Thank Goodness It's Monday #385

HOW TO NEGOTIATE

SO EVERYONE COMES OUT AHEAD

Yup, I’m back on that track. I'm inspired -- once again -- by all the hoo-hah coming out of the nation’s capital these days. And I’m pondering why these beltway folks –

Just don’t get it.

In the business world that I occupy a pretty good definition of “Effective Negotiation” would be: 

A process by which two or more parties

use a problem-solving approach

to build something better for all.

Obviously we’re not talking political parties here.

So let’s just review with our personal/professional circumstances in mind.

The concept of effective negotiation doesn’t mean you’re not going drive a hard bargain to get what you want. And it doesn’t mean you won’t be willing to take any concessions you’re offered. 

It does mean you go into the negotiation process intending to use effective – maybe even “tough” – techniques that should enable you to control the process and lead it toward the outcome you want. 

But you’ll do this in a principled way.

To guide us, here’s a rundown of --

8 Principles Of Effective Negotiation

#1: There’s a solution that can benefit everyone. That’s true in most cases. So it makes sense to go into a negotiation with a problem-solving mindset; looking for ways both sides can be better off. 

TGIM IDEA IN ACTION: Don’t operate in terms of you vs. an opponent. Think instead, “you and the other problem solver.” You might even disarm future conflict by announcing this point of view at the outset.

#2: Anything can be negotiated. (Alright, almost anything.) Just don’t accept the established order. Rules are made by people and people can change them.

TGIM IDEA IN ACTION: Anything and everything can be up for grabs. A printed policy … price tag … instructions from higher ups … budgets … salaries … a sign on the wall – none of these are inviolable. They can all be changed by someone willing to invest the time and energy necessary to do it.

#3: Attention must be paid. To get anyone to sit still for a serious discussion, you must first get his or her attention. You do that by letting that person know you can help or hurt them in some way.

TGIM IDEA IN ACTION: Since our emphasis here is on something better for everyone, emphasize how you can help. Then you will not only get attention, but – ideally – receptive, positive attention.

#4: Needs are seldom what they seem. What the other problem solver says he or she wants may not be what he or she really wants.

TGIM IDEA IN ACTION: Is there any history with this kind of issue? People are fairly predictable. Think back on what your counterpart has said or done in the past. Most folks are likely to do the same tomorrow as they did yesterday. And don’t forget psychological needs such as ego and self-esteem.

#5: It’s best to remove the decision maker from the actual negotiation. That way you can always say, “Top Gun would never go for that” or, at least, “Let me get back to you after I’ve shared it with Top Gun.” And, because Top Gun is not there, no one can work on changing his or her mind. 

TGIM IDEA IN ACTION: On the other hand: You don’t want to negotiate with a second party. You want to engage with the person who can make the decision. Find out who that is beforehand and strive to deal directly. Conversely, if you’re the decision maker, resist this maneuver. Have someone represent you.

#6: Have plenty up your sleeves. If you have only one option, then you are apt to want it too badly … care too much … and be willing to give away too much to get it.

TGIM IDEA IN ACTION: Set high goals. Assume you’ll be successful. But don’t count on it. Go into any negotiation with more than one option. If you must “know one thing” know the minimum you believe is acceptable.

#7: Wave your big stick. The amount of clout your counterpart thinks you have can greatly influence the outcome of a negotiation. Clout comes not only from your position in the organization you represent but also from other sources. 

TGIM IDEA IN ACTION: If you’ve got it, flaunt it. Make clear you have the background and experience to be considered expert. If you doubt your clout, you can establish it (real or imagined) by showing that: Others like your ideas and are on your side… established policy, traditions and culture support you… fairness dictates that you are right.

#8: Put time on your side. Keep it there. Think and prepare for “the long haul” from the start.

TGIM IDEA IN ACTION: Agreements tend to be reached when someone is running out of time. The more time you can get the other party to invest in the discussion, the more he or she will want to get to an agreement.

And speaking of time ... 

Wow! Look at the time. Shall we negotiate an end to this TGIM? 

Here’s the wrap up. Many factors affect the course and outcome of negotiations, of course. Recognizing them and preparing in advance are key to influencing the situation to suit  and reach your desired outcome. 

Competitive negotiators attempt to get their way by being aggressive. They convey anger, resolution, and a feeling of tension. While this may intimidate their counterparts into agreement, more often it will alienate and antagonize the opposition and make negotiations difficult, if not impossible.

Cooperative negotiators seek common ground and fair solutions. They attempt to reach agreement through trust, openness, and reciprocation. This principled style is more apt to result in effective negotiations with effective outcomes, particularly if the other side is also cooperative.

And, amazingly, everyone comes out ahead.

Come, let us reason together. Now if only our legislators would understand that.

Geoff Steck
Chief Catalyst
Alexander Publishing & Marketing

8 Depot Square

Englewood, NJ 07631
201-569-5373
tgimguy@gmail.com

P.S. “Start out with an ideal and end up with a deal.” Karl Hans Albrecht said that. Who? Albrecht is the richest person in Germany; an entrepreneur who founded the discount supermarket chain Aldi with his brother Theo. He ranked 10th on the Forbes 2012 list of billionaires.

Thank Goodness It's Monday #355

HOW TO LINK ISSUES

AND REACH A CONSTRUCTIVE AGREEMENT

One step at a time is generally prudent advice. However … 

“Counterwork your rivals

with diligence and dexterity,

but at the same time

with the utmost personal civility to them:

and be firm without heat.”

Philip Dormer Stanhope, 

(1694-1773)

4th Earl of Chesterfield  

gave his son that advice

in a letter dated 

26 September 1752

Linking issues during a negotiation can often get you better results than you could achieve by treating them separately, one at a time.

TGIM ACTION IDEA: Linking simply means tying together an agreement on one issue to an agreement on one or more other issues. 

TGIM IDEA IN ACTION: There a number of circumstances in which a “linking move” can improve your performance during negotiations and help you get a better deal.

Here are three simplified situations to start your mental wheels turning. 

● Linking can help you overcome areas of negotiating weakness.  Successful negotiators often link an issue on which they are weak to an issue on which they’re strong.

Example: Assume that a long-time customer is trying to negotiate a new contract with the supplier, and the seller has tried to strengthen his bargaining position by bringing up that the purchaser’s company was slow in paying the seller’s invoices over the past year.

To offset this, the purchaser might reply, “Since you’re bringing up the issue of my company’s slow payment, let’s also discuss why your company had such poor delivery performance and why there were so many backorders.”

By linking these issues, the would-be buyer moves his negotiating position from one of relative weakness to one of parity, and quite possibly to one of relative strength.

●Linking can force the opposition to deal with certain issues on your terms.  This approach was used by a woman who was being interviewed for a mid-level management position.

Case in point: She had an impressive track record, and the company made her an attractive job offer that she was eager to accept.  She knew, however, that her success with the new company would be determined, at least in part, by the operating budget she would be given to get the job done.

Rather than accept the offer an outright, she linked her acceptance of the job to the company’s acceptance of an operating budget she envisioned.  Management looked over her proposal and agreed it was reasonable. 

If she had tried to negotiate the budget after she accepted the job offer, her negotiating leverage would have been greatly diminished, and the results might not have been nearly as favorable. 

●Linking can force concessions from your opponent.  Another way of using linking strategy is to tie one issue to another, then claim that your opponent’s position on the issues, as a package, is not acceptable.

Example: A purchasing agent could say to a seller, “I can live with your payment terms, but not at that price.” If the seller wants the deal badly enough, he’ll concede on the payment terms or the price.

If, however, the seller holds firm on both issues -- but still shows signs of wanting an agreement -- the would-be dealmaker could then link a third issue to the other two and try to gain a concession.

He might say, “At that price and under those payment terms, you have to hold more inventory and I have to have faster delivery; then I might be able to agree. Is that doable?”

See the connection? Linking issues together in this manner is usually quite successful, because it provides a negotiation opponent with an opportunity to concede something and still feel good about the deal.

On the downside: Linking can also work against you. It can give your opponent an opportunity to use a minor disagreement on one piece as a means to force you to make a concession on any linked issues. If the issues aren’t linked, but are dealt with separately, an opponent can’t prevent agreement on one issue by objecting to another.

One last point: And maybe, if you’re on the verge of what you expect to be an intense negotiation, it should be --

Your first point: It’s prudent to agree that nothing is agreed until everything is agreed. That way all parties can advance in a negotiation with the expectation that, when they do make or gain concessions, those accommodations will have been made in good faith and will stick.

Wouldn’t you agree? (And in a linking move, if you do agree, you may stop reading this TGIM right after the Post Script.)

Geoff Steck
Chief Catalyst
Alexander Publishing & Marketing

8 Depot Square

Englewood, NJ 07631
201-569-5373
tgimguy@gmail.com

P.S. “If you come to a negotiation table saying you have the final truth, that you know nothing but the truth and that is final, you will get nothing.” Finnish politician Harri Holkeri said that.