3 Counter-Intuitive Negotiation Tricks
(Posted Feb 27, 2014)
When negotiating, we often follow our instincts and intuition. However, negotiation as a discipline is often counter-intuitive. Best practice suggests that we often go against our instincts and follow behaviors which at first pass do not seem to be appropriate to the desired outcome. A recent article posted on the Forbes Leadership Forum on forbes.com entitled Three Tricks That Make Negotiations Work by Richard Shore discusses three not-so-obvious strategies that seem counter-intuitive, yet make perfect sense.
1. Don’t look at the person who is talking; look at the people who are listening.
In group settings, people naturally tend to focus on the speaker. In a negotiation, that person commonly is a lawyer rather than a principal. He or she is trained to deliver a pitch or make an argument effectively. This includes not only speech, but also tone of voice, facial expressions, and body language. The negotiator is trying to control the message—and usually succeeds. Often, that is not a true reflection of their actual state of mind or your opposing party’s true settlement position. So, focus your attention on key representatives of the opposing party other than the speaker. They are more likely to convey their true frame of mind through facial expressions and body language. Because they are not in the spotlight, their facial expressions and body language can be quite informative, like a “tell” in poker. Negotiation tells can be particularly valuable when someone other than the speaker is the true decision maker—for example, when the in-house client representative is calling the shots on settlement, even though the party’s lawyer does most of the talking.
To read the full article, click here >>
Teaching Doctors the Art of Negotiation
(Posted Jan 18, 2014)
With recent health care changes, specifically the Affordable Care Act, negotiation skills will be tremendous value to medical professionals, administrators, and other stakeholders in the health care sector.
Recognizing the importance of negotiation, medical schools are starting to invest in communication training for students. A recent article by Dhruv Khullar in the NYTimes Health Blog, Teaching Doctors the Art of Negotiation discusses how doctors negotiation on a daily basis, with both patients and colleagues and should be offered classes in negotiation training just as law, business and public policy schools do.
In this context, “negotiation is about exploring underlying interests and positions to bring parties together in a constructive way. It’s about creative, innovative thinking to create lasting value and forge strong professional relationships. It’s about investigating what is behind positions that may seem irrational at first to understand the problem behind the problem.”
To read the full article, click here >>
CBS and Time Warner Negotiations
(Posted Nov 23, 2013)
On Aug. 2nd, CBS-owned stations in New York, Los Angeles and Dallas went dark on Time Warner Cable systems after talks between the companies broke down. Time Warner also removed Showtime and three other cablers from lineups nationwide in the dispute. The blackout was a result of a dispute over CBS' request for higher fees from the cable company to retransmit CBS stations.
They ended their one month battle/contract dispute, with CBS winning not only a significant financial increase for its programming, but also its stake in the digital future. The outcome should set a precedent for cable companies and their view of blackouts as a viable negotiation tool. Last month, Time Warner Cable reported a huge quarterly loss of television subscribers, the largest in its history: 306,000 of its 11.7 million subscribers dropped the company. While CBS has came out unscathed.
Harvard Law School's Program on Negotiation published an article written by Katie Shonk entitled "The CBS - Time Warner Cable Dispute: Making a Bad BATNA Even Worse." She discusses how the CBS/TWC standoff is a perfect example of how attempting to punish a negotiation counterpart into conceding often backfire. As Time Warner played hardball with CBS in an attempt to frighten the network into conceding, they lost focus on how the standoff would impact its customers and ultimately lose subscribers. Time Warner's BATNA -- its "best alternative to a negotiated agreement" with CBS -- was a bad one from the start.
To read the full article, click here >>
5 Hard-nosed Negotiation Tips from Steve Jobs
(Posted Oct 25, 2013)
A judge ruled last month that Apple violated antitrust laws in conspiring with some of the largest book publishers to fix e-book prices. While Apple continues to fight the allegations, there is a lot to be learned from the released e-mail exchange between Steve Jobs and James Murdoch. The e-mails had an important role in the lawsuit, but they also provide an savvy high-stakes negotiation between the leaders of two powerful firms.
Eric Sherman writer for Inc.com, reviews the series of e-mails and the negotiation principles used to create the best conditions for winning.
"A series of emails about ebook prices between Apple and HarperCollins, including ones written by Steve Jobs, were recently released as part of the Department of Justice price-fixing suit against Apple and a number of major publishers. As the site Quartz pointed out, these offer some great insight into how Jobs negotiated.
However, Zachary Seward at Quartz called it an example of "hard-nosed" negotiation at which Jobs excelled. I'd take a different view. This is not hard-nosed. The emails show how an excellent negotiator used a series of principles to create the best conditions for winning. Let's look in greater detail at the exchange between Steve Jobs and James Murdoch, son of Rupert Murdoch and the ultimate decision maker, and see how Jobs ultimately got his way."
To read the full article, click here >>
Negotiation Trends: Salary Disclosure
(Posted Sept 25, 2013)
Have you ever revealed how much you earn to coworkers? Your answer to that question may depend on your age.
The September issue of Harvard Law School's Program on Negotiation newsletter discusses the trend of openness about wages between coworkers and how it may be affecting job negotiations.
Comparing salaries has long been a social taboo in the United States, but members of the millennial generation -- people born in the 1980s and 1990s -- are changing that, according to Kevin Hallock, director of Cornell University's Institute for Compensation Studies.
According to a recent Wall Street Journal article, when 25-year-old Dustin Zick was preparing to leave his job with an online retailer, he compared salaries with five or six co-workers. Several of the coworkers strategized about salaries they hoped to attain and how they might negotiate for them. The discussions helped Zick meet his target salary at his next job.
Accustomed to sharing minute details of their lives on Facebook and Twitter, Millennials appear to be carrying that penchant for self-disclosure into their work lives. Websites such as Glassdoor.com, where people can post their salaries and other information about their jobs, are spurring this trend. That may be bad news for employers, who see value in encouraging employees to keep mum about their salaries.
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Negotiation and Active Listening Skills: Talk Less and Listen More
(Posted Aug 23, 2013)
Few negotiators would argue the value of good listening skills. Listening skills can calm tensions, break stalemates, and help build creative deals. Most people overestimate their ability of this key skill, and lack an accurate understanding of the concept of active listening.
Active listening doesn't mean sitting patiently while your counterpart talks or does it simply entail saying "I understand" and establishing good eye contact. Rather, active listening is a dynamic process and key in any negotiation. Here are some tips to become a skillful active listener.
- Showing Your Interest: Prove you're listening by using body language or brief verbal replies that show interest and concern. Simple phrases such as "yes," "OK" or "I see" effectively show you are paying attention. This encourages the other person to continue talking and relinquish more control of the situation to the negotiator.
- Paraphrasing: Tell the other person what you heard them say, either quoting them or summarizing what they said.
- Emotion Labeling: This means attaching a tentative label to the feelings expressed or implied by other person's words and actions. This shows you are paying attention to the emotional aspects of what other person is conveying. When used effectively, emotion labeling is one of the most powerful skills available to negotiators because it helps identify the issues and feelings driving the other person's behavior.
Ethics in Negotiations
(Posted July 31, 2013)
Legal commentators have written countless articles and entire CLE courses are dedicated to discussing what an attorney may or may not say in negotiations. Ethics in negotiations is tricky. On one hand, a lawyer must show honesty and good faith, and not accept a result that is unconscionably unfair to the adverse party. On the other hand, the attorney is obligated to obtain a result that is in the client's best interest and must do everything, short of fraud or deceit, to do so. The absence of a clear line between puffing and misrepresentation has resulted in a considerable body of ethics decisions and commentary.
Many lawyers refer to Model Rule 4.1 which states: "In the course of representing a client a lawyer shall not knowingly (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6." As the commentary to the Rule makes clear, a misrepresentation occurs when a lawyer incorporates or affirms a statement by another person that the lawyer knows to be false. A misrepresentation also includes misleading statements and omissions that are the equivalent of affirmative false statements.
Generally, Rule 4.1 defers to the parties and the circumstances of the transaction to determine what is factual, what is ethical, and what is legal. Here is where the line of negotiation ethics gets blurry. Not all untruths are equal. Posturing or "puffing" during negotiations is not a breach of the Rules. Specifically, statements regarding a party's negotiating goals or its willingness to compromise are not seen as actionable misrepresentations of fact but as negotiation tactics.
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Building Rapport During Negotiations
(Posted Apr 22, 2013)
IMPORTANCE OF RAPPORT
If you are like most busy professionals, you are typically pressed for time and would prefer to not waste time on small talk and just get to the issues at hand. This "small talk," however, if used correctly, has value and should not just be dismissed or glossed over. When bargaining parties take the time to establish some rapport and develop personal relationships, they tend to behave more cooperatively and enhance the likelihood they will achieve mutual agreements. It's important to remember that you shouldn't build rapport simply to win the upper hand in negotiations. Only building a sincere and genuine rapport can promote trust and credibility.
Many believe that the ability to connect with people is a natural gift -- either you can build rapport or you can't. However, developing rapport, like all negotiation skills, is something that anyone can learn, and then use. Here are some tips.
HOW TO BUILD RAPPORT
Unconsciously mimicking each other's gestures, facial expressions and tone of voice. Keeping your arms uncrossed, the occasional head nod to assure your attention. Maintaining eye contact, leaning toward the other person, and smiling are indications of openness and interest in each other.
Meet in Person
Easier to build rapport face-to-face rather than via email or over the phone, many of the above mentioned non-verbal communication cues are lost via email.
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Negotiating Strategies for Buying a Home (Part 2)
(Posted Mar 15, 2013)
Negotiating Strategies for Buying a Home (Part 1) was published last month. It covered tips for buying, strategies and negotiating. To read last month's post click here.
Real Life Example
THE MARKET: A seller's market
WHO: Hannah, a first-time homebuyer who had been going to open houses for months.
THE HOUSE: One day she drove down a side street and spotted a for sale sign on a house that wasn't advertised in that Sunday's paper. She knew the instant she walked in the door that she wanted the house.
THE AGENT: Hannah was not working with an agent. She sat down with the seller's agent and drew up a full price offer with standard contingencies.
THE OUTCOME: Could she have paid less? Maybe. Did she feel burned? No. Her homework told her this was an unusually good property priced to sell.
Negotiating in a Balanced Market
A balanced market feels less like a pressure cooker because there is a more equal supply of homes and buyers. Since neither side is feeling market urgency, personal priorities reign. Expect the back-and-forth counteroffer phase to take longer than it does in either a buyer's or seller's market. After several rounds of paperwork, buyer and seller might agree to do a 50-50 split of their differences on price, terms, and personal property.
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Negotiating Strategies for Buying a Home (Part 1)
(Posted Feb 23, 2013)
Negotiation strategy is different from negotiation style. From pit bull to diplomat, each of us has a personal style. But the strategy for negotiating the purchase of a home is based on facts: the real estate market at the moment and what we know about the seller's needs and the property.
Market knowledge courses through the veins of experienced real estate agents, which is one good reason to use one. Another is that agents are experienced negotiators who speak the same lingo. That means your agent probably will find out more about the seller's situation than you will working on your own. And for those of us who start sweating at the very thought of confronting a seller and the seller's agent face-to-face, why not pay a commission to someone who will relieve us of the task?
Can you negotiate without an agent? Absolutely. Many buyers do. It means:
- Doing intensive research about the market, the property you want to buy, and the seller's situation
- Figuring out an appropriate negotiating strategy and style based on that information
- Do your homework.
- Ask questions constantly.
- Share the details of your budget, emotions, and mental state only with your advocates (this does not always include your agent).
- Find an agent with whom you feel comfortable from the start - this will save you headaches later in the process.
Learn to Spot these 10 Negotiating Tactics
(Posted Jan 21, 2013)
Here's how to spot 10 tactics that many negotiators use. These have nothing to do with the win-win successful agreements of a good negotiation. Learn what to do when somebody pulls these tricks. Awareness of these tactics can strengthen your own negotiation skills.
Left at the altar - The other party feigns backing out of a deal just before you
are ready to complete the agreement. Hoping the tactic brings the other party closer to their position,
the tactic often yields 11th-hour concessions.
Your countermeasure: Don't fall for the bait. Let the deal drop and go through a quiet period. Try resurrecting the deal after no less than 30 days, or when the other party calls you. At that point, it will be your turn to get concessions.
Making balloon futures - The other party forecasts future sales growth, which is accelerated from historic
averages. This is similar to the "call-girl principle," in which a service is worth more before it's performed.
Your countermeasure: Base your decision or price only on past history. Make future bonuses or payouts available if accelerated growth actually happens.
Calling a higher authority - The other party says that they are unable to make a final decision or
won't tell you who the final decision maker is.
Your countermeasure: Stop negotiating until you are discussing directly with that decision maker. You are wasting your time and energy.
Practical Examples of Using a BATNA in Negotiations
(Posted Dec 17, 2012)
Over the past few months, this blog covered the basics of negotiation theory, discussing some of the strategies and tools of a successful negotiator. Last month, we explored Roger Fisher and William Ury's coined term BATNA. Coincidently, there was recently an article in the New York Times Business Section about the practical application of BATNA in Hollywood and Washington. The article is:
In Talks, G.O.P. May Have to Just Say Yes
By ROBERT H. FRANK
Published: December 8, 2012
To read the article, click here.
Using a BATNA in Negotiations
(Posted Nov 21, 2012)
BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. It stands for "Best Alternative To a Negotiated Agreement," and is in essence a well thought out plan "B" in the event your negotiation is unsuccessful. It truly is the measure you should use to prevent you from accepting terms that are too unfavorable and from rejecting terms that are in your best interest to accept.
Having a BATNA as part of the negotiation is imperative and increases your negotiating power. No one should come to the negotiation table without a well thought out and prepared BATNA. In addition to having a BATNA, parties should have a predetermined bottom line. The bottom line is meant to act as the final barrier where a negotiation will not proceed further. It is a means to defend oneself against the pressure and temptation that is often exerted on a negotiator to conclude an agreement that is self defeating. Although bottom lines definitely serve a purpose, they also regrettably foster inflexibility, stifle creativity and innovation, and lessen the incentive to seek tailor-made solutions that resolve differences. In stark contrast to a bottom line, a BATNA is not interested in the objectives of a negotiation, but rather to determine the course of action if an agreement is not reached within a certain time frame.
When creating a BATNA, you should:
- Develop a list of possible actions that you may take if there is a failure in agreement.
- Improve the more promising of the alternative ideas and tweak them a bit to get more of a realistic understanding of the agreement.
- Select the best option, after carefully reviewing the consequences of each alternative option.
11 Business Negotiating Tips
(Posted Sept 27, 2012)
There are many sources to turn to for resources, tips and advice on mastering the art of negotiations. Inc. Magazine and Inc.com are good places where entrepreneurs and business owners can find useful information, insights, and inspiration for running and growing their businesses.
Inc. Magazine has been publishing for more than 30 years. In 1996, they launched Inc.com as a place to access the current online issue of Inc. Magazine, as well as an archive of their back issues. Negotiations are a topic that comes up pretty regularly in the magazine and Web site. You can find tips on a variety of negotiation scenarios, including simple rules for customer negotiations, how to negotiate the buying and selling of your business, rules for venture capital negotiations, and key phrases NEVER to say.
Here are some key lessons learned from Inc. to help ensure that negotiations work to your advantage:
- Tip #1: Neutralize the competition. A customer can only threaten to go to a competitor if the competitor represents a viable option. Before negotiating, convince the customer that your offering is the only one that can adequately meet his needs.
- Tip #2: Develop realistic expectations. Temper your aspirations with "feasibility" based upon what your counterpart has in mind, and reassess your expectations as the negotiating progresses.
Improving Business Negotiations
(Posted Aug 29, 2012)
Most people simply don't know how to negotiate. Our parents didn't teach us and their parents didn't teach them. And despite the fact that negotiations are a daily occurrence, we're taught nothing about them. Many believe that since we're not taught we just assume it cannot be taught. And because we sometimes fear what we don't understand; we are afraid to learn. But there is good news; we can all improve our negotiation skills. A quote commonly found in negotiation theory books and articles from G. Richard Shell in his book Bargaining for Advantage: Negotiation Strategies for Reasonable People, reads, " . . negotiations commonly follow a four-step path: preparation, information exchange, explicit bargaining, and commitment. . . Negotiation is, in short, a kind of universal dance with four stages or steps. And it works best when both parties are experienced dancers."
Phase one of this "dance" is referred to as the Pre-bargaining Phase. This step involves:
Phase I: Pre-Bargaining Phase
- Information: Learn as much as you can about the problem. What information do you need from the other side?
- Leverage Evaluation: Evaluate your leverage and the other party's leverage at the outset.
(Posted Jun 30, 2012)
We are all negotiators, and we face challenging and complex problems of persuasion and influence on a daily basis. We manage workers and work for managers, deal with friends, family, colleagues, clients, merchants, and organizations all the time. Successful negotiation requires agreement and collaboration with other people. Since individuals often do not share the same interests, perceptions and values, skill is needed, personally and professionally in negotiating.
Understanding the dynamics of negotiating is critical in the business world, and is a topic we discuss often within our firm. Learning the art of business negotiations is a necessity for our partners and associates alike. There are numerous seminars, books and theories written on the subject; but the bottom line is that if you don't master the fundamental skills of business negotiation you could be losing money. This blog will be dedicated to the art of Business Negotiations.
There are three inherent tensions that exist in all negotiations, whether the goal is to make a deal or settle a dispute. These tensions will always exist, they cannot be eliminated but they can be managed.
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