Negotiation Tip Archives - discussingterms.com https://discussingterms.com/category/negotiation-tip/ The definitive source on negotiations. Sun, 22 Sep 2024 10:21:50 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://i0.wp.com/discussingterms.com/wp-content/uploads/2022/12/cropped-DTLogo.jpg?fit=32%2C32&ssl=1 Negotiation Tip Archives - discussingterms.com https://discussingterms.com/category/negotiation-tip/ 32 32 214584540 Preparation for a Negotiation https://discussingterms.com/2024/09/21/preparation-for-a-negotiation/ Sat, 21 Sep 2024 08:49:03 +0000 https://discussingterms.com/?p=239 Stuart R. Gallant, MD, PhD Dr. Atul Gawande tells a story about negotiating his first…

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Stuart R. Gallant, MD, PhD

Dr. Atul Gawande tells a story about negotiating his first job offer after completing his surgical training [1].  The chairman of the surgical department of Boston’s Brigham and Women’s Hospital offered Gawande a position, then the chairman asked him how much he wanted to be paid.  Gawande stalled the question by asking how much surgeons usually make.  But the chairman responded, “Look, you tell me what you think is an appropriate income to start with until you’re on your own, and if it’s reasonable that’s what we’ll pay you.”

To be fair, as Gawande tells the story, this was only his second interview, and presumably he did not realize that he was about to receive a job offer.  Gawande was unprepared and had to do several days of research to arrive at an appropriate figure.

Today’s post on Discussing Terms addresses preparing to negotiate.  We discuss some key points to think about while getting ready and provide a worksheet to aid in your preparations:

Know Yourself and Know the Other Party

The photo above shows the defenses of Port Arthur (present day Dalian, China) at the time of the Russo Japanese War.  By current day standards, it was a relatively short war.  Japan declared war in February 1904 and laid siege to the key Russian base at Port Arthur in August of that year.  By May of 1905, Russia had suffered three stunning defeats—Port Arthur had surrendered in January, the Japanese Army defeated the Russian Army at Mukden in March, and the Japanese Navy defeated the Russian Navy at Tsushima Straight in May.  It was an historic military victory—one that resulted in a favorable peace settlement for the Japanese side at the negotiation of the Treaty of Portsmouth in August 1905. 

The negotiation at Portsmouth did contain a small but important victory for the Russian side courtesy of the Russian lead negotiator Sergei Witte.  Witte knew that the Battle of Mukden had been shockingly costly to both the Russian and Japanese sides.  It was a massive clash involving more than 600,000 combatants and lasting more than two weeks.  The Japanese had eventually won, but at the cost of more than 15,000 Japanese dead and almost 60,000 wounded.  In the days leading up to the negotiation, the Russians moved four new divisions into Manchuria—the Russian clear threat was that if the negotiation was not satisfactory to the Russian side, the war might resume at who knows what cost.  Then, Witte made his move at the bargaining table.  He offered additional territorial concessions, but absolutely refused war reparations, and threatened to walk out of the talks.  His stratagem worked—the final treaty contained no requirement for the Russians to pay war reparations.  His ploy was successful for two reasons:  he knew what he wanted (no reparations), and he knew what the other party feared (a return to war)—he was in that sense prepared for the negotiation.

In the first section of the worksheet, there are a list of about 25 questions to be used in preparation for any bargaining session.  Of course, only a small number of these questions are pivotal.  For example, one common type of negotiation is contracting for manufacturing services between a pharmaceutical company and an active pharmaceutical ingredient manufacturer.  In this type of negotiation, the negotiation is simple:  1) the pharmaceutical company writes a request for proposal (RFP) that outlines every key requirement for manufacture of the drug; 2) the RFP is shared with multiple manufacturers and acceptable responses are compared; 3) a contract is negotiated which embodies the proposal, as well as.  In this case, the pivotal questions in preparation revolve around writing the RFP and selecting the candidate manufacturing firms.  As you prepare for your negotiation, decide which are the pivotal questions for your situation.

Your Negotiation Plays

In any negotiation, you will have a mix of complex emotions related to your desires, fears, and the stress of the moment.  To prepare for the negotiation session, it makes sense to have preset “plays,” just like in football.  These are questions and statements that you have planned out ahead of time to elicit helpful information from the other party and move the negotiation forward.

An example of the use of “plays” comes from the Watergate Scandal.  Watergate was set off by a burglary of the Watergate complex in Washington, DC (seen in the aerial photo above) and ultimately led to the resignation of American president Richard Nixon.  During the Watergate investigation, a critical revelation was the existence of a taping system in the White House documenting ostensibly private conversations in held in the Oval Office.

The existence of the taping system became public during questioning of former Whitehouse assistant Alexander Butterfield by a lawyer for the Senate committee investigating Watergate.  Any discussion which involves the authority of the legal system is a kind of negotiation. When Deputy Minority Counsel Donald Sanders began to question Butterfield, they were exchanging Butterfield’s honesty for the Senate’s promise of non-prosecution.  As one question followed another, Sanders realized that there must be some kind of recording system in the White House.  Eventually, Sanders asked Butterfield if such a system existed, and Butterfield replied, “I wish you hadn’t asked that question, but, yes, there is [2].”

In that sense, both Sanders and Butterfield were running “plays.”  Sanders had prepared a list of questions in advance which led him to the revelation of the taping system.  Butterfield had likely prepared in advance that he would not volunteer information about the taping system, but he was prepared to give the information up if asked.  Such in-depth preparation is common prior to giving a deposition—PharmaTopo.com has previously posted on deposition preparation [3].

Run Things by Counsel

So far, we have discussed things you can do yourself, but you may need to consider bringing in outside counsel, either in the form of an actual attorney or perhaps in the form of a subject matter expert, or just a friend.  Running your thoughts on the negotiation by a disinterested third party has two benefits.  First, they may see facets of the negotiation that you missed or got wrong.  Second, by stating openly and in confidence, your negotiation position, you commit yourself to the position emotionally—this means that you will be more likely to stick to your guns when the negotiation gets difficult.  DiscussingTerms has previously posted on the use of counsel in negotiation [4].

Conclusions

In the 2006 hostage negotiation drama Inside Man, the criminals play recordings of former Albanian dictator Enver Hoxha’s political speeches to confuse police officers listening in via hidden microphones.  When the police figure out the scheme, the following conversation ensues:

Detective Frazier:  They’re playing tapes for us now?

Detective Mitchell:  They knew we were gonna bug them.

Detective Frazier:  Damn right they knew.  And they knew how.  Worse than that, they wanted us to bug them so they could send us on this wild goose chase.

That was a good negotiation play from the hostage taker’s point of view.  The hostage takers prepared for the police and led them down the garden path.  If you prepare for your negotiation, perhaps you can do the same thing.

[1] Gawande, A.  “Piecework,” The New Yorker, 27 March (2005).

[2] Honan, W. H.  “Donald G. Sanders Dies at 69; Brought Nixon Taping to Light,” The New York Times, 29 September (1999).

[3] Gallant, S. R. “Documenting Your Intellectual Property and Defending It,” PharmaTopo, 1 January (2022).  pharmatopo.com/index.php/2022/01/01/lessons-learned-documenting-your-intellectual-property-and-defending-it/

[4] Gallant, S. R. “Use a Wingman,” Discussing Terms, 17 December (2022).  discussingterms.com/2022/12/17/negotiation-tip-use-a-wingman/

Disclaimer:  DiscussingTermsTM provides commentary on topics related to negotiation.  The content on this website does not constitute strategic, legal, or financial advice.  Consult an appropriately skilled professional, such as a corporate board member, lawyer, or investment counselor, prior to undertaking any action related to the topics discussed on DiscussingTerms.com.

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Negotiation Tip:  Establish the Right Environment https://discussingterms.com/2023/02/13/negotiation-tip-establish-the-right-environment/ Mon, 13 Feb 2023 07:26:10 +0000 https://discussingterms.com/?p=131 Stuart R. Gallant, MD, PhD When you are in the midst of your next negotiation,…

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Stuart R. Gallant, MD, PhD

When you are in the midst of your next negotiation, you may be:  1) wishing that you had made a stronger opening and thinking about how tough the negotiator across the table is, or 2) fixated on how thirsty you are and longing for a little bit of sunlight in your cramped meeting room.  If you are concentrating on 2), you are thinking about your environment, and you are distracted from the heart of the negotiation.  Ideally, the negotiating environment supports the negotiation process.  Today’s post discusses how to set up a productive environment and also how to skew the environment to favor your side.

Paris Peace Accords—a Table for Adversarial Negotiations

In January 1973, the Paris Peace Accords were signed with the goal of ending the Vietnam War and establishing peace in Vietnam.  There were four parties at the table for the negotiation:  North Vietnam, South Vietnam, the communist forces in South Vietnam (PRG), and the United States.  There are two stories about the negotiation environment.  The more well-known story is that of the shape of the negotiation table [1].  In the photo above, you may notice that there is a large round table with two smaller rectangular tables to the left and right.  This configuration of the three negotiation tables accommodated the various needs of the parties to recognize or not recognize the status of the different parties in the talks, and establishing this table shape required much negotiation.

The less well-known story of the Paris Peace Accords is that the actual negotiation took place secretly between Henry Kissinger for the United States and Le Duc Tho for the North Vietnamese government at a house in the suburbs of Paris.  The table shape at the real negotiation was rectangular with the United States on one side and North Vietnam on the other side, something like this diagram:

This is the classic negotiation table.  The rectangular table has some advantages:  1) lots of room to place papers and other resources between the parties for easy access, 2) equal status for both sides—it’s very well designed for negotiations involving two parties, 3) a feeling of solidarity among representatives of one side, 4) the easy ability to make side comments to one’s own team, and 5) if things get heated, the table also functions as something of a protective barrier.  But, a rectangular table has one big disadvantage, it emphasizes that there is a dispute at hand—the two parties begin and end the negotiation glaring across the no man’s land of the negotiation table—this arrangement can support posturing rather than resolution of differences.

2012 G8 Summit—a Table for Problem Solving

In May 2012, the G8 leaders met at Camp David, MD to discuss global and economic issues.  At the table seen above were:  United States President Barak Obama, French President François Hollande, Canadian Prime Minister Stephen Harper, Italian Prime Minister Mario Monti, Japanese Prime Minister Yoshihiko Noda, President of the European Commission José Manuel Barroso, President of the European Council Herman Van Rompuy, German Chancellor Angela Merkel, Russian Prime Minister Dmitry Medvedev, and British Prime Minister David Cameron.  This is a different type of negotiation—a problem solving forum based on long-term mutual relationships and alliances between the participating countries and authorities.  Some features of this bargaining environment include:  1) informality—in general sessions which occur at Camp David are conducted in shirt sleeves, rather than in suits, 2) collegiality—the participants know each other and generally like each other, and 3) commonality—many of the issues discussed by the participants have single solutions which benefit all the G8 members (or, in the case of tough issues, have downsides which bite all the countries equally).  The participants are seated around a circular table (emphasizing equality, rather than hierarchy).  In the photo, they are participating in side conversations, though presumably some portions of the summit were more formal and structured.  Support staff surrounds the main table—presumably a live audio feed permits transcript preparation and participation of other staff in separate areas of Camp David.

Camp David Accords—a Chance to Decompress

From 5 to 17 September 1978, Egypt and Israel met with United States mediation at Camp David to negotiate peace between these two long-time adversaries.  The initial four days had not gone as well as President Jimmy Carter had wanted.  In a reversal of their plan, Carter and the Americans stepped out of the role of mediation and put together an American-backed peace proposal on Day 5.  Then, to remind the participants of what was at stake, Carter organized a field trip on the morning of Day 6—the negotiators visited the site of the pivotal and bloody American Civil War battlefield at Gettysburg (the unspoken message was:  if you don’t sort this out, more people could die in Egypt and Israel like they did at Gettysburg).

It was a bold and non-traditional move by Carter (virtually every aspect of the Camp David negotiations was), and it seems to have had the needed effect of allowing some time away and an opportunity for the participants to reflect prior to returning to the hard adversarial negotiations before them.  By September 17, they had agreed on a groundbreaking peace agreement.  Carter had relatively little control of the Egyptian and Israeli bargaining positions and behavior during the summit, but he did control substantially the environment, and he used that control skillfully.

Jeane Kirkpatrick—Make Them Come to You

Jeane Kirkpatrick was an American academic, Cold War strategist, and the 16th United States Ambassador to the United Nations.  In the mid-1980s, literary agent Irving Lazar thought he could create a million-dollar book deal for Ambassador Kirkpatrick after her appointment as ambassador ended, but there was one catch—she did not want to “hawk” her book [2].  So, she refused to meet with publishers.  Given that publishers were used to actually meeting the author to whom they were offering a fat advance, this created a problem, but Lazar came up with an ingenious solution.

Lazar had a posh apartment on the east side of Central Park.  He was able to get Kirkpatrick to commit three hours to meeting publishers, and he set up the meetings at his apartment.  After an hourlong meeting, Lazar threw out the first publisher and invited in the second.  At the end of the day, Lazar had an $850,000 book deal for Kirkpatrick.  Lazar recounts that the Kirkpatrick negotiation changed the way that he did business, ”After that, when I had a major client, I settled him or her in my living room and had the publishers in.”  He called it the “home team advantage.”

Lazar was in effect running an informal bidding war among the publishers that the publishers probably sensed, even if they didn’t pass the rival bidders in the hallway of Lazar’s apartment building.  Taking absolute control of the negotiation environment is a way of demonstrating physically which party has the stronger bargaining position—seizing the environment is a show of force.

Issues to Think About

Environment is a grab bag—essentially everything about a negotiation that isn’t rules, strategy, or behavior is environment.  Here are some environmental considerations to bear in mind:

  • Layout:  Above are two options for room layout around the same rectangular negotiation table.  In the lefthand layout, the table is surrounded closely by the walls of the room.  In this room, participants are unlikely to stand up, except to leave the room.  In the righthand layout, the table is adjoined by a sideboard with refreshments, there is generous space to walk about, and there is a balcony with sliding glass doors on the right.  Participants in the negotiation may engage each other at the table, standing together in the room, while getting refreshments from the sideboard, or on the balcony.  The righthand layout will lead to a higher quality of interaction.
  • Food and Drink/Hospitality:  Many of the stories about the former President of Syria Hafez al-Assad as a negotiator focus on how uncomfortable he tried to make the other side.  His thinking seems to have been that if the other side was uncomfortable, they might give up and concede aspects of the negotiation.  I am not going to insist that he was wrong, perhaps his experience showed him that his methods worked.  What I will say is that there is strong data that kindness helps in human interactions.  The practice of giving gifts seems to create a psychological need for reciprocity.  This effect is so strong that many hospitals have guidelines against receipt of gifts by doctors from pharmaceutical representatives—the thinking is that even small gifts can alter prescribing patterns in healthcare professionals.  This phenomenon may be worthy of reflection during planning for food and drinks, lodging, and other considerations associated with a negotiation.
  • Support Services:  Consider whether the negotiation will require:  administrative staff, audiovisual equipment, transcription services, computers, additional rooms for breakout sessions, communication with other sites or home offices, transportation for the participants, etc.
  • Agenda:  The traditional agenda for a business negotiation is:  facility tour, lunch, negotiation, wrap-up.  Other types of negotiations have their own rhythm and pace.  What is the best negotiation agenda for the topic at hand?
  • Product:  What is the product of the negotiation to be?  Typically, a short written document memorializes the results (a diplomatic communiqué, a letter of intent, etc.).  How will this be produced and signed?  How much time is required in writing—can some aspects be pre-written with key information filled in at the end of the negotiation?

Breaking the Spell of Environment

We have talked about how to set up the environment to be neutral or to be skewed to your team’s benefit.  But, we don’t always control the environment—what do we do if the environment is wrong somehow or is tilted against us?  Here are some ideas:

  • Make sure you are in the right place:  We talked about the Paris Peace Accords at the beginning of this post.  The South Vietnamese side was in a bad position—the United States representative Henry Kissinger was negotiating secretly with the North Vietnamese without the South Vietnamese side present.  You do not want to be in the South Vietnamese position.  So, try to be absolutely sure that there is not another separate behind-the-scenes bargaining session undermining your side’s position.
  • If the environment is wrong, fix it:  Figure out what is wrong, then make a change.  Move the table, bring a computer in and gather everyone around it, take everyone out to lunch or dinner together, turn up the heat or turn on the A/C, get someone to bring in a blueprint or a whiteboard—whatever it takes to get the negotiation moving in the way you need it to go.

There’s a great scene in the HBO series Winning Time which gets at the environment problem.  Earvin “Magic” Johnson and his father are having lunch with Jack Kent Cooke and Jerry Buss.  Cooke has sold the Los Angeles Lakers to Buss, but the deal is not completed.  During the lunch, Cooke wants to show how powerful he is by upstaging Magic Johnson at every turn, but he only succeeds in antagonizing Johnson and his father.  Jerry Buss sees things going sideways, and as the lunch ends, he says, “I’m going to walk you fellas out.”  Presumably, he tells Johnson to ignore Cooke—because as we know, Buss succeeded in signing Johnson and launching the Laker dynasty—something he could not have done without the generational talent that was Magic.  The lesson is:  if you see your deal going sideways because of the environment, you have to step up and change the environment.

[1] Herdeg, K.  Die Geschmückte Formel:  Harvard:  Das Bauhaus -Erbe Und Sein Amerikanischer Verfall, Friedr. Vieweg & Sohn, Braunschwig (1988).

[2] Lazar, I.  Swifty:  My Life and Good Times, Simon & Schuster (1995).

Disclaimer:  DiscussingTermsTM provides commentary on topics related to negotiation.  The content on this website does not constitute strategic, legal, or financial advice.  Consult an appropriately skilled professional, such as a corporate board member, lawyer, or investment counselor, prior to undertaking any action related to the topics discussed on DiscussingTerms.com.

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Negotiation Tip – Making an Offer https://discussingterms.com/2023/01/09/negotiation-tip-making-an-offer/ Mon, 09 Jan 2023 17:28:40 +0000 https://discussingterms.com/?p=111 Stuart R. Gallant, MD, PhD There are two reasons that people are hesitant to make…

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Stuart R. Gallant, MD, PhD

There are two reasons that people are hesitant to make the initial offer in a negotiation.  First, they may be unsure of the market value of the item they are trying to buy (or sell).  They are worried of significantly under or overstating the item’s value.  The fear is that the negotiator will telegraph to the other party that they are unprepared for the negotiation—and therefore ripe to be taken advantage of.  Second, the negotiator is worried that the other side will talk them down from their offer—that they will be “ground down” during the negotiation process.  The fear is that the other party has the power in the negotiation, and as a result, the other party will eventually get what they want.  Today’s post addresses the process of making an initial offer, discussing these and other fears.

Preparing to Negotiate

Preparing for a negotiation is a five-step process.  The steps include:

  • Think about your personal/your organization’s goals—what do you want to achieve in the next few years?  Starting with this step puts the negotiation in perspective.
  • Think specifically about your goals for the negotiation:  what is the best possible outcome you reasonably expect (one end of your range) and what you cannot tolerate (the other limit of your range, “your limit”).  This may require some research (i.e., step 3).
  • What is the market of the object?  You can use many resources to answer this question:  internet, the other side’s competitors and customers, your friends and work acquaintances, industry pricelists and databases, comparable sales, etc.
  • Does the other party see things differently?  Understanding the other side’s motivations is critical to a successful negotiation.  Do they have an emotional connection to the object?  Does this deal mean that they will be leaving or entering a particular area of business—how will that affect them financially and organizationally?  What do you know about what their range might be?
  • Talk to your team, a friend, or a spouse about your goals for the negotiation.  Studies show that talking about goals helps humans invest in them emotionally and stick with them during difficulty.  Talking about the negotiation ahead of time will help you stick with your plan during the hard parts of the negotiation.

Making an Offer

The 2018 film Beirut is a movie about hostage negotiation.  In the climactic scene, two characters haggle over a hostage payment.  Skiles makes an offer, aware that the price he earlier negotiated is out the window because he is dealing with a new man he has not spoken with previously.

Skiles:  This is it. All I got.  ($2 million.)  I’m topped out. Deal speaks for itself.

Kidnapper:  You wouldn’t open with your best offer if your life depended on it.

Skiles:  Two point two-five.

Kidnapper:  Five million.

Skiles:  Three.

Kidnapper:  Four and a half is my floor.

Skiles:  Point blank, I have $3.9 million exactly.

Kidnapper:  Going once.

Skiles:  Why should Bashir be the only person to profit?

Kidnapper:  Going twice.

Skiles:  If you take the three-nine right now, I swear I will tell Bashir you settled for three-five.  You can go back to Arafat with your head held high and $400,000 in your pocket.

Kidnapper:  Deal.

What is driving Skiles in this scene?  First, he is spending someone else’s $4 million—he is willing to go up to that level, but he does not have any more money after that.  He has no incentive to spend less (none of the money will end up in his pocket), but he absolutely needs for the negotiation to succeed (he has no backup plan).  Starting at $2M allows him the room to negotiation inside of his range.  As he reaches his limit, he skillfully offers a consideration to the other negotiator which seals the deal.

So, what are the options for making that first offer?  They include:

  • Wait for the other side to make an offer.  When you really do not know what the stakes are, there are advantages to waiting.  If you go first, then you could make a foolish offer—significantly far away from what the other side has in mind.  However, by remaining silent, you take a risk.  They could low-ball you, and you would have left a lot of money on the table.  This is called an anchor.  Even if the negotiation continues after the anchor is offered, and the deal improves, the deal can only move so far from the anchor—limiting the value you will receive.
  • 60/80/90/Go.  When I was younger and traveling with friends in Central and South America, we would keep our money divided in convenient amounts in different pockets in case we had to do any bargaining—we did not want to pull out a big roll of cash.  For this method to work, you have to have an idea of a reasonable price for you to pay for an item.  First, you offer 60% of your price.  The seller reacts.  If there is no deal, you can come up to 80%.  If you still do not come to a deal, then you can come up to 90% of your reasonable price, but make as if this is really hurting you.  You can start to walk away at this point (either literally or rhetorically).  Sometimes that stratagem triggers a concession.  If not, there is still 100%.
  • Focus on something else.  This strategy works best in salary negotiations.  It is common for an HR person in the initial interview of a job candidate to ask about salary requirements.  In spite of the troves of information that is available online, it can be hard to establish a good range when things like hiring bonus, commission, stock options, time off, and benefits start to come into the picture.  As a result, answering HR’s question can be hard.  Instead of naming a range, come back with, “I would like to be hired with a title of….”  Since many companies have salary ranges assigned by position, you have answered their question—at least within their company.
  • Start off small.  I frequently negotiate agreements for contract manufacturing of pharmaceuticals.  Particularly, if both parties are new to each other, constructing a large manufacturing deal can be a challenge.  There are so many variables and so much risk—in order to have drug ready for shipping, there must be:  transfer of manufacturing procedure at small scale, transfer of analytical methods, scale up to full scale, the manufacturing run itself, packaging and labeling, and testing of the pharmaceutical.  Often, starting off with the first steps (small scale process and analytical method transfer) allows both parties to feel comfortable with each other before committing to the higher cost of full-scale manufacturing.  However, if you go with this approach, there is a significant risk—to prevent a bad deal down the road, you must have a fallback plan.  For example, in the pharmaceutical manufacturing world, you must have an alternative manufacturer lined up.  This allows you to walk away if the later negotiation with your initial manufacturer goes poorly.

Make Your Offer Look Good

Frequently, there are aspects of a deal that cost you little or nothing but provide reassurance to the other party.  One way of making a successful deal more likely is to play up these aspects of your offer.  You have financing already in place.  Your offer is all cash.  Your side is prepared to sign as soon as certain details are clarified.

This strategy requires empathy on your part.  What is the other side looking for?  How can you make your deal look as much like what they want as possible?

Also, if you are looking at their initial offer, beware of hidden unpleasantries.  As an example, in the pharmaceutical contract manufacturing business, the sponsor needs the raw data from the manufacturer.  Usually, raw data is supplied free or at some nominal charge.  An illustration of a hidden unpleasantry would be significant add-on charges for the raw data to be supplied by the manufacturer.  These kinds of concealed penalties need to be neutralized as they appear in the negotiation.

Conclusions

The negotiation process involves four steps:  1) preparation, 2) initial offer, 3) bargaining, 4) closing.  Ideally, you would perform all four steps with precision and skill, but that is not always how things go.  For example, perhaps you allow the other side to open, and you realize that they have anchored at a value that is very disadvantageous to you.  You can correct this by addressing the issue directly.  You say something like, “Clearly, we are very far apart,” or “This is a premium service.  Our clients pay significantly more than that.”  You have neutralized their anchor, and now it is your turn to place your anchor.

All of this should be done directly, with good humor, and a clear intention to resolve problems in the negotiation.

Disclaimer:  DiscussingTermsTM provides commentary on topics related to negotiation.  The content on this website does not constitute strategic, legal, or financial advice.  Consult an appropriately skilled professional, such as a corporate board member, lawyer, or investment counselor, prior to undertaking any action related to the topics discussed on DiscussingTerms.com.

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Negotiation Tip:  Use a Wingman https://discussingterms.com/2022/12/17/negotiation-tip-use-a-wingman/ Sat, 17 Dec 2022 19:41:29 +0000 https://discussingterms.com/?p=73 Stuart R. Gallant, MD, PhD My field of negotiation primarily involves business negotiations in the…

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Stuart R. Gallant, MD, PhD

My field of negotiation primarily involves business negotiations in the pharmaceutical industry.  I regularly discuss ongoing negotiations with people I think of as “negotiation wingmen.”  I do not recall reading about the practice in any books on negotiation, but I assume that most negotiators have someone that they use as a sounding board.

What is a Negotiation Wingman?

A negotiation wingman is someone who is generally familiar with your line of business who can help you with advice about your negotiation challenges and opportunities.  They may be someone you met at a previous company or someone you work with currently.  They should be capable of maintaining confidentiality—in many circumstances, they should be covered by a nondisclosure agreement (NDA) which means that they should receive some compensation to lock in the validity of the NDA.  This does not need to be an expensive relationship.  If you can offer them the same service as their negotiation wingman, the payment may be in the form of your advice in return for their advice.  Also, they should be easy to reach (cellphone is best), and needless to say, you should respect their opinion.

Trends in Negotiation

Having someone to discuss ongoing negotiations with has always been a good idea, but two trends make use of a negotiation wingman even more valuable:

  • Today, more negotiations occur with a significant email component.  That form of communication significantly increases the risk of misunderstanding.  There are no body language clues.  Back and forth dialog may be difficult due to scheduling difficulties and time zone differences.  Fortunately, email exchanges provide natural pauses where consultation with your negotiation wingman will be convenient as you contemplate a response to the latest offer you received.
  • Today, legal counsel is more expensive than ever.  At the same time, more employment situations are remote with small teams that may not meet face-to-face.  The negotiator has less time with legal counsel than in previous decades at the same time they are more isolated in the office.  A negotiation wingman relationship can fill in these gaps.  (Caveat:  there is no substitute for good legal advice—DiscussingTerms is not suggesting getting rid of your firm’s counsel.)

Benefits of a Negotiation Wingman

There are many benefits of using a negotiation wingman:

  • The dialog with a negotiation wingman can prevent misunderstanding.  “Am I reading this correctly?”
  • You and your negotiation wingman can work through scenarios.  “That is super unlikely.” versus “You better consider this.”
  • Scientific studies show that in most circumstances, two minds work better than one.  A diversity of knowledge, world experience, and emotional responses provide the best resource to consider your next move in a negotiation.
  • Negotiation can involve a significant amount of tension—particularly when the stakes are high.  Talking things through with your negotiation wingman can release some of that tension, allowing you to perform better as you bargain.

Conclusions

I think anyone who has spent a significant amount of time in the field of negotiation appreciates the value of having someone to talk to about the goals and strategy for a bargain.  If anyone has seen an academic study addressing this area of negotiation, I would be interested in hearing of it.

Disclaimer:  DiscussingTermsTM provides commentary on topics related to negotiation.  The content on this website does not constitute strategic, legal, or financial advice.  Consult an appropriately skilled professional, such as a corporate board member, lawyer, or investment counselor, prior to undertaking any action related to the topics discussed on DiscussingTerms.com.

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