Grow Your Training Business: Negotiation Skills

Negotiation Skills

Jun 12, 2011

Quick Tip #41 - Battle for a Bigger Piece of the (Shrinking) Pie

In order to maintain your business during an economic downturn, you are going to have to find a way to gain a bigger share of the shrinking market. And of course you will have to do this while many of your competitors are trying to do exactly the same thing. Some business leaders try to convince themselves that it’s enough to just maintain their market share.

Recently a vice president for a commercial printing company said to me “Our industry is shrinking by 30%, but we are only down 12% so I think we are doing pretty well.” Not surprisingly, when I asked this woman about her overall competitive strategy and what she was doing specifically to grow her business, the answer was less than robust. She wasn’t playing to win; she was playing to tie. As we talked, I recalled a conversation I had a few weeks earlier with one of her competitors. He was a VP of sales as well, but when we discussed his competitive strategy the conversation took more than an hour. He had a detailed, multi-pronged plan to take business away from specific competitors. And not surprisingly, his sales were up by 8%.

In a shrinking market, you are either battling aggressively to gain share, or you are passively letting someone else take a big bite out of your (shrinking) pie.

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Nov 01, 2008

5 Essential Negotiation Principles for a Tough Economy

The way that you conduct yourself in a negotiation can dramatically the outcome, and there are 5 essential principles you should remember. These principles are always at work for you and will help you smoothly get what you want.

1. Get the Other Side to Commit First. Top negotiators know that you're usually better off if you can get the other side to commit to a position first. Several reasons are obvious:

Their first offer may be much better than you expected.
It gives you information about them before you have to tell them anything.
It enables you to bracket their proposal - present a counter-proposal which creates a "middle ground" that happens to be exactly what you ultimately want.

If they state a price first, you can bracket them, so if you end up splitting the difference, you'll get what you want. If they can get you to commit first, they can then bracket your proposal. Then if you end up splitting the difference, they get what they wanted. The less you know about the other side or the proposition that you're negotiating, the more important the principle of not going first becomes.

If both sides of a negotiation have learned that they shouldn't go first, you can't sit there forever with both sides refusing to put a number on the table, but as a rule you should always find out what the other side wants to do first.

2. Act Dumb, Not Smart. To effective negotiators, smart is dumb and dumb is smart. When you are negotiating, you're better off acting as if you know less than everybody else does, not more. The dumber you act, the better off you are unless your apparent I.Q. sinks to a point where you lack any credibility.

There is a good reason for this. With a few rare exceptions, human beings tend to help people that they see as less intelligent or informed, rather than taking advantage of them.

Of course there are a few ruthless people out there who will try to take advantage of weak people, but most people want to compete with people they see as brighter and help people they see as less bright. So, the reason for acting dumb is that it diffuses the competitive spirit of the other side. How can you fight with someone who is asking you to help them negotiate with you? How can you carry on any type of competitive banter with a person who says, "I don't know, what do you think?" Most people, when faced with this situation, feel sorry for the other person and go out of their way to help him or her.

Do you remember the TV show Columbo? Peter Falk played a detective who walked around in an old raincoat and a mental fog, chewing on an old cigar butt. He constantly wore an expression that suggested he had just misplaced something and couldn't remember what it was, let alone where he had left it. In fact, his success was directly attributable to how smart he was-by acting dumb. His demeanor was so disarming that the murderers came close to wanting him to solve his cases because he appeared to be so helpless.

The negotiators who let their egos take control of them and come across as a sharp, sophisticated negotiator commit to several things that work against them in a negotiation. These include being the following:

A fast decision-maker who doesn't need time to think things over.
Someone who would not have to check with anyone else before going ahead.
Someone who doesn't have to consult with experts before committing.
Someone who would never stoop to pleading for a concession.
Someone who would never be overridden by a supervisor.
Someone who doesn't have to keep extensive notes about the progress of the negotiation and refer to them frequently.

The highly effective negotiator who understands the importance of acting dumb retains these options:

Requesting time to think it over so that he or she can thoroughly think through the dangers of accepting or the opportunities that making additional demands might bring.
Deferring a decision while he or she checks with a committee or board of directors.
Asking for time to let legal or technical experts review the proposal.
Pleading for additional concessions.
Using Good Guy/Bad Guy to put pressure on the other side without confrontation.
Taking time to think under the guise of reviewing notes about the negotiation.

Warning: Be careful that you're not acting dumb in your area of expertise. If you're a heart surgeon, don't say, "I'm not sure if you need a triple by-pass or if a double by-pass will do." If you're an architect, don't say, "I don't know if this building will stand up or not."

Win-win negotiating depends on the willingness of each side to be truly empathetic to the other side's position. That's not going to happen if both sides continue to compete with each other. Effective negotiators know that acting dumb diffuses that competitive spirit and opens the door to win-win solutions.

3. Think in Real Money Terms but Talk Funny Money. There are all kinds of ways of describing the price of something. If you went to the Boeing Aircraft Company and asked them what it costs to fly a 747 coast to coast, they wouldn't tell you "Fifty-two thousand dollars." They would tell you eleven cents per passenger mile. Salespeople call that breaking it down to the ridiculous.

Haven't we all had a real estate salesperson say to us at one time or another, "Do you realize you're talking 35=C2=A2 a day here? You're not going to let 35=C2=A2 a day stand between you and your dream home are you?" It probably didn't occur to you that 35=C2=A2 a day over the 30-year life of a real estate mortgage is more than $7,000.

Effective negotiators think in real money terms. When that supplier tells you about a 5=C2=A2 increase on an item, it may not seem important enough to spend much time on. Until you start thinking of how many of those items you buy during a year. Then you find that there's enough money sitting on the table to make it well worth your while to negotiate.

Here are some other examples of funny money:

Interest rates expressed as a percentage rather than a dollar amount.
The amount of the monthly payments being emphasized rather than the true cost of the item.
Cost per brick, tile, or square foot rather than the total cost of materials.
An hourly increase in pay per person rather than the annual cost of the increase to the company.
Insurance premiums as a monthly amount rather than an annual cost.
The price of land expressed as the monthly payment.

Businesses know that if you're not having to pull real money out of your purse or pocket, you're inclined to spend more. It's why casinos the world over have you convert your real money to gaming chips. It's why restaurants are happy to let you use a credit card although they have to pay a percentage to the credit card company.

So, when you're negotiating break the investment down to the ridiculous because it does sound like less money, but learn to think in real money terms. Don't let people use the Funny Money Gambit on you.

4. Concentrate on the Issues. Effective negotiators know that they should always concentrate on the issues and not be distracted by the actions of the other negotiators.

Have you ever watched tennis on television and seen a highly emotional star like John McEnroe jumping up and down at the other end of the court. You wonder to yourself, "How on Earth can anybody play tennis against somebody like that? It's such a game of concentration, it doesn't seem fair."

The answer is that good tennis players understand that only one thing affects the outcome of the game of tennis. That's the movement of the ball across the net. What the other player is doing doesn't affect the outcome of the game at all, as long as you know what the ball is doing. So in that way, tennis players learn to concentrate on the ball, not on the other person.

When you're negotiating, the ball is the movement of the goal concessions across the negotiating table. It's the only thing that affects the outcome of the game; but it's so easy to be thrown off by what the other people are doing, isn't it?

Effective negotiators concentrate on the issues, not on the personalities.

You should always be thinking, "Where are we now, compared to where we were an hour ago or yesterday or last week?"

Secretary of State Warren Christopher said, "It's okay to get upset when you're negotiating, as long as you're in control, and you're doing it as a specific negotiating tactic." It's when you're upset and out of control that you always lose.

That's why salespeople will have this happen to them. They lose an account. They take it into their sales manager, and they say, "Well, we lost this one. Don't waste any time trying to save it. I did everything I could. If anybody could have saved it, I would have saved it."

So, the sales manager says, "Well, just as a public relations gesture, let me give the other side a call anyway." The sales manager can hold it together, not necessarily because he's any brighter or sharper than the salesperson, but because he hasn't become emotionally involved with the people the way the salesperson has. Don't do that. Learn to concentrate on the issues.

5. Always Congratulate The Other Side. When you're through negotiating, you should always congratulate the other side. However poorly you think the other person may have done in the negotiations, congratulate them. Say, "Wow-did you do a fantastic job negotiating that. I realize that I didn't get as good a deal as I could have done, but frankly, it was worth it because I learned so much about negotiating. You were brilliant." You want the other person to feel that he or she won in the negotiations.

Don't think of this as being disingenuous or manipulative. Look upon it as the ultimate in courtesy for the conqueror to congratulate the vanquished.

When the British army and navy went down the Atlantic to recapture the Falkland Islands from the Argentineans, it was quite a rout. Within a few days, the Argentine navy lost most of its ships and the victory for the English was absolute. The evening after the Argentinean admiral surrendered, the English admiral invited him on board to dine with his officers and congratulated him on a splendid campaign.

Effective negotiators always want the other parties thinking that they won in the negotiations. It starts by asking for more than you expect to get. It continues through all of the other tactics that are designed to service the perception that they're winning. It ends with congratulating the other side.
If you let these five principles guide your conduct when you're negotiating, they will serve you well and help you become a highly effective negotiator.

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Oct 28, 2008

Bracket Your Objective

Whether = you're bargaining in your favorite antique store, negotiating = for an increase in pay, or trying to get the rock-bottom price for a new = car, you'll do better if you use a technique that negotiators = call Bracketing. This means that your initial proposal should be an = equal distance on the other side of your objective as their proposal. = For example: <ul> <li> The antique dealer is asking $1200 for that antique = desk that would be perfect in the corner of your living room. You are = willing to pay $1000. You should offer him $800. <li> You hope that your boss will give you a 10 percent = increase in pay. You should ask him for 20 percent. = <li> The car dealer is asking $25,000 for the car. You want = to buy it for $22,000. You should make an opening offer of = $19,000. </li> </li></li></ul> Of course = it's not always true that you'll end up in the middle, = but that is a good assumption to make if you don't have anything = else on which to base your opening position. Assume that = you'll end up in the middle, mid-way between the two opening = negotiating positions. If you track that, I think that how often it = happens will amaze you. In little things and in big = things. In little = things. Your son comes to you and says he needs $20 for a fishing trip = he's going to take this weekend. You say, "No way. = I'm not going to give you $20. Do you realize that when I was = your age I got 50 cents a week allowance and I had to work for that? = I'll give you $10 and not a penny more." Your son says, "I can't do it for $10, = dad." Now you have = established the negotiating range. He's asking for $20. = You're willing to pay $10. See how often you end up at = $15. In big things. = In 1982, the United States was negotiating the pay-off of a huge = international loan with the government of Mexico. They were about to = default on an $82 billion dollar loan. Their chief negotiator was Jesus = Herzog, their finance minister. Treasury Secretary Donald Regan and = Federal Reserve Board Chairman Paul Volcker represented the United = States. In a creative solution, the US negotiators asked Mexico to = contribute huge amounts of petroleum to our strategic petroleum reserve, = which Herzog agreed to do. That = didn't settle it all, however. The U.S. proposed to the Mexicans = that they pay a $100 million dollar negotiating fee, which was a = politically acceptable way for them to pay the the U.S. accrued = interest. When President Lopez Portillo heard what we were asking for, = he went ballistic. He said the equivalent of: You tell Ronald Reagan to = drop dead. We're not paying the United States a negotiating fee. = Not one peso. So now they = had the negotiating range established. The U.S. asked for $100 million = dollars. Mexico offered zero. Guess what they ended up paying the United = States? That's right. $50 million = dollars. So often, in = little things and in big things, we end up splitting the difference. = With bracketing, effective negotiators are assured that if that happens, = they still get what they want. To bracket, = you must get the other person to state his position first. If the other = person can get you to state your position first, then he can bracket you = so that, if you end up splitting the difference as so often happens, he = ends up getting what he wanted. That's = an underlying principle of negotiating: Get the other person to state = his position first. It may not be as bad as you fear, and it's = the only way you can bracket his proposal. Conversely, = don't let the other person trick you into committing first. If = the status quo is fine with you, and there is no pressure on you to make = a move, be bold enough to say to the other person, = "You're the one who approached me. The way things are = satisfies me. If you want to do this, you'll have to make a = proposal to me." Another = benefit of bracketing is that it tells you how big your concessions can = be as the negotiation progresses. Let's take a look at how this = would work with the three situations described = earlier: <ul> <li> The antique dealer who is asking $1200 for that = antique. You are willing to pay $1000. You offer him $800. He comes down = to $1150, which means that you can raise your offer to $850, and still = have your objective mid-way between the two proposals that are on the = table. <li> You hope that your boss will give you a 10 percent = increase in pay, so you asked him for 20 percent. He offers you 5 = percent, so you can now lower your demand to 15 percent. = <li> The car dealer who is asking $25,000 for the car. You = want to buy it for $22,000. You made an opening offer of $19,000. Then = if the dealer comes down to $24,500, you can go up to $19,500 and you = will still have your objective bracketed. If the dealer's next = move is to $24,200, you can also shift your position by $300 and go to = $19,800. </li> </li></li></ul> There's a danger here, however. You should not = become so predictable with your responses that the other side cannot = detect your pattern of concessions. In this article we've = illustrated bracketing with mathematically computed concessions to make = the point clear, but you should vary your moves slightly so that your = reason for making a move cannot easily be = determined. If you want to = be a better bargainer, take a tip from the professional negotiators. Get = the other side committed to a position first, and then bracket your = objective. You're far more likely to end up with what you = want.

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Aug 11, 2008

Nibbling

If You Don't Feel = You're Getting Enough Out of a Negotiation, Nibble for More at = the End Negotiators know that by using the Nibbling tactic, you can = get a little bit more even after you have agreed on = everything. You = can also get the other person to do things that he or she had refused to = do earlier. Car salespeople understand this, don't they? They = know that when they get you on the lot, a kind of psychological = resistance has built up to the purchase. They know to first get you to = the point where you're thinking, "Yes, I'm = going to buy a car. Yes, I'm going to buy it = here." Even = if it means closing you on any make and model of car, even a stripped = down model that carries little profit for them. Then they can get you = into the closing room and start adding all the other little extras that = really build the profit into the car. So, the principle of Nibbling tells you that you can = accomplish some things more easily with a Nibble later in the = negotiations. Children are brilliant Nibblers, aren't they? If you = have teenage children living at home, you know that they don't = have to take any courses on negotiating. But just to stand a chance of = surviving the whole process of bringing teenagers up you HAVE to be a = master negotiator, because they're naturally brilliant at it. = Not because they learn it in school but because when they're = little everything they get, they get with negotiating skills. = Think = about it - children have virtually NO leverage over adults except that = which they create through negotiation tactics. So of course they get = VERY good at it. They learn when to cry, when to smile, when to be = especially cute and when to be terribly stubborn. And = they DEFINITELY know when and how to nibble: "Dad, can I borrow the car for a couple of = hours?" "Sure son..." "Thanks... could I get next week's allowance = in advance?" "No. You know the rules about = that." "How about just a few bucks for = gas?" "Uh, OK. But make sure you're back in time = for supper." "But I wanted to go to a movie. It won't be = over until later." "I thought you were only going to borrow the car for = a couple of hours." "Maybe five or six. Could I get HALF of my allowance = in advance?" You = get the idea - What's happening here is that a person's = mind always works to reinforce decisions that it has just made. = Effective negotiators know how this works and use it to get the other = side to agree to something that he or she wouldn't have agreed = to earlier in the negotiation. Why = is Nibbling such an effective technique? To find out why this works so = well, a couple of psychologists did a study at a racetrack in Canada. = They studied the attitude of people immediately before they placed the = bet and again immediately after they placed the bet. They found out that = before the people placed the bet, they were uptight, unsure, and anxious = about what they were about to do. Compare this to almost anyone with = whom you negotiate: They may not know you, they may not know your = company, and they certainly don't know what's going to = come out of this relationship. Chances are they're uptight, = unsure, and anxious. At = the race track, the researchers found out that once people had made the = decision to go ahead and place the bet that suddenly they felt very good = about what they had just done and even had a tendency to want to double = the bet before the race started. In essence, their minds did a flip-flop = once they had made the decision. Before they decided, they were fighting = it; once they'd made the decision, they supported = it. If = you're a gambler, you've had that sensation, = haven't you? Watch them at the roulette tables in Atlantic City = or Vegas. The gamblers place their bets. The croupier spins the ball. At = the very last moment, people are pushing out additional bets. The mind = always works to reinforce decisions that it has made = earlier. So = one rule for effective negotiators is that you don't necessarily = ask for everything up front. You wait for a moment of agreement in the = negotiations, then go back, and Nibble for a little extra. = You = might think of the negotiating process as pushing a ball uphill, a large = rubber ball that's much bigger than you. You're = straining to force it up to the top of the hill. The top of the hill is = the moment of first agreement in the negotiations. Once you reach that = point, then the ball moves easily down the other side of the hill. This = is because people feel good after they have made the initial agreement. = They = feel a sense of relief that the tension and stress is over. Their minds = are working to reinforce the decision that they've just made, = and they're more receptive to any additional suggestions you may = have. Always go back at the end to make a second effort on something = that you couldn't get them to agree to earlier. Look = out for people nibbling on you. There's a point in the negotiation when you are very = vulnerable, and that point is when you think the negotiations are all = over. You've probably been the victim of a Nibble at one = time or another. For example: You've been selling a car or a = truck to someone. You're finally feeling good because = you've found the buyer. The pressure and the tension of the = negotiations have drained away. He's sitting in your office = writing out the check. But just as he's about to sign his name = he looks up and says, "That does include a full tank of gas, = doesn't it?" You're at your most vulnerable = point in the negotiations, for these two reasons: <ol> <li> You've just = made a sale, and you're feeling good. When you feel good, you = tend to give things away that you otherwise wouldn't. = <li> You're = thinking, "Oh, no. I thought we had resolved everything. I = don't want to take a chance on going back to the beginning and = re-negotiating the whole thing. If I do that, I might lose the entire = sale. Perhaps I'm better off just giving in on this little = point."</li> </li></ol> So, = you're at your most vulnerable just after the other person has = made the decision to go ahead. Look out for people Nibbling on = you Making a huge sale has excited you so much that you = can't wait to call your sales manager and tell her what = you've done. The buyer tells you that he needs to call = purchasing and get a purchase order number for you. While he's = on the telephone, he puts his hand over the mouthpiece and says, = "By the way, you can give us 60 days on this, can't = you? All of your competitors will." Look = out for people Nibbling on you. Because you've just made a big = sale, and you're afraid to reopen the negotiations for fear of = losing it, you'll have to fight to avoid the tendency to make = the concession. Countering the Nibble The = counter-tactic to the Nibble is to gently make the other person = feel-cheap. You have to be very careful about the way you do this = because obviously you're at a sensitive point in the = negotiation. You = smile sweetly and say: "Oh, come on, you negotiated a fantastic = price with me. Don't make us wait for our money, too. Fair = enough?" So, that's the Counter Gambit to the Nibble = when it's used against you. Be sure that you do it with a big = grin on your face, so that they don't take it too = seriously. So, = consider these points when you go into = negotiations: <ul> <li> Are there some = elements that you are better off to bring up as a Nibble, after you have = reached initial agreement? <li> Do you have a plan to = make a second effort on anything to which you can't get them to = agree the first time around? <li> Are you prepared for the possibility of them Nibbling on = you at the last moment? </li> </li></li></ul> So, = effective negotiators always take into account the possibility of being = able to Nibble. Timing is very critical-catching the other parties when = the tension is off and they're feeling good because they think = the negotiations are all over. On = the other hand, looking out for the other side Nibbling on you at the = last moment, when you're feeling good. At that point, = you're the most vulnerable and liable to make a concession that = half an hour later you'll be thinking-why on Earth did I do = that? I didn't have to do that. We'd agreed on = everything already. Key = points to remember: <ul> <li> With a well-timed Nibble, you can get things at the end of = a negotiation that you couldn't have gotten the other side to = agree to earlier. <li> It works because the other person's mind reverses = itself after it has made a decision. He may have been fighting the = thought of buying from you at the start of the negotiation. After he has = made a decision to buy from you, however, you can Nibble for a bigger = order, upgraded product, or additional services. = <li> Being willing to make that additional effort is what = separates great salespeople from merely good salespeople. = <li> Stop the other person from Nibbling on you by showing her = in writing the cost of any additional features, services, or extended = terms, and by not revealing that you have the authority to make any = concessions. <li> When the other person Nibbles on you, respond by making = him feel cheap, in a good-natured way. = <li> Avoid post-negotiation Nibbling by addressing and tying up = all the details and using Gambits that cause them to feel that they = won. </li> </li></li></li></li></li></ul> If you HAVE to give in to a = Nibble Always get SOMETHING in return if you have to give in to a = nibble. Even if it is something that is relatively small and = insignificant, it is important that the other party pays some sort of = price for the Nibble. Because at this point you are training the other party - = if they Nibble on you and you give in, without getting something in = return, they will tend to come back and Nibble some more. Again and = again and again. Example: A car salesman thought he had a deal closed until = the prospective buyer said "We've got a deal, IF you = can throw in a set of new tires." The car salesman = didn't give in right away, but eventually said "With = the deal we're giving you on the car, there's no way I = can afford the cost of new tires, but I CAN go on the lot and see if = we've got a similar vehicle with ALMOST new tires we can switch = out on your vehicle. Then he made the prospective buyer walk around the = car lot with him to find a set of "almost new" tires = he would swap out. So the prospective buyer got MOST of his Nibble, but he = paid the price in a) Time spent walking the lot and b) Feeling a little = cheap to be going through so much trouble for a set of "almost = new" tires. If the salesperson had = just gone ahead and given a new set of tires, the Nibbling would likely = have continued. Because once a Nibbler gets a taste of getting = "free stuff" just for asking, with no additional price = to pay, then they'll never stop asking. <= /p>

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Jul 23, 2008

8 Key Negotiation Principles

According to the Rolling Stones, "You can't = always get what you want." The question now becomes, = "How many of the stakeholders can get what is in their = interests?" If a business is to succeed in today's = climate, everyone must be prepared to negotiate to arrive at favorable = results. Negotiating is an art practiced by = virtually everyone; it is a craft practiced by few. There are many = techniques to making negotiation work. If you pay careful attention to = the following 8 key principles, you should find that negotiating, with = all the stakeholders who are clamoring for your attention, will yield = more efficiency, less stress, and greater long-term = success. <ol style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10px; FONT-FAMILY: Arial = Unicode MS"> <li> Be = Conscious of the difference between positions and = interests. If you = can figure out why you want something - and why others want their = outcome - then you are looking at interests. Interests are the building = blocks of lasting = agreements. <li> Be = Creative. Anyone can do things the same old way. Using brainstorming techniques, listening = to outlandish proposals and opening up to unanticipated possibilities = expands agreement opportunities. If you respond with new ideas and do = the unexpected, you can open doors to far greater gains than when you = behave predictably. Creativity can make everyone look = good. <li> Be = fair. If people = feel a process is fair, they are more likely to make real commitments = and less likely to walk away planning ways to wriggle out of the = agreement. Sometimes things are helped when a neutral, external = authority is used to measure fairness - a dictionary, a lab test, or an = academic article, for = instance. <li> Be = prepared to commit. You shouldn't make a commitment unless you can fulfill = it. Your commitment isn't worth much unless the parties to the = negotiation are Drop-Dead Decision-Makers. Moreover, commitment is not = likely to result unless all parties feel the process has been = fair. <li> Be an = active listener. Communication takes place when information passes from a source = to a receiver. If you spend all of your listening time planning how to = zing the other party, then, when they finally stop talking, you = haven't heard them. Focus on what others say, both on their = words and their underlying meaning. = </li> </li></li></li></li></ol> This will help you understand the interests = upon which agreement can be based. When your response makes it clear = that you've really been listening (and after the other party = gets over the initial shock), they, too, may be more prepared to listen. = Active listening can change the rules of the game and raise the level of = civility in the negotiation. <ol start=3D"6" style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10px; = FONT-FAMILY: Arial Unicode MS"> <li> Be = conscious of the importance of the relationship. Most of your negotiation is with repeaters = (people you run across time after time such as your spouse and kids). = The same is true for borrowers, directors, and representatives of = affiliated institutions. If you understand the relative priority of the = relationship, it can be easier to know when giving on a particular point = may yield short term costs but long term = gains. <li> Be aware = of BATNAs. BATNA = stands for the Best Alternative To a Negotiated Agreement. Your BATNA is = the situation you want to improve by negotiating with a given party or = set of parties. If you can improve things on your own, you don't = need to negotiate. = </li> </li></ol> But BATNA is not your bottom line. It is a = measure of the relative value of negotiating a particular issue with a = particular party -- or whether you can fall back on better alternatives. = Be Prepared. In order to negotiate effectively, efficiently, and wisely, = it is crucial to prepare. Your job is not to outline a perfect, total = solution; that would be a positional approach. = Preparation means studying the interests = and BATNAs of every possible party. It means understanding the short and = the long term consequences you use and the substantive results you = pursue. Doing your homework can save a lot of time. = <ol start=3D"8" style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10px; = FONT-FAMILY: Arial Unicode MS"> <li> Continually Enhance Your Negotiation Skills. = Enhancing your negotiating skills is an = important element of personal development. Helping your colleagues and = staff to negotiate better will save time, reduce stress, and increase = productivity. The changing cast of stakeholders means that successfully = negotiating the minefields in the business world can be crucial to your = own health and = success.</li> </ol>

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Jul 10, 2008

Resolving Conflicts

Life = is far easier when people have the sense to see things our way. In the = real world, however, capital planning, corporate borrowing, annual = budgeting, and priority setting all tend to require that people from = different organizations - or even our own people with a different point = of view - find satisfactory means to reach = agreement. For = many decision-makers, annual obligations like business plan reviews and = budget approvals tend to coincide with increased levels of stress and = anxiety. We are well-prepared for the substance to be decided; = it's the process that is so unsettling. It = can be troublesome if the short-term objective of minimizing conflict = gets in the way of developing and achieving long-range goals. = Interest-based negotiation techniques can help us focus our energy on = the process and guide that process towards yielding a satisfactory = result. Most = negotiations are repeat performances. We tend to deal with the same = bankers, suppliers, clients, directors, managers, etc., for a long time. = It is important to recognize and give proper weight to the context in = which a negotiation is taking place; if it is within an on-going = relationship, the significance of that relationship must be = considered. We = can take positive steps to prepare for the decision-making process and = we can monitor our own behavior - and that of other participants -- as = the process goes forward. By following a few common sense rules we can = reduce conflict and turn it into cooperation and reach solutions that = really work for all the participants. 1. Separate the people from the = problem. Religion teaches us to hate the sin not the = sinner. If we view the problem as that which needs to be resolved rather = than viewing someone holding a contrary viewpoint as a person to be = defeated, the odds of a successful collaboration increase. One specific technique that can work is to change the = shape of the table rather than sitting opposite your = 'opponents', arrange the seating so that all the parties = are sitting together facing a flip chart or blackboard where the problem = is presented. That makes it clear that all the participants are facing = the problem together, that instead of it being 'us' = against 'them', it is a case of 'all of = us' against 'it'. 2. Distinguish between interests and = positions. The classic story to illustrate this describes = two sisters fighting over the only orange in the family larder. Each = sister must have the entire orange for herself, any less is impossible. = A wise parent asks each of the girls (in private) why she wants the = orange. One explains she wants to drink the juice; the other wants to = use the rind to cook a pudding. What each sister wants is her position, = why she wants it is her interest. In this case, the simple solution is = to give the cook the rind after the juice has been squeezed for the = thirsty sister - thus meeting the interests of both. When preparing for a negotiation, or after it has begun, = don't just ask "What do they want?" It is also = important to ask, "Why do they want it?" It is equally = important - and often more difficult - to ask the same questions about = your own views. Many successful negotiators find they will be more = successful if they focus on understanding their interests as they enter = discussions. If they haven't started out with a perfect package, = the ideas of others may actually improve their final result. Negotiators who arrive with a complete package can = create real problems. Modifications to their ideas might be taken = personally, they may be stubborn, and reaching a satisfactory resolution = is made more difficult. 3. Consider = your BATNA (Best Alternative To a Negotiated Agreement). = If you do not reach an agreement with the other, does that really make = things worse for you? When you're selling an antique Rolls Royce = and have received an offer of $43,250, you know what another potential = buyer has to do to get you interested. Of course, the first offerer may = plan to use the car for chauffeuring wedding parties while a second = offerer collects and restores antique cars and preserves them indoors. = In determining you BATNA, a straightforward review of your interest will = give you the clearest picture. There's an = old American country & western song about playing poker that = summarizes the concept of BATNA: "You have to know when to hold = and know when to fold." If you accept your BATNA, you know when = you can simply turn your back on the negotiations. But it is important = not to ignore the other party's BATNA. The relative strength of = each party's BATNA will determine the balance of power each can = exercise. 4. Silence is = golden. This is true for two reasons: If one party is = highly opinionated or emotional, if their approach is threatening or = extremely demanding, keeping quiet after they finish speaking can be = quite unsettling to them. It is like jujitsu; you allow them to be = tripped up by their own forcefulness. Most people are troubled by = silence in the midst of heated discussion. Sometimes silence is viewed = as disapproval -- but since no specific disapproval has been voiced, it = cannot be treated as an attack. It has happened on many occasions that, = when met with silence, people have modified their previous statements to = make them more palatable. Silence is an important = element in the crucial tool called Active Listening. The job of a good = negotiator is to listen to and understand what others are saying. After = all, you can't make an intelligent response to an opinion you do = not understand. The discipline of Active Listening requires that you = focus on what another person is saying; don't spend your time = shaping a stinging response that will put them in their place. Active Listening has some interesting consequences: The = listener may actually be able to get a clearer picture of the other = party's ideas. And when the listener's response shows = just how good a job he or she has done listening, it can shock the other = party: "Good grief, they actually paid attention to = me!" One other terrific result of Active = Listening is that the discipline of focusing on other opinions can also = give the listener the chance to reflect on the process and strategy. = Stepping aside and taking a dispassionate view of the goings-on can make = one a far more effective negotiator. 5. Pursue Fairness. If all the = participants view the process as fair, they are more likely to take it = seriously and 'buy into' its result. Moreover, the focus = on fairness can have an important impact on the substantive result. If = the parties to a negotiation can agree on standards against which = elements of the agreement can be measured, it can give each a = face-saving reason for agreeing. Referral to the Base Rate of the other = major lending institutions, an industry standard of marketability, or = other common measures, can validate the agreement the parties = reach. To be considered successful, an agreement = must be durable. Parties who walk away from the table grumbling may = regret their commitment and only honor it grudgingly. If they end up = looking for excuses to get out from under an unwanted result, the gains = achieved by the other side may prove to be short-term indeed. 6. Only one person can get angry at a = time. This is yet another means to help individuals keep = a cool head and pay attention to the process and the strategy, as well = as the substance of the negotiation. If it's not your = 'turn' to be angry, the exercise of restraint can be = turned into a positive opportunity to observe what is going on with a = clear eye. No less important, yelling at each other is not negotiation; = it is confrontation. In those situations there may possibly be a = 'winner'; but it is even more likely there will be a = 'loser'. In times past, when two = property owners had a disagreement, they would hire knights and wage war = to reach a conclusion. Then somebody invented lawyers, and the = problem-solving process became one of waging law. Our society has = reached a level of sophistication in which we recognize that the costs = of waging war - or waging law - are terribly high. With the use of good = negotiation skills, we have the capacity to reach conclusions in a more = satisfactory manner: we can wage PEACE.

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Jun 30, 2008

Cash isn't Always King

When You're Negotiating, Money Isn't As = Important as You May Think. There are many things that are more = important than money. A reporter at a press conference once = asked Astronaut Neil Armstrong to relate his thoughts as Apollo 11 = approached the moon. He said, "All I could think of was that I = was up there in a spaceship built by the lowest bidder." A cute = line, but he was falling prey to a popular misconception that the = government must do business with anybody who bids the lowest price. Of = course, that's not true, but it's amazing how many = people believe it. Cost = is far from the top of the list of what's important to most = government procurement professionals. They are far more concerned with a = company's experience, the experience of the workers and the = management team assigned to the product, and their ability to get the = job done on time. The rules say that they should buy from = the lowest bidder who they feel is capable of meeting their = specifications. If they know that a particular supplier is the best one = for them, they simply write the specifications to favor that = supplier. Of course, that is the key to selling = to government agencies, whether it is the city, county, state, or = federal government. If you want to do business with any level of = government, you should become known as the most knowledgeable person in = your industry, so that when the agency starts to prepare bid = specifications, they welcome your advice on what they should specify. = Fortunately, the trend is away from this type of direct bidding and = toward the government agency hiring a private sector project manager to = supervise the work. By inserting this middle person, they avoid the = obligation to let bids and instead let the middle person negotiate the = best deal. So even with the federal government, = price is far from the most important thing. When you're dealing = with a company that doesn't have legal requirements to put out a = request for bids, it's far from the top of the list. Just for = the fun of it, review the following list of things that are probably = more important than price to buyers: <ul> <li> The conviction that they are getting the best deal = you're willing to offer. <li> The quality of the product or service. This is an = interesting one because I frequently hear from salespeople that they = sell an item that has become a commodity, and it doesn't matter = which source the buyer uses and that the buyer wants only the lowest = price. Baloney. If that were true 90 percent of companies supplying such = products or services would be out of business. If that were true, the = only company that could exist in the market place would be the one = offering the lowest price, and that's a nonsensical = proposition. <li> The terms that you offer. Many large companies make more = on the financing of their product than they do the sale of the = product. <li> The delivery schedule that you offer. Can you get it to = them when they need it and be counted upon to keep on doing that? Do you = offer a just-in-time delivery system? Are you willing to let them = warehouse the product and bill them as they use it? = <li> The experience you have in delivering the product or = service. Are you familiar with their type of company and the way they do = business? Are you comfortable with that kind of = relationship? <li> The guarantees that you offer and, in general, how well = you stand behind what you do. <li> Return privileges. Will you take it back if it = doesn't sell? Will you inventory their stock and do that = automatically for them? <li> Building a working partnership with you and your company. = The old adversarial relationship between vendor and customers is = disappearing as astute companies realize the value of developing a = mutually beneficial partnership with their suppliers. = <li> Credit. A line of credit with your company may be more = important than price, especially to a start-up company or in an industry = where cash flow is cyclical, and you could take up the slack during the = lean months. <li> Your staff. When the contract calls for something to be = made (aerospace, construction) or a service to be performed (legal, = audit or accounting work, computer services) other factors may be more = important than price: </li> </li></li></li></li></li></li></li= ></li></li></ul> a) The quality of the = workers that you will assign to the job. b) The level of management = that you will assign to oversee the work. c) The ability and = willingness to tailor your product and packaging to their = needs. <ul> <li> The respect that you will give them. Many times a company = will move from a large vendor to a smaller one because they want to be a = substantial part of the vendor's business to have more = leverage. <li> Peace of mind. = <li> Reliability. Can they trust that the quality of your = product and service will stay high? = </li> </li></li></ul> Finding Out How Much a = Seller Will Take=20 Now = let's look at some techniques to find out the seller's = lowest price. When you are buying, the negotiating range of the seller = ranges from the wish price (what they're hoping you'll = pay) all the way down to the walk-away price (at anything less that this = they will not sell at all). The = same is true in reverse with the buyer. How do we uncover the = seller's walk-away price? Let's say that your neighbor = is asking $15,000 for his pick-up truck. Here are some techniques you can use to = uncover his lowest price: <ul> <li>Ask. = That may seem incredibly naive, but if he's not a good = negotiator, he may just tell you what's on his mind. Of course, = an effective negotiator won't fall for that, but many people = will. If he's an effective negotiator, he will automatically = turn the tables on you by saying, "I think $15,000 is a very = fair price, but if you want to make me an offer somewhere close to that, = I'll talk it over with my wife. What is the best price you would = offer me?" </li> </ul> Of course, the WAY you ask for = his lowest price makes a big difference. Try = these approaches: "I'm really interested only in a pick up = truck for occasional use, not one as fine as yours. I'm looking = at one that the owner's asking only $5,000 for. However, I = thought I'd be fair to you and ask you what the least = you'd take would be." Or be a = =E2=80=9CReluctant Buyer=E2=80=9D - After spending a lot of time looking = it over and asking questions you say, "I really appreciate all = the time you've taken with me on this, but unfortunately its not = what I was looking for. But I wish you the best of luck with = it." Then, when you're halfway into your car to leave = you say, "Look, I really want to be fair to you because you = spent so much time with me, so just to be fair to you, what is the very = lowest price you would let it go for?" = Drop = out of contention but tell him you have a friend who might be = interested. You might say, "Thanks for showing it to me but = it's really not what I'm looking for. However, I do have = a friend who's looking for something like this, but he = doesn't have much money. What's the very least = you'd take?" Nibble for a finder's = fee. "If my friend did buy it from you, would you give me a = $500 finder's fee?" Offer = something in return to see if it will cause them to lower the price. = "Would you take less if I let you borrow it once in a = while?" <ul> <li> Have other people make super-low offers to lower the = expectation of the seller. This is unethical of course, but we will tell = you about it so that you will recognize it when it's used = against you. If the seller has high hopes of getting $15,000 for his = truck, your offer of $10,000 may sound like an insult. However if = he's had only two offers so far, one for $7,000 and the other = for $8,000, when you come along and offer him $10,000, he may jump at = it. <li>Make a low offer subject to the = approval of a higher authority. "My buddy and I are going in on = this so I'll have to run this by him, but would you take = $10,000?" </li> </li></ul> Now = let's look at some techniques that a seller could use to find = out how much a buyer is willing to pay. Let's say that you sell = switches to computer manufacturers. Here are some techniques you could = use: <ul> <li> Raise their top offer by hypothesizing what your higher = authority might be willing to do. Perhaps they buy similar switches now = for $1.50 and you're asking $2.00. You might say, "We = both agree we have a better quality product. If I could get my boss down = to $1.75, would that work for you?" Protected by Higher = Authority, it doesn't mean that you have to sell them to him for = $1.75. However, if he acknowledges that $1.75 might be workable, you = have raised his negotiating range to $1.75 so that you're only = 25=C2=A2 apart instead of 50=C2=A2.o Determine their quality standards = by offering a stripped down version. "We may be able to get = down below $1.50 if you don't care about copper contacts. Would = that work for you?" In this way you probably get them to = acknowledge that price isn't their only concern. They do care = about quality. <li> Establish the most they can afford by offering a higher = quality version. "We can add an exciting new feature to the = switch, but it would put the cost in the $2.50 range." If the = buyer shows some interest in the feature, you know that they could pay = more. If he or she says, "I don't care if it's = diamond plated. We can't go over $1.75," you know that = fitting the product to a price bracket is a critical issue. = <li> Remove yourself as a = possible vendor. This disarms the buyer and may cause him to reveal some = information that he wouldn't if they thought you were still in = the game. You say, "Joe, we love doing business with you, but = this item is just not for us. Let's get together on something = else later." Having disarmed Joe in this way, a little later, = you can say, "I'm sorry we couldn't work with = on the switches, but just between you and me what do you realistically = think you can buy them for?" He may well say, "I = realize that $1.50 is a lowball figure, but I think I'll get = somebody to come down to around $1.80."As you can see from all = we've talked about here, there's a lot to be said about = the subject of price. </li> </li></li></ul> <= /p></p&= gt;=

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Jun 23, 2008

Expect to WIn

Much = of the research on effective negotiation points toward HIGH EXPECTATIONS = as one of the fundamental keys to a successful outcome. = As = much as we emphasize the importance of win/win negotiating and = "putting yourself in the other person's shoes" = it is also important that you feel comfortable expecting a VERY positive = outcome for yourself. Don't be afraid to have unreasonably high = expectations, as long as you can back them up with some tangible logic = and a process designed to move the other party in your = direction. In = addition to having high expectations, here are a few more tips for = effective negotiation: First Agree on the Terms and Scope = of the Negotiation. Lots of = negotiations get off to the wrong start because the parties involved = have not taken the time to define clearly the areas where they disagree. = Very often, parties will rush toward gaining positional advantage over = what they see the main issue to be, but before there is real agreement = on which issues are at stake, no real agreement is possible. = <ul> <li> Define where all parties agree and disagree - the = main sticking points become apparent and areas of possible agreement = come to light. <li> Discover possible areas of agreement - it sets a = more balanced tone as all parties proceed further. = <li> Define the scope of the dispute - you have = already begun to take subtle control of the following negotiating = process. </li> </li></li></ul> See Yourself from the Other = Party=E2=80=99s Point of View. "Empathy" does not mean soft, emotional feelings = of affection. It means the ability to put yourself in the other = person's shoes, to see the world from his/her point of view. = Empathy does not require "sympathy," it only requires = understanding. You can agree or disagree with = whatever the other party sees or believes, but you will do well to = understand it. By understanding it, you will have the advantage in = knowing how to present what you seek as a fair outcome in terms that the = other party will be able to accept and understand, rather than fear. = See the Other Party from Their = Point of View. You will be most = successful if you can advance your position so the other party can still = maintain the "ego" beliefs they hold most = important. =E2=80=9CTact is the ability = to see others as they see themselves=E2=80=9D - Abraham = Lincoln For example, if the other = parties see themselves as "tough negotiators," find = ways during the process to emphasize their "toughness" = - directly or, (better yet) indirectly - especially when you are making = progress in advancing your position. Be Honest, and Get Your Facts = Right. You can't negotiate = successfully if you lose or lack credibility. Never knowingly make a = false statement or assertion, but even that is not enough. Very often, = successful negotiation comes down to having more - and more accurate - = information than the other party. For that reason, be sure to do your = homework, so that you can speak of many facets of the issues at hand = with confidence. Use Silence To = Your Advantage. Loud displays, or = "blowing off steam" will almost always work to your = disadvantage. Experienced negotiators who use such styles know how to = feign such emotions at strategic points in time, in a purposeful = fashion. So stay cool. A corollary to this rule involves the use of = silence. It is a natural human reaction, especially during conflict, to = try to fill up silence, due to anxiety. But anxious people during = negotiations tend to say things that erode their positions. = By = being silent at the right moments, you can give the other party a chance = to see your strength, give voice to the thoughts behind their stated = positions - so if they are secretly giving in on the inside, you give = them a chance to do it for real. Find Some Objective, Fair Standards = All Sides Can Agree Upon. Take the = initiative early on to stake out some fair standard against which any = final solution can be judged. Tell the other = party you want to come to a fair solution that maximizes the outcome for = both of you, and propose some standard against which the results can be = measured. For example, if you are selling your = car, you may want to use the Kelly Blue Book - especially since Blue = Book values tend to be slightly higher than those found in other such = sources, so that this resource favors the seller, but is still a = recognized, fair standard. By setting the = standards for final judgment of the solution, you frame the issues, take = greater control of the process and frame up the standard to your = advantage.

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Jun 18, 2008

Good Cop / Bad Cop

This is one of the best negotiation gambits to use if you need = to put negotiating pressure on the other = side. Charles Dickens first wrote about it in his book Great = Expectations. In the opening scene of the story, the young hero Pip is = in the graveyard when out of the sinister mist comes a large, very = frightening man. This man is a convict, and he has chains around his = legs. He asks Pip to go into the village and bring back food and a file, = so he can remove the chains. The convict has a dilemma, however. He = wants to scare the child into doing as he's asked, yet he = mustn't put so much pressure on Pip that he'll be frozen = in place or bolt into town to tell the policeman. The = solution to the convict's problem is to use the Good Cop/Bad Cop = Gambit. Taking some liberty with the original work, what the convict = says in effect, is "You know, Pip, I like you, and I would = never do anything to hurt you But I have to tell you that waiting out = here in the mist is a friend of mine and he can be violent and = I'm the only one who can control him. If I don't get = these chains off-if you don't help me get them off-then my = friend might come after you. So, you have to help me. Do you = understand?" Good Cop/Bad Cop is a very effective way of = putting pressure on people, without = confrontation. You've seen Good Cop/Bad Cop used in the old police = movies. Officers bring a suspect into the police station for = questioning, and the first detective to interrogate him is a rough, = tough, mean-looking guy. He threatens the suspect with all kinds of = things that they're going to do to him. Then he's = mysteriously called away to take a phone call, and the second detective, = who's brought in to look after the prisoner while the first = detective is away, is the warmest, nicest guy in the entire world. He = sits down and makes friends with the prisoner. He = gives him a cigarette and says, "Listen kid, it's = really not as bad as all that. I've taken a liking to you. I = know the ropes around here. Why don't you let me see what I can = do for you?" It's a real temptation to think that the = Good Guy's on your side when, of course, he really = isn't. Then the Good Guy would go ahead and close on what = salespeople would recognize as a minor point close. "All I = think the detectives really need to know," he tells the = prisoner, "is where did you buy the gun?" What he = really wants to know is, "Where did you hide the = body?" Starting out with a minor point like that and then = working up from there, works very well, doesn't it? = The = car salesperson says to you, "If you did invest in this car = would you get the blue or the gray?" "Would you want = the vinyl upholstery or the leather?" Little decisions lead to = big ones. The real estate salesperson who says, "If you did = invest in this home, how would you arrange the furniture in the living = room?" Or, "Which of these bedrooms would be the = nursery for your new baby?" Little decisions grow to big = decisions. People use Good Cop/Bad Cop on you much more than you might = believe. Look out for it anytime you find yourself dealing with two = people. Chances are you'll see it being used on you, in one form = or another. For = example, you may sell corporate health insurance plans for an HMO and = have made an appointment to meet with the Vice-President of Human = Resources at a company that manufactures lawn mowers. When the secretary = leads you in to meet with the vice president, you find to your surprise = that the president of the company wants to sit in and listen in on your = presentation. That's negotiating two on one, which is not good, but = you go ahead and everything appears to be going along fine. You feel = that you have a good chance of closing the sale, until the president = suddenly starts getting irritated. Eventually he says to his vice = president, "Look, I don't think these people are = interested in making a serious proposal to us. I'm sorry, but = I've got things to do." Then he storms out of the room. = This really shakes you up if you're not used to negotiating. = Then the vice-president says, "Wow. Sometimes he gets that way, = but I really like the plan that you presented, and I think we can still = work this out. If you could be a little more flexible on your price, = then I think we can still put it together. Tell you what-why = don't you let me see what I can do for you with him?" = If you don't realize what they're doing to you, = you'll hear yourself say something like, "What do you = think the president would agree to?" Then it won't be = long before you'll have the vice-president negotiating for = you-and he or she is not even on your side. If = you think this is an exaggeration, haven't you, at one time or = another, said to a car salesperson, "What do you think you = could get your sales manager to agree to?" As if the = salesperson is on your side, not on theirs? Haven't we all at one time been buying real estate and = have found the property we want to buy, so we say to the agent that has = been helping us find the property, "What do you think the = sellers would take?" Let me ask you something. Who is your = agent working for? Who is paying her? It's not you, is it? She = is working for the seller and yet she has effectively played Good = Cop/Bad Cop with us. So, look out for it, because you run into it a = lot. Counter-Tactics to Good Cop/Bad = Cop The = first Counter-Tactic is simply to identify the fact that the tactic is = being used. Although there are many other ways to handle the problem, = this one is so effective that it's probably the only one you = need to know. Good = Cop/Bad Cop is so well known that it embarrasses people when they get = caught using it. When you notice the other person using it you should = smile and say, "Oh, come on-you aren't going to play = Good Cop/Bad Cop with me are you? Come on, sit down, let's work = this thing out." Usually their embarrassment will cause them to retreat from = the position. o You could respond by creating a bad guy of your own. = Tell them that you'd love to do what they want, but you have = people back in the head office who are obsessed with sticking to the = program. You can always make a fictitious bad guy appear more unyielding = than a bad guy who is present at the negotiation. You = could go over their heads to their supervisor. For example, if = you're dealing with a buyer and head buyer at a distributorship, = you might call the owner of the distributorship and say, "Your = people were playing Good Cop/Bad Cop with me. You don't approve = of that kind of thing, do you?" (Always be cautious about going = over someone's head. The strategy can easily backfire because of = the bad feelings it can cause. Sometimes just letting the bad guy talk resolves the problem, = especially if he's being obnoxious. Eventually his own people = will get tired of hearing it and tell him to knock it = off. You = can counter Good Cop/Bad Cop by saying to the Good Guy, "Look, = I understand what you two are doing to me. From now on anything that he = says, I'm going to attribute to you also." Now you have = two bad guys to deal with, so it diffuses the Gambit. Sometimes just = identifying them both in your own mind as bad guys will handle it, = without you having to come out and accuse them. If = the other side shows up with an attorney or controller who is clearly = there to play bad guy, jump right in and forestall their role. Say to = them, "I'm sure you're here to play bad guy, = but let's not take that approach. I'm as eager to find a = solution to this situation as you are, so why don't we all take = a win-win approach. Fair enough?" This really takes the wind = out of their sails. KEY = POINTS TO REMEMBER: <ul> <li> People use Good Cop/Bad Cop on you much more than you = might believe. Look out for it whenever you're negotiating with = two or more people. <li> It is a very effective way of putting pressure on the = other person without creating confrontation. = <li> Counter it by identifying it. It's such a = well-known tactic that when you catch them using it, they get = embarrassed and back off. <li> Don't be concerned that the other side knows what = you're doing. Even if they do it can still be a powerful tactic. = In fact, when you're negotiating with someone who understands = all of these Tactics, it becomes more fun. It's like playing = chess with a person of equal skill rather than someone whom you can = easily outsmart. </li> </li></li></li></ul>

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May 16, 2008

Practical Negotiation Tips

Whether we realize it or not, we negotiate things every day. = Many of these are "little things" (Who's going = to pick up the dry cleaning?...When can we get together for a = discussion?...How can I get you to return my voice mail message?) = Children negotiate for toys and sugar-filled treats. Spouses negotiate = for more time, more attention and more control. Employees negotiate for = better offices, bigger salaries, more responsibility, = etc. So = the ability to negotiate effectively can serve you in every area of you = life. Here are a few quick tips to help you develop this important life = skill: <ul> <li> Know what YOU want. Think through = exactly what you want - be specific and have valid reasons for why you = need it. Knowing what you want, and why, will help you to be clearer and = more confident. <li> Know what THEY want. Before you = start negotiating, it's important to have an idea of what the = other party would like the outcome to be, too. So think it through - why = do they need what you're offering/asking for? And do your = research - how can you make them happy? = <li> Be fair. If what you're = asking for is fair and justifiable (example: you'd like to earn = as much as someone you work equally as hard as) then you're much = more likely to get what you want. It's no good thinking - = "I want to go to Ibiza, therefore I need a pay rise, so give me = the money". Try and demonstrate how what you do is worth just = as much as other person's work - and you're on the way. = <li> Believe you're worth it. = You have to believe that you deserve your desired outcome. If you = don't, the moment your client or boss questions you, your = argument will fall apart because you don't have enough = confidence in it. Believe it, trust yourself - and rehearse it. = <li> Listen carefully. When your = boss/client is talking to you during negotiations, don't use = that time to plan your next line of attack - it's more important = that you listen to them and see their point of view. They'll = take you more seriously if you do, even if you disagree with them. = <li> Keep it friendly. Negotiating = isn't about confrontation; it's about two parties = reaching an amicable, mutually beneficial agreement. Keep that in mind = when you're talking and, even if you don't get what you = want this time, view it as good practice for the future. = <li> Have an = alternative. When you're discussing specifically = what you want, as well as what they want, work out what you'd be = prepared to walk away with if you're not successful. Is there an = acceptable alternative that will keep both parties happy in the = short-term? Throw this into the negotiation if it doesn't go in = your direction - everyone can compromise. = </li> </li></li></li></li></li></li></ul= >

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Apr 04, 2008

They Want to Pay More (Sometimes)

People want to pay more when there is a true justifiable = REASON for doing and they don't think they can get a better deal = elsewhere. Yes it is true. People DO want to spend = MORE... as long as they a) Have a justifiable REASON for doing so, and = b) They are convinced that they cannot get a better deal = elsewhere. Let's face it, does what you = pay for something really matter? If you're going to buy a new = automobile, does it matter if you spend $20,000 or $21,000? Not really, = because you'll soon forget what you paid for it, and the slight = increase in payments is not going to affect your lifestyle. What really = matters is the feeling that you got the best possible deal. You = don't want to go to work the next morning and have everybody = crowded around to admire your new car when somebody says, "How = much did you get it for?" You say, "I worked out a = terrific deal. I got them down to $21,000.""You paid = what?" he replies. "My friend bought one of those, and = he paid only $20,000. You should have gone to Main Street Auto = Mall." That's what hurts-the feeling that you = didn't get the best deal. The = objection that every salesperson hears most is the price objection. = "We'd love to do business with you, but your price is = too high." But in most cases this has NOTHING to do with your = price. You could cut your prices 20 percent across the board and = you'd still hear that objection. Because the people you're = selling to study negotiating skills too. They meet in groups at their = conventions and sit around in the bars saying things like, "Do = you want to have fun with salespeople? Just let them go through their = entire presentation. Let them take all the time they want. Then when = they finally tell you how much it costs, lean back in your chair, put = your feet up on the desk and say, 'I'd love to do = business with you, but your prices are too high.' Then try not = to laugh as they stammer and stutter and don't know what to say = next." Instead of letting this kind of thing = work you up into a sweat, adopt the attitude that negotiating is a game. = You learn the rules of the game, you practice, practice, practice until = you get good at it, and then you go out there and play the game with all = the gusto you can muster. Negotiating is a game that is fun to play when = you know what you're doing and have the confidence to play it = with vigor. The = next time you're trying to get somebody to spend money remember = that they really want to spend more money with you, not less. All you = have to do is give them a reason and convince them that there's = no way they could get a better deal. <= /p>

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Mar 17, 2008

12 Negotiation Skills

Whether you are working on a joint business venture, a new = job, the price of an auto or your child's new curfew, = negotiation is a key success skill. So how can you improve your = negotiation skills? Here are a dozen techniques to practice in every = negotiation. 1. Be Prepared. = This is not just the motto of the Boy Scouts. Preparation = is the single most important element in successful negotiations. In = negotiations, information is power. The more relevant information you = have, the better your position is. Preparation for your negotiations = cannot be overdone. Allow yourself adequate time to prepare prior = entering any negotiation. 2. = Understand The Needs of the Other Party. Put yourself in = the other party's shoes. What would they like to gain from the = negotiation? Write down as many possible goals as you can think of. = Prioritize your list in the order that you believe the other party = would. Identify the items you are willing to negotiate and those items = which are nonnegotiable. Tip - = once you think you have a good understanding of what the other party = wants from a negotiation, confirm this with them. You might say = something like "I know if I were in your shoes, the most = important things to me would be ______ and _____. Are those your biggest = priorities?" 3. Know What Your Needs = Are. What do you need out of the negotiations? More = money? More flexibility? Better opportunities? Access to broader = markets? Make a list of those things you would like to receive as a = result of the negotiations. Refine and prioritize your list before = starting the negotiation. Identify the items you are willing to = negotiate and those items which are nonnegotiable. This list and the one = created above will allow you to know what your true "bottom = line" is. 4. Manage the = Ongoing Relationships. With the exception of large = purchases, most negotiations are between parties involved in a long term = relationship. Whether the relationship is family, friends or business = associates, it will be necessary to continue to deal with your = "adversary" outside the context of the negotiation. = Always be sensitive to the potential impact of your negotiations on = these relationships. 5. Treat = Every Negotiation as a Unique Situation. Every = negotiation is different. Negotiating with a loved one is different than = buying an automobile. Buying an automobile is different from negotiating = with a new employer. The key difference is the relationship you wish to = have with your adversary once the negotiations are complete. When = negotiating with a loved one, you may be willing to make more = concessions in the interest of harmony. When buying an automobile = harmony may be less important than paying a fair price. Keep these = intangibles in mind when creating and prioritizing your lists. 6. Understand The Situational = Dynamics. In order to negotiate successfully, you must = understand the dynamics of the situation. Identify your role and the = role of your adversary. Know what are the "power = positions" of each role. The dynamics of negotiating in a = parent/child relationship are significantly different than the dynamics = of and employer/employee negotiation. Be certain your desires are = appropriate and achievable in terms of the situation. 7. Never Lie. Very few negotiations = are a single contact event. With the possible exception of making large = purchases, most parties involved in a negotiation have continued contact = after the negotiations are completed. When you are caught in a lie, and = it is inevitable that you will be, your future credibility will be = lost. It is possible to prepare to handle those = areas where the need to lie may be felt. Examine the areas where your = case is weak. Work to strengthen your case. In those areas that remain = vulnerable, prepare how you wish to handle them should they arise. = 8. Be Firm, and = Fair. Negotiation is not an "I win, you = lose" proposition. Webster's dictionary defines = negotiate as "to bring about by mutual agreement". The = best negotiators create "win - win" situations in = every negotiation. This does NOT mean that you are willing to accept a = lower offer just to help the other party "win" - this = means you are willing to invest the time and mental energy needed to = create a true win/win solution. 9. Don't Tip Your = Hand. It's never a good idea to lie in a = negotiation, but that doesn't mean you have to tell the other = party everything (or anything) that might give them an advantage. = Uncertainty is your key advantage in most negotiations. If your = adversary knows what you desire most, your negotiating position is not = as strong. Play it close to the vest. 10. Be Flexible. Understand that = negotiation frequently involves compromise. Look for creative solutions = to the problems presented in the negotiation. Make tradeoffs in order to = gain those elements you most desire. 11. Winning Isn't Everything. = It is easy to get caught up in the competitive spirit of a negotiation. = Remember that the point of negotiation is to reach a common agreement on = how to move forward. While it may be possible to bludgeon your adversary = into agreeing to your terms, this does not create the "mutual = agreement" that makes for a truly successful negotiation. = 12. Quit While You Are = Ahead. Too many people have to see just how far they can = push a negotiation. They have to try to get just one more concession. = This attitude can be a deal breaker. The best negotiations are brief and = to the point. Get agreement on your major points and stop. Additional = items can be addressed in subsequent negotiations. =

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Feb 22, 2008

Day-to-Day Deals

Consumers sometimes think of negotiations as intimidating, = formal proceedings that only happen in lawyers' offices, or = under high pressure in venues like car dealerships. In reality, people = are negotiating all the time. In = our daily lives, negotiating can be a means of making decisions with = other people in a civilized, productive way. What you can negotiate = ranges from what restaurant you'll have dinner at, to what movie = you're going to see, the purchase of a house [or] negotiating a = loan from a financial institution. Negotiations with teen-agers have financial implications, too: = when they want money, clothes or books. Deciding where to go on vacation = is a major financial decision. Negotiation really covers every area of = life. Virtually all people negotiate on a regular basis at work. It often help to look at most of these day-to-day = negotiations as episodes in ongoing relationships. You can start at the = dinner table, or in other private social situations. You think about = what you're doing and what you want to = accomplish. You = need to understand why you want what you want, what your interests are = and whether a given negotiator can be responsive to you. What good does = it do to ask your father-in-law for a favor if his wife is going to make = the actual decision? Zone of = Possible Agreement In some = cultures negotiation is highly choreographed. If in an Arab soukh = [market] you give a merchant his or her first asking price, = you've ruined their day. You're supposed to be outraged = by the price they are asking, and they are supposed to be outraged by = the first price you're offering. Try to = figure out your zone of possible agreement. We can't always do = that off the top of our heads, so asking questions helps us find out. = You might ask, "What kind of price range sounds = attractive?" Big-ticket items are = usually more open to negotiation; houses, cars, things like that. Hotel = rooms and airplane fares are, too. Ask the representative: "Is = this really the best price you can offer me?" The Most Common Mistakes Not being prepared is the most common negotiation = error, along with not understanding why you're looking or = something. You can say you want a blue dog, but WHY do you want it? Do = you want to make a fashion statement, or do you want a dog that will = scare everyone else? Understanding your CORE reasons for wanting = something will give you added negotiation = flexibility. A = very major mistake is getting emotional and taking the dealings = personally. "An adversary is not necessarily an = enemy," as Richard Nixon once said. That's why people = negotiate better on someone else's behalf. They can be more = cold-bloodedly analytical about somebody else's decision than = their own. Negotiations at = Work In the work environment, you = need an understanding of how badly they need you. Otherwise = you'll always feel at a disadvantage. You can only learn how = badly they need you by asking questions and doing homework. That gives = you a measure of the relative balance of power, and understanding the = balance of power gives you a sense of the leeway in negotiations. If you're being out-placed, or offered early = retirement, you may still have some leverage. Let's say they = have to downsize by 97 employees and 95 have agreed. Your leverage is = probably better at number 96 than if you are the first employee to sign = up. You have to understand the needs of the people making the = offer. Clearly, you have to look as best you can = at your short- and long-term interests. If you're downsized out = on the street, you may need enough money to pay the rent next month, but = in the long-term maybe another job would be better. Perhaps = you'll be able to quit the short-term job, but you may not have = the choice. You've got to keep your eyes and ears open and know = when to keep your mouth shut. EVERY negotiation has long-term = implications Negotiation results = don't just impact on the other side of the table. They can = impact your reputation in the community, your reputation among friends. = The question to ask is: How would you feel if the story was published on = the Globe editorial page, read out in church or if your mother found = out?

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