difference Between Bartering and Negotiating
Learn to Communicate
The Currency of Negotiations
How to Negotiate
Negotiating Tip Brainstorm to get to a Win/Win Negotiation
The best possible resolution to a conflict is one from which both people walk away thinking they gained more than they expected from the exchange. This will achieve a win/win solution. This can best be accomplished when incremental value is created through the negotiation process.
The exchange of information is the crux of negotiating. Unless the parties at the table begin to work together to resolve their issues the confrontation is merely a brawl or barter neither of which creates value. Brainstorming is essential. It serves to resolve differences and, possibly, create unexpected value to one or more of those involved.
Brainstorming can be used introduce additional incentives or opportunities for inexpensive concessions into a negotiation.
The whole-pie approach to negotiations is based on the theory that the sum of the parts exceeds their individual values. Before focusing on the basic or primary terms of a negotiation, work with the other side to identify as many additional wants or needs as possible. This expands the scope of the discussion.
These incremental incentives/concessions potentially add value to the entire negotiation. They may also provide incentives that may help counterbalance concessions required by one of the parties. The key to adding value through brainstorming as part of the outcome of a negotiation is the disparity of value each incentive/concession holds for those involved. If you do not mind granting a concession and the other person values the concession highly enough to agree to another concession you value, incremental value has been created. Both of you come away with more than you conceded (in your respective minds).
Six Basic Negotiating Tips
Negotiating Tips Learn to Act
Just as mediators and negotiators nurture keen interpersonal communication skills it will help any relationship if you consider the importance of being an effective negotiator at home, in school or the work environment. Above all else, we as every-day negotiators need to develop the skill of delivering and receiving communiqués effectively.
Unlike a postal carrier whose job is done when the mail is delivered to the right house, it is incumbent upon us to make sure tour message is heard and actually understood. Developing this skill is completely within your ability. It's more practice than art.
Being a good communicator means more than just being able to speak clearly and passionately. It also includes being able to listen proactively and to visually observe the other person's reactions while you are speaking. Communicating is more than the spoken or written word. Mastering the ability to reinforce the content or meaning of what you are saying with your physical actions, demeanor, intonation, and delivery style improves the effectiveness of the point you are trying to make.
Actors rehearse their lines in front of mirrors to create the entire persona necessary to deliver the "feeling" behind the script and character as well as the line itself. Attorneys prepare for opening and closing arguments the same way. Business executives review in their minds the presentation they are about to make as they drive to a meeting or sales call. I doubt a minister takes to the pulpit without rehearsing in some fashion the sermon he is about to share with his congregation.
It makes sense as practice does make playing a role more "natural." As a negotiator, you will want to make sure what you are saying, the intent of your words, are actually being heard. Expect to present a number of performances to enhance your communications.
Silence As A Negotiating Tactic
Everyone is gathered around the table, the stakes are high, tensions fills the air as the other person layouts a detailed counter-proposal for your consideration. What to do. Everyone is hanging on your reaction, waiting, expecting a response.
When your proposal or offer is countered you have three obvious options. You can accept, reject, or counter. You also have two additional options that are seldom considered but are frequently worthy strategies. You can 1) simply sit back and do nothing or you can 2) ask for a break to consider the terms.
Doing nothing causes a pregnant silence. Often the other person will feel compelled to fill the void. Your silence is telegraphing that you are not entirely happy with the proposal. If the other person offers to improve or modify the proposal or if he becomes otherwise uncomfortable with the silence, he is signaling that he has room to negotiate further. Either reaction helps you decide which of the first three options you should pursue.
Asking for a break is another form of the silence tactic. It also signals that you have issues with the counter proposal. Watch how the other person reacts to your taking a break. If he or she appears anxious or ill at ease, it likely means that there is room to negotiate further. If instead the person appears uninterested and willing to delay for an extended time, it may mean that he or she has reached a final position and it is up to you to accept or reject the offer.
In either case, you have the opportunity to qualify how firm their counter proposal is by deploying either of these tactics. If, instead, you choose from the first three, you lose the opportunity. Learn to deploy and use silence as a negotiating tactic. The timing of your response signals a lot of information. Be aware of what a prompt or delayed response means to the other person and selectively use a variety of timed responses to send the signal you want to send rather than reveal what you are thinking at the moment.
Ironically, the art of negotiating is most required when you are presented with an offer that is acceptable. The dilemma is in knowing if it is the best you can do and if it is time to stop negotiating and accept the terms.
While you do not want to needlessly leave anything on the table, you do not want to over negotiate and risk losing the opportunity to come to an agreement. Understanding the difference in your wants and needs and being able to place these in perspective with what you have learned about the "marketplace value" of the currencies involved enables you to know when you have "won enough." "Marketplace value" is much more than the monetary value of a commodity or service. When valuing something always take into account the currencies of time, convenience, need and risk. Also try to assess the other person's unique/personal situation relating to the item, transaction or service.
Personal need or desire usually enhances actual value and can be used to leverage ancillary concessions. the use of silence as a negotiating tactic can bring out the extraordinary interest the other person may have in the negotiation.
5 Negotiating Tips to Uncover Hidden Agendas
Hidden agendas are the personal are the private goals and objectives that impact how we publicly negotiate. Everyone has these agendas. Very likely your hidden agenda will be far different than the other person's or even those of co-negotiators.
Hidden agendas are the meat and potatoes of good leaders/managers. Good leaders have a sense of mission, a purpose that garners the respect of others. Negotiators who can demonstrate these same leadership traits will garner the same respect. Just as leaders can impact the outcome of meetings so too can effective negotiator-leaders impact the outcome of a negotiation.
Every participant in a negotiation has a personal agenda. Those agendas are hidden unless they are shared with the group and most people don't openly share personal agendas. If they did, there would be little mystery or drama in life or our personal interaction.
So how do you uncover another's hidden agenda? By being a good detective:
1. Ask questions. Soliciting the other person's needs and wants is essential in setting the parameters of the negotiation.
2. Think like a reporter: Ask follow-up questions designed to cross-check or validate previous answers.
3. Feel free to question responses. It is important to understand what you are being told.
4. Gather and digest the responses to develop a basic understanding and appreciation of the other person's perspective, basic needs and stated wants regarding the situation.
5. Observe the non-verbal reactions that may indicate responses that are less than forthright.
Negotiation is far more than simply sitting at the table and exchanging proposals. It is the process of learning enough about the other person to be able to engage the person in a dialogue that makes that person want or need to work with you.
Remember, negotiating is persuading someone else to do what you want them to do.
Negotiating Requires Knowing Your Bottom Line
A key strategy in any negotiation is establishing your 'bottom line.' Knowing your "bottom line" is one of the most important aspects of being a good negotiator. The bottom line is the minimum or maximum acceptable threshold that you will accept concerning a given situation. It is the point at which you should decide not to continue to try to hold things together and simply walk away from the opportunity.
Constantly revising is part of a negotiator's strategy because negotiating requires knowing your bottom line or the limits you are willing to go to win an argument or closing a sale or purchase. Your "bottom line" depends on each negotiating event and can change as your situation changes. Typically in the business environment the negotiating parameters are mandated by company objectives, limitations and policy. Working within these guidelines allows company negotiators to negotiate with confidence that they will be able to deliver on the promises they make during a negotiation. Knowing these corporate bottom line parameters also signals when the negotiator should leave the discussion to seek more guidance or look for another opportunity for the company. Thus knowing the company parameters empowers the company negotiator.
We are used to setting minimum or maximum parameters in the business or professional environment. In personal situations negotiating requires knowing your bottom line or the limits you are willing to go to win an argument. There is no reason the same discipline cannot and should not apply to interpersonal/family situations.
When you are negotiating personal matters ranging from credit card debt to what to do about an errant son or daughter you should try to set the point at which you are no longer willing to negotiate. This is especially important on the personal side as conceding too much only teaches your spouse or child that you will continue to do so and that he or she should continue to press their argument until you cave. This conceding on your part rewards bad behavior rather than deters it.
If you continually do this when disciplining a child you will raise a spoiled child who, later in life, may well have difficulties relating to his or her spouse when the 'adult child' doesn't get his or her way. As parents it is our responsibility to teach our children how to negotiate in a productive fashion so they can get along after they leave the nest.
It is even more important when dealing with an overbearing spouse. Your concessions will not only make the other person expect to prevail, it will cause you to lose respect for yourself and become even more dependent on what could become a damaging relationship.
Not to belabor the point but I need to point out here that I am not advocating never conceding. Just the opposite as we all need to be willing to 'give and take' to make any relationship work. What I am saying is that it is helpful to know in advance at what point we will no longer be willing to offer further concessions. To make this point graphically, a woman must draw the line at being physically abused. To let this type of behavior occur without recourse is simply asking for a bad outcome.
Negotiating requires knowing your bottom line or the limits you are willing to go to win an argument or closing a sale or purchase. When you approach your predetermined bottom line, the point where it's appropriate to be willing to bluff before walking away, you have two choices; bluffing or walking away. Depending on the potential impact on the relationship and how much you value the relationship, bluffing should only be considered as a last resort tactic. It should be reserved until all you have at risk is failure itself and you are fully prepared to walk away from the relationship as well as the situation because if you are caught in a bluff your credibility, integrity or sincerity will be damaged.
How to Negotiate Discounts for Paying Early
Remember the saying, 'cash is king'? It is true. Cash can be a driving force when you are buying something. If you are a cash buyer it is good to understand the value to the seller of your paying cash. When you pay with a credit card, the seller pays fees to the credit card company. If you pay over time the seller loses interest on the cash. So the seller has a reason to value cash.
Tips on how to negotiate discounts for paying early when buying:
1. Do your research to understand the value of cash to the seller:
- Determine the cash differential the seller loses when selling to you on terms.
- Gently question the seller to see if he or she might have a need or other use for cash at the moment.
- How badly do they need to sell? If you are willing to pay cash, at a discounted price, but unwilling to pay the full price on any terms then the seller must decide to sell at your price or lose the sale.
2. Determine the value of the cash to you:
- The interest you would lose.
- The lost benefit of not using the cash for another opportunity.
3. Make a cash offer discounting the price by twice the assumed differential value to you or the seller.
4. Be prepared to walk away from the negotiation if the seller will not offer a reasonable discount for a cash payment. If it comes to this, by indicating you are willing to walk, the seller may come back with a viable 'final and best' offer acceptable to you.
There are also opportunities for paying obligations early. Such obligations may be to landlords, lenders or other sources of credit. How badly do they need cash? If you are willing to pay down a note or prepay rent you should get a fair return for doing so.
Tips on how to negotiate discounts for paying early on obligations:
1. Do similar research to understand the value of cash to the landlord or lender and to you:
- Gently question the landlord or lender to see if he or she might have a need or other use for cash at the moment.
- The interest you would lose.
- The lost benefit of not using the cash for another opportunity.
3. Make a cash offer discounting the obligation by twice the assumed differential value to the landlord or lender.
4. Be prepared to withdraw your offer to pay early if the discount is not meaningful. If it comes to this, by indicating you are willing to walk, the landlord or lender may come back with a viable 'final and best' offer that is acceptable to you.
Cash is important today. The most important aspect of having cash or receiving cash is the opportunity value of using it wisely. Understanding how to negotiate discounts for paying early or in cash can help you save money.
How to Negotiate A Salary
Salary discussions are more often feared than not. The problem with many salary negotiations is that the employee is often placed at odds with his employer. If the employee presses too hard, he or she may worry that they will lose favor and maybe even harm their career potential. If they don't press hard enough and fail to get a reasonable increase they may feel that they are being taken advantage of and loss their positive attitude.
What many employees fail to realize is that most employers wrestle with how to attract and keep good people. Naturally they want to contained employee costs but good employees are hard to find and harder to replace. There is a very real cost of losing a good employee.
So both the employee and employer have a common goal. That is, how to keep a good employee motivated while keeping costs reasonable for the company. The core issue is not over the amount of the salary but the value received for the salary paid. This is often missed in salary negotiations.
To maximize your earning potential consider these tips on how to negotiate a salary:
Establish Your Value
In order to warrant consideration for a significant raise you need to establish why you deserve to be treated differently from your peers. Value to a company comes from the work you are doing, the cost of training your replacement, and the potential value you have to offer to the company. Start your conversation with your boss off on the right foot by clearly establishing that you hope to build your career with the company. That means you are willing to invest years of your career life with the company if they are willing to similarly invest in you. By establish the fact that you think you have far more to offer than what your current job entails you are establishing the potential value you have as a loyal and happy employee.
Throw a Curve
Your boss will be expecting you to ask for a dollar-based raise. Instead ask him how else you might be used in the company or department that would be good for your career and the company. Indicate that you have more potential than the current position requires and want to contribute more. This will often throw your boss off as he or she now has to think outside the anticipated and prepared topics.
You can further this strategy by bringing a self-evaluation to the meeting and discussing your strengths and weaknesses openly. Highlighting those qualities that warrant the company investing in you with some career planning changes the discussion from what to pay you to how to utilize your potential. By discussing your potential and the self-evaluation you are providing the reasons for your boss to handle you differently from others in your pay grade.
Offer Some Alternatives
Salary is important but it is only thing the company can do for you. Many times a company simply can't meet your salary demands immediately. But there are other benefits that may be more valuable to you than a simple pay increase. Getting placed in a fast-track program to advance has strong future value. Assistance in getting an advanced degree also enhances your future earning potential. Even moving into a high pay-grade position but at the same pay rate while you get established in the new position enhances your future salary potential.
Don't forget about upgrades in medical coverage, dental coverage, 401k matching contributions, stock options, a company car, laptop or notebook, tuition assistance, day care assistance and company cellular phones may add tangible value to you. These perks may allow the company to add to your compensation without exceeding their mandated pay range for the position you hold and many of these perks are not taxed further enhancing their value to you.
Don't Limit Your Options
Your job will consume at least 30% of your waking hours. You need to like the job, your peers, your boss and feel that you are being paid for the service you are providing. To make sure you are making the right career decisions you should always be open to opportunities outside the company. If other companies or departments want you, your boss will value you more. Don't be afraid to look around.
Life is short. Make sure your work contributes to a full life and does not detract. When you are meeting with your boss take the opportunity to discuss potential growth and what he or she sees in their crystal ball for you over the long term. This not only focuses your boss on the value you have to offer but on what they see for the company of which they are a part. By opening this perspective you are becoming part of the team rather than just another employee trying to get more for doing the same old thing.
When to Negotiate a Raise
How to Negotiate a Severance package
The Art of Persuasion
Ten Persuasion Techniques
What is Negotiating
When to Accept an Offer
Six Basic Negotiating Tips
What to Avoid When Negotiating
When to Negotiate for a New Car
Once we decide it is time to get a new car we get excited thinking about our new wheels we should consider when to negotiate for a new car. Instead we want to get out of the old bucket of bolts and into tour shiny, new alter-ego, right? Yes! That is exactly what the car dealership uses to attract you into the showroom and seal the deal. Your enthusiasm for making a change can be your worse negotiating liability. You are being driven by your wants rather than your needs.
Before you start to negotiate for anything remember to sort out your wants and needs.
There are needs and there are wants. Maslow's work on need theory explains the forces that drive, motivate, and even control much of what we do. To the negotiator what is important is the difference. Needs are those things someone will fight to the death to protect. Wants are the things we want but can live without. The reaction to an offer or proposal tells you if you are discussing a need or a want and provides insight about what tactics to use next.
During most negotiations most people don't hide their emotions particularly well. There should be an observable, inverse relationship in their response depending if you are threatening a need or want. A threat to a need will evoke a very strong response as compared to a threat to take a want. To become a better negotiator learn to use the Maslow Need-Theory Model as a situational thermostat.
Now back to the issue at hand. When should you start to negotiate for a new car? Here are a few tips on what to do first so you are prepared to negotiate smartly:
1. Check your bank account and cash flow to see what you can afford in terms of down payment and monthly payment.
2. Decide if you need to sell your old car first. If so, do the research to establish what you can sell it for to a private party. When you go to the dealer he will take it in trade so you need to make sure you are getting a fair value for your trade-in.
3. Decide what you are going to use your car for and pick a car that matches those needs. Getting a flashy Ferrari does not make sense if you are going to have to leave it in an airport parking lot most of the time. The cost of simply repairing the door dings will soon tap out your cash reserves.
4. Based on how you will be using your car, decide which options make sense to include and which are better purchased elsewhere. An excellent example is the GPS packages.
For a mere $2,500 or more you can have one built into your new car. Or you can buy a standalone package on the internet for under $200.00 that does the same thing. If you travel a lot, you will need the GPS where you go; not where you live. Having one in your car does not do you a lot of good in a rental. Another point, that nice GPS add-on ill not bring you much if anything when you sell your car.
You have now established you basic needs when negotiating for a new car. Now add some wants to the equation. What color do you want? What type of interior? If the GPS were free, that would be nice. And those chrome, low profile rims, pricey if you have to buy them but not bad if the dealer will give them to you at cost to get you to buy the car.
Identify your wants and use them as negotiating chip to be used when you negotiate.
Now you are ready to negotiate for a new car.
How to Sell a Used Car
How to Buy a Used Car
What is Negotiating
When to Accept an Offer
Six Basic Negotiating Tips
How We Negotiate
The difference Between Bartering and Negotiating
The Art of Persuasion
Ten Persuasion Techniques
How to Buy A Used Car - Six Negotiating Tips
Everyone has bought or helped someone else buy a used car. It is usually how teenage boys get their first cars. If they are fortunate enough to have their father there to coach them, it is the lesson that they actually listen to and take to heart.
Because we frequently purchase used cars we all think we know how to negotiate with a car dealership. To some extent this is true. But consider this, used car sales people do this all day long. They likely make as many deals in one week as you will in a lifetime. So they are more practiced than you are. That is a given.
So it is wise to respect your adversary when buying a used car. The dealer will have many tactics and techniques to eke the best possible price out of your negotiation.
To be prepared to buy a used car, consider these six negotiating tips.
Typically buying a used car is the perfect setting for a negotiation. The buyer has limited assets and the seller is eager to get the car off his lot. Both parties are motivated to make a deal. The setting is ideal.
1. Define your objective. Never discuss price until you are you have found the car you want. Price may make a car appear attractive but that allure will fade when you see what you really wanted in the paper or another lot tomorrow or the next day.
2. Be prepared to buy. Make sure you know what the car would cost elsewhere before making an offer. There are several blue book resources and online shopping can give you a feeling for a fair asking price. The actual condition of the car you are considering will only tweak what the car should bring as compared to others that are available.
Remember, asking prices are marked up in anticipation of buyers negotiating discounts and offsets. When you find the used car you want get it checked out by your mechanic before you negotiate the price. A lemon is a lemon at any price!
3. Manage your time. When you have found the car you want don't start negotiating with limited time. Come back when you have ample time as the dealer will use the negotiating delay tactic to make you anxious to complete the deal and drive out with your new car. Avoid this trap.
4. Don't go first. Knowing that there will be a negotiation, the asking price is always set high. Before you make a firm offer ask what the best deal the seller is willing to take is. Typically the seller will pare something off his price to get the negotiations started. This will not be their best price but the most they are willing to offer before you state your price.
There are times when they will drop their price below what you are about to offer. Even if this is the case grimace and feign that their best price is slightly out of your reach. Slowly make your counter at a price affordable to you but beneath their asking price to establish the parameters of the negotiation.
5. Don't forget the terms. The terms of a deal can make the price more or less attractive. Make sure you factor in the financial impact of the terms before settling on the final price. Do not pay top dollar for deal options or maintenance agreements. This is often where the dealership makes high margins. Keep it simple and negotiate the best price and financing when buying a used car.
6. Be Observant. Be aware of the other person's response to your offer. Your objective is to bring the negotiation to a close just before they decide not to sell. Don't over negotiate.
While salesmen in dealerships have experience negotiating the sale of a used car you have an advantage of your own, the power of choice. There are many used cars and many dealerships. There are private and public sellers. You can buy in your town, in your area or on the internet. There are online and print resources. Because you have all these options or choices you have a lot of power because you are free to choose to go to the next seller if you are not happy.
If the salesperson will not come down to what you know the low market is, then leave your number and walk out indicating you have other opportunities. At this point the salesperson only has one buyer. This means he will need to come after you and improve his deal or, which might be the case, he paid too much to get the car and is not in a position to be competitive.
Either way, you time is valuable and you need to know if you can deal with the person or go to your next option.
When to Barter - The Difference from Negotiating
Bartering is a tactic, not negotiating. To barter is to effect trade by the exchange of commodities, assets or services on a par value. Negotiating is an endeavor designed to add value by the exchange of disproportionately valued commodities.
Barterers focus on the exchange of specific commodities based on their intrinsic value. Negotiators look at all of the aspects of a negotiation and seek to identify potential ancillary incentives or concessions that can be combined with the primary commodities to leverage perceived value and thereby create incremental value.
It is important to know when to barter and when to negotiate. Consider the differences.
By creating perceived value negotiators are able to motivate others to do what they otherwise would be reluctant to do. Introducing other incentives is also a viable negotiating tactic to counter a power play. Without ancillary issues to thwart a frontal attack there will be little reason for the party with the most power or strength to compromise, AKA negotiate.
Bartering exposes one to power plays. Everyone knows that he who has the gold makes the rules. The basic concept of negotiation is to expand the conversation from a direct exchange of two commodities, assets or services by offering something of modest value to you which may be perceived as very valuable to the other person. In return for obtaining this ancillary commodity or service the other person should devalue their position on the original item. In agreement, both parties come away with more value than expected thus creating incremental value.
Rule #1 of Negotiating: The objective of negotiating is NOT to win the negotiation. It is to achieve your goal or objective. Giving something of marginal value to achieve a important objective is prudent use of your assets.
Rule #1 of Bartering: The objective of bartering is NOT to win the exchange. It is to exchange your commodity, asset or service for something of comparable value with a minimum of effort and time. Getting a needed commodity or service without having to expend your time and effort is prudent management of your calendar.
In most negotiations we assume that the prime motivators are avarice and greed. It is the use of other, less obvious motivators that makes the difference between those who barter and those who negotiate. Negotiating has the potential of creating value from the process. It is like making 1+1=11 rather than 2. In your discussions you should always be on the lookout for what might be of value to the other person. This is best accomplished by taking the time to understand the needs and wants of the other party in addition to your own goals and objectives.
Simple bartering is appropriate in many situations where time and convenience trump the effort to try to negotiate a better price. At the grocery, for example, you simply exchange money for a can of asparagus. There is no negotiation because you are dealing with an intermediary who gains his or her benefit from very slim margins. They value you as a customer but only marginally. They hope to keep you as a customer by providing reasonable service, good products, competitive pricing and convenience. Your decision to purchase from them depends on how you rate the grocery compared to the competition; not based on how much you hope to negotiate off the price of a can of asparagus.
How to Buy - Six Good Negotiating Tips
Everyone has endeavored to optimize the opportunity to buy cars, boats, homes, appliances almost anything directly from owners. When dealing in the resale market don't forget to negotiate.
We live in a fast paced, got-to-have-it-now world. Unfortunately this environment is good for sellers and bad for shoppers. In a high pressure environment the time and patience required in any negotiation is often considered too burdensome to do properly. So the shopper settles for making the seller happy.
There is no reason to forego go proven negotiating tactics in the interest of immediate gratification. There are few things so precious that failing to get one today diminishes the value of getting it tomorrow. To learn how to buy almost anything, develop these six good negotiating habits.
The First How to Buy Tip: Define your objective. Never discuss price until you are sure it is the item you want. Price does not make the item any more useful or beneficial to you. It may make it appear attractive but that allure will fade when you find a better widget tomorrow or the next day.
The Second How to Buy Tip: Manage your time. The purpose of negotiating is to get the item for the best possible price within a reasonable length of time. Time is a valuable commodity and you don't want to spend too much time negotiating for a $1.00 item when there is a $100.00 item around the bend that you really want.
The Third How to Buy Tip: Don't go first. Before offering a price ask the other person what his or her best price is. There are times when they will drop their price below what you are about to offer. It is a standard negotiating tactic to get the other person to make the first offer so you can adjust your offer accordingly.
The Fourth How to Buy Tip: Be prepared to negotiate. Make sure you know what the 'widget' would cost elsewhere before making an offer. Preparing for your shopping spree should include some due diligence before leaving home so you are prepared to recognize a good deal when you come across it.
The Fifth How to Buy Tip: Don't forget the terms. The terms of a deal can make the price more or less attractive. Make sure you factor in the financial impact of the terms before settling on the final price.
The Sixth How to Buy Tip: Be Observant. Be aware of the other person's response to the negotiation. There is a time to bring the negotiation to a close just before they decide not to sell. Don't let the discussion drag on as the other person may lose interest or patience. Over negotiating can kill a deal that should have been made.
These how to buy tips are routine negotiating tactics that can be applied in almost any venue. They obviously are valuable when buying a used car, negotiating for a boat, purchasing a time-share or condo, or making any significant purchase. The trade-off is time. The larger the purchase the more time you may want to spend on the negotiations.
How to Negotiate a Severance Package
Getting laid off is never fun. In difficult economic times layoffs are all too common. Companies have a need to improve their bottom line for any number of reasons but remember, it is at your expense that the plan is being implemented. The best way to mitigate your personal pain is to negotiate the severance package by customizing it to your personal needs.
To negotiate a severance package that best fits your needs identify how a layoff is going to impact you personally.
Sure, you will be out of work. But what does that really mean? The company will typically be offering a universally equitable package to all affected employees.
You need to consider the layoff a personal situation and put aside company loyalty and resist the argument that they are doing what is best for the company. That may be true for the company but as of the layoff notice you are no longer a valued member of the company. You will soon be on your own. You will want to negotiate a severance package customized to your personal needs.
Before accepting the severance package as offered consider enhancing it by taking these two essential steps.
1. Assess your situation:
Evaluate your potential for finding another job, how long it might take, if you need additional training or schooling, if there is a likelihood of having to take a cut in salary or benefits. Getting back to work has cost in time and loss of income and even job search expenses. Knowing what you are likely facing in terms of expense will help you assess the reasonableness of the severance offer from your perspective.
Evaluate your personal needs for things like medical coverage, help finding another job through professional outplacement support, continuing use of a company car or computer for a period of time, the right to continue to use an office while you search for a new job, or other support that will specifically help you between jobs or to find a job.
When you negotiate a severance package consider asking how the company might help you find your next job.
Often the Human Resource Department will have contacts and resources that they use to find people which can also be used to find job openings. Just having the contact information will help you; getting a paid outplacement service is even better.
If you or a family member has an immediate medical situation or need you may want to see if you can get that resolved before you are removed from the company health insurance plan.
2. Prepare your counter-proposal:
Consider whether you have the leverage to ask the company to increase your package or if you need to work within the parameters of the offer extended. Many companies are limited in their capacity or flexibility when it comes to large layoffs. When considering how to negotiate a severance package you will need to be sensitive to what the company is able to do.
If the company is limited in capacity or is facing bankruptcy, your proposal may need to trade off some of the offered package in exchange for specific continuing benefits that would make your transition easier for you. Often the cost to the company for continuing a lease on a car is far less than the cost to you of leasing or buying a comparable car. The company should not care how they compensate you as long as the total cost to the company remains static.
If the company has the ability to deal individually when negotiating severance packages in order to do what it can for their departing employees, you can counter by adding continuing benefits that make your unique situation easier to absorb personally.
In either event your objective and the argument you are making to the company is to clearly explain why certain continuing benefits are critical to making the best of a difficult situation essentially caused by the company. They are laying you off so the company can improve its bottom line. That means they are thinking about the company's welfare; not yours.
You are entitled to ask the company to be a little more expansive in how they take care of you as they implement their corporate improvement plan. Make your case civilly, professionally and backed up with specific reasons for the trade-offs or additions you feel appropriate in your case.
Remember, the offer of a severance package is only the first round in a negotiation that is very important to you.
How to Negotiate a Lower Rent
Just because you are not a real estate professional does not mean you cannot negotiate a lower rent. Anyone can identify a problem, develop a solution, and present it for consideration. Those are the basic steps when appealing to a landlord for rent relief.
Here's how to negotiate a lower rent in three easy steps.
Identify the Problem
You know you can't pay the rent. But do you know why? If you have had an unusual, unexpected expense that is a readily understandable. If you have a recurring cash flow problem or are habitually behind in your rent that is something else. Before talking with your landlord you will need to identify the cause of your cash shortage so you can explain your situation clearly and concisely.
Develop a Solution
Landlords need to understand your situation and know that you have a way to get back on track. This plan should include the reason for your cash flow problem. It should also show what you are doing on your own to cut expenses. Finally, put together a short budget that shows how much rent relief you need along with your cuts to make it through the problem.
If you have an emergency, then the plan can be simple. You need short term relief to cover an unexpected and non-recurring problem. You will want to prepare a schedule that show with the landlord's help and the things you are doing, provide specifics about your attempt to reduce expenses, you can get back on track in a set amount of time. Your request may be to reduce rent for 90 days and then repay the rent relief over 180 days to ease your cash flow.
If you have had a permanent set back in cash flow then your plan will be a little more aggressive. Be prepared to share with the landlord that you have lost a certain amount of income and while your personal cuts in expenses, again you will want to be specific, cover much of the shortfall you need help in the form of a permanent rent reduction.
Present Your Plan and Request
Ask to meet with the landlord then explain your situation. Don't start off simply asking for help. You want to draw them into the conversation about how times are hard, you have been hit with a problem and you are working on a solution. The approach to the landlord should be that you need him or her to be part of your plan to get back on track; you are looking for their help.
Once you have their attention, lay out your plan and how you want to get back on track. How you value their help and enjoy renting from them. Tell them specifically what you need and why. This is when having been a good tenant will pay dividends. If you have thrown too many parties or been a problem tenant you can expect a comparable reaction.
Likely Landlord Reaction
Landlords have needs of their own. They are in business to make money and have to service their own debts and pay their expenses. You are asking them to give up income, actually bottom line profit, that they are rightly due.
You can anticipate outright rejection, a counter-attack in the form of the story of their cash flow problems, or a willingness to work with you. Hopefully your landlord values your tenancy enough to try to work with you. If so, this is where the negotiation begins.
How to Restructure a Commercial Lease
There are many reasons to restructure a commercial lease. The reasons can range from securing more time for a flourishing business to reducing the rent to survive. Knowing when and how to restructure a commercial lease is part of doing business.
There are a number of ways to approach the challenge of restructuring a lease. The key is to understand your needs, develop a plan, and present the landlord a well thought out proposal that addresses the landlord's needs as well as your own.
If you want to learn more about how to restructure a commercial lease consider these techniques.
Learn what the landlord can do - Knowing what your opponent is able to do enables you to target your requests or choose which issues to address.
- Determine the loan status as part of your effort to restructure a commercial lease. A landlord who has just acquired a property is likely to have a new, large loan and a lender who controls many decisions. A recently refinanced shopping center also likely has more stringent lender controls than a center with an older, seasoned loan. Find out the loan status by asking or simply pulling a recent title report.
- Find out if co-tenants have gotten help before seeking to restructure a commercial lease. Landlords also hate to set precedents with tenants; especially when the precedent lowers rental rates. Talk to your cotenants to see if any of them have gotten rent relief or other assistance.
- Discover what the landlord will do if you leave. Consider how your lease compares to deals currently being made. If you are not in a multi-tenant center, gather what other landlords are getting for comparable space. This will indicate what your landlord can expect to do if you leave.
Prepare a plan to restructure your commercial lease to present to the landlord - Don't approach the landlord with your hand out expecting a break. This is business. A professional approach will yield better results.
Sell why your plan to restructure your commercial lease will benefit the landlord - if you want help you will have to convince the landlord that helping you will in some fashion be of benefit to him. Before he can utter the word 'no' you will want to demonstrate why he should say 'yes'.
Develop a short be meaningful list of the reasons that you would consider your proposal of you were the landlord. These benefits will be best derived from the research you did about comparable rents and vacancy factors in the area. By helping you the landlord might avoid a vacancy, having to re-let the space at a lesser rate while incurring the costs of re-letting, or simply having the space dark and diminishing the appeal of the center to customers and co-tenants.
What do you want from a restructure of your commercial lease - make sure you are asking for what you need. In some cases rent relief will only slow the inevitable.
If you don't have the time to restructure a commercial lease yourself consider hiring an advocate to do this for you. There are many different types of professionals who do this time of work including commercial real estate brokers, financial advisors, management consultants and attorneys. They can be hired to advise you on how to approach the landlord or actually do the negotiating on your behalf.
How to Negotiate with a Collection Agency
Everyone falls behind in payments from time to time. No matter the reason, once this happens the last thing you want is to have the amount referred to a collection agency. When that happens, you lose the ability to deal with the original company because they sell their bad debt at a heavy discount to the collection agency.
Ideally you can act before the debt is sold and negotiate a discounted payoff that saves you the aggravation of dealing with a collection agency. If not, you will need to know how to negotiate with a collection agency. Here are some tips.
Collection agencies make their money by collecting more from you than they paid for the debt originally. More important, they know they will never collect on some of the debts they buy so they have to make up that lose from.....you!
To negotiate with a collection agency you have to appreciate their motivations:
That is all you have to work with when trying to negotiate with a collection agency.
The best strategy is to try and balance time and money in a fashion that the person on the phone becomes motivated to work with you. What will not work are tactics designed to make them empathetic such as a sad story about your troubles, how you were wronged, or the potential of future business if they work with you.
You will be dealing with an accountant type of person who is not associated with the original company or lender. They have no interest in you or your future actions. They want your money, they want it now, and they are very practiced in what they do.
Usually the person you are dealing with is on a commission or bonus plan. So you need to find a way to get them a bonus without paying too much.
What to do:
First don't let your debts go to collection agencies.
Second If you failed the first step, understand that the credit agency will typically buy the debt at the discounted face value of the debt excluding interest or penalty charges. That means they have paid something under 50% of the original cost of your debt. That is their cost basis. They will have handling costs and the burden of other debts they can't collect on to add to their cost basis so I would assume their 'all-in' cost will be around 50%. You can expect to pay more than this amount to settle with them.
Third Your leverage is time and cash. Determine how much cash you can afford to pay immediately to resolve this matter. That amount will be your best and final offer.
Fourth Approach the contact at the collection agency:
How to Get Out of a Commercial Lease
There are times when a business must close in a location. This is usually because it is losing money at the location and the business can no longer service the lease without jeopardizing the company as a whole. There may be other reasons for closing such as the trade area changing demographically or a major tenant leaving the center.
Whatever the reason, this is a business problem; not a personal failure. Treat it as just another challenge to be overcome.
To learn how to get out of a commercial lease consider the following.
What Do You Want?
Closing is often the obvious solution but not necessarily the right solution. Each case is different. Before embarking on termination discussion with the landlord you should be sure you have considered the options you may have. If the location is in a very busy center and demand for space is high, you may have an asset to be sold rather than given back to the landlord. If there are a lot of vacancies you should be prepared to have to pay to terminate early. If you are moving to get into a larger space or different area there may be ways to enlist the landlord's support. If the reason is a personal health issue or other family pressure it is as important to understand this need as thoroughly as a business driven need.
The reason for the change will provide insights into what your options are. To negotiate or get out of a commercial lease you have find a way to get the landlord to agree. The last resort is to simply pay your way out or, worse, default and turn control over to the landlord.
Quantify the Benefit to You
The benefit to you is important because when you get out of a commercial lease early you will likely have to compensate the landlord to do so. That means you should quantify the value to you to leave early so you don't agree to pay more than the value you are getting.
If you are relocating to another location the difference between the net profit of the new location and the net profit or loss of the current location is one way of looking at the benefit to you. Another would be to assess the additional time you would have to handle a personal situation, go back to school for an advanced degree, or other less tangible benefit. Whatever the benefit you need to try to put a value on it so you can measure the cost of getting out of the lease against the benefit to you.
Identify The Impact on the Landlord
As with most things in life, when there is a benefit there is a cost; when something goes up something else comes down; the Ying and Yang thing. The benefits of getting out of a commercial lease will likely be offset by the inconvenience or cost to the landlord to re-
let your space.
Understanding the cost to the landlord will help you assess if his termination terms are fair or egregious. The landlord will have to absorb the loss of rent until he gets the new tenant paying rent. This includes the time to find a tenant, sign the lease then any free rent the new tenant requires to convert the space. The landlord will also have a real estate commission to pay and legal fees for preparing the lease. Then there is the rent he will be getting as compared to what you are paying. If less, that is a further cost but if
the new rent is higher, then he will have an offsetting benefit.
What Will the Landlord Do with the Property
In preparing to sit down with the landlord to negotiate an early lease termination you should canvass the market to understand the likely redeployment strategy of the landlord and projected results. One way to address this problem is to assess why you failed in the location if that is the case. The reasons for your problems may relate to the center or the trade area and, if so, will probably cause the landlord to change the use of the space to make it more viable.
This is a great time to pay a consultant or broker to assess the trade area and give you an opinion of the highest and best use for your specific space within the trade area. Along with that opinion the brokers should be able to estimate how long it will take the landlord to find a new tenant and the estimated terms of the new lease. This information obviously helps you in your negotiations and is worth the cost to assemble a package to share with the landlord at the right time.
Unless you want to pay a lot of money to get out of a commercial lease you need to identify other ways to motivate or compensate the landlord. For example, if you are moving to get into a larger space or different area consider asking the landlord if he has other centers in the area to which you want to relocate or other spaces in the existing center to better fit your needs. Trading locations may meet both of your needs. Another option might be to find someone to take over your business and the lease. Offering a replacement tenant is obviously far better than a vacancy!
As with any negotiation communication is critical. You should be prepared to state your case clearly and concisely and provide documentation to back up what you say. If you are claiming to be losing money at the location, bring operating statements or tax returns that show your loses. It is your job to convince the landlord to help you. Facts always help in establishing the legitimacy of your case.
Sit Down with the Landlord
Getting out of a commercial lease will not be easy unless your rent is way under market. The best strategy is to meet with a decision maker to make your case directly. How the person initially reacts will provide valuable insight into how you will want to refine your actual proposal to terminate. The first meeting should be just to broach the subject of an early termination and gauge how the landlord reacts and develop options that may offset any financial compensation need to achieve your objective. Be prepared to have several
meetings with the landlord each time trying to learn best how to advance you cause. The
time you spend should yield real dollar savings in the final analysis.
If you don't have the time to do this yourself or if there is another reason consider hiring an advocate to do this for you. There are many different types of professionals who do this time of work ranging from commercial real estate brokers to financial advisors to attorneys. They can be hired to advise you on how to approach the landlord or actually do the negotiating.
How to Negotiate for a Used Car
How many cars will we buy during our lifetimes? A dozen such purchases is, on average, only one car every eight years. So we all know how to negotiate for a used car, right? Probably not as we approach the process from the wrong perspective.
The problem with negotiating for something we really want is that...we really want the object of our desire. That weakens our negotiating position significantly.
To improve you skills at negotiating for a used car consider these tips.
You Have Power
There are many cars and many dealers. There are private and public sellers. You can buy in your town, in your area or on the internet. There are online and print resources. Because you have all these options or choices you have a lot of power. The power you now wield is the ability to work one option against the other to get the best deal possible on the car of your choice.
You Have Work to Do
Knowing how to negotiate for a used car starts by understanding your needs versus you wants. The first step in buying a used car is to select the car that best meets your needs. Take a moment and write the primary reasons for buying a used car. Then number the reasons based on their importance to you with one (1) being the most important.
Second, prepare or update your annual budget and decide how much you want to allocate to your car purchase, When you do this also factor in insurance (insurance for a Porsche is much more than for a VW Bug) and even taxes if your budget is really thin.
Finally, consider which options are important to you and which fall in the nice-to-have-but-not-worth-paying-for category. You want to deflect the traditional add-on sales attempts at the dealership.
Start Shopping and Stay Focused
The list of reasons to buy a car and the budget will help keep you focused on selecting the right car for you and staying within your budget. It is easy when in the presence of a practiced salesman to be lead towards a more expensive model, extra options and more car than you actually need or can afford. Keep the lists handy and refer to them frequently to keep you on track for making the right purchase for you.
There are ample resources to help you evaluate the cars that may meet your needs. Periodicals and the Internet offer specs and price ranges. Using your list and personal desires narrow your list to a few makes and models that fit both lists. Then browse the Internet and regional newspapers to see how many matches you can find. You are researching price and availability at this point; not looking for the right car. Make sure you make copies of the best deals you come across as you may need to refer to or even provide them later.
Negotiate for Your Car with Confidence
If you can find one of the makes and models locally you are ready to start negotiations. At this point you probably know more about the make, model, price range and availability than the average used car salesperson. Use that information to strike the best deal possible.
If the salesperson will not come down to what you know the low market is, then leave your number and walk out indicating you have other opportunities. At this point the salesperson only has one buyer unless the model you have selected is a very unique, high-value car. This means he will need to come after you and improve his deal or, which might be the case, he paid too much to get the car and is not in a position to be competitive. Either way, you time is valuable and you need to know if you can deal with him or need to go to your next option.
The point is, being well-informed gives you the confidence to negotiate firmly and fairly and, if appropriate, walk away. You have developed options and so control the negotiation. Knowing how to negotiate for a used car is simply understanding your needs and wants in a car and then following a disciplined approach in selecting and reaching a fair agreement with some who is interested in only your money.
How to Negotiate a Contract
It is important to know how to negotiate a contract to protect oursleves professionally and personally as contracts are a part of life. We expect them in business but they also proliferate thoughout our personal lives. Contracts can be verbal agreements as well as written documents.
They range from marriage contract to agreements with those who work around our homes. To learn more about how to negotiate a contract consider the following.
Understanding What a Contract Is
A contract can be struck between two people verbally or in writing. To make a contract two people have to agree on two things - the service or commodity to be provided and the amount to be paid for that service or commodity. If you agree to pay your gardener $100.00 to take care of your lawn and he agrees, you have just entered into a contract. Breach of a contract can result in a lawsuit so each time you enter into an agreement it is wise to consider getting the precise terms in writing as memories can be very 'convenient'.
Establish your Objective
Before entering into any agreement clearly identify what it is you expect from the other person and what you are willing to pay. Consider what ancillary items or services should be addressed as part of the agreement. Make sure you understand your expectations as to who is to do the work or provide the item, when the work is to be done, when it is to be completed, and how payment is to be made and when.These items should be fairly clearly refined in your discussions before you start to establish the parameters of a contract.
What one person says is usually heard slightly differently by the other. The best way to establish terms in a contract is to put each item in writing and have the other person edit what you have done. This way tests his or her understanding of what you think is the agreed upon term.
You may also want to ask a follow-up question to make sure there is clear understanding. Part of communicating effectively is to ensure that the other person has understood what you are saying. Disagreements arise from misunderstandings on the part of the two people. By communicating effectively you can reduce the risk of any misunderstanding.
What Comprises a Contract
To be a conract there must be an offer, an acceptance without condition and legal consideration, AKA payment, established. For the example above you offer to your gardener the task of taking care of your lawn, he accepts without reservation, and you both agree that the price to be paid for the service is $100.00. That is the essence of a contract. If he fertilizes your lawn and charges another $25.00 that is not covered within the contract and you are free to discuss the charge and even the service. If you disagree over the fertilizer you can reserve payment.
You can also cancel the contract but must pay for the work tendered to the termination notice date excluding the fertilizer. He also can terminate the agreement but must pursue payment for the fertilizer through other channels (small claims court). If the contract is in writing and ancillary services are covered, then the court will look to the contract. If it is a verbal contract the gardener may well say that it was implied that he could charge extra based on your verbal discussions. In such case the judge is likely to award a fair amount to the gardener for the fertilizer as the service was rendered in good faith.
Consider Using Experts
If the contract is more than the maximum small court claim you would we well advised to have any agreement put in writing and reviewed by an attorney. Lawsuits are worth avoiding and a good contract may help avoid a frivolous lawsuit as the losing party often must pay the other person's legal expenses.
Integrity, Demand It
A man's word is his bond, right? Well, maybe. Integrity is a convenience to some and obligation to others. But you can raise the level of integrity by demanding it. By this I mean you can establish the standard in a relationship by indicating how you intend to act and exuding the expectation that the other will do the same. A firm handshake, a direct look into the other person's eyes, and a personal commitment to keep up your end of the bargain encourages the other person to do the same.
How to Negotiate a Raise
Asking a boss for a raise can be stressful. It need not be. If you are doing a good job and if your boss has just given you a good performance review then you both know that you are a valued, contributing employee. The focus on the amount of your raise should now be that of two allies trying to sort out how to merge the company's needs and your expectations.
Properly managed, negotiating a raise can be a good, healthy discussion. If you want to learn how to negotiate a raise consider these ideas of what you can do to maximize your potential.
Identify The Restrictions
You know the company is looking to minimize its labor costs. They usually have two issues. One is the human resource pay range for the position you are filling. The other is how your raise will impact those with whom you work. That is, if you get a large raise will others expect or demand commensurate increases. Finally, your immediate boss may be concerned that giving yoou too much will impair his raise or refelct on his or her job performance. These are the issues you want to address in the discussion.
Put Conflict Aside
Conflict occurs when two or more people are in competition. Discussions about a raise typically follow a good performance review. You have established your talent and capacity. The company is happy with your performance. At this point both parties have agreed on the ultimate outcome provided the salary negotiations can be resolved. Both parties now want the same thing; to keep you happy and productive!
Support the Other Person by Establishing Your Value
Instead of an antagonistic environment you want to find ways to help your boss justify the raise you want. Work with him or her to identify what pressures he or she might be facing. By understanding these issues you can better develop arguments that provide ammunition to use when your bass makes the case for your raise; and he will have to do this.
If the company loses you to another firm it will cost the company time and money. It may also cost them talent.
- If you are doing things above and beyond your job description, make a case for additional compensation. As one stays with a company it is typical that they are asked to take on more and more responsibility. In some cases your boss may not even realize how much your role has been expanded. It is up to you to identify your contribution to the company.
- If you have aspirations for advancement now may be the time to seek that next higher job to increase your earning potential. Your advancing can make your boss look good to his boss as a person who picks good people and develops them.
- Offer to take on more responsibility as a bridge to a promottion and justification for a larger raise now. Identify what you can do beyond your current job that will save the company money or resources. Demonstrate that you are a team player. Reinforce how you are looking for a future with the company.
If you feel you are in a really strong position or if your talents are hard to replicate you can always go to the dark side and suggest that you may need to look elsewhere if the company can justify keeping you. Always phrase this as "keeping you" rather than "affording you" or "paying you enough". You are trying to place the blame on the company's inability to remain competitive for someone with your talents and keep the focus off the mercenary aspect of the discussion.
- If you have been with the company they really do have a significant investment in you. If you are prepared to seek work elsewhere, raising the cost of their having to replace you has merit.
- If, on the otherhand, you are concerned about replacing your income elsewhere then don't try to bluff on this point. Your bluff might get called!
Be Creative When Discussing a Raise
Base salary is important but it is only one portion of a compensation package. Brainstorm with your boss about other benefits such as medical coverage, dental coverage, 401k matching contributions, stock option, a company car, and / or a company mobile phone which you might consider extra compensation and which the company does not have to consider "salary". Extra benefits add real value to you and also become leverage when you go to another company. At that time you can indicate the total package you are getting and require it be improved upon to get your attention.
What Do You Want?
You will spend at least 30% of your waking hours at work. Assess if your current job is fulfilling, rewarding and what you want to do. Even if the money is right it may be time to go in a different direction. It is your career and each step should be carefully planned and executed.
How to Negotiate a Commercial Lease
Are you in business or want to go into business? Need a space to sell your product or meet potential clients? Then you will need to know how to negotiate a commercial lease. Commercial leases are different than residential leases as the parties to the lease have different interests, needs and expectations.
Here's how to negotiate a commercial lease.
Understand the Bigger Picture
To effectively negotiate a commercial lease you need to know and understand the bigger picture of how the lease terms impact the business. A lease is a large, fixed, monthly expense that will impact the bottom line. That means it can add or detract from your income. Before you should negotiate a commercial lease you should have a profit and loss statement for at least the anticipated first year's business. More typically you will want to have several prepared based on the best case, worst case and most likely performance. With this you can see how your occupancy costs impact your profit margins. Do not fall into the trap of basing what you can afford on the performance three year's out. This projecting future potential is a method designed to justify bad business decisions. Things can and do happen and you must be able to weather prolonged weak performance.
Improve Your Communication Skills
Filters are the impediments to clear understanding of the spoken word. Every individual has his or her own filters that change what someone else says. When dealing with a company or corporation which may own a commercial property each person within that organization has their own set of filters. The owner of the commercial property is likely not the person you are dealing with when negotiating a commercial lease. Assuming that you are dealing with the landlord's broker or property manager or leasing agent your verbal proposal will never get to the actual owner or decision maker without a change in the message. The best way to avoid misunderstanding or intentional misdirection is to always put your proposals in writing. And require a response to include the original offer as an attachment. This is your best chance of making sure the decision maker has had the opportunity to hear your message first hand.
Establish the Value You Have to Offer
When negotiating a commercial lease the monetary aspect of the the transaction are far less important than in a residential negotiation. Too often prospective tenants approach landlords focused on the rent when the landlord is more interested in the financial stability of the tenant and the tenant's contribution too the shopping center. Landlords will willingly extract as much money as possible if the tenant is not knowledgable enough to know the other attributes he or she may have to offer. To properly negotiate a commercial lease the tenant must appreciate the available commodities that enhance the tenant's occupancy to the landlord. These possible commoditis may include a unique or complimentary use, a strong balance sheet, a large personal guarantee, the prospect of multiple transactions with the tenant, a strong advertising campaign that will bring more traffic to the shopping center, and the potential of increasing the rent value of the adjacent spaces. This value oriented approach, also considered the whole pie negotiating strategy, may help keep the rent below market even though others are offering more.
Develop Your Power Base When Negotiating a Commercial Lease
Landlords like to think they have the best site in the area. Prospective tenants can balance the power in the negotiation by:
- Demonstrating knowledge of the city and its approval process by sharing prior experiences with the city and noting the professionals available to expedite the permitting process.
- Revealing the investment the tenant will be making in the premises and how the improvements may benefit the landlord.
- Discussing alternate locations you are considering and demonstrating you have choices when it comes down to picking a site.
- Selling yourself as the right person with whom the other person should be negotiating. Indicate that it is you, not a cororate flunbky, who will do everything possible to gain city approval and follow through on the buildout of the premises.
The most important commodity you bring to the table is you. Assure the landlord that you consider success in the location as important to your reputation and that you are committed to making the business a success whatever it takes. Your conviction, passion and vision will translate as a compelling argument to give your proposal more merit with the landlord.
How to Negotiate a Salary for a New Job
Asking a boss for a raise is typically very stressful. It need not be. Asking a potential boss for a salary higher than he or she is offering can be even more trying if you really need that job. Winning a negotiation over a starting salary does not mean the loser must feel that he or she has lost. The art in negotiating is the creation of mutual value. The true objective is an agreement in which both parties have a vested interest.
Here's how to negotiate a salary for a new job like a pro.
Establish the Offer Parameters
Once compensation discussions start the first thing to do is to see what the company is offering in terms of salary, benefits and other compensation. This will give you a complete picture of the potential offer. If there are additional items you expected to see in an offer package you can always ask if they were overlooked. At this point you are just compiling data. Depending on the job, the information may be provided as a range. One thing you should do is ask for the company's compensation range for the specific position. This will tell you a little about their flexibility in the offer and your upside income potential if you are hired.
Conflict is Not Part of a Negotiation for a Salary for a New Job.
Conflict occurs when two or more people compete over a commodity. This can be anything. Land, money, a woman, a man, the baseball bat or the last piece of cake are all commodities likely to cause conflict. But a salary negotiation for a new job is not a fight over a commodity. The company is looking to minimize its expense in the hire. You are looking to maximize your potential in taking a job. What you have to offer is time, talent and potential. They offer income, benefits and future potential. At this point both parties have agreed on the ultimate outcome provided the salary negotiations can be resolved. That is a significant aspect of any negotiation. Both parties now want the same thing!
Change the Negotiating Environment Strategically
Knowing at this point that you both want the same end result, you can relax and seek ways to make the other person more comfortable with the process, with you and with his or her decision to hire you. Instead of an antagonistic environment you want the discussions to become mutually supportive and respectful. Make an effort to recognize the pressures the company faces n its hiring practices and seek ways to assuage such impact my reselling your credentials or capacity to handle more than the specific job description. Suggest that they are hiring not only someone to do the job in question but to grow with the company and take on far great responsibilities. You are their investment in the future. This shift in mood exudes confidence on your part and may make your salary requests more palatable.
Establish Your Value
Job applicants are readily available. If you have made it to the stage where you are discussing salary you are doing very well. Now is the time when you slow down, take a few moments to resell your unique assets for the company. Note that I said the company and not just the job. Sure you can do the job. That is why you are talking salary. But you have more to offer. You are looking for a future with the company. Once they have trained you, you will be a valuable asset they won't want to lose. Your addressing why you are seeking a position with this particular company for long term reasons will enhance your potential value to them and improve your ability to seek a higher salary or more benefits.
Be Creative When Structuring a Compensation Package
Salary is important but it is only one portion of a compensation package. Seek benefits that are meaningful to you such as medical coverage, dental coverage, 401k matching contributions, stock option, a company car, and / or a company mobile phone. All these items add value to you and also become leverage when you go to another company. At that time you can indicate the total package you are getting and require it be improved upon to get your attention.
Be Patient When Negotiating
This is an important negotiation. You job will consume at least 30% of your waking hours. You need to like the job and you need to feel adequately compensated for doing it. That means at the onset you should be patient and make sure you do the best possible job getting the right package for you. That includes an opportunity for advancement either with our without the company. It is your career and each step should be carefully planned and executed.
How to Negotiate a Loan
Everyone at one time or another has the need to arrange a loan. Most of us will do this many times when buying homes, cars, even appliances. Loan negotiations should be approached with care and consideration as there are many ways to arrange financing and the easiest are typically the most expensive.
Anticipate If You Will Need Financing Before Negotiating a Loan for a Purchase
The biggest mistake when people arrange financing is that they don't anticipate needing a loan before starting the process of negotiating for the item in question That is, they focus on the home or car or television and try to get the best price for what they want. Then they are presented the financing terms by the person selling them the item. By then they are tired of the process and only want to get home and enjoy their recent acquisition. Unfortunately, it is the financing that can make a good buy an expensive acquisition. Before going on a buying spree consider how you will buy the item. If you know you are going finance it, consider setting up a line of credit with your bank or other lender so you do not have to take the seller's financing unless that is better than what you have arranged.
As with any negotiation, you will want to spend time getting to know the people you are dealing with before having to talk turkey. Tellers at your bank are not able to give you the best financing terms but a loan officer who knows you, your situation and your expectations can be groomed through regular contact on your art to help when you decide to take out a loan or line of credit. Cultivate a relationship with a loan officer when you are in the bank so that you have a "history" to use when you need a favor.
Why do you Need a Loan?
Discuss why you are buying the item with the lender and explain how you plan to absorb the cost into your current obligations. Establishing how well you are prepared will give the lender confidence that you have a plan, it is well thought out, and you will be able to make your payments. He or he will have more confidence in your performance and may be more inclined to help you get the best terms.
Identify the Needs of the Lender or Seller
When you have selected the item discuss financing options with the seller. Take the time to establish what your parameters are and what you expect. Ask how sales are going in general. What you want to find out is how motivated they are to sell the item to you. If it is a home and the market is down their motivation could easily be greater than your interest in the house! You want to solicit as much information as you can before discussing the financing options.
Develop Your Power
When purchasing a car or a house the financing is a large part of the cost. Car dealers can make a lot of money of the financing terms. If you have bank financing available, you are able to negotiate a cash price and use your own financing or take the dealer financing if it is better for you. Now that you have the power to choose the dealer loses his control over you and may offer more attractive terms to keep you as a borrower as well as a buyer.
If you have come to the financing discussion prepared, you will be a unique customer. That gets you respect and perhaps some fear as your being informed erodes the power the seller usually enjoys. Now you have the chance to lead the discussion in the direction you want. You are able to compare the terms being offered with what you know you can get from your bank or personal lender. Unused to this approach, the seller is likely to follow your lead and start trying to match or beat the terms you have available rather than selling you on how great his terms are. The difference is that you have become an equal rather than a pigeon.
Have a Winning Attitude
As always, use your persuasiveness to keep the discussions moving forward toward your goal. Persuasion can include deference, manipulation, bluffing and intimidation among many techniques. The most persuasive argument is one delivered with a winning attitude.
How to Negotiate a Car Price
Everyone at one time or another needs to buy a new or used car. Most of us go to the dealership more interested in the car's specifications than in the process of making the purchase. Automobiles are expensive, some are very expensive. This sized negotiation should be approached with care and consideration as there is money to be saved by negotiating well. This article will teach you how to negotiate a car price that you can feel good about.
Research Car Prices
Long before going to a dealership there is a lot of research you can do. There are magazines and on-line resources that will help you narrow the type of car you want. It is also important, once you have two or three viable makes and models, learn what the base price for the car is and how much the dealer is making. Learn what the dealers offer as standard and what are options. Options are always well marked up because this is how the dealer makes his profit. Options are also typically more negotiable than the basic car. Find out where the dealerships are located, especially competitor dealers. Research the difference between this year's, last year's and next year's model.
Pick the Right Salesman
An investment of this size will take some time. When you decide to go to the dealership allow adequate time to meet several of the salesmen or women. You do not have to accept the person who approaches you. You can talk with several until you find one with whom you are comfortable. The salesperson has no authority. He will have to always check with his manager before granting any concession. So his role in the negotiation is to keep it going and act as a messenger between you and the manager. Thus you want someone who can identify with your needs, personal situation, and personality to fight for your proposals. Negotiating is a personal activity and the more personal you can make it the more likely the other side will actually try to bend the "rules" just a little bit more.
Be Honest About What You Want
You will have needs when it comes to the car you want in terms of price range, color preference, and options. Share those needs so the salesman can find you the cars he has that most closely meet your needs. If you play cagey the salesperson may waste of lot of your time showing you cars that aren't right or are too expensive. Time is a commodity. You deserve not to have your time wasted.
Know That The Salesman Is Not on Your Side
In any negotiation communication is essential. You will be hampered in negotiating for a car because you will hardly ever get to meet the manager until you are signing the paperwork. This limits your ability to 'read' how the manager is reacting to your proposals. The salesperson will always try to slant his response to either dissuade you from countering or encourage you to offer a little more. His job is to insulate the manager and get you to the highest price you will pay. He will role play depending on what the manager has told him to manipulate you into. Your job is to recognize these roles and negotiate to your own needs and pay little heed to what the sales person is saying, He is not on your side. He is trying to eke out a living by making commissions.
Know Your Power
Power comes in having options. When you are buying a car you have several options. You can buy new or used. You can purchase now or in the future. You can threaten to take your business elsewhere if you can't make the deal you feel is reasonable. Each of these options gives you the power to walk out of the showroom if you are not satisfied. All the salesman can do is write-off his time spent with you and go on to the next shopper. Use this power to your advantage.
Ask for What You Want
You have two choices. You can let the salesman drive the process or you can take control. Yes, you are in the showroom and he knows where the various offices and people are. But you are a potential customer. You have time constraints, needs and expectations. Once you select a salesperson to work with you should then tell him what you expect in terms of time, communication and assistance. The salesperson is your conduit to the sales manager. Tell him what you need from him. The various model specs, options, option mark-up sheet, information of various maintenance programs and anything else you need to begin considering if you should even deal with this dealer. You can even be so bold as to say that you will work with the salesperson to select the right car for you but then you will require negotiating the actual deal directly with the sales manager.
Depending how soft their sales have been you might be able to get this concession. But unless you ask for what you want you won't have a chance of getting it. Don't accept 'no' from the salesman for something you want or need. Direct him to take the matter to the manager or do it yourself. As a potential buyer they want your business as much or more than you want to make the purchase.
There will come a time when you and the manager cannot agree. If you don't reach this point it means you have not gotten to their best offer. This is when persuasion comes into play. If you have planned well you will know what the car should sell for with the options you want. Now is the time to use that information to persuade the salesman to let you deal directly with the manager to get to the final price. Remember, your power lies in the ability to turn around and walk out the door. They will have lost the opportunity to sell you the car but you can go to the next dealership. You don't even need to stay in the state if you want. When you get before the manager your job is to persuade him to keep you as a customer. You might just ask him what he can offer to do that.
When is compromising negotiating?
Is bipartisan compromise possible in Washington?
So much is touted lately about bringing Washington together and acting in a bi-partisan manner. It is interestng that many view this as a novel idea. It is, in reality, what the Congress was challenged to do since first formed.
Compromise, in a negotiation, is the process by which each party gives a little to get a little. It is the process of merging interests to yield a balanced outcome meeting the needs, not necessarily the wants, of the parties to the agreement.
We are a very diverse nation, a federation of states in fact. This diversity is what makes America great. Our system was designed to enable the diverse interests to get along side by side and in harmony. Today that harmony seems ot be constantly challenged.
In Washington, unfortunately, the effect of our lawmakers working together is typically the creation of a bill loaded with all the necessary extra provisions to attract votes seemingly with disregard for how the earmarks will be paid.
That is not negotiating. That is not compromising. That is simply buying votes to assure passage.
One wonders what has happened in Washington over the last forty to fifty years that has seen our lawmakers seeking to do right by their country change to fighting to get their fair share for their constituencies, advocates and, yes, special interest supporters.
I may be naive being outside the beltway but I have not sensed true compromise when it comes to garnering votes for a bill in a long time. What I have repeatedly seen is the purchase of votes that violate the interest of the Country for the interests of a select few in the form of earmarks. Earmarks are riders to the bill that promises something to a small group in exchange for support of the major bill. It typically has nothing to do with the actual bill. It is, pure and simple, a payoff.
What ever has happened to principles. honor or integrity? Since when did the lawmakers of America, and that includes both of the Parties, become Machiavellian advocates of the end justifying the means. When those in the Congress cast dispersions upon the CEOs of America they should, once in a while, reflect on their own questionable behavior. It smells the same! They have been and continue to spend beyond their means.
Many of our good representatives are not negotiating in good faith. They can't cover to costs of their promises...unless we, The People, bail them out.
Keeping Your Job
Negotiating is not always about getting something you want. Often it is about keeping something you have.
Keeping your job in a down-turned economy when layoffs are rampant becomes very personal.
Rather than waiting for others to decide your fate there are things you can do to shape the outcome and improve your chances of not getting a pink slip.
Don't accept the status quo. Seek ways to improve your skills and therefore your value to the company. Discuss additional training opportunities or mentoring opportunities you might take advantage of on your own time. Offer to take on these opportunities in your spare time rather than seeking compensation for offsite courses. Seek out coursework or seminars that will enhance your skills and company value and offer to take vacation and pay for them yourself as a way to informing your boss and others that you are committed to staying on top of things in your industry.
Don't hide or avoid the limelight. Many will seek not to be noticed hoping that will save them. But that is exactly the wrong thing to do. What you need now are champions or sponsors who will speak up for you when considering who should be kept. Volunteer, do extra work, find ways to save money and offer them up the chain. Cultivate favor with those you work with, even in other departments, so when asked they will a) know who you are and b) indicate how helpful or productive you are. When you are not in control of a situation you need others to want to help you.
Be Innovative. Now is the time to come up with better ways to do things. Get outside the box mentally and look around, observe, plan and promote ways to be more efficient. This is the time to be a good corporate person and not a grouse.
Plan for the Worse. The best defense is a good offense. If your company is downsizing or you otherwise feel your position is at risk do not wait. Get your resume updated. Discreetly start a job search and see what is out there. Check with your network to see if there are any opportunities. Talk with those in your life, like your spouse, to see what options you have. Together plan for tougher times and how you can economize. Talk about a total change in direction; maybe even relocating to a more affordable area or changing careers totally. What you are doing is developing contingency plans. Working together to avoid surprises and be prepared to handle whatever comes your way.
Should the Worse Happen. Do not panic. Find out the reason and be prepared to negotiate. If you have tested the waters and found little opportunity to find another job at a comparable salary you may want to try to justify the company keeping you. By offering to lower your salary temporarily or work part time you can argue that your retention may make sense by keeping a loyal employee, by saving money and by saving the future cost of hiring and training a replacement once your company's future brightens. The key is to stay calm and know your options, and being prepared to fight for the best solution for you.
Jobs, like it or not, are privileges not rights. It is up to you to do what you can to protect your future. Consider that staying the course may be your best or worse option. If the company is really in trouble, the sooner you move to Plan B the better. If not it offers security in a tumultuous time. The time you take to consider all aspects of your situation, that of the company, and your family's needs the better prepared you will be make prudent decisions about your future and meet challenges as they come your way.
Negotiating Your Bottom Line
"If you want something done right, do it yourself."
Beware of hiring someone to negotiate for you. Too often hired negotiators are little more than mediators. Their reward stems from the reaching an agreement rather than the actual terms of the agreement.
Companies who hire real estate negotiators and reward them based on performance are asking for trouble. The very people who should be protecting the operating viability of the company are rewarded for something else, making the deal. People are human and incentives are important. Attorneys pose a different challenge to their clients. Some attorneys enjoy the process, the fight. They would rather fight to the end then compromise and settle. This is good for their egos and billable hours!
Knowing your bottom line is important. The bottom line is the point that you should either be prepared to walk away or to start bluffing seriously. In most cases, you should walk away. The deal was not meant to happen. When you walk away the other party may reach out to bring you back to the table. That is when you know they want the deal more than you do and that you might be able to agree on your terms.
Do not confuse goals with bottom lines. Your goals are what you want to achieve while your bottom line is what you need to achieve.
Whether you are negotiating over money, land, or any other commodity, interest, belief or service it has a personal value to you. Before you relinquish it, you want to establish that value so you don't sacrifice it for less. Your bottom line is not your goal or objective. It is the worst case scenario that you would accept. Anything less and you would refuse.
Your bottom line has little to do with your cost in acquiring the item. It is the lowest price you would be willing to accept. This might include among other things:
• The actual acquisition cost.
• The interest on the money invested while you owned it or the "carry cost".
• The value of improvements you made to the item.
• The fdiscounted uture value you think the item may have were you to keep it.
• Any other cost you expended to acquire, hold or sell the item.
This is not your asking price. That is negotiable. This may not even be your non-negotiable bottom line. This is your frame of reference when setting your bottom-line before the negotiating gets hot and heavy. In the throes of the bid and ask you do not want to have to decide a that time what your bottom line is. It is too easy to miss something or make a mistake when calculating under duress. Do it in the quiet of the preparatory period when emotions are in check and you have ready access to files and records.
Manage Negotiations Like Dysfunctional Small Groups
We all know the saying “the best defense is a strong offense”. This is especially true in negotiations. Attitude and conviction of purpose can trump facts and reality. If you feel you should win you demeanor will reflect your passion and confidence. This is very convincing.
Bartering is about trading between equals. Negotiating is all about leadership. Attaining your goal requires your convincing another person to do something they prefer not to do. In the work environment managers entice workers to come to work and perform to certain standards. They do this through offering to pay the employee. This gets reasonable performance. To get exceptional performance managers must develop and apply leadership techniques. Negotiators must do the same. They must motivate exceptional performance on the part of another person or group.
If you don’t need the help of others there would be no reason to negotiate. You would simply do what you wanted to do with pure power.
In any dispute those involved make up a small group and are subject to traditional group dynamics. Groups need to be lead or managed. Filling this role is what makes mediators effective at resolving disputes. Negotiators who take the initiative to become informal group leaders are most likely to have the best track record of achieving their goals.
Those involved in negotiations essentially are dysfunctional small groups. Negotiators should look at the various people around the table as a small but dysfunctional group in need of leadership.
The challenge is to motivate the group as a whole to focus on mutually beneficial goals.
Language of a Negotiation
The language of a negotiation is a complicated smorgasbord of sounds, words and non-verbal signatures. Language, the proper use of it, is more than words or sounds in a negotiation. It is the meaning behind them that reveals the real meaning of the speaker. A lion or gorilla voice their intent to wreak havoc to make their prey cower or run. They know it is easier to bring down a large prey who has turned his back in fear. Were the elephant not to turn away, he would be a good contender and likely the lion would walk away rather than chance being crushed under the elephant's hoove.
When you are negotiating, having almost any conversation with anyone else, it is not your words that are being listened to as much as how you are phrasing them and the intonation of your delivery. And we, as adept social animals, often hide our true meaning with oblique comments and inflections so as not to expose ourselves unnecessarily.
The equation is simple: Language + Delivery = Intent x Obfuscation.
Delivery of an low-ball offer or seemingly unreasonable proposal along with a humorous inflection can be shrugged off as a joke if it is received and rejected out of hand. On the other hand, if it is not rejected but countered then you have a meaningful bid-ask situation and stand the chance of securing an agreement on attractive terms. The use of diametrically opposed inflection to provide cover when the message is substantially different then the other person expects is a calculated negotiating tactic. And it works!
As the recipient of such an offer understand the intent. The person using humor as a delivery tactic is likely fishing to see how you will react. By listening to the meaning behind the words, you will be better able to respond strategically rather than emotionally. If the offer is ridiculously low, you can choose to walk away or respond. If you are serious about making a deal, an effective response would be to calmly inform the other party of the value of the commodity, the basis for that valuation and ask them to reconsider their offer and do better. What you have done is delivered the message that you are informed; that you know the value of the commodity; that you are not desperate; and, that you are serious about reaching an agreement; if they are.
Recently when negotiating for a property in Beverly Hills, the other person threw out some obscenely high comparables. The numbers were astronomical. He did not say that he expected us to pay that amount. He did say that is what "others" were getting. My response was a civil recap of actual comps for like property and the flaws his site had as compared to them. Much later, after he had done his research (validating the information I had provided him), we were able to reach an accord. Had I simply reacted to his initial overture assuming he was serious, we would likely have parted company on the spot.
Learn to listen and observe and then, most important, think about the information you have just gathered before reacting.
Socializing is Part of a Negotiation
Sociologists have studied the ways primates learn. One of the studies included very young chimpanzees and children. The combined group was given a basic demonstration on how to open a device. Afterwards the chimps and children were given their own devices.
The chimps diligently tried to open the devices. They applied their proven skill of random experimentation. The children, on the other hand, applied what they had been shown and tried to open the device with that technique. The children were far more successful.
We, humans, learn through socializing. We observe others, collect those observations and store them away to use in the future. Chimps, on the other hand, attack each new task with vigor but with little application of what they have just observed.
Negotiators must develop the social skills to promote social interaction as part of the early negotiating process. From this interaction will come insights useful in the actual negotiation discussion. In today’s fast paced environment, too often building a relationship is omitted in the interest of saving time and getting to the point. This can be a costly strategic error.
Fear - the Negotiator's Tool or Nemesis
Fear is what terrorists use against large, organized, powerful foes. In earlier times in Chicago a mafia underling would walk into a local bar or restaurant and observe, "This place could have a fire." The owner would logically say, "No way, never had one." The next day, after a fire broke out in the kitchen, the underling would return and say, "See, I could have helped you avoid that. A little insurance goes a long way."
This intimidation forced many law abiding citizens to pay for protection from the Mafia.
In the 21st Century Muslim extremists are using the same concept. They are trying to invoke fear into the western population to advance their cause. They cannot hope to confront most of the world's military power or even their own countries head on, so they resort to attacking the mass population in the name of Allah and their cause. If the masses become too fearful they will either promote aggressive retaliation or elect acquiescence candidates to avoid personal harm. Either way, the terrorist gains strength and power by usurping control of the population.
The best defense against a terrorist is to not change dramatically our daily routine, our perspective on life, and our willingness to do what we want to do. Add to this a little caution, some extra vigilance in being aware of what is going on around us, and not changing our basic beliefs will declaw the attempt of the terrorists to control us.
In a negotiation fear plays a large, strategic role in the outcome. Fear of failing, fear of the unknown, fear of not being helpful, there are many fears that can be used to advance a negotiator's cause. One of the most powerful tactics that few think to use is the fear of not being helpful.
Everyone wants to think that they care about others and want to be liked. A professional and adept negotiator will take the time to build a strong relationship with his or her adversary before really getting to the task at hand. In today's fast paced world, too little time is spent in this fashion. As a result, many negotiating successes are lost because people are too impatient, to hurried and dismissive of the value of building relationships.
How does fear serve the negotiator in this context? By becoming a silent motivator to get the other person to do something that he or she does not want to do. A sociopath has no regard for the feelings of others. He does not relate to others. The rest of us do. In the business environment, many try to be non-emotional. They get away with this sociopathic approach if the other person does not build a personal "bridge". Bank lending officers, credit managers, retail clerks all fit this mold. But who gets the best service at a store? Not the dour patron but the person who reaches out with a smile or kind remark. That is the person the clerk relates to and gives just a little extra. Why? Not because they have to but because they want to. This is a basic demonstration of the application of fear in a negotiation. The customer who has made the effort to build a personal bridge to the clerk has subliminally made that person concerned that they do not want to offend the person in some way. So they try to accommodate the patron.
Power Balancing in Negotiations
Power in negotiations must be recognized and, if you are on the short end of the equation, balanced.
Other people presume to have power over us. Be they attorneys, accountants, doctors, clerks, teachers, or spouses who can make our lives miserable the power they presume to hold over us is based solely on the power we allow them to have.
Most power held by negotiators is illusory but powerful until it is challenged. Fear of everyday conflict, confrontation avoidance, can be overcome by understanding the process of any negotiation and learning how to garner enough power to impact the outcome of the situation in a positive fashion.
Surviving is getting along and accepting the status quo. Conquering is overcoming and prevailing. When we negotiate, the goal is to reach an agreement that meets our needs and advances our cause by satisfying some of our wants. As conflict is a constant part of our lives, it should be conquered rather than merely survived.
Conquering conflict does not necessarily mean crushing the other person. It means dispatching the negative connotation of conflict in your mind, the fear if you will, so that you can focus on resolving issues to advance your interests rather than merely preserving them.
The reality is that fear makes us act defensively, being defensive shuts down our ability to communicate. Lack of communication stymies negotiations.
In Negotiations Personality Matters
Knowing the deployable "personalities" in a negotiation (see my previous post) is a good strategy but does not address use of your strongest negotiation asset; your personality!
Effective communication is essential in a negotiation. Sincerity is the power behind the delivery of a point or proposal during a dispute resolution settlement conference.
Using your natural personality to color or add dimension to your delivery is your best means of making your statements come across as sincere. Getting comfortable with your innate personal style will help you become more believable; more trustworthy in the eyes of others.
Everyone has different personality traits. Some are hard-driving, get to the meat of the matter forces. Others are more relaxed, preferring to develop relationships before focusing on the issues. Still others use humor as a defensive or offensive tactic.
How do you come to understand your basic personality traits? Observe how you act around those you are comfortable with; family, close friends, school chums. Are you the one cracking the jokes? Do they look to you to decide what to do? Are you always trying to keep everyone happy? How you act with these groups is a mirror as to your natural personality. You are relaxed and at ease. It is this personality that is "you".
Knowing that you have a primary personality does not mean that it is the only one you can deploy during a negotiation. But it does let you understand your most sincere delivery style. As your mix the four negotiating styles in any negotiating situation you should find that you shift back to your primary style when trying to make an especially important point or close a deal. It is the strong under-current of sincerity you emit in this mode that signals the other person that this is your final concession, your highest bid or the point at which you are about to walk away from the table. It is a powerful message!
Knowing how to deliver key messages with intense sincerity is part of the art of negotiating.
Do personality traits affect negotiation skills?
There are four primary negotiating styles. They are similar to management styles or personalities.
We learn to negotiate from birth through our experiences, education, and from the people around us. From our first cries when hungry, the reactions of others reinforce our predominant negotiating behavior. We learn based on what we find works with others. We also learn that different approaches work on different people and, as a result, we develop additional styles.
Each is a blend of the four primary styles. Our predominant negotiating style is the manner in which we are most comfortable when interacting with others.
Consider how you act with other people; especially strangers in a stressful situation. You can probably identify your predominant negotiating style pretty accurately as long as you listen to what others think of your style at home or around the office. We constantly negotiate with them. Their perceptions are a mirror available to you if you are willing to look.
We also have a natural style. This is the style that emerges when we are physically threatened or under severe stress. My natural style is much less collaborative! Understanding your predominant and natural styles will help you will understand how you react with others. Now comes the difficult part.
One's predominant style is a learned style. That means we can learn and develop different styles.
Now comes the difficult part.
Each negotiating situation deserves its unique style. One does not negotiate the same way with his wife as he would a business adversary, boss, or even the children. There are differing power bases and interests to be considered and respected. A negotiator is most effective when able to deploy a complimentary negotiating style to each situation.
Effective negotiators are like chameleons. They adapt to each situation. The benefit of being comfortable with a number of negotiating styles is that the appropriate style can be strategically used at will. In any negotiation one might use several different styles depending on the reaction of the other person.
What happened to the Immigration Reform Bill?
No one can win every negotiation. Many suggest making each negotiation a "Win/Win" situation. The reality is that there is always a winner and a loser. It seems to be a better strategy to seek a solution that allows both parties to come away with terms that provide each enough incentive, positive or negative, to support and live up to any agreement that is reached. This mutual incentive is the basis of every relationship whether it is in a marriage, friendship, or business setting.
Of concern, though, is that such an equitable approach to some negotiations may result in too much compromising yielding too little progress toward the original negotiation objective.
This is where I think the Immigration Reform Bill ran aground.
The People of America wanted border security. For that, many were inclined to consider some form of expansive legislation addressing the current illegal immigrant problem. However, those in control, behind closed doors, became so focused on compromises pertaining to the current immigrant situation that they lost sight of the true goal of blocking illegal entry of future immigrants.
Add to that a latent distrust that the Government will really follow through on promises, and you have a broad-based constituency that rose up and cried "foul". They felt that the solution was worse than the original problem because they did not believe the border enforcement aspects of the bill would ever be fully implemented; only the prompt legalization of the existing illegal immigrants.
So the negotiators lost the faith of their principals, on both sides. They were so embroiled in the process that they lost sight of the forest for the trees.
What is troubling is that those behind the bill are the leaders of this country and in theory have been elected to their posts based on their ethics, competence, intellect and the commitment to represent those who voted them into office.
Negotiators must retain a sharp focus on the primary goal and not dilute that objective simply to solve the problem. Anyone can compromise to the point that a deal can be made. Negotiators must strategically use compromises to make progress towards their primary objective.
Rules and Negotiations
A Great White has no known predator. He is unique in that he can and does make his own rules. They are simple as they are based solely on the concept that might does make right in their world. Machiavelli would have liked the great white shark.
Every situation has rules. Whether it is playing baseball on the corner lot or submitting an appeal to the Supreme Court. Knowing the applicable rules enables us to compete more effectively.
In school, legal situations, dealing with any governmental agent and other structured settings, rules must be followed to stay in the game and make progress. As an example, failure to adhere to specifics of state contract law can invalidate contracts.
Depending on your goal and the importance of the negotiation, it may be wise to hire professionals to assist in the documentation to insure what you sign is what was agreed to in the first place. A note of caution: Use these professionals as tools to help you. Do not rely on them to solve your problem.
Rules are essential to order but they are not sacrosanct. If you find the rules to be too restrictive it is your right to challenge them.
Far too often I have heard negotiators say they didn't ask for a concession because it was simply not “done” or the "rule" could not be challenged. All to frequently these are rules established by the other person (landlord or developer as an example). Other than having something you want, these individuals hold no power over you; they have no authority to which you must succumb. Also once firm rules may change over time.
Don't assume that rules of others necessarily apply to you or are still in effect. Rules are subject to time and circumstances. They are not always in effect. Good negotiators challenge rules to avoid missing an opportunity.
The Power of Persuasion
If you want to win a negotiation you must expect to win. Attitude counts! Like any sport or other competitive venue, attitude has a direct bearing on the outcome of a negotiation.
Each negotiation, no matter how insignificant, by definition is based in conflict. The people involved are each competing to protect their respective rights by depriving another of his or her expectations. It is a negotiation over conflicting interests.
The secret of winning lies in the passion one brings to the event. If you are convinced that you are right, if you think you deserve to win, if you know that you are in the right, then your passion will color each argument, strengthen each statement, and lead you to victory. If you have doubts, you will be less than effective. Get rid of your doubts before getting involved.
Positive Attitude Tips:
Plan to win. When you are considering strategies and tactics before a meeting envision using each tactic and prevailing with it. This mental exercise sets in your mind the feeling or the gestalt of deploying the strategy or tactic successfully. When the time comes to actually use it, your actions will be more natural and more effective.
Expect to win. When setting your objectives and goal, test them against what you know to be reality. If they are reasonable expectations, visualize achieving the objective. Do this repeatedly to set the image in your mind that the objective and goal is achieved. Don’t focus on the process of achieving it during this mental exercise but on actually achieving it. This is a form of programming yourself to not only want the objective but feel entitled to it. You are aligning your inner being to expecting to walk in and win. You are empowering yourself to prevail.
Act like a winner. When you enter a room, stand tall, make direct eye contact, offer a firm handshake, and be confident in why you are there. Take the time to get comfortable at the table, lay out material you may need, then settle back, ready to begin. Your statements should be brief, pithy and authoritative. Concise, targeted proposals convey clarity of purpose and conviction on your part. As you deliver them, assume they will be accepted. The power of a positive delivery is immeasurable. If the other person has doubts about their position, it may show in their reaction. Be alert for signs of their doubt. If they question you proposal, ask them why. Never accept on face value an objection. If you are confident of your position, the other person should be placed on the defensive unless they can prove you wrong.
The power of persuasion is based in your personal conviction of being right and entitled to prevail.
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.
What is Negotiating
When to Accept an Offer
Six Basic Negotiating Tips
What to Avoid When Negotiating
How We Negotiate
The Difference Between Bartering and Negotiating
Learn to Communicate
The Art of Persuasion
Ten Persuasion Techniques
How to Negotiate
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.
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.
Running into a angry grizzly requires swift, deliberate action. It is often best to aim and shoot rather than think and plan how to react.
Flash Negotiations is a tactic used to quickly resolve an issue. The proper use of this tactic relies on the sixth sense a negotiator gets that a resolution is at hand. This can happen when meeting the other person for the first time. Usually such meetings are tactical opportunities to gather and validate information upon which future strategies are developed. But the experienced negotiator will, on occasion, get a flash opportunity to open resolution discussions while the other person is off guard. Take advantage of these situations to save time and money. Flash Negotiations often yield the best possible deal available.
How does flash negotiating work?
To be able to deploy Flash Negotiations one must be able to draw upon his or her experience reading people, understanding the specific situation, knowing the background facts and understanding what they are prepared to do to make the deal. Armed with a strong base of experience and people skills, an aware negotiator commences the research interview. As the discussion develops, the other person may signal that he or she is receptive to an offer, is caught off guard, wants quick resolution, or is up to speed and prepared to discuss the matter.
Any of these signals presents an opportunity for Flash Negotiations.
If you are prepared to open negotiations, take the initiative and make a low but realistic offer. Tender as low an offer as you think will be received without shutting off the dialogue.
If the other person counters the offer or asks for more information you will know that the opportunity exists for a Flash Negotiation. His counter will set the parameter of the bid / ask and you can typically assume that the negotiation will end up at the median of the bid and ask. In a flash negotiation I often move quickly to that median point and use the swift pace of the negotiation as a reason to acknowledge the other person's professionalism, insight and forthrightness.
If you are ready to deploy Flash Negotiations as a tactic you will typically find that you will secure better terms and save time by doing so. As you have initiated the dialogue, you should be in control of the facts, be better prepared, and have the negotiating advantage while the other person has had little time to assess the situation.
When to use Flash Negotiations:
-When more time benefits the other person.
-When time is critical to your cause.
-When you know what you are willing to spend.
When Flash Negotiations may not be appropriate:
-When you aren't sure what your initial offer should be.
-When you do not know what you are willing to spend.
-When time is critical to the other person.
-When you are not prepared.
-When you do not have the authority to commit to the terms.
Develop the discipline to be alert and ready to deploy Flash Negotiations and you will be more effective as a negotiator or mediator.
Having Alternatives Improves Negotiating Results
When you come to a fork in the road you have two chances to make the right choice. Pick carefully.
Negotiating is very much like a trek through a jungle. You know where you are going but will encounter any number of obstacles that need to be negotiated to get back to your camp. Being proficient with your tools and having planned the journey will increase the odds of your making it through the jungle.
A negotiator does not have a compass, map or guide to assist him. But he does have similar tools and the opportunity to plan. Those who come to excel in the field invest in their trade craft and properly prepare before each encounter.
Planning for a negotiation requires proper knowledge and preparation. Facts are the basis of the map to the negotiation. Your ultimate goal is the compass heading you need to check and recheck as you proceed. Your co-negotiators and experts are your field team. Setting the plan is an essential step in the pre-negotiation process. Establishing a common goal for the team allows everyone to set their internal compasses and pursue the same objective.
Planning provides a chance to anticipate objections and prepare counter strategies. It is far better to be prepared than forced to react. Preparing and planning gives a negotiator alternative strategies and tactics to use in pursuit of his or her goal. Negotiations are conflict based. They are not intended to be easy. Being armed with alternatives improves one's chances of prevailing.
Everyone talks about negotiating tactics. I prefer to think of tactics as tools to resolve problems. The term "tactics" often connotes efforts to manipulate another into agreeing to something they don't want to agree to do. That may be shortsighted as agreements forged on reluctance have a habit of falling apart as soon as the oppressed side has an opportunity to go back on a prior agreement.
The best agreement is a lasting agreement.
Tactics that coerce compliance are best reserved for last ditch efforts to save a deal that has all but failed.
The tools of negotiation are those tactics and strategies that work to bring the parties together. Such tactics serve to:
Tactics that tend to be coercive attempt to:
Consider the tenor of the negotiation and your tactical intent before employing any negotiating tactic.
Bluffing is a dangerous negotiation tactic.
A pack of wolves can smell your fear. Yelling and shouting is better than running, but not as good as firing your rifle if only you had remembered to bring it!
Do not employ bluffing as a tactic unless you are prepared to have it called. Bluffing can be a strategic mistake if you can't back it up.
A bluff is a venture into the unknown. You are calculating the other side will back down or not take the challenge. If you are wrong, you will have to perform or be caught in a bluff. Once you are caught bluffing, the other side will tend to assume you are always bluffing. It is essentially being caught in a lie.
Strategically it is safest to bluff when you have nothing to lose. Sometimes last ditch bluffing pays off. Sometimes it doesn't. The odds, obviously, are in your favor of improving your position as compared to doing nothing and accepting defeat.
There are times when you know you have cornered the other person. If the person then proffers an obvious bluff, you may want to consider it. It can be strategically prudent to grant a minor, ancillary concession to shore up the transaction rather than see the deal collapse and try to make the deal again.
Bartering is a tactic, not negotiating.
Never venture into the jungle without something of value, like your guide or your mother-in-law, to barter with if you encounter a prowling, indigenous tribe of headhunters.
To barter is to effect trade by the exchange of commodities. Bartering is an important part of negotiations. The non-monetary commodities of the transaction are often more important than the actual monetary settlement.
While bartering is seemingly commodity driven, effective negotiators and mediators know to look for ways to leverage the human psyche to create commodities of intangible value in the form of apologies, respectful recognition, and pain infliction within the bartering framework. The more skilled the negotiator or mediator the more complex the physic negotiating arena can become.
As an example, often corporate negotiators approach landlords seeking contracts or leases bartering solely with their primary commodity, money. They know how much they can afford to pay for a given location and seek to pay a little less than that amount. It is fairly easy math, easy to explain to the home office, and easy to discuss with a landlord. It may not, however, be the best approach. They are apt to forget the value to the landlord represented by the security of their company's financial ability to service the lease or how much value their use may add to the center as a whole. More experienced negotiators would approach the same landlord on behalf of the same company with a quiver full of commodities with which to barter. These commodities could include the quality of the proposed use, the prospect of multiple transactions with the landlord, the ability to move swiftly through the permitting and construction process, a strong national advertising campaign that will make the shopping center more known within the trade area, the potential of increasing the rent value of the adjacent spaces, the strength of the tenant to potential lenders, and so on. This extraordinary-value oriented approach serves to inform the landlord about potential benefits above and beyond rent with this tenant. If any of those arguments are meaningful to the landlord, the tenant should be able to offer less rent than another tenant.
Unless the negotiating arena is expanded, the primary focus will remain on the base commodity. Without other incentives, there will be little reason for the party with the most power or strength to compromise. This tactic of adding commodities of value to the negotiation applies to almost every possible human interaction.
Understanding the full range of your available assets is a critical part of the strategic planning of a negotiation. In many cases, something that seems of little value to you may be perceived as very valuable to the other person. You need to uncover what is of value to the other person to be able to properly leverage its full value. You need to understand the needs and wants of the other party as well as your own goals and objectives.
No one said this was an easy process. It requires time, patience, interviewing skills and research. Then you might be ready to sit at the table. Once seated at the negotiation table, do not become so intent on winning that you offer more than you can afford to pay.
The objective is NOT to win the negotiation, but to achieve your goal; a cost effective resolution.
Removing Barriers to Effective Communications
To negotiate with a deaf and mute adversary, use a pencil and paper.
A negotiator must be understood to succeed. Barriers to effective communication can be removed if they are identified.
Look for signs that the other person is not listening and understanding you. Watch for nonverbal signals that he or she is uncomfortable, bored or otherwise distracted.
Check yourself when the other person is speaking to make sure you are listening rather than planning your next comment or thinking of what you will have for dinner. It is your responsibility to be an effective listener.
If you have issues that prevent you from focusing properly, tell the otherside you need to reschedule the meeting or that you are having trouble following his argument. Proactively remove the barrier so you can do your part in the discussion.
Layered Barriers To Communications
When you come across a tribe of headhunters it is wise to make sure the person you are bartering with is the one who plans the dinner menu.
Other than on playgrounds most negotiations are not one-on-one situations.
-In the business environment it is typical that at least one of the parties is an employee of a company. As such, that person is burdened with a hierarchy of approval rights. It is typical for both parties to have the same burden of needing the approval of others before being able to fully commit to an agreement.
-In family disputes there may be spouses or other family members who have a voice in any agreement.
-In mediation settings there may be spouses, insurance companies or other entities that must be part of the final approval of any accord.
Part of the initial phase of any negotiation is to establish who the decision making authority is for the other party. In the case of a mediation, each of the parties may present layered authority issues.
Most people will reveal their lack of authority only if asked directly if they need someone else's consent. The human ego is typically fragile and to admit dependence is sometimes hard to do. The inclination is to personalize the situation. It is up to the negotiator or mediator to peel away the posturing and determine who the actual decision makers are. In the case of a mediation, the mediator needs to gain access to the decision maker. That may mean asking the person to attend or at least making sure he or she is available by telephone to confer and when appropriate, consent to an agreement if one is reached.
Layered approval structures create barriers to clear communication. Actual decision makers must rely on the interpretations of their delegatees as to the dynamics of the discussions. Each person between the decision makers unconsciously or consciously alter the message. Individuals have their respective filters that alter what they hear.
Consider a corporate negotiation. When dealing with a company or corporation, each person within the organization has his or her own set of filters. They each adjust what they hear. For example, the CEO has a long-range perspective, the CFO is concerned about quarterly earnings and cash flow, the VP of Real Estate is concerned about opening new locations to meet his or her budget and the real estate manager is worried about making his bonus. In addition, each has a personal agenda caused by personal issues such as meeting mortgage payments, college costs, a pending divorce or marraige, or retirement planning. In this scenario, it might be that the real estate manager is really trying to maximize his bonus by chasing any location that presents itself. The CFO is feeling the pressure of lagging sales and has been talking to the CEO about the need to slow development or actually retrench. And the CEO is contemplating a sale or merger that is based on growth through new locations. How is a landlord/owner supposed to know how to negotiate with the company when there are internal conflicts within the corporate culture? How will his message be altered before it reaches the CEO.
Layered barriers in a negotiation require aggressive communication countermeasures to insure that your message is being heard. Possible counter-measures include:
-Put all critical communications in writing. This way, those involved on the other side will at least be able to refer to your written message.
-Copy everyone possible on the communication to make sure it is shared.
-Pick up the phone and call the decision maker to simply inform him of the progress being made and see if there are questions you can answer.
-Refuse to negotiate further unless you have access to the other decision maker.
Negotiating is an exercise in communications. Layered negotiations poses a normal challenge until you gain access to the right person with whom to deal. A standard negotiating strategy is to try to keep key decision makers out of the room so they can assess the situation without the pressure to respond immediately. Take the time before negotiations commence to find out who is involved in the approval process and seek to work with the highest person you can reach.
Negotiators often create barriers to buy time.
There are times when you want to slow the negotiating process. This is when you need to deploy time-buying tactics. Creating barriers is an excellent way to forestall an unacceptable decision.
We live in a society where everyone is supposed to be omnipotent and the best at what they do. Playing dumb to disarm the other person or to buy some time to think over what is being said is a seldom used negotiating tactic. It is very effective.
There is nothing wrong with asking questions or asking for clarification. When the other person is making a major point against you, don't hesitate to interrupt to ask for clarification. It will break their train of thought and give you a chance to think of ways to deflect their argument.
We also live in the real-time world of email and faxes. Just because you receive a proposal by fax or email does not mean you should respond in kind. Feel free to sit on a proposal for a few days before sending a response. This signals several things. That you are too busy to look at the proposal. That you may have other offers. That it is not important to you.
Most important, it "says" you aren't ready to respond for some reason.
Don't be forced into making a hasty decision. Time typically works to your advantage. When you are at the negotiating table and the other person makes a proposal, sit back and ponder, for as long as you want and then some. More times than not the person making the offer will get nervous and improve the offer.
Your silence will signal that you were not satisfied with the terms. Their reaction tells you how much they want to reach an agreement.
As they say, silence is golden.
Negotiators must overcome barriers to effective communication.
While a deep, fast moving river between you and a hungry lion may appear to be an effective barrier, a locked cage with strong bars would be even better.
To be effective a negotiator must have his message clearly heard and understood by the other person. Barriers to effective communication can obscure the best argument. Look for and remove barriers that block your message. All negotiators must be, by definition, skilled communicators. That means they must listen as well as speak clearly.
But there is more.
Reactions to what you are saying signal if the other person is listening and understanding your message. Watch the listener's eyes. If they stay focused on your eyes, that usually means they are intently listening. If however, the wander or disconnect, it usually means that their mind is racing ahead to formulate what they are going to say, that they are not believing what you are saying, or that they are thinking about the hot date they have that evening. In any event, you need to regain their attention. An effective way to do this is to simply stop speaking. When they realize that you are no longer speaking resume as though nothing has happened.
You may actually need to call their attention to the fact that they weren't listening and ask why. This tactic will often uncover the reason for the barrier. Then it can be properly addressed. For example, I recall a situation where the other person replied, "I'm really sorry, my daughter is very sick and I'm distracted." I said that I was sorry to hear about her daughter and suggested we put off further discussions until she was better. In recognizing her personal need, we dealt with each other as real people. Later this personal respect helped us to overcome some of the tougher issues we were facing.
Unless communications are being heard, they should be forestalled until the other person is able to hear what you have to say.
The mere act of acknowledging barriers to communications can give you the opportunity to work together to start to agree on how to resolve the barriers. Then it will be easier to discuss and resolve the real issues.
Anxiety is Normal in Negotiations
Sharks never show anxiety, as predators they sense it. Then they go for blood. Make sure you have plenty of deodorant when 'swimming with a shark'. Power negotiators train to be able to observe, detect and capitalize on the anxiety of their opponents.
It is natural to start any negotiation with some anxiety. Whether in a family setting or the business environment, conflict is not comfortable for most people and a negotiation is a step we take to resolve conflict. Conflict by nature is stressful. Anxiety comes from not being fully prepared or experienced in any endeavor. People are anxious on their first date, before speaking in front of others and when meeting the in-laws. Why should they not be anxious before starting a negotiation with strangers?
Mediators know the root of the anxiety is typically the fear of the unknown. That is why they start mediation sessions with clear, understandable instructions to the parties explaining how mediation is structured, what they can expect, and what the rules of engagement are. The mediator is working at removing the anxiety from the room and opening the way for productive discussions. A seasoned negotiator will take similar steps in a negotiation to set up an environment that is conducive to reaching an accord.
Negotiators can create anxiety as a tactic by introducing new facts, raising embarrassing questions and challenging assumptions to unsettle the other person. Creating doubt may help to bring a recalcitrant opponent back to the negotiating table by undercutting his confidence. It may also create a defensive atmosphere that is counter productive.
Arguing is a destructive by-product of human interaction. Between nations, it can lead to war and mayhem. Between couples it can lead to pain and divorce. Negotiating is very different than arguing.
Arguing or fighting typically ends with the proponents trying to obliterate each other by out-shouting or simply shooting the other to end the argument. This amounts to screaming over the other's words to the point that nothing is heard by anyone. Seeking to overpower the other person may result in the other person simply walking away from the situation. If so, nothing is solved. No one wins.
When involved in a marital or family argument, understand that every person has differing personality traits that impact how they deal with anger. One important difference is the time it takes to get over a fight. Many of us get mad quickly but get over it just as quickly. Others are slow to ignite but simmer for days!
A couple needs to learn the "anger" pattern of the other. This difference will explain reactions and enable the couple to better understand each other. Respect is a key part of any relationship. Granting enough time or space for the other party to cool off is part of respecting their needs. Demanding the argument end on your timing is to selfishly want things your way and is not the way to end an argument. It often will result in a far greater argument than the original issue.
When conflicts between a parent and child or a husband and wife repeatedly escalate beyond control, destructive words and acts often become the norm. This mutual abuse slowly destroys the underlying relationship. Even though the more powerful parent may prevail, the underlying war will ultimately be lost as the core feelings that bind the family relationship may eventually be killed off. As a parent you need to try to control the situation and keep the discussions focused on the matter at hand rather than allow personal attacks to overshadow the core issue.
In business it is not acceptable to kill one's opponent!
Business conflict is typically resolved through negotiation. Whether the negotiation is over an employee's conduct, a supervisor's actions, a building lease or pay raise, the process is the same.
It stands to reason that the most effective negotiators are those with absolute power and the willingness to use it! Few people have absolute power. The rest of us must work to develop tools and techniques to improve their negotiating results.
Managers who demand compliance leave employees with two choices. They can knuckle under, accept the situation, and stay to make the money necessary to feed their family. Or they can fight back. Rather than quitting and jeopardizing their family's subsistence, they simply start seeking another job. By learning of other options the employee has grasped the power to decide whether to stay or leave. If the decision is to leave, the manager will have to become reasonable or accept the loss of an employee and the cost of finding and training a replacement.
In taking the initiative to seek another job, the employee is establishing his or her value on the open market. Knowing that worth empowers the employee with choices and forces the company to either acknowledge that value or lose it.
While arguing is not an effective negotiating tool, prolonged discussions designed to wear the other party down on issues can be an effective negotiating tactic. Learn to control your temper and extend discussions to gather information or wear down the other party. Losing your temper will have the opposite effect.
Assumptions Lead to Negotiating Pitfalls
Seldom does a lion make a faulty assumption about its prey. They take the time to carefully stalk their prey until they know the time is right to strike. Man, on the other hand, eagerly rushes in only to find he forgot to pack his big-game gun!
Assumptions are at the same time necessary and dangerous. It is not likely you will have all of the information you need to make a decision. So you must fill in the blanks, so to speak. How you do this will determine if you are successful or not in whatever you do.
The best defense against a poor assumption is good preparation. Thorough knowledge of your topic, your goal, your strategies and objectives, your company, yourself, your opponent, his company, and the issues relating to the task at hand is the best way to insure your assumptions are reliable.
Few have the luxury of such preparation in their daily routine. So prepare as much as possible before the meeting and then add to your knowledge by measuring the reactions to your questions and comments. During a casual question and answer session you can refine what you know or think with reasonable accuracy if you listen effectively and watch the person's body language.
The problem with bad assumptions is that they can lead to bad conclusions. During your preparation separate what you know and what you assume to be the case. Then focus your conversation on validating your assumptions. In addition to using the preliminary casual discussion period to build a good working relationship or to create a healthy environment within which to negotiate, do not miss the opportunity to uncover false assumptions.
Eventually Negotiators Must Agree
For a negotiation to be successful, it must end in agreement. As the saying goes, you can lead a horse to water but you can't make him drink. He has to want to take a drink.
The parties to any agreement both have to be willing to sign. This is different than wanting to sign. An agreement does not necessarily need to be equally satisfying. It just needs to be agreed to. Negotiators and mediators know that disparity of satisfaction has little to do with getting the parties to agree.
What is important is that both sides, individually, feel that they have gotten something out of the agreement.
Timing is everything. Agreements shouldn't be rushed. But a negotiator can prepare the way to reach an accord. Effective mediators and negotiators know this and use the negotiating process as a means to building an environment that promotes agreement.
Practice makes perfect. Actually, we all learn by practicing. Getting the parties comfortable with committing is part of achieving a global accord. All too often a negotiator tries to rush to an agreement only to be frustrated when the other person pulls back at the last minute. The problem is that the other person is psychologically not prepared to agree. This may well be an unconscious reaction to being pressed too hard to do something that he knows, in the end, he will agree to do. But undue or ill-timed pressure may cause him to rethink, and often change his mind.
One can pave the way to reach a global accord by making it a point to recognize each sub-agreement the parties make during the conversation or negotiation. These agreement opportunities can be as simple as deciding where to meet, to selecting a restaurant for a lunch break. They will also apply to small issues within the context of the discussion. These small achievements of collaboration establish a pattern of cooperation that prepares the parties mentally to accept the final terms.
Unless you have pre-emptive power and intend to use it, realize that you have the power to do everything but make the other party sign the agreement.
Few negotiations are concluded through invoking absolute power. Those that do would be better referred to as mugging the other person. In such situations, one side is out to decimate the other with little regard to the damage done in the process. This is an abusive situation, and after the dust settles, the oppressed party will be laying in wait for any excuse to break the contract or simply leave.
Power driven agreements are typically short-lived. Given the chance, the other person will renig as soon as possible.
Negotiators use Agendas, Hidden and Apparent
There are two types of agendas. Those that are public and set the course of a meeting and those that are hidden and guide the actual progress of the session. Uncovering hidden agendas is an important aspect in any negotiation or mediation.
It is the hidden agendas that truly impact how a settlement conference will proceed.
Controlling a meeting is key to controlling a negotiation. Managing the agenda establishes this control. Mediators garner their power as they control what happens, when it happens and where it happens during a settlement conference. They have the ability to call for caucus sessions, quiz both sides, and dictate certain rules. This often gives them the cloak of authority to get the parties to move toward reconciliation.
Hidden agendas, on the other hand, are what skilled negotiators use to manage the process as the informal group leader.
There are likely many hidden agendas at play during any negotiating session. Those of the primary negotiators and those of the other participants in the room. Each person is likely to have a personal agenda that differs slightly from their own teammates. Uncovering and capitalizing on the disparity of these agendas can be useful to a negotiator.
How does one uncover another's hidden agenda? By being a good detective:
1. Ask questions soliciting the other person's needs and wants.
2. Ask follow-up questions designed to cross check previous answers.
3. Seek similar responses from other members of the other negotiating team.
4. Feel free to question the responses.
5. Press to discover why the individual sitting across from you feels that way; as opposed to why his company or client may feel a certain way.
6. Identify if there are personal needs that are in conflict or amplify the stated objectives of the otherside.
7. Seek to discover if the real decision maker is at the table or available to be reached for input or decisions.
8. Gather and digest the responses to create the 'fabric' of the other side's basic needs and stated wants regarding the situation.
9. Observe non-verbal reaction that may indicate responses are less than forthright.
Negotiation is far more than simply sitting at the table and exchanging proposals. It is the art form of learning enough about the other person to be able to engage him or her in a dialogue that makes them want to work with you. Without absolute power, your primary agenda is to uncover enough about the other person to be able to manage the discussion toward satisfying your needs.
A Negotiator Values Good Advice
Advice is cheap. No matter the cost, it can be extremely valuable to a negotiator!
Before sitting down to negotiate anything of substance it is worthwhile to conduct a little research about the person with whom you will be meeting. Seeking the advice of others is part of the due diligence aspect of negotiation preparation. How you handle that advice marks the difference between an impressionable novice and a veteran negotiator.
The negotiator's job is to qualify and verify the advice received. Often information is biased or flawed and can be misleading. Remember, the information passed along has been filtered by the other person and may be biased based on their experience. The task is to validate input garnered from numerous sources. If this information is deemed pertinent to the task at hand, mentally file it away to use when appropriate. If something is learned that is disturbing, seek collaborative input. Never trust a single source even if that person is respected. If they lost a fight or were embarrassed by the outcome, they are more likely to 'bend' reality to their liking than to relay the facts of the situation dispassionately.
Seek out advice by asking peers about their past experiences with the person or company, asking other people who have negotiated with them, or even asking their assistants or co-workers about them. Often one's hobbies reflect on the type of negotiator they are apt to be. A sailor, as contrasted to a power boat owner, is likely to be much more process oriented while the power boater will be focused on the end result.
Solicit input from as many sources as possible and distill it to salient impressions. Then, when actually meeting the other person, during the initial getting-acquainted conversation, observe and validate if the impressions seem to fit.
Train yourself to be observant and reflective to fully develop your negotiating skills.
When to Accept an Offer
Crossing a rushing stream is easier if you take the time to locate the stones creating a path across the stream before wading into the water.
The art of negotiating is most required when you are presented with an offer that is acceptable; but you don't know if it is the best you can do!
When it's time to stop negotiating and accept the terms is an art of timing.
While you do not want to needlessly leave anything on the table, you do not want to over negotiate a point and risk losing the whole transaction. Understanding your business model enables you to know when you have acceptable terms. Knowing the other person enables you to know when you have pushed him as far as possible.
How do you get to 'know' the other person in the time span of a negotiation?
You do it by observing how he or she reacts/responds to various aspects of the negotiation. As you discuss terms, make offers, and react to offers made to you, carefully observe the non-verbal reactions of the other person. These reactions become the benchmarks you will need to evaluate how hard you have pressed them when the final offers and counter offers are being made.
No conversation should be treated as idle conversation. If you are not studiously learning something about the other side you should assume they are learning a lot about you. Learn to mask or vary your reactions, especially the non-verbal reactions, to keep them off balance. Negotiating is in no small part bluffing.
Knowledge Improves Ability as a Negotiator
In negotiations, one's areas of expertise are not only defined by his mastery of the art of the process but his mastery of the issues being negotiated. You cannot expect to negotiate an outstanding real estate transaction unless you are well versed in the economic, cyclical nature, demographic, and geographic aspects of the specific real estate segment you are considering.
Negotiating is not just the process of bartering. It involves creating value from ideas and altering wants and needs to achieve an accord that is compelling enough to get both of the parties to agree. A negotiator cannot achieve this without being well informed of the subject matter.
A mediator, on the other hand, needs a working knowledge of the subject matter but need not be an expert in the field. His or her role is to bring structure to the settlement discussions and help forge a viable solution. Mediators are not creating value for their own accounts. They are seeking to introduce enough avoidance value so the parties can agree to settle for less than they feel they are entitled to in order to avoid the risk of losing more before a judge or jury.
A negotiator's ability stems from his or her knowledge of the collateral being discussed. The ability to negotiate is a hidden asset skilled negotiators possess. Frequently, they hide this attribute by feigning limited experience or lack of knowledge in "handling" such matters to put the other person at ease. This also may give the other person a false sense of superiority.
When a skilled negotiators meets the other negotiator for the first time, he or she will take the time to learn whether the other person is knowledgeable about the underlying subject matter. Many landlords are able to outwit and out negotiate corporate representatives from very large, powerful companies simply because they know more about the subject matter. Corporate employees handling real estate acquisitions for restaurant and retail companies often know a lot about real estate and very little about their industry. Landlords, on the other hand, are extremely well versed in the shopping center business, the economics of leasing and the dynamics of their tenancies. If you are a corporate negotiator, it is wise to learn the basics of how your business is run, what it takes to make a location profitable, how the occupancy costs impact cash flow, and what the drivers are that generate a strong top line. Being armed with this knowledge will enable you to meet the challenge of a well-prepared landlord and seek viable lease terms for your company.
It is not about how cheap you can get a property. It is about getting a property at a price that allows your company to make money.
Similarly, when negotiating to buy a home, you need to focus less on the cost than the affordability of the purchase price and mortgage terms.
Power in Negotiations
Everyone possesses some form of power. It is not a unique or rare commodity. It exists within each of us. Power is an integral aspect of all negotiations. Those who have it flaunt it. Those who don't, crave it. Power is the fulcrum from which one seeks to leverage his or her position. The ability to reach within and draw upon it in time of crisis is another matter.
Knowledge is power. Similarly the lack of knowledge gives the other person power. Because you have not reviewed your material, your options, the facts, or your opponent's strengths and weaknesses you can not know just how much power the other person possesses in a given situation. Doing your homework before a negotiation expands your power base and diminishes any advantage the other person may have.
Everyone has the power to say "no". Knowing when to do so is essential. Knowing how much you can afford to spend on a purchase gives you the power of knowing when to walk away from the transaction. Saying "No" is very powerful in any negotiation. It is an unequivocal statement. Saying, "No, that is my highest and best offer. Take it or leave it!" is the ultimate power move. At this point in the negotiation you have decided that you have nothing to lose. It forces the other side to make a hard decision. Accept your terms or forego the transaction. Either way you have regained control of the situation.
Never enter a negotiation assuming you have no power. That is predisposing failure. If it is a situation where you have to meet and you are powerless, make the meeting worthwhile by cross-channeling the conversation to open other doors of opportunity. Don't waste your time or the other person's posturing when you know that you will concede. Move swiftly to the final agreed terms and then make the most of the balance of the meeting.
Power is an interesting commodity. It can be fact based or an illusion. Factual power has to do with money, options and time. The more you have of these three items, the more negotiating strength you have. Illusionary power, on the other hand, is often based on how the other person "sees" or perceives you. Your image is based in part on the assumptions the others make about you. You can impact those opinions by the way you act, your dress, your surroundings, your mannerisms, and how you address the others. Power is a state of mind; both yours and those around you.
Basic Management Skills in Negotiations
Any situation involving two or more people is a management opportunity. Those who take the initiative will typically prevail whether it is a physical confrontation or simply deciding which movie to see. Negotiations are only slightly more complicated management opportunities. Unlike a fight where blows are thrown, the combatants must feign civility and control. Initiative and leadership, however, are the most reliable tactics to be used to prevail.
Those involved in a dispute make up a small group and are subject to traditional group dynamics. Groups intrinsically need to be managed. This is what makes mediators effective in settling disputes. They are adept at taking control and managing the mediation process. Negotiators can benefit from learning mediating techniques. Parents, too, benefit from approaching family disputes as a group dynamic situation in which each family member has a role and voice. Using the mediation technique of inclusion to integrate everyone's needs into the solution can provide a mutually agreeable group decision.
How does one take control of an informal group?
By exerting influence and demonstrating leadership traits. In a negotiation, there are some ways to take the initiative:
- Initiate the call to arrange for the meeting.
- Host the meeting where you will have the ability to perform administrative tasks through your staff for the group.
- Prepare and present (or have on the table) an agenda for the meeting.
- Acting as the host, introduce everyone to each other and make sure they have coffee, water or anything else they may need.
- Position your pad and pen at the head of the table before the others arrive.
- Before someone else suggests it, call the meeting to order.
These seem like small things but they demonstrate your confidence, your can-do attitude, and your control of the environment. All that is left is for you to control the discussion. That is not as easy. But you will have made a good start.
Managing implies taking responsibility for the actions of others. A negotiation leader or a mediator delegates responsibilities not only to his co-negotiators, if any, but to the other side. This delegation of assignments serves not only to get the job done but also to give everyone a vested interest in the outcome. A mediator advances the process by directing and delegating the participants in a mediation. This process serves to make both parties valuable to the process, more equal in their respective statures, and, ultimately, more likely to be able to come to reach an agreement.
In a negotiation, group participation can have a similar impact. By getting both sides involved in working together, the resulting 'attitude' should be more supportive of reaching a mutually viable accord.
Two ways to get two people openly at odds to work together include:
Start with simple tasks that are unrelated to the primary issue.
1. Suggest the other person come with you to the coffee room to help get the coffee, cream and sugar.
2. Suggest methods of sharing information. "If I can explain to you how I have valued the property will you demonstrate to me your cost basis?" This is a tactic to get the parties involved in valuing a piece of real estate by working together. It calls upon each to be an expert in their own right. It also allows you to gather essential information.
Disorganized groups without leadership quickly collapse into chaos. Chaos rewards the stronger of the parties; it does not yield a negotiated settlement. Chaotic situations offer opportunities for someone to intervene and bring some order to the situation. Effective negotiators seek to control the environment and manage the process. It is better to be deciding what is going to happen next than to be told what to do.
Don't relinquish your role to another unless doing so tactically serves your ends. There are times to defer to another person to advance your cause.
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.
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.
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."
Is an Enemy Required in a Negotiation?
In the September 17, 2005 edition of the Epoch Times there is an article about Sino-U.S. relations, the Storm Clouds That Cancelled the Sino-U.S. Summit Were Not from Katrina, by He Qinglian. In that article he explains the need for an adversarial relationship between the U.S. and China. "China's ever-growing military power requires that China have an "enemy" so that the military can greatly enhance its political status and increase its budget."
The Chinese government appears to need to make an enemy of the U.S. to keep control of its population. In normal life we tend to make our opponents our enemies. This is usually not the case. They just want something different than we do. Like the opportunity to make a profit or to win a point. An enemy is out to do you physical or fiscal harm. In most business negotiations that is not the intent of the parties. Divorce settlements may be different. The parties want to do damage!
It is not always productive to view your opponent as an enemy. One makes enemies and friends through their actions. Both your enemies and friends will talk behind your back. Realize just as you seek background information on others before a meeting, they will likely do the same. If the feedback they get about you is too adverse, you may never be able to have an open, productive dialogue.
Dangers of being viewed as an Enemy:
-You may be prejudged.
-You may lose opportunities if viewed as an enemy or staunch adversary.
-You may have to overcome fear and hostility from a perfect stranger.
-It will take twice the effort to convert that enemy to be a friendly associate.
He Qinglian goes on to say, "A short while ago, General Zhu Chenghu announced the intention of using nuclear weapons against the U.S. The explanation offered by the Chinese government, that Zhu's speech only expressed his own personal opinions and does not represent the Chinese military, is not convincing. Looking at the changes in the relationship between the two countries, whether a state of military neutrality will last depends on whether or not the Chinese civil system is strong enough to manage the military."
Beware of letting your prejudice block your ability to negotiate. Yes, you have to watch your enemies to see the strike coming before it hits; forewarned is forearmed. Don't let an impression of your enemy hinder communications. Through a dialogue you may find he is not the enemy but a potential ally.
An anonymous complaint is filed against Deputy Chief Brenda Johnson, the lead character on the new TNT series The Closer, while she is busy investigating the murder of a Hollywood producer. The investigation threatens to jeopardize her career. Rather than take the easy way out by pretending to be contrite to stop the investigation, Brenda focuses on breaking the case. Her squad members, knowing of the pending investigation, work behind her back to thwart the unfounded case against her.
Negotiators are human. They are subject to being distracted by personal problems, other matters and even exhaustion. To a lesser extent, they can be distracted by delays in a meeting, antagonistic behaviour of someone in the room, or even by the light coming in through the window.
Being comfortable is an essential ingredient to being effective as a negotiator or mediator. Before entering a settlement conference put aside you personal issues and clear your mind. If the other issues are such that you can't do this, don't start the negotiation. Ask for a postponement or send someone else. You need to have all of you faculties focused to do the job properly. Such distractions are barriers or obstacles that stand in the way of a successful negotiation. Better put, barriers are obstacles to effective communications.
In order to have an effective discussion, the people party to the discussion have to be able to hear, be heard, and understand each other. If you sense the other person is distracted, make it your responsibility to expose the cause. If it is going to impede the other person from listening or focusing on what you are saying, you may want to suggest postponing the meeting. If you feel it will cause the other person to rush through the meeting and grant concessions to wrap things up, then it may be advantageous to proceed. Until you know the situation, you can't judge what the impact will be on the negotiations.
You may actually want to call their attention to the fact that they weren't listening and ask them why. While this second tactic may seem rude, it can often uncover the reason for the barrier that can then be removed. For example, I recall a situation where the other person replied, "I'm really sorry, my daughter is very sick and I'm distracted." To this I said that I was sorry to hear about her daughter and we put off further discussions until the personal problem was resolved. In understanding her personal need, we dealt with each other as real people. This helped us to overcome some of the tougher issues we were facing as we had built up a level of trust and respect. The point is that unless communications are being heard, they should be forestalled until the other person is ready or capable of hearing what you have to say.
The mere act of acknowledging barriers to communications can give you the opportunity to work together to start to agree on how to resolve the barriers. Then it will be easier to discuss and resolve the real issues.
By the end of The Closer, Deputy Chief Johnson's staff had demonstrated to her and to the LAPD that she was finally accepted. This will change for the better how they function as a team.
Collateral Damage Assessment.
Michael Scheuer, one of the CIA's foremost authorities on Bin Laden, says his agents provided U.S. government officials with about ten opportunities to capture Bin Laden. All of them were rejected. One of the last proposals, which he described to the 9/11 Commission in a closed-door session, involved a cruise missile attack against a remote hunting camp in the Afghan desert. Bin Laden was believed to be socializing with members of the royal family from the United Arab Emirates.
Collateral damage is a seemingly unique human concern. It comes from living within social structure and being concerned about how one's actions might impact those around the targeted objective. In war, collateral damage pertains to loss of civilian life when taking a military objective and the potential of losing support at home or from one's allies. In negotiations, collateral damage can mean damage to one's reputation or the company's reputation if unilateral actions are taken.
Often the easy victory is foregone in favor of the collective good of a grander plan. But if you lose enough skirmishes, the war might become hard to survive.
The best way to manage collateral damage is to maintain a proper perspective as to the importance of the issues being discussed. If they are related to other issues, make sure you are addressing the big issues before you bring in your really big guns. Don't waste too much of your power base on minor issues. If you win the major battles, the small issues will likely fall into place in time.
When to Use Power
"The use of force is the last option for any president. ... You know we have used force in the recent past to secure our country." -- --U.S. President George W. Bush, on the possible use of military force against Iran.
Power is a constant in all negotiations. Understanding the dynamics of power in conflict settings is essential to mastering its potential. Skilled poker players know that for a bluff to be effective you must first establish yourself as being a competent player with a tendancy to back up your bets with good hands. The public remarks made by President Bush certainly deliver that message loud and clear. As he has done in Afganistan and Iraq, he has used our military when negotiations fail. By rattling his saber, President Bush is pressing Iran to soften their resolute posture before he is forced to act. This does not mean he wants to act. Only that he might act and is not afraid to do so.
Power can complicate negotiations. Viable deals are often missed because one side assumes the other will not negotiate or will take undue advantage of their strength. This false assumption can result in an acceptable offer never being tendered. In fact, were a proposal made, there is always a chance that it could lead to a satisfactory result.
Everyone has power in a negotiation if they have the ability to walk away from the "table". A powerful person or company does not always hold all the cards. No matter your net worth, company size or investment in the situation, if you can get up and walk away, you have a degree of power. You have the power, and it is absolute, to say "No!".
In today's world, every nation appears to be vying for their own power base to remain significant on the national stage. Iran and North Korea are using the threat of obtaining nulclear status to grab the center stage while the rest of the world is trying to diminish the nulclear threat. America is very aware of the growing threat and is putting them on notice. We may just have to use the power we have to thwart their efforts as we have done in the past. His statements are to be taken seriously as he has the track record of doing what he says he is going to do. Saddam did not listen or believe. Hopefully others will.