Negotiation Space

The cover story on the front page of a recent Wall Street Journal declared that “President Barack Obama installed four key regulatory appointees Wednesday without Senate approval using a disputed legal maneuver, setting off a clash with Republicans over presidential power that may end up in the courts” (WSJ, 1/5/12). The President utilized a tactic known as “fait accompli.” Regarding this tactic, Dr. Karrass writes that the strength of this tactic “is the fact that once a deed is done or an action taken it is difficult to undo” (In Business As In Life, p. 351). While people will debate over the ethics of a tactic like this, it nevertheless is a very powerful concept and tactic. The same concept is based on the old adage, “It’s generally easier to get forgiveness than it is to get permission.”

In the past few months, the United States Congress has held high-stakes negotiations regarding the national spending and debt that have often stalemated or reached unsatisfactory deals. Currently, a “super committee” is in the process of negotiating what was not resolved in the debt ceiling negotiations of August. Perhaps, politicians need to learn the basics of win-win negotiations.

In the article “Seven Communication Rules for the Debt Super Committee,” Business Insider has provides excellent negotiating advice to the super committee.

These are the seven rules:

1. Avoid leaking information.
2. Avoid ultimatums.
3. Listen more than talk.
4. Move from rhetoric to actionable ideas
5. Get independent/neutral help.
6. Be the first to cooperate (give a concession)
7. Work on creating personal connections

Anyone who has been reading this blog regularly or has taken a Karrass Effective Negotiating seminar will recognize many of these techniques. They are the basis of  win-win negotiations. The article sums it up as this:

Instead of looking at the negotiation as combat, the super committee should look at it as a joint project where the overall goal is to achieve a solution better than both parties initially thought possible.

We couldn’t have said it better. Is there anything you would advise the super committee to do?

Not all business negotiations take place between peers. There is often some sort of difference or inequality—perhaps hierarchical, perhaps cultural. Navigating those differences skillfully will result in better business negotiations and agreements.

The first step in navigating differences is to acknowledge they exist. Once you realize that the person across the table is different from you, you can work on recognizing what the differences are.

Culture is a huge differentiator among negotiators. The culture and country of origin can have extensive influence upon your negotiating style and expectations (both of yourself and others at the table). Culture can influence your ability to take risks, to speak your mind, and how you perceive behavior. For instance, some cultures express differences by speaking loudly, and for some, speaking loudly means you are being rude.

Lothar Katz has written a book called Negotiating International Business – The Negotiator’s Reference Guide to 50 Countries Around the World where he outlines how different countries and cultures deal with negotiation.

Are you negotiating in Denmark? Read “Negotiating with Danes: How to Catch the Curveballs.” You will have to be aware that Danish business culture is flatter than the American one, with less hierarchy and more openness.  The article in the Copenhagen Post online says:

author Lothar Katz characterises Danes as “moderate risk takers” who shun “aggressive tactics” in negotiations and absolutely hate to haggle.

“Since the Danes believe in the concept of win-win, they expect you to reciprocate their respect and trust,” Katz writes.
In contrast, in some countries, such as Spain, negotiations tend to be seen as win-lose situations, where the winner takes all, and that can lead to more aggressive and confrontational tactics.

Clearly, the more you understand about the culture of the person across the table, the better position you will be in to negotiate an agreement that satisfies both parties.

Salary negotiations are one type of negotiation most working people will enter several times in their lives. At some point, you will want to negotiate a raise or a starting salary or even a multi-year contract.

Salary negotiations are a fine example of the importance of power in a negotiation. When you are asking for a raise, the power may rest with your boss instead of you. How can you help distribute the power more equally?

In an article on the Harvard Business Review blogs, “Negotiate Where You Want to Get What you Want”, Markus Baer and Graham Brown argue that location is a very important factor in salary negotiations. One place where you will be at a disadvantage is in your boss’ office. According to their research:

…residents of an office space — even after only 20 minutes of residing in a space — were able to claim as much as 160% more value in a distributive (”You win, I lose”) negotiation than the visiting party. And it is not only that residents do better when negotiating on their turf. Our study also revealed that entering someone else’s office space causes us to do worse.

Clearly, to do better in salary negotiation you have to take the discussion out from the office to a more neutral spot—perhaps the conference room or a coffee shop. If this is impossible, then you will have to work on increasing your power and confidence. To do that, research as much as you can about salaries in your field, and be prepared to back up your claims.

What do you suggest to people negotiating for a higher salary?

Sometimes business negotiations are straightforward affairs, where both parties can reach an agreement quickly and painlessly. However, sometimes negotiations take place under less than ideal circumstances. There is a looming deadline or the threat of a strike. Those circumstances lead to negotiating under pressure.

Negotiating under pressure can lead to strategic mistakes or unwanted concessions. It may also lead to bad agreements.

Katherine Bell discusses negotiating under pressure for the Harvard Business Review blog in an article called “Extreme Negotiations: Putting the Idea Into Practice.” In it, she discusses an article “Extreme Negotiations” by Jeff Weiss and Jonathan Hughes that appeared in the printed Harvard Business Review last year. The authors drew lessons from military negotiations in Afghanistan and Iraq and applied those conclusions for business negotiations.

The article focuses on five effective negotiation strategies to help you negotiate under pressure:

Understand the big picture by soliciting the other person’s or group’s point of view

Learn what’s motivating the other party, then come up with a variety of possible solutions and invite critiques

Use facts to persuade

Build trust over time

Focus on actively shaping the process of the negotiation

What have you learned from negotiation under pressure? Please share your experiences, tips and strategies in the comments.

Here at Negotiation Space we aim to give you tips and techniques that will help improve your business negotiations. There may be a way to improve your ability to sell (and also to persuade) by  improving the synergy you are creating with the other party.

Online, Inc. Magazine provides a few tips in the article “ How to Communicate to Sell” by Marla Tabaka. Tabaka says:

An effective sale is most often achieved between two (or more) people who have synergy between them and understand the desired outcome for, not just one, but both parties. No matter what business you are in, you sell. You sell yourself, your product and/or your vision. And to do so with great success depends on your skill in creating synergy between you and your prospects, potential investors, partners and employees.

To create synergy, Tabaka recommends several steps:

1. Observe the other party’s body language, tone and speech patterns.
2. Put the other party at ease.
3. Create connection by mirroring body language.
4. Have the intention of creating a meaningful connection with the other party

By creating synergy, you are creating connection and perhaps a shared goal of achieving a deal that is good for both parties.

What are your tips to create synergy?

Business negotiations are similar to poker games in that you don’t reveal all your cards to the other party (player).  But, there is a vast difference between not revealing information and willfully providing the wrong information.

One move—bluffing—is ethical and the other move—lying—can be unethical.  Dr. Chester Karrass says the following: “Discretion in making claims and statements should not be confused with misrepresentation.”

You should not allow your side or the other party’s side to engage in lying. Dr. Karrass recommends the following policies:

• Never condone lawbreaking, lying or gross misrepresentation.
• Make your team sensitive to the important of avoiding the above.
• Only hire ethical people for your team.

Harvard University’s Program on Negotiation tells you how to “Defend yourself against deception.”

The advice is the following:

you will sometimes encounter negotiators who feel comfortable lying to you. To reduce the likelihood that you’ll face deceptive tactics, try prefacing important negotiations with a discussion of ethics. Tell your counterpart that you intend to behave as fairly and truthfully as possible, and ask him to do the same. When you do catch someone in a relatively minor lie, consider discussing the matter directly to see whether you feel comfortable moving forward. If the lie is significant and trust seems beyond repair, walking away may be the best choice.

How do you deal with lying during a business negotiation?

We came across the article “The Art of the Deal: Negotiating your Next Tech Contract” on BusinessNewsDaily.com and thought it was worth sharing four of the tips it outlines.

1. Do not give in to pricing pressure: As in other industries, technology needs to fill yearly sales quotas. If the seller says the deal is only good for a short while—check it out. Talk to your industry contacts and check with other vendors.

2. Customization is expensive. Tech is highly customizable to a company’s specific needs. However, be aware the more you customize, the more expensive it will be, and also that you will be locked in to dealing with one provider.

3. Know what you need and what you don’t. Some add-ons are necessary and some are just nice to have. You must know the difference, because this is where you will have leverage in negotiating with the other party.

4. Have an exit strategy. Define how you can end your agreement in case you are not satisfied with the product or service.

Clearly, these tips are also applicable to other types of business negotiations. If you are a technology buyer, do you have a number one tip you could share?

Any experienced business negotiator, or indeed any experienced person, knows that there is something is wrong when you are getting “something for nothing.” We are all familiar with the adage “if it sounds too good to be true, it probably is.”

In business negotiations, it is OK to throw in extra value (we’ll give you free shipping or 45 days credit, for example) but when an offer sounds too attractive, you may be dealing with the “shyster tactic.”  A shyster is someone who obscures his/her purposes by using verbal/legal smokescreens. A shyster tactic is unethical and it involves luring the other party with a deal that is very attractive into a never-ending negotiation.

Dr. Chester Karrass tells us that the shyster will make and break verbal agreements—using a variety of tactics such as claiming a misunderstanding or using the missing-person technique.  A shyster will be cordial until the agreement is signed, and then the trouble will begin. Costs will not be what you thought or there will be endless delays in delivery.

Dr. Karrass says: “Shyster tactics work because people like a bargain and don’t want to work very hard. They get lured into the ‘something-for-nothing’ trap.”

How do you deal with the shyster tactic? First of all, remind yourself that “if it sounds too good to be true, it probably is.” Second, if you detect any signs of bad faith or a whiff of unethical behavior, turn and walk away.

Have you been taken in by a shyster? Tell us your experience.

In any business negotiation, the other party will ask something of you. They may ask you whether you want to take it or leave it, or whether you agree with the terms and conditions. In any case, you will have to provide the best answer you can.

To give a good answer, you must increase your ability to handle questions. To do this, you should anticipate likely questions. You and your team should come up with a list of questions that the other party could ask.

To give a good answer you should:

1. Give yourself time to think—don’t answer right away.

2. Understand the question thoroughly

3. Understand that you don’t always have to answer every question.

4. Recognize that you can answer part of the question.

5. Recognize that if you don’t want to answer or don’t have the answer, you can find ways to postpone providing a response.

The key here is to give a GOOD answer. A good answer will preserve your position at the bargaining table and help move an agreement along.

What do you do when faced with a question you don’t want to answer? Let us know.