Tag archive: have-an-open-mind-in-negotiation

If you are looking to take your negotiation skills to the next level from the comfort of your own home, check out our virtual negotiation programs.

How would you like to give the other person a concession without giving away anything of tangible value?  It’s easy.  Just listen to him or her. Listening is the least expensive concession you can make. It can well be the most important. 

Active vs. Passive Listening:

Are you listening? Probably not. Research indicates that immediately after people have listened to someone talk, they remember only about half of what they have heard—no matter how carefully they thought they were listening. 

Passive listening is using your ears to hear something without giving the speaker’s message your full attention.  You aren’t checking email, but you’re not giving the communication your full attention either.

Negotiation requires ACTIVE listening. It is too bad that most of us do not know how. Listening is the easiest way to recognize needs and discover facts. If you take the time to listen, you can’t help learning. The trouble is that you have to get out of some bad habits. It means that you must look the speaker in the eye, be alert, sit straight, get close, and be greedy to grasp new information. He or she will reward your efforts by making it easier to pick out his or her points. 

Why don’t we listen? Of the eleven reasons below, only the first is the responsibility of the speaker. The rest are self- inflicted impediments to good listening. 

1. Most people speak before they think. Their speech is disorganized and hard to listen to.
2. We have a lot on our minds that cannot be switched off at a moment’s notice. 
3. We tend to talk and interrupt too much. 
4. We are anxious to rebut the other person’s arguments. 
5. We dismiss much of what we hear as irrelevant or uninteresting. 
6. We tend to avoid listening to hard material because it is too technical or detailed.
7. We allow ourselves to get distracted and don’t concentrate. The distractions are more fun than the topic under discussion. 
8. We jump to conclusions before all the evidence is in. 
9. We try so hard to remember everything that the main points get lost. 
10. We dismiss some statements because they come from people whom we don’t consider important. 
11. We tend to discard information we don’t like. 

A close look at the bad habits reveals that they center around one theme. Poor or passive listeners permit themselves to drop out of the conversation in the hope of catching up later. Unfortunately, they don’t. 

Active Listening is Effective Listening

Active listening begins with a realization that a speaker is presenting themselves for your approval.  The speaker wants you to see and believe the presentation. 

Like an actor on a stage, he or she will perform better if you open your senses to what he or she says. 

When people speak, they have a main theme, a few major supporting ideas, and proof that their ideas are sound. The trouble is that people don’t follow that simple pattern. Speaking styles vary. Speakers mix things up. Anecdotes, ideas, irrelevancies, proof, and empty cliches are thrown together for the listener to unscramble. 

How can we cope with this jumble? We can ask the other person to summarize main points and reasons. At times we can summarize the statements and ask whether or not our summary is correct. There is nothing wrong with saying, “I don’t quite get the point,” or “Let me get it straight,” or “Do you mean to say ...,” or “I’m not quite sure how that ties in.” The other person wants you to understand. He or she will welcome the chance to make the point clear. You are doing a favor. 

Listen as though you will have to summarize the main points to your boss. You will find that supporting details will fall in place if you catch the main points. Get into the habit of repeating what has been said so that the speaker knows you understand. 

One Strategy for Better Outcomes

Another good idea is to assign one person on your team as an official “listener” who can take notes and observe what is said, how it is said, the order in which things are said, and what is not said. You will be surprised at how much a perceptive listener can see and hear that others at the table fail to pick up. One company I know of went too far. They had a group of psychologists on the staff and decided to put them into negotiations as listeners. It should have worked but didn’t. The psychologists turned out to be harder to understand than the opponents. 

Gaining Listening Skills with a few Active Listening Activities 

Below are a few more active listening activities that work every time: 

1. Give full attention. You just can’t listen and do anything else at the same time. 
2. Don’t interrupt. 
3. Discourage cute side remarks and distractions. 
4. Don’t cut off listening when something hard comes up. 
5. Practice listening to ideas you don’t like. Try to repeat what you’ve heard. 
6. Let the other person have the last word. 

Listening is the one concession you can give that is guaranteed to get you more than you gave. 

Use this article as a guide to help you think in new ways to renegotiate for better contracts and stronger partnerships, whether in business or in life. Never be afraid of sitting down at the table to set new terms. The examples below explain how to avoid getting stuck in the details, how to use strategic tools for renegotiation, and how to make sure you clarify the value of your business to the other side.

If you are looking to take your negotiation skills to the next level from the comfort of your own home, check out our virtual negotiation programs.

In business, when we negotiate, we are usually negotiating with partners we work with often. As markets and supply chains shift, our interests change and we look for different opportunities in our contracts with partners. At the same time, unless we don’t have a choice, it can be tempting to avoid coming back to the table to set new terms, particularly if things didn’t go so well last time.

We are here to tell you that you can renegotiate a contract in ways that don’t just serve your interests better, but also improve your relationship with your business partner. The problems arise when we don’t look at the big picture to figure out how change brings opportunity. If we avoid renegotiating or if we don’t think about the contract as just one part of a larger partnership, then things can easily go south or, at the very least, we guarantee that we will miss out on new opportunities.

Even when we have work done on the house or the car, we generally work with the same people again and again. But over time our needs change, and the kinds of services and products also change. When we avoid taking the time to rework expectations, we lose out every time. That’s because not only could we be getting more of what we want, we could also be finding new ways to reach a Both-Win® that’s going to make everybody happy and lead to many more years of productive collaboration.

When to Renegotiate (Hint: it’s not only when we have to!)

We clearly need to renegotiate when a contract ends and needs have changed. Even worse, maybe we finalized a negotiation that didn’t meet our organization’s needs -- we might be renegotiating under extra pressure. Or maybe a problem has come up and the terms of the original agreement can’t be met as planned. In those cases, we might not have a choice but to go back to the table.

At other times, there may not be any urgent reason to go back to the table, and we might tend to leave things as they are for the time being. This can be a big mistake. As things evolve in the marketplace -- whether in business or in our own private lives -- we can miss out on big opportunities if we aren’t paying constant attention to what a new contract might offer us.

That means that at all times we should treat renegotiation as an ongoing part of an active and engaged relationship with all buyers and suppliers. When we do this, we build the strength of our relationships as well as the terms of each contract and build ourselves a stronger position for future renegotiations.

Starting from a Positive Position: The Normal Course of Renegotiation

We find ourselves renegotiating most often when a contract just is not working out because needs have changed or a contract period is ending. Usually, this won’t bring added stress to the process as can happen when something is not working. These are the ideal circumstances for an easy renegotiation because we can usually start from a position of finding the common positives for both sides.

Let’s start by considering an example that sets out an ideal situation. You’ve been working with Aces Supplier for years through contracts that last for about one to two years at a time. Their product has consistently met your needs, and renewing the contract has generally been a simple and friendly process. Let’s even assume that the two entities at the table share common values of maintaining good quality and strong business relationships even as circumstances change over time. You find yourself sitting down at the table once again without any major changes to worry about in the supply chain or market demand. This all might feel very easy and straightforward.

There is a danger here, though. The danger doesn’t come from the relationship, but from our own tendency to continue along the same route with the same terms we’ve always set without looking at the big picture. While both sides of the table might be staying relatively constant, in today’s global world we are guaranteed to lose out every time we forget to see the forest for the trees. Before we sit down with Aces, we should be doing almost as much research as for a brand new contract with an unknown supplier.

The first step is to make sure you are always researching your own enterprise. Ask your own organization questions like “How are we responding to these specific new technologies or supply chains?” and “How are we modernizing our apparatus?” More than anything, you want to understand what kinds of needs are emerging or on the horizon that should prompt new negotiating terms with even our most reliable and familiar suppliers or partners, like Aces.

A second crucial step is to look around at the marketplace again. What is changing? Are there new technologies emerging that could improve the product or service you are offering, even if this supplier hasn’t yet caught up?

Once you are at the table, keep two strategies in mind. First, raise your tolerance for going back to zero. Instead of jumping back to the same familiar terms, you can use patient silence as a crucial tool for opening up new possibilities. Second, make the power of silence work for you.

Instead of using your old emails or notes as a guide, treat this as a fresh negotiation and don’t assume that the terms are set in advance. Ask Aces the same kinds of questions you’re asking of your own enterprise about how they are modernizing and adapting to changing circumstances. When you do this, you are notifying Aces that you are not going to remain satisfied by the same terms simply because you’ve built an ongoing relationship. At the same time, you are maintaining the positivity of this ongoing relationship by opening the door for the other side to introduce new possibilities.

Silence is a powerful ally, and it can be most potent when we want to change the terms of an old and familiar contract negotiation process. Instead of jumping in with facts and figures you’ve simply updated for a new contract period, it can be very effective to introduce some neutral but productive tension by refusing to set clear boundaries or expectations. There is no predetermined reason why this year’s numbers should only be altered to keep up with inflation or other outside criteria. Put the power for setting terms back into your own hands and allow a degree of unpredictability to give you the leverage to ask new questions and propose new terms. After all, Aces is more than likely relying on your contract as part of its business plan, and this means that you should scrutinize and re-evaluate terms more than ever.

To recap, the trick here is to avoid complacency and make sure you have your eyes on the big picture. Strategies of going back to zero and harnessing the power of silence can give you grounds for renegotiating a better and more profitable -- and satisfying -- contract that sets terms that will strengthen your current and future positions.

Starting from a Potentially Fraught Position: Getting What You Need When Things Aren’t Working

When things have gone wrong because a supplier’s product is not up to par or no longer fits our needs, or because a buyer isn’t fulfilling the expected ordering schedule or has maybe set new terms that were never agreed to, this creates a more stressful renegotiation process, and the process is different when we start from a less positive position out of the gate.

For this example, let’s say we are negotiating with a foreign, global entity called Market Analysis, which has long supplied your business with crucial data about foreign market demand for your products. This could be particularly important if social media is part of your marketing strategy since social media operate so differently across global business environments. Again in contrast to the Aces example, let’s assume that Market Analysis trades in information that is both vital for your expanding enterprise and difficult to obtain through other channels. If you add to this the potential for cultural differences that might make it difficult to maintain consistent expectations that fit your own business’s outlook, then I think we can assume that you’d be spending some extra time and energy every week or month keeping things moving smoothly.

If you are already always working overtime to keep the boat steady, then you may be unlikely to want to take risks in this relationship. But again, this is a problem of focusing on the immediate and losing sight of the larger landscape. You might be starting from the fear that Market Analysis has you over a barrel in one sense, since their service is highly specialized and highly valued for your business. For this kind of situation, you need to have a strong plan.

With Market Analysis, you would do well to start in the preparation stage by gathering as much information as you can about what makes your business valuable. As above, look at what knowledge and insight you can bring that you are uniquely positioned to gather or analyze. Then, if renegotiation starts to get stuck, make use of foundational negotiating tools to show the other side that you can add value in unexpected ways to strengthen the partnership and reset the terms for the renegotiation.

Research and careful planning are vital in difficult negotiations, and we run the risk of weakening our position over time with long term partners if we don’t constantly evaluate how changing markets and circumstances can be used to our advantage and could be used by the other side to disadvantage us. Be prepared and study the Karrass skill sets to learn the finer points of gaining advantages that broaden the scope and strategically set new terms for powerful renegotiation.

In this case, Market Analysis may have an invaluable product for your needs, but you are doing their work for them if you give in to the fear that you don’t have power in your corner, too. Maybe you have something to offer, here, that would cost you little but would provide something of distinct value to Market Analysis. You might be in a position to offer information or analysis about your regional marketplace that their global positioning leaves them unable to fully understand. Not only would this build stronger grounds for renegotiating terms, this builds your partnership and strengthens your long term relationship with Market Analysis.

You can use these strategies just as well for renegotiating with your household landscaper. Maybe you can offer scheduling flexibility or partner with neighbors to bring in new clients at a lower price, even if your needs limit the competitiveness of the market for you.

Don’t Wait for a Contract to Expire: Build a New Both-Win® Today!

One of the least common situations for renegotiation is when things seem to be going along just fine, but a good negotiator sees a way to improve the terms of a contract and wants to find a way to bring parties back to the table.

The key here is to make sure that you are always watching the big picture of the marketplace and your long term relationship with the service provider or buyer. This means not only looking at what you have to offer, but also at what’s happening with competitors. Are they offering new incentives or advantages that are weakening your negotiating position? If so, over the course of a stable contract you are likely losing ground if you aren’t paying attention.

All business relationships are human relationships, and maintaining that relationship over time is part of building your strength in renegotiation. If you are consistently in touch with a partner, you are in a position to ask exploratory questions at any time. This reduces the tension that might come up if you decide it’s time to renegotiate an existing contract.

At other times, adding some tension might be advantageous and appropriate. Here you might make use of techniques around financial or decision-making authority. Authority tactics require nuance and preparation, but they can be very effective in renegotiation because they provide a logical reason for bringing an existing contract back to the table to set new terms.

For example, you might usefully claim that you are bringing the contract back to the table due to demands from higher up. This adds pressure but also displaces it onto a vague authority, thereby giving you the chance to put pressure on other terms you’d like to renegotiate without adding more tension than necessary. Alternatively, anticipating that there will be difficulties in the process, it can even be advantageous at times to put pressure on the other side by challenging their decision-making authority.

The Upshot

Whatever tools from your negotiation training you choose to bring to the table, renegotiating from a strong position means understanding the nature of your long term business relationships, keeping an eye on the big picture, and adapting your best skills to emphasize the value of what you have to offer over the long term.

If you are looking to take your negotiation skills to the next level from the comfort of your own home, check out our virtual negotiation programs

Everyone knows that practice makes perfect. Similarly, if you want to get better at negotiation, you need to practice negotiating.

Below is a list of 10 Negotiating Exercises and Activities that will help you improve your skillset. 

1. Learning Both-Win® Strategy: Practice Bartering in a Market

We are conditioned to believe that when a price is printed on a tag, it’s no longer up for negotiation. But what that tag is actually telling us is that this is what the store owner has decided is the best match between market pressures on the seller’s side and price incentives on the buyer’s side. When you find a product at a low price, you feel like you’ve won the price comparison game, and when you buy a product, the seller feels they have won your business.

But that scenario just proves how limited our imaginations are when we approach the buyer/seller relationship. If you as the buyer can think outside the box, you may find that you can create an opportunity for both of you to get what you want: a Both-Win® outcome.

Both-Win® is possible when you can create new value where none was seemingly available before.

2. Practice Reading the Room

Too often we focus on information and forget that we are negotiating with fellow humans. As any great poker player will tell you, all humans have tells of one sort or another. And as any stand-up comic will tell you, the better you can read the room, the better you’ll be able to appeal to the specific people in front of you. Every audience is different, and every negotiating table is different.

When we negotiate, oftentimes our words say one thing while our demeanor says something else. Practice paying attention to how others communicate more than the information they are saying by the way they sit, whether they are looking at you or looking away, and whether their faces are open and interested or closed and distracted. If you practice this with people you know well, then you can start to learn how certain tells indicate a willingness to talk further, a fear that they won’t get what they want, or (hopefully) a distinct interest in what you have to offer and motivation to learn more! This will help you build your mental encyclopedia of body language so that when you’re at a negotiating table, you have some tools to draw on every time to make a decision about whether to go in one direction or another.

But there is more to reading the room than body language. You also want to read the table, so to speak, even before you’re sitting down to talk. Your relationship with your own negotiation team and the other side starts before you arrive. As you work with buyers or sellers by phone and email, practice picking up cues. Which issues seem to make the other side tense? Which issues does the other side keep returning to? Make a note of these. And while you’re at it, see if you can figure out some background information.

Try to figure out who at the institution drives decisions, and of course make a note of this information, too.

You can practice all of this when you’re making those everyday decisions with friends, family, and the person trying to sell you a dishwasher or car (see number 5 below).

3. Role-Playing Scenarios

There is nothing better for honing your Effective Negotiating® skills than role-playing with a friend or associate. We hear from our seminar participants that the case studies are especially effective because there’s nothing like adding some pressure to help us see where we make mistakes. Role-playing also helps point out how effective certain tactics can be in a pressured situation.

Find a friend or associate to practice with to help you focus on where your strengths and weaknesses are, and be sure to incorporate some of the elements that make a real negotiation complicated and unpredictable to get the most out of it.

4. Practice Negotiating from the Worst Position Possible

Think about something practical that you’ve been working toward getting for a long time without success. It’s helpful to practice starting from a position of wanting something -- like a new dishwasher or car -- from a position of having limited funds. This is where you can practice all the techniques of negotiation that move you from an impossible position (the dishwasher you want costs $X but you only have $X-20% to spend) to a handshake and a good deal.

Start by preparing to walk into a negotiation with this kind of serious limit. Think about what kinds of research could help you figure out how to defend against nibbles, for example. This advance research will give you a larger playing field for your negotiation, setting you up to get what you want from the negotiation!

As you negotiate, notice which techniques work in a personal negotiation that wouldn’t work as well in a team negotiation between much larger entities. For example, an interaction between a single buyer and a single seller can rely a lot more on building personal satisfaction for the seller (building satisfaction), possibly by building the authority of the seller to their own organization. Reflect on how a team negotiation requires some different tactics.

5. Know the Power of the “No!”

We are conditioned to negotiate toward a “yes-yes” situation. Anthropologists tell us it’s in our DNA to want to reach consensus and find harmony, after all we are social animals. But one of the most powerful tools in a negotiator’s box is the willingness to say a firm “no” and stand by it. There are several important reasons why you should keep this tactic in mind every time you come to the table.

Negotiations can easily become all-encompassing, and we might feel as though a perceived win or loss in this negotiation is a measure of something larger. The danger there, however, is that each negotiation is actually just one along a long string of negotiations we will take on -- often with the same entities -- over a long period of time. When appropriate, and when it’s used well, saying “no” this time can set an anchor point for future negotiations, giving you more power the next time you’re at the table. This could even push the other side toward new concessions in advance of your next meeting, thereby doing some of your negotiating for you.

Practice using the strategic “no” and, under the right circumstances, you may well find that concessions that the other side was holding in their back pocket come up more quickly, improving your success at Effective Negotiating®.

6. Understanding Assumptions and Setting a Guiding Principle

We tend to assume that other people broadly share the same assumptions that we do about what is valuable and what is not. This can be dangerous, however, because while most of us share some assumptions, in practice that can sometimes mean very different things to different people. This is why it can be helpful, and sometimes even crucial, to understand how to set a guiding principle at the beginning of a negotiation. As you talk through everything from what to have for dinner to whether you should renegotiate last year’s deal with a supplier or buyer, notice that you probably see value differently from others you’re talking with.

Notice that if you set value differently even with somebody who is supposed to be on your own team, this leads to problems. If it’s getting late at dinnertime, you might suggest going out to eat as a way of decreasing stress, but your spouse might see staying home as the much less stressful option. Unless you name this up front, you might find you’re arguing for the same thing -- decreasing stress -- while effectively negotiating against each other. Similarly, when you push your organization to renegotiate a big deal your team settled a year ago, you might be thinking about the value of bringing the price down, while somebody else on your team might see value in holding off on some major demands that you managed to stave off last time. If you aren’t on the same page as your own team about what the guiding principle is and what has value, then you will be working against each other.

In those scenarios, you’re working with somebody on the same side. But this is also an important tool to use with an opposing team. For example, if you can set a guiding principle up front that as the seller you deserve a fair profit, then you have an assumption built into the negotiation that is going to benefit you.

7. Build Your Team Skills

The great Kareem Abdul-Jabbar once said: "Five guys on the court working together can achieve more than five talented individuals who come and go as individuals." When a star athlete gets onto the field or the court for a competitive sport, they need to decide how much their strategy is to be a lone superstar and how much their strategy relies on working with the team. Even if you do most of your negotiating on your own, you have some network of connections -- even if this includes your own distributors or bulk vendors -- that you have to keep in mind when you’re sitting down to negotiate or renegotiate an important contract.

One of the major pitfalls of a team negotiation can come from competitiveness or just plain disorganization within the team. The best way to head this off is to practice your team skills all the time. When you’re in the thick of a negotiation, everybody on the team needs clearly designated roles. But before you get there, you’ll need to have some open airing of ideas and approaches. Somebody on your team is going to be a great researcher while somebody else is going to be great at figuring out the margins on the fly.

Even if your next big negotiation isn’t coming up anytime soon, you can keep honing the strategizing and cooperative skills that will give you that crucial edge for Effective Negotiating® when the time comes.

8. Be Adaptable to Changing Conditions

Between the time you make your first call to a buyer or seller and the time you sit down, many of the factors will change. These will change again between the time you sit down and the time you shake hands. Every negotiation means preparing for different demands or possibilities, but inevitably unexpected issues come up. How can you prepare for this so you are in the best possible position to deal with the unexpected?

Practice being ready for the inevitable by taking a little time to do extra research ahead of time. As technologies evolve and companies change focus, their interests change. Remember that you are negotiating not only with the partner you have in front of you, but also with the future version of this partner. If a corporate parent company is merging or shifting within the market, how could this change their priorities between your last negotiation and your next one? What partnerships do you already have that could give you an advantage at the table? What do you have to offer that could be valuable now in a new way?

It also pays to think about where your organization is headed. Could you offer a concession in return for something especially valuable that the buyer or seller has newly available to them? Thinking in these terms can help you to practice reacting to the unexpected by bringing your own unanticipated options to the table.

9. Upgrade Your Skills!

At some point as you do these exercises you’ll realize that you’re very good at figuring out some of the body language, guiding principles, and research that will put you in a stronger negotiating position. But that’s no substitute for gaining the tested skills that professional training can offer you.

Karrass is on the leading edge of techniques for Effective Negotiating® in a changing world. Every day we are training your competitors in crucial tactics to get what they want from you, and your best defense is a finely tuned offense to counter these techniques and make your mark next time you sit down at the table!

10. Talk to Experts or Take a Course!

KARRASS offers Effective Negotiating® seminars across the world for individuals and teams as well as “In-House” tailored packages to address the specific needs of your organization. Let us show you the value of bringing real expertise into the room with you, and demonstrate why we have been an industry leader for almost half a century.

If you are looking to take your negotiation skills to the next level from the comfort of your own home, check out our virtual negotiation programs

When people hear the term “negotiation,” one of the first thoughts they have is of a sales rep who never seems to lose. It may be effective to boost numbers and commissions, but it's not often the most powerful when it comes to conflict resolution or building long-term relationships. That belongs to a style known as “principled negotiation."

While KARRASS uses the term “Both-Win®,” the term “principled negotiation” was originally coined in Robert Fisher and William Ury’s book, Getting to Yes, published in 1981. At its core, Principled Negotiation is about conflict resolution—a necessary skill for every facet of life.

How does Principled Negotiation differ from Positional Bargaining?

What many people understand as negotiation is actually positional bargaining, or distributive bargaining.

This is a winner-take-all style of negotiation that is focused on one specific goal: winning. In this mode of negotiation there is little room for consideration of the other party’s needs and requirements, or the long-term effects of the deal.

As such, there is a much greater risk of injured relationships, wounded egos, and frustrated parties who may have little or no desire to continue the professional relationship moving forward.

In Dr. Karrass’s book In Business as In Life You Don’t Get What You Deserve, You Get What You Negotiate, he discusses the strategy of taking on a firm price [see Chapter 8]. He encourages his readers to take a quiz to help them determine their “Timidity Quotient.” The chapter goes on to provide strategies to help the reader overcome the distributive bargaining model and move the needle of the negotiation toward a principled negotiation.

Principled negotiation is about finding a deal that will benefit all parties involved, no matter if it is a negotiation between two people or a multi-billion-dollar project finance agreement with a non-recourse finance structure.

Principled negotiation is interest based. Each party is concerned about the other(s) based on a vested interest in maintaining a relationship once the deal is completed.

What impact does Principled Negotiation have on Project Management?

As any project manager knows, a project’s numerous components must work together for the project to be completed on time, on budget, and without damaging long-term business and/or personal relationships. The more complex a project is, the more opportunity exists for competing needs to arise, and more the more important principled negotiation becomes.

For example, a buyer for a large multi-national hospitality chain is ready to upgrade their guest internet services. The Project Managers from both the Buyer and Supplier have complex logistical, legal, regulatory, and budgetary challenges. By working together, they can discover multiple avenues within the project scope that enable them to decrease costs, increase revenue, and provide a better service to the Buyer’s guests.

In a Both-Win®/principled negotiation, the project managers work to find common ground between their different teams to determine the best way for the project to move forward and meet the goals of their respective organizations.

The Four Basic Tenets of Principled Negotiation.

1. Separate the person from the problem.

When people feel they are at a disadvantage in a negotiation, they will often take a defensive approach. This can cause miscommunication which opens the door to hostility, resentment, and a breakdown of the negotiation. Dr. Karrass recommends handling high emotions or defensiveness by resisting intimidation. Remaining rational, refusing to take abuse, dealing with the facts, and acting with quiet dignity and firmness can lead to a positive outcome

2. Focus on common interests.

One of the key challenges of positional bargaining when it comes to building long-term relationships, is that each party tends to focus on their interests first and foremost. Instead, each party should consider what interests they share. By focusing on common interests, a relationship can be built upon a both-win outcome. During a magazine interview many years ago, Dr. Karrass compared building long-term business relationships to the partnership needed to create a successful marriage, emphasizing that the conduct of each corporation is of great importance to the success of their negotiations.

3. Generate ample options.

When two parties work to generate numerous options, a negotiation no longer feels like a win-lose or lose-lose scenario, but rather a win-win. Whether one party gains an advantage over another is not relevant so long as both parties feel that the result was reached in good faith and with minimal pressure.

4. Rely on objective criteria.

Whenever there is direct opposition in a negotiation and the parties cannot agree on terms, objective criteria need to be employed. Scientific research, studies, legal precedent, and even industry statistics can all be helpful tools in highlighting objective criteria. If both parties agree that the given information is valid, a level of objectivity can be brought to the negotiation. For example, in a salary negotiation a new recruit might be expecting $80,000 for her services while the employer is offering $60,000, but industry averages show that this position with her experience warrants $68,000. As long as both parties accept the independent information, they will both be satisfied with the deal.

How to put Principled Negotiation to work.

The most important focus of principled negotiation is building strong long-term relationships and possess a willingness to get involved with the other party and their organization—that is, to understand all the various personal and business issues that could affect the desired outcome. Coming to a negotiation with an open mind, a willingness to compromise, and an understanding the other party’s inherent value (monetary and otherwise) are the most effective ways to create a both-win.

When is Positional Bargaining effective?

When a party is only interested in negotiating for a one-time opportunity, has no interest or desire for a long-term relationship with the other, and if they have something of inherent value (determined by desire, necessity, or other driving factor) and can impose their will on the other party, positional bargaining can result in the desired outcome. In more complex negotiations—especially ones where conflict resolution and a long-term relationship are part of the overall goals—Both-Win®/principled negotiation is the most effective strategy.

What are your assumptions and can you trust them? Assumptions are educated guesses or guesstimates about what the other person is doing, thinking and/or planning. In business negotiations, we work to assess the other person and part of that assessment is to make assumptions. We assume what their bottom price might be or what concessions he or she might be willing to make Stephen Covey, the author of The Seven Habits of Highly Effective People, once said: “We simply assume that the way we see things is the way they really are or the way they should be. And our attitudes and behaviors grow out of these assumptions.” It is human nature to assume things based on our experiences. Perhaps someone who looks a lot like the person you are negotiating with once lied to you and now you assume this person across the table looks like a liar. The point is that assumptions can be faulty and you should not trust them entirely. However, we make assumptions each day about a whole slew of things: which line at the bank will move faster, which item at the store is better than another, etc. We often base our decisions on those assumptions regardless if they are correct. In decision-making theory, this is called bounded rationality (when people make decisions without all the information necessary). Dr. Chester Karrass tells us that the “ideal negotiator should have ... the open-mindedness to test his or her own assumption and the other person’s intentions.” If, as a negotiator, you do not test your assumptions, you may become a victim of bounded rationality, which in turn could lead to costly mistakes as you negotiate. Don Miguel Ruiz, in his bestselling book The Four Agreements: A Practical Guide to Personal Freedom says: “The way to keep yourself from making assumptions is to ask questions.” In negotiations, always question your assumptions.

Negotiation is one of the most difficult jobs a person can do. It requires a combination of diverse traits and skills. The process of negotiating demands good business judgment and a keen understanding of human nature. There is no other area in business where the alchemy of power, persuasion, economics, motivation, and organizational pressures come together in so concentrated a fashion and so narrow a time frame. But – nowhere is the return on investment potential so high! Today economic pressures around the world are causing organizations to put more pressure on their negotiators. In other words—you! Buyers and supply management professionals are being asked to cut costs and increase efficiencies. Sellers and marketing professionals are being asked to increase volumes and increase margins. Engineering, system analysts, IT professionals, manufacturing managers, and HR managers are being asked to do more with less. There is a lot of negotiating going on! Here are some of the key attributes good negotiators exhibit: 1. An ability to negotiate effectively with members of their own organization and win their confidence. 2. A willingness and commitment to plan carefully; know the product/project, the rules and the alternatives; and the courage to probe and verify information. 3. Good business judgment; an ability to discern the real bottom-line issues. 4. The ability to tolerate conflict and ambiguity—it comes with the negotiating process. 5. The courage to commit oneself to higher targets and to take the risks that go along with it. 6. The wisdom to be patient—to wait for the story to unfold. 7. A willingness to get involved with the other party and their organization— to understand all the various personal and business issues. 8. A commitment to integrity and mutual satisfaction. 9. An ability to listen with an open-mind. 10. The insight to view the negotiation from a personal standpoint—discover the hidden personal issues that could affect the outcome. 11. Self-confidence based on your knowledge and your planning. 12. A willingness to use experts and an understanding of how a team might be valuable in the negotiation. 13. A stable person; one who has learned to negotiate with oneself and to laugh a little; one who doesn’t have too strong a need to be liked so they can feel free to disagree when the need arises. Research shows us that skilled negotiators create better agreements. But we are not born with these skills, it takes training, practice and persistence. Be confident in your ability to negotiate. You have the tools and skills to create good, long-lasting agreements that will satisfy all parties.

When learning to negotiate with another party, it is important to discover their personal negotiating characteristics. At the same time the knowledgeable negotiator on the other side of the table is learning how to deal with us. Even though we try to do business only with cooperative business partners, the old military admonition, "Know thy enemy," certainly applies. Here are a few characteristics that will be useful to understand your other party's approach to negotiation:

• What range to negotiate do they leave themselves? In other words, historically, is there a consistent pattern from where they open to where they close?
• Concession valuation: It was interesting to learn that not everyone values concessions the same way. Some count consessions, while others look at the total value of the concession.
• People who count concessions are bargainers who are very comfortable with the tit-for-tat approach. Dr. Karrass reminds us that if we must give a concession in return, make sure it is less costly than the one gained.
• How does the other party respond to deadlines?
• Can we believe their deadline?
• How good is their planning?
• How is their team synergy?
• Do they use ploys like Good Guy-Bad Guy?
• Does the boss come in at the eleventh hour as the bad-guy?
• How much emotional content do they use in the negotiation process?
• Do they have non-verbals that signal a willingness to close?
• Is there someone on their team who talks too much?
• How well do they honor agreements once they have been made?

These are a few ideas on reviewing and recording at the end of this negotiation to learn how to negotiate with the same party next time. Quote: "People tend to replicate behavior which has proved to be successful in the past." Chester Karrass

Not a day goes by in this century that we are not reminded that our economic world is indeed flat. Competition in the global marketplace is more fierce than ever. The battle for market share, control of resources and technological dominance will continue for the balance of our lives. On a personal level there is little doubt that our jobs, our salaries and our standard of living will be increasingly affected. We see evidence of these changes everywhere. The workplace itself is changing under our feet and we must move with it. Disputes and disagreements between superiors, peers and subordinates are likely to increase as more of us become knowledge, information and service professionals rather than production or manufacturing executives. Top-down decision-making and management, while still dominant, will gradually give way more and more to team and project organization. We can safely project that members of these teams will be better educated than those of earlier generations. Each will have developed technically and professionally along paths of specialization previously unheard of. These “idea” people will feel strongly about their viewpoints and concerns. They will defend their ideas vigorously and have a lower tendency to be passive when confronted with conflicting views or values. The same factors will come to play on the factory floor and service sectors not at so fast a rate as in the professional classes. They will also demand a greater voice in how things are done and managed. They will want to negotiate a greater range of workplace issues. We are in the age of collaboration and negotiation as far as ideas and viewpoints are concerned. How we handle and resolve the rising tide of conflict is crucial. We can continue to deal with each other as we have in the past and accept an increasing level of dysfunction, or we can embrace a new approach that fosters the open exchange of ideas and increased innovation. What I propose is a new approach and model for working together and resolving difference harmoniously and productively in an economic world centered on ideas, constant innovation, individual choice and intense competition. That model, “The Effective Negotiating Virtuous Cycle,” with its emphasis on Collaborative Negotiating, Being Heard and Listened To, and Building Positive Relationships, when applied by each of us in the workplace, has the power to help us work together more effectively and lift our level of creativity to greater heights. With that our success in the global marketplace will grow.