Archive for the ‘negotiation skills’ Category

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How To Hire A Negotiator

Tuesday, December 9th, 2008
Sometimes It Is Desirable To Bring In A Negotiator From The Outside

Sometimes It Is Desirable To Bring In A Negotiator From The Outside

In life, there are some situations that you will be called on to negotiate in order to get what you want / need.  However, there will also be situations in which you have the time (and the budget!) to reach out and get outside help.

Getting outside negotiating help can be especially critical if the type of negotiation that you are preparing to start is of a very technical or detailed nature. If you can find someone who has “been there, done that” you can significantly improve the odds of being successful in the negotiations. Now the big question is just how does one go about hiring a negotiator?

The challenge in interviewing someone to do negotiating on your behalf is that negotiation is a very difficult job to do. The reason that negotiating is such a challenge is because it doesn’t just require one or two specific skills, but rather a whole collection of skills that we really don’t find in business.

At a very high level, a good negotiator has the ability to show good business sense while at the same time displaying a deep understanding of how people think and act. It is a rare thing indeed to find both of these qualities in a single individual. Couple that with any special knowledge or experience that you are looking for and choosing the wrong negotiator to represent you can appear to be all too easy.

The following 10 characteristics of a good negotiator are what you should be looking for when you are interviewing possible candidates. It’s going to take some probing on your part to uncover these traits, but it will be worth the effort:

  1. Must have the ability to negotiate well with members of YOUR team. If the candidate can’t win the confidence of your team, how can you expect him to succeed in the negotiation with the other side?
  2. Must show that he/she has the ability to construct a plan and the commitment to follow it through. The ability to realize that not all information may be available before the negotiation starts and the willingness to check facts and alter plans as new details emerge are also critical.
  3. Did I mention the need for sound business sense? The ability to see through the fog of negotiations and identify the issues that will have an impact on your bottom line is key.
  4. The ability to deal with both ambiguity (both before and during the negotiations) as well as conflict during the actual negotiations.
  5. The willingness to aim high when setting goals for the negotiations.
  6. The ability to realize that a negotiation is a process and the patience to wait for the other side to reveal more so that the process can move forward.
  7. The ability to personally connect with both your team and the other side. Yes, negotiation is a business process, but the personal touch can make all the difference when it comes to closing the deal.
  8. A realization that his / her personal integrity is what matters above all else.
  9. The ability to, no matter how heated a discussion gets, listen with an open mind to what the other side is saying.
  10. The self-confidence that is needed to see a negotiation through from start to finish.

What else do you think should be added to my list? Is there anything on the list that you think could be dropped? Which one of these 10 items is the most important in your opinion? Leave me a comment and let me know what you are thinking.

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Negotiation Do’s & Don’ts From The Master Negotiators

Thursday, December 4th, 2008
Master Negotiators Use Many Different Skills To Achieve Their Goals

Master Negotiators Use Many Different Skills To Achieve Their Goals

If only there was some book, some DVD to watch, or some class that you could take that would provide you with access to all of the secrets of those master negotiators whom we are always reading about. You know the ones, they negotiate the billion dollar business deal, the hostage negotiations, they settle the labor strikes, and they come up with solutions to lawsuits before they hit the courts. Just what are their secrets?

As we’ve discussed before, there are no such courses, DVDs, or courses to take because of the nature of negotiating: it’s not just a couple of key ideas, but rather a whole bunch of very small things that when taken together make a master negotiator.

However, there is no need to despair! The good folks over at Karrass have been doing research into what makes a good negotiator for quite some time. Based on this they have been able to pull together a list of ten things that a master negotiator needs to be able to do.

What I’m hoping that you’ll get from this list is the awareness that there is nothing earth shattering here. No great secrets are revealed. No hidden negotiating ninja secrets are being brought to the surface for the first time. Rather, a set of skills are being identified as being those skills that a master negotiator needs to have.

It’s not that a master negotiator has just one of these skills that makes them so skillful. Rather it’s the fact that they have ALL of these skills that makes them a master negotiator. Now there’s something to think about! Here’s the list, let’s see how many of these negotiating skills you already have:

  1. Nothing Is Fixed: Don’t let the other side of the table try to intimidate you with “last & final” offers, firm fixed prices, or even “take it or leave it” statements. Remember -  this is a negotiation and that means that everything is negotiable.
  2. Deeper Is Better For Both Sides: Although you are negotiating directly with the person(s) on the other side of the table, you are really negotiating with their entire organization. This means that before your negotiating partner can agree to your terms, they are going to have to get buy-in from their organization. During your negotiations you need to cover all of the key details in enough depth that the other side will be able to thoroughly explain the deal internally.
  3. Got To Get Satisfaction: Forget win-lose, win-win, etc. Negotiating is all about making sure that both sides come away feeling satisfied with the outcome. Although it’s easy to focus on the stated negotiation issues, be sure to look for other “hidden” issues that are also important to the other side. Addressing these issues will boost satisfaction and increase the probability of reaching agreement.
  4. These Boots Are Made For Walking: One of the most powerful negotiating techniques is also one of the most difficult to do – leave & walk out. This by itself would kill a negotiation, so you also have to master the other half of this skill – you need to know when to return later.
  5. Conflict Is King: The very reason that you are negotiating is because there are differences between both sides. Differences mean that there will be conflict. You need to be able to deal with conflict. If you have an overpowering need to be liked, then you will end up giving too much away during the negotiation just to be reassured that the other side likes you in the end.
  6. Too Much: In any negotiation, you can screw up. You can end up asking the other side for more than they are willing / able to give. When you realize that you’ve done this is the time for you to take a step back and tell the other side that you are willing to renegotiate. No matter what, make sure that you show empathy for the other side’s situation.
  7. No Such Thing As Too Much Education: You will never know everything that there is to know about negotiation. There are so many small tricks & techniques that it will take you a lifetime to master even some of them. This means that you always need to be reading and studying in order to boost your knowledge of negotiating strategy & tactics.
  8. Aim High: Where you end up in a negotiation has a great deal to do with where you set your target. If you aim high, then you will be prepared to take the negotiating risks that go with higher goals. Lofty goals don’t come easily so you are going to have to be willing to work hard and to take your time.
  9. Be Testy: Since you can never completely know what the other side of the table is thinking, you need to always be testing him / her. You just might surprise yourself when the other side gives in to one of your demands. Once again, this type of testing requires that you take your time and be very, very patient.
  10. Take Your Team To School: Negotiating is often a team sport and you want your team to be in the best shape possible. You need to make sure that your team has been trained to negotiate the way that you want them to. This is the one area that investing in quality training (just like the training offered by Blue Elephant Consulting) can really pay dividends.

How many of these tips do you already use in your negotiations? Which ones were new to you? How do you keep improving your negotiating skills? Leave me a comment and let me know what you are thinking.

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Negotiation Awards: Who’s The Best Negotiator In The World?

Friday, October 24th, 2008
Good Negotiators Try Different Techniques And Keep The Ones That Work

Good Negotiators Try Different Techniques And Keep The Ones That Work

We all like to think of ourselves as fairly good negotiators who are constantly getting better. However, it’s time that we take a moment and acknowledge that there will always be someone better than us out there. Someone to whom negotiating skills come as almost a second nature. Whose very survival, arguably, could depend on their ability to not only negotiate well but to end up getting their way most of the time. I can almost hear you asking: who is this fantastic manipulator of men and how can I learn from them? Well good news, you’ve probably already met them: professional negotiators will almost all agree that the best negotiators in the world are two-year-olds.

Why two-year-olds you ask? Well take just a moment and think about it. If a two-year-old makes a request and then does not get his/her way, what will they do? They’ll fall to the floor and start to cry, scream, kick their feet and maybe even hold their breath until they get their way.

If you’ve ever been the target of one of these fits, you know just how powerfully effective they can be. You just want the kid to stop! This is where the negotiating starts. If the parent tries to appease the child by begging, pleading, or even offering them bribes to stop their behavior then the child will have learned an important lesson: throwing a fit works. This means that the next time that the child wants something, he/she will have the fit as one of their known successful negotiating techniques.

If, however, the parent is strong enough to just walk away and let the child wear themselves out with no effect, then once again the child will have learned something: a fit does not work. In this case the parent’s negotiating technique has taught the child something and so the child will adjust their technique next time: they’ll try something else. The next time that the child wants something, perhaps they will hug their parent or say that they love them or something else along those lines in order to see if this achieves a better result.

We can all learn something each time we negotiate and a two-year-old has a great deal to teach us. A child’s ability to try new negotiating techniques, retain those that work and discard those that don’t work, should be showing us the way that we need to be constantly refining our techniques. All too often I encounter people who view negotiating as a “process” to be learned and repeated over and over again in every situation. This couldn’t be further from the truth.

A better way of thinking about negotiating is to view it as a specialized form of communication. When we negotiate we are trying to get something that we want by interacting with someone else who is trying to do the exact same thing. Every negotiation is different and every individual that we negotiate with is different. This means that there IS NO FIXED FORMULA for negotiating. Rather, skilled negotiators have a collection of skills that they can use as they see fit to do so. I guess the best analogy would be to a carpenter. Every piece of wood is different and depending on what the carpenter wants to create out of the wood, he will choose to use any one of a large collection of specialized tools that he has to work with.

Years ago I used to watch the This Old House TV show in which Norm Abrams would do fantastic things with wood as part of a house remodeling job. It took me a long time to realize that not only was Norm a gifted craftsman, but he also had every specialty wood working tool known to man. He would smoothly swap out tools as he transformed a tree stump into a fantastic Adirondack chair. If Norm was a negotiator, we’d be seeing him swap negotiating skills in and out as he searched for the right tools needed to turn a negotiation into a success.

If you’ve been looking for the one negotiating “system” that will allow you to “win” all of your negotiations, it’s time to give it up. Such a system does not exist and any two-year-old can tell you this. However, if you can understand that like a master carpenter, you can collect the right negotiating tools and by choosing the right tools for the right situation, you can create negotiation results that are things of beauty.

Have you ever had to try to negotiate with a two-year-old? How did it turn out – did you give in or did you take a hard line and let them throw a fit? Last time you negotiated with someone, did you detect them trying out different negotiating techniques on you or were they just executing a fixed system? What negotiating skills do you already have and which ones would you like to develop?

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It’s Krunch Time!

Friday, August 22nd, 2008
The Krunch negotiating technique is used by buyers to get lower prices from sellers

The Krunch negotiating technique is used by buyers to get lower prices from sellers

What the heck is a Krunch? In a nutshell, it’s a negotiating technique that a buyer can use to squeeze a lower price / better terms out of someone who wants to sell them something. I’ve seen this technique used most often when I’ve been buying a house – it’s a classic. I guess that I should confess that I’ve also used it when I’ve been selling a house…

How Does It Work?
Here’s how the Krunch technique works. The buyer has to have more than one person who wants to sell to them. When the buyer has collected prices from each of the sellers, then the buyer can go back to every one of them and tell them “Your price is to high, you can do better.” Generally speaking, each of the sellers ends up lowering their price.

Why Does It Work?
To understand why the simple Krunch technique works so well, you’ve got to look into the mind of the seller and see what goes on when the buyer tells them that their price is too high:

  • Yeah, I built some give into my pricing just in case this happened.
  • I knew that what I was selling was too expensive.
  • The buyer must have a lower price.
  • Hey! The buyer is talking with me so they must like me.
  • Oh, oh – does the buyer know something that I don’t?

What Are The Drawbacks To Using It?
It doen’t take a rocket scientist to realize that sellers who keep getting Krunch’ed will eventually start to build up defenses to it. Specifically, what you can expect them to do is:

  • Boost their prices because they know that they’ll be asked to lower them.
  • Reduce the quality of the product being offered because they know the price will be lower.
  • Drop some services that used to be given.

What Countermeasures Can You Use?
What good is knowing about a negotiating tactic if you don’t know how to defend yourself against it? Here are three things that you can do when someone tries the Krunch on you:

  • Defend or describe your value. It’s not all about price so take some time to tell the buyer about why your offer is better than anyone elses.
  • Ask them how much better you have to do. There’s no need to lower your price more than they are expecting you to.
  • Buy yourself some time by starting to respond by saying “Hmm…” This will buy you time and will make the buyer feel obligated to fill the blank space with an explanation as to why they want you to lower your price.

Hopefully you’ve learned to set your negotiating goals high enough so that you will achieve more than you ever dreamed possible. Now that you know how to deal with the Kurnch tactic, next time we’ll have to talk about the “nibble”…

When was the last time that someone tried the Krunch on you? Have you built up defenses against it? Have you ever used the Krunch on someone? How did things turn out? Leave a comment and let me know what you think.

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Posted in negotiation, negotiation skills, negotiation style, negotiation tactics, pricing strategy | 7 Comments »

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