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Use The “Reverse-Godfather” Approach To Win A Negotiation

Tuesday, December 30th, 2008

Some Negotiations Are Like Visiting The Godfather - Just A Bit Scary

Some Negotiations Are Like Visiting The Godfather - Just A Bit Scary

In the classic movie, The Godfather, Marlin Brando utters the unforgettable phrase “I’ll make him an offer he can’t refuse.” Clearly Brando’s character Don Corleone is operating from a position of negotiating power as the head of an organized crime family. However, is there anything in this phrase that us mere mortals can use?

It turns out that, with a twist, yes there is something here for us negotiators. Specifically, what we can do is make the other side of the table an offer that they MUST refuse. Now why would you ever do such a thing?

This is a powerful negotiating tool and when used correctly it can produce amazing results. When you make an offer to the other side that you know that they just have to refuse, what you really are doing is setting the stage for when you make offers later on. These future offers will look reasonable in comparison to the offer that they refused.

During a negotiation, time is one of your most valuable tools. The more time that you have, the more power that you have. Making an offer that the other side must refuse will buy you more time that will allow you to spend it exploring additional alternatives that may end up being acceptable to both sides.

Interestingly enough, this technique can also be used to either stall the negotiations or even perhaps cause the negotiations to break down and come to a complete halt. You may want to do this if it turns out that moving the negotiations to a different time would be more favorable to you. This may allow you to create a better set of arguments that will result in a better outcome for you in the end.

If we could read the other side’s mind this whole negotiation thing would go much quicker. Since (most of us) can’t do this, making an offer that the other side must refuse will help you to bound the negotiations and get closer to finding out what the other side views as being an acceptable offer.

What’s interesting about making a clearly unacceptable offer is that it will interrupt the flow of the negotiating conversation. When the other side starts to believe that perhaps no agreement may be able to be reached, they are often likely to drop their “negotiating face” and talk candidly with you.

This is your best chance to discover their real motivations – sorta like reading their minds. Once you have this information, then you will be well positioned to make use this knowledge to make a follow-up offer that will be much more acceptable to the other side.

Yes, yes – as with everything in life, there is some risk associated with using this technique. The other side may become so upset that they just up and walk away from the negotiations. However, using this technique carefully and in the correct negotiating situations can open up avenues to reaching a solution that were not previously available. Remember that before you use this technique, you want to make sure that you have left yourself a way to re-enter the negotiation – don’t get shut out!

Have you ever been given an offer that you just had to refuse? Did you refuse it? What happened next? What was the final outcome of negotiations? Leave me a comment and let me know what you are thinking.

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Posted in negotiation tactics | 2 Comments »

Merry Christmas – Take The Week Off!

Monday, December 22nd, 2008
Here's Hoping That You Name Shows Up On The "Nice" List This Year!

Here's Hoping That You Name Shows Up On The "Nice" List This Year!

Loyal readers & subscribers, here’s hoping that this upcoming Christmas season week is a great week for you – I’m taking it off! Blogging will resume next week…

Everyone seems to celebrate something different this week, but I’m hoping that no matter how you choose to spend your time you enjoy yourself. The world can wait, let’s spend time with friends and family and we’ll get back to the madness next week.

Have a happy and safe week no matter where you are and we’ll talk next week.

- Dr. Jim Anderson

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So Just How Do You Negotiate With Pirates?

Thursday, December 18th, 2008
Pirates Aren't Just In Movies - So You Had Better Be Ready To Negotiate With Them!

Pirates Aren't Just In Movies - So You Had Better Be Ready To Negotiate With Them!

Negotiating is both an art and a science. We study what works and what doesn’t in order to make sure that the next time that we are in a business situation in which somebody has something that we want, we are able to negotiate to get it. But what about pirates?

The newspapers are all abuzz about the pirates who are operating out of Somalia. So far this year, there have been 96 pirate attacks this year. 40 of these attacks have resulted in pirates boarding a ship, taking over control, and then demanding a ransom for the ship and its crew. World wide there have been 83 reported pirate attacks in the 3rd quarter alone.

When pirates capture a ship, they then demand a ransom in order to release it. These ransom demands are generally in the range of $1 – $2 million dollars. However, in the case of a Saudi oil tanker the ransom may have been as high as $15 million dollars.

What is a ship owner to do if his ship is captured by pirates? Apparently a lot of them are calling Holman Fenwick Willan, a London maritime firm. HFW has 6 lawyers who are currently working on pirate cases. Ashby Jones wrote an article in the Wall Street Journal in which HFW stated that they are working on “over a dozen” of the 20 pirate hijackings that have occurred in the Somalia area.

So just how does one negotiate with pirates? At HFW, their first job after being notified of a pirate highjacking is to calm their customer’s fears – nobody seems to know how to react to this sort of thing.

The next step is straight out of the negotiators handbook – do some research. HFW then works to find out just where the hijacked ship was registered, oh, and where exactly the hijacking occurred. This will set boundaries around the negotiations and will determine what laws are in play and will determine who is liable.

The issue of paying a ransom is, of course, a big deal. One key question that the negotiator needs to resolve right off the bat is if it is even legal to pay a ransom. It turns out that under U.K. law, paying a ransom IS legal and that’s important because for some reason most marine insurers are located in England.

The actual negotiations with the pirates are, to put it mildly, stressful. The negotiations are conducted by negotiators that HFW obtains for their clients. Forget suits and ties, this special breed of negotiators generally come from the miltary special forces. Probably the right men (I think that I can be sexist here) for the job.

Once a deal has been struck and the ship has been returned to the crew, the negotiations are not over. Indeed, they are often just beginning. The boat owners will now start to negotiate with the firms who were shipping cargo on the boat in order to get them to reimburse them for part of the ransom that was paid. These negotiations can drag on for a very long time.

We are all privledged to live in the 21st Century; however, sometimes aspects of the 1800′s, such as pirates, intrude into our world. Thankfully the negotiation skills that have been developed over the centuries serve us just as well now as they did then.

If you were called on to negotiate with pirates, what research would you do? Do you think that they would have the power in the negotiation or would you? Would creating a solution with mutual satisfaction be important to you in this type of deal? Leave me a comment and let me know what you are thinking.

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Posted in art of negotiation | 2 Comments »

Every Negotiation Needs A Rap(port) Star!

Tuesday, December 16th, 2008
Establishing Rapport With The Other Side Is Music To Everyone's Ears

Establishing Rapport With The Other Side Is Music To Everyone

So here’s something that will blow your mind: studies have shown that car shopping customers are willing to pay between $200 and $300 MORE for a car if during the negotiation process they became convinced that the salesperson was committed to their satisfaction.

Wow – talk about a successful negotiation for the salesperson. But wait, isn’t the customer the customer getting something out of this also – satisfaction. Think back over all of those deals in which you have been the customer and in which you walked away afterwards feeling less than satisfied. Perhaps nobody is getting taken for a ride here (sorry for the pun).

It’s possible that the customer side in this type of deal can actually put a value on being made to feel satisfied: $200-$300. Hmm, if it’s true when people are buying cars, just imagine what feeling satisfied must be worth when you are working on a much larger deal!

All this comes down to one thing: part of the price that is being negotiated is friendship and goodwill. Angry, bitter, combative negotiators will get beaten down on price each and every time. In all business negotiations we must remember that we are negotiating not only things (goods and services), but also attitudes.

As the car buying study shows, part of the price of any deal that you negotiate will include:

  1. Trust: does the other side trust that you have been straight with them and that you will keep your word after the deal is signed?
  2. Friendship: yes, friendship does still exist in the 21st Century. Does the other side believe that they have developed a relationship with you that will continue to exist after the negotiations are completed?
  3. Integrity: would you do something that you knew was wrong? Would you sell a product or a service that you knew was flawed or wasn’t going to meet a customer’s needs?
  4. Goodwill: do you have that intangible asset that makes the other side believe that you will do them no harm?
  5. Credibility: does your track record support what you are saying?
  6. Authority: do you really have the ability to deliver all that you have promised?
  7. Status: are you the peer or the better of the other side – are you the right one for them to be negotiating with?

It’s important to note that there is a HUGE difference between establishing rapport (a connection) with the other side vs. just being cooperative. Experiments have shown that when the other side is exploitative, they can easily take advantage of cooperative negotiators.

So where does all of this lead to? It’s as simple as realizing that compatible attitudes between both sides of the negotiating table are needed in order to be able to reach solid, long-lasting agreements. In the end, there is no way that either side can trust what the other side has promised if the two sides can’t trust each other.

Although they may not be listed on the list of bargaining points that you drew up before the negotiations started, everything that we’ve discussed including recognition, friendship, and trust are always items that are up for negotiation. It’s well worth the extra time that it takes to make sure both sides walk way mutually satisfied.

Have you ever negotiated a deal and then left unsatisfied? How much would you have paid to have been satisfied? Have you ever formed a lasting friendship with the other side during a negotiation? How important is trust to you when you are negotiating with someone? Leave me a comment and let me know what you are thinking.

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Posted in satisfaction | 1 Comment »

Single vs Team Negotiation: Which Is Better?

Thursday, December 11th, 2008
Sometimes It Takes A Team To Complete A Negotiation Successfully

Sometimes It Takes A Team To Complete A Negotiation Successfully

Sorry – that’s a trick question. Most of the time when we talk about negotiating skills, we talk about how you can improve how YOU negotiate. However, in the real world, negotiations are often done by teams of negotiators.

The reasons for this are fairly simple: negotiations more often than not can take a long time and just the physical strain of active negotiating can wear a single person down quickly. Additionally, often special subject matter knowledge is required in order to hammer out specific issues and no one person posses all of that information. It takes a team to negotiate well.

There is, of course, one additional reason for preferring to negotiate using a team instead of a lone individual. During a negotiation so much is happening that a single individual is often hard pressed to stay on top of all of it.

Using a team for your negotiations allows you to use a group of people to capture all that is occuring. You can also use the team to jointly review what has transpired and make better decisions.

There are several reasons for not wanting to use a team as a part of a negotiation process. Here are three of them:

  • Requires Coordination: When you are the sole negotiator, once you know what you want to accomplish and how you are going to make it happen, then you are set. However, if you have a team of negotiators, then you need to make sure that everyone on your team REALLY understands what the goals are. This can be a challenge to do, especially if your goals change during the negotiation.
  • Sharing Information: In order for a team of negotiators to work together successfully, they need to all be aware of the same information. This will require that all information about the negotiation be collected, shared, and reviewed prior to the start of the negotiations. This can be a challenge under the best of circumstances and if the team is geographically distributed then it becomes even more difficult.
  • Showing Disunity: In the end, negotiating is all about power. Having team members become confused or showing disunity will reduce your power and increase the other side’s power.

With all that being said, you would think that nobody would ever use a team to perform a negotiation. However, you would be wrong. There are a number of compelling reasons why teams should be used more often for negotiatons than they currently are:

  • Better Coordination: Using a team allows you to distribute the tasks of negotiating among team members. This means that documents that need to be produced or facts that need to be checked can be done in parallel to the negotiations and this will speed the process up and reduce confusion.
  • More Experts: A single negotiator can only provide his / her expertise to the negotiations. A team can provide a much broader collection of experts and this should help the discussions move much faster.
  • Moral Support: Since a negotiation can continue for a long time, it’s easy to become disheartened if it appears as though an agreement will never be reached. If you are working with a team, it will be must easier to “keep a stiff upper lip” and not give up.
  • Listen Better: One set of ears can only hear so much. In fact, not only can multiple ears simply hear better, but they can also hear things differently which might help the negotiation move along faster.
  • Plan Better: A plan that is created by a single negotiator is as good as that negotiator. A plan that is created by multiple negotiators is often much better because it reflects the different inputs of multiple people.

What has your experience been: do you do better when you negotiate by yourself or when you negotiate as part of a team? When you are on a team, what role do you play? Which type of negotiation more often leads to a successful outcome? Leave me a comment and let me know what you are thinking.

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Posted in strategy | 1 Comment »

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