Negotiation Assumptions You Make

When in a negotiation, never trust your assumptions. They are likely to be as wrong as right.

If you are negotiating to sell something, be careful with your assumptions. Don't make assumptions like:

"She'll never pay that much"

"There's a lot of competition"

"He doesn't have enough money"

"They don't want to do business with us after the last mess-up"

"I'm sure we're not the low bidder."

Such assumptions can defeat you before you start negotiating; these assumptions lower your expectations; influence the outcome of the negotiation; and may, in fact, be dead wrong.

If you are buying something, your assumptions can:

* Cause you to make high offers when low ones are called for.

* Influence you to make low demands and quick concessions when opposite actions are warranted.

* Seduce you into believing deadlines when patience is by far the better course.

* Create potential hurdles that can move you in the wrong direction.

Don't fall in love with your assumptions. You need to check them out in the interchange of information that comes out of the process of negotiating. Your assumptions are neither right nor wrong until proven so.

Negotiating Understandings and Agreements

An Understanding is an expression of mutual viewpoint and attitude on an issue. An Agreement is a conclusive commitment to mutually acceptable terms. And a Procedure is a way of doing something.

You're probably wondering what this has to do with negotiating. What difference does it make? After all, isn't a deal a deal?

When you're negotiating it's not enough to simply reach agreement. Even when two parties have the best intentions, Agreements break down for a variety of reasons. Breakdowns occur because those responsible for implementing the Agreement often do not understand the common viewpoints, attitudes, and backgrounds that brought about the Agreement. Sometimes the breakdown occurs because neither party knows how to make the Agreement work or how to prove what is, or is not working.

A good Agreement should not only spell out the work and money involved, but should also discuss the understanding behind the Agreement and a Procedure for measuring cost in the event that additions or deletions of work occur. A poor Agreement simply leaves the parties bickering about whether verbal understandings are being met and whether costs are being accumulated fairly.

The next time you are in a negotiation, better say to yourself, "It is not enough just to reach agreement on terms. Are there any understandings and procedures that ought to be documented in detail right now, while they are fresh in our minds?"

Concessions -- Much Like Investing in the Stock Market

A negotiator should approach their concessions like an investor approaches the stock market.

Prudent stock market investors look to increase the value of their money. They look at growth potential, expected dividends, and risks associated with an investment. They attempt to compute the present value of the investment given the expected growth rate and dividend payouts. This present value is balanced against the associated risks, compared to other potential investments, and a decision is made to buy or not. Is the investment fairly priced, over-valued, or under-valued?

A good negotiator does the same thing, but on a very subjective level. Negotiators need to focus on the present value of satisfaction, determine the present value of future satisfactions (and dissatisfactions), and compare that to making no deal at all or holding out for a better deal.

This brings up a fundamental but subtle point about any negotiation. The flow of positive and negative satisfiers in any deal is in the head of each participant. Some participants are optimistic about the future. Others are pessimistic. Some are "I-want-my-kicks-right-now" people, while others are prepared to wait a long time.

Much of your strength as a negotiator comes from your ability to provide satisfaction in one form or another. You can help raise the present value of the deal by getting the other party to place a higher value on future satisfaction. You can do the same thing by showing them that future dissatisfactions are unlikely. If they want kicks now, show them how much more important kicks will be later.

Concessions can play a big role in creating the flow of satisfaction. But this flow between people is not as simple as it looks. Before you start making concessions to increase satisfaction, think about how you want to do it. Take into account who will benefit, in what way, when, and from what source.

A concession can provide satisfaction to the receiver now or later. Maybe the receiver wants to take it all at once or a little at a time. A concession can direct its benefits to the organization, specific parts of the organization, third parties, to the other negotiator on a personal level, or to all of them at once.

Every negotiator has the same role to perform: to raise the present value of future satisfaction for the other person and thereby help the other party reach a decision.

Yelling and Screaming

Some people get their way by deliberately yelling and screaming. It's a negotiating tactic. These screamers know from experience that other people find this tactic uncomfortable. Most people find it difficult to cope with a screamer. This is especially true if others are around to witness the scene. Most cringe at the thought of having to deal with an obnoxious character - so they simply give in.

A loudmouth is accustomed to winning these negotiations and uses this tactic time and again to get their own way, or to gain a better position than other, more reasonable people. Their plan is to intimidate the other party into submission.

People who yell and scream do so because they have learned, like children, that it is easier to scream than to take the time to persuade by rational means. In fact, the weaker their position, the more they resort to loudmouth tactics.

As parents, we have a responsibility not to let our children get their own way by yelling and screaming. When children rant and rave, we have to call their bluff by calmly demonstrating that their approach will not work. This takes a good deal of parental courage, patience, and self-confidence.

How do we handle an adult negotiator who uses such tactics?

This question is important because many of us, sooner or later, will have to deal with someone who yells and screams. Don't let this negotiating tactic trap you into responding with like actions. If you both end up yelling at each other a satisfactory outcome is a remote possibility.

The key defense is not to be intimidated. If you remain rational, refuse to take abuse, deal in terms of fact - not emotion, and act with quiet dignity and firmness, the loudmouth will soon stop. If not, then it is wise to bring them to someone at a higher level who can handle the screamer with calm authority.

The experienced loudmouth has won a lot of easy victories since childhood. Don't let them win another one at your expense.