Posts Tagged ‘deadlock’

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Negotiators Know That Persistence (& Risk Taking) Pay Off

Tuesday, October 6th, 2009
Persistence And Risk Taking In Negotiations Can Pay Off

Persistence And Risk Taking In Negotiations Can Pay Off

In this world there are two types of negotiators: the good ones and everyone else. The goal of any negotiator is to become a member of the group of good negotiators. The challenge is that the path to becoming a good negotiator is not always clear. However, there are two basic skills that lay on this path: persistence and the ability to take the right risks.

Persistence Pays Off For Negotiators

Persistence is another one of those skills that we all think should be obvious to ever negotiator; however, it’s very easy to not have it. When the other side of the table says “no” to one of our offers during a negotiation, it’s very easy to lose heart and give up.

However, the negotiator who treats every “no” as a step towards “yes” is the one who will be successful in the end. Realizing that there is a reason that the other side is saying no and then being persistent enough to continue talking until you uncover that reason is the key to success.

American negotiators have been confronted with negotiators from other countries who appeared to be unmovable in their positions. Day after day the negotiations would continue with no progress being made. In the case where the Americans would return to the table and not give up, eventually progress ended up being made. The other side’s unmovable position was just a ploy to see how committed the Americans were to the negotiations.

Risk Taking Has Its Rewards

Being persistent in a negotiation is a form of risk taking: you are risking continuing down a path that may not pan out for you. However, there are other forms of risk taking that can occur during a negotiation:

  • Deadlock: The risk of encountering a deadlock faces every negotiator. The more you press a point, the greater the possibility that the other side will become unyielding. A skilled negotiator knows how to not force the other side into a position from which there is no way out.
  • Losing Current Deals: Whenever a change to an existing deal is being negotiated, both parties realize that there is a risk that they could walk away from the table with no deal at all. Often it’s this fear of losing an existing deal that will keep both parties at the table. Sharp negotiators realize this and will be willing to push harder because they know the other side of the table won’t walk away.
  • Losing Opportunities: Both buyers and sellers can potentially not realize that a deal is more important to the other side than it seems at first glance. Sellers may be trying to break into a new market or buyers may be trying to get additional suppliers. In situations like this, the other side of the table can press harder because the risk of reaching a deadlock is much less.

Final Thoughts

Successful negotiators aren’t that much different from everyone else. The things that distinguish them are actually very small details. Two of the most important features of a good negotiator are persistence and knowing when to take risks.

Persistence means knowing when to keep on even after you’ve been told “no” by the other side. Good risk taking is when you know that your persistence will pay off for you in the end. When you can combine these skills, you will have become a good negotiator and you will be able to close better deals and close them quicker.

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What We’ll Be Talking About Next Time

Quick: what’s the first thing that you think about when you picture your next negotiation in your mind? Unless you are Mother Teresa’s brother / sister I’ll bet that you saw yourself walking away from the bargaining table with the best deal in the world , you had gotten everything that you had wanted and more. Umm, what about the other side? That’s why win-win negotiating never works.

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Tips From The Middle East For Sales Negotiators

Tuesday, May 5th, 2009
The People Of The Middle East Have Always Been Sales Negotiation Experts

The People Of The Middle East Have Always Been Sales Negotiation Experts

They say that the world is getting smaller every day. This may be true, but the people who live in this smaller world couldn’t be more different than they are! A case in point are the  sales negotiators who hail from the Middle East – Arabs if you will. Unlike us in the West who become uptight at the mere thought of entering into a negotiation, they actually look forward to negations – it’s fun!

There is a lot going on behind the scenes here. Not the least of which is that negotiating has been a key part of Arab culture since days in which the very first trade routes wound their way through the Middle East connecting Europe to the Orient. They’ve gotten to be quite good at this skill and it shows when you negotiate with them.

One thing that Westerners need to understand when entering into negotiations with Arabs is that bargaining is a very social activity for them. You’ll find that you will be greeted warmly and food and drink are often provided in generous quantities. This can throw a Western sales negotiator off because you’ll start to feel as though you are at a dinner party instead of a sales negotiation.

Arabs also have a different view of time than those from the West. In part because they enjoy the sales negotiation process nothing will be rushed. You’ll find that there are many breaks, many side discussions, and frequent interruptions.

These interruptions may include visits from people not involved in the sales negotiations. They may come and go multiple times. Just let it happen. You need to keep your calm and realize that you are playing the same sales negotiation game, just at a different table.

Finally, you need to realize that Arabs don’t really worry about deadlocks. They have no problems walking away from a sales negotiation and then coming back to it later on. They always hope to eventually do a deal, but they realize that sometimes this is not possible.

Have you ever had a chance to participate in a sales negotiation when the other side of the table was from the Middle East? Did they seem to enjoy the sales negotiation process? Was time a factor? Did you ever encounter a deadlock? Leave me a comment and let me know what you are thinking.

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A Sales Negotiator’s Guide To Dealing With A Deadlock

Tuesday, February 10th, 2009
A Deadlock During A Negotiation Can Bring Things To A Screeching Halt

A Deadlock During A Negotiation Can Bring Things To A Screeching Halt

When driving a car, the #1 thing that most of us fear is hitting a wall. Or another car. Or pretty much anything that would cause us to come to a complete stop quickly. Why are we so afraid of this? Well duh – it will damage / destroy the car that we’re in, delay or prevent us from getting to where we want to go, and may even result in damage to us. The same thing can happen during a negotiation, but we call it a deadlock.

A deadlock occurs when both sides have not yet reached an agreement and all of a sudden they reach an issue that they fundamentally cannot agree on. If negotiating was a board game, then there would be no possible moves for either side to take – deadlock.

If you are a negative person you might be willing to give up and walk away. Lots of people do. A deadlock is a powerful thing and it can affect both sides of the the negotiating table in the following ways:

  • A deadlock tests the resolve and the strength of both sides.
  • A deadlock often forces both sides to be willing to give more concessions after it occurs.
  • A deadlock is a signal to both sides of the table that what they want out of the negotiation might not be possible.
  • A deadlock can cause both sides to reduce what they expect to get out of the negotiations.
  • A deadlock can mess up schedules for both sides.
  • A deadlock can make a negotiation more expensive and riskier for both sides.

So this all seems like it’s pretty serious stuff. However, there’s more.

Both sides of a negotiation realize going in that a deadlock can occur. The key thing that you as a negotiator need to determine is which side fears a deadlock more. Generally speaking, the larger an organization is and the more layers that it has in its management structure, the less able it is to deal with a deadlock. If you are willing to risk not walking away with a deal, then your negotiating power may be greater than the other side’s.

No matter how much power you think that you have, what every negotiator needs to realize is that when a deadlock occurs during a negotiation, it’s the negotiators responsibility to find a way to resolve it. A deadlock can have a significant impact on a negotiator’s career in the following ways:

  • You may get criticized by your own management.
  • You may end up getting extra work in order to resolve this deadlock.
  • You may lose your job.
  • You may have a personal sense of failure.
  • You may become frustrated.
  • You may lose friends and damage relationships.
  • You may make people angry with you.
  • You may lose self-confidence.
  • You may start to question your own business judgment.

So there is a lot of personal risk going on here. What’s a negotiator to do? One key action that you can take occurs before the negotiations start. Every negotiation is really a team event – it’s not just you sitting on your side of the table, it’s really you, your team,  and your management structure. If you take the time to discuss the possibility of deadlocks, what might cause them, where in the negotiations they might occur, and how best to deal with them then you’ll avoid a lot of the consternation that a deadlock can cause your team.

One final point – don’t give up just because you encounter a deadlock. In fact, the longer that the negotiations have gone on before the deadlock was encountered, the better your chances of being able to restart the discussions are. The more effort that has gone into the negotiations will mean that neither side wants to let a deadlock stop progress from being made…

Have you ever encountered a deadlock during a negotiation? Did this cause the negotiations to stop? What did you do to try to restart the negotiations? Were you successful? Leave me a comment and let me know what you are thinking.

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Negotiation Battle: Tom Hanks vs. Mel Gibson

Thursday, February 5th, 2009
The SAG And The Studios Are Deadlocked In Their Negations, Now What?

The SAG And The Studios Are Deadlocked In Their Negations, Now What?

In the world of Hollywood, they have the ability to make the unreal seem oh so real. However, right now they are having a great deal of difficulty negotiating to make a contract between the big movie studios and the Screen Actors Guild (SAG) become a reality. Are we going to be looking at another actors strike?

Perhaps a bit of a background is needed here. The SAG is a 120,000 member union that represents, what else, actors. The SAG is currently negotiating with the major studios to create a new contract for its members – their old contact ran out back in June.

This type of negotiation is fairly common. However, what’s making it interesting this time around is that there appears to be a difference in opinion on how best to negotiate within the SAG. This is causing a split to occur and may be significantly reducing the SAG’s negotiating power.

Within the SAG there are two groups that are taking differing views of how the negotiations need to proceed. The first group, called Members First,  is lead by the SAG’s president Alan Rosenberg and their Executive Director Doug Allen. Doug also happens to be the SAG’s chief negotiator. The second group calls itself Unite for Strength and has won several key seats on the board and now, by aligning with other board members,  has a slight majority.

So what’s the issue here?

Currently the SAG is in deadlock in their negotiations with the big studios. The Members First team wants to have the SAG members vote to authorize a strike if the negotiating team needs to call one. The Unite for Strength team wants the board to vote against having a strike vote as well as having them replace the current negotiating team. Talk about bad blood!

If the Unite for Strength team got their way, then they would probably try to jump-start the stalled negotiations with the studios. They would go along with the pay terms for new media that other unions have negotiated with the studios as  an exchange for getting improvements in the traditional media pay areas.

Why does the Unite for Strength team not want a strike vote to be taken? They believe that a strike now would be a poor decision based on the current economic state of the country.

Tom Hanks supports the Unite for Strength team. Mel Gibson supports the Members First team.

Just to make things a bit more complicated, the studios are insisting that their current offer on the table is their final offer. It contains some provisions that no SAG members likes such as a proposal to eliminate mandatory meal times (I mean come on, an actor has got to eat…)

So what should a negotiator make of all of this back-and-forth?

First, the public SAG split is bad news for the actors because it transfers power to the studios. When the other side of the table is in disagreement, your position is stronger. However, this also means that reaching an agreement with the SAG will be more difficult – the studios need to get all of the SAG to agree to a new contract.

It looks like SAG has done a poor job of PLANNING their side of the negotiation. There is a critical question of what is more important: money from traditional (films, TV) media or money from new (DVD, Web) media. Pick your poison, but this is an issue that all of the SAG needs to get behind.

Both sides of the table are at fault for allowing the deadlock to continue for six months. One subtle point here is that the studios may be willing to live with a deadlock because there is no current threat of a strike and the longer they wait, the greater the split within the SAG grows.

If the SAG replaces their negotiating team, then there will be a great deal of negotiating ground that will need to be revisited as the two negotiating teams meet for the first time and work out their negotiating positions.

What’s to be learned from this negotiating mess? A couple of key points: negotiations need to be planned out before discussions start so that inter-team squabbling can be taken care of BEFORE the talks start. Next, replacing a negotiating team during negotiations is a radical step that should be avoided at all costs – it’s just too expensive in terms of time. There’s a lot more to learn here, but I’m pretty sure that time will reveal what mistakes were made and which side ended up with more negotiating power…

If you were a member of the SAG, which team would you want to be a part of (the Tom Hanks team or the Mel Gibson team)? Who do you think has the stronger position in the negotiations right now? What would your next steps be if you were the studios? Leave me a comment and let me know what you are thinking.

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What If There Was No “What If” Negotiation Tactic?

Tuesday, January 13th, 2009

The "what If" Negotiating Tactic Is A Powerful Way To Get More Information

The "What If" Negotiating Tactic Is A Powerful Way To Get More Information

During a negotiation, there often arise cases where we’d really like to get the seller to give us information that they really don’t want to give to us. If only there was some way to test the other side’s willingness to settle with us. Oh, and if there was a way to also “zero in” on the seller’s lowest selling price, this would be nice also.

It turns out that such a tactic does exist – it’s called (what else) the “what if” tactic. An example of how you’d use this tactic would be if you were buying blue widgets from someone.

You’d ask the seller to give you a quote for 100, 1000, 10000, and 20000 blue widgets (sorta like asking “what if I was to buy…”). Once you have a response to your request for bids, you’ll have lots of information about their pricing scheme, any setup charges, learning experiences, and production costs.

The “what if” tactic is very powerful when used correctly. In order to help you get the most out of this tactic, here are several suggestions that can help you get information during a negotiation:

  1. What if we change the specifications?
  2. What if we change when the work is actually done?
  3. What if we buy more items than just the ones being negotiated?
  4. What if we provide the required materials?
  5. What if we increase / decrease the warranty period?
  6. What if we increase the quantity?
  7. What if we agree to a longer contract?

Now all of these suggestions are great news if you are trying to buy something. But what if you are the one doing the selling? In negotiations, everything is an opportunity.

Once you hear the buyer starting to ask “what if” type questions, you should start to be on alert to what might be coming next. Here are several ways that the seller can react to the  “what if” tactic:

  • Don’t come up with new prices “off the cuff”. Take time to plan your prices carefully.
  • Realize that not every “what if” question actually needs to be answered. You can avoid answering these types of questions by using responses such as “they won’t”, “we can’t”, or “that will be very expensive”.
  • Use the buyer’s deadline to avoid answering a “what if” question. Tell the other side that in order to answer one of their “what if” questions will require more time than they have available to negotiate.
  • If you offer a concession, then make it contingent on you receiving their order immediately.

The selling party has a counter tactic called “would you consider” which can be used in response to “what if” questions. Both of these tactics can open new negotiating possibilities that may help both parties move towards a successful solution.

Have you ever used the “what if tactic” during a registration? Did it work for you? Have you ever had this tactic used on you during a negotiation? How did you respond to it? Leave me a comment and let me know what you are thinking.

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