Saturday, March 17, 2012

Getting to Yes! Negotiating Like a Pro...

The book of the week was Getting to Yes by Roger Fisher and William Ury. This is a book all about negotiating, one of the most important skills any person can learn in a lifetime. You might think that negotiating is only for lawyers and business people, but everyone negotiates- every single day.

People negotiate about simple things on a daily basis. You negotiate who pays for lunch, what movie to get at Blockbuster, what route to take on a family trip and the list goes on. Then there are some more obvious functions of negotiations: asking for a raise, bargaining with a shopkeeper in Central America (one of my favorite things to do), and trying to get the best deal on your new house. After reading this book, I look forward to all of these events to test my new found ability. 

When people think about negotiating, many have a lot of misconceptions of the "right" way to do it. Often negotiating is shown on television using the positional bargaining technique. Using this method people take sides. "This is what I want and I am sticking to it" and when you have two or more people arguing like this they become more and more entrenched into their own idea. Often, sides start to attack the other person's ideas and, in a round-about-way, start to attack that person. Big picture, positional bargaining leads to negotiation-by-strong-arm, if any solution is found at all, and really has negative affects on the relationships negotiating. 

The authors have a more useful approach to negotiating... Principled Negotiation. In essence, this is separating the people from the problem and focusing objectively on this issue. This does not mean that you do not focus on the people as a part of the issue, but just eliminate the "my side, your side" back and forth. In every negotiation there are people and those people have emotions and wants. You can and should take that into consideration when using principled negotiation. Ultimately it should all come down to fairness. You don't need to strong-arm someone into getting want you want. Just think about the situation as a whole and make agreements based off all the information. If someone wants to sell their house, they will have set a price on it. As the buyer, use all the information to negotiate a fair price for yourself and them. Use probing questions to get them to help you make a fair decision. Ask them how they came to their conclusion on the price... if they say that the house next door sold for that much... you might bring to their attention that the house two doors down sold for $20k less... or that the house they are basing their price off had 1 more bedroom and 1 more bathroom. In that case, how much is an extra bedroom worth?... They might say $8k... and a bathroom?... $4k... That other house also had a shed in the backyard when it sold, how much would that have been worth?.. $1500.. So on a so forth... using this type of negotiation you can objectively analyze the situation. Be sure all along the way to inform the negotiated party that you just want it all to be fair. Most people are on board when it comes to being fair. 

It is important you put yourself in the other party's shoes. See the situation the way they do. In the previous example they party wanted to sell their house. Find out why they want to sell their house, are they moving far away? How soon do they need the house sold? How long did they live there? In addition to helping you see the negotiation from their point of view it can give you incite into what agreement inventions to make to negotiate more efficiently. If you know they need to move within 2 weeks, you can invent a solution that involves closing sooner in exchange for a slightly higher price.... or if the party is on the fence about your asking price, closing within 2 weeks is something that can put them over the fence.... creating a win-win situation.

Additionally, you will most likely come across aggressive negotiators that will give you high or low-ball offers, they may have someone else there playing good cop, bad cop or in the worst case, uses threats to try and get their way. When you find yourself in these situations, lay them out immediately and let the other party know that "I am most interested in the fairness of the deal and I know that your offer is just trying to high-ball me. Let's get past that, please give me a reasonable offer and we will work from there."  You may find yourself in situations where a party manipulates the environment in order to make you uncomfortable: increasing the heat, being in a loud environment, being in a place where they know everyone and you know no one. If you find yourself in this situation let them know that you don't feel comfortable discussing the issues in that environment and you would like to reschedule to meet at X. Dirty negotiation techniques are used and the best thing you can do is let the other party know that you realize what is happening and bring them back to the issue of fairness.

Next time you find yourself in the Caribbean negotiating the price of a hammock to take back to the States, use principled negotiation. Look at the situation from the shopkeepers perspective. Don't strong-arm him and play the whole game where you walk away 5 times in order to get the best deal. This will end up hurting the shopkeepers ego because he "gave in" to your demands and you probably won't get as good of deal and you might think. Instead, brainstorm some agreements of strength for both sides. He asks you for $80, since you know he is just highballing you call him out on it. Break it down to the root of the problem. Ask him if he is willing to take $30... and when he says no (they always do) dig deep into possible agreements like buying a hammock and a picture for $40. These negotiations are the hardest to have with a rational principle negotiation, but I can't think of any better practice! Give it a shot! I promise you'll have fun with it.

I think this book is a must read for any business person or lawyer, but, as I said earlier, is incredibly helpful for everybody else too. It's a short read and it's really pretty fun. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

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