چطور انجامش بدیم

16

How to Do It

Now that you have all this stuff, what do you do with it? How do you start the negotiation? Who should make the first offer? How do you know when the other person is ready to walk away? How do you close the negotiation?

Answers to these questions have been sprinkled throughout Getting More, but a summary chapter might be useful.

So here are some thoughts on how to actually do the negotiation—after you’ve learned the tools, understand your goals, and think you understand the other party. While every situation is different, this chapter should be viewed as a kind of template.

ATTITUDE

If you are nervous, afraid, angry, or distracted, you are more likely to do poorly. Morale is important. The other side will know if you are nervous.

Think about the worst thing that could happen to you in a negotiation. If you can withstand it, you will be more confident. If you can’t, this is probably a bad negotiation for you to attempt. Find someone else to conduct the negotiation: prepare more, change the perceived risk, or examine opportunities elsewhere. Get yourself more mentally ready.

If you feel intimidated by the other person or party, imagine them in the most embarrassing position you can think of. Let your imagination run wild.

Lower your expectations about their good faith. Be prepared for anything they might pull. You will be less rattled if they do pull something, and you will be surprised far less. Be incremental. Don’t think you have to do everything today. Chill out! Unless your life is on the line, there’s always a tomorrow.

Your ability to meet your goals, and your confidence level, is often in your mind. As Henry Ford once said, “Whether you think you can or you can’t, you’re right.” PREPARATION

A big confidence builder in doing a negotiation is preparation. The more prepared you are, the less nervous and more effective you will be. You won’t be busy trying to remember what you’re supposed to do next. You won’t be as worried about what you don’t know.

WHERE AND WHEN TO HAVE THE NEGOTIATION

Short answer: it doesn’t matter, as long as you are comfortable, and as long as they are comfortable. If the other side does something that makes you uncomfortable, say, “This will make me uncomfortable.” Or “I’m not ready to negotiate yet.” If they say, “Tough,” say, “So you’d like me to negotiate unprepared?” Or “Can I get back to you with a more complete answer?” Students sometimes ask, What if it’s a job interview? Let me tell you, the interview is the nicest a future employer will ever be to you. If they are unkind to you in the interview, run! If you have to take the job to eat and pay the rent, start planning your exit immediately.

Negotiating on their turf doesn’t have to give you less power. It depends on how you frame it. You might say, “Okay, so you’ll serve lunch?” Or “Can you send a car for me?” I once was so obnoxious that I sat down in their conference room, leaned back in my chair, and put my feet up on their conference table. My message: “I’m right at home.” This doesn’t mean you shouldn’t negotiate over where and when a negotiation should take place. It just means that every situation is different. Where and when would be the best place to hold the negotiation to meet your goals?

From time immemorial, men proposed marriage to women in the most romantic place the men could find, at just the right moment. Labor and management might start their negotiation where the company was founded. Disputes among combatants might be settled on hallowed ground. This is not necessary, but might be considered under “nice to have.” GET TO KNOW EACH OTHER

It’s not a dance. There are no magic incantations. I tend to be informal. I might say, “Hi.” Or “What’s going on?” You might be more formal, depending on your comfort level and how well you know them. Find common enemies: complain about the weather or the traffic. Compliment the other person on a suit, dress, or watch. The only thing is, you have to mean it. Again, people can spot phonies a mile away.

I’ve been in negotiations where the other party has said, “How’s your family?” And when I started to talk about my wife and son, they appeared to be hardly listening. To me, this was a manipulative person who read about small talk somewhere, but doesn’t really care about me.

Think about the other person’s perceptions. They put their pants on the same way you do. They get hungry and thirsty and tired and sometimes overwhelmed. They are human, too. Make a human connection.

You may not have time for small talk. But you can still make a human connection. Rayenne Chen at the opening of the book made eye contact in bringing back the plane.

Small talk is big talk in a negotiation. It helps to make a human connection. And humans are social beings, with few exceptions. People like to make connections with each other. Even discussing differences is a connection. It’s an act of interacting. Studies have shown that humor (if they recognize it as such), small gifts (“Want a mint?”), or a comment about something interesting that happened today are all key in setting a more collaborative tone.

If you are not interested in the other person, don’t conduct the negotiation if you can help it. Your lack of interest will come across. You will seem bored, distant, rude. The best negotiators are curious. They want to know about other people. They want to make a connection.

That does not mean you need to be a social butterfly. But there must be something about the other person that’s interesting. Something you can learn. The act of being curious about others, by itself, is persuasive.

How can you make yourself and others more comfortable? This is exactly the opposite of what people often do, which is try to make others less comfortable.

Of course, if the other person or party is pressed for time, don’t waste their time. Ask them how much time they have. It’s another way to make the connection. It shows that you value them, and their time.

The best “small talk” I ever experienced took place during a factory tour. It was the first time I went to Dnepropetrovsk, Ukraine, to tour the sprawling factory complex of Yuzhmash, which I was representing.

After a brief meeting in a conference room, they escorted me to the factory floor, and brought me right up to a huge nuclear missile lying on its side. It must have been as long as a football field.

The nuclear warhead, of course, had been removed. But there were the guidance systems, exposed and being worked on. There were the huge exhaust cones. I could reach out and touch things, and I did. The technicians with their work overalls said hi. One guy told me, proudly, that his target had been Minneapolis. Now that’s what I call getting familiar.

GETTING STARTED

Even in a short negotiation, you should know specifically what you are going to talk about. That is, what subjects will be covered, and in what order. Get an agenda that both parties agree to. This will help the parties get back on track if they get lost. It will also help organize things.

Karine Adalian, a consultant in California, said she started going into meetings with a one-page written agenda. “The first time, I appeared to be the most prepared person at the table of much more senior people, including thirty percent lawyers,” she said. No one else had an agenda or an organized list of issues. So she had copies of her agenda made for everyone. And she got everything she wanted.

If several people bring agendas, it’s that much better! Now you have surfaced most of the issues to discuss.

How long will the negotiation take? Sometimes circumstances dictate this. Other times, have a discussion about this. It’s often best to break a negotiation incrementally into smaller pieces. Every time you get new information that can affect the negotiation, consider taking a break to think about it, and then resume.

Start with the easy things. It gives the parties a sense of accomplishment and progress as they agree on them. Tell people as soon as you can in the negotiation what you can’t agree to. That way, people don’t waste their time. If you wait until the end to mention your dealbreaker, one of three things usually happens: (a) the deal falls apart, (b) you lose trust and get a worse deal, or (c) they ask for much more to compensate them for what you are now asking them to give up.

As noted earlier in the book, try to set a time limit on issues. For example, anything you can’t solve in fifteen minutes, go on to the next issue. That way, you get as many issues out of the way as you can. Also, try never to commit to any one thing until you see the entire package of points to be negotiated. In lieu of that, make conditional, or tentative, commitments.

THE NEGOTIATION DYNAMIC

You need to discuss the other person’s perceptions every time you confront an issue. Through your preparation and role reversal before the negotiation, you should already have ideas about this that you can share. If you want to persuade them, their perceptions are the starting point.

If something surprises you, take a break immediately. My team once took five breaks in the first hour of a merger negotiation where we were presented with a bunch of surprises.

If you have a disagreement on your own team, stifle it while you are in front of the other party. You risk others exploiting the disagreement to play people off against one another. It’s okay if more than one person from each side talks, as long as it’s not confusing and you are in agreement. That is, if people have assigned roles or you are brainstorming.

If a contradiction emerges, call for a break. Tell the other side something like, “When we figure out what we really mean, we’ll let you know.” People don’t expect you to be perfect. They do expect you to be real.

Decades of studies have shown that time pressure at the end of a negotiation produces: (a) worse deals, (b) less ability to process information, (c) less value added, (d) neglect of important information, (e) bad judgments, (f) more emotion, (g) fewer options, (h) more raw use of power, (i) more stereotyping of the other side, and (j) more stress. It can fray relationships and kill the deal entirely.

If you realize you don’t have enough time to cover everything, don’t. Get a couple of things done very well, rather than a lot of things done poorly. Use all the time you have.

Time pressure can be real or imagined, internal or external. It’s all the same in its harm to negotiations. If you are stressed out by deadlines, make adjustments. Try to allot more time. Or decide you won’t negotiate in pressure situations. Whether buying a car or a house, you can tell the other party at the start that if they set a deadline on something, you won’t consider buying it. It trains people to behave.

HOW YOU TREAT EACH OTHER

In negotiation classes, we often ask students to rate how they treated each other in a case. Those teams that treated each other poorly almost always did much worse. What do I mean by treating people poorly? Using threats, insults, or sarcasm; interrupting, blaming the other person, devaluing the other side, failing to communicate effectively, not having an agenda, and other people-and-process-related failures. In big cases, the differences in outcomes often mean millions of dollars.

Negotiations are very sensitive to the exact words used. For example, you could issue a veiled threat, such as, “If we don’t reach an agreement, it will hurt your reputation.” Or you could say instead, “How can we help you use this deal to enhance your reputation?” The latter is a “collaborative threat,” as noted earlier. The other party understands what the flip side looks like. But the way you say it—putting a positive spin on it—makes it easier for the other side to hear.

There are many ways to do that. Instead of saying “We don’t trust you,” why not try “How do we start to trust one another?” Instead of saying “You aren’t answering my phone calls,” how about “Did you get our calls? We’d love to talk to you about things.” You will get better at this with practice.

Is an emotional payment needed? Being nice to them in a hostile situation will make the negotiation better. Focus on what each of you can achieve together—a sense of vision. Let them talk. Let them explain their side of things.

It is usually helpful to appoint one person on your side, at least, as the observer of the other team and process. Whenever this person sees something getting out of whack, they can either ask for a break or say something tactful or diplomatic to keep things on track.

HOW YOU DISCLOSE INFORMATION

Most people are afraid to give too much information up front. My guideline is, give out information that tends to bring you closer to your goals. Don’t give out information that tends to bring you farther from your goals. So if your goal is to buy a car or a company for the least amount possible, it’s probably not a good idea to tell the other party how much you can afford, at least not at the start of the negotiation.

However, at the end of the negotiation, if they are asking for more money than you can afford to pay, you might as well tell them that, and let them know what your top price is. That might get them to come down into your range.

Of course, you can also try to bridge the gap with intangibles. But go ahead and reveal your bottom line if (a) you have tried everything else, (b) they are still outside your bargaining range, and (c) it looks like you’re at the end of the negotiation.

The same is true with telling them your interests and needs. If you think they will take advantage of you, then don’t tell them how much you want something. However, you do need to tell them something, or you might not get what you want. The danger of lying about your needs is that they might give you what you don’t want. That will turn out to be a mess.

Be incremental if you’re not sure about how much good faith the other side is exhibiting. You should say, “I’m interested in this painting,” as opposed to “I absolutely adore this painting.” You are not required to disclose information in a negotiation. You are not on the witness stand in court. But you shouldn’t be coy about hiding something, either. If you don’t feel comfortable answering, you can say, “I don’t feel comfortable answering that question.” If someone asks you if you have other offers, ask yourself, “Now why would they ask me that?” The obvious reason is that they want to know if you are desperate, and if you would therefore take less. Instead, ask why that’s important. You might say, “Will you pay more if I have other offers?” or “Will you charge more if I don’t have other offers?” That’s a bit obnoxious. But you should tell people if you think they are playing games. You could ask more tactfully, “What effect do you think this might have on our discussion?” In a job situation, reframe this and say that you have a lot of “opportunities.” You could also say, “Are you trying to find out the (or my) market value?” Then you can suggest using standards.

Who makes the first offer? This answer is actually much easier than you might think. If you have a lot of information about the negotiation, you should make the first offer. That would include price, value, terms, what they know, competitors, and so forth. That is because you are “anchoring” the negotiation, setting expectations if you will, within a narrow range.

So if you know the car prices and details, you should make an offer. In general, you do 3 to 5 percent better if you make the first offer under those circumstances.

If the bargaining range is broad or uncertain, don’t make the first offer. You are likely to negotiate against yourself. Their expectations may be a lot different than you think.

A young manager in the Columbia University Executive MBA Program, Charlie Smith, went to buy a kitchen table and chairs with his wife. The set was priced at $3,000. Charlie understood that the store rarely discounted, maybe $50 or so. But he wasn’t sure. So he asked the salesman if the store could discount the $3,000 set if they bought it today, and also since they were starting to furnish their new home.

“How about $300 off?” the salesman said. Charlie was so flabbergasted that he just stood there, unable to speak.

“Okay, what about $500 off?” the salesman said, filling the silence. Charlie started to regain his voice. “Well, uh …”

“And I’ll throw in free delivery and eat the sales tax,” the salesman said. Total discount: $800. The point: don’t make the first offer if you don’t know the bargaining range. You will negotiate against yourself. “It’s happened again and again since then,” said Charlie, now managing director and head of corporate finance at Loughlin-Meghi Company in New York. “It’s a good lesson that one’s perceptions might not be a complete picture of the situation.” Now that doesn’t mean you can never make the first offer if the bargaining range is wide or uncertain. You can narrow the bargaining range by asking questions. Why is the other person here to discuss this matter? You can find out their needs. People will often tell you a lot if you ask them.

But the rule of thumb is not to make the first offer unless you have a lot of information about them, the bargaining range, and the situation. Always try to find out.

EXTREME OFFERS

Extreme offers kill deals. The other party usually feels insulted. If it’s too low, it devalues the other party. If it’s too high, often the other party gives up. It risks your credibility. If you make an extreme offer and then quickly back off it, the other party thinks you were trying to take advantage of them. Mistrust ensues.

An extreme offer is an offer upon which no reasonable standard or information is based, as perceived by the other party. Not you, but the other party. Even a madman thinks his offer is reasonable. You need to look into the head of the other party and figure out what they think. As such, the tactic of asking for a lot to give yourself negotiating room will too often backfire.

What if an extreme offer is made to you? The antidotes are (a) not reacting emotionally, (b) asking questions, and (c) using standards. Maybe they’re not trying to take advantage of you. Maybe they don’t know how to negotiate effectively. Maybe someone taught them to do this. So ask them how they got to this offer. Did they pick it out of a hat? Do they have some data? Also, you can say that the offer is out of line with what you’ve seen elsewhere. So where did they get their information?

Extreme offers also violate one of the fundamental principles of the book: being incremental. Almost by definition, an extreme offer is the opposite of incremental. So the chances of the other party accepting it are much less. In a meeting, if someone is extreme, you might turn to the other members of that person’s team and say something like, “Do you all agree with each and every word that was just said?” If there is any hesitation, ask for a break. Maybe they can talk some sense into the person being extreme.

Check and test everything. If you are buying a car and they tell you a particular option costs more, check it on the Internet. The Wall Street Journal once did an article in which a dealer added $2,000 to the purchase price for high-end tires and rims. The buyer did an Internet search right there on his cell phone and found that the wheels were actually less expensive than the standard ones, which came with the car at no extra charge.

THE POWER DYNAMIC

As noted throughout this book, be careful of overusing power. Just use enough to meet your goals but not more. Lessening the misuse of power by the other side is important only if it enhances your ability to meet your goals.

It should be clear by now that the notion of power in and of itself is irrelevant. It is relevant largely in relation to your goals. Traditional ideas that size equates with power are simply not true. First, small parties can be very powerful. A single well-prepared advocate such as Martin Luther King Jr. or Mahatma Gandhi can inspire millions and bring governments and other power interests to their knees. The young man who stood in front of a line of tanks at Tiananmen Square in the 1989 uprising changed the power balance. Though he never said a word to the public, his standard apparently was, “In China, it’s not right to use violence against individuals expressing themselves.” He made a human connection with his countrymen, the operators of the tanks. They were unwilling to run him down under those circumstances. At the same time, large parties can be weak, or become weak. Consider Enron, which lost all its power quickly amid a financial scandal.

Who has more power, General Motors, which essentially went bankrupt, or a highly profitable, medium-size technology firm? GM had a lot of expenses and debts. But the smaller firm probably had much more control over its goals and its destiny. And it likely has a lot more credibility.

In the 1970s and 1980s, the multibillion-dollar nuclear power construction industry in the United States was all but destroyed by a loose-knit coalition of people who had been ridiculed and deemed powerless by utility companies. Those people included college-educated housewives, retired people who went to the library, various journalists, activist attorneys, and public interest groups whose members were in college or recently graduated. This collection of people formed a coalition, did research, and found safety issues, including the hazards of what to do with nuclear waste and how to evacuate the surrounding area in the case of an accident. They persuaded lawmakers to pass more stringent regulatory requirements, and the economics of nuclear power went out the window.

In a 1987 treatise by Martin K. Starr and John E. Ullman titled “The Myth of U.S. Industrial Supremacy,” a line has stuck with me. I hope it sticks with you: “There is no institution, enterprise, society or human achievement of any sort, no matter how strongly established and esteemed, that cannot be ruined.” Good comment on the misuse of power: with your kids, your company, your counterparts, or even your competitors.

As you negotiate, don’t throw your weight around. It may well come back to bite you. And if they throw their weight around, make sure you document every unreasonable action.

If they have a lot more raw power than you do, they can certainly beat you up. In such a case, you should acknowledge their power, giving them an emotional payment. And you should ask them, just because they can beat you up, should they? For example, if an opera house can beat down a star performer in negotiations, how will that performer feel? Will he or she be as motivated to give a great performance, thus benefiting the opera house? If you can beat up employees, will they work less hard for you?

Better to focus on meeting needs and expanding the pie by using the tools in this book. And feel free to have a frank discussion about power with your counterparts. Feel free to educate them, tactfully, if they are misguided. Remember, though, they might be emotional about their power, so they may need emotional payments.

WHAT ARE OUR NEEDS?

After you become comfortable with one another, the parties need to figure out what to negotiate about. Goal-setting will help this. So will agenda-setting. Now you need to go more deeply into what your needs are. Not just in the negotiation itself, but in life. That’s because you can trade items of unequal value. What can you trade off in the negotiation, on any subject?

WHAT CRITERIA SHOULD WE USE TO EVALUATE OPTIONS?

For things that you cannot trade off, you should be looking for standards (criteria) to help you decide the best criteria. What are their standards? What criterion should you use to decide? Is it prices of comparable houses? Is it past practice?

WHAT CAN WE DO NOW? MEDIUM TERM? LONG TERM?

It is empowering to figure out what the parties can do now. A lot of people get lost in negotiations because they argue over things they have no control over. Even if the other items on your agenda are really important, if you can’t do them now, who cares?

That doesn’t mean you shouldn’t have a strategy for long-term gains. But the more stuff you get done now, the more all the parties will feel a sense of accomplishment. And the more likely they will keep trying to agree on things.

As noted earlier, prioritize the issues based on what is easiest and fastest. Easiest is a subset of fastest in most cases. You should do all the things now that you can do now. Then tackle the medium-term things. And then the long-term things.

If the parties can’t decide anything, can they recommend something? Can they decide when to meet next? Can they figure out what parties should be involved next time? Can they get to know each other better? Can they explore creative options that will make each look better to their own third parties back at home or the office?

This is all part of being incremental. A lot of people want to do the whole thing at once. This takes so much up-front planning, cost, and organization. We live in a rapidly changing world. If you plan out every detail of a long, long campaign, and the world changes (which it usually does), then you’ve wasted all this time, effort, and expense.

WHOM DO WE NEED TO HELP US?

Almost everyone needs third parties to help them complete things. Even when negotiating with a contractor. Do you need to get something at the hardware store? Do you need permission from the town? Is there some electric or water hook-up that needs to be dealt with?

A really good task for the parties in a negotiation is to figure out the third parties and other resources that are needed.

HOW CAN WE MAKE A COMMITMENT THAT STICKS?

As I pointed out earlier in the book, just because two parties say, “I agree,” or sign a contract, doesn’t mean you have a commitment. You need a commitment from them in the way they make commitments. This should be explicitly discussed as part of the negotiation.

They will want to know, also, whether you’ve made a commitment. Third parties can both strengthen and weaken commitments. Boards of directors, bosses, bankruptcy officials, an economic recession, or other kinds of new information could scuttle the deal. If there is a ratification process on each side, what does that look like? Which third parties or incentives can hold the other party to its commitments?

The making of a commitment also needs a deadline and a time frame. This needs to be explicit. If there are any conditions that will cause the other party (or you) to be able to get out of the commitment, spell them out.

Finally, what happens if a party breaks its commitment? Will anything be owed to the other party? Best to get all this settled up front. The other party might say, “We won’t break the commitment! Don’t you trust us?” You should answer, “What if you leave the company? What will the next owner or management team do? What if you get hit by a truck?” If they say there is no chance they will break the commitment, ask for strong penalties, since it carries no risk for them, but “It will make me and my team feel a lot better.” Test people. Be careful of taking on more risk.

Risk should be discussed explicitly in negotiations. This ranges from key employees leaving to third-party interference (friends, lovers, regulators) to a noncollaborative person. Clearly, the more risk one takes, the more one is entitled to be compensated in some way. So a key thing to do in a negotiation is to understand the other party’s risk profile. Then try to minimize their perceived risk. If you reduce their perceived risk, they will pay you more if you are a seller, or take less if you are a buyer.

This is why people who start new businesses try to get seasoned businesspeople on their board of directors or their advisory board: financiers will think there is less risk.

You can argue with the other side about actual risk all day. This is not as important as figuring out their perceived risk and reducing it. All of these things should be specifically discussed in the negotiation.

Some negotiators try to increase the other party’s perception that they are risky, in order to exact more in the negotiation. This is what happens when lenders lower your credit score based too often on some spurious example of a credit problem. Consistent with the advice in Getting More, ask for details and evidence. Get the standards.

More effective is a joint effort to reduce perceived risk. Make risk a common problem. That way, you are working on it together. If they don’t want to help you, assume they are trying to manufacture perceived risk in order to charge you more (for example, a bank or credit card agency). Be suspicious.

WHO DOES WHAT BEFORE OUR NEXT MEETING?

You’ve all had this experience. You leave a really great discussion. Then you think about it and you are not sure who does what: spouse, kid, friends, colleagues, counterparts. “Now who was going to get the tickets to the game? Who was going to call about the airline schedules? And was the person who called going to buy the tickets, too?” So when the moment of truth comes to put everything together, a key thing has not been done. Everything is ruined. Everybody blames everybody else. Or it is blamed on “miscommunication.” But the real culprit was the lack of tying things down. So at the end of each negotiation, develop a task list, with a timetable and individual responsibility.

If something goes wrong, who contacts whom? Is there a sort of emergency lever that anyone can pull? Who does your job if you get sick?

Does each person have a back-up plan if their first choice doesn’t pan out? Does each person have a range within which to make a decision before consulting others? Sit down and think of all this stuff. Take a pen and a piece of paper and five, ten, fifteen, or thirty minutes. It will save days of time, lots of money, and tons of aggravation.

FROM PICTURES TO GOALS

I want to come back to the summary of my course: what are my goals, who are they, what will it take to persuade them. I just want to make sure you have the picture in your head. Here is the model in a nutshell.

First, the big arc is what people usually try to do: go in one step from the pictures in their heads to your goals. It’s too big a step for most people. Instead, go back until you find the pictures in their heads. Then ask them questions that confirm those pictures. Do you want to reach an agreement? Do you want to have a meeting? Once you get them to confirm it, move one small step at a time toward your goals.

So, your goals are at the right, who they are is at the left, and what it will take to persuade them is the step-by-step, incremental process that you will use to get them there.

Yeah, yeah, yeah. Don’t need to repeat it. You know all this. But it’s not enough to know all this. You actually have to do it. Which, of course, is the title of this chapter. And the way to get more. Which, of course, is the title of this book.

You’re ready! Go out there and get more!