Keep things positive. When they attack, hold your fire. Create positive emotions as you negotiate.
Negotiation Blog - Trust
Refresh Your Negotiation Techniques
By Marianne Eby
Spring is the time we shed our winter slump by enjoying the sunshine and returning to the fundamentals of gardening, and the beauty it brings. It is the perfect time to refresh your negotiation techniques as well, by returning to the fundamentals that inform how you turn conflicting goals into opportunities for reaching agreement. To do this I re-read the 1980s classic, ‘Getting to YES: Negotiating Agreement Without Giving In’ by Roger Fisher, William Ury, and Bruce Patton.
The point that resonated with me this time was ‘Negotiators are people first’. Working in a fast- paced corporate environment where people are focused on results, and forever pushing to meet a deadline, we often forget that we are going through ‘micro-level’ negotiations daily. Negotiation skills are useful in far more situations than just formal contracts. Whether answering your supplier’s questions, checking in on a customer, or discussing issues with your supervisor, recognize that your discussions are often hidden negotiations, and you are negotiating with people. People have ego and emotions, and give more to people they like and trust.
Success at these daily micro-negotiations requires that we spend time building relationships founded in trust, understanding, and respect. “Failing to deal with others sensitively as human beings prone to human reactions can be disastrous for a negotiation.” (Getting to Yes, p. 19). It only takes a few negative interactions to override an otherwise positive connection. For some reminders about building and maintaining good business relationships, check out this blog entry I came across: How to build business relationships.
This spring challenge yourself to be a better negotiator by returning to the fundamentals. And remember to use your daily micro-negotiations as opportunities to build positive relationships with people, the very people with whom you will likely be negotiating issues, big and small.
If you have time to read or re-read ‘Getting to Yes’, you’re likely to find some good reminders. Refresh!
8 Tips for Successful Email Negotiation
By Thomas Wood
Email may well now be the dominant form of business communication, and increasingly unavoidable in negotiations. It has its advantages -- it saves money and time, allows you to ask questions that might be more difficult in person, and sometimes reduces stress because of the time allowed for contemplation and reaction. So why do half of email negotiations end in impasse?
Negotiating by email has pitfalls too many negotiators ignore. Research shows that negotiators experience less satisfaction with the process, less rapport, and less future trust in their partners. Why?
- There is a greater tendency to lie, exaggerate, bluff, or intimidate with email.
- Negotiators don't feel the pressure of "live performance," and thus often prepare less.
- Because it is more difficult to build rapport and trust, there is often less focus on interests and more on positions and demands.
- Communication challenges arise easily, including rudeness, ambiguous messages, misinterpretations, and ill-conceived reactions.
- It is easier to say "no" and brainstorming is not possible, thus cramping creativity and the likelihood of value creation.
Because of these downsides, email negotiations can inhibit the trust and mutual understanding that builds and sustains rapport, so conflicts or misunderstandings can easily degenerate or worsen. Here are 8 tips for maximizing the value of email and minimizing the risk:
- Meet first. The first meeting is critical to establishing rapport. It gives everyone the chance to observe expressions and gestures, gauge likeability, style, and personality. Web-conferencing can work, but meet face-to-face if possible, especially for complex agreements.
- Continue to build rapport. Over the course of emailing, express emotions as you would in person, especially positive ones (e.g., excitement, confidence, hopefulness. Even a simple opening greeting and sign-off, as we naturally do in face-to-face meetings, can go a long way in maintaining essential rapport. Make “small talk” or “small text” as you naturally do in face-to-face conversations, before you get into the meat of your message. “Hope all is well.” “Were you hit by that tropical storm last week?” “Did your daughter’s team win their game?”
- Have a well-established goal. Think of negotiating as communicating with a goal in mind. Beware of stream of consciousness negotiation on key deal points. Share your expectations, and when you think things have gone awry. Always know the minimum and maximum parameters that make agreement worthwhile for your side, and return to those before responding to offers via email.
- Brainstorm offline. Email does not usually spark or encourage creativity like the back and forth of live conversation. When a solution is not apparent, schedule a phone call or in-person meeting to get the ideas moving.
- Stamp out conflict. If an email comes off as rigid, or rude, it may be unintentional. Don't respond immediately and don't respond in kind. Take a short break, then contact your counterpart by phone, or email a simple statement of concern or desire to clarify. If there is a problem, pick up the phone or schedule a face-to-face meeting as soon as possible. Conflict with emotional intensity is rarely solved over email.
- Ask more questions, not less. There is a tendency to limit questions over email because it appears tedious. Don't fall into this trap. To avoid lengthy and exhausting lists, start with broad questions, intersperse phone conversations to discuss the answers, and use shorter emails to group follow-up questions by topic.
- Keep the climate positive. Maintain a friendly tone in emails -- use emoticons, (but don't over use), if it feels friendly. Interpret email messages with caution and sensitivity, and leave room for personality, style, and cultural differences. Make sure to clarify any ambiguities right away, and use generally accepted best practices in email etiquette.
- Sprinkle in the personal touch. Share or ask something personal to connect with the other side -- even if it's only about the weather or a local team. Or look for other areas of common interest (try checking Linked In) and asking open-ended questions. Once you've found out their interests, send them URL's or articles that they might find interesting. Avoid religion or politics, though!
Business professionals continue to use email to further the negotiating and decision-making process, despite its drawbacks, so there's no avoiding it. Just use it carefully! And smile as you type.
Visit Watershed's Negotiator's Learning Center to read more on Negotiating Over Email.
By Marianne Eby
Lying is not an easy subject to discuss.
How many lies did you tell today? None? How many times were you lied to today? Not sure? According to the latest research – people lie on average 3 times every 10 minutes, and most of us can't recognize a lie over 50% of the time. So what’s a negotiator to do when your counterpart is not going to announce that they are lying?
Everybody lies. You don’t believe this do you? Think about these everyday examples:
- Compliments that seem expected but are not sincere: "Nice hair cut” might get your boss to be easier on you in this afternoon’s staff meeting.
- You respond that you too are from Oklahoma City when in fact you are from Norman, Oklahoma where you lived from birth through high school. Maybe you tell this lie because it’s easier than describing where is Norman, or maybe you don’t want to be perceived as naive, or maybe you want to build an alliance and your business counterpart went to school in Oklahoma City so there is some advantage to you to be vague in declaring where you are from.
- Apologies that are necessary but resented by the speaker: "Sorry we are late” is appropriate to say, even though your colleague has been late on numerous occasions and you feel justified to be late this time.
- Providing agreement to appease someone : "Yes, that hotel was fine,” even though this customer put you up at a low end hotel where you heard the trucks on the highway all night, but you can’t afford to lose this customer so you aren’t going to complain.
Lying plays out regularly in negotiations just as it does in everyday conversation.
Imagine a building owner who says that for this deal to work, the buyer interested in the building needs to close the deal in 2 months. The prospective buyer in fact wants to close within 2 months, but rather than exposing this interest, the buyer exacts some concession from the owner in exchange for agreeing to close quickly. Is this lying? Or just good negotiating?
We are not in any way suggesting that anyone should tell factual lies in a negotiation - ever - or in any way commit fraud, which his illegal. (Fraud is a misrepresentation of material fact upon which someone justifiably relies to their detriment and suffers resulting damages, and the offense varies by jurisdictions worldwide.) If you are asked a question in a negotiation and you don't want to say the truth, you are obliged to find a way to not answer the question so that the other party knows the question remains unanswered.
But lying happens in negotiations without any factual lies being exchanged. Lying occurs regularly in a back-and-forth conversation where each party recognizes they would have to ask for candor on each and every topic to expect to get it. That's not practical in an intense negotiation, so negotiators understand that the other side is there to seek advantage, leaving little room for any justifiable reliance on your negotiation counterpart’s "negotiation lies."
Why not just negotiate in a straightforward and honest exchange?
Here are just a few examples of why it doesn't happen:
- If a seller reveals her bottom line, the other side would be foolish to offer any more than that.
- If a buyer discloses his must have issues up front, those concessions will be leveraged heavily to close the deal.
- Admit that you have total authority to finalize a deal and you will be pushed to decide and concede all issues on the spot.
- Open with terms of a deal you want, then that will become the starting point from which negotiations begin, assuring you get less than you wanted.
What strategies can you use to close a mutually beneficial deal given that Negotiators Lie?
There are many:
You are negotiating a lease for additional office space. The real estate agent tells you that if you don’t increase your offer by $10K by the end of the day, you’ll lose the space to another company. Is she bluffing or is the deadline real? Ask her lots of questions about the deadline and the competing offer: What time today? Why today and not tomorrow? Who told her this? Why does she believe it’s true? Could it be her source was bluffing? What exactly did they say? When did they tell her? If she was being straightforward, her answers will likely come easily. But if she was bluffing, she will have to go into cognitive overload to keep her story believable. While she is answering, assess how hard she is thinking in order to produce the answers, because even good lyers have to work hard mentally to keep their story coherent.
Propose ideas and options
What do you do when your negotiating counterpart says, “Take it or Leave it.” Do they mean it? Maybe. Is it a lie? Often. Should you test it? No, you should ignore pronouncements of “take it or leave it.” It’s up to you to float options – What if? How about? I wonder how we’d each feel if we can’t reach an agreement? Might another way work? Does your counterpart engage in discussion of these hypothetical options? If so, they didn't mean "take it or leave it" literally.
Use economically equivalent offers
Negotiators often add extra issues to the pot so that they can give in on the ones they don’t really care about and thereby seem cooperative, motivating you to concede on the issues that matters to them. If your counterpart insists that price, delivery time and contract length are all critical and can't be prioritized, offer 3 economically equivalent deals where one of these is addressed in each offer. The offer your counterpart chooses to discuss most will provide clues as to what issues really matter. Now Probe more to find out why that issues is so important.
Offer contingent concessions
Your counterpart insists something is true that you can’t verify: “We plan to build 3 plants next year so our capacity will be doubled by the time you need more product.” Agree to move volume from other suppliers as long as the plants go live by a date you are comfortable with. And put that contingency in writing.
Use Best Negotiating Practices(R)
Rather than spend your energy trying to determine if you are being lied to and navigating around lies, use Best Negotiating Practices that ensure mutually beneficial and sustainable agreements:
- Build relationships with your counterparts: Meet face-to-face when possible and get to know them as humans, not just negotiators
- Prepare: research, verify claims, plan questions
- Exchange: Probe with sincere and intense curiosity, test assumptions, build trust
- Bargain: Bargain with integrity by modeling truthfulness; explain resistance, trade value, admit mistakes and offer any needed apologies
- Listen, be observant and manage our emotions: Be in the moment of the conversation rather than thinking of your next explanation or offer. Emotional states make you more vulnerable -- angry at being taken advantage of, excited about the deal you about to get, depressed about previous losses -- all of these mental states make you more receptive to deceit. Notice clues to lying, but don't accuse - instead use the strategies identified above.
If you think you can spot a liar, then you won’t need these strategies (but at least check your reliance on tell tale myths for spotting liars at the door). And beware: According to the latest research and expert Leanne ten Brinke, you’d be overestimating your chances of successfully knowing a lie when you hear it. A good liar’s lie-revealing facial expression only lasts 1/15th of a second and takes an expert to recognize; body language can give clues but results in many false positives. And accusing a person of lying who didn’t in fact lie, will likely cause the honest person to become defensive – a clue we often misread as protecting a lie. False accusations usually destroy trust, which leads to more lying.
Keep it simple
Avoid lying in your negotiations as much as possible, even though it's a natural part of the game. Expect your negotiating counterpart to lie quite a bit. Don't get mad (it'll backfire); Use Best Negotiating Practices and defensive strategies to find the truth so you can make good decisions and reach a mutually beneficial and sustainable agreement.
Top 10 Ways to Destroy Trust in Negotiations
By Thomas Wood
Trust is the underpinning of all successful negotiation results. It takes sincerity and a great deal of time invested in order to build trust among the parties. But to destroy trust in our negotiations? That takes only a minute.
I have spent the last 6 months tweeting about the ways negotiators accidently destroy trust, and thereby damage the chances of success in their negotiations. It's time to pull those tweets together and add some context.
Let's start really broad. Negotiations are conversations.
- Conversations are between negotiators -- people, not companies.
- The negotiators have individual egos, and conflicting but overlapping goals to achieve for their companies.
- Achievement results from planned strategies that address the parties’ interests -- Why you want what it is that you want.
Simple enough. So why are trusting relationships so important to negotiations?
At some point people have to disclose sensitive info about their interests. If you are not willing to share your interests at some point, win-win is impossible. When people don’t share their interests with you, they don’t trust you (they worry that you will use the information against them).
Affiliating (connecting on a human level) creates positive emotions that allow you and your counterpart to trust, be creative and take risks with ideas. Affiliating is one way to build trust. There are many other ways to build trust as well. Unfortunately, there are just as many if not more ways to destroy trust. And we don’t always realize that our actions may destroy trust.
Here are the top 10 ways negotiators destroy trust:
#1: Not doing what you said you would do.
#2: Opening with an unreasonable and unjustifiable offer.
#3: Over using tactics: surprise attack, bluffing, good-guy/bad-guy, ultimatums, end-runs, artificial deadlines...
#4: Failure to acknowledge problems or apologize (sincerely and effectively).
#5: Not Listening.
#6: Exaggerating and lying.
#7: Showing no empathy or desire to address your counterparts interests.
#8: Not moving off an opening offer for no reason.
#9: Deliberately omitting information that does harm.
#10: Conducting business in a way that your negotiation counterpart considers unethical.
This is a fundamental that master negotiators know at their core
- Trust is critical. We build trust as we develop relationships with our customer, suppliers, colleagues, and partners.
- Use of the collaborative negotiation process is one way to build trust because people feel that their true needs get addressed.
- It takes a lot of investment to build trust. And only a second to destroy it.
Masters of the "Mulligan" on the Golf Course and in Negotiations
By Leslie Mulligan
One of the preeminent “grand slam” golf tournaments celebrated globally, The Masters in the U.S.(Augusta, Georgia), began today, Thursday, April 9th. As a negotiation expert with a long career in sales and business development, I know how helpful golf can be to your professional career. Forbes distilled the 19 tips to “Closing a Deal on the Golf Course” and all of them ring true for me. But what many negotiators miss is that mastering the game is not enough; you must also master the "Mulligan", on and off the course.
A "mulligan" is a do over stroke in golf. My last name is also "Mulligan." As you may imagine, many people ask me if I play golf. I do play golf, enjoying the mental and physical challenge as well as the time spent with colleagues, on business and with friends. And I also leverage the "mulligan."
If you are not aware of the golfing term “mulligan”, it is a free stroke that you can claim, but only if your partner agrees. For example, if your ball happens to make its way into the sandtrap (never happens to you?), well, you get a do-over – a mulligan. It's sort of an unwritten rule of golf that found its way into the game when prominent golfer David Bernard Mulligan took a correction shot on the course with friends, and he and his partner later won by 1 point. Getting a mulligan can make a difference.
But offering a free stroke or mulligan, may be even more impactful – on and off the course.
Let's back up and take a look at Forbes tip # 6 -- also a cornerstone for master negotiators – “don’t be too competitive. The emphasis in a business golf setting should be on building rapport and trust with your playing partners.” In collaborative negotiations, a win-win philosophy where value is expanded for all by addressing parties' interests, establishing a trusting relationship is imperative if you want your “playing partners” to reveal their essential interests. If they view you as trustworthy, they may let you know what their priorities are – and you can do the same – allowing the business deal to grow in value for both parties.
Even the PGA (Professional Golf Association) highlights the fact that golfing can help you in your business networking, enabling you to learn about your playing partners, on their Get Golf Ready website: Networking is like socializing on the golf course (or anywhere)– “but with the purpose or intent of gaining information and insight about someone or something.”
Offering mulligans to your playing partner may significantly improve your business relationship (and their golf round). In social science, we know that doing a favor for someone triggers a debt of social obligation, where the recipient of the favor feels like they may “owe” the giver something. Even if it is a small favor, it can still work to your advantage. So why not ensure your playing partner can take a do-over now and again in their 18 holes. They will appreciate your offer, and it may pay off for you in a subsequent business deal.
Now, none of the professional golfers at The Masters will take mulligans, but for amateurs like us, it can be a powerful lever at the negotiation table! A few other tips in the Forbes article caught my eye as potentially very helpful - not just on the course, but at the negotiation table as well:
- Be on your best behavior – golf is a very revealing sport, and if you play with potential business partners, rest assured that they will take their impressions of you on the course into the negotiating arena. If you are trustworthy, likeable and hopefully competent on the golf course, that will serve you well once you are sitting at the bargaining table with them.
- Respect the etiquette of the game – on the golf course, your partners will take notice that you respect the game, and them as well, if you follow the rules and play with decorum. Don’t take your own mulligans, unless offered by your playing partner. In the negotiation process, you also want to earn respect. Don't make outrageous offers or claims, avoid tactical maneuvers (i.e., arbitrary deadlines, bluffing, good cop bad cop) designed to trip or trick the other side. Respecting the process and earnestness of the discussion will accelerate your ability to gain trust, allowing you to more easily learn the interests of your business associates.
- Control your anger – emotions running high can undermine any negotiation, so best if you control yours while at the negotiation table, just like on the golf course. You want your partner across the table, and on the links, to see you as someone who is rational, capable, and working with the spirit of win-win.
In my experience, I know that do-overs in business do not happen often, even with the last name of Mulligan. So seize the moment if someone proposes one at the negotiation table, but more importantly, watch for opportunities to offer a mulligan to your negotiation partners. Favors offered early in a developing business relationship can definitely pay off down the road. And the golf course is an ideal way to tap that opportunity!
Empowering Technologists at the Negotiation Table
By Leslie Mulligan
Courtship….not necessarily a word that springs to mind when describing a mega-deal taking place in America’s bastion of high tech – Silicon Valley – but that is exactly how Forbes described Mark Zuckerberg’s pursuit of WhatsApp in an article detailing the Facebook acquisition. This seismic, $19B deal closed in less than a week once the principals sat down at the negotiating table, but only after Mark Zuckerberg and WhatsApp co-founder Jan Koum built a true partnership during the previous 2 years.
Technologists typically don’t contemplate relationship building as a cornerstone of their negotiating strategy, but that profound relationship is precisely why the Facebook-WhatsApp acquisition closed so quickly, once $ were in play. Beginning in the spring of 2012, after Zuckerberg reached out to Koum for a casual lunch, they got together almost monthly- sometimes for dinner, sometimes to hike trails around Palo Alto. Not only did they share philosophies on business strategy and innovation, they built a trust that enabled rapid closure on terms, once Google stirred the pot and made overtures toward WhatsApp.
Inventors and technologists usually have an innate curiosity – they push the cutting edge of their domain, fostering innovating thinking and breakthroughs in technology. Turning this natural curiosity toward your potential counterpart at the negotiating table, you can gain significant leverage before talking terms. Find or create shared experiences and build rapport – and you are on your way to earning respect and ultimately trust. Cultivating this trust is essential to spur your counterpart to reveal their underlying motivations and deeper interests.
Once you know what is really driving them, rely on another natural skill of most technologists – creativity. Creativity – and flexibility – allows you to think through a set of alternatives that will meet some, or many, of the interests you have uncovered. If they reject one proposal, you have others ready to propose that might win the day. But this powerful give and take during bargaining is only possible if your partner trusts you. The $19B WhatsApp deal was done in a few short days because Koum fundamentally liked and trusted Mark Zuckerberg.
The Forbes article claims that once the deal was “done” - Zuckerberg and Koum had shaken hands on the basic terms - that Mark Zuckerberg broke out a bottle of Johnnie Walker Blue Label to celebrate, as he knew this was Koum’s favorite Scotch. Now that is indisputable evidence that the Facebook CEO had done the work to uncover the real interests of the WhatsApp Founder!
To learn more about how to Empower Technologists at the Negotiating Table, listen to the August 17, 2014 IMI Tech Talk radio program, hosted on KFNX News-Talk-Radio 1100, when host Tom D’Auria speaks with Leslie Mulligan of Watershed Associates about this topic.
Top 5 Negotiation Lessons from Summer Vacation
By Marianne Eby
Like me, many of you are returning from summer vacation. You relaxed, explored, and played. But you didn’t sharpen your negotiation saw. Or did you? Without realizing, you likely practiced your negotiation skills, and upped our negotiation quotient. Here’s my Top 5 negotiation lessons from summer vacation:
- Have confidence in the process.
Almost two thirds of Americans work during summer vacation, as reported by the Los Angeles Times. . We know we have to work, at least some, while we’re gone. And yet, we go, with confidence in the value of vacation -- expecting we will come back refreshed for a positive impact on our lives. We should go into negotiations the same -- confident that if we follow a disciplined process, we will achieve predictable and repeatable results that create value for both parties.
- Be creative.
Vacation presented us opportunities to play outside the sandbox. In a new place our personality wasn’t known, so we experimented with our approach or style to get the results we wanted. We experienced new things: different foods, new ways of taking photos, other cultures. Being creative with our choices allowed us to discover new things. Being creative in a negotiation allows us to find new solutions to difficult issues.
- Adjust your style and build rapport.
People we had to deal with on vacation were unfamiliar -- hotel desk clerks, beach patrol, waiters, tour guides, friends of friends. Naturally we wanted a pleasant experience, so we explored common areas of interest to build rapport. And because so much was new and different on vacation, we asked lots of questions. Because we were sincerely curious, we listened well to the answers. Some of these people even made it into our virtual rolodex. Think of your negotiation counterpart similarly. Adjusting your style to the situation or person, and making a personal connection, builds trust. And as we all know, building trust allows both parties to share their true interests, and find hidden value in negotiations.
- Plan, Propose options, and develop alternatives.
Most of us planned our vacations more thoroughly than we plan most negotiations – hotel reservations, addresses to enter into our GPS, must-go concert tickets. We knew the budget we wanted to keep and the money and time limits we could not exceed. When different members of our family were unhappy with the offering, we proposed options. We suggested a willingness to hike the long trail today if everyone would get up early for kayaking tomorrow. Indeed, one of the best negotiation practices is to offer options. People stay involved when they have to respond to options. And on vacation we thought of backup plans if rain stole a beach day. Our vacation /learning-center-item/batna.htmlBATNA! Without knowing it, we practiced our negotiations skills on vacation!
- Take breaks.
We took breaks to relax – mini-vacations within a vacation. Relaxing gave us time to reflect and rethink our needs and priorities, or to calm friction from too much time with family and friends. Taking breaks during negotiations is equally beneficial. Time away allows issue clarification, a chance to reset the emotional climate, and check in with stakeholders. Taking a breather is rarely a step back; more often it provides a renewed vigor to work toward common goals.
We’re refreshed upon our return from vacation. And without realizing it, we honed our negotiation skills in the process. Be sure to apply those summer lesson to your next negotiation.
Spending Time on Relationships is Never Wasted: Negotiation Lessons from Enron in India
By Thomas Wood
Everywhere I consult and teach on negotiations, people love hearing stories of the negotiations that didn't go well, and especially stories of the now infamous former US behemoth, Enron. Everyone remembers Enron’s meteoric rise to power in the 1990s – as well as its shocking fall into bankruptcy in 2001. Fewer people remember that the Houston-based energy giant had tasted defeat at least once before, when negotiations over a planned $20 billion power plant broke down with the Government of India. Why did this high-profile, lucrative deal fall through? One major reason harkens back to the most fundamental of all negotiation principles - spending time on relationships is never wasted.
In the late 1990s, Enron seemed to be on top of the world. The Houston-based energy company, named “America’s Most Innovative Company” six years running by Fortune magazine, claimed over $100 billion in revenues during 2000 alone. By December 2001, however, widespread accounting fraud and corruption had brought Enron crashing down in a stunning turn of events.
Although it seemed as though Enron could do no wrong, the company had in fact experienced a serious setback in the mid-1990s, when negotiations over the massive 2,015 megawatt Dabhol Power Plant – the first part of a planned $20 billion effort – broke down with the Maharashtra State Electricity Board and the Government of India.
Why did this high-profile, lucrative deal fall through? Despite their business acumen, Enron committed two key mistakes during the negotiation process that sowed the seeds of the deal’s demise.
First, by pushing to sign a contract as quickly as possible, Enron negotiators failed to build a longer-term relationship with their Indian counterparts. As reported in Business Week, although Rebecca Mark, head of Enron International, justified their strategy by stating “time is money for us,” for instance, the speed of the arrangement looked suspicious to many key Indian powerbrokers. Influential local leaders immediately began criticizing Enron’s negotiation strategy as an affront to Indian sovereignty and argued that corruption must have been used to speed up the process.
Enron’s failure to cultivate a long-term business relationship with any local partners – (it also rejected the advice of many experts and refused to take on a local Indian partner as a minority equity holder) – meant that Enron possessed no trusted local partners to help navigate the pressures that inevitably accompany such endeavors. This made it virtually impossible for either side to capture valuable trades – and increased the likelihood that India would execute its BATNA.
Second, rather than thinking creatively in search of mutual gain, both sides resorted to positional-based, competitive negotiation strategies that manifested themselves in bitter criticisms and veiled threats. As reported by the BBC News, after local Indian officials characterized the power plant agreement as a “betrayal” and suspended payments, for example, then Enron CEO Kenneth Lay implied that his allies in the US government might cut off aid to the Indian government. Threatening India's relationship with the US crossed the line and sealed the end of Enron's power play.
In high stakes and complex negotiations, all the great financial analysis will not change the need for trust and strong relationships. We can all learn from Enron's missteps.
Why did the negotiator cross the road?
By Marianne Eby
Negotiations are serious business, which is why it is important to understand, and build trust with, the other party. Great negotiators know that no matter how serious the interaction, laughter is often one of the quickest paths to trust; it can relieve tension, create a bond, improve everyone's moods, and foster the creativity you want for mutually beneficial agreements to emerge.
Researchers in many fields, from medicine to psychology to communications, are increasingly interested in the social power of humor and the physical and emotional benefits of laughter. Public speakers are trained to open presentations with jokes or funny anecdotes. Political candidates are now expected to demonstrate their sense of humor on the talk show circuit to improve their likeability. In 2010 Comedian John Stewart was voted the "most trusted man in America." His social power derives from the fact that he is knowledgeable and funny, which makes him seem more trustworthy.
A sense of humor is useful during all phases of negotiation as well -- to signal confidence or shift power, to change the environment, to soften bad news, to avoid answering a question, to respond to a ridiculous offer, or to save face.
Telling a funny story or acceptable joke can also help you gauge whether the other party is on the same page with you. If the other side is not laughing, or even engaging in a joking conversation, pay attention: they are not where you hope they are. Not laughing in response to a humorous gesture is a sign of discomfort or disconnection.
So prepare with ice-breakers -- anecdotes or jokes that get a group to laugh before you begin bargaining.
Try these tips for opening an interaction with humor:
Tell a story on yourself: People love to laugh at absurd but real events. Carol Burnett famously said "comedy is tragedy plus time." A story you tell about yourself makes you more human.
Don't take yourself too seriously. Keep the humor light, and your expectations for laughter down. Nothing kills an attempt to develop rapport more than someone who can't laugh at him or herself. Mildly self-deprecating jokes imply trust.
Collect a few jokes that work for you. They're easy to find or to collect. Good storytellers and comedians prepare material in advance, to avoid hitting the wrong note, and to be ready to hit the right one.
What to avoid:
- Stories and jokes about race, culture, gender, religion, politics, or hometowns
- Offensive material
- Targeting something sensitive about them you discovered by being empathetic (don't overuse empathy!)
- Stories or jokes that require long, complex setups, or special insider knowledge
- Telling a joke if you are not good at it
- Jokes that rely on an exact understanding of your language
Sometimes puns (ambiguous play on words with multiple meanings) can be fun – just make sure your humor is understood. Let’s say you’re in a tense negotiation and everyone is frustrated. You might say:
“Does any one feel the way I do? Trying to figure out a solution that satisfies us all is like getting ready for a root canal – it’s unnerving!”
Keep these guidelines in mind for successful humorous stories and jokes:
- Make them modest, not ambitious
- Keep them short -- avoid a long setup!
- Try to be topical -- find a story or joke that's relevant to the negotiation at hand, a recent press story, your travel, etc.
- Be yourself!
Be real. Leverage your own style and personality. Be willing to laugh. See how it changes your negotiation results!
Connect with Your Negotiating Counterpart
By Marianne Eby
You are about to begin a difficult project at work in conjunction with your co-worker, and he asks, "Want to grab a cup of coffee before we get started?" You may not want coffee, you may be busy, you may be dreading working with this person, or you may think chit chat is a waste of time. But if you are going to successfully complete this project, you would be wise to respond with a resounding "Yes!" You have just received an "emotional bid" that holds the key to you getting more of what you want in the many negotiations that will unfold during this project.
As John Gottman described a decade ago in his book, The Relationship Cure, an emotional bid is a question, gesture, or expression that implies, “I want to connect with you.” The label "Emotional bids" may be 21st century nomenclature, but the idea is as old as the first negotiation between cave men setting out on a hunt who sharpen sticks together, and will later have to negotiate who gets the best meat of the kill.
Emotional bids are part of all developing relationships, including those between co-owrkers and negotiating counterparts. If your polite answer to such a bid is "sorry I don't drink coffee" or "thanks but I have too much work right now," you are missing an critical opportunity to connect in a way that supports your inevitable ask for something you want.
Many of us fail to recognize or extend emotional bids. As a good negotiator, you already know that relationships are critical in your negotiations -- with customers you can't afford to lose, suppliers you need, and partners you want. The relationship you develop with the other party, whether positive or negative, impacts every aspect of your negotiation. Yet we spend more time alone completing tasks, and avoiding interaction, only to lament, "We don't have a trusting relationship!"
Recognize emotional bids for what they are -- a prime opportunity to build affiliations, find common ground or interests, and understand each other outside the conflict zone.
Be on the lookout for "emotional bids" and use them yourself. An "emotional bid" can be an interesting "tweet" or funny story, sharing an industry related article, a recommendation for a good book or restaurant, and a million other ways to connect.
Remember, institutions don't negotiate. People do. And people give the best deals to people they connect with -- people they like.