Tag archive: the-bogey-response
Strategies for Negotiations
Let's review some negotiating strategies.
1.Leave yourself room to negotiate --but don't be ridiculous. Always give a reason for your position.
2. Be stingy with your concessions. Always consider your concessions as a "message" or information you are sending the other side.
3. Always tie a string to your concession and ask for something in return. This communicates to the other party that you don't have a lot of room to move; it communicates good will and your willingness to cooperate; and it introduces a talking point that might gain you additional information regarding their position. This new information could lead to a totally new solution. A solution you might have not considered before.
4. Patterns or rates of concessions are important. Always use declining numbers; don't always use whole numbers/percentages; don't match the other person's concessions-----instead say: "I can't afford to match that, because . . ."
5. Always provide reasons for the positions you take. This communication to the other party can encourage them to introduce new information that could create better paths to agreement and a better solution.
6. If you can, always get the other side to state their position first/make the first concession/or put out the first number. You may be surprised to find that the situation is better than what you anticipated. This information permits you to modify your response and change your negotiating strategy.
7. Consider the pressures 'Deadlines' can cause. Can you relieve your pressure by changing the Deadline? Can you cause pressure on the other side by enforcing a deadline?
8. It is generally wise to "Say NO once more" before coming to agreement. There usually is a way to make the deal a little bit better---for both sides.
9. When the opportunity presents itself, use the Considered Response, Limited Authority, Power of Legitimacy, the Bogey and the Flinch. They really do work and will provide you more negotiating power and create the opportunity for you to learn new information.
10. Remember "Catch Twenty-Two." Being real smart in the negotiation can be kind of dumb. Being a little dumb can be very smart. Don't know everything. Ask the other side to help you 'understand.' This conversation may open up avenues to agreement that you had not considered before.
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The Flinch Response
As controller of my small division, I had requested a budget of $20 million which I thought was quite reasonable considering the effect of higher than usual inflation pressures on engineering salaries and technology-based materials. The other party responded with a $17 million counteroffer. That Bogey response with its low but friendly offer helped set the stage later for an amiable, mutually satisfactory agreement. What would I have done if, instead, he had flinched by saying in loud terms, “That’s ridiculous,” and offered nothing in response to my $20 million request? The negotiation might have gone differently.
I can assure you that a strong “flinch” would have reduced my expectations and made me wonder if any agreement was possible without large concessions. I’ve seen people “flinch” in many ways. One, in response to a price he didn’t like, actually fell off his chair as it tipped backward. Others have screamed in anger, and still others, more polite, nod their heads sadly and say words like, “Wow, that’s awful,” or “Are you kidding?” The effect of the flinch always leads you to think, “Coming to agreement is not going to be easy.”
There is nothing unethical about the “flinch.” Those who differ with your viewpoint, or proposal, have every right to express their disagreement by either flinching, remaining silent or quickly offering another opinion. Their flinch may, of course, be real or postured. It’s hard to tell, but the effect is the same. The person facing the “flinch” feels they must relieve the concern of the “flincher” by explaining why their position or price is not unreasonable. Later, if the flinching resistance continues, concessions or alternate approaches may follow. Those who flinch know this.
The key to responding to the “flinch” is to recognize that it is an opportunity to express your position more fully. Instead of lowering your expectations it can serve as a springboard to exchange viewpoints and build a stronger relationship. The best way to handle the flinch is to tell your story as though the other person had said, “Please tell me more.” Don’t let it bother you or cause you to lose confidence in your position. Use it as an opportunity to explore both-win possibilities.
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The Bogey Response
The best way to explain the Bogey response is with an example. As controller of a five-hundred-person division of a very large technology-based conglomerate, my responsibilities included negotiating an annual operating budget with the controller of corporate finance and accounting. While neither of us exercised any direct authority over the other, it was obvious that the corporate controller held a more influential position than I did.
The corporate controller asked what my division needed for the year. I was prepared to go into considerable detail but was cut off after I made a request for $20 million, just a million more than the year before, and began to offer an explanation for the modest increase.
He responded immediately by saying, “We in corporate would love to give you the $20 million but we can’t.” He acknowledged that my department had done a good job the previous year, but that all the corporate could allot this year was $17 million because the company was under competitive pressure and outside capital and credit sources were drying up.
A reduction in our budget would require cuts in staff and commitments. I brought my staff together to search for a way to handle the $17 million Bogey. Four approaches were discussed to bridge our difference with Corporate.
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- Test the bogey. Almost all budgets are flexible to some extent. Money can be shifted from one account to another, from one purpose to a second or from direct to overhead accounts. Working together we might find some relief that way.
- The time shape of funding can be changed. If the other side doesn’t have enough now, they may have it later or early next year. They may prefer to cover the budget shortfall by using investment or borrowed funds rather than direct revenue.
- Change the time shape of performance. Not all work need be done between January 1 and December 31. Some parts can be completed later; some must be done early in the year. Changing the scope of work, leaving some things out, adding others and doing some later can serve to bridge the gap between parties in whole or in part.
- Shift the work. If our department expects trouble meeting its responsibilities with the $17 million budget offer, we might offer to shift some work to other departments or to farm it out overseas. We could ask for temporary help or assistance to meet overload requirements. The lines of authority and responsibility between departments are never rigid over time. Some of our work could be done by another department if several of our people had to be transferred to meet the Bogey.
Strategies for Recession Negotiations
Today’s global recession is causing a lot of negotiations. Many of you are having to re-negotiate agreements you thought were settled.
Now is the time to review these negotiating strategies. If you have attended the Karrass Effective Negotiating Seminar, refer to your seminar workbook, the text books and the CDs.
1.Leave yourself room to negotiate --but don't be ridiculous. Always give a reason for your position.
2. Be stingy with your concessions. Always consider your concessions as a "message" or information you are sending the other side.
3. Always tie a string to your concession and ask for something in return. This communicates to the other party that you don't have a lot of room to move; it communicates good will and your willingness to cooperate; and it introduces a talking point that might gain you additional information regarding their position. This new information could lead to a totally new solution. A solution you might have not considered before.
4. Patterns or rates of concessions are important. Always use declining numbers; don't always use whole numbers/percentages; don't match the other person's concessions-----instead say: "I can't afford to match that, because . . ." (If you attended the Karrass Effective Negotiating Seminar, review the Atlantic City real estate negotiation -- remember the video?)
5. Always provide reasons for the positions you take. This communication to the other party can encourage them to introduce new information that could create better paths to agreement and a better solution.
6. If you can, always get the other side to state their position first/make the first concession/or put out the first number. You may be surprised to find that the situation is better than what you anticipated. This information permits you to modify your response and change your negotiating strategy.
7. Consider the pressures 'Deadlines' can cause. Can you relieve your pressure by changing the Deadline? Can you cause pressure on the other side by enforcing a deadline?
8. It is generally wise to "Say NO once more" before coming to agreement. There usually is a way to make the deal a little bit better---for both sides.
9. When the opportunity presents itself, use the Considered Response, Limited Authority, Power of Legitimacy, the Bogey and the Flinch. They really do work and will provide you more negotiating power and create the opportunity for you to learn new information.
10. Remember "Catch Twenty-Two." Being real smart in the negotiation can be kind of dumb. Being a little dumb can be very smart. Don't know everything. Ask the other side to help you 'understand.' This conversation may open up avenues to agreement that you had not considered before.
Read more »