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When logic is involved, you have to carefully plan your next move…

A negotiation is very much like a dance, you make a move and then your move forces the other side to make a move. Once they’ve done that, then their actions force you to take some corresponding action and so on. There is a logic to all of this and where things get interesting is when we start to try to figure out if the role that logic plays is working for us or against us…

Why Logic In A Negotiation Can Be A Bad Thing

Logic – a bad thing? Who would dare to say something like that? It turns out that I would and the reason that I would is pretty simple. If you’ve ever been in a negotiating situation where the other side started to use logic to support their position, you know what I mean.

/p>When you are faced with a negotiating opponent who is prepared and equipped to use logic as one of their negotiation styles, then you’ve got a problem. Negotiations can be difficult enough without having to deal with this kind of challenge.

The reason that you can run into problems when you are confronted with lots of logic during a negotiation is because the other side now has a way to guide you to a conclusion using their logic.

What’s going to happen here is that the other side will make a request and then use logic to explain why they are making the request. It will seem like a reasonable request to you. They will then make another request that flows from the first. Once again they’ll provide the logic that is needed to support this request also.

What will happen here is that you’ll find yourself starting to be guided by the logic of their requests. Before you know what is happening, you’ll be agreeing to their requests and going along with them. The other side will have been able to use logic to gain the advantage in the negotiation and they will now be able to move you towards creating the type of deal that they want.

Why Logic In A Negotiation Can Be A Good Thing

Clearly logic can be a bad thing if the other side starts to use it against you. However, is it possible that logic could be a powerful tool if it was in your hands?

The answer is, of course, yes. In any principled negotiation you should plan on using logic as one of your tools. The trick to getting the most out of logic as a tool is that you need to be able to prepare to use it in a negotiation before the negotiations begin.

I tend to believe that logic should be included in any negotiation definition. The reason is that as you are planning how you want your next negotiation to proceed, creating a sequence of arguments based on logic can provide you with the negotiating framework that can help you to close a deal.

What you are going to want to do is to include logic in your preparation for the negotiation. This means that you’ll need to lay out a sequence of proposals that you’ll want to make of the other side. You’ll then have to create a logical framework for why you are making that proposal. Your goal will be to get the other side of the table to agree to your proposal based on your logic.

If you can do this, then your next proposal should be based off of the agreement that you’ve been able to reach on the first proposal. By doing this you can use logic to guide the other side to the conclusion that you want to reach. Once they start to agree with you, logic will make it very difficult for them to stop agreeing!

What All Of This Means For You

Negotiating can be hard work. We’ve all been taught that logic is a good thing and so as a negotiator you’d think that using logic as a part of your negotiating techniques could only be a good thing, right?

It turns out that logic is a slippery beast. During a negotiation if the other side of the table starts to use logic against you, you may quickly find yourself in trouble. The reason for this is that logic is a well-defined series of conclusions that may lead you to a result that is not what you wanted to get out of the negotiations. On the other hand, if you construct a series of logical arguments that support your position, the other side may find it hard to object to your requests.

Logic is a powerful tool. The next time that you are in a negotiation make sure that you keep your eyes open in order to quickly determine if the other side is preparing to use logic against you. No matter what they do, you should always be ready to use logic to support your negotiating positions.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How much time do you think that it’s worth spending creating a set of logical arguments to use during your next negotiation?

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What We’ll Be Talking About Next Time

Magical mind control powers. That’s what every sales negotiator would like to have. The ability to bend the other side of the table’s mind to your way of thinking would be the set of negotiation styles or negotiating techniques that would make life so much easier. Sadly, I don’t believe that such powers exist. However, there is something that comes pretty close – standards.

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Clear Channel Needed Money And It Was Going To Have To Negotiate To Get It

It’s all too easy to get caught up in the theory of negotiating and sometimes we forget to take the time to look around us and see other deals that are being made – and learn from them. If we needed a recent deal to teach us a lesson, the $20 billion dollar Clear Channel private equity buy-out would be a good example — because it almost didn’t happen!

The Background Of The Clear Channel Deal

Once upon a time Clear Channel was a high-flying communications company (in the 1990′s). Their stock traded at north of $100 per share. That was then, this is now — their stock has been in the dumpster for a while now and was trading in the low $30′s.

The company decided that what needed to be done is that they needed to go private. No problem with that decision, its just that it takes a whole lotta money to buy up all of those outstanding shares of stock.

This is where various private equity firms and six different Wall Street banks came in. A deal was struck to buy the company for $24.4 billion.

A Problem Arises

When somebody is getting ready to pay a lot of money for your company, the last thing in the world that you want to have happen is to start having legal problems. That, of course, is exactly what happened: Clear Channel got sued at the same time in two different states.

This of course messed with the value of the company and that made all of the bankers very mad — it was looking like they had agreed to pay too much for the company.

Things got so bad that when Clear Channel’s executives placed calls to the six bankers on the deal, only one of them called back. One of the reasons that the others didn’t call back was that they were afraid that the conversation could get introduced into court proceedings. People who worked on the deal said that the hatred (their word, not mine) got so bad that it was almost palpable.

Negotiation Comes To The Rescue

So how did Clear Channel and the bankers resolve their impasse? Negotiation of course (this blog is called The Accidental Negotiator after all!). How did they do this?

• Egos Away!: Everyone involved took a step back and put their egos away for at least awhile (we are after all talking about Wall Street folks here).
• 2nd Look: Next they took a second look at the deal that was on the table and started to get clinical about how they were going to go about doing the financing.
• Mistrust: The banks had been reading the body language of the private-equity firms as saying that they didn’t want to do a deal anymore (at least at the price that had been agreed to originally).
• Red Herrings: The banks started to make demands regarding the length of time that Clear Channel would be allowed to take a revolving loan and other items that had nothing to do with the price of the deal. These were all just a smoke screen.

In the end, it all got negotiated. The private-equity firms got the revolving credit from the banks that they believed they needed to make the company a success. The banks got a higher spread on the deal and ended up taking on less debt than they had originally signed up for.

What All Of This Means For You

Each of us ends up negotiating every day. It can be easy to get caught up in our own little world and forget to keep our eyes open so that we can see others who are also involved in the negotiation game. It is from them that often we can learn the most.

Clear Channel thought that they had a deal all wrapped up to sell themselves to willing buyers until the credit crunch came along. When the environment changed, along with a couple of lawsuits, the other partners in the deal wanted to make changes.

What started off very badly — anger and resentment were in ample supply, ended up with a new deal getting negotiated. What’s key for us to take away from this event is that having the ability to step back from an emotional deal, focus on what’s really at stake, and then find the courage to move forward is the mark of a great negotiator.

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What We’ll Be Talking About Next Time

The next time that you are facing a situation that will require a sales negotiation, I’d like to ask you to stop for a moment and consider one important question: should you go it alone or should you bring others from your side along with you?

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Post tags: bankers, Clear Channel, debt, Morgan Stanley, private-equity, revolving credit

A Tough Customer Requires Special Negotiation Skills

In the world of negotiations there are the easy ones (getting a discount on that lawnmower that you bought) and the hard ones (a difficult customer to whom nobody has ever been able to sell). It’s the difficult customers that are the most interesting because they are a real challenge no matter what stage of negotiating you are at. Let’s take a look at this type of customer and see if we can come up with a strategy that will boost your chances of successfully concluding a negotiation with them.

Negotiations with a difficult customer rarely look like a formal negotiation with both parties sitting on different sides of the table. Rather, a negotiation with a difficult customer often starts out as a discussion and then steers into negotiation territory. That’s why you as a negotiator always needs to be ready to switch into negotiator mode when the customer wants to start negotiating.

One of the best things that you can do right off the bat when you are dealing with a difficult customer, says Grande Lum who is a negotiation training profession, is to take ownership of the situation. All too often customers become upset with the way things are going and they feel that nobody is stepping up to the plate in order to take charge and solve the problem. By accepting ownership of the situation and perhaps even going so far as to apologize if it is called for, you can diffuse the situation from the start.

Your next challenge is to find out why they are being difficult. There is a good chance that their motivation for being so adversarial has nothing to do with the deal that you are currently discussing. Rather, long simmering issues with you company, other people who work for your company, etc. could be spilling over into the deal that you are currently working on. Of course there is also the possibility that this is just the way that this customer deals with anyone who is trying to get him/her to buy something – it’s a negotiating tactic.

Lum has come up with a clever way to deal with difficult customers which he calls the ICON framework for negotiation. ICON stands for the four steps that you need to move through during the negotiation: Interest, Criteria, Options, and No-Agreement Alternatives. When using this frame work, you first probe the customer for Interest, then you use the information gleamed from this to establish a Criteria that you can use to understand and persuade, next you brainstorm with the customer to come up with Options and finally you make sure that you identify No-Agreement Alternatives so that you have a fallback option should the negotiations not work out.

If you are looking for a magical silver bullet that will instantly solve your negotiation problems with a difficult customer, bad news – it doesn’t exist. However, if you can get them engaged and get them talking and into a problem solving mode then you’ve succeeded in getting them working in the right process. In some cases this just is not possible with your customer. You then need to reach out to others who work at his/her company and ask for their help in understanding what is causing your negotiation problems.

How have you helped to move things along when you find yourself negotiating with tough customers? What techniques have you used to resolve the problem? Have you ever had to work with other people at the customer’s firm in order to get things moving again? Leave a comment and let me know what you are thinking.

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Post tags: communications, deals, how to deal, ICON, negotiation, negotiator, ownership, strategy

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.

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