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 Bottom Line Tactics
Knowing your objective, goal or bottom line is essential to maintaining your negotiating perspective. It is your compass during a negotiation. 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. Anything that falls short of your bottom line, your basic needs in the situation, is too expensive and something you should be willing to reject. The bottom line is the point at which you should walk away if possible or to start bluffing seriously. In most cases, you should walk away as resolution is too expensive if you have to give away too much to reach it. When you reach your bottom line in a negotiation you essentially have three options:
1. To walk away. You reach the point where you have to walk away when the price of the resolution exceeds what you are willing to concede. It is not what you want to pay or receive; it is what you need to receive or can afford to pay. 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 renegotiate the terms at or slightly above your minimum position.
2. To concede defeat. You may not be willing to sever ties with Raspe and may be forced to concede defeat to preserve the relationship. This is a viable if undesirable option unless someone is getting hurt in the process. If Raspe is winning through power tactics, especially if they involve physical attacks, you should seriously consider if the relationship is worth keeping.
3. To bluff fully prepared to walk away or concede defeat. This approach is often effective because you essentially have nothing to lose. As a result you can become more aggressive in your arguments, more passionate in your style and more compelling in your delivery. The cautionary note is that you do not want to over use this tactic as being caught in a series of bluffs will result in Raspe becoming suspect of all of your arguments. Bluffing is very akin to lying and Raspe will develop a reluctance to negotiate with a liar.
Whatever it is that you are negotiating for it should have a specific value to you. Before you start to discuss relinquishing it in exchange for something else, you want to establish what the value to you is firmly in your mind so you don't give it away for less in the heat of the negotiation. Your bottom line is not your goal or objective. It is the worst-case scenario that you would or should accept.
Negotiations Impact Relationships
You live, work, and play with others. To move through life, you must get along with other people in family, social, and professional settings. You must also get along with total strangers who happen to cross your path.
Winners feel good naturally. It is the way we are programmed. The feelings of losers, however, should also be considered. The fact that the other person lost, especially if the negotiation was a personal or social or even in some business scenarios, tends to breed feelings of resentment and ill will. In a on-going relationship you may win the battle only to damage the relationship.
At the end of negotiation find ways to make the other person feel good about something. In a business setting, compliment the other person's performance, professionalism, or knowledge.Indicate your appreciation that the other person was personally involved in working things out. Ease back from the transaction discussion to a more personal level of conversation.
With a spouse or other family member reaffirm how much you care about the person, that you love him or her, and that you are glad things were resolved because your relationship is so much more important than the problem that caused the fight.
Even when dealing with your banker, a store manager or another casual acquaintance, a proper closure can be the basis of avoiding future conflicts. Indicate that you appreciate how the other person was able to be flexible and help solve the situation. Indicate that he or she has won some loyalty on your part. Try to give the other person a reason to be pleased with more than just the terms of the agreement.
Conflicts are usually short-lived and resolution offers the opportunity to move forward together. Over your life, it is the relationships that will prove valuable, not the little victories along the way. As you interact with other people you naturally balance a myriad of things to maintain the level of a relationship that you want. This does not imply that the other person has the same level of interest in the relationship. When you are negotiating it is important to appreciate how much the other person values the relationship and make sure that you are not threatening the relationship when simply trying to avoid taking out the garbage in the middle of a football game.
Be a good winner by reaching out to the other person to stem any residual ill will. The effort will pay dividends.
Effective Communication is Essential in Any Negotiation
To negotiate people must have the ability to exchange ideas, concerns, proposals and arguments. The purest form of communicating is a power play based on brute strength. It requires no finesse. Time was when a caveman simply beat to death another male and took the man's woman back to his cave. Deal closed! The message is clear, concise, and unequivocal.
Civilization, A.K.A. socialization, has complicated matters creating a need for more complicated negotiations. Today, inflection, innuendo, and deceit cloud otherwise simple statements. We have learned to hide our feelings, goals, and ambitions. We try to suppress our base appetites to appear more civil but the basic urge to self-indulge is never far beneath the surface. This feigned civility is more often learned at home as a child and is subsequently reinforced later in school and evolves as we mature to the point that many adults are hampered in their relationships by self-imposed communication barriers established to create what they perceive are improved images of their real personalities.
They are living a fabricated image and have to constantly hide their true self to preserve the image they want to project. This is not to suggest that we should return to the Neanderthal approach and just clunk each other over the head! To negotiate effectively we need to understand that we must peel away the communication obstacles the other person has created, knowingly or not, and uncover the real issues the person needs resolved. This means being a good listener as well as an effective speaker.
We need to work at hearing more than what is being said to source the intent of the speaker; not hear what we want to hear.
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
Improve Your Negotiating Skills by Learning to Read People
We are all human. One thing we do is react to what we hear or see.
These reactions are typically unintended communiques to the other person as to how we feel about what we have just witnessed. When speaking you, as well as the other person, need to listen. The other person is listening to your words. You should be listening/observing the other person's physical/emotional/tonal reactions.
Speaking really is a two-way form of communicating. Concurrently your words provide information to the other person and the other person's non-verbal reactions provide you with information.
When you first meet the other person, the verbal, nonverbal, overt, discreet responses to your initial casual conversation / small talk will begin to give you a feel for how comfortable or confident the other person is, how interested he or she is in the issues to be discussed, and how you can expect the person to react under pressure. The other person's style, mannerisms, dialect, diction, education, background, knowledge, expertise are often immediately exposed from the moment you begin speaking. Rather than thinking about what you will be negotiating in a few moments, pay attention to the subtle insights the other person is revealing while he or she is at ease. What you learn about the person will help you decide how best to approach him/her once the discussion becomes serious and focused.
Negotiating is a natural process. Being effective at it, however, is not. It takes hard work and discipline to be more than a casual negotiator. Taking the time to improve your ability to be more aware of the responses of others will yield big benefits in your personal, social and professional life.
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.
Negotiating Tips - Seven Basic Steps Before You Negotiate
Negotiation is far more than simply sitting at the table and exchanging proposals. It is the process of working through various phases while you learn enough about the other person or team to be able to engage the other person in a dialogue that makes the other person want or need to work with you. Remember, negotiating is about your getting the other person to do something that you want done. The other person has to eventually be motivated to act. Negotiation is the process of establishing that motivation.
The seven basic steps leading up to any negotiation include:
1. Identification of the problem. It is essential to establish what the issue is before you try to resolve it. Often arguments occur because you and the other person are discussing different issues or the crossover relationship is not apparent to one of you.
2. Researching the issues. Knowing what the issue is allows you to do the basic research into why you are in disagreement and how important the issue is to you.
3. Selecting the participants. Both you and the other person are entitled to add or object to a potential participant in any negotiation. How the two sides populate their teams usually will have an impact on the outcome. Among other things you should try to keep people out of the negotiation who tend to inflame the situation.
4. Researching the participants. Once you and the other person have established the people to be involved in the discussion/negotiation you need to assess who The other person has on his or her team, why they were added and what position they are likely to advocate. The other person's selection of co-negotiators will indicate the areas he feels are important to his position or the areas he feels he lacks expertise.
5. Preparing for the negotiation. Before you actually start any negotiation take a few moments or a few weeks, depending on the importance and complexity of the negotiation, to prepare for the negotiation session.
a. Separate facts from assumptions. Understand what you know about the situation and what you assume to be true.
b. Validate your facts. Sometimes facts change. Make sure your information is current. If you can't do this, consider the unverified facts to be assumptions.
c. Validate your assumptions. Assumptions should be validated by third party confirmation or simply asking the other person if they are valid.
d. Test your assumptions. Assumptions that can't be validated need to be tested or discarded. Erroneous assumptions can impair an otherwise sound negotiating strategy. Don't set yourself up for failure relying on an invalidated assumption because you like it or it helps your case.
e. Adjust your strategies. Using the newly acquired information, make sure your initial strategies, objectives and goals are still appropriate. The new information can often change strategies and on occasion can obviate the disagreement altogether.
6. Meeting the Participants. When the participants first get together to start the negotiation there is usually a short period of time when people meet each other and get settled. This is an excellent period during which you should take the measure of everyone about to take a seat at the table. Observe who are comfortable and who appear uneasy. Participate in casual conversations to determine the interests and backgrounds of the other person's co-negotiators. Make sure your advocates are comfortable and ready.
7. Establishing the parameters of the situation. Once seated at the table it is helpful to make sure everyone is aware of the issues to be discussed and uncover any new issue that needs to be addressed. If new information is provided or the issues changed feel free to take a break to reflect or regroup with your team if necessary.
You are now ready to enter into the negotiation. This is most typically done by asking or soliciting an initial offer. The early stage of any negotiation should be used to establish the parameters of the situation. That is, the bid/ask disparity between you and the other person.
Each step deserves to be mentally considered before it is undertaken. A negotiator should prepare, plan, and execute on the sub-task or individual step level to maximize the potential from the process. The skill is in the preparation and the art is in the execution. Obviously more complex negotiations will have added steps and a more detailed approach but even simple negotiations can be better resolved if these steps are fleetingly considered before you enter the fray with the other person.
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.
Trader or Negotiator
What are you, a trader or a negotiator? Is there a difference?
Trading is the exchanging of comparably valued items, not negotiating. To trade is the exchange of commodities, assets or services on a par value. Negotiating contemplates the exchange of disproportionately valued commodities.
Traders focus on the intrinsic cost basis. Negotiators look to minimize cost or maximize their return. There are times when it may be better to trade then negotiate. Consider these examples.
Power or control over a situation often makes a transaction a simple trade. The person with the power establishes the rules and the rate of return. Those who find the terms acceptable participate. If not, they will seek another venue.
Limited availability of a commodity also creates a demand driven market. Sellers who hold such a commodity have the power to demand a high rate of return. Buyers who must have the commodity, oil comes to mind, have little choice but to pay the high rate while they develop alternative sources.
Hospitals and doctors enjoy another hedge against having to negotiate with you. Because you have insurance, you are not paying the bill (other than a small co-payment). That means you have little control over what is paid for the service rendered. More important, the provider has little incentive to negotiate with you or remain competitive. And the insurance company has little incentive to negotiate a unique rate for you as they spread their risk over all the people they are covering.
Simple trading is also appropriate in many situations where time and convenience are more important than price. At the grocery, for example, you simply exchange money for a loaf of bread. There is no negotiation because you are too busy to try and the amount you might save is negligible. But no one says you could not negotiate with the manager if you wanted to do so. In fact, if you are contemplating a very large purchase for a party or office event there is absolutely no reason not to contact the manager, explain the situation, and inquire about wholesale pricing or other possible discounts he or she might offer to avoid risking that you might go to a competitor.
To answer the question, are you a trader or negotiator, the answer is 'both' depending on the situation, your time, and the balance of power.
Tips on How to Lease a Commercial Property
Leasing commercial property should be a significant event for most people because of the financial liability they are incurring once the lease is signed. Like buying a house it is a major investment. Therefore it is important to consider carefully why and how to lease a commercial property.
Obviously the 'why' is because you want to start, relocate or expand a business. The 'how' is the process of negotiating a lease that provides you a new location and also protects your interests.
Once you have found the right site or location and made sure that the location conforms to prudent operating needs you need to consider the lease terms. When people ask me how to lease a commercial property in addition to making sure the financial terms were viable I caution them to consider what will happen if they need to get out of the lease. Landlords usually frown upon this but there are instances when your contract with the landlord will have to be modified.
Most people are so focused on the opportunity to open a new location. In their quest they don't always consider the prospect of having to get out before the end of the lease. Business is a risky endeavor. There are many things that can and do go wrong. Therefore it is important to provide some safety measures to protect you against the need to terminate the lease.
If you mismanage your business or otherwise cause your own demise, it is not reasonable to expect the landlord to graciously allow you to terminate the lease. You have entered into a contract and the landlord has relied on you to perform through the full term. That said, if the landlord fails to do some things that directly impair your business, then you should have some rights to protect your interests. These are points that should be negotiated into a lease before you sign and while you still have some leverage with the landlord.
Adequate Parking - If your proposed use of the space is dependent on readily available parking for your customers make sure you provide for an adequate number of spaces around your location. Equally important, you may want to provide that the landlord may not lease space within a reasonable distance to a user that consumes an inordinate amount of space for long periods of time. These uses include such uses as fitness centers and theaters.
Co-Tenancy Issues - If your use is vulnerable to competitors, you may also want to provide that the landlord cannot lease to a direct competitor within a certain distance. Many tenants require this protection but within the center of which they are a part. The problem with that is that landlords are in the business of developing properties and may build other centers within your immediate trade area. Try to expand your protection right to adjacent properties within your primary trade area.
Dependency on the Center - If your use is dependent on the traffic being generated to the center then it is smart to seek protection from the center having too high a vacancy rate or losing a major draw either of which can reduce traffic to the center demonstrably. Also, a new center is always attractive and appealing. But what would happen if the landlord failed to maintain the center and the parking lot. If things fall into disrepair it may have a direct impact on your business. Try to provide that should the landlord fail to maintain the center in a fashion that impacts your sales you have the right vacate or withhold rent until the issues are corrected.
With these safeguards in place the rest is up to you to do your best to build your business and service the lease. Knowing how to lease a commercial property is an important part of being in business. Knowing how to provide for future uncertainties enables you to stay in business.
Solve Negotiation Problems By Focusing on the Details
Negotiation is far more than simply sitting at the table and exchanging proposals. It is the process of working through various phases while you learn enough about the other person to be able to engage in a dialogue that advances your cause.
The basic phases or steps leading up to any negotiation include:
• Identification of the problem.
• Researching the issues.
• Researching the participants.
• Preparing for the negotiation.
• Separating facts from assumptions.
• Meeting the participants.
• Validating your facts.
• Adjusting your strategies.
• Testing your assumptions.
• Re-Adjusting your strategies (this is an ongoing activity).
• Establishing the parameters of the situation.
• Taking a break to reflect or regroup, if necessary.
• Making or soliciting the initial offer.
Each step deserves to be considered before it is undertaken. A negotiator should prepare, plan, and execute on the sub-task level to maximize the potential from every step of the process. Too many people approach negotiations from the end result, their objective, rather than focus on the steps of the process. This linear thinking results in loss of opportunities.
The skill of a negotiator is in the preparation and the art is in the execution.
Three Negotiating Strategies
Negotiating is the process of enticing someone else to do what you want them to do for you. That can be selling something for less, providing service you need, or paying more for something you have. Obviously there are endless applications of negotiating but you get the drift.
When you interact with other people you are always negotiating in some way. Whether it is passing in the hall or closing a large real estate deal, you must reach an agreement. Getting to a consensus is the process of negotiating.Forcing your way on others may be effective while you have the power to do so but will quickly wear thin at work, at home or with friends.
If negotiating is so prevalent in our lives it makes sense to consider these three negotiating strategies:
1. Get to know the other person. How, you might ask, do you get to know a person you meet in the hall? One of you needs to step aside to pass. By observing the other person you can assess your need to be considerate of an older person, the fact that the other person is preoccupied and does not see you, or a threatening glare. In any negotiation the other person will reveal valuable information through nonverbal signals and innocent conversation. Being observant enables you to learn very quickly a number of things about the other person. Such strategic observation will help you decide what to do.
2. Understand what it is the other person wants. Everyone has wants and needs. You may know yours but have you taken the time to understand the needs of the other person. How can you hope to negotiate anything unless you know what the other person wants? Ask. Most people will share what they want. It is up to you to ascertain what they really need. That is what you will have to pay.
3. Determine how important the issue is. There are four primary currencies in a negotiation. The commodity itself, compensation, time and the relationship of the parties involved. It is a balancing act to be efficient in how you expend these currencies throughout your day. Make sure the commodity you are negotiating for is worth your time, potential damage to your relationship with the other person, and what you will likely have to pay. Don't waste your time trying to win negotiations that take too much from your aggregate pool of these four currencies.
Negotiating is not rocket science but it does deserve your attention. Our lives are filled with interactions with others and how we handle pour negotiations impact not only the quality of our lives but that of those around us; especially those closest to us. These three negotiating strategies will help you extend due consideration to the feelings and needs of others. Bullying others into doing your bidding or always using power negotiating tactics threatens your relationships and limits what you accomplish in your life.
Negotiating with a Stranger
To many negotiating is an awesome task shrouded in manipulation and connivance and plied by attorneys and politicians. The fact that often we have to negotiate it is with a stranger makes it that much more difficult. Trying to confront a car sales person, a banker or credit manager, a vender at the farmer's market, or any other person we run into on the street that has something we want can be very intimidating.
No wonder so many shy away from negotiate with a stranger. It is often easier to accept the terms being offered. This is no way to build confidence in standing up for your best interests. It is no way to live.
Get real! The birds do it. The bees do it. We all do it. Negotiate, that is! If we all do it why not consider these 5 Tips on negotiating with a stranger to improve how we interact with others? These tips on negotiating are designed to help you better understand the art of negotiations and improve your relationships with those you have to deal with every day.
Tip #1 When negotiating with a stranger approach the situation as you would any casual conversation. Take some time to get to know the person a bit. Try to identify some common interests you might have. The objective is to stand out in his or her mind from all the other strangers that pass by each day. By making this stranger feel a little more comfortable with you, you are subtly encouraging the person to deal with you as a person and not just as a source of another sale.
Tip #2 When negotiating with a stranger your primary objective is to be heard and understood. Learn to communicate effectively with strangers and you will improve your negotiating results. Communicating is more about being heard than speaking. If the other person cannot understand you all the talking you do won't change that. To be effective when negotiating requires that you have a clear message and the ability to deliver it in a fashion that a stranger can understand.
Tip #3 When negotiating with a stranger consider why the other person is resisting your proposal so much. Could it be that you are asking too much of them or offering to little in return. Negotiation is all about wants and needs. An effective negotiator will take the time necessary to separate the two. Wants are those nice-to-have extras that can be bartered for other concessions. Needs are those things that one must get to go through with any agreement. Try to view the issues from the other person's perspective to better understand the reason for their reluctance and then craft a new proposal that addresses their needs a bit better.
Tip #4 When negotiating with a stranger consider how you are handling the situation. Are you bullying the other person? Are you threatening them in some manner? Consider how you are approaching the negotiation in terms of words and mannerisms to make sure you aren't changing a negotiation into a fight. When people are backed into a corner they may agree to get out of it but it is likely they will break their agreement later if they have an opportunity.
Tip #5 When negotiating with a stranger make sure you know what your goal is. Make sure that the prize you are seeking is what you really want. Sometimes we simply become too embroiled in an argument or negotiation to see that we are investing far too much time chasing something of marginal value.
Negotiating with a stranger should be easier than with someone you know because you don't have to worry about the collateral damage to the relationship. You should feel free to press hard for what you want and challenge the other person. Doing so without becoming abusive should enable you to not only garner the fruits of your labor but also build relationships that may be beneficial in the future. These successes will instill confidence in your negotiating skills making future negotiations easier.
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 Currency of Negotiations
What is Negotiating
Negotiating is the process by which two or more people get along in a social, competitive environment. Competitive in that two people typically have differing wants and needs and must figure out how to work together to get along. Negotiating is an integral part to any relationship. It may be personal, social, professional or simply a chance meeting on the street.
Unlike bartering, arbitrating or mediation negotiation is the collective process that impacts us in every aspect of our lives. It is not limited to the business or legal aspects of our lives. Negotiation is the base process of people interacting with one another. Bartering, arbitrating and mediation are civilized attempts to refine the negotiating process into a disciplined process.
To answer the question what is negotiating we need to understand better what it is get along with our fellow negotiators; other human beings that happen to cross our paths for one reason or another.
It is very human to want something someone else has. How we get it, or attempt to do so, is how we implement our style of negotiating. We can be subtle, caring about the other person's interest, wants and needs, or we can be self-centered, focused solely on our needs and abusive in the process.
What is negotiating? When two people meet and begin to get to know each other, they start establishing how they will negotiate in the future. In essence, they are establishing how they will negotiate important things by laying down simply rules of etiquette. They learn each other's mannerisms, inflections, how they speak, what they are like. All these personal characteristics begin to build a mental profile that will help them understand each other in future conversations. Negotiating is built on the premise that two people can communicate effectively to work out a disagreement or problem. To communicate effectively we need to understand the nuances of nonverbal communications. Learn to Communicate
What is negotiating? Negotiating is the exchange of unlike currencies in a fashion that motivates both parties to honor the agreement. In this case currency can include tangible and intangible commodities. The age old exchange is sex for money. In the 21st Century it could easily be sex for power (or association with power). The currency of a negotiation may be wealth, recognition, sex, a diaper change or simply peace from a crying child or whining peer. We are trying to improve or avoid some aspect of our lives. It is a composite of needs or wants that drive any negotiation. Especially when someone else has what we want! The Currency of Negotiations
What is negotiating? The goal of negotiating is to improve your position as the result of the process. It is not simply getting to 'yes', 'no' or any solution. The solution is the product of an effective negotiation; not the goal. Being Right Isn;t Winning
The basic answer to what is negotiating is that it is effective communications between two or more people that result in all involved feeling that they have improved their situation to the extent that they will honor the agreement in the future. This does not mean that both have to win or feel like winners. It can also mean that the person who fell short of attaining his wants at least satisfied his base needs from the interaction. Sometimes losing less is better than losing everything.
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
The Art of Persuasion
Ten Persuasion Techniques
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 Make Up After a Fight
Just how bad was the fight? Do you have any idea what you said in the heat of the moment? Knowing how to make up after a fight is an important part of arguing. Relationships are precious things in life. Knowing how to fight and make up is an important aspect of keeping the relationship healthy.
Making up can be easy or hard. A lot of what makes it hard is trying to undo what was said when you were both really mad. Like it or not, those comments have a habit of being remembered. They hurt. At the time you meant them to hurt but now you can't imagine ever saying them.
Everyone negotiates. It is part of socializing, working, marriage, virtually all aspects of our lives. But some negotiations are more important than others such as those with a friend, spouse, parent or child.
Arguing on a social or personal level impacts our personal lives beyond the immediate debate. The same applies to how we handle negotiations in the workplace or school. We should be aware of the potential of the lasting damage that can be caused by what we do or say when arguing which is just a form of power negotiations.
To ensure you will be able to make up after the fight there are some things you should avoid when negotiating.
If you want to get someone to do something they don't want to do, does it make sense to irritate or antagonize them when negotiating the matter? Unless you have a strong power advantage over the other person or maximum leverage, it is better to seek their support rather than use ridicule or anger to force the issue. This is especially true when the relationship with the other person is expected to survive the immediate situation.
Bluffing carries significant risk. As poker players know, if you are repeatedly caught bluffing your effectiveness will be undermined and you will be left with the reputation of being a liar or at least less than fully truthful. Bluffing can be perceived as a pattern of lying and you run the risk eroding trust with those you care about. Loss of trust is very damaging to any relationship.
No one likes to feel helpless. Avoid forcing someone into a corner when negotiating or in an argument. You are asking them to strike out, hit back or otherwise hurt you to get out of the 'corner'. Even if they acquiesce at the time and let you have their way, they will harbor resentment at being forced to do what you want. if you continually corner someone their resentment overtime until they find a way to sever the relationship.
Don't Win the Battle and Risk Losing the War
It is fun to win. Most of us are programmed to do so. The problem arises is when we seek to always win and let our passion for winning damage the relationships we value. It is important to maintain your perspective when discussions get heated and pick the right arguments to fight, much less win.
Some arguments are meant to be lost strategically to preserve relationships. Make sure the issue causing the argument is worth winning. The best way to do this is to assess what you will gain by winning and what the other person will lose. Avoid those situations where the other person will damage to his or her ego over something trivial to you.
Be sensitive to the needs of the other person by keeping your perspective about the big picture, the relationship, as compared to the immediate situation.
Don't Forget to Mend Fences
Everyone loves a winner; few like braggarts. Avoid inadvertently abusing the other person when you prevail. When you come out on top take the time to shore up the relationship with the other person. Whether it is a spouse, child, parent, friend, boss or business associate, you seldom want to jeopardize a relationship by not taking a little time to ease the other person's pain of losing.
This investment in the relationship will pay dividends down the road and makes making up much easier.
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 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 House Price
Unless you are a real estate investor or developer, there are few personal items that will cost as much as the home you buy for your family. Your home represents far more than just an investment. It will become your castle, your nest, your family's home base. The point is that when you negotiate a house price you may or may not be the best person to do so because there are emotional issues that may hinder your ability to negotiate effectively. An example might be the pressures of a spouse who really, really, really wants the house.
Buying a house comprises two diametrically opposed issues. One is location and configuration. These are personal issues that are based on your preferences, proclivities, and desires. They are emotive and philosophical by nature. The other is financial. It is based in hard numbers and facts. One reason real estate brokers can be of value is that they can take on the negotiating aspect of the transaction leaving the personal issues to you. It is up to you to find and select a home that meets your personal criteria. It is also your responsibility to manage how the broker handles the financial negotiations.
Just because you delegate the financial aspect of the acquisition does not mean you relinquish control. To manage the broker's efforts on your behalf when negotiating a house price you will need to provide him direction.
Brokers are not acquiring the house. They are not paying the mortgage. They are looking to make money on the deal as efficiently as possible. You can help them achieve their goal by clearly giving them direction about your expectations from them while they act as your agent.
1. Determine how much you can afford to pay in terms of down payment, monthly payments and total price. Then tell the broker not to waste your time with anything more than 15% over the maximum you know you can comfortably afford. You can likely get the asking price down a bit but there are always hidden costs that creep into the picture so a little buffer is always nice to have.
Brokers frequently try to get you to stretch. You need only be firm. Your time is valuable and if you have set your budget accurately, there is little reason to look at anything that is out of reasonable reach. Do not let the broker tell you not to worry about the price just find what you want. He or she is trying to draw your emotive side into the equation hoping to get you to stretch a bit. This is not servicing your needs. Brokers should be directed to do what you ask not what they think might be best.
2. Determine the requirements you need in terms of size, number of rooms, lot configuration, distance from work, and whatever other criteria is important to you. Tell the broker these are your requirements and that you do not expect him to bring in properties that deviate substantially from your criteria. If you are looking for a three bedroom house and the broker continually presents you the perfect five bedroom homes you are working with the wrong broker as he is wasting your time as well as his own.
3. Make sure the broker is showing you all available properties that meet your needs not just the listings from his company. Too often brokers try to maximize their commissions by only sharing their listings. You need a broker who will try to service you fully regardless of his or her commission.
4. Some brokers represent both parties. This is known as dual agency. By law they need to tell you if they are representing both parties. If so, realize that your broker is legally obligated to fairly represent the seller as well as you. This is not an optimal situation if you are going to rely on the broker to negotiate the best possible deal for you. In such a case you can refuse to approve a dual agency listing asking the broker to find you or the buyer another broker or you can assume the negotiations yourself.
5. Set the price you are prepared to offer. Depending on the broker's role you will want to establish the maximum you want to pay and the minimum you should offer. Do not let the broker recommend a high initial offer to not offend the seller. Brokers traditionally try to narrow the gap quickly to get a deal made before losing the opportunity. You should be more interested in negotiating the best possible deal. The seller, just like you, wants to see a deal made and is not likely to get too upset with a modest offer. Just keep it reasonable from your perspective based on comparable sales which the broker should provide you and the economic climate.
6. Ready to negotiate? When you are ready to make an offer and start negotiations you should provide your broker with specific guidelines that he can work within without your prior consent. I recommend that you:
• require the broker to discuss any offer with you before it is tendered;
• obligate the broker never to intimate to the seller what you might be willing to do;
• thoroughly debrief the broker as to how the seller reacted when presented with an offer; and,
• require all offers and counter-offers to be in writing.
I actually prefer you be in the room so you can assess the reaction personally but sometimes this is not possible. The reason is that the reaction goes a long ways towards guiding your next response. When the broker, any broker, relays what happened they will, consciously or not, bias their report to you. It is like the old 'telephone' game. A phrase is repeated through several people and changes with each restatement.
Do Politicians Negotiate
In a manner of speaking politicians negotiate for your vote. They stand up and tell you what they think you want to hear to get your vote. They make promises you expect them to keep. In essence, they make a contract with you based on trust.
No matter the negotiation venue every instance of human interaction requires a basis of trust upon which commitments can be built. Conflict resolution, alternate dispute resolution, negotiations, mediation, settlement discussions, debt restructuring, salary and performance reviews are all examples of human interaction. Whenever our species interacts, the discussions are colored by the natural inclination of each person involved to trust or distrust the others.
Therein lays the problem. Politicians from all sectors of the political landscape have become so adept at playing to the crowd that we no longer trust them. They have proven time and again that when they get to Washington they will quickly forget the promises they made that enabled them to get there.
So the contract is breached. You delivered and they reneged. What should you do?
When someone breaches a contract you have several recourses. Some are based in law and some are personal. A politician who breaches his contract with the voters knows they will never sue for specific performance or otherwise try to enforce the contract through legal channels. But they should fear the other ramifications of breaching the contract with their constituents.
As a voter you have the privilege of voting. Actually it is your responsibility. Your representation should be very important to you. If a politician promises to represent you to get your vote then does not do so once elected you should consider the following actions:
1. Spread the word. A word-of-mouth campaign, if it catches on, can be effective in either causing the politician to rethink his actions or come back to the local group to try and make amends.
2. Speak Up. Call, email, mail, fax and otherwise make sure that he or she knows that you are not happy, that you are telling your friends, and that come the next election he will have a hard time getting your vote. The pressure is always on the politician during the run up before an election.
3. Find a New Candidate to Support. There are lots of wanna-be dog catchers. If your politician fails to represent you, find and encourage someone who will to run and actively support this person.
4. Report the Breach. Everyone has a boss. Politicians are no different. Their 'bosses' are those who give them money to run. If you are unhappy with you or representatives performance write or email or otherwise contact the local party organization, the state organization, and the national committee making your concerns known. And copy your representative each time. Do not let them forget that they serve at our pleasure; not the other way around!
We are seeing trust erode as politicians pursue seemingly unpopular programs and use questionable means to secure the votes necessary to get them passed. The culture of backroom negotiations and payoffs is the same old political practices common to both political parties that the American people have come to distrust. This distrust, if left unchecked, will undermine the general public's faith in government.
How to Negotiate Credit Card Debt
The most important aspect of personal debt restructuring is to ask before you get in too deep and before the lender sells your debt to a collection agency. So it is more important than ever to learn how to renegotiate credit card debt before one is forced into bankruptcy court.
Renegotiating debt is best done before you are too delinquent. Debt can be restructured a number of ways. Here are some ways to help you preserve your ability to control the restructuring of your debt.
To learn how to negotiate credit card debt consider these negotiating tactics:
- Do not wait until the debt has been sold. By then it is too late to deal with the bank personnel who might have an interest in helping you. The third party's only motivation is to make money off your bad situation.
- Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and negotiate your credit card debt.
- Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue and saves them the time and effort of writing it off.
- Be persistent when negotiating credit card debt. "No" is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.
- Be pleasant on the phone and in person. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse. Besides, you have little to threaten with so avoid creating an atmosphere of a confrontation. You will lose.
You have a cash flow problem that is about to become the lender's problem. You have to have a viable solution to offer the lender that makes more sense to them then selling off your debt. They have to be enticed and motivated to listen to you. Your challenge is to negotiate your credit card debt in a fashion that allows you to stay afloat. Theirs is to mitigate their losses. Your plan has to be better than their alternative.
The most important aspect of credit card debt restructuring is to ask before you get in too deep. A good customer's case always sounds better than a plea from a habitual problem customer.
Negotiating: How to Negotiate a Job Offer
You are one of those lucky people who are looking for a new job and actually found one of interest. You have passed your interviews and are being offered a job. How do you negotiate the job offer?
For starters you need to consider what you need and what you want. Those are quite different things and defining each will enable you to focus on getting what you need without being taken in by what you want. A company car and other perks can turn your head but do not necessarily pay the bills. At the same time they can offset other costs and may be worth more than cash itself.
To maximize your potential when negotiating a job offer consider taking these simple preliminary steps.
Define the Job Requirements
Before consider accepting an offer for a new job there are some things to be considered.
Where will you be working? Does it require a commute or relocation? This can add personal costs that may or may not be covered by the new compensation package unless you address it when negotiating a job offer. Depending on the job there many situations where asking for a relocation allowance or commuting compensation is not out of line.
Will you need a new wardrobe or other tools of the trade? If the job has specific requirements that are unique to the position you should be able to negotiate an adjustment in the compensation package to offset these job related costs.
What will your hours be? Even though you may not be able to garner additional compensation for child care you will want to consider additional personal expenses such as extending child care costs when evaluating any offer.
What you are doing at this juncture is assessing the cost to you of taking the new job and identifying such expenses that you will want to address before you negotiate a job offer. The base salary is only the starting point in a compensation package but the hiring day is the best day to address the full range of compensation the company is able to offer.
Define the Potential Sources of Compensation
Compensation is far more than the salary. It is the full range of benefits you receive from an employer that comprise the compensation potential to you. Obviously these vary by job level so it is important to establish the parameters are for the specific job for which you are being considered. The human resource personnel are likely to be willing to share the various standard benefits available for the position for which you have applied.
Depending on the job grade, typical benefits are expense accounts, mileage compensation, company cars, phones and computers, college are advanced degree reimbursement, vacation time, maternity time, company recognized holidays, possibly child care facilities, and anything else the human resource department feels is appropriate or standard for your position.
Remember, while you are the interviewee for the position you should also consider the company your interviewee in terms of an important change for you. Before considering any job offer you should spend a little time finding out the company's retention and promotion reputation. You will spend as much time with the company as you do with your family each year, maybe more. So you should make sure the company, the co-worker group, and the job are worth making a change.
Don't forget your current company. If you are employed, review why you are leaving. If you like the company and you work environment but want or need more compensation consider seeing if your company will match or beat the best offer you can negotiate with the new company. Tenure is a benefit in many companies in terms of benefits and you may be losing ground in terms of vacation pay or job security so you should not consider simply a lateral move unless you have to do so. By having n offer from another company you are able to demonstrate your value in the job market to wake up your current boss and get him to go to bat to keep you.
Establish How Badly You Need This Job
One thing that will impact how aggressively you negotiate a job offer is how badly you need the job. Obviously your situation will control how much you can press the new employer. The more desperate you are the less leverage you have.
If you are gainfully unemployed, then you will obviously want to press enough to see if you can improve the package but not so much that you make the other person consider withdrawing the offer. Even if you agree to the terms if they feel you won't be happy with the package long term they may decide to look for someone else who will appreciate the opportunity more.
If you are employed and your job is secure then you are simply looking to upgrade your situation. That allows you to be more aggressive as losing the job just means that you start the job over; not that you lose your house!
And then there is the market place. Estimate how likely it is you can find a comparable job. If similar jobs are few and far between, then you will want to be more cautions. If these jobs are readily available then press and, if you aren't satisfied, go to the next prospect.
Take the Negotiation to the Right Person
Many companies put applicants through several different interviews and, when they decide to make an job offer, do so though the human resource department. This is great for the company but impersonal for you. Human Resources is more likely trying to fit you into company brackets for the specific job and leave some room for your financial growth before you 'max out'. This may not meet your needs and HR may not care as they will not be working with you.
If you have made a good impression with someone or everyone on the selection committee you should be sure to send them a personal letter thanking them for the opportunity to interview. If they respond you may have created an inroad to which you can turn if negotiations with HR falter. HR is just doing a routine job but the selection committee is seeking to bring talent into the company. As a result, they may be more willing to bend the rules a bit to accommodate your needs. Subject to how badly you need the job you should use this option only if you are prepared to walk away from the opportunity as you may step on a few toes that kick back.
Negotiating: What to Avoid When Negotiating
Everyone negotiates. It is part of socializing, working, marriage, virtually all aspects of our lives. But some negotiations are more important than others such as those with a spouse, boss or the armed robber you are facing down over the barrel of a gun.
Negotiating on a social or personal level impacts our personal lives beyond the immediate debate. The same applies to how we handle negotiations in the workplace or school. We should be aware of the potential collateral damage that can be caused by what we do or say when negotiating.
There are some things you should avoid when negotiating.
If you want to get someone to do something they don't want to do, does it make sense to irritate or antagonize them when negotiating the matter? Unless you have a strong power advantage over the other person or maximum leverage, it is better to seek their support rather than use ridicule or anger to force the issue. This is especially true when the relationship with the other person is expected to survive the immediate situation.
Bluffing carries significant risk. As poker players know, if you are repeatedly caught bluffing your effectiveness will be undermined and you will be left with bartering as your primary negotiating tool. This is a one-dimensional tactic and not one that will add value to what you are exchanging.
Also, avoid bluffing when negotiating with a friend or family member. If you frequently get caught bluffing by a friend or family member, it can be perceived as a pattern of lying and you run the risk eroding trust with those you care about. Lose of trust is very damaging to any relationship.
No one likes to feel helpless. Avoid when negotiating forcing someone into a corner. You are asking them to strike out, hit back or otherwise hurt you by cornering them. Even if they acquiesce at the time, they will harbor resentment at being forced to do what you want. This resentment will build overtime if you continually corner someone their resentment will likely build until they find a way to sever the relationship.
Don't Win the Battle and Risk Losing the War
It is fun to win. Most of us are programmed to do so. The problem arises is when we seek to always win and let our passion for winning damage the relationships we value. It is important to maintain your perspective when discussions get heated and pick the right battles to fight, much less win.
Some battles are meant to be lost strategically to allow wars to be won. Make sure the battle you are fighting is worth winning. The best way to do this is to assess what you will gain by winning and what the other person will lose. Avoid when negotiating battles where the losses of the other person will be significant, including damage to his or her ego, and your winnings trivial. These may be skirmishes that make sense to concede to preserve a valuable relationship.
Keep your perspective about the big picture, the relationship, as compared to the immediate situation. You may lose big by winning!
Don't Forget to Mend Fences
Everyone loves a winner; few like braggarts. Avoid inadvertently abusing the loser when you prevail. When you come out on top take the time to shore up the relationship with the other person. Whether it is a spouse, child, parent, friend, boss or business associate, you seldom want to jeopardize a relationship by not taking a little time to ease the other person's pain of losing.
This investment in the relationship will pay dividends down the road.
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.
What is a Negotiator?
Negotiating is not bartering; nor is it arbitrating or mediation. Negotiation is not limited to the business or legal aspects of our lives. Negotiation is the base process of people interacting with one another. Bartering, arbitrating and mediation are civilized attempts to refine the negotiating process into a disciplined process.
Needing to negotiate is not necessarily a bad situation. Negotiation is not something that can be avoided by choice. Negotiating is not something that is done. It simply is. In a world of opportunity and challenges created by human interaction, negotiating is the staple of human socializing and communal living.
To answer the question what is a negotiator we need to understand better what it is to negotiate. Then we can better appreciate that we are all negotiators.
To negotiate one has to have the ability and interest to do or avoid something; to take action. There must be the want or need to try to improve a specific situation. The motivation behind negotiating is the need to make things better or preserve what we have.
What is a negotiator? Someone presented with an opportunity or challenge in the form of another human being. The results of such human encounters do two things. Obviously, the immediate result of any negotiation is to either satisfy or stymie someone's quest. Equally important, the outcome of the encounter provides experience to both of the parties participating in the encounter.
What is a negotiator? A negotiator can be many things; a bully, a charmer or an appeaser to name a few. Negotiators wear many different personas and use a vast multitude of tactics and styles to get their way. Over time we each develop a predominant negotiating style. We learn each day, each hour, each minute what works and what doesn't based on our life experiences from birth. We don't all learn the same things.
What is a negotiator? Someone trying to satisfy a need or want. The currency of a negotiation may be wealth, recognition, sex, a diaper change or simply peace from a crying child or whining peer. We are trying to improve or avoid some aspect of our lives. It is a composite of needs or wants that drive any negotiation. Especially when someone else has what we want!
The differences between individual negotiations are the commodities at stake. Babies want to be changed or to be nourished. Captains of industry want more land or power. Men want sex and women want security. Needs vary, personalities vary, settings vary, currencies vary, tactics vary, but the process does not.
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:
Ten Persuasion Techniques
The objective of negotiating is to inspire another person to do something they may not want to do. Some of the tactics of negotiation include persuasion techniques. Persuading others is the art of the process. A little friendly persuasion by Guido, the godfather's henchman, is one way of being persuasive. Encouraging the parties to talk and work things out using persuasion techniques is another. It is all in the approach.
Persuasion is often used just to get reluctant participants to talk; to get reluctant adversaries to open up, consider options and discuss the situation. This dialogue is an essential step forward in any negotiation.
There are many ways to be persuasive. To improve your negotiation technique, learn to use these 10 persuasion techniques, or recognize when they are being used on you.
In most negotiations we assume that the prime motivators are avarice and greed. While almost always present, these motivators are not always the most persuasive techniques available to a negotiator. It is the ability to use more subtle tactics that marks the difference between negotiators.
Positive Persuasion Techiques
1. Positive Reinforcement
The desire to be liked is very strong in all of us. An effective persuasion technique is the use of classical reinforcement conditioning.
The Pavlovian cause and effect relationship model relies on the consistent response, positive or negative, to condition the other person to react in a specific way. In any negotiation there are ample small issues that need to be resolved before the main task is even addressed. Deciding when and where to meet is the start of a relationship. Reinforcing the other person's working with you on these little issues with a sincere smile, handshake or appreciative gesture you are subliminally reinforcing their performance with your approval. Most people enjoy being liked by others and will, properly reinforced, continue to try to get more of your approval.
Don't fall into the I-want-to-be-liked trap yourself. In general most people genuinely want, even need to be liked. But in a negotiation you need to have the personal self-esteem and confidence to understand what is being asked and reject pressure to do what you know is not in your best interest. By standing up for yourself you will gain the respect of those around you.
A negotiator can motivate another to help by outwardly deferring to the other's expertise, experience and power. Playing to another's ego can be an effective persuasion technique to invoke the other person's ego to help you make the deal. When the strategy works, the other person begins to act like a coach or mentor and in doing so reveals the terms upon which a deal can be struck. Once that is established then you are in a position to either tweak or accept the terms; or decide that a deal just can't be made. In any event you have achieved your goal of learning the other person's parameters.
3. Avarice and Greed
Avarice and greed is a positive motivator in that it clarifies the situation. If you know the other person is driven predominantly by money or wealth accumulation then you know he or she will be willing to agree if the price is right. Your challenge is to mitigate your cost. This is typically best done by introducing other, less costly motivators into the discussions.
Who does not want to be recognized by their peers? Often in a public or important corporate negotiation one side will offer the other the opportunity to claim the responsibility for reaching an agreement in exchange for a major concession. This persuasion technique, either psychological or professional, can be very powerful.
Everyone wants to succeed. Sometimes winning becomes more important than the commodity in question. A traditional persuasion technique is to feign submission while garnering the final concessions. You might expect to hear a phrase like, 'You really beat me down but I have to have it, can you just agree to "X"?'. This submissive approach telegraphs to the other person that they have won....if they will only make one "little" adjustment to their terms.
This is a great closing technique when the parties are close but not quite there. The willingness to leave a little of your ego on the table in exchange for tangible rewards can pay dividends.
Negative Persuasion Techniques
6. Avarice and Greed
Threatening to deprive someone of a deal or the proceeds from a deal can be a powerful persuasion technique or tactic. Individuals forced into a negotiation because of cash flow problems such as a mortgage they can no longer service are vulnerable.
Being fixated on the monetary aspect is a weakness that can be used by anyone with available cash or credit. In down markets smart money comes into play. This is unfortunate for some but beneficial to others. Cash, in this situation, is very persuasive.
No one likes to lose. In America we are taught from a young age to try to come in first, get "A"s, or be the first picked. Our mother's and father's beam when we do well. By the time we are adults failing has become ingrained as a major psychological punishment. When you enter a negotiation you must set aside your fear of losing in order to negotiate with a clear mind.
Avoid the compulsion to always win. You can't and won't win every negotiation. Losing isn't failure to a negotiator; paying or sacrificing too much is.
People can be motivated by many things. The basic motivator is fear. A robber with a gun pointed at you need only ask once for your wallet. The bank threatening foreclosure can also bring havoc to your life and alter your negotiating position.
The best way to thwart fear being used as a persuasion technique against you is to develop options. Threats are only compelling when you have run out of options.
Just as positive reinforcement works to motivate people to do something negative reinforcement can stymie open communication and positive results. Negative feedback such as frowning, feigned anger or frustration sends its own message.
Monitor the non-verbal signals you are sending to make sure they are not getting in the way of your objective. Anger, frustration and petulance is no way to encourage another person to do something they are reluctant to do.
Persuasion techniques include tactics to mislead us by intentionally sharing part of the truth. A broker or landlord may mention that he heard that your competitor has been looking at a site across the street when in fact they looked at the site but have passed on it. What was said was technically true but misleading by intent.
By withholding part of the truth or adding unrelated information into the conversation the other person is seeking to manage your opinion of the subject knowing that the whole truth would be counter-productive.
Persuasion, sometimes considered manipulation, is not evil. Those who misuse or abuse it are. Whether we are dealing with a spouse, child, boss, employee, peer, ally, school mate, date, teacher, banker or car salesman, we are simply trying to reach an accord. Aggressive persuasive techniques such as bullying can be persuasive but are often caustic to a relationship.
How to Negotiate a Real Estate Commission
Negotiating a real estate commission is an important aspect of getting a property leased or sold. You are hiring someone to do something for you. Accordingly, you want to have a broker that is motivated to focus on your need to sell or lease the property. You do not want to look back and realize that you grounded the broker too hard when negotiating the commission. You negotiate a real estate commission based on the type of transaction, the type of property, and the size of the transaction. It can also vary according to geographic area, the economic climate, and how busy the real estate market is.
Here's how to negotiate a real estate commission in seven steps.
Determine the proper usage of the property
When negotiating a real estate commission the first step is to determine what type of real estate is involved. If already developed, is it residential, industrial, office, restaurant or retail? If it is raw land then consider how it is currently zoned and perhaps complete a highest and best use analysis. Even if the property is currently used for a specific use you may find that there is a higher and better use for the property.
What is your preferred type of transaction?
There are many real estate transaction types to consider when negotiating a real estate commission. A property can be sold or leased. The seller can provide financing or require all cash. It can be leased as a vacant lot or developed and leased to an end user. Each transaction has different levels of complexity and challenge. Before a commission is structured the viable types of transactions should be identified so the commission agreement reflects the transaction.
Determine the value of the transaction
Is it a $5,000,000 property sale, a 10 year lease at $120,000 per year net rent, or a one-year residential lease? The monetary size of the transaction has direct bearing on how you will negotiate the real estate commission schedule. The larger the transaction, typically the smaller the percentage of the sales price or value of the lease should be. At If you are trying to achieve an above market sales price, aggressive rental rate, or need to attract a unique type of tenant, you should factor in the time it should take to make the transaction happen and the probability of success. Consider the risk involved for the listing broker. You are asking the broker to invest his time, efforts, and experience without any guarantee of being paid. The more difficult the deal, the higher the percentage of the deal not happening the way you want, the higher the commission that the broker will want, and should be paid.
Determine what the "industry standard"
Even for simple transactions like selling a home the standard commission could easily range from 4% to `10%? The local range can be determined by calling a few residential brokers and asking them the question. You should not have to reveal your name or identify the property to get this information. Make sure you acquaint yourself with any commission formulae that may be customary. For example, it is typical that a long term commercial lease provide for a commission based on x% of the rental income for the first five years then y% for the next five and so on.
Evaluate the degree of difficulty in making the transaction happen
If you are trying to achieve an above market sales price, aggressive rental rate, or need to attract a unique type of tenant, you should factor in the time it should take to make the transaction happen and the probability of success. Consider the risk involved for the listing broker. You are asking the broker to invest his time, efforts, and experience without any guarantee of being paid. The more difficult the deal, the higher the percentage of the deal not happening the way you want, the higher the commission that the broker will want, and should be paid.
Shop around for the right broker
Contact a number of brokers that specialize in selling this type of property, and interview them. Tell them you are considering an Exclusive Listing Agreement. Ask each broker for a Marketing Proposal based on marketing your property. If you feel the transaction is especially challenging tell the broker you are "open" to paying more commission, but only if is justified. Ask the broker to assign a marketing value to the property.
See what each broker comes back with. You are looking for several things.
Make sure you are comfortable.
When you are finished with your review of the marketing proposals from the brokers and have selected the plan and broker you want to use, evaluate the total commission. Discuss this issue openly with the broker. You are hiring someone to do something for you. Accordingly, you want to have a broker that is completely motivated to focus on your need to sell or lease the property. You do not want to look back and realize that you grounded the broker too hard when negotiating the commission.
If the total commission is fair and reasonable to both you and the broker, you should be ready to write it up.
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 the National Deficit and Debt Ceiling
We are all watching as our representatives in Washington struggle over their negotiations.
Much can be learned watching this political theater.
The most important negotiating tip to take away from this is:
Do not go to Washington to learn how to negotiate!
It is obvious that most people in Congress regardless of their political affiliation forgot long ago the basic tenants of negotiating.
Integrity is definitely lacking when bending the truth on national television is the norm. Double-speak and falsehoods are now an accepted part of the national dialogue.
Honesty is lost when terms are changed after agreements are struck or proposals are rejected before being considered. Honesty is more than not lying. In negotiations it includes having the honor to respect one another and consider fully each proposal.
The desire to get things done, an essential characteristic of an effective negotiator, seems lacking on the part of all involved. It appears most of our elected representatives are content with worrying more about the next election than the Country.
If we are to believe what we hear, we are out of time to get things done . Those in Washington have had ample time to negotiate the debt ceiling or address the national debt but the political posturing and antics have taken away that luxury. When rushed negotiators make mistakes. We can expect a very big mistake to be made in Washington!
Being informed is essential to a negotiator. In Washington so much time appears spent on spinning the message that there is little time to actually understand the fullness of the problem and evaluate proposed solutions. The general consensus is that none of the current plans do anything to solve the underlying problem; our deficit spending. Effective negotiators do not waste time. Posturing and bluffing in negotiations takes time which is rapidly running out. An able negotiator knows when to settle down and work on the problem. Our collective representatives seem to have lost that perspective.
A final observation. In this negotiation between power players there seems to be little power wielded. These reputed power players have been left with the sole strategy of merely blocking each other rather than actually moving the discussion forward. The President has been cut out of the actual fray. The Senate killed the House bill without considering it. And the House killed the Senate bill before it formally arrived.
The result is a stalled negotiation with time running out. This appears to be the perfect setting to see the negotiators forced into making a big mistake in terms of solving the problem. They may reach an agreement but it will likely fall short of solving anything.
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 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.
Negotiating - A Contact Sport
In our lives we have two basic choices, to take control or follow.
Negotiating is a contact sport. To be effective you must be able to persuade others to listen to your arguments, consider the arguments, and decide that they want to help you in some way achieve your goals.
They do not need to decide that you are right. They do need to want to help you or allow you to proceed toward your goal. In fact, they will try almost anything to win including making personal attacks.
To handle the conflict common t negotiations consider the following approach.
This is simple leadership. Managers must motivate employees to do their jobs allowing the manager to succeed. Teachers must motivate students to study and produce homework and learn. Parents must convince their children not to play in the street, do drugs or otherwise step in harm's way recklessly.
Whenever two or more people come in contact there will be some level of conflict. It may be as simple as passing on a narrow mountain path next to a sheer canyon wall or as complex as working out a peace accord between vying nations.
Resolving the disparate interests is a matter of establishing a commonality of interests. Leaders are adept at forging such realignment of individual interests. Individuals do the same when resolving conflict. They persuade others to consider alternatives in the hopes of reaching a mutually agreeable solution.
The Art of Persuasion
"Yes" is what we all strive to make another person say. The objective of negotiating is to inspire or coerce the other person to agree to your terms. Persuading others is the art of the process.
People can be motivated by many things. Simple fear, a desire to be liked, respect for the other person, or simple avarice and greed. Each are motivators in a negotiation.
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. Bartering is an exchange, typically a fair exchange of like value. Negotiating has the potential of creating value from the process. It is much like making 1+1=11 rather than 2.
There are many persuasion techniques. They all play off the core psychological drivers that effect most people. They represent the basic negotiating tools most of us use consciously or unconsciously.
One such technique is the use of classical conditioning when trying to persuade others. The Pavlovian model can be effective. Ivan Pavlov studied the cause, effect and reaction relationship and how consistent repetition of a reward or punishment can reinforce a specific performance. The important lesson is that the subject need not understand the cause but learns to relate or anticipate the response to the action.
A consistent emotional response, positive or negative, on your part can be used to condition the other person to react in a specific way. This persuasion tactic involves reinforcing positive performance such as reaching an agreement with you with a positive emotional reaction.
People want to please others. It is human nature.
If you proactively reinforce their performance when you reach an agreement with something with a sincere smile or handshake or appreciative gesture, you will be establishing a reinforced relationship subliminally. You can do the same with negative incentive such as frowning, feigned anger or frustration. The key is consistent reinforcement on small matter to build the performance pattern.
Like it or not, everyone uses persuasion throughout their lives. There is no way around it. Whether dealing with a spouse, child, boss, employee, peer, ally, school mate, date, teacher, banker or car salesman, we are trying to hear that special word, "Yes!"
If you are unable to convince others to your way of thinking, you will constantly be doing their bidding or lose the relationship. Rather than resenting others who are telling you what to do realize that it is your fault, not theirs that you are not more persuasive.
Trust: An Essential Aspect of a Negotiation
No matter the conflict venue every instance of human interaction requires a basis of trust upon which commitments can be built. Conflict resolution, alternate dispute resolution, negotiations, mediation, settlement discussions, debt restructuring, salary and performance reviews are all examples of human interaction. Whenever our species interacts, the discussions are colored by the natural inclination of each person involved to trust or distrust the others.
Those who establish credibility and an honorable reputation develop, over time, a personal power advantage at any negotiating table.
The need to trust each other is essential for groups of people to function well together. This grouping can be in the form of friends, family, business, church, communities, governments, and even at the global level in forums such as NATO or the United Nations. If the trust of the members is tested the ability of the group to function is challenged. The more diverse the group the greater the level of mistrust and the harder it is to get the group to function together.
As an example, we are seeing trust erode as the Administration pursues seemingly unpopular programs and uses questionable means to secure the votes necessary to get them passed.
The American people are watching brokered deals, weekend debates, and late night votes to get the current version of the health care bill passed through the senate. One must ask why, if the bill is a good bill, such antics are required.
The culture of backroom negotiations and payoffs is not the hope and change promised by this Administration. They are the same old political practices common to both political parties that the American people have come to distrust.
This distrust, if left unchecked, will grow into resentment and ultimately a loss of support for those in government. If that occurs, a populist change to restore confidence and trust becomes a possibility and may empower third party movements to gain tangible footing.
Being Right Isn't Winning
Being right is an ego thing. Just because you feel that you are right does not make it so. It also does not mean that others agree; or should agree. Being right is a perception colored by interests, needs, history, emotion, perceptions, and, all too often, self-deception.
Thinking that you are right is almost always biased.
Don't let your ego blind your vision and foil an opportunity to advance your cause. Achieving your objectives and goals should be more important that assuaging your ego. We often lose sight of this. It is a dangerous mistake to make in a negotiation and can result in a satisfying victory at the cost of losing the war.
Equally important is to consider the other person's reaction to losing. Will a loss cause more than a material loss? Will it leave an emotional scar or, worse, terminal injury?
When handling conflict with family, friends business associates or even adversaries consideration should be given to the relationship and its value over and above the incident at hand. Do not ruin a valued relationship just to point out that you are right or gloating when you are victorious.
Negotiating can be a very personal activity. People become empassioned when arguing with those close to them because they care. They are emotionally invested with the relationship. How you handle these situations will color the emotional health of the relationship in the future.
Applying Poker Tactics in a Negotiation
Interacting with other people is always like a poker game. Invariably someone has what someone else wants. Sex, money, food, shelter, and land have been the staples of disputes since the first two people happened across each other. The only difference today is that we try to be civil in our relations.
Society tries to mandate how this disparity of interest is resolved through contract laws, social customs and other contrived bridles to our human proclivity to take what we want. Learning to curb our enthusiasm for simply taking what we want is part of growing up. Those who achieve a reasonable state of adulthood are able to work within the confines of the society of which they are a part. The others struggle as criminals, sociopaths and, in general, those who put their needs ahead of those around them. They typically resort to lying, cheating and letting down those closest to him or her.
In the final analysis, it is the best poker player who will consistently fare better in the realm of human interaction - negotiations.
So learn the rules of the game.
• Knowing When and What to Bet
Knowing when to bet requires an understanding fo the game, an awareness of the value of the hand you are holding and the likely better hands around the table, and what betting will tell the other players.
Knowing what to bet is a developed art form as you learn from experience how the other players will react to low, high and moderate bets. Betting is a form of communication. Each bet signals something. What needs to be learned is what the player making the bet is trying to do; bluff, force you out, or lure you in. The other players should also be studying your betting patterns to better understand your patterns.
• Knowing When to Hold 'Em.
In an ideal world, one would only hold winning hands. The key is in understanding what a winning hand is. That takes knowledge of the game, the odds, and the other players. Luck starts and stops with the cards you are dealt. The rest of the game is a developed skill.
• Knowing When to Fold 'Em.
In poker statistically 80% of the hands one is dealt should be folded. Few players have the discipline to not try to improve what they are dealt by staying 'just one more round'. In fact, if players played by the numbers, the games would be relatively boring. It is the chance draw that lures people to gamble on drawing to an inside straight.
• Know When it is Not Your Night.
There are times when you should not be in the game. This can be because you are distracted, because your luck is running cold, or when you are consistently getting the second best hand. If you should not be at the table for any reason get up and leave before you leave your stake on the table. It is important to always have enough to buy into the next game.
The Art of Persuasion
"Yes" is what we all want to hear. There are some basic situations that motivate utterance of that word:
Seeking reciprocation from a past deed - People naturally feel an obligation to return favors. Do not miss opportunities to help others, to do something for them in any venue. Later, you will have a little more leverage. Besides, it is nice to be nice. People really do appreciate it.
Establishing your authority in one or more areas by being active in trade or professional associations, publishing articles or books, promoting yourself through public service or excelling in your work all lay the ground work to be able to entice others to agree with your proposal when the time comes to make your case. The human nature is to defer to experts rather than trust ourselves. Leadership capitalizes on this propensity.
Scarcity of any service or product increases its value. By establishing the uniqueness of what you have to offer you are creating value at the negotiating able. The less available a resource is the more people will seek it.
Personality matters in persuading others to say "yes". People are more likely to want to say " yes" to a proposal offered by someone they like. The second motivator is fear. In that case they are seeking to avoid wrath rather than please someone.
Societal conformance provides the shelter some need to agree. By remaining part of the herd they are taking less risk. Pointing out that others have agreed to your proposed terms indirectly gives the other person a sense of safety in that they are not granting a non-conforming concession.
While there are many other persuasion techniques these basic tenants seem to be the core psychological drivers of persuasion without the use of power, fear or threats. They represent the basic tools most of us have available in our daily lives.
Everyone uses persuasion throughout their lives. There is no way around it. Whether dealing with a child, pet, boss, ally, school mate, date, teacher, banker or car salesman, we are trying to hear that special word, "Yes!".
If you are unable to convince others to your way of thinking, you will be constantly doing their bidding. You will quite likely resent being told what to do. Realize that it is your fault, not theirs, that you were not more persuasive.
Desire Drives A Negotiation
I am often accused of ‘shifting into my negotiating mode’ as though it is different than my normal mode of interacting. This impression I do find to be interesting. What some presume to be my negotiating mode is simply a disciplined approach to assessing, analyzing, strategizing and pursuing a solution to a problem.
Because they know what I do, they assume it is a ploy rather than simple interaction. It’s not. It is simply an application of a process that is designed to work; not take advantage of a situation.
In our everyday lives we negotiate constantly. Why; because we want something from another person or animal.
Yes, we do negotiate with animals. We train our pets to do what we want and reward them for obedience. And we punish them for disobedience. That is basic power negotiation. We have the power and our pets are forced into a behavioral pattern to receive a treat or avoid pain.
Women flirt with their husbands, boyfriends, potential boyfriends, complete strangers and even their best friend’s husband suggesting an illicit rendezvous in exchange for something they want; sometimes only attention. Men react because they are programmed to want the favors of a woman. They may have no intent to consummate the deed but can’t resist the challenge. Sometimes the game goes too far and the collateral damage is far greater than ever intended. The original flirty look that started the process is an example of a very human and natural negotiation. One person’s leveraging an asset to gain something.
The key in any negotiation is mutual incentive. For a negotiation to create value above the intrinsic worth of the basic assets involved the parties must have a desire, especially a driving desire, to have the assets being offered.
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.
Why do we negotiate?
Is it our avarice and greed that compels us to try to best our fellow man or woman? It it the need to win? What is it in some of our psyches that motivates the quest to size the upper hand, to compel obedience, to prevail?
Negotiation stems not from avarice and greed but from our primal instinct to survive and thrive.
Man, alone and on his own, would fend of other men and scrounge for roots and berries while looking for the hapless female to take back to his cave. His negotiations were against his environment to see it though the night and, if fortunate, to seed a child. Life was simple if short-lived.
Those fortunate enough to find unprotected females soon learned the challenges of heading up small clans. Gathered around a small fire our ancient ancestors would find ways to work together to share the tasks of protecting and providing for their small clan and, most important, growing it. The size of the clan gave it the strength to find more food, work together to fell larger beasts and generally survive yet another night.
As clans grew and became more numerous, clans started to interact. The result was initially conflict based as they fought one another out of fear and distrust protecting their turf and their women and children. The currency of these negotiations was rather basic: death or life. Victory was clear.
In spite of their attempts to kill all outsiders who threatened them, eventually clans began to merge and learned to get along with each other. Civilization was sprung and these new entities did what....carried on the same habits as the original clans. They feared and distrusted other feudal states and tribes and did their best to eradicate any who came into their arena of influence. But commerce did emerge in spite of their baser instincts.
Times have not changed a lot. Be it 21st century nation-states or vast religions spanning the world, fear and distrust are the sentiments that prevail. But the incentives that drive those feelings are based on the need to provide and protect. So there is a balance of good and evil at play.
We negotiate to preserve the value of what we have achieved. In the dawn of man's existence the clan that learned how to raise and harvest produce sought to trade it for what they needed in a fashion that they benefited as much as possible from the exchange. Bartering quickly gave way to negotiating when the concept of currency was introduced. Currency gave a standard of value to be applied universally. Now barterers has the ability to try to increase the value of their labor by getting more currency for their product than bartering it for the neighbor's pig.
But currency is not the root of negotiating. It is only the measure. Currency is not solely monetary. Currency can be in the form of product, services, coinage or even promises of future action. Currency, in a negotiation, can be as illusive as good will.
Currency is what the negotiators decide it is and is unique to the negotiation at hand. In any negotiation, understanding the many dynamics of the currency at play is essential in the creation of value from the exchange. To negotiate properly one must consider all aspects of the situation and leverage those commodities to his or her advantage.
Properly done, the outcome will be far better than simply accepting the pig for three bags of potatoes.
Six Basic Negotiating Tips
The First Tip Never discuss settlement terms until the end of the process, when both parties are committed to trying to resolve the situation. Before discussing the meaty terms of a settlement get to know each other, find out what you can about possible competitors, learn as much as possible about the issue at hand, determine if this is really what you need or want, wait until they indicate that they really want or need to settle.
The Second Tip The purpose of negotiating is to discover the term parameters of the other person. You want to know the most the other person will pay for something or the least they are willing to sell for so you can couch your initial offer or response to strategically position your offer or proposal.
The Third Tip Try to get the other person to make the first offer or proposal. Knowing how to bracket your response will let you move the final outcome toward your goal. But the starting point is a critical step in getting there. Manipulating the other person into making the opening proposal allows you to set the parameters of the negotiation to your advantage.
The Fourth Tip Prepare before meeting by considering why you are negotiating, what you expect to gain, why that is important to you, and what you expect to have to offer. If you fully understand your needs and wants you will be able to quickly determine if continuing a negotiation is worth your time.
The Fifth Tip Test the market before sitting down. Get comparables, talk with others, and establish reasonable parameters for the negotiation . The key to a successful negotiation is keeping your proposals and counters within a range of reasonableness. Do not undermine your credibility by appearing ill-informed or overly aggressive.
The Sixth Tip Be aware when it is time to bring the negotiation to a close. Don't let the discussion drag on as the other person may lose interest, patience or the desire to commit. Over negotiating often kills deals or agreements that should have been made.
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.
INTEGRITY MATTERS. IT IS THE BASIS OF PERSONAL POWER.
No matter the conflict venue any form of human interaction requires a basis of trust from which accords can be reached and commitments relied upon. Conflict resolution, alternate dispute resolution, negotiations, mediation, settlement discussion, debt restructuring, salary and performance reviews, whenever humans interact are colored by the inclination of each party to trust or distrust the other. Those who establish credibility and an honorable reputation possess a personal power advantage at any negotiating table.
Honesty and integrity is what makes a negotiation between two people meaningful. Unless they can rely on the word of the other, the pledges are meaningless. In the business environment, all agreements are reduced to contracts and the law is fairly clear that most agreements are confined to the written word once signed.
- How do the parties get to the point that a document can be prepared and signed? By trusting each other.
- How does a couple reach an agreement that will never be documented? By building a relationship based on trust. Without it, the agreement and potentially the relationship will falter.
- How do friends resolve an argument? They rely on the bond of their friendship which is based on mutual respect and trust.
The power of being respected as a person of integrity, no matter the venue, is strong. If you have a reputation as a straight shooter when you agree, when you say No!, or when you bluff the other person is likely to be inclined to take you at your word. That is personal power.
Proactively protect your reputation and diligently seek to establish your credibility not only with those you care about but even casual acquaintances. It is your reputation that others learn of from common co-workers, business associates or friends. This indirect referendum on your integrity is what establishes your personal power in a negotiation or simple discussion.
How to Renegotiate a Christmas Gift Bought Before the Great Retail Sales
Are you frustrated because you bought items for yourself or others before the big, last minute retail discounts went into effect? Do you wish you had a gift card instead of a the gift from the big mall retailer?
This year you can consider renegotiating those pre-discount purchases. That's right. Just because you have the gift in hand and paid retail for it is no reason you are stuck with the pre-discount price.
Why not try to renegotiate the price?
What you need and, this year, have is leverage.
Because the stores allow you to return items with a receipt for the price paid, you can use that policy to renegotiate a price closer to the heavily discounted post-holiday sales prices. And this is a year when you want to use that leverage to your advantage. The retail chains are hurting and the last thing they want to do is take back an item. You know this and they know it.
There are "facts" you need to be armed with to accomplish this:
1. You must have the sales reciept.
2. The store must have the item in stock.
3. You must have the patience and motivation to wait in line and then press your case.
The strategy is simple. Take the item to the return desk and say you want to return it. When asked why, say that it is now significantly discounted and you intend to buy it with the refund you will be granted. Then simply offer to keep it if they will refund the difference in the price.
Be prepared to take the matter up to a supervisor but prevail in your quest. There is no reason you can't take the item back. Once you have returned it you can then go buy it again at the lower price.
Your leverage is increased because by offering to keep the item at the reduced price you are actually helping the store.
Be sure to point out that:
1. They will not have the paperwork to handle.
2. They will not have the returned item to re-inventory in an opened box and possibly have to return to their supplier.
3. They will have a happy and possibly more loyal customer.
The negotiating power is on your side this year. It is your choice to use it or lose it.
The Economy - What to Do?
Talk about a negotiation! The major forces were at play to stem the current financial crisis. It cried for setting aside our political differences and seeking a cohesive, focused plan to stabilize the situation.
President Bush and Congress had to actually set aside their differences and work together to solve this situation. It required their foregoing power tactics to negotiate in good faith. Or did it?
Paulson's proposed plan was the focus of intense negotiations between the Administration and the Congress and, of course, both Parties. Unfortunately the situation was so desperate that the issues became diverted to add-on riders and special-interest amendments.
It appears that Congress ignored the interests of the American people and protected their pork barrel add-ons. Was this good negotiation? Of course it was. The Congress had the power to hold the Administration up to ransom and did so. BUT, the People of this great Country have seen how they acted and will not soon forget.
Congress may have won the battle but in so doing may have jeopardized their standing in the eyes of America.
Remember, when negotiating you may have several audiences. The misuse of power may win a victory but at what cost?
Creating Value as a Negotiating Strategy
Except in a physical confrontation winning does not mean the loser must lose or even know he has lost. The art in negotiating is the creation of value so both parties can be vested in the outcome.
Creating value is work. It requires knowledge, preparation and inspiration. The benefit, however, can be a mutually satisfying resolution.
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.
The solution to conflicts other than by brute force is the realignment of interests through the exchanging of concessions. If the focus of the conflict is very narrow, like the wallet in your coat in a dark alley, the opportunity to align interests is very limited. Your best option is to tender it and hope that you will gain the option to walk away unscathed.
When the focus is widened, then there are opportunities to create value through the redistribution of assets or concessions that are valued differently by the parties.
The disparity of valuation is the key to value enhancement. Because we are all unique, we value things differently. The differential allows for the creative realignment of interests to maximize the potential value of the aggregate commodities.
Sex sells. The age old profession repeatedly validates this. The professional knows that she can up her price by adding feigned affection and personal involvement in the basic act. The cost to her is little in tangible assets but the reward can raise the price of a furtive back alley service to a lucrative remuneration for an ego (his) satisfying performance. The act has not changed. The perceived value has.
Similarly in a dispute over a minor issue between a contractor and the customer, a simple apology by the contractor may yield a significant concession by the customer. The cost of the apology to the contractor is a bit of ego; the reward is incremental cold, hard cash.
Negotiators Need Social Skills
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 in fellow chimps.
Negotiators need social skills to capitalize on the preliminary social interaction. Insights potentially useful in the actual negotiation are gathered and stored for future reference.
In today’s fast paced environment building a relationship is often neglected in the interest of saving time and getting to the point. This can be a costly mistake. Negotiators are humans and humans respond to the personalization of any situation. It is our nature as social beings.
Conviction is Contagious
There is great negotiating strength in having the right attitude. To win it helps to expect to win. Attitude counts! Like any sport or other competitive venue, attitude has a direct bearing on the outcome of a negotiation.
Any negotiation, no matter how insignificant, is based in conflict. Those involved are competing to protect or advance their respective interests by depriving another of his or her expectations. Negotiation is the settlement of conflicting interests without resorting to force.
If you are convinced that you are right, if you think you deserve to win, if you know that you are in the right, your passion colors your arguments and strengthens your statements. Conviction is contagious. Others will be persuaded to at least consider your position if your passion is obvious and sincere.
If you have doubts, you will be less than convincing. Self-doubt will undermine your arguments and encourage others to resist and fight back. Before getting involved in a settlement session resolve your doubts and mentally prepare to win. If necessary, adjust your position to be more realistic and, thereby, increase your own expectation of prevailing.
Positive attitude does not come to everyone naturally. There are ways to reset your mindset to be positive and create a positive demeanor:
• Visualize Winning. When considering strategies and tactics before a meeting envision winning with each tactic. Actually imagine and savor the moment of victory. 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.
• Deserve to win. When setting your objectives and primary goal, test the terms against what you know to be reasonable. If they are reasonable you can set aside doubts that you will be rejected on the facts or "found out". Before the meeting mentally contemplate the other person acknowledging the reasonableness of your argument and amending his position towards yours. Focus on actually convincing the other person. This form of mental preparation serves to establish your expectation that you deserve to prevail, that you should prevail. You are empowering yourself to prevail.
• Prepare to Win. As the start of the meeting approaches, plan how you will enter the room. Remind yourself to stand tall, make direct eye contact, offer a firm handshake, and emit confidence. Dress for the meeting. Pick your clothes to reflect this confident demeanor. Remember, you can always dress down during a meeting but you can't dress up. Typically I over dress to insure I am the power figure in the room. I can always take off my coat and loosen my tie to make others comfortable.
The power of persuasion comes from within.
Creating Value in a Negotiation
Negotiation is about the exchange of currency. Currency in a negotiation usually is far more than money. Understanding the totality of currency of a negotiation is essential in negotiating the optimum resolution. Obviously the currency differs depending on the situation and the parties involved. To be able to negotiate well one needs to develop the discipline of identifying and interjecting alternate or ancillary currencies into the discussions.
Understanding the currency of a specific negotiation enables you to focus on satisfying the wants and needs of each other rather than simply trying to win. Expanding the negotiation discussion to include these alternate currencies provides additional incentives for the parties to agree on a myriad of terms rather than disagreeing on one major point. Diluting the importance of the primary term may convert a troubled situation into a mutually beneficial accord.
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 garner value from the other person for something that you intended to provide anyway. Dollars are only one measure of value. Feelings, recognition, success, inclusion, service, image, ego and future opportunities are less measurable currencies but often they are more important than the dollars.
Ancillary currencies may seem to have little or no value to you but may be vitally important to the other person. It is the disparity of value that makes converting idle currencies into valued commodities in a transaction the creation of value. Bartering is the exchange of like value for like value. Negotiating is the creation of value and is more art than discipline.
Mistakes Hurt a Negotiator
Everyone makes mistakes. To try and fail is far better than not trying at all. Unless failure spells your demise! In today's civilized world, failure at the mediation table seldom results in death for one of the parties.
Fear of failure, however, can paralyzes otherwise competent negotiators. That is a major problem in that we must face and embrace the act of negotiating in every aspect of our public and private lives.
We are taught to win in America and almost any cost. Winning is what we are about as a culture, a society and as a nation. The problem is that everyone can't win. In fact, most sports teams don't win their conference titles. Only one team prevails.
So if we are expected to win but reality mandates that only a small percentage of us can actually be winners how are we to handle coming in second best?
In a good poker game the worst thing that can happen is to draw a hand that is second to the best possible hand. In a game like Omaha you can see from the board what the possibilities are. If there are three diamonds showing but no pair on the board you know that a flush is likely but a full house impossible. Your king high flush is so good, the second highest possible hand, you have to stay in and match all bets. But, if others are betting aggressively, you know someone else likely has the ace high flush. But you are not sure. And, as they always say, to win you have to play.
Second best hurts simply because there is no reward for being second across the finish line on in poker. But there is comfort in knowing that all of us lose from time to time. The key is to win more than we lose. That means learning from our mistakes.
Yes, we all make mistakes. No worries, everyone makes them. Coming in second should only motivate us to sharpen our skills and try again.
Mistakes come in varying sizes. The bigger the mistake, the more likely it will be noticed. If, in that poker game, you are beat by several other players, then you need to assess how you are calculating the odds. Obviously you are not reading the hands right.
In a negotiation small errors are recoverable and forgivable. Large errors implying deceit or ignorance can prove very costly. How to handle mistakes made in a negotiation:
If it is an innocent error, admit it and move on. Do not offer to compensate the other for the faux pas. It was unintended. Everyone makes mistakes. What's the big deal? It can be blamed on moving too quickly, not catching a minor change in a document, or simply a typing error. Don't give it any more attention than you would a clerical error. Be willing to do the same if the other person slips up. If it is not material move on.
If it was a tactical blunder or bluff that was called, assess the real damage. Some compensatory groveling may be in order. You may be able to ease the situation by suggesting that you had to try it, even though you knew it would not fly. Or that you were not sure how firm he was in his position and had to test the waters. You can even feign humor asking the other person if he really thought you were serious. If really desperate you could claim that you knew better but your boss made you to try it. The bottom line is that you will have lost ground and will need to redouble your efforts to make it up. You credibility, at a minimum, will be diminished.
If the mistake involves a lie or falsehood and it is discovered you have a significant problem. Your integrity in on the line and the other person has every right to walk away. Before you can get back into the negotiation, you need to repair the relationship. Be prepared to take the brunt of the other's wrath. You deserve it. Depending on the extent of the damage, you may have to suggest replacing yourself as negotiator. This is best done if the situation is very important. You can and should fall on your sword and tell everyone the deal is too important to be jeopardized by a stupid act on your part, then bring in a new face to handle the salvage operation.
Your word is or should be sacrosanct. Do not soil your good name to win a battle. You will place the war in jeopardy. Innocent mistakes or mistakes made in haste are forgivable. Lies and deceit erode your ability to negotiate effectively.
Silence - A Negotiating Tactic
Silence can be used as a power tactic. If you resist the compulsion to fill every void with the sound of your voice you will be able to actually hear the other person and, more important, impact how they react to you.
If you studiously avoid filling the lapses in a conversation or discussion you will notice something interesting. Others will nervously try to fill the verbal void. It is these comments that provide interesting factoids and give you power.
Take a day to demonstrate this to yourself.
Spend the day not making small talk with anyone outside of your family. When you go to get you cup of coffee and pastry don’t respond verbally when the clerk asks how you are. They don’t really care. They are programmed to ask. Simply nod and observe how they react.
Typically if you answer, they have already looked away and are preparing to ask what you would like. If you don’t verbally respond they will likely hesitate and look at you intently waiting for a response.
They are actually seeing you for the first time; really looking. They will also likely be notching up their respect for you. The unknown or unpredictable is always note worthy. This simple change in the typical protocol of social interaction has elevated you with the power of mystery. Do this all day long and observe how differentially you are treated by clerks, peers and even your supervisors.
Your silence denotes confidence, control and focus. It can be very intimidating.
In a negotiation you can and should use silence the same way. When entering the room and everyone is shaking hands and discussing the weather try stand slightly apart and silent. When people greet you, simply nod. Take a seat while others are still standing and shuffle through your papers.
Note how the others begin to react to you. Typically your opponents will become more wary having taken note of your serious demeanor, your sense of purpose, and your self confidence. They may even try to reach out to you to break the silence.
You are having an impact on them. That is the genesis of informal leadership power.
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.
Group Dynamics in Negotiations
People seldom act alone. Everyone has a group of associates or family members that need to be at the least informed of important decisions before a commitment is made. More often, prior approval is needed. This approval may be from a family member to keep the peace at home or from a corporate superior or oversight committee having the actual authority to bind the company.
When the group is involved in the negotiation process becomes much more challenging. The group has its own structure and objectives. Individual members of the group will typically have differing personal objectives and opinions. The negotiators challenge is to decipher the leaders in the group and the protagonists. Each will have to be dealt with to achieve an agreement that will survive the test of time.
The best way to find the decision makers or leaders within an opposing group is to discuss various aspects of the situation. Listening to each member's dialogue, content and, equally import, to whom they address their remarks no verbally. Look for glances or a change in their sitting position as an indication that they are watching how someone in their own group is reacting to their remarks. This differential habit will reveal where they stand on their team.
It is important to 'hear' the content and observe the delivery. A CFO can speak in deference to his CEO but the message can carry the import of the Board of Directors. Conversely, others speak to be heard and recognized by those in power. Differentiating those who want power and those who enjoy it will improve your ability to target the right person with whom to forge a consensus.
Group negotiations are most challenged when there are opposing views and power factions within the group. As an outsider and the 'opposition' it helps to ferret out such discord to decide if the group can reach an accord or if you are wasting your time and theirs.
When you run into a fractured opposing group dynamic you may be able to divide and conquer. But such power tactics have their limits:
• Pushing the primary negotiator to make a commitment contrary to the rest of his team may be successful during the meeting but fall apart as soon as the meeting ends and his or her associates speak up in private.
• Pressing too soon may cause the other team to postpone making any decision until they can agree among themselves thereby costing you the benefit of their fractionalization.
• Choosing the wrong negotiator to whom to play may back fire when the real power on the team emerges in opposition to the way you have lead the discussion.
The best advice when facing a dysfunctional team of negotiators is to go slow, increase your awareness of non-verbal signals and verbal intonations, and pace yourself not to be overcome by the varied and oblique affronts frequently used in group negotiations, and keep the discussion focused on where you want it to go. Don't let it become distracted or fragmented by allowing everyone on the other side to derail the process by talking just to be heard.
Strong negotiators must also be strong leaders. Controlling the content of the meeting and the direction of the discussion comes from the deft application of informal leadership skills. Sharpen these skills and you will improve your negotiating results.
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.
Life's a Jungle
We live in a competitive environment. At home there is competition over who gets the car, who takes out the trash, who takes the first shower. In school it's who gets the boy or girl, who makes the touchdown, and who has the correct answer. At work, as would be expected, competition is rampant.
In today's civilized world competitors don't have the luxury of killing each other. To survive and evolve man has learned to lose and return to negotiate another day.
So what is so special about negotiating? After all, we all do it. From the dawn of time life has been about trying to improve our situation. This applies to man and beast alike. Man has just become more complicated in his quest to improve his situation. Competitive by nature, we are constantly trying to make sure others don't take advantage of us or, given a penchant for getting into trouble, we are trying to convince others to help us out of a bad situation.
Honing our negotiating skills and learning to apply them in our daily lives can change how we manage to make it through.
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.
Choose to Improve
We approach many of our daily negotiations as mere nuisances to be mindlessly dispatched or avoided. Ironically this cavalier negotiating attitude is extended to those we love; our spouses, children, friends, family, and close associates. We tend to pay more attention to our interactions with those we don't know, retail clerks, teachers, students, clergy, bankers, police, dentists, doctors and the like, rather than those most important in our lives.
There is no reason not to try to ease the stress of the conflict in our personal lives as much as we do with perfect strangers.
It takes very little effort to improve how we deal with people; how we handle our every day negotiations. We do this by listening better. Honing our awareness of the interests and needs of others enables us to forge resolutions that are healing by design. Merging some of the needs of others into your solutions to daily problems will definitely reduce the negativism of unhealthy conflict.
It is your choice; your life. You are free to choose to be proactive and improve things. You can also simply contribute to the unhealthy conflict in your life and live with the consequences.
You are not helpless. You have choices.
Surviving Daily Challenges
Survival is a strong word. When discussing the everyday interactions we all have with one another it really doesn't seem like survival. But it is.
The decisions we make, the compromises we agree to, and the arguments we win determine our quality of life each day. They also help to forge our future. Survival is defined as staying alive or living through something. We endure daily challenges. We just don't give our actions and interaction with others the importance that they deserve.
To illustrate how well survival describes what we do day in and day out consider our daily commute. Typically we are on the freeway, traveling between 60 and 70 miles per hour in a 3,000 pound steel projectile. In Los Angeles if you are on the 405 or the 10 you are much more likely to be traveling between 5 and 10 mph but you get my point. Our challenge and that of our fellow commuters is to avoid contact with each other.
Each commuter has similar tools with which to work. Each has a steering wheel, gas and brake peddles, and rear view mirrors. We also have dissimilar tools in that each car is unique with different engines, transmissions, suspensions and maintenance issues. Each driver has different driving skills, experience and habits. While we are all going in the same direction, we have different goals and objectives.
But we also have a common goal. To survive the commute without incident, AKA contact!
We, to survive, should deploy our best defensive driving habits to stay in our lane, watch out for those who can not do the same, and maintain a prudent distance from the car ahead that is safe. How many drivers on the road do this? A slim majority is my guess. Many tempt faith when behind the wheel. This reality places each of as at risk on a daily basis. Our skill at avoiding other drivers is a matter of survival.
For the most part we climb behind the wheel armed with a mind clutter with thoughts not related to driving, turn on the radio to distract ourselves and settle in to make the commute and as many cell calls as possible. Paying close attention to driving is not high on our list of priorities.
This is one example of how we unconsciously handle the abundance of everyday social, family and business interactions. We are on cruise control. Yet each of these is an example of basic human negotiations that impact how our day is going to be or how our future is going to turn out.
Why do we negotiate?
Everyone does it, but why? Wouldn't life be easier without conflict? Wouldn't the world be better off if nation-states didn't compete for resources and land? Is religious intolerance really good for the peoples of the world?
We negotiate to satisfy or protect a need or want. The currency of a negotiation may be wealth, recognition, sex, a diaper change or simply peace from a crying child or whining peer. Negotiation is also the process for seeking world dominance, gaining a competitive advantage, or overpowering an aggressive predator.
Negotiation can take the form of civil discussions, formal debates, open and hostile fighting, marketing campaigns, political caucuses, or simply a baby crying to resolve its discomfort. It is simply the broad-spectrum of human interaction.
Anything we want or need becomes the commodity or currency of a negotiation. We try to improve or avoid some aspect of our lives through forcing a change. Typically such change involves other people though we often negotiate with ourselves when making the decision to do something we don't want to do. Conflict enters the equation when someone else has or wants what we want or we resist the need to do something out of fear, complacency or dread!
The differences between negotiations are the commodities at stake. Babies need to be changed or to be nourished. Captains of industry want more land or power. Men want sex and women need security. Wants and needs vary, personalities vary, settings vary, currencies vary, tactics vary, but the process does not. To satisfy our daily needs and wants we must interact with others; we must negotiate.
We negotiate because we live in a society of people with varying interests. We negotiate to make things better for ourselves, our family, our company and our country. Avarice and greed are only examples of possible root causes for negotiation. Patriotism, pride, ego, and concern for those we love and care for also are drivers of negotiations. It is not negotiation or conflict that is good or bad; it is the behavior of the participants.
Knowing that you have no choice but to negotiate why not embrace the process as a natural aspect of life? If conflict is a natural state it should not be feared. It should be considered like riding a bike or driving a car. To get where you want to go you need to climb on board the negotiating train and buy an E-ticket.
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.
From birth we face a steady stream of challenges, struggles, and opportunities until the ultimate negotiation, death. Conflict exists as we struggle to satisfy our respective wants and needs in social circles, at school, at work, with our mates and companions, between parents and children, with medical and legal professionals, government officials or employees and retail clerks or service providers. The need to negotiate, AKA conquer conflict, permeates our very existence. Surviving a life of conflict is not enough. We need to conquer conflict so the act of living is not an arduous process.
Conflict need not be a negative aspect of our lives. It should not be feared or avoided. It is simply an aspect of life. Conflict in our daily lives can be handled with a common sense application of negotiating disciplines and techniques.
Many consider a negotiator a manipulator or someone intent on taking advantage of another person. The consensus seems to be that negotiating is a last resort through which one seeks to resolve a bad situation. That or it is the activity of predators.
I disagree. Conflict and negotiations are not only remedies for bad situations. They are not even aspects of our lives that can be avoided by choice. In fact, they cannot be avoided at all.
Handling conflict is part of the process of living; surviving in an interactive, social environment. We enjoy a world of opportunity and challenges. Negotiating is the steering wheel in our lives. How we steer determines if we land in the ditch or make it to our destination.
What we achieve during our lives is the result of our choices, our willingness to negotiate rather than avoid conflict and our attitude. With the right attitude, an expectation to succeed, and the willingness to try, fail and try again, there is little we can't achieve. Most important is to not lose ourselves in our goals but to enjoy and learn from the process of achieving them.
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 Benefits of Losing
So we all lose from time to time, right? Don’t let your losses be a waste of time and effort. When a football team suffers a loss what do they do? They review what went wrong, what the other team did, and try to improve their performance in anticipation of the next game. Every negotiation, even those that are lost, can be of value if they serve to help you learn how to interact better with those around us.
When you lose a negotiation try to salvage something from the experience:
Make a friend. Even losers have the chance to build a relationship with the other person. This may help to mitigate future conflict with a friend or it may develop a valuable contact in the work environment. The people we interact with can either remain estranged or become friends and associates. Whenever possible, convert an adversary into a friend.
Learn from your experiences, even the losses. When you lose a good fight respect that the other person was better in some ways. Review what went wrong. Consider what might have been done to change the outcome. We do this routinely in sports. Why not apply the discipline to our human interactions?
Survival in any situation is making the most of the cards you are dealt. Win, lose, or draw there’s always something to be learned from any negotiation. It just makes sense to take the time to reflect on what happened and what could have changed the outcome.
Learn to Communicate
Babies Must Forget to Communicate
Gorillas beat their chests and roar to establish their supremacy in the jungle. This simple approach to communicating can be very daunting if you happen to be cornered at the time!
For millions of sleep-deprived mothers around the world, the findings of a mom from Australia with a special gift could be a miracle! Priscilla Dunstan says she's unlocked the secret language of babies. When Priscilla was a toddler, her parents discovered she had a photographic memory for sound. At age 4, she could hear a Mozart concert on the piano and play it back note for note.
Priscilla says "Other people might hear a note but I sort of get the whole symphony," She goes on saying. "So when someone's speaking, I get all this information that other people might not pick up." That mysterious second language took on an astounding new meaning when Priscilla became a mother to her baby, Tom. "Because of my gift for sound, I was able to pick out certain patterns in his cries and then remember what those patterns were later on when he cried again," Priscilla says. "I realized that other babies were saying the same words."
After testing her baby language theory on more than 1,000 infants around the world, Priscilla says there are five words that all babies old utter regardless of race and culture. These are Neh="I'm hungry", Owh="I'm sleepy". Heh="I'm experiencing discomfort", Eair="I have lower gas", and Eh="I need to burp".
Evidently all babies have the same basic 'vocabulary' at birth. When parents don't respond to those reflexes, the baby learns to stop using them. When parents don't respond they must learn how to make their needs understood.
What are these babies doing? They are learning how to negotiate. The first rule of negotiation is that one must be able to -communicate and hear the wants and needs of the situation.
When we enter into a negotiation, any negotiation, we need to communicate. We need to learn how to do this in that specific situation. Each situation, because there are different personalities and issues involved, present differing communication challenges.
In a family dispute yelling or screaming is very likely going to block effective communications rather than make your point. The best way to resolve an emotionally charged discussion is to learn how to diffuse anger to allow both sides to be heard and to try work out their difficulties.
In the business environment negotiators who are demanding and use aggressive tactics often win small skirmishes but lose battles when the other person walks away from the table or declines to negotiate further. They may also miss opportunities to build the relationships that may later have been the bridge necessary to succeed.
Parents, struggling to communicate with their teenaged son will find that a ratio of calm logic may be far more effective that harsh criticism and grounding for sneaking out at night. Even though he is grounded there is little to do once you are asleep and he has your car keys. Rebellion is a strategy to test limits. By having their teenagers balance responsibility and performance in setting their own limits parents will fare far better than trying to enforce an autocratic approach.
By shutting down communication one loses the opportunity to learn from the exchange. As long as you possess absolute power this may work for you, Beware, typically power is fleeting and revenge is sweet!
How does one learn to communicate in a given situation? Much like the babies discussed above, we need to listen and observe the reactions to what we are saying. Verbal, non-verbal, overt, discreet responses need to be studiously considered during initial conversations the lead up to the actual negotiation so that you are prepared to understand what the other person is trying to say. Style, mannerisms, dialect, diction, education, background, knowledge, expertise are all exposed when one speaks. The question is if you are able to 'hear' the subtle messages that are being sent and aware that they will help you to learn how best to communicate with the individual once the discussion becomes serious and focused.
Negotiating is a natural process but by no means is being effect at negotiating easy. It takes hard work and discipline to be more than a casual negotiator. Take the time and make the investment to be come good. The efforts will return huge benefits throughout all aspects of your life.
When bartering with headhunters, make sure you have enough beads and trinkets to stay out of hot water.
When negotiating for services or products or even a repayment schedule don't be afraid to ask hard questions. You have the right and the need to assess the capacity of the other person to honor the terms of any agreement that might be reached.
Doing your due diligence is part of managing the process of negotiations.
Before sitting down to negotiate part of your homework is to research the other party. That research should include conducting formal and informal credit checks. Credit checks can be simple on-line reports reflecting past performance or more informative inquiries of others who have done business with the person in the past. One's reputation as a performer (or not) is typically readily available if you take the time to ask around. Remember, your reputation is also in the public domain. So take care to preserve it.
Credit and Reputation reflect the capacity and inclination of the other person to make good on his or her promises. In every walk of life there are those who try to bluff their way to greatness. They do not realize that if they fail to perform they are hurting the other person. You have the right and responsibility to determine with whom you are dealing and whether it is a person with whom you want to associate, work, or entrust your project or assets.
When finally seated across the table from the other person continue your due diligence of determining his or her capacity to perform. You are merely establishing that it is worth your time to even enter into discussions. Be prepared to be asked for your references or evidence of your ability to perform. Both parties are entitled to know who they are dealing with and that the others performance is viable if an agreement is reached. The more credit you bring to the table, the less risk there is for the other person to enter into an agreement. That lessened risk will often allow them to compromise more during the negotiation.
Don't be afraid that your questions may be considered impolite or intrusive. Credit checks are done daily. When we tender our credit cards or checks to a clerk in a store, they do not simply take our word that we can pay, they access a credit service and verify that we have the money to pay the bill. If someone is willing to be questioned by a total stranger over their ability to buy a steak dinner, surely they should not object to providing a financial statement when buying a million dollar parcel of land or home. If they are, caveat emptor or seller beware!
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.
BRACKETING tactics in Negotiations
When using heavy artillery against a grizzly bear, it is normal to shoot long, then short to establish the range and effect of the wind, then "walk" the rounds down until the grizzly is effectively de-clawed. Unless of course, if he is charging. In which case you should fire for effect without delay!
As a dispute resolution strategy, bracketing is an effective way to resolve differences. It is also the most heavily used approach in negotiations. It encompasses establishing "bid/ask" positions between the parties then working for a common ground, typically somewhere in the middle of the initial "bid/ask" parameters. The important aspect of bracketing is determining what your opening position should be.
A mediator's first challenge is to get the parties to open with reasonable offers to settle. This will likely be accomplished in private, working with one side then the other. While the objective of these breakout sessions is to generate an opening bid, the mediator will also be trying to learn what other issues are important to each party. It is these ancillary issues that often pose the greatest potential for settlement.
The initial offer or counter needs to be carefully considered. As most negotiations are not life and death situations, each party has the right to walk away and save time if they feel there is no chance of reaching an agreement. So the opening offer and counter need to either be within reality or one's bottom line if that is what is required to keep the discussions alive. By preparing and doing your research you should have a reasonably good idea of what it will take to reach an agreement. Your initial offer should reflect some reasonableness in that regard.
It is the number one tactic in bracketing to not make the initial offer. Getting the other person to make the first bid takes time, communication skills, and manipulation. The art of negotiation is not as much in the numbers as it is in the human skills of getting the other person to do what you want them to do. In this case, make the initial offer. That offer, when made, will tell you a lot. It establishes the expectations, knowledge, confidence and need for the deal of the other person. Take the time necessary to try to get the other person to make the first offer.
Once the opening bids are established, the mediator will need to formulate how he presents each bid to the other party in the best light so that the offer is not rejected but countered. This is where ancillary issues can be used. That is, when presenting a unusually high bid, the mediator may say to the other side, "While this may seem high, you have told me this is not really about money. So let's see if we can resolve the other issues and then come back to the money." What the mediator is doing is expanding the scope of the negotiations to their widest parameters. He will then work to bring the parties together by "horse-trading" issues and monetary considerations until both can justify accepting the final terms.
There is an art to bracketing. Moving too quickly will result in giving up too much. The amount of each concession also signals when the parties are getting close to their final positions. A mediator needs to be sensitive to this and work to always leave a door open for "just one more" concession if necessary.
Don't forget that time is a major commodity. The final concessions may have to be extracted by using the gambit, "We have so much invested in this session, one more small concession has got to be worth considering."
There are those times when you know you have to make a ridiculously low or high initial offer. The goal is to keep the dialogue going so you can sway the other person toward your bottom line. When you have to make an unreasonable offer, use the following delivery techniques to preserve the dialogue:
- Prepare the other party up front for the offer.
- Establish a relationship through preparatory dialogue.
- Desensitize the number using some humor in the delivery.
- Do not tender the offer with equivocation; deliver it with confidence.
- Explain the merits of the offer during the delivery.
Remember, you don't know the other person's situation or knowledge base. While your offer may be seemingly ridiculous, the other person may have pressures or needs that make it viable.
Negotiations are not easy. They are interpersonal conflicts that need to be managed. If they were easy we would all be living happy, healthy, wealthy lives with perfect families, burgeoning bank accounts, and ideal career paths.
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.
Managing from the Bottom Line
A Ruby-Throated Hummingbird must consume twice 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 bottom lines. While 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.
Knowing your bottom line is perhaps the most important aspect of being a good negotiator. The bottom line, the minimum that you will accept, is the point that you must decide whether to continue to try to hold things together or simply walk away from the opportunity.
In most cases, this is the point where you become willing to bluff. Bluffing is a last resort tactic that should be reserved until all you have at risk is failure itself.
Share your bottom line with your co-negotiators. If you are uncomfortable doing this, you should consider replacing the person causing the concern. A team is only as strong as its weakest link. Your concern about being totally transparent with everyone on your team tells you something about the team or your management style.
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.
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.
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.
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.
Overcoming Barriers to Negotiations
When embarking on a hike in the woods don't expect it to be a walk in the park. Anticipating challenges and obstacles is the best insurance to winning a negotiation. Barriers to a settlement are the reasons negotiating is necessary in human interaction. Without them life really would be walk in the park!
It is not if, but where, barriers exist. I say where rather than when. If you view the negotiation process as a journey, you will find your path littered with obstacles challenging your progress. Seeking each out and resolving them is the only way to make it to the end of your journey.
Understanding that they exist is the first step. Uncovering them is the second. Resolving them is the third.
To better understand where the another person is coming from in a negotiation, take time to get to learn about the person. Visit his or her office. Get a feel for the person's personal life including family, interests and hobbies. Talk with mutual friends. In short, learn what you can before settling into the actual negotiation. Football coaches video the competition and then review the tapes with their players to identify and anticipate likely offensive and defensive barriers they will face. Negotiations should be no different. It is an adversarial sport.
When you are stymied by a barrier, find a way around it. If it is a personal prejudice, you may want to call in a co-negotiator to counter-act the image you represent. If it is a technical matter, you may want to enlist the help of an expert. Your role as a negotiator or mediator is to identify and resolve barriers.
In family situations the barrier can be generational. A father often filters the statements of his thirty-something son as though he was still an adolescent. And the son still looks at his father as a stern, judging parent. Changing this engrained perception is difficult because both are relying on years of first hand observation.
Barriers are the crux of human interaction. Rather than trying to avoid them, embrace them as natural challenges to be overcome. A positive attitude toward resolution is ninety percent of the battle.
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.
Negotiating requires one to keep their balance.
BALANCE / EQUILIBRIUM
Having to cross a deep ravine using a rope bridge can challenge your balance. A good negotiating opponent will similarly keep testing your footing. The best way to keep your balance is to be focused and have taken the time to be well prepared.
Keeping one's balance is essential as a mediator or negotiator.
For the mediator, each party will try to get their points made and solicit the support of the mediator to make the other person listen. The mediator, by definition, must remain impartial. This can be challenging if one person is obviously being less than realistic in his or her demands. But the key to a successful mediation is a mediator who can ferry between the parties helping each to get comfortable with compromises that bring about resolution. This is a task of balancing information flow and presentation.
There are times that the best efforts of the mediator fail to convert one of the parties who is openly arrogant and unreasonable. In a break out session the mediator will need to impress on this person the need to carefully rethink what he is doing. The mediator will stress that the alternative to an arbitrated settlement is to have a judge hand down a binding decision. That decision may not be what the individual wants to hear, and in the mediator's best judgment, it would be better to reach an accord now than risk such a decision.
During the mediation, the parties have the chance to impact the outcome. In court they lose this luxury.
In a negotiation if the other person is acting unreasonably you have several options. You can walk away from the table, you can capitulate, or you can act like a mediator and explain to the other person that he or she has two choices. He can become realistic and work with you as a professional, or he can find someone else to sell to, lease from, etc., depending on the situation.
Then you proceed to tell him why you are his best option (as compared to a judge in the case of the mediator).
This is a 'soft-bluff' designed to get him involved in resolving the situation rather than fighting you. You are taking on the role of the parent, AKA mediator, to guide the other person into becoming more participative. If successful you will have finessed the situation and proved your skills as a negotiator.
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.
Antagonism as a Negotiating Tactic
Don't feed the sharks if you want to go swimming! Intentionally irritating another person is usually counter-productive to settling a dispute. The goal is to build relationships upon which agreements can be forged. That being said, the parties to any dispute are essentially antagonists.
When a negotiation is stalemated and no one is really trying to make progress, shifting styles from that of a polite mediator to that of an antagonist can evoke a reaction. Such reactions cause some form of movement in the discussions. Then the parties on one side begin to bicker. They may be called into a caucus session by their attorney and told to quell the internal fighting in public as it undermines their cause. Similarly, a mediator stymied between two parties may become antagonistic toward one of the parties in private by implying that they are wasting his time by not trying to reach a settlement or not considering facts when they are presented. A healthy tongue lashing in private may serve as a reality check for the obstinate party and evoke a counter proposal.
When one party does not like a proposal and does not need to make the deal, he may simply harden his position and become antagonistic. If he is willing to walk away, being abrupt will either save time or cause the other side to improve their offer to keep the dialogue going. Either way, the antagonistic approach has used the power of indifference or negativism to change the outcome of the meeting.
Antagonistic tactics can backfire. Egos are fragile things and anger can rage uncontrollably when a person is provoked. Use an antagonistic style or tactic only if you are prepared to walk away from the meeting if things fall apart.
Distractions in Negotiations
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 behavior 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 your 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 sayoing, you may want to suggest postponing the meeting. If you feel it will cause the other person to rush through th emeeting 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.
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.
Who is the Best Negotiator?
Who is the best negotiator?
There is no way to tell. One who wins is not always the best negotiator. If that person had absolute power, he did not need to negotiate effectively to prevail. If one lacks any power or the capacity to perform, then the best negotiating skills would be for naught.
The measure of the best negotiator lies in how well one does with what they have to negotiate with at that moment in time. But, if one knows he lacks the resources to negotiate effectively, then perhaps the best negotiator is one who knows when not to negotiate.
Negotiation is an art. Art is difficult to measure as everyone has a differing opinion of beauty. There are too many variables to create a proper scorecard.
Why, then, are some judged to be better negotiators than others? Typically a respected negotiator has demonstrated consistent, disciplined behavior that results in a series of perceived victories. No one but the person will really know how effective he has been during each session. But their mastery of the process and their persona at the negotiating table will create the image of a winner, and they will be considered to be one of the best negotiators others have encountered.
So then how can one become the "best" negotiator?
Being the best at anything means taking the time to learn the process and then execute each step diligently. It means investing the time and effort to properly research and prepare for each encounter. It means developing honed communication skills. It means building an arsenal of negotiating tactics and strategies to deploy when needed. It means firmly grasping the attitude that you will win before you sit down to negotiate. It means being willing to take control of the situation and lead others.
In short, it means working at being the best you can be.
Data Can Impact a Negotiation
Identification of edible plants in a survival situation can be the difference between living and dying. Knowing the poisonous plants is essential!
Data is any information available about a given topic, person, commodity or situation. Having the discipline to gather, assess and use this data makes the difference between negotiating and begging. Preparedness is the key to a successful negotiation.
Typically information is readily available if you know how to seek it out.
If the information you are seeking is fact-based and in the public domain, the information may be available at the library, newspaper archives, from a title company, or off the Internet. If it concerns a payment that is in question, records from your accounting group or a copy of your personal check from your bank may be what you need. It may be troublesome to get the hard data, but it is difficult to refute and worth the extra effort.
Knowing the facts that help you is a good thing. Knowing those that hurt your cause is much better. When you conduct your fact-based research, don't narrow your search to the specific item. Be on the alert for related information that may be used against you or undermine your position. The search for data should be broad-based and inclusive to allow you to properly prepare for the moment of confrontation.
If your research is about the personality of the person you are confronting, seek the counsel of others who know the person, study previous negotiation results with the person or his company, casually discuss the person with his or her secretary, or read up on the person's activities. With a little sleuthing, there are usually some valuable insights available. As with data-based research, cast a wide net and collect as much information about the other person's interests, nature, and reputation as possible. You can use this collective pool of data to talk about his hobbies and interests to build a relationship or use it to be on the alert for his known stylistic tactics.
Take the time to fully prepare. If you do this, often as not you will be better prepared than the other person. As a result, you may be able to control the conversation and impact the outcome of the negotiation.
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.
Technology and Human Communication
21st century communication tools have dramaticaly changed the negotiating process. We live in the communication era complete with faxes, mobile phones, laptops, PCs, PDAs that retrieve and send e-mails, the Internet, DSL and modem connections, video conferences, and pagers. And that is today. Tomorrow there will be even more ways to stay in touch or communicate.
We are trained to be readily accessible and available on demand with nano-second technology. It is almost a distinction to be the most-available executive on a team. Our generation expects instant gratification. That includes responsiveness. This immediacy is not necessarily good for negotiations. Like a fine wine, some negotiations require time to come to their full bloom.
Negotiating is an art and art should not be rushed.
The compressed time of today's electronically connected world takes the finesse out of negotiating. If you want to barter, succumb to nano-second technology. If you want to negotiate, require face-to-face meetings and save the time-saving technology for procedural matters.
There are times to use technology. But make sure you use it to your advantage and don't succumb to the expectations of others to do so just to make them happy. You are entitled to your privacy. You are also entitled to time your responses to your liking.
- E-mail is a great vehicle for quick, casual communication. It is no replacement for negotiating terms unless you have established a rapport with the other person and know that the essential negotiations are either resolved or will be handled at a future meeting. When responding to an e-mail consider that the timing of a response sends a distinct message. A prompt response can indicate eagerness to settle, desperation, or a lack of options on your part. A delayed response generally indicates the issue is not one of your priorities, you have other options, or that you are not very happy with the terms.
- Facsimiles and e-mail attached documents can move the documentation process along swiftly. This is to your advantage when you have made a good deal and don't want time to erode that agreement. But if you have yet to agree and need to gather additional information, choose the traditional method of transmitting documents, the U.S. Mail, to give you time to finish your research or explore other options.
- The Internet is an invaluable research tool. Use it to research your opponent. Assume that he or she will be doing the same thing. Make sure you don't have too much information about yourself on the 'net'.
- On screen reading is fine for the news. Don't scan through documents on the screen. Print and read important documents. Take your time and consider each important paragraph.
You need not give others your e-mail address or fax numbers even if asked. That information allows others to invade your privacy. Provide it only to those you want to have priority access to you.
Interpersonal Communication Skills
A negotiator needs to be skilled at two things. Delivering and receiving messages. Unlike a postal carrier, he must make sure his message is heard and understood. Unlike a court recorder, he must understand as well as hear.
Learning to listen pro-actively and observing while you speak is just the beginning. Negotiating is an art form. Communicating is nothing less. Mastering the ability to reinforce what you are saying with your actions and demeanor allows you to more effectively communicate your point.
Actors practice or rehearse their lines in front of mirrors to get their entire persona to deliver the "feeling" as well as the line. Attorneys preparing opening and closing arguments do the same thing. Why, then, should not other professionals take the same care to insure they are optimizing the impact of what they are going to say? In fact, most mediation and negotiation professionals do go through various types of rehearsals and dry-runs before important meetings.
Prepare, review, and practice for the meeting so that you have mastered the subject matter and know what your objectives are before you sit down to do battle. If you are not adequately prepared you may find that the discussion is being controlled by the other person and that it is being channeled where they want you to go rather than toward your goal.
Knowing the material and being prepared is the first step to good communications. Taking responsibility for delivering the content is the second. Most people will not be convinced through a verbal presentation. Likely they will be spending more time preparing their response than listening to you. That is why you need to shoulder the responsibility of making them actually hear and understand what you are saying as part of your role as an effective communicator and negotiator.
When speaking, you are responsible for making sure what you are saying is being understood. Verify this by:
- Asking follow-up questions to make sure you were understood.
- Repeating salient points two or three times.
- Seeking input on your comments.
- Repeating key points one more time for effect!
- Observing the non-verbal reactions to what you say. *
* By observing you are trying to see if they are thinking of something else, if they are planning what next to say, or if they are just asleep!
Conversely, as an effective negotiator you have to train yourself to be a good listener. We all have bad habits. Many of them apply to how we listen. Our minds can handle much more activity than mere listening. Because of this, we are apt to be subconsciously trying to frame a response to the last point made, figure the odds on the baseball game this evening, concocting a strategy to get a raise at work and worrying about last night's fight at home; all the while also listening to the other person making a point. With all this concurrent activity, actually hearing what is being said is at best difficult. Hearing the subtle nuances within the context of the remarks is next to impossible.
When listening, you are responsible for making sure what you are understanding what is being said. Verify this by:
- Observing the non-verbal signals of the speaker.
- Asking follow-up questions to make sure you understood what was said.
- Repeating back the salient points for affirmation.
- Seeking clarification on complex points.
- Make sure you are not thinking about something else!
- Make doubly sure you are not thinking about what you are going to say next!
Don't sell short the need to improve your communication skills. They can always be improved. The discipline of leaving one's baggage at the door is the most touted and least observed. After all, it is your baggage, you can handle it! But like alcohol and drugs, personal baggage in a negotiation can take your edge or focus away.
People Skills and Negotiations
Managing any group of people or even another person requires well-honed people skills. Managing the people involved in a negotiation requires exceptional ability to influence and motivate others.
As all human interaction is a form of conflict resolution, enhancing your people skills is a sure way to improve your ability to negotiate successfully.
To manage people you have to first understand them. Negotiators are people and people are individuals. To reach them through a debate of the issues it is best to present your case in terms they understand and with which they are comfortable. The time spent informally talking before a negotiating session serves the purpose of providing insights into how you might phrase your arguments. Researching the other person before the meeting may also provide information on his or her background, professional and scholastic. Talking to associates who know the person is another way to develop a dialogue strategy.
Develop a style that allows you to be assertive and not aggressive in your communication with the other person. The "3-Rs" to accomplish this are: Rehearse, Repeat, and Request feedback. To lead an informal group you must assert yourself. Being assertive does not also mean being demanding, rude and egotistical. Being assertive is a management style to enable you to control the actions of the group. In a negotiating setting, this needs to be very subtle. The 3-Rs approach is an effective way of taking control without grasping it from the other person.
The process of preparing children for life is a complicated mix of coaching, demanding, directing, disciplining, dreaming, educating, encouraging, entrusting, informing, loving, mediating, negotiating, nurturing, philosophizing, training and trusting. Unlike most management situations, it is unique in that neither party has the option to quit without devastating consequences. There are some well-known parenting situations that can help managers understand and improve their management behavior.
Parents, like all people, react when challenged. This reaction is not the best of management styles, even for parents. Among other common mistakes, parents are apt to resist allowing their child to grow and assume additional responsibility as fast as the child would like. Parents tend to thwart blatant independence at a young age by saying "No!". Unfortunately "no" creates frustration rather than redirecting activity. In a negotiation "no" has a similar impact on the atmosphere between the negotiators. It can be frustrating to the point of distraction. If your intention is not to stop the dialogue in its tracks, be judicious using the word.
Parents also tend to concede too soon and then spend the night worrying if it was the right decision, often with good reason. Negotiators who preempt the other person by negotiating against their own proposal often wish they had just been patient. Cognitive dissonance is often referred to as buyers remorse. After a negotiation you do not want the other side thinking they gave away too much. You want to make sure you have reinforced their decisions as being well made and in their best interest. By building up their egos you are cementing the deal so it will stand the test of time.
Managing others is a design on your part to influence how they will act or respond. Before getting them to act, you have to first impact how they think. Few people can be persuaded to change how they think through a verbal debate. Bring data sheets, diagrams, experts, and other tangible support for your arguments to help educate, inform and influence the other person. Remember also that attitude and setting can influence the other person's mood. Take the initiative to make the initial few moments of any meeting positive and upbeat. Make it a personal challenge to get the other person to smile at least once before sitting down to start the formal dialogue.
To create change in another person, you need to make them uncomfortable and then lead them toward a comfortable resolution. One technique used is to change the topic abruptly to throw the other person off balance. This is especially useful when the discussion is heading into 'troubled waters' for you. Use any transitional thread to shift away from the sensitive area. Most people do not want to be rude and openly object. And example of how this might be done is to interject an observation about how difficult it is to work with city planners when an aspect of the lease negotiations is going against you. There are few people involved in developing commercial properties who won't readily vent about past problems with planners or planning commissions. Use the diversion as a chance to mentally regroup and find a way around problems the other discussion presented.
Using Time as a Negotiation Tactic
Whether we are talking about one's personal or professional life, time is a precious commodity. Appreciate the time you are investing in resolving a dispute or negotiating an issue. Make sure your time is warranted before over-investing in a minor issue's resolution. Unlike money, wasted time is not recoverable. It is a limited commodity that should be wisely rationed.
In addition to the currency of a transaction, time is likely to be the second most important commodity in a settlement conference. To use time strategically it needs to be understood.
Examples of how time impacts a negotiation or settlement conference include not only the time taken to attend a conference or meeting but also the actual time of the meeting plus the preparation time, the travel time to and from the meeting, and the time to prepare and review the documents required to memorialize the meeting.
You can manage the time consumed by a settlement conference by:
- Hosting the meeting at your office. This eliminates travel time and time lost in traffic.
- Setting the agenda to keep the meeting dialogue focused.
- Allow the other party to draft the settlement documents. This allows you to only review the documents.
- Send them edits to be incorporated into the draft document.
- Establish a set time when your secretary is to interrupt your meeting for a "urgent" matter. If the meeting is not making good progress, you will have an excuse to cut it short. If progress is being made and your continued participation is warranted, you can always make the meeting a higher priority.
- Add negotiating team members to assist in the research and preparation for the meeting.
When considering the time investment of taking on a dispute, consider the lost opportunity time to work on other tasks or spend with your family or on a hobby. Time is a consumable. You can't simply go to the bank and get more. Make sure you have prioritized your activities and this dispute merits your attention.
Because time is important to others it can and should be used as a negotiating tactic.
- Extend the time to settle to force resolution: If the issue is a minor irritant for the other person, being openly willing to prolong the time it will take to settle the issue may motivate the other party to settle rather than waste additional time at the negotiating table.
- Compress the time allowed to settle: If the issue is a minor irritant for you, being openly willing to walk away leaving the matter unsettled may motivate the other party to settle rather than risk losing the opportunity. This is especially effective if you have other options and the other party does not.
- Recognize the time being spent on the matter: By acknowledging the investment in time being made by both parties to address the situation you increase its stature or value and make the process more meaningful. This helps at times to get people to become more serious in their roles and diligent in seeking to reach an accord.
Time is a valuable commodity to us all. It is often overlooked. In today's fast-paced world, time is a true commodity to be managed and used as part of any negotiation.
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.
Debt Restructuring Before Buying a New Home
The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay.
Nell Henderson, Washington Post Staff Writer, Tuesday, September 27, 2005 wrote an article, "Concerns Raised as Home Sales, Prices Rise Again". In the article he notes concerns about the high cost of real estate and the risk lenders are taking by granting creative financing to facilitate sales at such elevated prices. "One driver behind price appreciation, Greenspan said, is the popularity of new types of mortgages that enable many borrowers to buy houses at prices they could otherwise not afford -- and that may be hard for some borrowers to repay if interest rates rise and home prices stabilize or fall."
The temptation of getting into the runaway housing market is understandable. Simple savings accounts are returning less than 2% per year. CDs and bonds are not much better. "Safe" funds are yielding 5% pre-tax. And real estate is surging, offering both equity appreciation and tax protection. However, if you are in debt, it's important to make sure you restructure it and consolidate it before taking the leap into the housing market.
So many see the risk of taking on a house that is beyond their means as worth taking in order to create value and build a financially secure future. The problem is that the lenders, once predominantly banks prone to conservative lending standards, now include pension funds, insurance companies and other investment entities eager to place loans to keep their money working. It is not the lenders who will be hurt. It is the borrower who gets burned. Bankruptcy laws are changing in October and it will no longer be convenient to file bankruptcy to avoid creditors. Individuals, once protected from forced liquidations, will find that to be the norm rather than the exception. So it is more important than ever to learn how to renegotiate or restructure debt before one is forced into bankruptcy court.
Renegotiating debt is best done before you are too delinquent. With a solid payment history with your lenders you are more likely to find them willing to work with you when you approach them. Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.
-Do not wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third party's only motivation is to make money off your bad situation.
-Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.
-Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue.
-Be persistent. "No" is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.
-Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse.
Debt restructuring is a basic form of negotiation. You have a need.
The lender also has a need. You have a solution to offer. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should gamble with your plan. Don't ask for a hand out. Ask for approval of a specific plan.
A plan that works for you should give them something as well. The two primary commodities are time, money and your credit rating.
-If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. Obviously you should be able to settle between 50% and 100%.
-If you offer to pay the full amount, but over time, you will be saving a lot in money and keep you credit rating from being impacted.
-Be sure to negotiate the interest. It does you no good to extend your payment period if you are also going to be paying a higher interest rate. Interest rates are negotiable.
-Finally, require that the lender not place this delinquency or restructuring of the loan on your credit report.
The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay. A good customer's case always sounds better than a plea from a habitual problem customer.
By successfully restructuring your debt you will have protected your credit rating for forays into the housing market.
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.
Katrina has thrown America a major curve. After weathering the storm everyone exhaled. Then, the following day, the levies gave way and havoc erupted. The ensuing crisis has focused the attention of the world on America's ability to handle the situation.
Having good crisis management skills is an essential characteristic of an effective negotiator. No matter how well-prepared, how you have planned, or how ready you are for a negotiation, the unknown can always through a curve into the process. How the unexpected is handled often determines the outcome of a negotiation.
Managing a crisis requires:
• Understanding your own strengths and capabilities.
• Knowing where the high ground is and how to get there.
• Being able to gain the confidence of others and lead them to safety.
• Having the strength to weather the store and make the trek.
• Caring enough to make the effort to prevail.
• Taking action and following through to complete the task.
In negotiations when your final overtures are thwarted or an agreement made is broken at the last minute presents a crisis situation. Times like these require regrouping, on-the-fly assessment of options, and concise decision-making. Only good preparation and a strong knowledge base will prepare you to step into the breach and save the day. Whether you do it is up to you. It takes confidence, conviction and a passion to prevail.
Michael Chertoff, the Homeland Security and FEMA, Governor Kathleen Babineaux Blanco, Army Lt. Gen. Russel Honore, New Orleans Mayor Ray Nagin and everyone else involved on the ground and in the chain of command have had to cope with correcting a problem that emerged from what initially was thought to have been a near miss. How they handle the situation on a go-forward basis is far more important that understanding how it happened. That will come later. In a crisis you look forward, make a plan, and attack the plan. You can look back later. What is essential is that the victims are attended to, the areas impacted are stabilized, and rebuilding is not only started but completed.
Trust is Necessary When Negotiating
In episode eight of Showtime's popular series Huff, Izzy lectures Beth on trusting too much. "You know, trust is a device we use to put people on pedestals. The higher we put them, the harder they fall". "And your point is?" Beth asks. "The next time you catch yourself trusting somebody, look at that scar!" Izzy has been deeply hurt by her husband leaving her for another woman. Beth had naively let Huff's patient into their home trusting her when she said she would not hurt anyone.
Conflict resolution, alternate dispute resolution, negotiations, mediation, settlement discussion, debt restructuring, salary and performance reviews, literally any form of productive human interaction requires a basis of trust from which accords can be reached. Humans are inclined to want to trust each other. The need to trust one another is necessary to function in society.
Honesty or integrity is an essential personal characteristic for any negotiator regardless of the situation. If you have a good reputation others will listen with confidence. If not, you will have to sell each point hard and even then may still be doubted.
Make sure you mean what you say and that you are able to back it up with your actions or those of your company. Never intentionally give your word then go back on it. Sometimes situations change and you are forced to back out of an agreement. Never do so lightly. Explain the change that occurred. Clearly demonstrate your frustration at having to change your mind to the other person. Apologize profusely and empathize with the other person's angst. Try to find a way to make it up. You do not want others to think this is typical behavior for you.
If directed by superiors to reverse your word or go back on a contract, do not blame your boss or company. Even if that is the cause, it is your word that has been broken. Taking the heat personally demonstrates your sincerity and should save a good portion of your reputation. If such vacillation is habitual in your company, consider seeking another job where you can provide proper representation.
Izzy's bitter resentment demonstrates the damage caused by a breach of trust. For her, she has lost the ability to assume people are trustworthy. When this happens in a negotiation, the absence of trust will block any chance the parties have of opening up and solving the problem. In such a situation someone needs to suggest changing the negotiators or separating them. Often a mediator will put the parties into a permanent caucus setting and negotiate between the two parties, a process called shuttle diplomacy. This tactic diffuses the angst one or both of the parties has toward the other and may allow meaningful discussions to get started. You have to be willing to get burned from time to time, as Beth was, to effectively negotiate. It requires you to have faith in the other person.
In the last 2004 episode of ABC's popular series, Desperate Housewives, Edie goes to Susan's. She's scared to be alone after the news of Felicia's attack spreads throughout the neighborhood. She is so consumed by her fear she can't understand Susan's attempt to tell her Zach's holding a gun on her. Storming off in a huff, she is completely unaware of the situation.
Edie has demonstrated the need for effective, two-way communications in stressful situations. Observing other people while talking enables you to make sure they are awake, alert and actually hearing what you are saying. If you find them to be inattentive, as in the case of Edie, stop what you are doing and find a way to get their attention.
Whether you are negotiating, telling a joke or simply discussing a topic, you are partially responsible to make sure others are listening. You can verify you have their attention by:
-Observing the non-verbal reactions to what you say. Watch to see if they are reacting to what is being said or if they are thinking of something else. Frequently you will find that they are planning what to say next rather than listening.
- Pepper your comments with questions designed to draw the other person into the discussion.
- Pause and let the ensuing silence pique their interest.
- Ask their opinion of a point you just made to confirm that they heard you and understood what you said.
Taking responsibility for being heard and understood is part of being effective as a negotiator.
Edie's role in this episode also illustrates someone who is so involved in her own issues that she is not hearing what the other person is trying to say. As a negotiator, you have a real need to not only hear but fully understand the other person's comments. Make sure you aren't preoccupied with other matters before entering serious settlement discussions.
Deputy Chief Brenda Johnson, the lead character on the new TNT series The Closer, faces a group of Los Angeles' finest who do not know her, do not like her, and do not respect her. As a department head new to the department, Johnson is thoroughly resented. The newly formed Priority Homicide Squad is also a threat to the existing LAPD old boys club. Her challenge during the opening season, in addition to solving the homicides, is to overcome her squad's obvious dislike and disdain for her. Johnson is a CIA trained interrogator and was previously employed by Atlanta PD. Her excellent reputation for being "a closer", getting confessions that lead directly to convictions, is why she was brought in to head the new squad.
In negotiations being a closer is being someone able to actually bring discussions to a head and walk away with a signed agreement.
Mediators are expert at closing. That is what they do. They manage the process in a fashion that the parties ultimately come to an accord. Anything short of this is typically viewed as a failure. Their sole goal is to have the parties reach agreement.
The best negotiating that does not result in an agreement is less than satisfying. Corporate managers are not likely to appreciate all your hard work if you don't win more often than not. Corporations often lead managers to ignoring that accepting a bad proposal would be worse for the company than walking away from a deal. Most companies openly recognize and reward completion of negotiations more than the actual details of the transaction itself.
Closing a negotiation requires getting the other person to actually sign or agree. People naturally resist making final decisions. This is especially true when they feel they are being pressured. The climate of the discussions leading to this moment play a significant role in everyone being comfortable with signing the document or shaking hands to seal a deal. 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.
The timing of asking for a signature or commitment is also important. If you sense the other person's unease, 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.
By the end of the first season in the series Closer, Deputy Chief Johnson has demonstrated to her squad and to the LAPD as a whole that she is, in fact, a Closer. Doing so she effectively converted her squad to silent but solid supporters. She did so by demonstrating that she can get the job done, with or without their willing support. Negotiators benefit if their reputation for doing what they say precedes them into settlement discussions. Not only does this make them more credible, it allows them to bluff on occasion.
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.
Collective Dreaming - How to Win in Negotiations
Empires are built on dreams. Olympic champions start by dreaming of winning their next match in middle school. In last season's closing episode of ABC's television series Lost, Locke shared the spirituality of why he has been placed on an island in the South Pacific that has healed his legs. Jack, his protagonist in the series, is limited to caring for the others and hoping to be rescued.
Locke is much more likely to sleep peaceably dreaming of something more than just surviving each night while Jack lies awake wondering what the next challenge will be that he will have to overcome.
According to Peter Drucker, successful companies such as Harley-Davidson and Starbucks work because they are selling a lifestyle or an image rather than simply a product. Successful companies offer more than a commodity. They create a collective dream-need through marketing that only their product or experience will satisfy.
No one enters a negotiation without an expectation of the outcome. Nor should they. Their expected outcome is their dream. To achieve that dream, they must find a way to make it the other person's "dream" as well.
Most focus on their individual needs and wants without caring about the other person's needs. To excel at negotiating, the strategy of collective dreaming is required. Collective dreaming is the process of getting everyone involved in the discussion and then having the group envision the same objective. That is, getting all concerned to want to achieve that objective albeit for differing reasons. Then they are more apt to work together to make it happen.
To do this a negotiator needs to look beyond his or her interests and conjure the ultimate outcome of the negotiation if successful for the group. Then, acting as an informal leader, he or she must present that dream to the entire group demonstrating how, if achieved, it benefits everyone.
It does not cost anything to consider another person's needs or perspective. In the coming season of Lost it will be interesting to see whether Locke or Jack prevail in creating a common goal for the survivors.
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.