Jan 12

Effective negotiating tactics: stop talking!

If you follow sports long enough, a certain pattern emerges in any league. One person is anointed the franchise of the league (think Michael Jordan, Wayne Gretzky and, um, until recently Tiger Woods); they can do no wrong and the league does anything and everything within their power to maintain this image. Every league has a player or players who are the bad guys and then there are the court jesters- the guy the league brings out to show its fun, modern and hip.

In the National Basketball Association (the NBA) the court jester was Gilbert Arenas- until last week. Gilbert, or Agent Zero, was suspended indefinitely by the league for: (i) bringing unloaded guns from his house into his locker-room; (ii) had some type of conflict with a team-mate over an unpaid gambling debt which may or may not have involved one party pulling said gun (or guns) on the other (given an on-going criminal investigation, what occurred exactly in the locker-room is speculation rather than fact); (iii) going onto Twitter and joking about his situation; and  (iii) making light of the situation by pretending at a pre-game introduction to shoot his team-mates with guns made out of his fingers. Agent Zero may, in fact, be a reference to his level of common sense.

We can all learn from Gilbert Arenas as negotiators. Mainly, stop talking. Just stop.

What you do not say is sometimes better than what you do say especially in delicate situations. Here is an excerpt from Gilbert Arenas’ official press release before he was suspended:

“I told the detectives and prosecutors the whole story about my storing the unloaded guns at the Verizon Center and what I was intending to do when I took them out of my locker on December 21st.

As I have said before, I had kept the four unloaded handguns in my house in Virginia, but then moved them over to my locker at the Verizon Center to keep them away from my young kids. I brought them without any ammunition into the District of Columbia, mistakenly believing that the recent change in the DC gun laws allowed a person to store unloaded guns in the District.

On Monday, December 21st, I took the unloaded guns out in a misguided effort to play a joke on a teammate. Contrary to some press accounts, I never threatened or assaulted anyone with the guns and never pointed them at anyone.”

If what Gilbert Arenas said to the authorities was consistent with his press release, he admitted to the following:

  • bringing firearms to a place of employment, a breach of the NBA’s collective bargaining agreement
  • transporting guns over state lines, a criminal offense
  • drawing a firearm on a third party, a possible criminal offense (whether you think it is a joke or not is irrelevant. In many jurisdictions, the criminal offense of assault compromises of the intended victim believing reasonably that you would attempt to carry out harm on them. Battery is the actual touching of someone unlawfully)

One is not exactly sure why he would admit these to the public. If he spoke to the authorities and then said nothing publicly, there would not be any sense of public outrage, or fear of public backlash, if the authorities declined to act further. By issuing the statement, the media is hounding the authorities to do something.

Perhaps, Gilbert Arenas wanted the press. Once a court jester, always a court jester. And, yes, he took down his Twitter account (I suspect his lawyer had a little chat with him about that).

For an example that applies to people who are not professional athletes, consider a mailer I received from a real estate agent who recommended that if you have to be at home during an open house, just smile and say as little as possible. We are wired to tell stories but sometimes our stories hurt us as negotiators. As the mailer continued, the vendor told everyone at the open house that the condo was full of nice old people. Problem was most of the potential buyers were younger couples who may not want to live in that type of building (having lived in both a younger person and older person condo, there is a huge difference).

The rule when being questioned by the authorities is always be respectful, be polite and only answer what is being asked. Don’t try to tell your story. All you are doing is giving angles to the other side to use against you. The same concept applies in negotiating.

To be clear, if there is something that needs to be disclosed legally or ethically, disclose it. However “stop talking” refers to not staying on point in negotiations and wandering off into what may be interesting facts or some self-need to spill your guts to strangers. It is ok to say you are selling the 2nd car to pay off some bills but I am not sure we need to know about all the good times you had in the backseat in graphic detail.

Stop talking also means keep a muzzle on your social media accounts (a rant onto itself). If you are selling your house, please don’t post on your Facebook page “Put our house up for sale. Hope someone buys soon. Bought another place already.” You never know who is reading your Facebook feed or what your privacy settings are.

Finally, stop talking refers to Four Pillar’s excellent post about bias and pointless arguing. Negotiations is much like sales. You are trying to get to a result. Good salespeople know that getting to a “no” is almost as important as getting to a “yes” so bias and pointless arguing may just annoy the other side and forgo the opportunity cost  of negotiating with someone who wants to negotiate a deal which, frankly, is much more desirable than hearing the sound of another’s voice drone on and on…

Dec 01

Effective negotiating strategies: phrases to avoid

In fields which we are  not experts, we tend to be heavily influenced by perceptions given to us through television. For example, when the television show CSI first made it big, a lot of prosecutors lamented that juries wanted a full DNA report, which can cost tens of thousands of dollars, in order to convict an accused for charges as  simple as shop-lifting.

In a similar vein, when we think about negotiations we think about actors screaming at one another across a table, banging their fist, crying to the heavens in anguish over the other party’s position and generally making a scene. But, more often than not, professional negotiations tend to advocate their positions without overly dramatic displays or scorched earth phrases (negotiations with unions tending to be a notable exception lately).

The point of effective negotiations is to arrive at an ideal position and not to inflict emotional harm on the other side (unless this is a bitterly contested divorce). Unfortunately, for many who do not negotiate often, poisonous or ineffective phrases and terminology are often thrown around, as seen on tv, which can move a person negotiating further away from their intended position. A few notable examples includes:

“You L-I-E.” You say to hurt. Not to advance a position. Go home tonight and the first time a topic comes up that needs to be discussed with your spouse, tell her she’s a lair. See how the rest of your night goes.  Hope your couch is not lumpy.  The problem with telling someone that they lie is that you are assuming you know what’s in their head and I have met few mind-readers in my time. Alternatively, even if you have the incriminating piece of evidence, what exactly is the point of calling them a lair as opposed to using that evidence to your advantage without resorting to name calling?

For example, assume you are buying a new car. If the dealer insists that they have the best price in town but you have a better quote from a dealer downtown in hand, even if the dealer said it was impossible, you are better off showing the quote than telling the dealer he is lying. It may not get you a better deal but at least the dealer is less inclined to stick it to you if you told him he was a liar.

“Trust me” or “I am giving you a good deal” Why are you tell me to trust you? Are you attempting to cover something up or you trying to counter-act a reputation you have? Why do you need to tell me its a good deal? If I am a prepared negotiator, I know its a good deal without you telling me.

“Trust me” and “I am giving you a good deal” are subtle or not so subtle, depending on the negotiator, ways to brow-beat you into a deal.  I often equate good negotiators to good con-men; both are so good at their job that you don’t realize you are giving away the farm because they have framed the conversation so well (read anything on Bernie Madoff’s manner of attracting money and he’s never telling his investors to trust him or it is a good investment). But rarely have I heard a good negotiator say “trust me.”

“This is my final offer…” Please don’t say this unless you absolutely mean it. If you don’t, a good negotiator will run roughshod over you since you have no defined walk-away point or you have one but do not have the willpower or discipline to enforce it.

Your alternative to “this is my final offer” is to use the element of time rather than money. Indicate you have a hard stop at whatever time and stick to it. People, especially salespeople, hate spending time and having nothing to show for it; very few people can spend a lot of time in a mall without buying something for this same reason. Real estate agents do this all the time. They give a very small time frame to submit an offer or to counter-offer. By creating a time scarcity, they sometimes successfully drive up the price.

The other alternative is basically show indifference if they turned down your last offer. Call this the “playing hard to get rule” of negotiating. You really wanted to date that cute guy in high school because he just didn’t care if he went out with you or not. If you are indifferent to your last and final offer being turned down, the other side may compromise simply because they can see they are losing the deal or move on which really means they value the subject of negotiations more than you ever would.

“I have someone else interested…” This is negotiating strategy 101 employed by used car salesmen. Anyone who is savvy will see through this. Think about it. If I have an offer in hand which I am happy to take, why have I not taken it already? Either the offer is not that good or I am very greedy and want more. In other words, the other offer is not a serious offer or you are negotiating with someone very greedy.

On the other hand, this is a great phrase to use on inexperienced, or emotional, negotiators which is why real estate agents use it to such great effect; real estate is an emotional investment and people do not buy a lot of real estate in their life times. Conversely,  no one really uses this phrase for a product devoid of emotional value. The photocopier sales person at your office is not using this line to sell his last copier.

I once negotiated for a client with someone who used this line 3 times in a 15 minute conversion. This is the first tip off that he really did not have another offer (works in a similar negative manner as saying “trust me”). When I told him that I was happy for him to get such a great offer over market and he should buy me a drink once he accepts and closes, he paused for a second and changed the topic. He never brought up the phrase again. He called the client the next week and lowered his price.

Nov 04

Effective negotiation strategies: does nice actually work?

Have you ever negotiated with anyone- spouse, boss, landlord, vendor- and hit a roadblock and simply thought or said “but I am such a nice person, why can’t they agree with me?” The “nice card” is played all the time in negotiations by both sides. Think of purchasing a home when the vendor says they are nice people and wants to sell to nice people too. Meanwhile, the purchaser are also nice people who simply can’t afford the list price so, Mr. and Ms. Vendor, can you do better on the price since we are such nice people? Somehow nice on nice really doesn’t budge the price much does it?

Is nice simply an over-rated negotiating tactic?

Certainly, not being nice has the opposite effect. People tend to give the other side less ground and no one really wants to deal with unpleasant people. Perhaps Jim Balsillie’s Quixotesque pursuit to buy a hockey team or Rush Limbaugh’s attempt to buy a football club would gain more traction if one wasn’t calling out the current owners or had a reputation of belligerence respectively (perhaps Balsillie’s attempt to buy into a poorly run sports league is the true sign its time to sell RIM?).

But, from personal experience, the nice card in negotiations tends to decline in proportion from the distance to the ultimate decision maker. Lawyers are often nice to one another in order to seek small indulgences such as granting adjournments with consent, ceding small negotiating points and even going so far as to point out errors in the document. But, at the end of the day, its the client who will make the call on the really fundamental and large decisions and no amount of niceness between the lawyers will change a client’s mind (no matter how unreasonable the position).

Similarly, personal experience and observation tends to show when negotiating rent, a landlord is willing to compromise on lower rent or other concessions if they are sourcing out their own tenants and they perceive them as nice; I recently was listed as a reference for a friend renting an apartment for his family. The landlord gave it to my friend before I returned his reference check call because he found him to be nice.   Correspondingly, as Four Pillars pointed out, tenants of rental properties are more likely to stay if the landlord is nice too. But, as anyone who has rented from or worked at a large real estate management company knows, niceness generally does not change “policy” and “we are sorry sir, our policy is not to rent under list price.”

…and that’s  the crux of playing the nice card- policy. People who are not the ultimate decision makers get fired for breaking policy and, quite frankly, the employee likes her job better than your sunny disposition. The owner-manager can’t fire himself for selling you that used piece of furniture for cheaper than its desired profit margin. So they will give up a few dollars profit to make themselves feel good for doing something nice.

This is not to suggest that the nice card cannot be effective. It is not a question of if the nice card works but when to use it. Being nice to the customer service rep will usually get you nowhere. Being nice to the manager with over-ride clearance may get you somewhere. Being nice, but firm, to the Senior Vice-President will typically get you some movement. The closer to the decision maker, the more effective the nice card (plus if you are working your way up the chain, you are doing something right anyways so an additional dose of honey never hurts).

It becomes a matter of strategic timing on when to use the nice card. Simply playing it early and often to people who have no real decision making powers is tantamount to going all in at the first round of poker. Most of the time, you end up with very little or nothing in return.

Sep 29

Effective negotiation strategies: when do you hire help?

Just a reminder that today is the last day to enter the contest to win free stuff. All you have to do is post a comment on this post.  Your odds of winning are pretty good. Entries end at 9:00 EST (to be fair to PST readers)

I have often described a lawyer’s job function as:  “someone you hire to say what you want but can’t and do what you want but won’t.” On some level, lawyers, and other people who negotiate for a living, are blunt instruments for what needs to be done. Get a deal completed while having the other side not hate you (too much) at the end.

Lawyers are expensive though. Same with accountants (if you have a dispute with the tax authorities), real estate agents or other professionals who negotiate for you. Thus, the question becomes when do you hire help and how do you use them?

On one extreme, one should seriously consider hiring help for negotiations which are extremely technical in nature or for subject areas in which you have little to no experience (e.g. buying your first home). In such cases, feeling your way around is not a very practical manner to obtain a good deal.

On the other extreme, subject areas which are quite general (e.g. buying a used chair from Craig’s List) or negotiations for subject matters you have entered into multiple times may not require help or the help is hired only to paper the transaction over once the primary business terms are negotiated. For example, I am not sure it makes much sense for a seasoned real estate investor to use a real estate agent to negotiate terms; they probably have conducted more analysis than the agent and know what their deal parameters are.  Associates for law firms who represent big corporations often view their position as more bureaucratic than deal-making since their clients are so sophisticated that they require little to no business advice and the instructions are often “just paper this over.”

The question of how you use your hired talent is just as important as whether to hire that help. My general observation is that few people use their professionals effectively because they have little to no experience.  The result is that there is an abdication of responsibility which can result in two negative consequences: (i) the professional negotiates the deal in a manner they want rather than what you want (the typical example would be a real estate agent pushing up the top price a client may be willing to buy a property for); or (ii) the professional racks up large fees by not working efficiently (the typical example are lawyers who over-staff files and do a lot of un-necessary work on a file).

By no means am I suggesting professionals are out to plunder their clients in fees and commissions. Instead, let us remember that everyone needs to make a living and you cannot expect someone to provide value without paying for it. The question is whether what you are paying for falls under the category of value or is  unnecessary.

More often than not, unnecessary fees are caused by both sides. In my experience, clients often come unprepared with what they want or the instructions are not clear. A lot of “feeling your way around” ensues which costs time and money.

To give you an example, pretend you want to purchase a home. If the real estate agent asks you: “what do you want to buy?” the answer cannot simply by “something cheap.” It has to be more specific as to area, price range, new/fixer-upper and then you have to adjust and continue to give instructions. If the agent is not following instructions which are reasonable, they may not be the agent for you. But if there are no instructions as to the upper limit you are willing to buy, can you blame the agent for negotiating a purchase which is too steep if the instructions are “we are willing to go as high as we feel is right”?

Granted, since I am a lawyer by training, I have first hand experience of what constitutes a good use of hiring professionals having been hired effectively and ineffectively in the past. To give you an example of how I use a professional, when I purchased a home, I gave my real estate agent a 2 page memo of what I wanted (price, area, how many bedrooms, order of priorities, conditions). When we looked at places, I would share with my real estate agent my comments which I had placed in an excel spreadsheet indicating what I liked and did not like in the places we saw.

I only saw 12 places. Place 1-5 was to get some feelers. By place 7-8, I had a good sense of what I did not want. By place 9, I had readjusted the memo given what we had seen and instructed my real estate agent to downplay certain criteria and focus on other criteria (I gave up the extra bedroom/home office for location). I ended up purchasing a place I love.

This sounds like a lot of work doesn’t it? It is but, at the end of the day, the real estate agent is not living at my place and paying my mortgage.  I am. What he did do which I found to be of value was review the memo, review the spreadsheets, give me a reality check, conduct due diligence based on the parameters I gave him, did all the leg work and had him negotiate given a specific budget (since I was being paid by the billable hour, time was literally money to me).

By no means is this the absolute best way to use a professional but it made both of us turn our minds to the issue at hand and focus. The key point is that even if you hire professions to negotiate, you have to be active in formulating what you want and don’t want. Good luck.

Sep 16

Effective negotiating strategies: using deal fatigue against you

Ever shop for a car and the salesperson puts you in some tiny office with uncomfortable chairs and then asks you to wait while they take the deal to the manager and you wait and wait and wait? It is not that salesperson moves slow or the sales manager can’t make a decision or time moves slower in an auto dealership. It is more likely that they are using deal fatigue against you.

Deal fatigue is a term often used to describe negotiations which tend to drag on and, having lost all patience, one side or the other gives in. Deal fatigue is often a good opportunity for that most despised negotiation tactic- trying to renegotiate or slip in new terms at the last minute (as Squawkfox found out when buying a used car).

A good salesperson aims modest but knows, having spent hours negotiating, you may be more susceptible to agree to something, anything, to get the negotiations over. This is why extended warranties are always sold last- the salesperson knows that few people walk away from a deal over an extended warranty and commissions on extended warranties are higher than the good or service being sold. What good salespeople are really doing is exploiting our innate need in the internet age to seek an expedient rather than a correct solution.

This is why so many labor negotiations are finalized in the wee hours. Both sides are literally tired of one another and, suddenly, those entrenched positions are no longer so entrenched (and in public-sector negotiations, it is not their money anyways so you might as well give away someone else’ farm- see David Miller, exhibit A).

But, let’s turn this around on its head. Remember that deal fatigue is a double-edged sword. Most salespeople work on commissions and the longer you negotiate and may not close the larger the opportunity cost of lost commissions. The absolute worst thing for a salesperson is for hours of negotiations to occur and for you to simply walk away. Thus, the other side may simply cave as well sensing lost commission.

There are a few practical things you can do to avoid having deal fatigue work against you.

  1. Never negotiate hungry. Big ticket item negotiations, for cars and houses, can literally take hours. Let your head do the thinking not your stomach.
  2. Create an artificial deadline. Indicate that you have an appointment to keep at the beginning of a negotiation and, if you can’t close the deal before the appointment, you will have to leave. Remember good salespeople want two answers: “yes” or “no.” The two worst answers are “maybe” or “let’s talk tomorrow.” The key to this one is to stick to the deadline AND walk away or they know you are bluffing.
  3. Tag team the salesperson. Bring someone else along and take turns on issues. You tend to keep fresh and you have a perfect good cop, bad cop set-up.
  4. Ask for a life-line. Like the show “Who wants to be a millionaire?” have someone who you can call to give you objective advice in the heat of negotiations (it is also a covenient way to take a break).
  5. Simply walk away. It is not a perfect home or the perfect car or the perfect gadget until it is yours. The worst thing in the world is actually not getting what you want but getting what you want- and paying too much for it.
Jun 30

Effective negotiating strategies: give some to get some

Men’s Health has an excellent article on negotiating the best deal for a wide variety of goods. One of the broader lessons in the article is that good negotiation requires both sides to feel some pain whether its buying food in bulk with a short shelf life or spending 45 minutes chatting up a salesperson to get a discount on luggage.

Yet, when Four Pillars writes about negotiations, the comments to the posts often take a tone of a zero sum game: negotiations are only won if you have the other side completely defeated, ethics and context be damned. I find in most contexts this is a limiting strategy for several reasons.

Good things don’t come cheap

Certainly, in an one-off transaction or in industries where ethics are rather loose (see buying a new car), going into negotiations with your guard up is recommended but, as a white-haired lawyer once said to me when I began practicing the law, “a good deal is a deal where both sides are unhappy.”

In other words, every good thing in life comes with a price. If you really place a value on something but you have finite resources, you are willing to give up a little more than you want but, given you have finite resources, the seller probably thinks you are giving her less than she wants for it. Something that is of intrinsic of value to you means you may end up paying a little more than you want for it. If you live in your dream home, you probably know what I mean.

Clearly, my analysis has no application where the subject of negotiations is some commodity. But where the negotiations are for something more personal  it is important to distinguish between paying for value and being cheap. As Buffet once said about investing: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Take the long-term perspective

An often voiced complaint about the legal industry is that the lawyers seem so chummy with one another.  At the end of the day, and to be blunt, clients come and go but the legal bar is community based and small so you have to maintain your reputation for being a good advocate without engaging in all those “dirty lawyer tricks” you see on television.

Some lawyers do certainly engage in a win at all cost mentality but they get such bad reputations that their clients are being done a disservice by retaining them. The other side has its back up so much that they tend not to yield an inch on anything whereas more reasonable lawyers may be granted indulgences from the other side (see below for an example). If you are reasonable, it helps you in the long run.

For example, I was once involved in a file that went into the silly season. But I actually ended up being referred files from opposing counsel subsequently since he thought I managed to maintain some reasonableness and practicality through the entire back and forth.

Payback- its a bitch

An unreasonable lawyer once scheduled a motion during opposing counsel’s parental leave and refused to change dates. The lawyer on leave attended. Stored it in memory banks. Waited 5 years and got the lawyer back. Poor client got rail-roaded that had nothing to do with him.

Bears Stearns was the only major investment bank that did not participate in the Long Term Capital Managment bail out in 1998 in which everyone lost money. When Bear Stearns began to implode in 2007, no one lifted a finger to help it initially. Some  conspiracy theorist believe the stock was universally shorted- its ultimate downfall- as the street’s delayed payback (no one quite knowing what this would start).

The morale of the story being it is a small world and people end up being in weird places at weird times. Just be careful that your scorched earth negotiating tactics doesn’t end up costing you down the road.



Apr 02

Effective negotiating strategies: are you being used in a bidding war?

I recently had this happen to me. I got the distinct feeling that I was negotiating with someone who he had no intention of actually of selling something to me. They were negotiating to provoke a bidding war. I cannot substantiate why I felt this way and I could be completely wrong. The only thing that tipped me off was that the seller said they had been talking to someone to buy the computer servers for a long time and they wanted to speak to me “out of fairness.”

This occurred frequently during the real estate bubble. The real estate agent would say there’s some other couple who wants the house badly and you better make a bid quickly. Of course, you really did not know whether that other couple actually existed.

For some reason, my experience has been that the people who try to engage you in a phony bidding war talk a lot more than they have to. I remember once negotiating to buy land for a client and the vendor talked so much that he changed his story 3 times in 10 minutes: first it was a school going in next door, then the university expanding then it was a day-care. The school/campus/day-care were all reasons why he had an offer of $X in hand already and why we had to up our offer.

I told him that if he had an offer for $X then he should take it since he clearly got a good deal. I checked a month later and the property was still listed.

A good negotiator can really fool you and subtly convey to you that there is another offer on the table, triggering on some emotional level the need to counter-offer. I have been on the losing end of those a few times in my life. The bad negotiators talk too much about their offer. A litigator friend of mine, a great observer of the human condition, once pointed out to me if someone says something about their offer or themselves unprovoked (“I have a great offer from another person” or “people say I am very honest”), it is probably not true- you are trying too hard to prove or disprove something that was not brought up-why?

On a more practical level, one should plan a walk-away point and stick to it- or bring an enforcer to help you stick to it. In my case, I bring my brother for major purchases- he’s detached, good with numbers and tell me to shut up (the enforcer part). Typically, buyer’s remorse occurs when you budget to buy a new home is $350,000 but you end up paying $375,000 for it because you broke your own walk-away point. In the end,  all good negotiating strategies come down to preparation, self control and not negotiating emotionally. This is probably why good negotiators are also great poker players.

Nov 12

Effective negotiating strategies: never throw out the first number

I use to be in a fantasy basketball people. One of the other fantasy owners was the son of a lawyer and was destined to be a lawyer (and he actually did become one during my 5 year stint in the pool). He never ever made the first trade offer. He would always start with “I am interested in [insert player here] on your team. Why don’t you make me an offer?” or “I hate [insert player] on my team. If you want him, make me an offer.”

It was a very clever tactic on his part because he was letting the other fantasy owners set a valuation for a player which allowed him to counter-offer. If your opening offer was too high, you just set the floor too high for yourself. If it was too lower, he could withdraw without ever showing what he thought a player was worth.

In essence, he was following a rule that all good negotiators adhere to- never throw out the first number. Whoever throws out the first number always sets a valuation and basis of negotiations and allows the person to counter-offer based on that. If you have negotiated against yourself and gave a too high/low number, it just may be taken.

In non-fantasy pool life, think about how this works. Most car dealerships teach their salespeople to ask customers “how much do you want to spend?” The trick in the automotive sector is to tailor monthly payments to how much you say you want to pay even if the loan ends up being unusually long and detrimental to the customer. But, in the heat of the battle, the customer thinks they got a good deal since the salesperson got them a car at the price they told them to.

Or, to turn the tables, I have seen this done a lot to salespeople in the business world. The salesperson gives a quote and a shrewd potential customer says: “Well, I got a quote for lower than that. Can you do better?” The key is to not tell the salesperson how much lower the quote is (if you got another quote at all- you sly bluffer). What a lot of inexperienced/bad/desperate salespeople will do is to undercut their price without even asking you how much lower the other quotes where.

The other example you see is a lawyer saying: “well, that offer is utterly insulting to my client”… and then not make an counter-offer. They want you to negotiate against yourself and lower your offer without them doing anything.

Now, if you meet a shrewd negotiator, you end up in this strange dance where no one wants to throw out the first number. Then you basically become Job and become super-patient and outwait them or you know you are against a good negotiator and walk away. If you have to make an offer, make sure you do your research carefully.

Sep 24

Effective negotiations techniques: don’t make it personal

In today’s post on negotiations, I wanted to address something patently obvious. Don’t make negotiations personal. In some cases, like child-custody or separations, the nature of the negotiations are very personal. But, in most business negotiations, it is not about you. Its about the deal. So don’t turn it personal.

Some people are personally upset if negotiations did not turn out as planned. That is just part and parcel of negotiations- not every deal has to get done (a post for another time) and they are not rejecting you. They are rejecting the terms and conditions you have put forth. Everyone has different expectations and, more often than not, things don’t work out because of expectations of the person on the other side of the table and not you per se.

How do you turn negotiations personal? Watch for phrases that begin with:

“you said….”

“My problem with your position is…” (positions also implies posturing)

“How do you expect me…”

You, you, you….pointing fingers at someone; you turn the interest of parties into a personal power struggle. Instead try:

“the proposal does not work because…”

how about trying things this way…’

This doesn’t work because…”

Remove the words “you” and make it neutral and things don’t sound so blunt. Even if you think someone else’s position is crazy, its the position and not them and you end up removing the personalities from the discussions as much as possible (let’s face it, all negotiations have some degree of emotions in it, the key is to remove as much of it as possible).

Good luck.

Aug 26

Effective Negotiation Tactics: Staying away from the absolutes

I have created a new category called “negotiations” and added all my previous posts on negotiations into them. I hope you enjoy this once in a while series. Today’s negotiation tip comes courtesy of our friends at Last Minute Training who suggested that one of the cardinal sins of negotiating is to take absolute positions or make definitive pronouncements.

When I was a junior lawyer, I was taught many things about communicating by some great mentors. One of the key fundamentals I was taught was that any statement made or written should not be definitive unless it is an undisputed fact by the other side. Try to put escape routes in your communications and generally make things as broad as possible (the other side’s mission is to make you as “narrow” as possible in your position; hence  trial lawyers are taught to phrase questions that only have yes or no answers). For example, if you read this blog frequently, you will notice I like writing using the words “generally” or “i understand” or “subject to” or “assuming…” Generalities have exceptions. Understandings can change. Subject to means a set of conditions must apply before a statement is true. Assumptions shift.

All of these phrases couch a particular statement to some exception (fundamentally, legal drafting is based on a rule, an exception to the rule and an exception to the exception). Non-lawyers call them “weasel words” for a reason. They allow you to get out of positions since the position itself has a built in escape hatches. It is probably 1 of 9,862 things that drive people crazy about lawyers (and why lawyers marry other lawyers- its fun to win arguments but not so good for personal relationships).

The opposite are the absolute statements: “Daddy is always right,” “This is the best used car ever,” “you can get great returns with no risk,” “this is the cheapest Blue-Ray machine in the city.” They paint you into a corner and if that absolute is proven to be wrong, several things can happen:

  1. You look like a fool and your creditability just went down several notches;
  2. You immediately become on the defensive about your absolute statement (“…did I say no risk? Well, there’s risk in every investment isn’t there…”) which means you are not negotiating from a position of strength; or
  3. You spend an inordinate amount of time trying to prove your absolute statement was right instead of negotiating the real point.

I was once told that there are three absolutes in life: taxes, death and change. Everything else is a varying shade of gray so why be absolute when so little in life is not?