Archive for June, 2008

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You Want A Bargain? Learn How Other Cultures Barter

Friday, June 27th, 2008

Skills needed in order to bargain at the bazaar

Although we pride ourselves on living in modern times, the art of negotiating is an ancient skill that our relatives who lived in more humble times probably did better than we do. Don’t despair — there’s no need to feel like a dummy! What your ancestors once knew can be quickly relearned! (plus you already know how to prepare to start to negotiate)

There are three negotiating skills that your grandfather’s grandfather used every time he ventured to market:

  1. Always leave yourself room to negotiate (& grant concessions): When trying to buy something, consider the price that is advertised for anything as simply a starting point no matter if it’s vegetables in the market or a giant wide-screen TV. Whatever you first propose as a price that you’d be willing to pay, make sure that the gap between it and the advertised price is great enough that you’ve got plenty of room left with to negotiate in. The flip side to this rule is that your starting price needs to be high enough so that it does not appear to be insulting.

  2. Concede Slowly: In every negotiation, you will end up giving some things away — that is the very nature of negotiations. What’s really important is how fast you give it away! The slower you are to give in on various points, the more time you’ll have to get what you want out of the negotiations.
  3. Ask For Something In Return When You Make A Concession: As silly as it sounds, this is actually very important. If when you make a concession you don’t ask for something, then the other side is going to end up feeling dissatisfied. They are going to feel as though it was too easy for you to give up what you offered. So instead, make sure that every agreement that the other side drags out of you has something that you get from them. Once again note that what you get does not have to have an equivalent value.

There you go! Armed with these three trusty guides you are once again ready to do your family proud the next time you venture to the market.

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Posted in deals, how to deal, money, sales, satisfaction | 1 Comment »

How To Deal With Hard Core Opposition

Sunday, June 22nd, 2008

Angry Mob Represents Opposition To Your Negotiation

We’ve talked about how to properly prepare to start a negotiation. Once we start to negotiate, thanks to millions of years of evolution, we are all pretty good at recognizing situations in which we are called on to compete. We are tuned to allow us to make ourselves heard in these situations and to get our point across. Which is why we all seem to do such a poor job when we are faced with no competition, but rather opposition. Oh, oh. What to do now?

So what is opposition? Opposition is what happens when the group of people that you are trying to communicate with are just dead set against what you have to say. If you show up in a situation where you are going to be telling your team about a great new documentation system that the company has mandated that everyone will start using, you will encounter opposition if nobody that you are talking to wants to do documentation in the first place — it’s not that the new system is a bad idea (although it might be), it’s just that everyone rejects the idea of doing documentation.

What’s funny is that although in technical fields we struggle with how to deal with opposition, the folks who work in politics deal with it on a daily basis. Our elected officials are forced to deal with opposition everyday and so they have developed effective ways of dealing with it. We could learn a thing or two from them:

  • Co-opt The Other Side’s Issue: this is one of my favorite approaches. Don’t go head-to-head with the oppositon. Instead take a careful look at what’s motivating their position: why doesn’t your team want to do documentation? If you show respect for their underlying issue and then go ahead and propose a different way of solving it, you’ll basically cut off the oppositon at the knees. In our documentation case, if you show the team that offshore developers do a poor job of native language documentation and by doing a good job of documentation their work they will be able to keep more jobs onshore, then you’ve accomplished your co-opting.

  • Redefine The Issue: Initially an issue may start out as a tug-of-war. In order to solve this problem, if you redefine it in such a way that it is no longer a tug-of-war, then you can win the other side over. In our documentation example, the issue could start out as a “the company is telling us to do more work”. This could be redefined as “Other companies have created products that interface with our product. In order for them (and us) to be successful, they have to understand how our product works and so documentation is needed.” All of a sudden, what was something that was being created for the faceless company becomes a tool for specific small business owners.

If you can become skilled at learning to distinguish opposition from competition, then you will have a hard-to-find skill that you can start to use proactively. Do a little bit of research on the group that you will be communicating with. If there is strong opposition to what you will be discussing with them, it will probably come out quickly. Look for ways to co-opt or redefine the issue and you’ll have accomplished half of your job before you even open your mouth.

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Posted in communications, ideas, opposition, planning, success | 2 Comments »

Don’t Give The Bad Guy A Gun

Thursday, June 19th, 2008

Don't Give The Bad Guy A Gun
Police hostage negotiators have a set of basic rules that they follow. One of the key ones is that no matter how strongly the bad guys might demand it, they NEVER give them a gun. Seems like sorta a no-brainer, et? However, in the heat of negotiations nothing is ever that clear. The police know that if the bad guys threaten to harm hostages unless they get guns, there is always the possibility that someone might say “yes” and turn a bad situation into a worst situation. That’s why they have all agreed on this rule long before they show up on site.

We can all learn from folks who negotiate every day. What they are telling us is that before starting any negotiation, you need to decide the specific goal that you want these negotiations to achieve and you need to decide what is negotiable and what is not. This is called setting your negotiating parameters: know your “out” and your “push”. ï‚· The “out” is your best alternative – if the negotiations don’t work out, then what are you going to do? The “push” is the approach that the your are going to take: how hard and what buttons are you going to push?

Another key point that too many of us forget time after time is that we begin negotiating when we’re still gathering information. Negotiations don’t begin until you’ve gathered all of the information. Then it’s time for you to sit back, evaluate the data that you’ve collected and work out what your “out” and “push” are.

The Boy Scouts got this right a long time ago: prepare, prepare, prepare.

Posted in best alternative, negotiation approach, negotiation goal, parameters | No Comments »

The Seven Deadly Sins Of Preparing To Negotiate

Tuesday, June 17th, 2008

The Seven Deadly Sins of Preparing to Negotiate
You wouldn’t show up for a job interview naked (well, let’s say that you wouldn’t show up naked for MOST job interviews). You wouldn’t sit down to gamble in Las Vegas unless you knew the rules of the game. You wouldn’t start to run a marathon while wearing snow boots. So why would you ever even dream about starting a negotiation with a bunch of wrong assumptions?

You would be amazed at how many people actually do this. Somehow we have all talked ourselves into believing a lot of stuff about how negotiating is done and just who has the negotiating power that are flat out wrong. We seem to get ourselves offtrack even before we start to negotiate. How about if we spend some time now and identify these Seven Deadly Sins so that we can stop doing them!

  1. We assume that the other party is all-powerful and is holding all the cards.
    Fact: In truth, the other side rarely, if ever, is , or does. Instead at the start of a negotiation, power is shared by both sides. Perhaps not equally, but you always do have some power.

  2. The other side has a clear idea of exactly he wants.
    Fact: Sometimes he does, sometimes he doesn’t, no matter how detailed he may have been in describing what he is looking for before the negotiations begin. Often times, the other side has a lot of details about something that won’t fix their problems. It’s your job as a part of the negotiation process to listen and discover their true issues.
  3. The other side is only concerned about price.
    Fact: price is the most overrated word in negotiation. It is an important part of the whole negotiation; however, it’s not nearly as big of a deal as most people make it out to be. There are lots of other issues that need to be discussed and these issues will diminish the importance of price in the final agreement.
  4. There are other people / companies / products that have a better solution to offer the other side than you do.
    Fact: This is almost always never the case. Of course there are other options for the other side no matter if you are talking about going on a date or buying an airplane. However, every single other option has an up side and a down side associated with it. What you bring the table has an up side and a down side also. Now the only thing to negotiate about is how valuable your up side it to the other side.
  5. You’d be in a better position to negotiate if only you had more authority.
    Fact: In most negotiations, you’d be better off with less authority. Less authority means that you can build better relationships with the other side because you are NOT the decision maker, instead you are both in this together trying to come up with an agreement that “they” will accept.
  6. Your only real weapon is the ability to ask for less.
    Fact: Asking for less is only one of the literally dozens of negotiation tools at your command, and, oh by the way, many are much more effective than asking for less.
  7. You treat negotiating like just another meeting.
    Fact: failing to get enough sleep, do your homework, or wear comfortable clothing all provide the other side with power over you. Why would you ever put yourself at a disadvantage just because you didn’t take the time to prepare?

There you go — now you know the 7 deadly sins that can diminish your negotiating power even before you start to negotiate. Overcoming these 7 can be challenging; however, learning to do so will start paying you back right off the bat.

Posted in authority, mental preparation, negotiating, power, price, wrong assumptions | No Comments »

Microsoft / Yahoo — When Negotiations Go Bad

Thursday, June 12th, 2008

New Microsoft Yahoo Logo
It’s sorta old news at this point in time, but Microsoft’s offer to buy Yahoo fell through. What’s interesting about this from an Accidental Negotiator point-of-view is that it offers a number of important lessons for us mere mortals who only occasionally get to practice negotiating.

First we need to set the stage. According to Yahoo sources, here’s how things went:

  • Microsoft showed up with a $31/share offer to buy Yahoo.
  • Yahoo said no thanks — we’re worth $40/share.
  • Microsoft stayed fixed at $31.
  • Yahoo came back at $38.
  • Microsoft stayed firm at $31.
  • Yahoo came back at $37.
  • Microsoft came up to $33
  • Yahoo would not budge at $37
  • Microsoft walked away.

Nothing is ever this simple, but price was clearly one of the key sticking points of the negotiations. This tells us that at $37/share, Microsoft decided that their BATNA (Best Alternative To A Negotiated Agreement) was better. What is not quite so clear is that there were a number of handicaps that were restricting the negotiations for both sides:

  • Steve Ballmer (Microsoft) could still follow through on his threat to do away with formalities and circumvent the Yahoo board with the promised proxy tactic.

  • Microsoft has to make sure to keep its behavior in check throughout this process lest its image as a monopoly that crushes everything in its path be confirmed.
  • Yahoo has to be careful that its shareholders not be left with the feeling that because of a Jerry Yang/Steve Ballmer personality conflict they were robbed of a significant payback on their investment in Yahoo stock.
  • Yahoo has to think about their employees — since there is such a us vs. them mentality when it comes to Microsoft, what would happen if Microsoft did buy Yahoo — would any of that valuable intellectual property be left?

Nothing is ever as it seems and clearly both sides did not do all of the homework that was required before starting these negotiations. If they had, the discussions would have been done at the negotiating table and not in the flurry of press releases that were issued while the talks dragged on. Oh well, their loss is full of lessons for all of us.

Posted in Ballmer, Microsoft, negotiations, Yahoo, Yang | 2 Comments »

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