15 Rules of Negotiation

Negotiation is a process that can be learned.
By following the 15 rules outlined here--and practicing, practicing, practicing--you can perfect your skills at negotiating deals in which everyone wins. 1. Remember, everything is negotiable. Don’t narrow a negotiation down to just one issue. Develop as many issues or negotiable deal points as you can and then juggle in additional deal points if you and the other party lock onto one issue.

2. Crystallize your vision of the outcome. The counterpart who can visualize the end result will most likely be the one who guides the negotiation.

3. Prepare in advance. Information is power. Obtain as much information as possible beforehand to make sure you understand the value of what you are negotiating. Remember, very few negotiations begin when the counterparts arrive at the table.

4. Ask questions. Clarify information you do not understand. Determine both the implicit and explicit needs of your counterpart.

5. Listen. When you do a good job listening, you not only gain new ideas for creating win/win outcomes but also make your counterpart feel cared for and valued. This also allows you to find out what the other party wants. If you assume that his or her wants and needs are the same as yours, you will have the attitude that only one of you can “win” the negotiation.

6. Set a goal for each deal point. Define your minimum level of acceptance for each goal. If you aren’t clear on your goals, you will end up reacting to the propositions of your counterpart.

7. Aim your aspirations high. Your aspirations will likely be the single most important factor in determining the outcome of the negotiation. You can aim high just as easily as you can aim low.

8. Develop options and strategies. Successful people are those who have the greatest number of viable alternatives. Similarly, successful negotiators are those who have the most strategies they can use to turn their options into reality.

9. Think like a dolphin. The dolphin is the only mammal who can swim in a sea of sharks or in a sea of carp. Dolphins are able to adapt their strategies and behaviors to their counterparts. Remember, even when negotiating with a shark, you have an option-you can walk away!

10. Be honest and fair. In life, what goes around comes around. The goal in creating win/win outcomes is to have both counterparts feel that their needs and goals have been met, so that they will be willing to come back to the table and negotiate again. An atmosphere of trust reduces the time required to create win/win outcomes.

If that’s not possible. Misunderstanding Power: Thinking one person has all the power. Be cooperative and friendly. Accepting Statements: Assuming what the other person says is wholly true. win-lose scenario. 14. The Walk-away Trap: Becoming too fond of your walk-away option. both the other person's mind and your own. if you don’t have to fight a little for what you want. Chances are. One Solution: Thinking there is only one possible solution. I blame all the twofaced businessmen who made their way onto the nightly news for . Concede slowly. Over-Wanting: Wanting something too much. in real-time. Use the power of competition. at least create the appearance of strength. Hurrying: Negotiating in haste (and repenting at leisure). Giving in too easily tells the other party that you will probably be open to accepting even more concessions. Misunderstanding Authority: Assuming that authority and power are synonymous. the other party will make an offer that he or she thinks you will refuse just to see how firm you are on key issues. Cooperate corruption in the media seemed to explode like the waters breaking from a dam. Negotiation Ethics I was in business school right around the same time the Enron scandal broke out. Never accept the first offer. he or she is less likely to ask you to. Negotiation Mistakes Disciplines > Negotiation > Mistakes Negotiation is a difficult art as it requires managing. 12. Cornering Them: Giving them no alternative but to fight. 13. Someone who thinks it’s necessary to compete for your business may be willing to give away more than he or she originally intended. Avoid being abrasive or combative. and call a concession a concession. Sometimes just the threat of competition is enough to encourage concessions. Hurting the Relationship: Getting what you want but making an enemy. Missing Strengths: Not realizing the strengths that you actually have. which often breaks down negotiations. Often. you won’t get the best deal. 15. Deal from strength if you can. Talking Too Much: Not gaining the power of information from others. Here are a number of mistakes that negotiators can make (and what you can do about them). Thinking in Absolutes: Assuming that there are only a few possibilities. Squeezing Too Much: Trying to gain every last advantage. Win-Lose: Assuming a fixed-pie. Issue Fixation: Getting stuck on one issue and missing greater possibilities.                 Accepting Positions: Assuming the other person won't change their position. Find out what the other party wants.11. If the other party thinks you have no reason to compromise in your demands.

The line between right and wrong can often be hard to find when the pressures on and the stakes are high. When you really think about it.the reason why ethics was so purposefully beaten into us at school. but this innate moral compass is universal in all of humanity. The act of taking through the decision making process in itself can often revel the answers you seek. your moral compass should point true. If you ignore these unspoken rules. 2004 Author: Deepak Malhotra    E-Mail Print Share Executive Summary: All negotiations involve risk. the rules of the game change. When negotiating with a stranger. take this time for a detour to explore your next step. Take into consideration what was previously discussed. like so many scandalous CEO’s. you could end up loosing a lot more than the negotiation. it is expected that you may use more harsh tactics to get what you want. How should you go about walking this tightrope of ethical negotiation? Read the following guidelines on negotiation ethics for a start: Interests of Others When faced with an ethical dilemma in a negotiation situation the first question you should ask yourself is. If you are able. “Who and how will my actions affect?” If using questionable tactics in negotiation will have a negative impact on one or more parties. If you are still unsure about what road to take. . Ethics Gap An ethical gap is the point at which you question what is right and wrong. After all. when you encounter a situation that is not black and white. ethics should be a disciple that deserves our attention. in us is another story… Six Ways to Build Trust in Negotiations Published: April 5. or the devil. One area of particular ethical concern is in negotiation. open up and be honest with whom you are negotiating. Relationship Value If you have an established trust with the other side of the negotiation table. Whether or not we choose to listen to the angel. the interest of others and relationship value. consult an associate that you trust and get their thoughts on the matter. if you are in a position of supreme power. such as when buying a car. Share your dilemma and work together to find a resolution. That’s why establishing trust at the bargaining table is crucial. especially for those of the business world. Your Moral Compass When all else fails. FromNegotiation. Everyone has variations of what they consider to be ethical. you should respect that trust and be clear about your intentions from the get-go. listen to you inner conscious. I will restate what I mentioned above. It is oaky to take a break during a negotiation if you need time to clear your head to find a better solution. like a friend or family member. If on the other hand you are negotiating with someone whose relationship you value. Professor Deepak Malhotrapresents strategies to build trustworthiness. a time-out during the negotiation can bring light to the situation. Sometimes candor can be the best way to create win-win solutions.

she was taking a class in negotiation and mediation. Organizations and Markets unit at Harvard Business School. but in the heat of conflict this became a secondary concern. who was also the VP of the division that had lost the account. and Kristen saved her firm more than $25 million in annual revenues.   More Working Knowledge from Deepak Malhotra Deepak Malhotra . one of its clients. she took several critical steps:  She became an expert on Impress and its needs. Kristen worked in a division of RLX that had few dealings with Impress. After a number of meetings and a lot of negotiation. to speak with the partner at Impress about her own positive experiences with RLX. RLX had nothing to lose by letting her try. to ask if she could try to win it back. The VP eventually agreed to put her in touch with the Impress representative. and a manager at Impress. had escalated into a conflict charged with growing mistrust. she had to win back their trust—and fast.Faculty Research What began as a misunderstanding about specifications and deadlines between a manager at RLX. who knew people at Impress. but she nevertheless approached her manager.  She arranged to offer Impress a few perks in a new contract as a show of good faith. Impress announced that it would be taking its business elsewhere. Both RLX and Impress had money to lose if the partnership ended. So before the first meeting took place.About Faculty in this Article: Deepak Malhotra is a professor in the Negotiation. Impress agreed to re-sign with RLX. After all. . and she had her own reasons for taking on this formidable task—as part of her work toward an MBA. This included talking to the RLX manager who had handled the account to find out the concerns Impress had had before the conflict escalated. Just two weeks after the first flare-up. a software development firm.  She asked the president of another RLX client. How did Kristen pull it off? She realized that to win back the account. and "negotiate something in the real world" was her current assignment. she argued.

This principle goes beyond understanding technical terms and lingo. stared at the group from firm X in amazement. as when you're negotiating with strangers. At the kickoff meeting with prospective consultants. Almost everyone in the room. coping with differences in power and status. you send the message that you're committed to the negotiation and the relationship—an integral step in trust building. culture. and the company was suddenly out of the running. the first step to inspiring trust is to demonstrate trustworthiness. but there's always a risk that the other side will refuse to budge. or hammering out unenforceable contracts. noticed that everyone was throwing around the word lifts. Representatives from consulting firm X. After the presentation. exploit the information to their own advantage. or even worse. It also means catching the nuances and cultural implications behind what's being said. It's important for negotiators to speak one another's language. For this reason. an airline that was seeking to go high-tech with its ticketing process invited a number of consulting firms to bid on the project. One party might want to make a concession or share sensitive information in the hope of inspiring disclosures and compromises in return. the airline's executives described the limitations of their current system and gave an overview of their needs and expectations. Trust is particularly elusive in high-stress. but negotiators rarely have the luxury of letting nature take its course. By taking the time to understand the other party's history. Trust may develop naturally over time. high-stakes conditions. This fluency also signals your readiness to follow through on your negotiated settlement. Negotiators usually say that they're prepared to bargain in good faith. and little information sharing between parties. fostering trust on the fly is a critical skill for managers. including the airline execs they were trying to impress. facing deadlines. high-stakes conditions. One innocent question. Thus it sometimes seems easiest to play it safe with cautious deals involving few tradeoffs. and perspective. who had never worked for an airline before. How could they not know that airlines' paper tickets were called lifts? By failing to understand this industry-specific term. establishing trust is critical to achieving success in any negotiation. they nominated one of their members to raise his hand and ask for a definition. As Kristen knew. yet talks sometimes collapse because each side lacks trust in the other's competence and good intentions. All negotiators can apply the six strategies that follow to influence others' perceptions of their trustworthiness at the bargaining table. and noticing how the other side uses words to convey ideas. Feeling lost. a dialogue opened up between the executives and the prospective bidders.While the RLX-Impress negotiation was particularly tricky to get off the ground. Speak their language Some years ago. few concessions. firm X had committed a major gaffe. 1. But avoiding risk can mean missing out on significant opportunities. Trust is particularly elusive in high-stress. because all negotiations involve some level of risk. .

You can also offer other forms of evidence of past success in similar relationships. but that you recognize—and hope that they do. with both parties carefully measuring what they're gaining with each concession made by the other side.And if you happen to make a gaffe. This phenomenon plays out to the extreme in the Stockholm syndrome. when both parties believe that they need each other to achieve their individual goals and that other options are limited. in which hostages become so psychologically dependent on their captors that they will trust their captors' statements and demands more than those of the officials who are attempting to negotiate their release. some early preparation—before the negotiation even gets under way— can lessen its impact. Make unilateral concessions Negotiations with strangers and enemies tend to be calculative. a third party could communicate with the other side prior to the negotiation—as in the RLX example—or even serve as an intermediary during it. for it conveys to the other party that you consider the relationship to be a friendly one. By contrast. needs. A bad reputation can be a deal killer from the start. with the potential for mutual gain and trust over time. too—that a lot of learning will take place as the negotiation moves forward and the relationship builds. a negotiator who senses he has no other recourse may come to trust even his "enemy. Effective negotiators realize that their reputation is not just a backdrop. both sides will see it as a natural part of the learning process and redouble efforts to reach an understanding of the other's point of view. We tend to cope with the psychological discomfort associated with dependence by believing in the trustworthiness of those upon whom we depend. If appropriate. In such situations. 2." 4. but a tool. In negotiation. How can you make your reputation a factor in negotiation? You might provide references from mutually trusted third parties that vouch for your character and competence. your reputation precedes you. Manage your reputation In negotiation. As a negotiator. Make dependence a factor The more dependent you are on someone. the more willing you'll be to trust her. A carefully crafted unilateral concession can work wonders for trust. you can trigger this trust-building process by highlighting the unique benefits you can provide and by emphasizing the damage that might result from an impasse. trust between parties will increase. Express the hope that when a mistake or misunderstanding occurs. such as media or trade reports. negotiations based on long-term relationships are usually less focused on tallying up wins and losses. State at the outset of talks that you have worked to understand the other party's perspective. and interests. 3. while a great one can help transcend an impasse. . as some inevitably will. as in all aspects of life. This technique can be particularly useful when a stalemate looms large and alternatives to agreement appear painful or costly.

When you've made a significant concession. but be of high benefit to the recipient. Richard E. be sure to communicate exactly how much you've given away and what the sacrifice means to you. He opened with an extremely generous offer—a wage that was almost certainly higher than what the union would have reasonably expected even after another week of bargaining. protracted contract negotiations with his employees' union. Parties are often motivated to discount and devalue each other's concessions and contributions. carefully crafted unilateral concessions also demonstrate your competence by portraying you as someone who understands what the other side values. many concessions go unnoticed or unacknowledged. Such concessions must come at little cost or risk to the provider. Explain your demands Unfortunately. resentment. In addition to establishing trust.A true unilateral concession requires no commitment or concession from the other side. he might think that you're greedy. After a string of long. . McKersie recount such a scenario. This difference in perspective between the manufacturer's and the union's negotiating styles resulted in a strike. unilateral or otherwise. are only influential in building trust or encouraging reciprocity if the receiver views them as concessions." The manufacturer was shocked by his opponent's caution. but a tool. 5. In reality. Effective negotiators realize that theirreputation is not just a backdrop. In negotiation. and increase the level of mutual trust. presumably reasoned that if the opening offer was this good. there's no reason to let actions speak for themselves. Label your concessions Actions may speak louder than words. If you hold out for a better offer. Concessions. or budget constraints might be forcing you to stand firm. But instead of seeming delighted. By doing so. because doing so relieves them of the obligation to reciprocate. He decided to start off the next round of talks with a take-itor-leave-it offer and then refuse to haggle. you can expect that he will assume the worst about your motives and intentions. Walton and Robert B. of course. when you start a negotiation with someone new. A Behavioral Theory of Labor Negotiations (ILR Press). but actions in negotiation are often ambiguous. another week of haggling would bring huge payoffs. or an escalation of hardball tactics and unaccommodating behavior by the slighted party. it could be that you're representing a constituency that will not accept the deal on the table. you'll not only affect the other party's perceptions of your goodwill but trigger your partner's desire to reciprocate. In their 1991 book. But should he have been? The union. As a result. expecting another drawn-out battle. This may lead to confusion. a manufacturer was fed up. that you like to see him suffer. or that you're simply unfair. the union's chief negotiator responded: "We'd like to caucus to consider your offer.

as these strategies suggest. The higher international rate sounds arbitrary. it smoothes his ruffled feathers and makes him like the agent—and trust her—even more. Maximizing joint gain Believing that the other party is competent and has character allows negotiators to take the risks that are necessary to achieve negotiated outcomes. Fortunately. But the agent goes on to explain that she charges a higher commission for an international deal because she has to split her percentage with the agent in the foreign country. At first.Psychologists have found that people tend to view themselves in the best possible light and others in a much less positive light—especially those with whom they're in conflict. and to implement agreements in ever-changing social. security. if viewed by the other side as extreme. or peace depend upon the motives and actions of another party. Her net commission is actually lower for international deals than for domestic ones. An opening offer. can diminish and even destroy trust. Though this explanation has no effect on the writer's bottom line. . the author is annoyed. For this reason. it's especially important that you make a strong case for your moves in a negotiation and provide the other party with explanations of your demands. and political environments. When profit. The agent mentions that her commission is higher for profits received in international deals than in domestic ones. negotiators can build the trust that's necessary for a negotiation to yield maximum joint gain. trust becomes essential. An offer that is explained and justified will probably preserve trust. and may enhance it. economic. just a sneaky way to squeeze more money out of him. Consider the case of an author negotiating with a literary agent over the right to sell his book.

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