The Intelligent Negotiator (18 page)

In my law school Negotiation class, some of the exercises are conducted on a one-on-one basis, while others are done on a two-on-two basis. When the students are assigned partners, there are occasions when one partner is ill or out of town and unable to participate. When this happens, the single negotiator has to interact with two counterparts. In almost all cases, the lone bargainer finishes near the bottom of the class. Almost never does the single participant obtain results that are above average.

When you have to engage in bargaining encounters with several people on the other side, take someone else with you. Depending on the circumstances, this person might be a friend, a spouse, a coworker, a parent, or an adult child. This is especially important when you are involved in discussions with professional negotiators whom you have good reason to believe have deliberately expanded their bargaining groups to place you on the defensive. The addition of just one negotiator diminishes the advantage that counterparts derive from a larger bargaining team. Your partner can monitor the verbal messages and nonverbal signals while you more actively interact with the various counterparts.

Some negotiators who add a person to their bargaining teams use that individual as a “silent partner.” They ask him or her not to speak, except in extraordinary circumstances. This can be effective. By just having the extra person present, the team negates the advantage multi-party counterparts are trying to obtain. It is usually preferable, however, to take someone with you who can at least minimally participate. He or she may see an opening that you have missed. If the extra person is unable to speak immediately, the opportunity may be lost; whereas by jumping right in to exploit the opening, he or she can be of great assistance. To enhance the ability of a partner to facilitate the bargaining process, make sure he or she is thoroughly prepared for the interaction. Before you meet with your counterparts, you and your partner must review everything and decide how to proceed. You must be prepared to conduct carefully coordinated talks based on unified goals and a cohesive strategy. If any member of your group does not understand his or her role, the benefit of having a multi-party bargaining team may be lost.

If you work for a large organization, there may be times when a number of people decide to participate in a significant negotiation. Individuals from each department that may be affected by the final result might demand input. During the preparation process, you must conduct a large intra-organizational negotiation in which all interested parties are invited to participate. You must develop a set of common goals and a unified bargaining strategy. If you fail to do this, your counterparts will discover the weak links on your side and exploit them. If ten, fifteen, or twenty persons plan to attend the joint bargaining sessions, you must carefully decide who will address which
issues. If everyone on your side is authorized to speak, your counterparts will target your weakest team members and take advantage of those individuals. Designate two or three people who will do all the talking for your side, or divide the issues into groups and indicate the particular individuals who will address each group of items.

T
IME
P
RESSURE

When individuals negotiate, whether in real estate, car, or job transactions, they generally feel time urgency, believing that if they don’t act quickly they will be out of luck. But when individuals negotiate in business transactions, they are more likely to understand that moving too quickly gives the other side a significant advantage.

Japanese negotiators frequently use the time factor to advance their interests. When they are visited by foreign corporate representatives who hope to negotiate business deals with Japanese firms, the Japanese hosts ask their visitors about their return flight schedule so they can reconfirm those flights. They then use generous hospitality to preclude the beginning of substantive discussions as they try to become better acquainted with their future business partners. Several days before their visitors are scheduled to fly home, the Japanese negotiators get down to business and obtain substantial concessions from individuals who feel they can’t return home empty-handed. Similar tactics are often used by insurance company representatives to settle claims filed by injured people who need financial assistance immediately. If the claimants hired lawyers and filed lawsuits, their
cases might not go to trial for several years. Most injured people cannot wait that long to obtain compensation for their injuries, and they settle their claims for far less than they deserve.

If you are ever in a situation where you feel time pressure, try to withhold that information whenever possible. For example, if you are selling your house and are asked by prospective purchasers when you plan to relocate, you may either say that you don’t have to move until you have sold your house or state that you plan to rent your home if it is not sold by a certain date. If you are trying to purchase a new home, a selling real estate agent may ask you how soon you plan to move to the new area, hoping to find out how quickly you need to get another house. You can indicate a willingness to rent a place if you don’t locate something you like to allow you to become more familiar with the new market.

Negotiators who feel time pressure forget to ask themselves one critical question: How much is the time factor affecting their
counterparts?
In most bargaining situations,
both sides
want to conclude the deal quickly. If you ignore the time pressure influencing your adversaries, you concede this valuable factor to those individuals. Ask yourself how soon
they
want to finish this interaction. They may have a shorter time frame than you have. If they do, you can exude a patience that will cause them to make the concessions that are necessary to conclude the deal by their deadline.

When you have a definite deadline that must be met, you can preempt the time factor. When you first meet with your counterparts, directly inform them of your time limit and indicate that if no agreement is achieved by that date, you will accept your non-settlement alternatives. No matter how much time they may actually have,
you are telling them that
your
deadline is
their
deadline. If no deal is reached by then, there will be no deal. Never misrepresent this factor because it would be considered unethical and the risks would be substantial.

C
OMMUNICATING
D
UAL
M
ESSAGES

Some communications contain
dual messages
—one apparently objective and forthright, and the other subtle and ulterior. For example, a real estate seller might openly suggest to a prospective buyer who is thinking of purchasing certain property he or she could barely afford that “you probably can’t afford this house.” While this overtly “adult”-to-“adult” statement may be objectively accurate, the seller doesn’t really wish to convince the prospective buyer of this fact because this would preclude a sale. The ulterior message is conveyed in a “parent”-to-“child” manner, with the “parent”-seller informing the “child”-buyer that he or she can’t do something. If the truly desired response is generated, the prospective purchaser will respond with a “child”-like “Yes I can!” Through this manipulative technique, the salesperson may be able to sell a house to someone who was not contemplating such expensive property.

You should be suspicious of opponent statements suggesting that contemplated transactions can’t or shouldn’t be consummated. If the speakers really believed this fact, they would not be negotiating with you. If, despite such communications, the speakers exhibit a desire to continue the bargaining discussions, it is likely they are disingenuously attempting to entrap you into accepting what are probably disadvantageous arrangements.

E
XTREME
O
PENING
O
FFERS

I discussed earlier how important it is for negotiators to develop high aspiration levels during your preparation and to plan opening offers that give you sufficient bargaining room. While I noted the need to always demand more or offer less than you hope to obtain, I also emphasized the importance of beginning with an offer you can rationally defend to preserve your credibility. If you don’t know how to judge the reasonableness of your opening offers, you might attempt to protect yourself by starting with extreme positions. This is a risky approach, because it may completely turn off counterparts who may give up and do business with someone else. On the other hand, it may work. You could be lucky enough to negotiate with careless counterparts who forget to focus on their own non-settlement options; if you are, your extreme positions may pay off.

When you are confronted with your counterpart’s truly outrageous opening offers, don’t casually dismiss them by suggesting they may be “a bit high” or “a bit low.” Counterparts who begin with extreme positions either know how unreasonable those offers are and expect you to respond appropriately, or they have no idea and need you to enlighten them. If you don’t demonstrate complete shock, they begin to think their positions are not really that extreme. They reassess their goals away from reality in a way that decreases the likelihood of final agreements.

As soon as you receive unrealistic opening offers, firmly but politely indicate how unacceptable those positions are. For example, you might say: “You and I know how unrealistic your position is. What you are proposing is entirely unacceptable. If these are the areas you hope to explore, we have nothing to discuss.” Once you convey
this message to your unrealistic adversaries, they will begin to lower their expectation level without fearing that their preliminary assessment was completely erroneous.

What should you do with counterparts who refuse to veer from their extreme opponent opening offers even after you have indicated your displeasure with those positions? You can indicate an unwillingness to articulate any offer of your own until the other side has placed a reasonable offer on the table. Some negotiators will refuse to bid against themselves in this manner and will restate their original offer. If this happens, you may then offer your own opening position that is as unrealistic as that of the other side. Then use attitudinal bargaining and the
promise
technique and suggest a willingness to provide a more reasonable offer
as soon as
they provide you with a fair offer. “You and I both realize how outrageous our respective positions are. We can continue with these absurd positions and waste a lot of time. Or, if you are willing to put a realistic position on the table, I will respond in kind, and we can begin the serious discussions.” This approach often produces beneficial results.

You can ignore the unreasonable nature of your counterparts and announce your own realistic opening offer, hoping to embarrass your adversaries into more accommodating behavior. This is a risky approach because you will quickly find yourself close to where you hope to end up while facing the other side’s initial position that is far from that point. You will then have to force your counterparts to make huge concessions in exchange for each of your smaller position changes. It is difficult to sustain this effort. As your counterparts point out how far they have moved compared with your minimal progress, you feel guilty and often give them better terms than they deserve.

P
ROBING
Q
UESTIONS

A different technique can be especially effective to counter unrealistic opening positions announced by the other side. Instead of arguing with them, take out a pad of paper and indicate how much you would like to understand their position. Break their offer into components—and begin with the more finite items for which it would be difficult to puff credibly. For example, if you are thinking of purchasing someone else’s business, you initially ask how they have valued the property involved. If they provide a remotely realistic figure, write it down and go on the next items (such as building and equipment, inventory, accounts receivable, patents and trademarks, and goodwill). If the number they cite is unreasonable, you calmly explain how you recently had the property appraised at $500,000 and ask how they got the $1,500,000 figure. The goal is not to argue with them, but merely to reason together in a highly professional manner. They have most likely had the property appraised recently and know its true value. They will then respond with a slightly exaggerated figure of $700,000. You write this number down and move on to the other items. When you are finished and add up the new total, it is one-fourth or one-fifth of their initial demand.

When people begin with wholly unrealistic opening positions, they have made them up. They have no idea how to defend them in a rational manner. When you break the underlying issues into finite parts and ask them to value each of the parts, opponents can no longer maintain their absurd positions. As they provide direct answers to your specific inquiries, their initial position crumbles and they end up in a more realistic area.

B
EST
-O
FFER
-F
IRST
(T
AKE
-I
T
-O
R
-L
EAVE
-I
T
) B
ARGAINING

You may not like participating in the usual give-and-take of the bargaining process where the parties begin far apart and move toward the center. Perhaps you find such concession-bargaining distasteful, or your bargaining position is powerful enough that you can avoid it. What you can do instead is to determine what you are willing to give to the other side before you initially meet with them. You then arrive at the first bargaining session and announce a firm offer that you are unwilling to modify. If the other side accepts your terms, you have an agreement. If not, there is no accord. From the perspective of the one making the offer, this is known as
best-offer-first
bargaining. From the recipient’s perspective, it is called
take-it-or-leave-it
negotiating.