Contrary to popular belief, 9 out of 10 times you will benefit greatly by making the first offer.
Negotiation Blog - Behaviors
Importance of good moods during bargaining phase of negotiations
By Thomas Wood
I recently led a webinar where I shared a number of tips to gain a psychological edge in negotiations. One thing I really enjoy about webinars is the interaction. You can ask the group a question and everyone can write in their answers at the same time. You can hear from everyone quickly.
For example, I was speaking about the importance of putting your counterpart in a good mood before you start to negotiate. This is an overlooked, yet essential part of the initial exchange at the bargaining table. People in a bad mood say "no;" they don’t say "yes." People in a bad mood are inflexible, and would rather get their teeth pulled at the dentist than make concessions. Yet, while someone would never walk into a negotiation without knowing what their MDO (most desirable outcome) is, they would start to negotiate with a counterpart who is in a bad mood, even though it is almost as important to get your counterpart in a good mood as it is to know your MDO.
In my experience, many people walk into a negotiation and they are so nervous themselves, that they don’t even notice the mood of their counterpart. Sometimes both parties are nervous and neither person is doing anything to help calm down and relax their counterpart, as they can’t even relax themselves.
What was refreshing and interesting in this webinar was to hear how people get their counterparts in a good mood. They used food, talking about their families, telling jokes and laughing about something light. When you hear these responses, it sounds so easy. You will get better trades when your negotiating counterpart is in a good mood. So why don’t we do this more often?
Check Your Negotiator Blind Spots
By Thomas Wood
Did you ever have a negotiation where you felt well prepared going in, but during the discussions you became frustrated? For most of us, frustration brings out our worst instincts and behaviors, ultimately leading to a poor outcome.
Here’s a quick quiz to help you see if you were held back by any of the common negotiator blind spots.
- Are you good at picking your battles?
- Do you consider it a successful resolution if you get everything you or your company wants without making concessions?
- Do you think that usually the best solutions come from the options offered by you or the other parties at the start of the negotiation?
- Do you tire of listening to the other side’s version of events and perspective on their own needs, and prefer moving forward with the agenda?
- Do you value objectivity and pride yourself on sticking to the facts in your negotiations?
- Do you act in a certain way to ensure people know you are a strong negotiator?
If you answered ‘Yes’ to any of the questions above, you may be suffering from one of the common negotiator blind spots. While teaching our negotiation workshops, we have found that participants often fall prey to these blind spots:
Battle Alert: He believes that it is important to pick his battles because negotiations are battles. He does not believe that a win-win outcome is actually possible, and thus approaches every interaction as a competition.
- Attitude is everything in collaborative negotiations! Enter your next negotiation as a discussion, and you may find the battle never was.
Give nothing/get nothing: She figured out what was fair long before the two parties started talking. She wants to achieve her goal, and show that she is a strong negotiator by giving nothing away.
- Negotiation is about getting, AND giving. Good negotiators come prepared to give concessions. You may get everything and give nothing, but don’t fool yourself. The party that feels "taken" will find a way to get it back.
There’s only one way to skin a cat: He has an idea of what will satisfy his counterpart, and has listened carefully to his counterpart’s idea. Both ideas were part of the opening offers. One of these ideas will win the day, or perhaps parts of each idea. Let’s decide and move on.
- The best ideas result from discourse, not solo genius. Very rarely does our first idea prove to be the best. Take comfort in knowing that the 3rd crazy suggestion might lead to a novel approach that is more mutually satisfying to the parties.
Can you hear me listening?: She has listened so much that she tires of the other side talking. Her counterpart feels that he hasn’t been heard. Was she listening loudly enough?
- Listening is not a silent or passive activity. It involves attitude, body language and follow-up that convince the other side you wanted to hear what they had to say. Sometimes, active listening – sincere curiosity, leaning forward, obvious contemplation and asking relevant follow-up questions – is the largest concession you will have to give.
Just the facts, ma’am: He prides himself on his objectivity. The numbers tell it all. We just have to stick to the facts and the negotiation will progress.
- People, not institutions, negotiate. People have history – his-story. Some stories are personal (ego, mood, fears), and some stories arise from circumstances. Ask for your counterpart’s story, and tell yours. Stories engage, leading to more open discussion and mutually satisfying solutions.
Never let ‘em see you sweat: She feels intimidated by her counterpart’s experience or reputation. He’s known to get what he wants. She intends to show him from the start that she’s no pushover and is tough as nails.
- Reciprocity is an ancient concept. You be bad and he be bad back. The best way to set the tone is to prove yourself as a worthy negotiator. Prove you did your homework. Prove you came to listen, learn, and give. Prove you can be creative. Prove you can be trusted. Your best leverage is your skill as a negotiator.
These natural inclinations and defenses can blind us from success in our negotiations. See clearly now.
Negotiators Do Judge a Book by Its Cover
By Marianne Eby
To really understand why something so superficial matters, we are going to think out of the negotiation box. Let's think restaurant menu, think Apple products, think Erin Brokovich, and before we finish, think Mao Zedong. Then we'll better be able to think negotiations.
Six Halloween Tips to Unmask the Hardball Negotiator
By Marianne Eby
Do you ever feel like your negotiating counterparts are wearing the same Halloween masks that show up trick-or-treating at your door? Are the mad rush of negotiations in your business to spend year-end budgets and internally as you plan for the next fiscal year really any different than what goes on among the children’s back-room deals over their stashes of candy? Here are 6 tricks (or tips) to unmask the hardball negotiator.
Tomorrow night Halloween in the US evokes images of costumed children asking to trade a trick for a treat – the trick is they are masked as real and fantasy characters and in exchange they want lots of candy – a trade at the heart of every negotiation. With a strong commercial foothold in the US and Canada, this strange bargaining called Halloween has spread in recent decades to parts of Europe and Asia, and is also popular in Latin America.
Halloween celebrations permeate the US culture. More than $7 billion was spent on Halloween last year and about 74% of adults celebrate this holiday, defined by costumes, masks, and out of bounds behavior. Businesses and professionals often consider how to participate in the late October frenzy, since employees and customers experience and relish Halloween as a community celebration. In offices and schools and neighborhoods, in big and small businesses, in penthouses and party rooms, in C-suites and hotel suites, Halloween fun and zany antics are planned, encouraged, enjoyed.
For most businesses, there's also a scene behind Halloween. Often, late October marks the beginning of the end of the annual business cycle. Wrap-up issues are on the table, and plans are being made for the upcoming year. And if your house is like mine on Halloween night, the real bargaining goes on after the candy is collected, when the kids spread out their winnings and begin to trade. That's when we see the real masked characters using the best and worst of negotiating behaviors to get what they want!
Even if the Halloween fete and the year closing create a tension of opposing demands, deals will get closed. For example, while we are spending $1.2 billion annually on Halloween costumes, $85.5 billion is also being spent on computers. Corporate negotiators are working computer deals, equipment leases, supply contracts, phone usage and supplier agreements that keep businesses running, while $21.5 billion in candy passes from hand to mouth. Company representatives in all corners of the world commute their own shares of the $85 billion computer spending, or source and set prices for personnel who can create and support the internet architecture that will permit a share of the $255.5 billion in annual on-line sales. (Data source)
Negotiating is never frivolous and is not always sweet. The scary part is when our negotiating counterparts come to the bargaining table wearing their Halloween masks. We find ourselves faced with people dressed up as superheroes, who want to play “hardball.”
Hardball negotiators use tactics to distract, manipulate, or trick us into moving off our position. They believe that they can win more by playing hardball than by collaborating to create value. The hardball negotiator wears masks – meaning they don’t share their interests – why they want what they want, and don’t care about our interests – why we want what we want.
We want to make a deal, and our hardball counterparts seem only to be willing to make their deal. We are looking for flexibility, and our counterparts seem determined, inflexible, even intimidating. Whether we are are sales or procurement or management, trying to meet quotas, move excess inventory, or gain savings from volume and vendor choice, hardball counterparts are entrenched in their position and tactics.
In the spirit of this Halloween season, consider these responses to the hardball negotiator:
- Consider the tactic what it is – just a trick for a treat. Compliment your counterpart for their tough negotiating style as you would the costumed child at your door. Then suggest you are likely to give better concessions if you can get a commitment to collaborate. Once people make a commitment to be cooperative, most feel bound by it. Remember that their inflexibility is just a costume that can be removed.
- Model collaborative behavior by asking questions to discover your counterpart’s interests. Then offer to address any interests you learn about if they are willing to shift to a collaborative approach.
- Label the hardball tactic (not the person). For example, when they tell you their boss won't go for it, respond, “I see you've brought your bad cop in the room today. I could bring mine in too, or we could just get back to discussing possible solutions.” Then Probe, with sincere curiosity. Same if they tell you that discussing options is no use because they don't have any authority to commit to a different solution. You should say something like -- "We both have limited authority and for good reason; now let's talk possibilities so you can go back and get the authority you need."
- Negotiate the ground rules. Propose that the parties step back and mutually determine how negotiations are to be conducted, building in discussions of challenges and possibilities, proposals, brainstorming, counterproposals, etc.
- Co-opt them. Become friendly. It is always more difficult to attack/deceive a friend than an opponent. Ask yourself: Was rapport built in Exchange stage or did you skip it? Can you step back and build rapport now or interweave it throughout the remainder of bargaining?
- Respond in kind. For example, when the other side opens with an outrageous offer (high or low), respond with an equally outrageous counteroffer, and a smile. This works well if they are simply testing YOUR resolve, or if they are bluffing. If they see you are also skilled in hardball tactics, they may try these strategies to get you to be more collaborative. But be warned, people have a tendency to reciprocate negative behaviors more than positive behaviors.
As we begin closing our current year and preparing for the upcoming year, our negotiating teams can benefit from reviewing the collaborations and hardball negotiations we’ve encountered, just as we review our numbers. Remember to assess strategies to disarm the masked negotiator, since collaborative negotiations create bigger wins for all of us.