Business Negotiation March 12, 2015

Moving Toward Settlement From the Start

Your first offer is an important one. It should be made in a firm but courteous way. Much can be learned by observing how your opening position is received. The other person’s body language may provide more insight than their words.

The other side’s subsequent offers and concessions also tell a story. Most would interpret concessions made too quickly as a sign of weakness. A rate of concession-making that moves in the direction of ever-smaller increments transmits a message that further compromise will be limited or unavailable later. Whether these signs are real or only imagined depends on what is learned through further negotiation.

Surprises in the form of unexpected issues or negative information learned at the table are always hard to handle. When a surprise comes up, it’s wise to find a reason to call a caucus or time-out as they do in basketball or football when things on the field go wrong.

When a question you are unprepared for is asked by the other, it is better to say that you are not ready to answer than it is to bluff your way through and be sorry later. Hardly a month goes by without some televised politician attempting to bluff a response to a difficult question and then spending the next month trying in vain to correct what was said in haste.

All good negotiators have an abundance of perseverance. When their great idea or well-analyzed viewpoint is rejected they do not falter or lose self-esteem. The perseverance rule is simple—when your proposal is rejected or laughed at, shape it in another way and return it to the table. Zhou Enlai, a famous Chinese diplomat under Chairman Mao once said, “If the other side resists my offer of a pizza cut in six pieces, I offer it later cut in eight.”

As a recent Harvard Business Review article reported, perseverance may pay dividends in dealing with your boss. Jack Welsh described a technique that he used when Chairman of General Electric to test a subordinate’s faith in the ideas that they proposed. He would reject their ideas a number of times to see if they would return with the idea after rejection.

After several re-submittals Mr. Welsh found that those who returned to him had greater faith in their proposals. They thought enough of their ideas to take on the boss. Like most decisions in business, when and whether to do this with your boss is a judgment call you’ll have to make for yourself.

Perseverance works in negotiation. Its powerful partner is “Acceptance Time.” Together they can help convince the other party that you are committed to your position in a thoughtful, disciplined way.