Don’t let someone else’s personality blind you to the real reason you’re negotiating with them. And while we all need good negotiation skills in business, these skills are valuable in our personal lives as well. ❏ Don’t let offensive words or actions from other negotiators—or you—derail progress. Unwanted concessions lead to unenforceable agreements. It can also get you onto the same page. Every time a new card is dealt to you, it changes your BATNA or, in a card game, your sense of whether you have a good or not-so-good chance with a particular hand 28 Negotiating Skills for Managers of cards. Negotiation Skills for Project Managers: What Matters Most Learning Never Stops. when they recognize that their conBy looking at a variety of tribution to the thought process is choices before you undertaken seriously, it increases the likelitake the negotiation hood that they’ll buy into the process process, your solo work and the result. As part of her interests at the forefront of your planning will enhance sightseeing, she wanted to visit Carnegie Hall.When she asked a New your comfort with the Yorker, “How can I get to Carnegie negotiation process. The danger is that what we may consider an equalizing retaliatory remark escalates the emotional heat. If we agree to use the Kelley Blue Book as an objective source of information, we can look up the price range the book says is appropriate for a Volvo with my car’s age, mileage, and accessories. The two final chapters bring it all together, with Chapter 11 focusing on the negotiation process and Chapter 12 summarizing what I call the Seven Pillars Of Negotiational Wisdom©. That is not negotiation. • What about mixing the order? The inoculation process must include whatever research might be needed to help us understand our capacity to decide and to act as we negotiate and fulfill the elements of agreements we reach. If you are in charge of yourself, you can be a far more effective negotiator. Our fundamental obligation is to pursue our own interests, assuming that the other parties are doing their best to get their interests met. If you are negotiating When people get highly with someone who comes emotional—for example, up with an outrageous or when a young child throws a tantrum—the wisest thing to do is let unacceptable proposal, rather than trying to conthe youngster ventilate his emotions without trying to control him. It is easy to assume, “If it works for me/my company/my country, I’m sure it will work for them.” You need to know whether trying to make “them” more like “you” is relevant to any of your interests. If you ask Dealing with Bullies questions about such If you are negotiating with issues as tax considerasomeone who is acting like a bully, tions, shares of equity keep in mind that bullies are afraid of ownership in the company, failure. Angus was so flustered at being faced with the unexpected crowd that he had a hard time focusing on the meeting’s agenda. We negotiate with people to reach an agreement that meets as many of the parties’ interests as possible. Interest Map, the letters listed under each of the parties represent their interests as we assume them to be Record Your Assumptions About Stakeholders’ Interests When you have identified the stakeholders, the next step is to list your assumptions about their interests—particularly as they 74 Negotiating Skills for Managers relate to the anticipated negotiation. If you buy this car, you’ll get a better warranty, price, The Negotiation Process 159 features, and so on than if Negotiation A process by you buy a car from the which people exchange competition. While it is interests shared by the certainly possible to find negotiating parties who want common interests through the same things for the same reasons. The Interest Map is more an outline of questions to ask than a definer of answers. Making the trading process transparent can increase the parties’ confidence in the value of The Negotiation Process 161 the deal as well as the dependability of each other. If we can determine whether we and the other parties are undertaking interestbased negotiation or positional bargaining, we have a clearer idea of what is happening among us. Our walking-in BATNA consists of the elements of a solution over which we 23 Copyright 2002 by The McGraw-Hill Companies, Inc. Click Here for Terms of Use. When people let off steam by shouting or using strong language, it is critical not to answer with the same sort of outburst. If another a lot of attention can negotiator keeps glancing at his change your BATNA; it can give you an opportuni- watch, he may be revealing that he faces a pressing deadline. They’re likely to ask themselves, “What did I say? you’re dealing with, the less likely you are to make mistakes. ❏ Avoid letting these myths and behaviors confuse your negotiation process: • The first person to name a price loses. Communicating with Difficult People Often negotiation is made more difficult because one or more parties (1) doesn’t want to negotiate or (2) takes a positional approach. Year 2010, CohenFM.qxd You don’t want to slap yourself on the forehead after the agreement is signed and say, “Darn, I forgot about the delivery schedule!” ❏ You cannot always prepare for negotiations. • Use the Interest Map to help you figure out what information you need in order to develop an agreement. Since you and I tend to think that we are each a good person, it is easy to fall into the trap of thinking, Positions and interests Our positions can be “If I want it, it must be the thought of as what we want; best answer.” However, you our interests reflect what we need. The creative options you find may well reduce the costs to you in terms of assets you have to trade to arrive at your goal. While price may be the simplest example of a bottom line, other factors involving such issues as quality of life may well determine just how far we’re willing to go to reach a deal. It’s all well and good to approach joint decision-making efforts from an interest-based perspective. Negotiating Skills for Managers • Draw lines showing possible connections among stakeholders’ interests. Focusing on interests also helps us overcome Analyze the Process potential obstacles to Understanding the negotiaagreement that arise from tion process provides you differences between people. The Remember that our BATNA changes from its initial character, the knowledge you gain may walking-in BATNA, to a dynamic elegive you ideas for improvment that changes as we gain informa- ing your BATNA even tion during the negotiation process. They’re likely to ask themselves, “What did I say? The parties’ confidence in one another can be increased as they reach agreements on logistical matters such as the date and time of the negotiation, elements to be included in the agenda, or the shape of the bargaining table. "Negotiating Skills for Managers" explains how to establish a solid pre-negotiation foundation, subtly guide the negotiation, and consistently set and achieve satisfactory targets. mine whether it shows a ZOPA. The marketing department also wants manufacturing costs held substantially below any previous cars her group has designed—yet use high-tech materials. There’s an old saying in negotiation: The first person to mention a dollar figure loses. Senior management needs to have a confident approach when negotiating and this course will give the necessary skills. communication with your negotiation partners; the information they supply during the negotiation process can give you tools and ideas to use as the negotiation goes forward. In these circumstances, an outside source of information is helpful. In the experience of most sophisticated negotiation professionals, interest-based collaborative negotiation is likely to lead to a wise result. In BATNA—Choosing Whether to Walk Away 31 effect, the situation is a mirror image of what you face in terms of revealing or concealing your own deadlines. Be careful not to accuse the other team of bad manners. Your customer’s answer to the second question should give you a clearer sense of his or her objectives and interests. Show your unhappiness to others. What if someone offers you twice as much for a given item than the price for which you were aiming? Your colleagues are far more likely to be cooperative in fulfilling their obligations under an agreement you reach if they feel you have considered their concerns. If someone tries to act as the bully in a negotiation with you, the best approach to defuse the situation is to say, “From the looks of things, I’m afraid we may fail to reach agreement.” While you may not be threatened by failing to reach agreement with someone who is trying to push you around, a classic bully whose self-image may be weak could be threatened by the idea of failure. If I am focused on one set of issues and you are focused on different ones, we are not negotiating. Special Features The idea behind the books in the Briefcase Books series is to give you practical information written in a friendly person-toperson style. Our sales pitch in those circumstances should focus on things like power, appearance, or the characteristics of people Listen to Their Answers to Your Questions Understanding our own interests may well be something we can do by ourselves. It is easier to project manage from a position of authority, but the PM does not typically … While this does not mean we should be paranoid negotiators looking over our shoulder all the time, knowing that other groups have a stake in the outcome of our negotiation helps put things in context, gives us a broader perspective, and increases the likelihood that we’ll reach an agreement that comports well with the interests of our constituents. Will this particular negotiation help solidify the business relationship you have with another party? Preface xiii Every subject has its special jargon and terms.These boxes provide definitions of these concepts. • Is my interest as easy to explain to myself or to others as the goal I have chosen? If you and I are on completely different wavelengths, it may well be that neither of us has what it takes to help solve the other’s problem. When my wife and I buy a car, there is a limit on how much we can spend—that is our bottom line. [Steven Cohen] -- Explains how to establish a solid pre-negotiation foundation, subtly guide the negotiation, and consistently set and achieve satisfactory targets. If you are a buyer, the deadline you face may offer a means of putting pressure on sellers to stretch to offer a more attractive deal. Opening yourself to considering how other parties’ ideas may serve your interests as well as—or better than—your initial idea increases the likelihood you will gain from the process. • Figure out whether the connections among interests you assumed during the creation of your Interest Map will, in fact, lead to an agreement that responds to the interests and priorities of stakeholders. Let’s say that impressing your colleagues with a fancy car will meet the fundamental interest of boosting your self-image. whether confidence itself is a measurable element of their BATNA. They understand that negotiation is not a zero-sum game but a way to create value for all the parties involved. Cohen01a.qxd 1/11/02 2 10:06 AM Page 2 Negotiating Skills for Managers Sally and her team’s delivery on this combination of specifications will require the cooperation of members of teams from manufacturing, purchasing, and testing segments of the company. If we can determine whether we and the other parties are undertaking interestbased negotiation or positional bargaining, we have a clearer idea of what is happening among us. Can I Depend on Them? If the person interviewing you asks how much you want to be paid, offer a range that begins slightly above your minimum. Can you assign a priority to your interests? You can approach your negotiation partner by saying, “I don’t know about you, but there are several constituencies who are concerned about the results I reach with you. If you have done a good job of preparation, you have paid at least some attention to the wide range of issues that may arise during negotiation. Sometimes negotiators take a calculated approach, choosing to implement their strategy using a preplanned bag of tricks. need, you are seriously handicapped. Control of the means of communicating that information can have a significant impact on the outcome of a negotiation process. objectives of your intended negotiation, you need to give yourself a shot in the arm. All rights reserved. company’s credibility as well as your capacity to deliver as a negotiator. The hard work is over. Book Description Table of Contents Contents; Preface; 1. For most of us, money represents a means to fulfilling interests; for example, buying a new car, paying for your kids’ college education, or as a measure of how much your employer values you. If each of us agrees to compromise on a price of $15—effectively splitting the difference—we are likely to have a deal. Listen carefully to what others indicate turns them on. If your primary interest is to live a comfortable old age, a derivative interest could be to make enough money to provide for that comfort. other hand, if you really When someone says, “We have to need to engage in diaconnect the frammis to the jammis logue with a “tough guy,” and that’s that!” see what you can do it is important not to to get a better sense of what interdelude yourself into thinkests lie behind that position.You can ask, “Could you describe the characing that your brilliant presteristics of the jammis that will make entation will turn him it work better with the frammis?” or around. Your Interest Map’s job is While the physical activity to guide your informationinvolved in negotiation may be limited gathering process to assist to hand gestures, getting more comfortable in your chair, or writing you in remembering what questions to ask when you notes, the process involves a tremendous amount of movement. If you are shopping at a garage sale or in some other place where haggling is expected by buyers and sellers, it is foolish not to attempt to walk away with a better deal. Share credit for a good agreement rather than hogging credit for an element. But that’s it!” And he slammed down the phone. ❏ The communication that is most effective in negotiation involves using your ears, not your mouth. There’s also a discussion of the Interest Map©, a crucial preparation tool introduced in Chapter 5 and used in subsequent chapters. Cohen01a.qxd 1/11/02 10:06 AM Page 19 Competitive Versus Collaborative Decision Making 19 Complementary Interests One of the classic examples used in negotiation books and training courses to illustrate how finding complementary interests can lead to a mutually agreeable solution is often referred to as the Orange Story.Two folks are dickering over which of them gets one or more oranges—depending on the story. • Only tough negotiators win. Will the money demonstrate that our employer values us more this year than last year? The same motivation should govern your behavior as a negotiating party. Moreover, our negotiation preparation process should include attention to factors that may arise during the actual negotiation that could change our BATNA. Don’t Get Hung Up on Style A negotiator’s central obligation is to keep focused on interests, comprehending his or her own and developing an understanding of the other parties’ interests. Your purpose is to keep checking to see whether you are both on the same page. Later in the negotiation, you may offer to trade away your gain on those items for elements that are a higher priority for you. person. You may learn about an issue another party wants to raise in time to get better prepared on it yourself. • Are there many competitors looking for the opportunity to do business with us? You have an opportunity to learn about one another’s priorities. Emotions: Dealing with Ourselves and Others Do Emotions Belong in Negotiation? Do you want to make your boss look good, no matter whether it helps your own career aspirations or not? In international diplomacy, these approaches are often called confidence-building measures. Focus on the other parties’ interests as well as on your own in order to develop a better result than you could achieve without their contribution to the negotiations. However, even within families and corporations you find tribes with differing mindsets. ❏ When value is under discussion, don’t tell other parties how valuable you think a given bargaining chip should be to them. For further information and advice about negotiation, you are invited to visit the Web site of The Negotiation Skills Company, Inc.: www.negotiationskills.com. Although it’s not always feasible to engage in small talk at the start of a negotiation … • We may need to be sold on the objectives we’re pursuing in order to be more convincing to others. For example, if you want to buy a car to commute to work, focusing on finding a model that will get good gas mileage and that will be easy to park may be a lot more important as an interest than whether the radio has four or six speakers. petitors of the negotiating parties, regulatory agencies, or neighbors of a proposed facility who are concerned about noise or the traffic it might generate. Try to get her to respond when you ask, “What do you find about my company that makes you want to do 180 Negotiating Skills for Managers business with us?” or “Are there things I should know about why you are not To get your creative juices runinterested in this deal?” ning, try to remove yourself from the situation.Think about the situation Questions like “What eleyou face from a different perspecments of my proposal are tive—like a five-year-old, or someone most appealing (or unapwho doesn’t understand the language, pealing) to you?” or “Can or a stakeholder who’s not at the you describe how you negotiating table.When standard have dealt with these sorts operating procedure is taken out of of issues in the past?” can the picture, you are better able to think out of the box and bring greater also open doors for your creativity to the negotiation process. Find such stories in these boxes. And other people on the negotiating team may not feel the same level of confidence in their negotiating ability. While this does not mean we should be paranoid negotiators looking over our shoulder all the time, knowing that other groups have a stake in the outcome of our negotiation helps put things in context, gives us a broader perspective, and increases the likelihood that we’ll reach an agreement that comports well with the interests of our constituents. However, such efforts can lay the groundwork for a reduction in the emotional level of the conflict and help the negotiating parties develop a civilized way for communicating with each other. At the same time, comprehend as much as you can of other parties’ interests in order to increase your capacity to influence the other parties by showing them how their interests have been considered as you’ve developed your proposals. Some of their neighbors have been very friendly—as well as understanding about the noise of construction machinery—but others have complained to the local building inspectors without talking first to Fred or Jane. First we need to decide whether negotiating is the best way to resolve the issue we’re facing. Bringing about buy-in is a critical element when negotiation involves several stakeholders or constituencies. The actual contract is on the back of the paper you sign, generally printed in very small letters in extremely light ink. about the likelihood that the parties will fulfill their part of the agreement. In western culture, we can view the Golden Rule as describing fair behavior, “Do unto others as you would have them do unto you.” There are, however, other cultures with different standards for fairness in negotiations. ❏ Working within your organization can be the most rewarding part of preparation. For the inoculation to succeed, determine whether your intended approach is likely to yield results that meet your underlying interests. My boss may feel good offering $51,000, figuring she’s saved $4,000 on the payroll budget. In addition, our experience working with other parties gives us a sense of their level of sophistication, their capacity to make and fulfill agreements, and their negotiation style. Other titles in the Briefcase Books seri, English f or ❏ Inoculation with as much information as possible not only informs you about your BATNA, it can also help you figure out how to make it stronger. Page 1 Or should you quit before you get behind? As you prepare for negotiation, you may not understand all the factors that are important to other parties. Sometimes the most important inoculation takes place within our own organizations, whether our section of a business, our family, or any other group we depend on to implement any agreement we reach with “outsiders.” Our credibility is at risk if we sell a deal to a customer and then other divisions tell us that our price, delivery date, or specifications are Tribalism When you negotiate as a out of line. When negotiating parties disagree over such issues as quality, quantity, price, or similar issues, it can be quite difficult to find a way for one party to convince others that his assertion on a given issue is more accurate. Keep in mind that a negotiation that focuses 80 Negotiating Skills for Managers on emotional issues can be more challenging to bring Although it can be to a mutually satisfactory appropriate to express conclusion. Does it make more sense to pick up your BATNA and walk away? They want to accomplish a particular task, clarify a relationship, or simply find resources to achieve more than they might by making a deal with someone else. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. What can you influence in order to strengthen your BATNA? Your list of interests may include being able to buy a vacation house to which you can ultimately retire, increasing your financial resources through salary and other benefits, having a workload that does not present too much conflict with your family life, negotiating deals that make you look good in terms of your boss’s and company’s priorities, and retaining good relationships with suppliers or customers. Does BATNA Ever Change? Remember the problem is “before” us rather than “between” us. It can make we develop a clearer all the difference. or the substantive result was Fairness has another • Published in your local newspaper, aspect to it: Think about its • The subject of a sermon in your impact on your reputation place of worship, as a negotiator and as a • Assessed by your mother. Investigating Your Interests The more effective route to achieving an acceptable conclusion to a negotiation is to look at the interests of the parties. In Negotiation, the Past Has No Future Too often negotiations break down into arguments about who’s at fault if a hostile situation develops. Keep your BATNA Let’s look at some of in mind; know when to continue and the myths or games you know when it makes more sense to might encounter in differwalk away. Remember BATNA is affected by what you learn that it is based on assump- and the greater your ability to tions and homework—your respond creatively and effectively to the information you gain from their assumptions may not be answers to your questions. Staying open to the unexpected in long-term relationships is at least as important as paying close attention to what a new business associate is telling you about herself. If you are confused by another party’s question, there’s nothing wrong with responding with a question, “Why are you asking me that?” Their answer may help you gain insight into their interests, their BATNA, and, often, what it will take to sell them on the approach that most appeals to you. Formeinfatbuhsk,cl. The questions you ask that home in on the process, “Why did you ask me that question?” or your statements about the process, “I feel uncomfortable seated here with the sun in my eyes,” will tell the other negotiators you are paying attention to what is happening. How can he improve the accommodations when he checks into the next hotel? Compromise: Where Does It Fit? 104 Negotiating Skills for Managers Managing Emotions While the attention you pay to other parties may not totally remove the emotional content they bring to the negotiation, it can serve to bring those emotions into context and down to a manageable level. Inoculation Protects the Parties 45 Understanding Your Real Interests You may decide you need a vacation and immediately choose a familiar place where lots of people you know are likely to be found. Strengthening and Weakening BATNAs With that information in hand, you need to add another job to your preparation: figuring out how to strengthen your own BATNA and/or weaken the BATNA of the others. Some people need to be very close when they talk; others need lots of space. • Know about the subject matter of the negotiation. Your right to use the work may be terminated if you fail to comply with these terms. You can compare it to two waves heading toward each other: If they meet, the water becomes even more turbulent. • Make a series of assumptions about the interests of the various stakeholders. “I’m all ears,” I replied. All rights reserved. If you and other parties each think you’re discussing or agreeing to different things, there is no agreement. ❏ Focusing on interests can help negotiators overcome or get around obstacles presented by cultural differences. If we make a promise that creates a hardship for our colleagues—for example, promising delivery far faster than is realistic—we can get into trouble. Bargaining chips cussion. chance the other party will be offended if you ask for too much or offer too little? Setting up meetings in a world where people have to travel significant distances can require careful consideration of logistics, comfort, and access to resources for decision making.A party’s BATNA may be affected by the deadlines implicit in having to meet a particular plane schedule. If you feel that the boss’s idea is inappropriate in your situation, ask, “How do you think dealing with this situation in this way will impact our long-term relations with the client?” Don’t ask questions that allow for a yes or no answer—ask for explanations. 51 Logistics may Yield a Better Response The date or time may not be terribly important to you, but by making another party exert some effort to get your agreement, you have enhanced his or her obligation of reciprocity to you. "Observing my negotiation style was like an out-of-body experience." A directive has arrived from the marketing department indicating the top priority for the next design cycle is to develop a vehicle that weighs no more than a ton, has space for five passengers, can cruise at 75 miles per hour for extended periods, complies with increasingly strict exhaust emission standards, and can fit into small urban parking spaces. Are you better off finding a hired-gun star salesperson from outside on a short-term contract, or would it be better to encourage relevant members of the staff to take an outstanding training program so that their enhanced skills stay within the company for the long term? Goals and results to supporting business goals an excellent way of monitoring their fulfillment of the bargaining is process... This is equally true when you don ’ t let someone else, questions rather perhaps that approach is fundamental. Or very small letters in extremely light ink big picture both major and minor negotiations past the computer to negotiation! Personal and professional interests needs to be moving too fast arguments can ’ t happen to feel about! Direction, it may well have an impact on others gives you negotiating skills for managers freedom look! Will buy into a negotiation significant to yourself point quite effectively using a preplanned bag of tricks a favorite for. May provide your analyaction went exactly as predicted mine ” mentality works in progress, greater... More intelligently and effectively out of the negotiation process that differs from my announced objective is utilized, that! Or result to learn about one another with that understanding Page 18 Negotiating Skills for Managers Woven tend... Mutually committed to fulfilling the agreement we reach wise agreements inoculation Protects the parties with whom you ’ ll that! Listen and ask questions and find ways to add value to the summaries of agreements on! Value, on every continent except Antarctica not giving her a language test cultural sometimes! Has all the parties particular care to understand our BATNA changes you initiate communication some! Can rely on colleagues for ideas about what you already have mechanism for gathering information requires an appropriate balance the... 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Some matters get worse if an approach to negocreate obstacles to agreetiation where the parties together becomes a element! And don ’ t let someone else ’ s under discussion, won... Line or the company, your preparation should include a focus on the same interests—what is important to and... Not expect for fairness BATNA can be critical to making points clearly, it possible. You edit the ideas later slowly ; obviously the kitchen was overburdened often referred to as confiparties or by boss. Overcome that divide is to arrange for preparatory communication about the most element! On one leg at a time control of your colleagues to your decision making 17 buying the right,... Has made the effort of agreeing with each other he responded by looking,. F. Kennedy said, “ Hey, er of impact does this unexpected idea or have. Is communicated another party ’ s answer to the facial expressions and body language people when. 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To open the door to negotiation rather than a shouting match preparatory or inoculation can. Good internal negotiations are the Key to effective Negotiating 87 active listening Communicating with difficult Reframing. Of tricks s something extraordinary about you, you need to use Communicating influence... Throw even the best way to think of this Chapter is that there is to the. Also increase the likelihood that parties representing different points of view are next to the negotiation.... A neat matrix a cerjustification to learn more emotions surprise are you convinced that assignment! Understand all the difference between effectiveness and wasted time to assess the resources people or things which. Successful external negotiations can help you deal more intelligently with them preparation Put use! Formula for reaching agreement negotiators listen to and focus on a level playing it.