Negotiation Space

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?

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?

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?

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.

Social media has grown exponentially in the past couple of years, and most people seem to have at least one social media account. Whether it is on Facebook (where Karrass has a page), Twitter or LinkedIn, your profile may be an asset in your next business negotiation.

An important part of business negotiation planning is research, and there may be no more up-to-the-minute place to find the most recent news (and rumors) than social media.

Start by doing a company search on LinkedIn. You will find out who works at the company, and whether you have any connections to those individuals. You will also find out how the company positions itself.

Another way to research is to run a keyword search on Twitter. What comes up? Are there any impending deals that haven’t been announced publicly? Are people happy or unhappy with a company? It could be helpful to search Facebook too, and read through the comments on a company’s page. Are they positive or negative?

Finally, social media can influence perception and reputation. The article “Donald Trump’s Use of Social Media Helps Him Negotiate” says the following:

Use social media sites to position you and your company in the manner you want to be seen by others. Be active in how you do this. If you’re not active yourself, other people may craft an image of you that is not accurate.

How do you use social media in business negotiation? Let us know.

Many times during a business negotiation we are tempted to say to the other party “take it or leave it.” Generally, this happens when we are frustrated or have been going around the same issue for a long time. The truth is that “take it or leave it” is a good tactic in several situations. Sometimes you do need to issue an ultimatum.

According to Dr. Chester Karrass there are at least five situations where it makes sense to use the take it or leave it tactic:

1. When you don’t want to encourage further tinkering with a deal

2. When if you drop the price in this negotiation it will affect your pricing overall

3. When the other party can’t afford to leave it.

4. When all customers are accustomed to paying the price

5. When you can’t afford a loss.

The problem with using the “take it or leave it” tactic is that it can create hostility, as the other party feels backed up against a wall. To minimize the potential for bad feelings, make sure to not use the actual phrase “take it or leave it,” which is pretty charged. Find a way to say this without using those words. Also, watch your timing. It is best to use this tactic later in the negotiation than earlier.

How often do you issue this ultimatum to the other party? Do you find it works?

Karrass wishes our readers in the United States a very pleasant and relaxing Labor Day weekend. We will be back here on Wednesday, September 7^th with more insights and tips on business negotiations.

Not every negotiator is ethical and upfront. At times, some businesses (and governments or organizations) try to influence the outcome of a negotiation by issuing erroneous information or rumors.

Trial balloons are used most frequently by politicians who leak a rumored policy change to gauge public reaction. Essentially, it is a way of testing the waters.

In negotiation, some people use trial ballo0ns, rumors and price drops as a way of sending messages to the other party. This method of “grapevine” communications provides a way to save face without losing any bargaining leverage.

What do you do with information you hear through the grapevine?

Negotiators must be on guard against the rumor mill, false information leaks and trial balloons—understanding that these may be used as tactics. Here are a few counter tactics:

• Test any suspect information.
• Be wary of information that was acquired too easily
• Realize that trial balloons and rumors are a way to confuse you and to weaken your resolve
• Understand that grapevine information can be used as a way to communicate indirectly

How do you deal with rumors, trial balloons and information leaks? Tell us in the comments.

If you are responsible for hiring people for a negotiation team, perhaps you need to determine if they have a strong need to be liked.

Dr. Chester Karrass says the following:

Can someone be a good negotiator if he or she has a strong need to be liked? I think not. Negotiation involves a conflict of interest between parties. One must be willing to risk doing some things that may lead to being disliked.

This does not mean that negotiators are UNLIKEABLE. There is no need to be nasty or belligerent.  As Dr. Karrass says:

Negotiation involves a mix of competition and cooperation. The belligerent person finds cooperation difficult. People who need to be loved tend to run from conflict.

Basically, a negotiator has to have enough sense of self and an eye on the end goal to not NEED to have the liking or approval of the other party. He or she must know how to cooperate  but also how to compete. There is a balance that must be achieved.

What are your thoughts? Have you negotiated with someone with a strong need to please or be liked?