Civility may save your negotiation

There’s little doubt that lately American society has been experiencing a slide in civility. In 2009, we saw many high profile, public demonstrations of rude behavior from politicians, athletes and musicians. As it turns out, the lack of civility may be influencing the course of business negotiations.

According to a Kansas City Star blog post entitled “Civility is desperately needed in work and in daily life,” business deals are falling through because of a lack of civility from one or both parties. Author Diane Stafford writes:

“From major real estate deals to individual job losses, we’re hearing more tales of business gone awry because of people who were too difficult to get along with.

And, unfortunately, many of those who are most adamant, most entrenched in the rightness of their views, are also the most factually wrong.

They can’t and won’t see it, though. And when there’s no civil sharing of opinions, there’s no compromise or conciliation. Labels and name calling replace discussion.”

Read the blog post here: http://www.kansascity.com/196/story/1712610.html

At Negotiation Space we have discussed bullying and other forms of unacceptable behavior in a negotiation. It is clear that when you are engaging in a business negotiation, treating the other party with disrespect will not help you reach a win-win agreement.

Some professions have mandates or even laws to enforce civility. For instance, in Pennsylvania there is a section of the legal code entitled “Code of Civility,” which enjoins lawyers and judges to

“conduct themselves in a manner that preserves the dignity and honor of the judiciary and the legal profession. These principles are intended to encourage lawyers, judges and court personnel to practice civility and decorum and to confirm the legal profession’s status as an honorable and respected profession where courtesy and civility are observed as a matter of course.” (From: http://www.pacode.com/secure/data/204/chapter99/subchapDtoc.html )

Business may not have a code of civility, but you can help encourage civility in your next negotiation. Some actions you can enforce to maintain civility include:

• Ban name calling or insults from your negotiation
• Listen to the other party without interrupting
• Treat everyone with respect
• Recognize opposing viewpoints without denigrating them
• Discuss issues rather than argue

Do you have any suggestions on how to maintain civility in business negotiations?

What are your limits?

Do you have limits when you are negotiating a business deal? Chances are good that you do have some limits because, unless you have complete authority, you have been instructed as to where you are allowed to go and where you have to draw the line.

Some limits you probably have:

• Budget limits
• Maximum/minimum price
• Need for director approval
• Credit amount limit
• Company and standard terms and conditions
• Company secrets
• Warranty limits

Having limits is a positive thing in a business negotiation because it creates power for you. When you have limited authority, the other party is forced to work within your limits or have to walk away from a deal.

By having limits, real or artificial, you have a face-saving way to test the other party’s resolve. By the same token, the other party can agree to your limits, and save face too. With limits, you know when to say no, and you can say it gracefully because it is not your denial but somebody else’s.

Limited authority makes it so that you don’t have to make concessions in the areas where you have limits (for instance, a policy that cannot be budged). Since you lack the requisite authority to make a change, the change is off the table. As Dr. Chester L. Karrass says: “There is greater strength in not having authority than in having it.”

What kinds of limits do you deal with? Do you find it is helpful or detrimental to your negotiation to have these limits?

Are you sure?

How sure are you when you walk into a business negotiation? Hopefully you are both confident of your negotiating skills and certain of your position.

First, you must be certain of your position, because how can you negotiate on issues you are not sure about? Can you negotiate on price if you don’t know the margins you are seeking to attain or the budget you are trying to stick to?

Second, you must be self-confident and be able to communicate your confidence. The other party will react to your degree of confidence. Not only is important to be certain, it is important to make sure the other party understands whether or not you’re certain.

Remember that confidence is communicated verbally and non-verbally.

If you say: “Absolutely, that is the best we can do” the other party will hear your certainty and proceed accordingly. However, if you say “It appears that there is no room to negotiate further on price” the other party is hearing that you are not 100% certain, and therefore may continue to discuss the issue.

Many of us have verbal tics like starting sentences with phrases like “I think” or “Honestly” or “Like.” Some of these verbal tics can communicate ambivalence. Pay attention to how you are saying what you are saying.

Nonverbal communication plays a large role in how others interpret our intentions, so how you act also communicates your degree of certainty. If you act nervously, the other party won’t trust your certainty or command of the situation. However, if you maintain good eye contact and appear calm, the other party will trust that you mean what you are saying.

Have you ever “lost” a business negotiation because of a confidence issue? Please share any stories about the importance of confidence.

Conan, heckling and negotiation

Watching and listening to Conan O’Brien and Jay Leno square-off against NBC and each other was getting really ugly. The situation, which NBC admittedly mishandled, was pretty bad. Everyone was losing something—NBC was losing money, Jay Leno was losing his prime-time show and Conan was losing the Tonight Show. In the midst of all the talk was a business negotiation between NBC and Conan O’Brien.

In the end, Conan has agreed to walk away from the Tonight Show. Read more about the settlement here: http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/01/nbc-and-conan-obrien-finalize-settlement-announce-their-divorce.html

The question is: Was Conan a heckler and did it help or hurt him?

In a negotiation, the heckler is the person who exploits weaknesses and generally, does not treat people courteously. Heckling can be verbal, physical and psychological. Verbal heckling includes kidding and nonsense talk. Physical heckling may include uncomfortable seating arrangements. Psychological heckling may include questioning someone’s intelligence, deliberately ignoring people, or even subtle threats.

Unfortunately, heckling can work in the short run because it shakes people up. A heckler’s goal is to reduce the ability of the other party to deal with the negotiation at hand. People may resort to heckling as a last ditch effort to shift the power in a negotiation.

We don’t know how the internal business negotiations were handled between Conan and NBC. However, we did witness lots of public sparring and put-downs. (Read this New York Times article about the decrease in civility: http://www.nytimes.com/2010/01/22/arts/television/22watch.html?hp) It may be safe to assume that Conan did engage in some heckling with NBC, and that in the end, he got what he wanted.

Heckling may have helped Conan in his negotiation with NBC, but it may have hurt him in the public’s eyes. We will have to wait and see where and when he reappears.

Have you ever dealt with a heckler? Have you heckled in a negotiation?

Indirect Information

Last week, we discussed closed-door business negotiations, which can sometimes also be secret negotiations. In these business negotiations, both parties want to keep the content of their discussions quiet. However, sometimes information between the two parties is also kept quiet, or off the record.

In any business negotiation, parties communicate directly at the table, yet there may also be indirect communication going on. Indirect communication supplements what is being said at the table. Indirect information can help provide better perspective and build a stronger negotiation position.

Indirect information is exchanged for many reasons:

• To keep up appearances
• To share conflicting motives
• To build kinship between the parties
• To make information flow easier
• To avoid loss of face
• To allow organizational and personal goals to be changed quietly

You may be wondering how indirect information is exchanged. Sometimes information is exchanged outside the room where the negotiation is held, and sometimes, information is exchanged in a more surreptitious manner. Here are some indirect communication channels:

• Secret discussions
• Rumor leaks
• “Lost” memos or key documents
• Third-party intermediaries
• The media

How have you dealt with indirect information? Have you found it useful or not useful in your negotiations?

Martin Luther King, Jr. and Negotiation

Today is the Martin Luther King, Jr. federal holiday here in the United States, celebrating the many contributions of this renowned hero of the civil rights movement.

Rev. King was known for his nonviolent approach, and his advocacy of peaceful civil disobedience. Yet, part of his approach, as he describes in his famous 1963 Letter from a Birmingham Jail, has to do with negotiation. (Read the whole letter here: http://www.lagcc.cuny.edu/ctl/mlk/letter.htm )

King writes the following:

“In any nonviolent campaign there are four basic steps: collection of the facts to determine whether injustices exist; negotiation; self-purification; and direct action. We have gone through all these steps in Birmingham. There can be no gainsaying the fact that racial injustice engulfs this community. Birmingham is probably the most thoroughly segregated city in the United States. ... On the basis of these conditions, Negro leaders sought to negotiate with the city fathers. But the latter consistently refused to engage in good-faith negotiation.

Then, last September, came the opportunity to talk with leaders of Birmingham's economic community. In the course of the negotiations, certain promises were made by the merchants--for example, to remove the stores' humiliating racial signs. On the basis of these promises, the Reverend Fred Shuttlesworth and the leaders of the Alabama Christian Movement for Human Rights agreed to a moratorium on all demonstrations. As the weeks and months went by, we realized that we were the victims of a broken promise. A few signs, briefly removed, returned; the others remained.

King believes the right place is to start with good-faith negotiations. However, if the other party breaks the spirit or letter of the negotiation outcome, action must be taken. Then, perhaps an environment is open again for negotiation:

“The purpose of our direct-action program is to create a situation so crisis-packed that it will inevitably open the door to negotiation. I therefore concur with you in your call for negotiation. Too long has our beloved Southland been bogged down in a tragic effort to live in monologue rather than dialogue.”


From this letter, we can summarize King’s views on negotiation as:

• Negotiations must be two-sided, with both sides having equal power
• Negotiations must be in good-faith
• Both parties must agree to abide by the results of negotiations.
• If negotiations break down, action may be taken, with the purpose of getting back to the negotiation table.

How a crisis affects negotiations

How a crisis affects negotiations

Since Monday’s massive earthquake that demolished Port-au-Prince, Haiti, the world’s humanitarian agencies have mobilized to provide aid to the impoverished nation. Normally, obtaining permits, negotiating contracts with providers, and the other bureaucratic issues that affect transportation and relief efforts, take some time. But when a natural disaster strikes creating a crisis, these speed bumps are smoothed and aid agencies are able to move quickly.

As you probably have heard, an immensely popular and successful donation campaign was started in which you text the word Haiti to 90999 to make a $10 donation to the American Red Cross (www.redcross.org). The money is billed to your cell phone. The Yéle Foundation started by singer Wyclef Jean has a similar program in which you text Yele to 501501 (www.yele.org) to make a $5 contribution. From a business stand-point, what is remarkable about these text message donation campaigns is how quickly they were set up and the fact that transaction fees were waived to allow the entire amount to go directly to the charitable organizations. Again, the crisis made this possible.

Crisis creates urgency and urgency creates speed. When there is a crisis, negotiators try to reach an agreement as quickly as possible in order to speed up a transaction. The sense of urgency makes negotiators cut to the chase.

However, negotiating in a crisis situation has its pitfalls and mistakes can happen. According to Dr. Chester L. Karrass here are some mistakes to avoid during crisis:

• Assuming the impasse in one area will result in deadlock in the overall negotiation
• Being afraid to admit to errors
• Panicking before getting to a final agreement
• A final agreement that is not fair or reasonable
• Failing to prepare your organization for potential deadlock or threat tactics by the other party
• Trying to be liked during the final stage of the negotiation results in not reaching the objectives

Have you seen other business negotiations being affected by crisis? Do you have specific examples from the Haitian crisis to share?

Re-Negotiating A Broken Contract

What happens when you try to re-negotiate on a broken contract?
In case you haven’t been watching television in the last couple of days, NBC is quitting its failed experiment of airing The Jay Leno Show at 10:00 p.m. and wants to push it back to start at 11:35 p.m., after the news.

The problem starts with the Tonight Show and Conan O’Brien. Conan took over the Tonight Show when Jay Leno left for the earlier time slot. Conan had been promised the slot when he started with NBC several years earlier. Now, NBC, in spite of having a contract with Conan, wants to push The Tonight Show to a later start, at 12:05 p.m. Conan is refusing, as this statement revels: (http://mediadecoder.blogs.nytimes.com/2010/01/12/conan-obrien-says-he-wont-do-tonight-show-following-leno) because he feels it would destroy the show.

NBC is a difficult situation because it has to re-negotiate with two stars (Jay and Conan) and two contracts. Both contracts stand to be changed or even broken by time slot changes.

There are many lessons to be learned, perhaps chief among them, as columnist Steven Pearlstein of the Washington Post points out, is that you should not resolve internal conflicts with costly, untested solutions. He writes:

“For NBC, the decision to move Leno to an earlier time slot had nothing to do with the desires of TV viewers. Rather, it seemed like a clever solution to the problem of having promised the "Tonight Show" to O'Brien five years earlier in an effort to prevent him from jumping to a rival network. It's a common mistake in business -- letting key decisions be driven not by market demand but by the need to resolve internal conflicts. As NBC discovered, it rarely works out for the best.”

Read the whole article here: (http://www.washingtonpost.com/wp-dyn/content/article/2010/01/12/AR2010011203671.html) which gives an excellent overview about what happened at NBC.

For business negotiations, the question is can you re-negotiate a broken contract? Can you reach an agreement when there are broken promises and hard feelings on the table? The NBC drama is unfolding and we will soon see how NBC executives end up resolving this acrimonious dispute.

What do you think will happen at NBC?

Is there a change in major business negotiations?

In the last several weeks we all were ‘treated’ to the Costco-Coca Cola re-negotiation where Coke (seller) demanded higher pricing from Costco. Then there was the Time Warner – Fox TV re-negotiation where Fox (seller) demanded higher pricing from Time Warner.

Normally these types of negotiations are ‘closed door’ negotiations – see our blog post last week (http://www.karrass.com/blog/2010/01/closed-door-policy-vs-coca-colacostco.html). Now the public and media are suddenly involved.

All negotiations have an ‘organizational’ component that comes into play. In these two cases, one side decided it was in their best interest to enlarge the organization; and to use organizational power to their advantage. In the case of the Time Warner – Fox negotiation, even politicians were incorporated into the ‘organization’.

These were some pretty major re-negotiations. And in each case, one side decided that it was to their advantage to take the negotiation public. Certainly with the Web, Blogs, Twitter and many other forms of communication, one side can create almost immediate public opinion. If developed correctly this can provide a source of power in their negotiation.

In your opinion, for these two specific cases, did this strategy work, or back-fire?

Are we likely to see more of this type of negotiating tactic in the future?

Are you getting all your questions answered?

One of the hardest jobs on the planet must be that of Sunday morning political talk show host. People like the late Tim Russert or the current Meet the Press host David Gregory are tasked with asking politicians hard questions that they don’t want to answer. Since politicians are very concerned with appearances, and want to avoid offending potential voters, they are very careful with what they say and usually sidestep questions they don’t like.

Likewise, in business negotiations tough questions may not be answered. The other party may simply not want to give you a necessary bit of information, either because he/she doesn’t know or doesn’t want you to know. Sometimes you will get only partial answers. And sometimes the other party may change the topic entirely.

Some telltale catchphrases that indicate answer avoidance are:

* I don’t quite understand the question.
* That’s a subject for another day.
* Let me give you some background.
* I don’t recall.
* It varies because....
* There are many reasons that cause that, like...
* I am not authorized to talk about that.

Another tactic that people use to not answer questions is to give lengthy soliloquies about a related matter. The intent is to give the appearance of providing information, albeit not the information you requested.

If the other party is blocking your questions or otherwise giving you the run-around, take a cue from the Sunday morning talk show hosts: rephrase your question and ask again. And if need be, ask again and again.

Questions that are not answered give you some valuable information about what the other party is holding close to the vest. You may need to conduct some independent research to figure out what is really going on.

What do you do when you are not getting your questions answered?

Closed Door Policy vs Coca Cola/Costco Negotiation

Closed door—is this a good policy? Or are there times when you want the negotiation public like in the recent Coca Cola-Costco price negotiations. See discussion here: http://bizconnect.purchasing.com/blogs/blogs_posts.php?mid=846

Closed door negotiations are usually reserved for high-level talks that deal with sensitive issues. The door is closed to the media and therefore to the public. Basically, closed door negotiations are open secrets. We know they are going on, but we have no idea what is being discussed.

Currently, the health care negotiations in the U.S. Congress that will aim to reconcile the differences between House and Senate health care reform bills are slated to be closed door negotiations. There has been some push back, notably from C-SPAN, as is reported by Fox News (and other sources).

There is a diplomatic model called Closed-Door Diplomacy (CDD). The International Studies Association defines CDD:

“In this model, a mediator invites negotiators, usually at the heads of state level, to a secluded location for intensive negotiations designed to achieve a major breakthrough. The model is based on the principle of applying internal pressure while neutralizing external counter-pressure in a controlled supporting environment. It is designed to produce maximum internal pressure on the sides to compromise through reciprocal concessions in the conference itself, while isolating them from certain counter-pressure from their own domestic constituencies and other sources.”
Source: http://www.allacademic.com/meta/p74174_index.html

Clearly, in certain cases, when sensitive political information is being discussed there is a case to be made for closed doors.

Rarely are business negotiations subject to the scrutiny of political or diplomatic negotiations, and there is very little reason to turn away the media. However, closed door negotiations can also turn away everyone except for the core negotiation team. Is this a good idea? Sometimes, it may be best to keep things private. The Karrass Law of Private Information says: “Sensational news drives out non-sensational news.” If something is going to make a splash, it will obscure everything else. But something quite different happened with the Coca Cola/Costco price negotiations.

What do you think about closed door negotiations? When are they appropriate? Was it wise for Costco to take their negotiation with Coca Cola public?

Your Negotiation Today

You've probably noticed that the last two years have been difficult for many individuals and many organizations. As the recession winds down, new opportunities will emerge, both for you personally and for your organization. Your negotiating skills are more important than ever.


In 2010 make things happen versus permitting things to happen to you!


Negotiating is a fundamental skill all business professionals must refine to survive. Regardless of your position within your organization, you will be negotiating today, tomorrow and throughout 2010. First and foremost, make sure you protect your own interests and the interests of your organization. Strive to create more innovative, Both-Win outcomes in your negotiations. The value you can create with your own unique knowledge, resources, perceptions and approaches to your negotiations is something to be treasured. You can make a real impact in your organization.

Every day you negotiate something.

It does not matter if you are an engineer, a salesperson, a supply management or procurement professional, a manufacturing specialist, construction manger, contract manager, marketing manager, project manager, or any of a multitude of other executive and top level positions (yes even CEOs). Every day (every hour) you negotiate something (schedules, resources, designs, prices, costs, specifications, work hours, legal terms and conditions, land values, etc.).

I want to personally thank all of you that have attended the Karrass Effective Negotiating Seminar and wish you much success in 2010. You have the skills to insure your organization's success.

If there are business associates you work with, or negotiate with, that have not yet experienced the Karrass training, please let them know about Karrass. The more everyone knows about negotiation, the better the probability for success.We know after 40 years of training business professionals, with proper skills (which can be learned), all negotiators can produce better outcomes--sometimes exceptional outcomes.


Chester L. Karrass

Washington Redskins Football Negotiation

One football team’s quest for a head coach: a negotiation story

The Washington Redskins finished off a dismal football season with a 20-23 loss to the San Diego Chargers on Sunday. Surprising no one, Redskins head coach Jim Zorn was fired early Monday morning. At the same time, former Broncos head coach Mike Shanahan was flying from Denver, landing not long after the Zorn announcement was made. Clearly, Redskins management knew what they wanted to do even before the Redskins lost their last game.

Washington DC sportscasters stood vigil for two days to find out if Shanahan was replacing Zorn as head coach. During those two days, Shanahan was deep in negotiations with Redskins owner Dan Snyder. Some of the issues being negotiated were: length of contract, the role Shanahan would play in choosing players and, of course, money.

Finally, a deal was reached. However, no decision was announced until both parties were satisfied, in spite of intense media pressure to make an announcement. In fact, the official announcement will be made Wednesday afternoon.

Sports negotiations are like any business negotiations except they are under intense scrutiny from fans and the media, which adds a tremendous amount of pressure and lots of speculation.

Several negotiating lessons can be learned from this sports negotiation episode:

* Do not cave in to pressure
* Negotiate until both parties are happy with the outcome
* Do your homework thoroughly (Shanahan held extended conversations with former Redskins head coach Joe Gibbs)
* Make a final decision and announcement when you are ready (or do not make premature announcements)

Redskins’ fans will have to wait until next season to see if this negotiation was favorable to their team.

What's ahead? Predictions for 2010.

On the first Monday of January 2010, we thought we would take a look at the year ahead. What is likely to happen in business and in business negotiations? Will the recession end? Will small business prosper?

For your convenience, we did a round-up of what business journalists are predicting for business in 2010 and beyond.

Newsweek predicts that the New York Times will start charging for web content, among its list of top ten business predictions.

Daily Finance shares predictions for which industries will have the top growth in the coming year.

On Entrepreneur.com, blogger Ivan Misner talks about networking trends for 2010.

Business Week forecasts five trends and other issues for business in the United States and globally.

On Small Business Trends, Barbara Weltman predicts what will happen with taxes and accounting in 2010.

On the Inc.com technology blog, here are the top 10 technology predictions for 2010.

Also at Inc.com, read what seven CEOs are resolving to do in 2010.

From FoxBusiness.com, here’s a video of experts discussing the January effect and giving their 2010 predictions.

And not strictly business, but useful nonetheless, here is a list of 100 things to watch for in 2010 (things like an election in the UK and TV/Web integration)


What do you think will happen for business in 2010? Please share your predictions in the comments.