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?

While many people think of creativity as the ability to paint or be musical, in reality, creativity is defined as the ability to generate and recognize new ideas that can be used to solve problems.

According to an abstract from the California State University at Northridge:

In order to be creative, you need to be able to view things in new ways or from a different perspective. Among other things, you need to be able to generate new possibilities or new alternatives.

You can see how the ability to create new solutions can impact your negotiation ability. A creative mind may find a great deal that will create a win-win scenario for both parties.

Harvard Business School recently reported on a study that found that negotiators do benefit from creativity training:

Negotiators who had received creativity training performed better than did those who had received more traditional training. The results suggest that by exposing negotiators to creativity training and supporting their bright ideas, organizations may see improvements to their bottom lines.

There are many ways to boost your creativity. Among the “20 Tips from from Psychology for Boosting Creativity” are actively looking for inspiration and creating a flow chart of ideas.  If you are looking for more ways to books your creativity, read the article “Boost Creativity: 7 Unusual  Psychological Techniques.”

Sometimes when you have been dealing with a problem for a long time, you can’t see alternative solutions. The best thing in this case is to take a break. You could quite literally walk away from the problem, as the act of walking can have a meditative effect, which will help you to see things differently.

What do you do when you are presented with a difficult problem requiring a creative solution?

As you know, business negotiations often involve compromise and making concessions in order to move ahead and reach an agreement. However, you want to make strategic concessions that result in win-win agreements—giving up too much, or too soon puts you at risk of a win-lose agreement.

Concession-making is an art. Something that can be improved with practice and experience. Dr. Chester L. Karrass provides some excellent tips to improve your concession-making in his book “In Business As In Life—You Don’t Get What You Deserve, You Get What You Negotiate.”

Here are the seven top tips to improve your concession making:

1. Never fear to negotiate—get over any embarrassment or fear of trying to win a better deal.

2. Always leave some room for compromise. Don’t dig yourself into a hole.

3. Get something in return for every concession you make.

4. If the other party wants to “split the difference” you can answer that you can’t afford to split it but you can do 75%.

5. Learn how to give concessions that don’t give anything away such as good listening, courtesy, backup of what you are saying.

6. You don’t have to engage in a quid pro quo. You can give 80 even if they give 100.

7. Don’t concede “funny money” unless you have thought of it in terms of real money—that gives more weight to your concession, and how it is considered.

Do you have any tried-and-true tips for concession-making? Please share them with us in the comments.

Almost every negotiator has to present his or her offer. It could be argued that the better your presentation is, the better the outcome of the negotiation will be for you. How do you go about improving your presentation?

Use rhetorical flourish

According to a 2008 article in Business Week magazine, there are four ways you can improve your presentation, and they have to do with rhetoric. It is more about how you present the information than what the information is. Author Carmine Gallo recommends that you use these four rhetorical flourishes:

• Analogies
• Similes
• Metaphors
• Triads (delivering three concepts)

Use online software to jazz up your presentation

Some people use PowerPoint, others rely on paper handouts or even writing on a whiteboard. You may also consider online presentation software, which has lots of bells and whistles to give your presentation pizzazz.

Entrepreneur Maureen Carroll tells Inc. Magazine that her favorite online tool for presentations is Prezi. With Prezi, you can include text, graphics, videos and other items in your presentation, and zoom from thing to thing.

Mashable provides a list of thirteen online presentation applications that you can use as well.

Share your presentation online

There are several places online where you can share your presentation, in many cases for free. Wish some, you may be able to link them to your LinkedIn Profile or put on Facebook. Here are three websites to check out:

Slideshare: http://www.slideshare.net/

Sliderocket: http://www.sliderocket.com/

Slidebloom: http://www.slideboom.com/

What tips do you offer to improve presentation? Share in the comments.

We spend a lot of time here at Negotiation Space talking about what you should say during a business negotiation and when you should say it. Perhaps we should also discuss what you should not say.

Don’t let emotions get the best of you!

Your first rule is to avoid saying anything when your emotions are getting the best of you. With any strong emotion—anger, sadness, even happiness—people tend to become less rational. Some people even lose touch with reality or the situation at hand. During a business negotiation, take a time out if you get emotional so that you can avoid saying anything “in the heat of the moment.”

Don’t make strong assertions if you aren’t sure

Dr. Chester L. Karrass also advises that you avoid making strong assertions, unless you are 110% sure of you are stating. If you have any doubt, he suggests saying “I reckon” instead.

5 Statements to Avoid

Inc. Magazine has suggestions for “5 Things You Should Never Say While Negotiating.” Author Mike Hofman writes that you should never say the following:

• The word “between” (or throw out a range)
• “I think we’re close.”
• “Why don’t you throw out a number.”
• “I’m the final decision-maker.”
• Obscenities.

What have you learned is best never to say while negotiating? Share with us in the comments.

Negotiations: How to Handle Objections

“Nothing will ever be attempted if all possible objections must first be overcome.” Samuel Jackson

There will always be objections—to your price, to your delivery, to your product or service, or maybe even to you. How you handle these objections will determine the success of your business negotiation.

The first step in handling objections is to try to understand the viewpoint. You don’t have to agree with the objection, but you must understand how the other party is thinking. Convey your understanding to the other party by re-phrasing the objection as a question. You can say something like “You think our delivery time is too slow?”

Handling objections also involves pre-negotiation preparation. For instance, if you are a seller, make a list of your product or service’s attributes, benefits and disadvantages. Do the same for your competitor’s product or service. Then, write down every conceivable objection to your product or service. Brainstorm with a group if possible. Come up with a list to counter these objections.

You will notice some objections are hard to handle and others are easy to handle. Easy-to-handle objections can always be refuted with available evidence (competitive pricing for example).

Other objections are harder to deal with. Dr. Chester L. Karrass suggests dealing with these by turning the objection into a yes-or-no question, and trying to elicit a “yes” answer. For instance, you can say something like “I see you are concerned with the price of this product. If you check our competition, you will notice that they don’t use the same material in producing the product, and you want this material if you want the product to have a 25-year life span, right?”

Dr. Karrass counsels that you should NEVER agree with the other party’s objection. In the example above, you would never agree point-black that the price is too high, instead you would only note that the other party thinks the price is too high.

What do you do to handle objections? What process do you follow?

“Time is free, but it’s priceless. You can’t own it, but you can use it. You can’t keep it, but you can spend it. Once you’ve lost it you can never get it back.”—Harvey MacKay

“The only reason for time is so that everything doesn’t happen at once.” –Albert Einstein

Time—how long or when—is a major factor in all negotiations. Some negotiators will say they did not have enough time to reach an agreement and some will say there was too much time.

How time is perceived may have to do with cultural background, and can affect a negotiation. In an article discussing time perceptions in Middle East peace negotiations, the following is worth noting:

“An article by Ilai Alon of Tel Aviv University and Jeanne Brett of Northwestern, however, cautions that good intentions alone may not bridge cultural differences. Specifically, they note that conflicting conceptions of time can thwart successful negotiation.”

According to Dr. Chester L. Karrass, time has power in a negotiation. Whichever party is constrained by time provides the other party with a source of strength.

Timing and schedules are crucial during a negotiation.  If you are on a tight schedule, or an internal deadline is looming, time can be a source of urgency. There are times of the year that are more beneficial to buyers than sellers (and vice versa). For instance, if it is the end of the month and a salesperson needs to meet a quota, he or she may be more willing to negotiate on price.

Dr. Karrass asserts that the timing of a final offer impacts its credibility—if you do it to early the other party may think you are bluffing.

“Time talks. It is the hidden language of negotiation.”—Chester L. Karrass

How does time affect your negotiations?

This week, China’s president Hu Jintao has been meeting with President Obama in Washington. The Chinese-US relationship has become increasingly important for both economies, yet there was opposition to the visit. Some oppose China’s stance on human rights and others are concerned about China’s monetary policy, which artificially inflates the value of the yuan. The political and economic opposition puts pressure on both sides, making it harder to negotiate.

In Huffington Post, Blythe McGarvie argues in the article “President Hu and Negotiations” that to better understand the Chinese position, it is important to know the “Beijing Consensus.” She writes:

“Joshua Cooper Ramo coined the term “Beijing Consensus” in 2004 in his 60-page Foreign Policy Centre article as he described China’s approach to new development. He states, “it is defined by a ruthless willingness to innovate and experiment, by a lively defense of national borders and interests, and by the increasingly thoughtful accumulation of tools of asymmetric power projection.” The Consensus addresses both the global balance of power and domestic issues such as quality of life and social and economic change.”

The Beijing Consensus has three main theorems:

1. “Chinese leaders who want to keep options open and preserve flexibility …. The only true path to success is one that is dynamic and responsive; no single plan works for every situation.”

2. “…Chinese behavior “demands a development model where [sic] sustainability and equality become first considerations, not luxuries.”

3. “China’s leaders want a peaceful rise by using economic leverage to keep the U.S. in check and assure China’s own financial sovereignty.”

Cultural differences also matter, as we have discussed previously on Negotiation Space. Matthew Edwards provides some more points to consider in the blog post “Negotiation skills when doing business in China,” published in Flying Solo. Two important points are that the Chinese don’t like to say no, which leads to different outcomes that what seemed to be agreed upon.

Today marks the 50^th anniversary of John F. Kennedy’s inauguration as president of the United Sates. In honor of the occasion, the JFK library in Boston has made available, in digital format, many letters, writings and movies from its archives.

When Kennedy took office on January 20, 1961, the world was in the midst of the Cold War. Two superpowers—the United States and the Soviet Union–were dealing with each other based on what politicians deem “mutually assured destruction.” Fears of nuclear war were very real and dictated the course of foreign policy for both countries.  Yet, in his inaugural address to the country, Kennedy talked about negotiation. This is what he said:

“So let us begin anew—remembering on both sides that civility is not a sign of weakness, and sincerity is always subject to proof. Let us never negotiate out of fear. But let us never fear to negotiate.

Let both sides explore what problems unite us instead of belaboring those problems which divide us.

Let both sides, for the first time, formulate serious and precise proposals for the inspection and control of arms—and bring the absolute power to destroy other nations under the absolute control of all nations.”

Kennedy summarized the win-win theory of negotiation masterfully. He advocated looking for common ground. He also thought that negotiations should be civil while still demanding assurances and proof from the other party.

On March 21, 1961, Kennedy wrote the following in a National Security Action Memorandum on the US-USSR Commercial Air Transportation Agreement:

“Prior to the initiation of the US-USSR negotiations on the draft agreement, I would like to have prepared for my approval a statement of objectives to be sought and the general principles to be followed in the negotiations. Such a statement would serve as a guide to the negotiators in responding to the Soviet counter proposals, as well as ensure that the negotiations are closely linked to our over-all relations with the USSR.”

Here Kennedy makes certain that negotiations have clear and stated objectives to serve a guide to the negotiators, and to make it easier to answer any counter moves.

You can access these and other documents at the John F. Kennedy library online: http://www.jfklibrary.org/

A year ago on Negotiation Space, we discussed how civility can save your negotiation. It is worth revisiting this now as the country marks Dr. Martin Luther King’s birthday on Monday, January 17 and also deals with the aftermath of the horrible tragedy in Tucson, Arizona.

It is hard to escape the calls for increased civility in political discourse. Although in the case of the Tucson shooting it is not clear that political rhetoric led the shooter to execute his rampage, it is easy to see how angry, heated exchanges can lead to violence. In terms of the civil rights movement, Dr. King advocated for civil disobedience—using quiet resistance instead of violence.

The issue for business negotiations is that attacking and creating an “us-versus-them” dynamic does not lead to agreement. Any negotiation starts with the premise that the parties are seeking to reach agreement. Insulting the other party is not going to result in compromise and finding common ground.

Dr. Chester Karrass writes:

“There are people who try to get what they want by becoming emotional, by embarrassing the other person or becoming a nuisance. Most of us become defensive when we encounter such behavior. We are not prepared for people in business to display emotions or act in an embarrassing way.”

Dr. Karrass goes on to say that people who act this way in a negotiation are using an intimidation tactic designed to make you less assertive in supporting your position.

To deal with incivility, you first must recognize that if the other party is being rude or otherwise unpleasant, it may be a negotiation tactic to put you on the defensive. Take the higher ground, but also stand your ground.

How do you deal with incivility in a business negotiation?