Tag archive: assumption
A good negotiator must be skeptical. Not because the other party may be trying to be deliberately unethical or dishonest (although that may happen on rare occasions) but because when you take a skeptical approach it gives you the opportunity to avoid misunderstandings. You often discover items or issues left out of the negotiation which may come back later and cause major problems between you and the other party. Being skeptical will also help you avoid making wrong assumptions and give you more opportunity to find out what the other party really needs. This allows you to reach better, longer-lasting agreements. The approach to evaluating what you are told by the other party can be summed up in four principles: Never take anything for granted. Check everything – and don’t forget to validate all your assumptions. Put everything into its proper context – size, time, importance, today, past, future, etc. Draw a sharp line of demarcation between facts and the interpretation of facts – validate your interpretations. As you conduct your negotiation use these principles. You will be better prepared to create a better agreement.Read more »
Testing Your Assumptions
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.Read more »
Acceptance Time in Negotiations
The idea of acceptance time is so simple that it is often overlooked when negotiating. Yet, when understood, it has the power to make each of us more effective. People need time to accept ideas that are new or different. Both parties walk into a negotiating session with somewhat unrealistic goals. They start with all kinds of misconceptions and assumptions. Being human, they hope that their goals will be easily met. The process of negotiating is usually a rude awaking. The low price hoped for by a buyer begins to look impossible. The easy sale that a seller longs for eludes him or her. The need for new production tools, engineering equipment, or software is confronted by an inflexible budget or competing demands for corporate resources. Reality is resisted—resulting in deadlock or an unrealistic agreement that soon falls apart. Can we expect a buyer, seller, engineer, or manager to adjust to new and undesired realities immediately? Of course not. Resistance to change is universal. It takes time to get used to ideas that are foreign or unpleasant. We can even get used to the reality of death given a long enough period to do so. Acceptance time is as important in negotiation as it is in life. By giving the other party acceptance time, reinforcing your own ideas with more information, and being open to the new ideas of the other party, you stand a greater chance of reaching a better understanding and a longer lasting agreement.Read more »
Negotiating During Economic Turbulence
During times of economic turbulence (LIKE NOW!) most negotiations get tougher. Don't reduce your bargaining power by making mistakes. Now is not the time! Here are eight common negotiating missteps people make. Despite their good intentions "not to do that again," mistakes like these happen over and over. Don't fall into these negotiating traps!Read more »
- Do not underestimate your negotiating power. Most people tend to have more power than they think. Make a systematic analysis of your power -- understand your strengths. Your negotiating power rests on a foundation of more than just competition or financial matters. Your commitment, knowledge, risk taking, hard work, and your negotiating skill are also real sources of power. Don't assume the other party knows your weaknesses. On the contrary, assume they do not, and test that assumption. You probably have more power than you think.
- Don't be intimidated by status. We all become so accustomed to showing deference to titles and positions that we carry these attitudes into the negotiation. Remember that some experts are superficial; some people with PHD's quit learning years ago; some people in authority are incompetent; a specialist may be excellent in their field but without skill in other areas; learned people, despite high positions of power and authority, sometimes lack the courage to pursue their convictions, or sometimes don't even have a strong conviction on the issue being negotiated.
- Remember not to be intimidated by statistics, precedents, principles or regulations. Some of today's decisions are being made on the basis of premises or principles long dead or irrelevant. Be skeptical. Many premises or principles may not apply today -- or do not apply for your specific situation. When necessary, challenge them!
- Do not forget that the other party is negotiating with you because they believe there is something they can gain by being there. You may discover that this negotiation, no matter how small, is part of a larger framework in the other party's objectives. This fact alone may provide you greater negotiating power that is apparent from the situation. Be positive in your approach. Assume the other party wants an agreement as much as you do. If it appears they do not -- find out why.
- Don't focus on your own problems or your possible losses if a deadlock occurs. In all likelihood, there are consequences for the other party as severe as your own. Concentrate on their problems and issues. These will reveal opportunities for possible ways to agree.
- Most negotiations require some concession making. Don't set your initial demands too close to your final objective. There is sufficient evidence to conclude that it pays to start high. Don't be shy about asking for everything you might want and more. Many times your demands are too modest, or too easy to achieve. The other party may not know what they want, or may have a set of values quite different from your own. Remember never to give a concession without obtaining on in return. Don't give concessions away free -- or at least without a thought provoking discussion with the other party about what they are getting. A concession granted too easily does not contribute to the other party's satisfaction as much as one that they struggle to obtain.
- It is a mistake to assume you know what the other party wants. It is far more prudent to assume you do not know, and then proceed to discover the realities of the situation by patient testing and discussion. If you proceed to negotiate a deal on the basis of your own untested estimates, you are making a serious mistake.
- Never accept the first offer (even if you like it). Many people do. There are two good reasons not to: First, the other party is probably willing to make some concessions. Second, if you do accept the first offer, there is a distinct chance the other party will feel that their offer was foolish and they should have asked for more. Immediately their satisfaction with the agreement will be reduced, and they may find ways to spoil the agreement later. In either case, the negotiator who takes the first offer too fast makes a mistake.
The Concept of Negotiating Space
The concept of negotiating space rests on the fact that we need more time and room to negotiate than we usually allot to making the best and most prudent deal possible for both sides. A manager I worked for at Hughes Aircraft used to say, “There’s not much to a negotiation, really. You make them an offer. They make you a counteroffer. You settle somewhere in the middle.” Those of us who have negotiated extensively would differ. There’s much more to it than that. To be successful one must create negotiation space to allow talks to move from point to point and to explore alternative possibilities. Sir Francis Bacon, writing four hundred years ago, said, “All negotiation is to work, to discover and take risk.” He understood this could not be done quickly or by merely splitting differences. Most negotiations are too complex for that, even relatively simple ones. What we need is negotiation space to talk, to test our assumptions, to learn about one another, to exchange ideas, to compromise wisely and to assure that what we promise to do will be done. Some strategies leave negotiating space; others do not. Leaving some room to bargain, even a little, opens the door to further give and take. Leaving none says, “I don’t have more to say or give-that’s it.” Making small concessions over time builds negotiating space by allowing you time to explain your position better and build bridges between each argument. What’s the hurry anyway when getting the project done right or a reasonable budget allotment are at stake. Negotiating space can be created by putting a string on your concessions. Asking for something in return when making a concession puts spirited new ideas and energy into quiet talks. It opens the door to varied responses on the part of both sides. Some responses to strings or conditions lead to clues about unspoken motivations. These provide spaces to explore further. Negotiation space leaves room for the relationship to grow: space for each side to gain respect and trust in the other, to accept each other as partners rather than adversaries, to learn what each has in common and to understand what important differences really exist. Bargaining space allows attitudes and beliefs each side has about the other to change as each group reveals itself through the extended bargaining exchange.Read more »
The Positive Role of Negative Planning
We are told many times that positive thinking is the key to a more satisfying, successful life. That, I believe, is essentially true. Yet, in negotiation, be it in your own organization or with outside suppliers, there is value to be gained by proposing a positive role for negative planning and thinking. Why? The path between what you want and what you settle for is replete with obstacles and frustrations. Your hopes for the best are not likely to be realized. Sitting opposite you is someone just as determined as you are to protect their interests, and just as convinced that their views prevail. With negative planning you can anticipate their arguments in a better way. With negative planning you can test your assumptions about what is achievable and what is not. In a typical workplace negotiation, you open with an offer, a proposal, an idea or a design. Your position and viewpoint are clearly presented and amply supported by objective criteria and documentation. This is of course possible that the other person will say “Yes” quickly and all will be over. This is possible, but not likely. More often they will flinch, gasp for breath or otherwise show their surprise or even disdain at your position. They will call it extreme and unwarranted despite your protestation that is it modest and in fact quite right. They will probably challenge everything you say. Expect them to respond to your proposal by saying things like, “It won’t work,” or “It will cost more than you think,” or “Absolutely not, it’s not good enough.” None of these responses are easy to cope with if unprepared. The best you can do is assume that the other side will be negative and protect yourself by rehearsing what you will do when they are. The positive role of negative planning is to help us think about these negative reactions to our opening offer, however good it may be. Anticipating the negatives will move you to prepare for the onslaught of naysaying and abuse that your fine offer or viewpoint will endure.Read more »
Let Acceptance Time Do Its Work
Two people at work decide to settle a difference between them. Each hopes the negotiation won’t be too hard or acrimonious. Both enter the session with somewhat unrealistic perceptions and assumptions. The process of negotiating is itself an awakening. The easy settlement they hoped for is not quickly at hand. There’s a lot of give and take still to be done if a mutually satisfactory outcome is to be achieved. The session begins. Proposals are offered, demands and offers exchanged. Phrases like “No,” “I can’t,” and “I won’t” are heard. Then something is submitted that one side believes fair and generous. To their surprise it is unceremoniously rejected by the other. Have they no sense? Is getting to agreement even possible? That’s where “Acceptance Time” does its work in negotiation. People need time to accept anything new or different. Offering the other side something they are not prepared to take, or perhaps have not even though of, is like asking them to give up the old friends in their head for the new friends you propose. Resistance to change is universal. It takes time to get used to new ways that are foreign or possibly unpleasant. Acceptance time is an important factor in life as it is in negotiation. The human resources department of a mid-sized company developed a sorely-needed improved health care plan for its employees. After considerable study and extensive negotiation with competing providers the new proposed plan was presented to its employees, first by email and then by question and answer sessions in groups of fifty. The HR team wished to ensure that all understood the proposed plan and its improved benefits. HR felt they were on firm ground: while employee contribution rates would go up slightly, benefits would improve much more. The team expected some resistance but not much. Within moments after the plan was presented an explosion of dissent followed. HR was challenged to explain whether one plan or another was better than the proposed one and the employees demanded further study before the company committed itself. Then slowly, over a two-week period, a change took place among employees. They began to discuss the plan and its details. They made their own comparisons. Each matched the new benefits to their personal needs. Acceptance time began to play a role in their decision process. A few weeks later, a slightly revised plan was presented, approved and implemented. Acceptance time works that way. People need time to accept changes to their usual way of doing things or to new ideas. You cannot expect that they will give up what were in effect their old friends or ideas for the new friends you are introducing to them. Acceptance time has the same role in negotiation. The next time you make a proposal or present a better way to do something, no matter how good it appears to you, don’t be surprised if the other person resists your magnificent idea. Let acceptance time do its work for you.Read more »
Your Assumptions are Probably Wrong
Making assumptions about the other party and their negotiating position is a natural part of the bargaining process. We make assumptions before negotiations take place and revise them as new information is discovered along the way. Unfortunately, the very assumptions made to guide our actions at the table lead us astray because they are all too often incorrect. The trouble with assumptions is that they are as likely to be wrong as right. What is in the mind and domain of the other person is hard to know. For us to forecast future trends, costs and problems is extremely difficult. Knowing what the other will do if confronted with deadlock is at best an educated guess. There is much we cannot know when assumptions are made about those we oppose and their future actions or behaviors under pressure. They themselves may not know. Yet, whatever the issues at stake, assumptions must be made. We have to ask ourselves questions like, “Am I asking for enough (or too much) and why?” and, “What will the other side do in response to what I say or do?” and, “What can they live with, what’s their bottom line?” Time is a factor in negotiation. Assumptions must be made about time pressures facing the other party and how these pressures will affect their choices and decisions in dealing with us. Negotiating effectively demands not only that assumptions be made, but also that they be tested in the light of what is learned at the table or elsewhere. How can we best do so? We do so by creating ‘negotiating space.’ We leave room for talk and bargaining. We leave time for explanations to be provided by both parties for everything they demand and offer. We give in slowly and in small increments. We ask for something in return for offering concessions and learn from the other side’s response. We explore by exchanging information to get a better picture of what they want and what they really need. We talk directly to them, both on and off the record, to discover what we need to know in testing our assumptions. Our assumptions are like anchors. If they are wrong, and we believe them, they will hold us back from reality. If we test them carefully they can guide us to fair and reasonable agreements.Read more »