The Negotiation Guru

“Mistakes are the portals of discovery.” - James Joyce

Mistakes are common in any negotiation. Learning to identify mistakes and avoiding these mistakes in your future negotiation will dramatically improve the success of your negotiation. If something did not work out as intended in your negotiation, there are still many ways of managing your negotiation to make it a success.

Here are 10 mistakes which you should avoid in your negotiations:

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“How do you know you have failed in a negotiation? When the person sitting opposite you is celebrating.” - Jens Thang

Being successful in negotiations often requires much strategic thinking and planning ahead. Negotiation is a process which requires all parties involved to reach a consensus in situations where there may be potential conflict and disagreement.

The 10 commandments of negotiations here apply to every negotiator, deal maker, mediator, lawyer or simply anyone who’s trying to negotiate something. To be real successful in negotiations, you need to invest and reinvest time to prepare ahead and adopt skills to help you improvise on the spot.

Here are the 10 commandments of negotiations:

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“You can stand tall without standing on someone. You can be a victor without having victims.”
- Harriet Woods

The best way to win and win BIG at a negotiation? Get to a win-win situation.

The main objective of a win-win negotiation is to be able to help the other party get what they want. Here, I am not advocating that you should sacrifice to help them get what they want. Find a solution that is best for both parties. Make them leave the negotiating table feeling that they have won.

The term “win-win” has been abused many times over. You can even negotiate on what a “win-win” solution is. Ideally, you want the other party to feel that it’s a win-win solution as well. It has to be mutual. If you are alone in believing that it’s an ideal win-win situation, you can’t be further from the truth.

So, how can we arrive at a true win-win situation?

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“I don’t even call it violence when it’s in self defense; I call it intelligence.”
- Malcolm X

Experienced negotiators know hundreds of tactics and strategies. However, when under pressure they will instinctly do whatever that works. In a real world negotiation situation, unethical tactics are very common. These tactics come in all direction and you won’t have time to think.

The skilled negotiator is able to deal with unethical tactics quickly with high level of control. With dedication and consistency, we can slowly learn how to deal with unethical tactics.

Here are 5 ways to deal with unethical tactics:

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Here’s the story:

There is a blind man and a lame man. They often compete against each other to see who’s better in what. One day, their deaf friend got so sick of their competition and came up with an idea.

“Let me be the judge. Whoever gets to my place first, will be the winner.”

The blind man and lame man were both set to win this competition. However, the deaf man stays 10 miles away from them. For many weeks, they brainstormed on how to get to their deaf friend. The blind man won’t be able to see the road and the lame man won’t be able to walk.

A brilliant idea struck them!

The lame man will get on the shoulders of the blind man. They collaborated! The blind man will be the lame man’s legs. And the lame man will be the blind man’s eyes. How wonderful! They were so happy and they got on their way.

As you are able to guess, both are winners. Win-Win!

Collaboration is indeed more powerful than competition.

What are the reasons to collaborate?

1) Improve relationships

It is really hard (near impossible) to main positive feelings about anyone who is trying to make you lose. Arguments and negotiation impasse are often the results from competition mindset.

By collaborating, the challenge and success are shared. At the end, its the relationship that really counts.

2) Sharing of expertise

If we often compete to win in a negotiation, we will overlook many aspects of collaboration. On such aspect is the sharing of expertise. Everyone is interdependent. In business, you depend on your partner. In your family, you depend on your family members. In work place, you depend on your colleagues.

Competition makes it real hard to share our resources, skills and experiences. We are so involved in our own exclusive goal.

In a negotiation, every person’s role is important. So why not collaborate?

3) Well-being

Negotiations are highly stressful. Many things are at stakes. The fear of failure is the reason for this anxiety and agitation. It causes tension, embarrassment and even hostility.

Good collaborations happens when there’s a good relationship. A relationship that is non-judgmental and non-threatening.

This in turn creates an environment that is healthy for both parties.

REMEMBER: Always collaborate to win.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Successful negotiation comes from avoiding some of the common traps.

Here are 4 common traps and how you can avoid them to help you be more successful in your negotiation:

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Hi John,

I agree that sometimes we do find that we have difficulty getting people to negotiate. They just seems to be disinterested in negotiating and have previously refused to negotiate. Things can get quite complex if not handled properly.

You must be thinking, “How do I negotiate with her if I cannot even get her to talk about the issue?”

How do you get people to negotiate?

First, look at the reasons why that person does not wish to negotiate.

Investigate from all areas and all perspectives:

Does she feel there is no need to negotiate?
Is she offended by something?
Is she concerned about some issue?
Maybe she is not ready to negotiate?
Could it be because she dislikes negotiation?

After you have tried to find out the cause for her refusal to negotiate, you can then truly understand from her point of view. Some people just dislikes negotiation. If this is so, maybe use another term to replace negotiation.

“Let’s discuss this issue.”
“We need to talk about this.”
“I am concerned that we are not progressing.”
“Is there something that you like to talk about with regards to this issue?”
“When is a good time for us to discuss this?”

There are other ways to get her to negotiate with you.

1) Find someone close as your ally

Get that person to talk to her. She could be refusing to talk to you because of the kind of relationship she has with you. She could be uncomfortable negotiating with you alone. Get someone who is close to her or at least someone neutral to talk to her .

2) Lure them in with opportunities

Make it really tempting for them to come to the negotiating table.

“Hey, I found a good solution to this problem!”
“If we can discuss this, we will be able to better our relationship!”

Create more irresistible offers to entice her.

3) Arrange the situation such that she has more to lose if she drags on

Some negotiation experts use the phrase: take away their BATNA.

“This issue at hand is frustrating me, I am not sure if I am willing to wait to resolve this.” (beware of the credibility issue of a threat)
“If you are not going to talk about this, I will move forward with my decision.”

Taking away her BATNA does not necessary means threatening or blackmailing. It is more credible if you are able to do something to change the situation and not just SAY something.

4) Wait, wait and wait

If all else fails, and there is nothing much you can do, you just have to wait.

Maybe she feels that it is not the right time to negotiate yet.
Maybe she has some issues at hand.
Maybe she needs more time.
Maybe she does not think negotiation is necessary.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

It’s so hard to find people who are willing to admit their mistakes. What happened to taking ownership of your own mistakes?

It appears to me that many organizations are training their customer-service staff not to admit mistakes. The logic is probably that admitting mistakes means taking responsibility for the wrong-doing.

For many reasons, many people find admitting their mistakes difficult (especially during a negotiation). This is probably due to the cultural assumptions that we have when we make a mistake. Mistakes and failures bring about shame to oneself. We have been taught since young that we ought to feel guilty about failure and should do everything we can to avoid failing.

Think of the times you failed to do accomplish something when you were young. How did your parents react to you? What did your peers say about you? How did you feel about your failure?

This strong combination of shame and unavoidable setbacks while attempting a challenge drives people to give up their goals. They are not prepared for the mistakes they will make on their way to success.

How does this apply to negotiation?

Admitting a mistake you have made during a negotiation is not a sign of weakness. On the contrary, its a sign of strength. It reflects greatly on you. The other party will see you more as a human when you acknowledge your own faults.

When you do acknowledge your own fault, you demonstrate courage. More importantly, you portray yourself as someone with integrity. Maintaining integrity is essential to becoming a good negotiator.

Master negotiators admit their mistakes easily. They understand that by admitting their mistakes, they will enhance the results of their negotiation. By doing so, they also accelerate the progress of the negotiation instead of finding ways to cover up their mistakes. This is a win-win situation.

“Always acknowledge a fault. This will throw those in authority off their guard and give you an opportunity to commit more.” - Mark Twain

Remember: Learn to acknowledge a fault during negotiation.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

In my previous post, I have described to you the Socratic Method to question and influence the other party. Let me use an example to illustrate to you:

Suppose you had to negotiate with your colleague about the expansion strategy my company should be taking. Let just say he had supported expansion plan A. You would need to first decide on a strategy and try to get him to agree to my proposal. This would require him to admit that his proposal was not feasible and had little chance of success. Definitely not an easy feat.

Opposing him and refusing his proposal directly will send a very strong signal to him. You should refrain from revealing your true intentions. Began by agreeing with him on his proposal and encouraged him to elaborate more. Like Socrates, start asking questions which seemingly skirted the main topic. This way, you could slowly catch them in their inconsistencies.

Assuming let’s just say that his main point was that his expansion plan would bring the company global, bringing in more clients from all over the world. It would result in fast expansion of the company. Get them committed to what they had said by rephrasing.

“So you are saying that going with the global expansion plan will bring in more clients for the company? Am I right on this?”

From there, start finding weaknesses in his claim.

“Do you know of any similar companies which had taken on such expansion plans before?”

“What are the costs for executing such a grand plan?”

“Do you know if other companies which expanded took this route we have on our table now?” (notice i use “we”, this sends a subtle signal to him that you agree with his plan and will help him open up to you.”

“Did this work for our company previously?”

“What are the concerns that we have to look into before we take on this plan?”

“Are there any pitfalls we should avoid?”

“How much do we have to invest and is the ROI worth it at this stage?”

“Will we bring in new problems?”

“What would happen if we execute this plan differently?”

“How would you have ensured the success of this plan?”

The final attack:
“Is it right to execute such a plan that has so much risks involved with no guarantee of success?”

What I am really trying to do is to find weak points in this proposal. Framing it in such a way that you would hope his plan to succeed as much as he did. Having so many weak points built up at the end of the discussion, adopting his proposal might not seem feasible anymore. Ultimately, you are bringing him from Point A to Point B to Point C.

We are not trying to trick another person into believing something else. You believed that his plan was flawed and you wanted him to communicate that to him. Hitting him face on would make him defensive and reactive. Using the Socratic Method would help open him up to possibilities that he might be wrong.

Remember: Ask questions that will navigate the other party towards a position you want him to be.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

The problem with many negotiators is that they do not direct their questions towards a certain purpose. The art of questioning has to be strategic. To be truly prepared, you need to put some thoughts and time into the type of questions you direct to the other party. Work out the questions with a strategic plan in mind.

Many negotiators believe that by proving inconsistency in the other party is strategic and tactical. They cannot be further from being strategic. When you show that you are trying to provoke them in your questions, you turn on the defensive mode of the other party. You put them on guard and that is not something you want to achieve during a negotiation. As the other party starts to get defensive and closes up to any form of conversation, the negotiation will go nowhere.

The true art is to make the other party open up to you. Lower their defense wall. And attack from a direction they did not anticipate.

Let me introduce the Socratic Method

This wonderful method requires you to understand both the viewpoint of the other party and HOW he came to that conclusion. By truly understanding the other party’s position, you will be able to identify the weak areas and start ripping them apart in a subtle way.

How do you apply the Socratic Method to negotiation?

First, begin by letting the other party express his interest and his decision. Ask him how he would like the negotiation to be resolved. Appear to agree with him at first and acknowledge whatever they are saying to be valid.

Start asking questions that presumably fringed on the main topic of the negotiation, but attacked the weak points into everything the other party has put out during the initial stage of the negotiation.

What you are trying to achieve, is not only to influence the other party to change his initial stand on the issue. But also make it appear to be his own idea.

With this, you truly convince.

You can still hold on to your initial viewpoint but the key is really to act like others. People do not like to believe that they are wrong. They always think that their decision is the best and they strongly believe in it. By proposing a challenge to their belief, you are attacking their ego. Again, you want them to tear down their own position and not build a wall around it.

With this Socratic Method, you will be able to question anyone’s fundamental beliefs in any topic. And of course, essential in negotiations.

Think about how you would apply the Socratic Method for your next negotiation. Email me your thoughts and results. We will evaluate them together.

Remember: Never challenge the other party’s position and viewpoint. Apply the Socratic Method to tear him down.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Listening is the best skill you can learn to do better in negotiations. It is the best way to learn more about the other party. It’s not surprising that there are many people with poor listening skills. Everyone wants others to listen to them. This validates their self-worth.

Learning more about the other party you are negotiating with will drastically improve the results of your negotiations.

How to listen?

1) Question

There’s a huge difference between hearing and listening. For the latter, you have TO BE THERE. You must take a more proactive stance to listening. Throw questions. After you have asked a question, listen. Don’t say another word. Give the other party more chances to speak. The more they talk, the more they will reveal information. In turn, the better your results.

“What are the reasons for requesting for this?”

“What is the best way to go about doing to this?”

“When do you think we should sign the deal?”

“How is it possible for us to come to an agreement?”

“What is holding you back?”

Listen to what the other party has to say and ask questions which will reveal more information.

2) Paraphrase

Paraphrasing is to check your understanding. It means that you express what you understand from the conversation using your own words. When you paraphrased, you let the other party know that you are listening. If you show that you have taken in whatever she has said, you will be more successful in gaining her trust. This also increase the chances of her listening to what you have to say.

“Just to make sure I get you right on this…”

“If i’m not wrong, you are trying to say that…”

“Correct me if i’m wrong…”

3) Acknowledge

To acknowledge means to express your understanding of the other party’s emotion. Negotiation can be an emotional affair. When someone negotiates, she is constantly looking out for validation. In her mind, she might be thinking, “Is my opening okay?” “Do they think that my concern is trivial?” “Do they think that I’m hard to deal with?” “Do they think that I’m demanding?”

To move on in a negotiation, we have to validate the other party’s emotions.

“Sounds like you are very concerned with the delivery…”

“It occurred to me that you are unhappy with the terms…”

“I can understand why you are not happy with this condition…”

“I can see the reason you should be upset..”

“I am hearing what you say, you are disappointed because…”

Remember: 3 steps to listen for more information: Question, Paraphrase, Acknowledge

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Tim Ferris wrote a blog entry on negotiations. He quoted a portion from filmmaker, Bob Compton. This is an interesting observation of how negotiations are being conducted in India.

This is not to say that every Indian negotiates like this.

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In India, every transaction — EVERY transaction — is negotiated. Merchandise, cab fare, restaurant bills, wedding doweries — the list is endless.As our guide Vishnu explained, “In India, we bargain to the level of the individual vegetable purchase.”

While awkward and uncomfortable to most Americans, that level of negotiating can be quite valuable.Hotmail founder Sabeer Bhatia, a CA transplant from Bangalore, credited the bargaining skills he learned in vegetable markets at home for getting Microsoft to push its acquisition price for his company from $160 million to $400 million. Bill Gates’ eye teeth were floating in tea with that deal.

Here are a few rules for bargaining on the buy-side when in India:

Rule #1 - The true price of any item is what you pay — There are no suggested retail prices in India. Nothing is labeled, so it pays to talk with several vendors before making a significant purchase.

Rule # 2 - Try for 70% off — Don’t accept less than 30%

Rule # 3 - Make them show lots of merchandise — If it is a rug merchant, you want the demo guys sweating profusely before you make your first offer. Get the vendor to “invest” in the transaction — emotion, time and energy.

Rule # 4 - Offer on one item at a time – If you plan to buy a couple things DON’T let on at the outset. Act like you intend to buy only one item, if that much. Get the seller to give you prices on each item; play one item off another to show you are looking for the lower price point.

Rule # 5 - Wait for the pad of paper — Every Indian sales person has a pad of paper and a pencil that they pull out when the bargaining gets a bit more serious. Though they write down the price for an item, this is only the starting point - remember rule #2.

Rule # 6 - Say “TOO HIGH”, a lot – Don’t even start negotiating until the salesman has scratched through the initial price and lowered it at least twice. I found that simply staring in silence at the pad of paper for a long time would result in the vendor cutting the price.

Rule # 7 - Imply a bundled purchase — OK, now that the price has been cut 25-30%, ask the salesman what deal he would give you if you buy two items. Expect 5% off. Ask for three items; get another 5%. Then add a very expensive 4th item — one which you do not intend to buy. This will excite the vendor and he will do a bunch of calculations which you will be unable to follow. The price will come down for the expensive item as well as for the other items you intend to buy. Lock those prices and drop the expensive item.

At this point, you should have been able to shave close to 50% off the initial price. Most Americans generally are satisfied at this point and close the deal.

One final point - no matter what price you pay — if the sales guy is smiling when you leave — guess who won…

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Jens: Well, this is really a stereotype.

I am writing an article on the rules of Chinese negotiators. Feel free to email me your experience.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

This can cost you a lot of money if you fail to understand all the terms and conditions. Always make sure that all the terms are properly negotiated before the end of a negotiation. Do not take things for granted.

I recently learned how important it is to negotiate all the terms and have the terms documented. Do not rely on mutual trust.

The setup

I had to buy a car to travel to work and decided to buy it from a friend. Let’s call him Jerry. The car was not in a good condition but Jerry had to sell it off. Deciding to do Jerry a favor, I agreed to buy the car from him.

There were 2 rounds of negotiation for the car.

During the 1^st round, Jerry offered a price of X amt and he will pay for the transferal fee of title deed. As X amt was not justifiable due to the condition of the car, I decided to negotiate with him two weeks later.

For the 2^nd round, Jerry decided to drop the price a little. I was still a little hesitant. Many friends discouraged me from buying the car. Since I gave him my word earlier, I decided not to negotiate further.

On the day of the sale, he said to me “Jens, you are paying for the transferal fee.”

That took me by surprise. I was living under the impression that he was paying for the transferal fee.

His defense line was, “since it was not mentioned during the 2^nd round of negotiation, whatever that was negotiated during the 1^st round would not be valid.”

He was right. I was the one who made the mistake of not making sure the condition would still be valid after the price reduction. My assumption was wrong.

The transferal fee was equivalent to the reduction in price he gave in the 2^nd round. At the end of the day, I was paying the same amount.

This entire transaction was based on relationship and trust. I did not feel the need to document everything. That was my fatal mistake.

Point to note: No matter who you are negotiating with, always make sure every term is made clear and documented. This can save you much trouble and even the relationship. The person you are negotiating with might not treasure the relationship as much as you do. Never take things for granted.

Remember: Always negotiate every term and condition. Document all commitments.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Before you step into the negotiating room, you have to consider many things. One of the things that you should consider is “what other options do I have?” Answering this question will alter the way you negotiate with the other party.

All skilled negotiators know their objectives before they start negotiating. They also have a bottom-line ready in case they need to walk away from the deal.

Apart from having your objectives and bottom-line, you need to consider your alternatives.

“What will I lose if there’s no deal?”

“Is there a better option?”

“Do I have another offer?”

“Can I get this from another firm?”

Think through all the possible alternatives that you can have. There are usually more alternatives if you look hard enough. One of the common mistakes a negotiator make is to think that they have everything to lose if there’s no deal. This will change the way you negotiate. Be really careful of this.

Never be too focused on trying to close the deal.

Imagine you have to shop for a birthday present for your best friend. You decided to get him a red tie.

Now there are 2 scenarios:

1) There’s only 1 shop in this world which sells red ties

2) There are 10 shops in your neighborhood that sell red ties

The way you negotiate in the 2 different scenarios will be vastly different. If you think that there’s only 1 shop in this world that sells red ties, you probably haven’t looked hard enough. There’s probably another shop that sells red tie just round the corner.

Having alternatives will improve your leverage when you negotiate.

Remember: Always have alternatives before you start negotiating.————–

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Definitely! You can have too much power when it comes to negotiation. This happens when you know that the other party has much more to lose should there be no deal. So, can having too much power be a bad thing? Yes.

When people have too much power, they tend to be arrogant. Your arrogance will show in the way you negotiate. You want to make the other party feel that a good relationship is being built in the process of negotiation. You should not make her feel that she is being bullied into closing the deal with you. Let the other party leave the negotiating table feeling victorious.

The other party will appreciate that you do not abuse your power. In return, there might be a higher chance of her returning the favor to you. If you do follow the law of reciprocity, you will understand that it pays to be nice (sometimes!). Believe in Karma.

In a business negotiation, you want to aim for a healthy working relationship.

Having too much power can cause you to underestimate the other party. Power is a perception concept. How much power each other has, depends on how the other party perceive them to have.

You might think that the other party is weak and therefore underestimate his power. This can be dangerous. Never underestimate the party you are negotiating with. The power balance in negotiation is dynamic. It changes every single minute. I will discuss the dynamism in the negotiation process in my later posts.

Remember: Even when you have a lot of negotiating power, do not abuse it.

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Jens Thang
Unleash The Negotiation Guru In You!

Email: jens@thenegotiationguru.com