Kids and Other “Irrational Negotiators” – A Holiday Special

They say people engage in an average of 2–10 negotiations per day. This must exclude parenting and holiday family gatherings. For those, we probably have to add a “0” or two.

Once you have little negotiators in your house, everything from putting on pants to eating lunch to leaving the house becomes a negotiation (read to the end for my favorite comedian clip on that).

My kids are now 3 and 1. They both started negotiating when they were around 9 months old (“I am NOT eating my breakfast, I want yours—points and shouts“).

As I am heading into a 3-week “break from work” (spoiler alert, it isn’t; see my Out-of-Office below), I thought I’d summarize what I have learned so far about how to negotiate with children and other “reasonable” family members.

This year’s word-for-word Out-of-Office reply for Negotiation Academy.

I must note that there won’t be any negotiation classes dedicated to parenting at the Negotiation Academy anytime soon. In fact, if you see a good one, sign me up!

But here is what I have learned so far about what a seasoned negotiator can use as a novice parent.

Let’s assume

Imagine you had a big fight with your mum or dad. Now you are home, telling your spouse all about it. They try various ways to help. How would you feel about each of these attempts:

  • Defend the other side: “I can understand their reaction.. I mean, you have to consider that they are old now and from a different time..“
  • Pity: “Oh no, you poor thing. These parents always..“
  • Question: “Why did you say that to her if you know she is sensitive about it?“
  • Advice: “Maybe you should call and apologize.“
  • Diminishing: “Oh, don’t be so upset. You are overreacting. It’s not that bad.“
  • Own experience: “Oh yes, I also had a bad fight with my mum the other day. She told me that…“

Do you recognize these in your environment?

Do any of these make you feel better?

I am going to assume your answer is “No”.

What would make you feel better?

How about an empathetic response: “Oh gosh, that does sound like a horrible fight. And it must have come at the worst time when you were already exhausted from the long weekend with the kids and guests.“

Better?

Most of us grow up having our feelings denied.

It’s the small things we were told.

  • “It’s not a big deal!”
  • “You are a big boy now.”
  • “You are just tired.”
  • “Don’t make such a big drama out of it.”
  • “You are acting like a baby.”
  • “Look how brave your little sister is.”

Sound familiar?

Yes for me.

Does it work to help calm down kids (or anyone for that matter)?

No, ma’am.

Enter a negotiator strategy for meltdowns, tantrums, and everything in between:

Acknowledge, don’t diminish

Here is one bit of advice we give for dealing with difficult negotiation counterparts. But brace yourself. It’s a tough one.

 

No one gets up in the morning thinking, “Today I will be completely irrational.” Everybody ALWAYS makes sense to themselves.

Yes. Always.

“But surely not this XXX person.”

Yes. Everyone!

 

I know. I told you this was hard to believe.

But it is true. People always make sense for themselves. So do kids. Just that they are little aliens who don’t yet know how things work around here on this planet.

Here is where our power comes in. No matter if we are with irrational seeming adults or kids. Our ONLY power is to try and see how what they are doing makes sense for them.

Because here is the problem: The moment you write them off as “irrational,” you have given away all power to change the situation.

So when you find yourself getting triggered into thinking “This person is totally irrational,” ask yourself this: “How does what this person is doing/thinking make sense to them? What information am I missing so that I don’t feel like it is making sense?”

Here is the 4 part formula I have put together for myself when it comes to my toddlers.

 

Enter the LSAT model

I use the LSAT model (such as a lawyer, I know).

It stands for Listen, Sympathize, Acknowledge, and Talk Alternatives.

In the past 24 hours, my kids threw a fit because ..

  • they wanted that orange juice right now;
  • they wanted to keep banging on the sofa table;
  • they didn’t want to go to school;
  • they wanted to be carried all the way home (at 20kgs..).

Strong-willed communicators as they are, they often land on the floor, making sure those wishes are heard by everyone in a one-mile radius.

Enter LSAT:

  1. Listen (don’t interrupt, diminish, or offer explanations, etc, see above)
  2. Sympathize: Verbalize to them why they are upset. It’s counterintuitive, but try! You might add your own feelings about it. “Oh, you really want that orange juice now?” “I also really like Orange Juice.“
  3. Acknowledge: Find a word to describe the feeling. “That must be frustrating.” “You look like you are really angry.”
  4. Talk Alternatives: Give them two other options of what to do now. “Would you like to walk to school or sit in the pram?“

Put together, this sounds something like this (imagine a 3-year-old who has thrown themselves on the floor and shouts off the top of their lungs)

“Oh, you really want that Orange Juice now, don’t you? Orange Juice is so yummy. Do you really like Orange Juice, ha? I also really like Orange Juice. Shall we have one after lunch? Would you like the one with pulp or the one without?”

“You are upset that mummy told you not to bang on the table. You really want to bang on the table, hm? The sound is fun. It’s frustrating when we have to stop doing something that is fun. I see you like to bang something and make a noise. Would you like to play with your piano in your room, or take the tennis racket and go down and hit some balls?

“You are upset that Papa didn’t carry you home. I know, it’s so nice being carried. I would love to be carried too. All day would be best!! 🙂 Isn’t it comfortable to hang over someone’s shoulder? (looks up and nods) Would you like me to pick you up and hang over my shoulder on the sofa a little, or would you like to get a big snuggle from Papa?”

“You don’t want to go to school today ha? We are having so much fun playing cars at home. I also want to keep playing. It’s frustrating when we have to stop doing something we enjoy. We should play again when you get back. For now, do you want to have Bananas or Dragon fruit for your lunch box at school today?“

I am still a novice at this parenting game but the difference I’ve seen between saying these things and “No, you can’t have an orange juice now we are having lunch first”, “We can’t carry you, you are too heavy”, “Don’t bang on the table it’s too loud” and “But you have to go to school” is tremendous!

It seems to me, that the default we have been shown, taught, and programmed to do – talk down the feeling, explain, rationalize, tell kids what to do – just leads to kids starting out being frustrated about the situation and end up being frustrated with parents.

Like in negotiations, when feelings are denied, parties become hostile.

Age doesn’t matter.

The language will change. The underlying concepts don’t.

 

If you have kids (big or small :D), I am curious for you to try out LSAT!

Please make sure to let me know how it went and what other things you have discovered that work. I am all ears!

 

Happy Negotiation Bootcamp, aka Holidays, everyone!

See you on the other side.

Claudia

 

PS: As promised, here is my favorite comedy piece on negotiating with kids by Michael McIntyre.

PPS: And a book recommendation: How to Talk So Kids Will Listen & Listen So Kids Will Talk, Adele Faber & Elaine Mazlish

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

Creating Rapport – Even with people you can’t stand

A few years ago, I was meant to interview James Corden (carpool karaoke anyone?) at a business conference in Los Angeles. I had prepared all my witty introductions, clever questions about his negotiation habits, and more. It was going to be great.

About an hour before the interview, the conference organizers told me that James wasn’t coming because his wife had to go to the hospital and that I was going to be on the stage with Charlie Sheen instead. I froze.

While I had been a big fan of Two and a Half Men as a teenager, the things he has been known for since triggered everything but positive feelings in me for this person.

I panicked. What should I say to this man whose behavior and reputation I wanted nothing to do with?

Once I had moved past my initial shock, I looked at the advice I give to negotiators who are faced with a counterpart they do not like or get along with well:

 

Look for commonalities and things you can appreciate, no matter how small.

 

I thought long and hard. Did we have anything in common?? I didn’t think so.

But eventually, I found something. It was risky and cheeky. But I figured risky and cheeky was exactly what this situation called for.

 

You can see how nervous I was.

But it worked!

We got a big laugh from the 2,500 people staring at us in anticipation.

To this day, I still can’t believe I said this to him. But he was a good sport, and it sure did break the ice, got us going with a laugh, and made the audience comfortable. And I could take it from there.

 

In a negotiation, you cannot allow your personal feelings to influence your chances of getting a good deal.

 

Here are the two tips I have for negotiators who find themselves with a counterpart they are having difficulty connecting with:

 

  1. Find something about them that you can appreciate

This can be hard – but try harder! There has to be something about that person that you can relate to, that is good, that is a silver lining. Nobody is all evil. It could be things they have done in the past (Two and Half Men was pretty cool when I was a teenager) or something where taking their perspective helps you appreciate why they might act the way they are acting.

Say you are negotiating with a counterpart who seems to have all kinds of unreasonable demands that they are trying to push. Try to imagine the kind of pressure they might be getting from their firm, partner, or client. Then articulate it. Say something like “I was just thinking about this case last night and how tricky it must be on your side as well having to deal with all these conflicting and ever-changing interests“. The way you say that matters! Not as a tactic, not condescending, but with true empathy for the situation. This won’t change your entire relationship, but it can go a long way in building a bridge to the other person.

Or say your flight gets cancelled and everyone is rushing to the counter to rebook. The staff is overwhelmed and passengers are impatient. Try for yourself what difference it will make if you approach them with a smile and honest appreciation of what they are trying to do and how hard their job is at the moment. An authentic  “wow, I’ve been watching you from the back for a while and I am so impressed with what grace you are handling this stressful situation” can change your encounter with that person (and your chances for an upgrade 😉 by 180 degrees!

Frenemies posing post-interview =)

     2. Find commonalities

Like in my Charlie Sheen situation, it can be hard to find commonalities with people you don’t like. We may also not want to. “I have nothing in common with this person“, was the first thing I noticed myself thinking. If we don’t like someone, the last thing we want to think is that we have anything in common.

But chances are that we do! So, if a poor relationship with someone is getting in the way, look out for them. I have seen people who do not speak with each other suddenly bond over the most random things! Like their love for durian (a smelly and very polarizing fruit in Asia), or their passion for fine wines where suddenly they can one-up each other (hey, at least they are talking), or their daughters both being semi-professional air rifle shooters training for the Olympics (until last week I had no idea that was even a competitive sport!). From my examples, you see that the more rare the commonality, the stronger the connection. So look for these!

I truly believe that whoever it is, no matter how “bad” the situation or connection, if you are determined, you can always find something.

And it may not always work or succeed in improving the relationship on the first attempt. But without giving it a try, you have already given up.

Not trying means that you have given away your power to make a positive contribution to that relationship and the possible deal or benefit that can come out of it.

To your negotiation success!

Dr. Claudia

Your Negotiation Whisperer

 

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.

Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

 

How your love or hate for negotiations influences your outcome. And what to do about it.

One question I ask at the beginning of almost every single one of my workshops is: “Do you enjoy negotiating?”

Having asked this question to over 5,000 people on five continents, across many professions and cultures, I am finally no longer surprised by the typical answers I get.

On average, only about 10–20% of people raise their hands (or click “yes” in our anonymous online poll). Yes, even professionals who negotiate every day! Yes, even in cultures where bargaining is life! I know.. I was shocked at first too!

Apart from curiosity, there is a deeper reason I ask this question.

With negotiations, it is much like with public speaking. If you hate public speaking, if it makes you nervous, if you dread being on that stage, you will likely not radiate confidence and give a very persuasive presentation. More likely, your inner discomfort will make you talk as fast as possible and do everything to get off that stage as quickly as you can.

The same goes for negotiations. If you are not comfortable with the process of negotiating (or at least comfortable with the fact that you are uncomfortable), your default reaction will be to get you out of this situation as quickly as possible. You are therefore much more likely to take a less optimal deal just to escape the situation.

Now think about this: If, on the other side of that negotiation, you happen to have someone who enjoys negotiating, guess what their default reaction to the situation will be. They will make themselves comfortable in their chair! They love it and are ready to do this all day long.

Guess who is getting the better deal?

The second person!

Without even considering negotiation position, skill, or strategy, the latter person already has an advantage by the sheer fact that they are comfortable in the situation.

And more: They will learn more from the situation. Because experience only translates into expertise if we analyze and consciously work on our skills.

I learned French for 8 years at school. And to this day, I can barely order a croissant. Your guess, how much I enjoyed the process of it 😀

What can you do if you want to become more comfortable negotiating?

Negotiation is like a muscle. It only grows with conscious training. Saying I am a bad negotiator without having worked on my negotiation skills is like saying I cannot lift weights without ever having stepped foot in a gym.

You need two things:

1. Learn a proper framework

Just starting to lift weights can be dangerous. You can hurt yourself, learn the wrong routines, and not see the best results. Anyone serious about lifting would first get a trainer. Negotiations are similar. You don’t need very much, but you do need to understand the fundamentals. Collaborative vs. competitive negotiation, how to create value, how to bargain, and how to ask good questions. See if your company offers a course or take one online (there is everything from free on Coursera to mid-range on Udemy to high-end by Harvard and consorts; we have a few specially designed for lawyers hereas well).

2. Put the skills and frameworks to conscious use

Negotiation is a muscle. It grows only with practice. The bad news is that this takes time. The good news is that you can practice anywhere.

Moving house, signing a new phone contract, insurance products, banking, buying clothes, picking a caterer, hiring a swim coach, painting the house, fixing the car, deadlines with your colleagues, task distribution with your boss, salary, vacation days, etc. I bet your day has at least five negotiation opportunities, probably ten times that!

Why do we not utilize these opportunities more? A lot of times we

a) don’t notice that we are in a negotiation or

b) can’t be bothered to negotiate.

“Claudia, I don’t want to bargain about every single small thing.” “I can’t be bothered.” “I feel silly.“

You don’t have to. But this is how you will learn to get comfortable. Because if you are not comfortable asking for the thing you want or the discount you would like in your daily low-stake interaction with the lady at the market, how do you expect to be comfortable negotiating high-stakes matters with the lady who runs your company? 😉

When I was young, I used to hate to bargain or ask for things for myself. I thought it was cheap, inappropriate or a waste of time. Gender expectations further exacerbate the notion of “don’t ask anything for yourself“.

But I love to lift weights. So the moment I understood how similar the success journeys of these two skills are and that in each case it is a learned skill that only grows with practice, I started taking daily situations as serious negotiation practice. The rest is history.

To your success!

Dr. Claudia

Your Negotiation Whisperer

 

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

Unlock the Power of Mirror Neurons to turn any ‘Debbie Downer’ into ‘Debbie Dazzle’

What you will learn today: The role of mirror neurons in negotiation; how to sway someone elses negative energy; the power of being the strongest energy in the room

There is one key insight I have gained from many negotiation dynamics, especially when they go in a direction that you don’t want them to go:

The strongest energy in the room will determine the energy in the room.

Here is the story about me trying to get preferential treatment with an Austrian passport authority to show you what I mean:

A couple of years ago, I had to get my passport renewed. It was quite urgent since I had a work trip coming up, and I was hoping to get the passport authority to prioritize it and also send it to my house instead of me having to pick it up.

I walked in ready to negotiate for this special treatment on a Monday morning as the first customer. The lady I was assigned to was not a (Monday) morning person, to put it mildly.

She didn’t even look at me.

Her replies were monosyllabic at best.

No matter how bubbly, friendly, and appreciative I was, she radiated an aura of darkness.

For about 10 minutes (that felt like an hour), I went on in my friendly bubbly monologue, trying everything to lift her mood. It seemed hopeless.

In my mind, I was ready to give up (“I am not going to turn this ‘Debbie Downer’ around“, I thought). But I had nothing to lose, so I kept going.

After maybe 15 minutes, suddenly something flipped. It was almost like a switch that had turned on a light inside of her. Suddenly, she started chatting with me:

“Oh, why do you have so many stamps in your passport? What do you do?”

“Where are you from?” “Oh, my niece also went to school there!“

She was a completely different person.

By the end of our interaction, I had gotten everything I wanted. On the way out, she even tapped me on the shoulder!! (Important cultural note here for those who go “So what?”: Austrians are not known to be ‘touchy’ like this)

 

What does this story teach us about negotiation?

You always have power over the energy in the room.

Your behaviour and your reactions directly impact how the other person will treat you. It’s called “Mirror Neurons”.

Mirror Neurons are special brain cells that mirror what we observe, helping us to better connect and empathize with others. Basically, people are subconsciously hardwired for reciprocity. You treat me well, and I treat you well. You treat me badly, and I treat you badly (of course there are always exceptions, but this is the basic premise).

 

Understanding and consciously using this helps you in two ways in negotiations.

1) Be the stronger energy to get your negotiation on the right track.

A negotiator who radiates a strong collaborative energy and models traits of win-win negotiators (e.g. active listening, interest-based questions, information exchange) has a good chance of inspiring the same behaviour in the negotiation counterpart.

2) Safeguard your tough negotiations from hitting the wall.

People often ask me, “What do I do if the other side is stonewalling or is not negotiating collaboratively?“

Same thing here! You can never change the other person! Your biggest factor of influence is YOU:

  • You can stay calm and not respond in kind when they treat you disrespectfully, aggressively, or dismissively-
  • You can model the way to get the negotiation back on a productive track by listening attentively, asking questions about their priorities, sharing yours, and looking for better ways to come to an agreement.

It may take time (like with my Debbie Downer), but it’s your best (and often only) chance to influence them (and not allow the negotiation to spiral into negative behaviour on both sides). It always takes two to tango, and the main problem is not, that they start out competitive, but how you respond to it (which, based on your mirror neurons, is typically in kind).

At the same time, this kind of self-control can be the hardest thing in the world in the face of an adverse counterpart. Your mirror neurons also make you want to respond in kind, and why should you be appreciative and collaborative with someone who is not?

Because it can save your negotiation!

Remember: The power is yours.

You can sway any mood by just being the strongest energy in the room.

It may just take time.

To your negotiation success!

Yours,

To your success!

Dr. Claudia

Your Negotiation Whisperer

 

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

How positional communication almost ruined my Christmas holiday

Negotiation Nuggets: Realizing that you are always in a negotiation; How to look beyond positions; How to train yourself to find interests.

“I’m sorry, the check-in is now closed.”

Over a decade ago, I called New York City home. I had a flight from NY to Uruguay booked to spend the Christmas holidays with my friend and her family.

The worst of all things happens. On December 22nd, the morning of my flight, my phone mysteriously died during the night, and my 4 AM alarm did not ring.

I wake up at 6:45. Fifteen minutes before boarding! Without wasting a second, I call a cab, grab my suitcase, and rush off to the airport. I arrive 40 minutes later, where luckily boarding has only begun 20 minutes ago.

I sprint to the check-in counter with my huge suitcase. Closed.

An airline employee is close by so I rush over and say, “I’m terribly sorry; I’m running late. I have to catch that flight!” She responds, “I’m sorry, but the check-in is closed.” So, I plead, “Isn’t there anything we can do?” “I’m afraid I can’t assist with check-in anymore; the system is closed,” she replies.

My expression freezes. I mutter a simple “Thank you” and walk away. For a moment, I stand in the terminal filled with people heading to their Christmas destinations, contemplating how all other flights are likely fully booked or exorbitantly priced on December 22nd. I can already see myself spending Christmas alone in cold and snowy New York.

Then, my inner negotiator springs into action.

I sprint back to the counter and say, “Look, the plane is still here. I can make it to the gate in time. What can we do? I need to be on that flight. I don’t care if you can’t check in my suitcase, we can put it on the next plane or in the mail or whatever, I don’t care. I just need to be on that flight!“

“Have you checked in online?” she asks.

“Yes, I have.“

“But you have a suitcase, right?“

“Yes, I do. But I don’t care! Send it on the next flight, send it by mail, whatever. I need to be on that flight.”

She starts talking into her walkie-talkie. Five minutes later, she and I are running through security with my bulky suitcase. Just before the plane’s doors close, we arrive at the gate where they take my suitcase and simply check it in there.

This was before I started Negotiation Academy. But these two key negotiationlessons will always stay with me.

  1. Positional communication can ruin your chances of getting what you want. Her position was, “The check-in is closed”. That seemed perfectly reasonable to me. No one was there. I was late. And boarding had started. So my brain said, “Okay, that means I can no longer check in, I am screwed.” What I didn’t realise was that she thought I needed to check myself in when really it was just my suitcase (and turns out even that can be done at the gate).
  2. Life is a negotiation. This lady had full power to run through security with me to get me on that plane with my suitcase. I was in a negotiation. But I didn’t notice that at first. To get her to go out of her way, ask security for special permission, and drop everything and run with me, I needed to do some persuasion. “Okay, thank you” after the first “check-in is closed” wasn’t gonna do that.

Become an Investigator of Interests

Our default style of thinking and communication is positional. Our brain needs to be efficient, so there is no conscious thought process that gets us from our interests to our positions. And neither does your counterpart. The positions just pop right up and we share them.

What this example shows is that the positional speaking and thinking that we are used to do often gets us nowhere when we try to negotiate.

To boost our chances of getting what we want we have to learn to actively go beyond positions. In this case, it would have meant to ask her (even if it sounds silly at first) “WHY is it a problem that the check-in is closed?” – “Because we cannot check you in any more “ “Oh, I am checked in, online“, “and because we cannot check the suitcase in” “Oh, so it’s about the suitcase?” “can we put it on the next flight, use UPS or (as it turned out) do that at the gate?”.

Realizing what was behind her position made the difference between staying snowed in and spending Christmas alone OR flying off to Uruguay for sun and holidays that winter. Or it probably saved me some $$$ for new tickets.

Whenever you feel like you are getting nowhere in your negotiation, ask yourself: Am I really talking about interests? And do I really know theirs?

Don’t get held back by your and their positional thinking and communication. Go beyond!

Happy negotiating!

To your success!

Dr. Claudia

Your Negotiation Whisperer

 

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

Give yourself negotiation power with an ambitious Goal & ZOPA – Part 2/3

Today you will learn: How to set a goal price in a negotiation – How researching and pushing the other side’s limit gets you the best deal – How analyzing the ZOPA (Zone of Possible Agreement) helps you avoid losing millions over your career

In this three-part series, we focus on how you secure the biggest piece of the pie and share the three key numbers you need to prepare for any monetary negotiation.

In Part 1 you saw how you need to set your Limit Price with the help of your BATNA (see here if you missed it).

This week, let’s talk about the 2nd Number: the Goal Price

Your second number to prepare in distributive negotiation is your goal. This number should be higher than the limit (if you are the seller/claimant) or lower than your limit (if you are the buyer/defendant).

How do you set a goal?

Some basics: It should be optimistic, yet realistic, specific and well-researched but as high/low as you can possibly dream to get. Remember, in life and in negotiations, higher goals achieve objectively higher outcomes.

There are 2 ways to set your goal:

A. Use your best objective criteria to calculate what might be the best possible deal.

B. Or even better: Push to THEIR limit price. Even the best objective criteria vanish in comparison to a good “guesstimate” of what THEIR limit (i.e. alternative) is. Because it can help you grab the biggest part of the “ZOPA”

ZOPA – What is that?

ZOPA is the Zone of Possible Agreement. It is the overlap between the limit prices of both sides. Any rational deal MUST happen in this zone. Whoever manages to push the deal closer to the limit of the other side has taken the bigger piece of the pie.

Here is a graphic of the ZOPA between the buyer of a house who has set their limit to 580k (let’s say they have an alternative house to buy at that price) and the seller who has set their limit to 500k (let’s say they already have an offer for that).

ZOPA – Zone of Possible Agreement

The ZOPA is therefore between 500k – 580k.

All deals will happen in this zone. Whoever manages to push the deal closer to the limit of the other side has taken the bigger piece of the pie.

What does this mean for our goal-setting?

The best goal price is the one that is as close to their limit as possible.

Will we usually know the (exact) limit (i.e. alternative) of the other side? Unlikely.

But we can do our best to do as much research as possible to find out about it (see example of a salary negotiation below).

Since people don’t spend time doing that research they set suboptimal goals and therefore end up with suboptimal deals.

Watch this video for more details and an example of how to calculate the ZOPA:

 

BONUS EXAMPLE SALARY NEGOTIATION

Here is a practical example: A university professor came to me to help him prepare for a salary negotiation with the dean for a new position. The job post had stated 70,000 for the job (the minimum salary, as required to be publicised by law). To prepare for the negotiation I asked him to research the average salary for this position. He came back with 80-100k. So then we started thinking: “What do we think is the absolute maximum the dean could give? Where is his limit?”. We decided it would probably be 100k. So this is where he set his negotiation goal, at 100k. He started out asking for 120k and ended up with an offer for 96k.

Without this thought process, he may have set his goal at 90k.. Which is “already 20k more than the post”. He might have started with asking 90k. Which then would usually get him around 80-85k. 10-15k less a year (or more than half a million over his remaining career years.. Even without any other promotions or adjustments.

In short: Don’t use this framework and it can cost you millions over the course of your career.

Keep Negotiating! And have a goal when you do!

Dr. Claudia

Your Negotiation Whisperer

Next Topic: Part 3 – Your opening price. How to anchor in a negotiation to significantly sway the numbers your way.

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

 

Give yourself negotiation power with Limit Price & BATNA – Part 1/3

How to Anchor in a Negotiation to significantly sway the numbers your way – Part 3/3

Today you will learn: How to set an Anchor in a Negotiation; how to avoid getting anchored; when and how to make the first offer; how to make a clever counter.

In Part 1 you saw how you need to set your Limit Price with the help of your BATNA. Part 2 showed you how to set an effective Goal Price.

This week, let’s talk about the 3rd Number: the Opener.

This number has particular power. Dare I say it is almost magical. Why?

The first number that is being put on the table has a significant effect on the negotiation outcome. It is called the “Anchoring effect”.

The Anchoring Effectis a cognitive bias that describes our tendency to rely too heavily on the first piece of information we receive when making decisions or judgments.

For example, if you start a negotiation by suggesting a high price for a product or service, that high price becomes the anchor. Subsequently, the other party may use that anchor as a reference point when making counteroffers or determining what they are willing to pay.

Want to dive deeper? In this video, we will do a little experiment to find out how anchoring works and I am sharing some examples and studies. You will also see how the Beatles lost 100 Mio. Pounds because of bad anchoring.

Takeaway

Here are 3 points to remember to use the anchoring effect to your advantage:

  1. Prepare the first offer/anchor: Whether you plan to go first or decide to go second, you need to have that opener prepared. Because either, you need to use it, OR you need it to protect you from being anchored. It doesn’t matter how smart you are, unless you have a firm opener in mind, you will be anchored!
  2. Make the first offer: 90% of people hate making the first offer. Understanding the anchoring effect should make you reconsider that. Every time that you are not running a risk of e.g. claiming way too little and the other side would have actually given you more, do put out that first offer.
  3. Make a clever counter: If you don’t open, don’t go off your initially planned opening number and come closer to them. If anything, go the other way! They anchor extreme, so should you. Because statistically, you end in the middle. Even better: make them come closer to you first. Saying something like “We really wanna work with you but that number is just so far out of what we had envisaged.. Can you move a little closer to us” might just get you a lower offer. When you open then, you have already moved the bargaining range to your advantage.

Pro Tip: Where is the fine line between setting an optimist anchor and putting out an offensive first offer?

(Hint: Which of the 4 Harvard Pillars can you apply?)

Number 4!

Objective Criteria!

As long as you can quote any objective criteria.. i.e. as long as you can say “I want X.. BECAUSE” you are in the safe zone where it is highly unlikely that the other side will walk out. This does not have to be your best criterion. Any variation of one of your criteria, as long as it has some legitimacy, will do. There is also magic in the word “because”, but that is for another time.

Keep Negotiating! And make sure you are setting a clever anchor!

Yours,

Dr. Claudia

Your Negotiation Whisperer

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.

Give yourself negotiation power with Limit Price & BATNA – Part 1/3

Today you will learn: Setting your Limit Price – Calculating your BATNA – Knowing the exact point when to leave a negotiation (with video example for calculating your BATNA in a court case).

There are 2 key forms of negotiation:

1) Collaborative Negotiation (aka Harvard win-win)

2) Competitive / Distributive Negotiation (aka Bargaining)

The best negotiators master both forms and know how to integrate them by first growing the pie with win-win strategies and then securing the bigger piece of the pie with distributive negotiation strategies.

This month I want to focus on how you secure the biggest piece of the pie and share the three key numbersyou need to prepare for any monetary (=distributive) negotiation.

  1. Limit price
  2. Goal Price
  3. Opener

These numbers are so key, that the GC of a Fortune 500 company I work with tells his managers to not even knock on his door before they have them hashed out. And it takes them a day, sometimes two, to do just that. So take good note!

Let’s dive in and talk about the first one, the Limit Price.

Your Limit Price is best determined by your BATNA (Best Alternative to Negotiated Agreement). BATNA is the answer to the question “What will I do if this deal/negotiation tanks?” This needs to be specific! Not just “I’ll just get another job” or “We will acquire another business” or “We will just take it to court if we cannot settle” but which job, for how much, when, under what terms, what is a likely outcome in court?

This always needs to be a specific number! Yes, even and especially going to court! The below video excerpt from our Master Negotiator Course shows how to calculate your BATNA in a business dispute lawsuit.

The bottom line is: The more specific your alternative and the more you work on improving it, the greater your negotiation power.

Knowing your BATNA is critical because it is your walkaway point. Too many times, people overpay or undercharge because in the heat of the negotiation, due to poor preparation, or due to the length of the negotiations (sunk cost principle) they do not realize they would have gotten a better deal somewhere else.

Sometimes the best deal is no deal. You have to know where that walkaway point is for your situation to apply it, regardless of whether this is a settlement negotiation, your salary, a new home or any other purchase or business contract.

Improve your BATNA – give yourself negotiation power!

Keep Negotiating!

Dr. Claudia

Your Negotiation Whisperer

Next Topic: Goal Price. How “let’s do the best we can” NEVER gets you the best you can – setting ambitious goals in negotiations.

PS: Book recommendation for German lawyers who want to dive deeper: Jörg Risse: Prozessrisikoanalyse: Erfolgsaussichten vor Gericht bestimmen. Highly recommend!

If you enjoyed this content, feel free to sign up for our free 10-week Email course on the fundamentals of Collaborative and Competitive Negotiation skills by clicking HERE.
Each week, you will get a bite-size email unpacking some of the most fundamental negotiation concepts that you can apply in your everyday negotiations, along with an insight video and book recommendation to go further in areas you want to learn more about.