No matter how many people are involved in
a negotiation, important decisions are typically made between no more
than two people.
As we said in the closing in the previous
column, we are convinced that one needs to approach each negotiation
with a well conceived game plan. Experienced negotiators develop
strategies for each phase of the negotiation process: opening, middle,
and end. Not unlike master chess players, they come to the table knowing
their opening move. They understand that, from there on, strategies have
to be flexible because how their opponents respond to opening moves is
unpredictable. Nevertheless, they plan ahead as much as possible.
The simple format then for developing a
negotiating plan is:
What do we want?
How do we begin?
When do we move?
How do we close?
While an inexperienced negotiator may do
some planning, they do not plan thoroughly. For example, the experienced
negotiator will always develop their closing strategy before any
negotiation begins. They know beforehand whether they want to close
sooner rather than later and whether they require extensive
documentation or if an outline is sufficient.
The initial opening move should always be
planned carefully. Initial offers define the parameters of how the
negotiation will be "played". The opening move defines the range in
which the negotiators will bargain. In every negotiation the parties
begin by defining the "negotiation range". We should determine where one
end of the range is located, and our opponent decides the other end.
Experienced negotiators understand that where leverage is relatively
equal, there is always a tendency to meet in the middle. Where the
middle is ultimately located depends on where we begin. Therefore, a lot
of time and energy is usually spent developing and justifying the
The experienced negotiator will often
make the highest (or lowest) first offer they can justify while being
careful not to stray too far beyond the initial offer. One of the
cardinal rules of negotiating is to ask the other party for more then we
expect to get. This is often referred to as the maximum plausible
position or MPP.
Professional business coaches tell is
that when setting goals , the more specific our vision of what we want
and the more committed we are to that vision, the more likely we are to
obtain it. The same theory holds true in the negotiation process. The
experienced negotiator knows that if they demand more than what they
expect to receive they will more often than not do significantly better
and do so without putting their relationship or reputation with others
The initial offer should be sufficiently
reasonable to be viewed constructively by the other side and produce a
positive response. However, the opening move should also give the
negotiator enough room to move deliberately to their expectation without
being forced to stretch.
The skilled negotiator knows that
justification is critical to a successful outcome. Having a reason for
every element of the offer greatly enhances their chances of success. We
know that if we ask someone for a favor, he or she will be more likely
to do it when we give them a reason for doing so. We never want to avoid
appearing arbitrary and for that reason we should always express a
rationale for our position. Negotiating often comes down to obtaining
concessions from the other side. The more logical our arguments in
support of a point, the greater our chances of resolving the issue on
The starting point we select should
always be defensible. Never suggest a figure that can't be backed up
with a plausible rationale. The more difficult it is to come up with
logic to support our position, the more concerned we should be that our
opponent will perceive our position as overreaching. Developing a
rationale furnishes us a useful litmus test to determine whether the
position we're taking is defensible.
The goal of an effective negotiator is to
have expectations that are high enough to present a real challenge but
realistic enough to promote good working relationships. If we are
basically a cooperative person, we should raise our expectations.
Respectfully ask for more and never hesitate to insist a bit. The truly
gifted negotiator, then, is one whose initial position is exaggerated
enough to allow for a series of concessions that will yield a desirable
final offer from the opponent, yet is not so outlandish as to be seen as
illegitimate from the start. Experienced negotiators understand at the
end of the day, after concessions are made, the other party will be
satisfied with the deal only after we have also made some concessions.
The experienced negotiator knows when to
and when not to make a first offer. There are some who say "never make
the first offer", but this is certainly not correct. There may be a
number of good reasons to make the first offer, including motivation,
lack of leverage, superior information, or to take control of an issue
such as price. The experienced negotiator knows that first offers are
usually artificially high and never get upset over that; they simply
Always remember that goals are more
important than the bottom line. Our goal is only as effective as our
commitment to it. We should always make sure our goals are justified and
supported by solid arguments.
Always plan on making concessions. Making
concessions triggers reciprocity. When we make a concession, the other
party will usually respond with one. Most often they will feel compelled
to do so. The reverse is that when we do someone a favor, they will feel
indebted to us for it. Many of us do not like to be obligated to others
especially those we are negotiating with. People need to feel that they
have "earned" concessions even when we are willing to give them away for
free. We will never prevail on all the issues that arise during a
negotiation, so we should save our victories for the significant ones.
Let our counterpart take home a few trophies, too, especially on issues
that aren't that important to us or when the point they are making is
Each party needs to experience the
satisfaction of seeing the other side move in order to feel that the
resulting agreement has been adequately bargained. Our refusal to budge
on an issue that is insignificant to us will leave our counterpart with
a nagging sense of having failed, and that thinking on their part can be
potentially hazardous to any deal we want to achieve.
Know when and how to mediate. Experienced
negotiators know when a mediator will facilitate settlement and when a
mediator is unnecessary and they know when arbitration is preferable to
going to court.
The inexperienced negotiator often waits
too long before employing a mediator. They let problems fester and
parties become too invested in their positions. By the time they get
around to mediation, they have wasted considerable resources and the
momentum toward third party, attorney, intervention is formidable. The
time to mediate is as soon as the negotiations flounder.
The experienced negotiator is usually a
master in manipulation, and mediation is no exception. The inexperienced
usually come to mediation and act combative with the mediator or exclude
the mediator from all relevant discussions. The experienced negotiator
understands that the mediator can help them sell their ideas. They arm
the mediator with persuasive arguments, relative information, or
material evidence in support of their position.
Always have a theme. Lawyers who argue
their cases to juries know the importance of having a simple, unifying
theme. Johnnie Cochran's theme in the O.J. Simpson murder trial of "if
the glove doesn't fit, you must acquit" is a classic example.
Experienced negotiators understand that this same technique works in
negotiations. A positioning theme is a crisp, memorable phrase or
framework that defines the problem you are attempting to solve in the
negotiation. An example of a theme I often suggested to my clients to
use was: "when you don't pay, it causes delays". Alright it is a bit
corny but it identified the problem to be resolved. The customer being
unable to receive products or service in a timely fashion.
In our next and final column on
negotiation we will discuss the steps to resolve the issue, the
importance of multiple solutions, and the criteria for evaluating our
I Wish You
David Balovich is an author, credit consultant, educator, and public
can be reached at
email@example.com or through the Creditworthy website.