Negotiating for Art --- Some Tension Relief

Jean-Claude

This week, Jean-Claude, partner and collaborator of the artist Christo, died. Both are probably best known for various large scale art works, some would say stunts, such as draping parts of New York’s Central Park in orange cloth in a project called The Gates. But what you may not know is that Jean-Claude was a great negotiator. It turns out it takes a lot of negotiation to be able to legally engage in the art that the couple were known for.

Harvard Business School was so impressed with the couple’s negotiation skills that it bestowed the “Great Negotiator Award” to them. Jean-Claude was apparently the better half at negotiating. For instance, she negotiated 59 separate contracts with land owners to be able to install the Running Fence project. You can read more here, at the Harvard Business Blog http://blogs.harvardbusiness.org/hbr/hbreditors/2009/11/jeanneclaude_the_great_negotia.html

As the article sums up:

“The greatness of Jeanne-Claude's negotiating was, in the end, not that she and Christo got their way at the bargaining table, but that they got so many millions of people to experience the world, at least a part of it and for a little while, on their terms.”

Tension Relief

Negotiating can become difficult and stressful. Chester L. Karrass says nothing dispels tension as well as a quip or a funny story. In honor of Thanksgiving here’s one:

“A lady was picking through the frozen turkeys at the grocery store, but couldn't find one big enough for her family. She asked the stock boy, 'Do these turkeys get any bigger?'
The stock boy answered, 'No ma'am, they're dead.”

(From the website: http://www.guy-sports.com/humor/jokes/jokes_thanksgiving.htm)

If you need more funny stories for your next negotiating session, check out Reader’s Digest online, they have hundreds! http://www.rd.com/clean-jokes-and-laughs


Happy Thanksgiving!

What makes a bad deal? AOL-Time Warner

Not every deal that is negotiated turns out to be good for either or both parties. In an article published Saturday, the United Kingdom newspaper Telegraph dissects what it calls the worst deal in business, the AOL-Times Warner merger. (Read the whole article here: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/6622875/Final-farewell-to-worst-deal-in-history---AOL-Time-Warner.html)

The AOL-Time merger happened back in 2000, and brought together a large media company with a leading internet company. But the deal went badly. Today, AOL and Time Warner have been separated, and both are facing challenges, including recently announced layoffs at AOL.

The Telegraph article explains the reason for the merger:

“Although each of the two original companies had its own reason for merging – AOL wanted broadband capability from Time Warner Cable and additional content to use across its sites; Time Warner desperately needed a way to digitise its content and reach out to a new online audience – neither strategy was played out in practice.”

But, according to the Telegraph article, there were several problems during the negotiation that led to the disastrous merger.

1) Not knowing enough about the other party

The Telegraph reports that Steve Case of AOL and Gerald Levin of Time Warner:

"... knew little of one another – and arguably of one another's businesses – before they struck the deal. An aging Levin, a lawyer by training, had worked his way quickly through Time Inc's corporate ranks, and while aware of the need to have an internet strategy, had little idea of the best way to get one."

2) One party dominates the other/Unwillingness to cede control

"In the negotiations for the deal, Case used AOL's larger market value to dominate Levin.... Case became chairman and Levin chief executive in charge of operations. Neither man wanted to cede control."

3) Questionable motivations on each side

“...the deal was motivated not by logic or strategy but by egos.”

4) Not recognizing or dealing with culture and management differences

Can you draw any other lessons from the AOL-Time Warner deal? Do you think any other big merger deals will face the same fate?

How important is it to "save face?"

To save face means simply to maintain one’s dignity. Conversely, to lose face would mean to be humiliated, or lose one’s reputation.

It turns out that face-saving is a big issue in every business negotiation. However, face-saving is a “hidden” issue.

During a negotiation, each negotiator is involved on both a professional/business level and a personal level. Some people are more prone to letting the personal intrude on the professional, and thus use a negotiation and its outcome to validate their self-worth and build their self-esteem. Clearly, for these types of people, face-saving during a negotiation because a larger issue.


Angry or hostile behavior can result when a negotiator’s self-worth feels threatened. Some negotiators shut down or refuse to proceed because their ego is at stake. When hostility arises, all parties should work to defuse the situation.

Here are some phrases that can help reduce tension:


"Obviously, this can be interpreted in several ways..."
"Perhaps there are other reasons that I am not aware of..."
"Here is some information that you probably did not have access to..."
"I understand your conclusion, but have you considered this..."

Your goal when confronted with a hostile negotiator is to minimize the hostility. Do what everyone else does: blame the lawyers! Seriously, if you can blame a third party such as someone who left the company, the accountant or someone else, it will take the ego issue off the table.

Obviously, when a negotiation breaks down because someone feels he or she is losing face it is bad news for everybody involved. At Karrass, we believe that personal attacks should be avoided. Our negotiation skills teach that you should always leave a face-saving way out for the other party.

Have you ever lost face in a negotiation? Did it affect the outcome against you?

Focus on what is important

Have you ever had a business negotiation that went south because of a bad personal interaction? Most likely, the answer is yes.

Whenever you negotiate, you are always dealing with people. People always seem to bring personal issues to the table. These issues can often make a negotiation difficult. On this blog, we’ve discussed personal issues that can derail negotiations like hidden motivations and bad tempers.

The solution is simple: focus on the negotiating issue at hand.

We came across “Deal or No Deal: The Art of Effective Negotiation,” a blog post by Keri Damen on the MaRS blog
(http://blog.marsdd.com/2009/11/16/deal-or-no-deal-the-art-of-effective-negotiation/) Damen provides some great business negotiation tips. Among them was this excellent piece of advice:

“Separate the people from the problem in your negotiations: Be soft on the people, but hard on the problem.”

It’s easy to make things personal, but we have to resist the urge to critique the person and not the idea. In a negotiation, it is important to measure the ideas being presented separately from whatever the personal issues may be.

In his book Give and Take, Chester L. Karrass quotes Benjamin Franklin, saying “there’s no such thing as a small enemy.” In that spirit, Karrass encourages negotiators to avoid personal attacks because people who feel attacked then feel they must get even. This cycle is counterproductive.

The next time you are negotiating with someone that is taunting you or that you simply don’t like, focus on your negotiation goals, be patient, and ignore the personal stuff. It will lead to a more productive negotiation.

What techniques do you use when confronted by a personal attack?

Using a 'Considered Response'

When you are negotiating, learn to discipline yourself not to provide quick responses. When the other side makes a demand, or makes you an offer, be it acceptable or not, don't respond to it with a quick 'yes' or 'no.'

Silence and Time

Use silence and time to your advantage. Once an offer or demand has been made by the other side, keep quiet and think about it for a while. Better yet, take a piece of paper and write down a few notes, or do a few calculations that only you can see -- or ask for some time to do a little research. Then, when you do provide a response, be it a yes, or a no, or anything else, your 'considered response' gives greater weight to your answer. What ever it is.

Credibility and Respect

A 'considered response' gives your response more credibility and respect.

Your 'no' becomes a stronger 'no.' You took the time to evaluate the offer, and, regretfully must say no.

Your 'yes' becomes a more thoughtful 'yes.'

A quick 'yes' leaves the other side second-guessing their offer. "We should have asked for more." They can feel some remorse. But when you take the time to thoroughly evaluate the offer, and then say yes, it tends to enhance the satisfaction of the other side.

Responding with a quick 'yes' or 'no,' often forfeits the opportunity to create a better, more satisfying deal for both sides.

It's all about the planning

“He who fails to plan, plans to fail.” ~ Proverbs

There is no doubt that planning helps you to succeed in life, and it is no different in business negotiations. “Winging it” or hoping for the best during a negotiation is not going to give you the results you want or need. Planning may take time and effort, but will pay off in better strategies and results.

Planning takes time. Sometimes, time is at a premium, but because planning is so important, Chester L. Karrass gives us several tips for a “quick planning kit.”

1) Choose the time and place to meet
2) Write down your wants in order of priority
3) Separate must-haves from would-likes
4) Figure out your opening offer and your target for each issue to be discussed
5) Determine what you will say after the other party says no
6) Make a list of things you want in return for any concessions
7) Brainstorm a few win-win deals
8) Have some defenses to avoid premature concessions
9) Prepare information to support your position
10) Make a list of things you should ask for before the deal is closed


We all know that plans sometimes do not work out. Things come up that we did not anticipate. To learn more, Dr. Karrass provides an in-depth approach to planning, and to anticipating the unexpected in his book “In Business As In Life—You Don’t Get What You Deserve, You Get What You Negotiate.”

Have you ever succeeded at a negotiation because of your pre-planning? Have you seen the other party not achieve good results because of lack of planning? Please share your stories in the comments.

Care for a nibble?

Are you a nibbler? We aren’t talking about your snacking tendencies but rather your negotiation style. If you are the type of negotiator who after agreeing to a deal asks for extra “small” things thrown in for little or no cost, you are a nibbler.

In sales, nibbling is effective because most sellers don’t want to lose out on a sale over small things. They are willing to throw in what the buyer is asking at cost or free in order to close the deal.

In general, both sellers and buyers may engage in nibbling. And most likely they will succeed. The other party rarely wants to appear miserly and will make concessions on small things. The other party wants to be seen as fair.

On the buyer side, nibbles are usually extra discounts, earlier delivery dates, higher quality merchandise than was originally negotiated, extended payment times, extra samples, free training and other extras.

On the seller side, nibbles can be extra charges, extended delivery dates, reduced services and other items that end up costing the buyer.

While there is room for nibbles, and there is nothing wrong with asking for extra stuff, both buyers and sellers should be aware of the practice. Build in some nibbles into the cost of your deal. Be prepared to stop excessive nibbling or your real cost is going to go up significantly. You could also develop a policy for nibbles. You could have a published price list on extras, for instance.

As a buyer, nibbling can pay off. But as a seller, giving in to too many nibbles can eat into your profit. Knowing when to say when is probably the best advice for both sides.

So, are you a nibbler? What have you successfully nibbled for?

Is it non-negotiable?

We often say that everything is negotiable, but sometimes negotiators come to the table with a list of non-negotiable demands. How do you deal with issues that are not up for negotiation?

Non-negotiable demands tend to be extreme, and defy compromise. Sometimes, they are centered on ethical, religious, professional or economic values that are deeply held. By making non-negotiable demands, some negotiators demonstrate their convictions.

In business negotiations, non-negotiable items tend to be issues such as cost structures, trade secrets and management decisions.

Some negotiators use non-negotiable demands for the express purpose of creating a deadlock. Indeed, they do not want to reach an agreement, and they use unrealistic demands to create an environment where compromise cannot be reached.

However, non-negotiable demands are a part of the bargaining process. They lower the other party’s expectation and make him or her more willing to compromise on other issues to avoid having a confrontation of deep-seated values.

There are several countermeasures you can use when faced with non-negotiable demands:

1) Conduct off-record talks
2) Dial down hostility
3) Ask for an explanation of why these demands are non-negotiable
4) Discuss the issues that ARE negotiable
5) Avoid panic and anger

Have you gone into a negotiation with non-negotiable demands? Did you end up compromising?

Negotiations in the spotlight: Philadelphia Transit

Negotiations have been big news this week in Philadelphia.

Philadelphia public transit, run by the Southeastern Pennsylvania Transportation Authority (SEPTA) had been partially stopped due to a six-day worker walkout, which ended today. At issue was the new contract between the SEPTA transportation worker’s union (TWU), which represents 5100 workers, and SEPTA officials.

The labor strike began on Tuesday of last week, disrupting trolley and bus service in Philly.

“Workers had asked for a 4 percent annual pay raise and a $25-per-month increase in pension payments for each year of service. It previously sought a 6 percent annual wage hike. Transit officials had proposed no pay raises for the next five years, and then offered a 2 percent increase for the third and fourth years of the contract.”
Read more: http://www.allheadlinenews.com/articles/7016920509#ixzz0WNuK1nO4

Resolution was reached over the weekend, with the intervention of Pennsylvania Governor Ed Rendell, who brokered a tentative contract agreement.

According to the Wall Street Journal:

“One last-minute sticking point in the contract negotiations was that Septa wanted a provision to re-open the contract if U.S. health-reform legislation is passed, in case reform would change the economics of union members' health plans. But the union objected and that language was stripped out...” (http://online.wsj.com/article/BT-CO-20091109-711603.html )


The Philadelphia Inquirer is reporting the following:

“The five-year contract also calls for a 2.5 percent raise in the second year, and a 3 percent raise in each of the final three years. It increases workers' contributions to the pension fund from the current 2 percent to 3 percent and increased the maximum pension to $30,000 a year from the current $27,000 a year.”
http://www.philly.com/philly/news/breaking/69522612.html?page=1&c=y

Team Negotiations Lead to Better Results

When conducting business negotiations there are very few instances where it is better to do it individually rather than as a team.

There are many advantages to team negotiating:

Broad base of knowledge
Teams are more creative than individuals
Teams are involved in better planning and better thinking
Teams set higher targets for negotiations
Team members reinforce each other’s strengths

According to an article (http://www.leighthompson.com/media/are_two_heads_better_than_one.htm) extracted from the Harvard Business Review:

“Team negotiations are generally more accurate than solo negotiations in discerning the other party’s interests and, as a result, they are better able to find common interests and create the win-win situations that benefit both parties.”

Whenever you are negotiating in a team you must have a good team leader. Team leaders are tactful and flexible. They know how to manage a diverse group of folks to achieve one end result. Team leaders must be able to control the content and flow of the discussion.

Having the right team will make the difference. Chester L. Karrass advises that you should never negotiate with a second-rate team. Take the time to recruit the best members for your negotiating team, and this will pay off in a more favorable negotiation.

Team negotiations take some planning. As this article by Tom Wood on AllBusiness.com points out (http://www.allbusiness.com/human-resources/819060-1.html) to negotiate as a team you need to follow certain steps:
1) Build the team
2) Prepare for the team negotiation by practicing and planning
3) Prepare the timing

Wood concludes by saying:
“....when complex multi-million dollar deals are at stake, effective team negotiating is critical. Who represents the team, when and how they speak and the role each team member plays can make or break a highly profitable deal.”

Do you participate in team negotiations? How does your company or organization select its teams?

It's all about people

In the end, all business is conducted between people. As much as the world has become computerized and automated, we still shake hands with a person to seal a deal.

Who you do business with is important. Choose your partners carefully. The right partners can help close a deal, while the wrong partners can make things go south quickly.

As Chester L. Karrass says in his book, Give and Take:

“Long term relationships based on integrity are essential to negotiation and to the day-to-day administration of agreements that follow.”

You may need to disassociate yourself from anyone that the other side may not like, who may have a bad reputation or who may act suspiciously. Obviously, shady characters (con men, deadbeats) are very bad partners—stay far away!

The right partners, on the other hand, are people with personality traits such as: trustworthy, have integrity and who show goodwill. Dr. Karrass calls these people “reliable nice people.” Being reliable and being pleasant are two key characteristics of someone with whom you want to do business.

According to former Secretary of State James Baker III, the traits of a good business negotiator are:
1) Someone who catches on quickly
2) Someone who is likeable
3) Being team player
4) Understands/penetrates the issues
5) Resourcefulness
6) Being knowledgeable
7) Being persuasive

Notice that being likeable is near the top of the list.

To do good business, do business with good people!

Is it ethical?

As Dr. Chester L. Karrass writes in his book Give and Take:

“Unethical tactics for achieving worthwhile goals ultimately destroy the positive value of those goals.”

In business negotiations, we are working to achieve a goal. However, we should not be so goal-focused that we fall into unethical tactics. As Dr. Karrass says that unethical tactics “....have no place in the business world. Those in the gray area between right and wrong should be looked at with skepticism.”

Whenever we enter a negotiation we may ask ourselves what will I do to achieve my goals? The website, Culture at Work (http://culture-at-work.com/ethics.html) on its section regarding ethics, puts it this way:

“When someone else stands in the way, the negotiator faces the core ethical issue of negotiation: when are my needs and wants more important than treating this person in a moral or socially acceptable manner? Whatever choice you make may involve significant costs to yourself, to the other party, to the wider community. Often the "right" thing to do is not clear.”

Some behavior is clearly wrong, like lying. But what about withholding information, is that unethical? What about bluffing?

According to Dr. Karrass, “Business bluffing is part of negotiating. However, the rules forbid and should penalize outright lying, false claims, bribing an opponent...”

In order to avoid unethical behavior and tactics, we must accept that ethical behavior is important and recognize unethical strategies and tactics. We may often have to take the higher road because the other party may not always act ethically.

Dr. Karrass suggests instilling the following guidelines:

Do not allow lawbreaking or lying
Avoid misrepresentation and exaggeration
Select ethical people to be on the negotiating team
Negotiate in good faith
Enforce the Golden Rule: “Do unto others as you would have do unto you.”


Have you been confronted with unethical behavior during a negotiation? How did you deal with it?