Negotiation Space

You are in the middle of a negotiation, and you realize that you and the other party just don’t agree on everything. You don’t trust each other enough.  Does this mean the negotiation is over?

Of course not! That is zero-sum/all-or-nothing thinking and it won’t move you forward.

To move forward, you should be thinking win-win. Perhaps you don’t agree on everything, and you have yet to build trust, but you can find one or two things you do agree on. Dr. Chester L. Karrass calls this the peace-by-piece tactic.

Dr. Karrass describes the peace-by-piece tactic like this:

“The two [parties] reach agreement on low-risk matters, leaving difficult issues to simmer. If, over a period of time, things work out satisfactorily, they tackle a tougher issue. ‘Peace-by-piece’ gives each party a chance to test the intentions of the other without getting hurt too much.” (Give and Take, p. 146)

This tactic serves to build trust, and in this way the peace-by-piece approach is applicable in both diplomatic and business negotiations. Trust is built over time, and is based on positive shared experiences. We see this approach when buyers are dealing with new vendors. At first, they place a small order, to see how the vendor does. Once the vendor proves himself, the buyer will place another, perhaps larger, order.

Clearly, the more trust there is between the parties, the easier it will be to reach a more global agreement. Dealing with the easier issues first allows both parties to move forward without feeling pressure or unease.

Like the Chinese philosopher Lao-Tzu said: “A journey of a thousand miles starts with a single step.”

According to Merriam-Webster, a grievance is a “cause of distress felt to afford reason for complaint or resistance.”

Generally, a grievance stems from a feeling than an injustice has happened. When an injustice has occurred, the best way to deal with it is to air your grievance and if appropriate, to file a formal complaint (many companies and organizations have processes in place for this). In this way, the grievance can be addressed and may be resolved. On the other hand, harboring grievances leads to bearing grudges and foments distrust.

What if you have a grievance regarding the other party in your negotiation? Can you negotiate with that party? Chances are if you are holding a grudge or feel that the other party has been unfair or treated you badly, you will not be able to negotiate with that party. Unaired grievances are one of those unspoken emotions that lurk beneath the surface of any negotiation.

In short, don’t walk into a negotiation bearing grudges and unaired grievances–these are poisonous to any negotiation.

Address your grievance and work to correct the situation that led to the grievance in order to move ahead with your negotiation. If the seller gave you a sub-par product last time, tell her exactly what was wrong with the product and what you expect this time. If your buyer paid late, be sure to clarify your payment rules upfront.

Whatever you do, don’t assume that the other party knows you have a grievance. Communicate to avoid misunderstandings and to move ahead with your negotiation.

What do you do when you have a grievance?

Unfortunately, in the world of business negotiations, not everyone plays nice. Some parties will bring out dirty tricks to help them “win” or perhaps hopelessly deadlock the negotiation to avoid reaching agreement.

You don’t have to fall prey to dirty tricks—the first step is to learn to recognize unethical or dirty negotiating maneuvers. If the other party uses one of these tactics or maneuvers, you are dealing with dirty tricks:

Bribery maneuver: The unethical use of payoffs or collusion for the other party to get its way.

Missing person: An authority trick where the person who has the ability to grant final approval is deliberately absent

Blackmail: Basically, a threat, this is an amount maneuver where the other party says pay this or else!

Scrambled eggs maneuver: Deliberately creating confusion by throwing lots of issues and numbers.

Low balling: Providing a really low figure—an offer too good to be true—just to get into a negotiation.

Personal attacks: Deliberately attacking someone to destabilize the negotiation.

Stretchout maneuver: Where one party will deliberately extend the negotiations over a long period, in order to reveal uncertainties prior to agreement.

There are dozens of other dirty tricks, ranging from deliberately providing the wrong information to engaging in bait and switch. To protect yourself, the best thing is to be prepared for the other party to engage in unethical maneuvering so you can recognize something is amiss before you get too far.

What kinds of dirty tricks do you see most often?

Here’s a scenario: You have been in a business negotiation for several days. There are ten items on the agenda and you have been reaching agreement on each of them, albeit slowly. You come to the tenth item and you can’t reach an agreement. What do you do?

• Do you agree to disagree on the tenth item but declare you have a deal?
• Do you call the whole negotiation off?
• Do you agree to negotiate on the tenth item at a later date?

This is a common occurrence since there will be items that are harder to agree on than others. But should you allow hard issues, or issues where you are deadlocked, derail the entire negotiation? Perhaps the best answer is that it depends on what it is and how big an issue it really is.

If you can’t agree on an item now that will keep most certainly keep coming up in the future, then you should continue to negotiate until you reach agreement. This is especially important if you are in the process of negotiating a joint venture. As is reported in “The Rules of Alliance,” a BusinessWeek article about an upcoming alliance between Intel and GE, joint ventures have to respond to compatible, mutually-agreed objectives. The article says:

“But there is a powerful temptation for two companies that are strongly attracted to each other to rush things along, like teenagers with hormones raging. ‘You get impatient. You want to get moving. You’re excited,’ says Louis Burns, vice-president and general manager of Intel’s Digital Health Group [...] Often during negotiations, Burns notes, if two sides agree on nine points and are stuck on the 10th, they’ll let the 10th one slide and agree to revisit it down the line, if need be. But for joint ventures, he warns, ‘the problem is that the 10th point will come and bite you in the backside later.’”

Read the article here: http://www.businessweek.com/managing/content/aug2010/ca20100826_270920.htm

If you are discussing something that does not have the ability to impact the entire scope of the agreement, or that is deemed to be minor, then you should agree to disagree on the one issue, and revisit it later.

What are your thoughts? Please share your experiences in the comments.

Problem solving is an essential skill in business, and especially for business negotiation. Imagine if when faced with a negotiating problem, you couldn’t think of any options or alternative solutions. You would have hard time reaching any kind of deal. Clearly, developing your problem solving skills will benefit your negotiating ability.

Can you develop and improve your problem-solving skills? Of course you can!

Boost your creativity:You will need creative mind-set to find solutions when faced with push-back from the other party. There are many ways to boost your creativity from simply going for a walk to meditating. The blog Write to Done has a fantastic list of 201 ways to boost your creativity (applicable to anybody, not just writers):

http://writetodone.com/2010/06/28/201-ways-to-arouse-your-creativity/\

Generate ideas:Brainstorming and mind mapping are two ways to come up with creative solutions to many problems. Some people prefer brainstorming by themselves, with a pen and piece of paper, and others may find it more productive to brainstorm with a team.

Avoid a rigid mindset:Rigidity is the enemy of creative problem solving. There is always more than one solution to any given problem, and your task in business negotiation is to find the win-win solution that will serve your needs and those of the other party.

If you are looking for some problem-solving resources, the book “101 Creative Problem Solving Techniques: The Handbook of New Ideas for Business” by James Higgins, may be of interest.

Also, there are resources on the web:

http://www.positive-way.com/business/creative.htm
http://www.mindtools.com/pages/article/newTMC_00.htm

Are you working on improving your problem-solving skills? What resources have you found?

Dispute resolution is the process of resolving a conflict between parties. There are legally enforced methods of dispute resolution, such as litigation or arbitration, and there are consensual methods such as mediation. In some cases, the parties will reach a dispute resolution agreement, which is a legal agreement laying out the steps and timetable for solving the conflict.

According to the Businessdictionary.com, negotiation is the “bargaining (give and take) process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict.”

Dispute resolution is not negotiation nor is negotiation the same as dispute resolution. Simply put, negotiation is one of the tools available for dispute resolution. Negotiation is about reaching agreements, and if a dispute is holding up said agreement, clearly the negotiators need to find a way to resolve the dispute.

Business negotiations should not focus on dispute resolution. To succeed, business negotiations should be collaborative and all parties should be entering the negotiation with the intent of reaching a mutually agreeable deal. If there is a conflict or dispute beforehand, it is hard to see how the parties will work together collaboratively.

If the parties are negotiating a contract, and can’t resolve their differences through negotiation, then the may need to move to mediation or arbitration. Dr. Chester Karrass calls arbitration “a legitimate alternative in the negotiating kit of tools.” Thus, dispute resolution can also be seen as an alternative to negotiation.

How do you handle disputes? Have you successfully resolved a conflict through negotiation alone?

Here at Negotiating Space we provide you negotiating tips and insights to improve your business negotiations. With that in mind we want to share an excellent article from The Star Ledger, a New Jersey newspaper (online at www.NJ.com). The article, by Stever Adubato, is titled “To stay in, and win the game, you must negotiate well.”

Adubato’s main argument is that in the economic recession, everything is negotiable and therefore, effective negotiation is more important than ever. Those who don’t negotiate will stay on the sidelines.

Following are some of Adubato’s tips:

* Improve you communications skills, especially your listening skills.
* Think things through and don’t respond right away.
* Be flexible in your goals.
* Be positive.
* Try to understand the other party’s perspective.

Perhaps most important to keep in mind is this:

“Never forget that people like doing business with people they like, even when they are not coming from the same place.”

Read the article here.

What do you think? Are there any other essential negotiating tips that Adubato should have included?

Dealing with stress

Clear thinking under stress is one of the most important traits for a good negotiator to have. Because negotiations can be very stressful, keeping your cool is a major asset.

In any negotiation, there are multiple sources of stress. There are organizational demands and performance expectations to deal with. If you are negotiating with a team, there may be stress from internal group dynamics. And of course, there is stress from the other party’s demands, behavior and expectations.

How do you keep a level head when you are faced with multiple stressors?

• Manage expectations, both of your organization and of yourself. If you have over promised results, and you don’t feel confident of your ability to obtain those results, you will certainly have stress.

• Put it in perspective. If the other party is being belligerent, it may be because he/she has to deliver on their own set of expectations. It is about the negotiation and not about you.

• Keep sight of your goals. You are negotiating to achieve something meaningful for you and/or your organization.

• Take a time out if needed. You can always ask for time—time to think, time to get more information, time to regroup.

• Breathe. It is a fact that when you are stressed, your breathing becomes shallower. Make a conscious effort to breathe deeply and regularly, and you will feel better.

• Rest. When you are tired (because you were up all night putting together your notes for the negotiation) you are less able to deal with stress. Smaller things may put you on edge. Prepare in advance and get a good night’s sleep before your negotiation.

What actions do you take to deal with stress? Have you ever had a less than favorable outcome because you were under stress?

Here on Negotiation Space we have often discussed that being prepared is one of the best ways to ensure success in any business negotiation. A checklist may make your pre-negotiation preparation easier. Checklists also have the advantage of reminding you of every thing you may need.
We’ve created a starter negotiation checklist for you:

1. Determine your goals/wants.

2. Prioritize your wants–distinguish ” must” from “would like.”

3. Think about some potential Both-Win scenarios.

4. Write out some ‘time-out’ scenarios that can be used to give you time to think.

5. Decide who will be on your negotiating team and why.

6. Consider the location where you plan to negotiate.

7. Determine what backup information and supporting materials (including presentation materials) you will need.

8. Think of how you will move forward if the other party says ‘NO’ to your demands.

For some further ideas, take a look at these additional resources from around the Web:

http://www.freshbusinessthinking.com

http://businessmanagement.suite101.com

http://www.entrepreneur.com

Do you use a pre-negotiation checklist? What would you add to the list?

Negotiation lessons from the current Israeli-Palestinian situation

Negotiations and confrontations have been going on between Israel and the Palestinians for decades. Many US administrations have been involved in trying to reach a settlement between the two parties. Recently, there have been renewed efforts by the United States to move the process along.

This past week, diplomatic chaos ensued when Israel announced, during a visit by Vice President Joe Biden, that it was continuing to build housing in East Jerusalem. This is relevant because the status of Jerusalem is one of the main sticking points in the negotiations. To Israel, Jerusalem is the capital of the state, and therefore non-negotiable. Palestinians view Jerusalem as part of the disputed territories of the West Bank.

• Deal with other issues first

The biggest negotiating lesson from the US-assisted Israeli-Palestinian discussions is how to deal with highly sticky and intractable issues such as Jerusalem. The first step in dealing with sticky issues is to move to find other areas of agreement. In fact, this is what negotiators have been working on for the past several years.

• Defuse tension

In a March 21 article BusinessWeek is reporting that Israeli Prime Minister Benjamin Netanyahu has requested that US Secretary of State Hillary Clinton help create “mutual confidence-building:

“to defuse the tensions over the east Jerusalem project.”

“Clinton said in a March 19 interview with Bloomberg TV. ‘It’s about the overall atmosphere that is necessary to demonstrate clearly and unequivocally the commitment to the negotiations and the outcome of a two-state resolution.’”

(Read the article here. )

• Provide assurances

The US government has often functioned as an intermediary between Israel and the Palestinians. During the Bush II administration, Secretary of State Condoleeza Rice often traveled in the region.

Jackson Diehl, writing an op-ed piece in the Washington Post said this about the issue of settlements:

“The Bush administration privately offered him (Palestinian President Mahmoud Abbas) an assurance: Any Israeli settlement construction that took place during the talks would not be accepted by the United States when it came time to draw a final Israeli border.

• Do not get derailed by provocation

Diehl writes the following:

“As Rice might have told the current White House, lesson No. 1 from history is that there will always be a provocation that threatens to derail peace talks — before they start, when they start and regularly thereafter. (…) The trick is not to let the provocation become the center of attention but instead to insist on proceeding with the negotiations.”

Read Diehl’s piece, A Familiar Obstacle to Mideast Peace: Mahmoud Abbas, here.

Certainly, the Israeli-Palestinian peace negotiations will provide plenty of material to study negotiation practices, and to see what works and what doesn’t.