Getting Past a Deal Impasse

Currently the situation in Washington or with the Minnesota Orchestra is lose-lose.  Since neither party has been investing in a relationship with the other prior to this debacle, how do we now move forward?  If I were an advisor to the principals involved I would suggest the following:

1.  Have a family dinner party with the both sides.

2.  At the party, share the following elements that help close deals, which I have learned from doing deals over the past 25 years: 

Various elements that close deals
90% - Attitude		55% - People
10% - Tactics		37% - Process
		8% - Substance
= Successful outcomes

These elements are also confirmed in Stuart Diamond’s great book called Getting More.

When doing deals, most parties focus on tactics and the substance.  These are the two least effective elements to focus on when closing a deal.   This is further complicated when the parties are working through the press.  Once the press is involved the tactics and substance elements reported are not even accurate and they start to inflame each side’s ego.   This in turn causes an almost complete shut down of possibilities.  

3.  After sharing these elements with the parties, I would have them work together on a quick and simple common challenge (a vanilla  issue we all agree upon) that has nothing to do with the current issue.  This will cause the parties to feel a collective mind shift toward possibility;

4.   Once that exercise is completed I would suggest the following approach:

i.  Focus on Attitude & Process.   These are the elements that can close this deal.

ii.  Use members of the party that do have relationships (i.e., People) to help close this deal!

iii.  Have the following boundaries:

Both parties quit talking to the press;

Leave the past in the past and be present;

Be hard on the problem, not the people;

When talking with each other try to use facts vs. opinion;

Have regularly scheduled meetings every day until the issue is resolved;

Focus on strategies (vs. positions and ideology) to overcome obstacles. 

Deal Day Questions

There are a lot of unknowns in the deal world, but one thing is crystal clear to us: you need to ask the right questions. In September we wrote about some good questions to ask your opponent while at the negotiation table, but those aren’t the questions we’re talking about now. What we’re interested in are the three questions you need to ask yourself before you make a decision on your deal.

BE SURE TO ASK YOURSELF:

1. Is this deal worth my time and effort?

2. What are the key terms in the deal?

3. Can we be successful with those exact terms?

If the answer to numbers one or three are “no” or “maybe,” run far, far away. If the answers are a solid “yes,” then you’re golden.

What questions do you ask yourself before you make your final decision?

Finding Your True North

A compass is an instrument for finding direction. One of the most powerful assets in our lives is that only you can be you. Your core challenge in life is to find your true north – your authentic self – using that magnet within you that is called your soul. And, upon such discovery, to focus your being toward advancing the human condition.


In the deal world, your compass should be filled out as follows:

North = Knowing what you want (the essence – it's more than time and money)

East = Knowing who you know that can help you with this particular deal

West= Knowing what resources you have to work with

South = Knowing who or how you can fairly share the risk

Have you ever used a deal compass like this? Has it proved helpful?

[Photo Credit: http://www.nateriggs.com/]

Deal Cartographer

It's sad but true -- deal world is full of ambiguity. We have tools at our fingertips that we can use to navigate this unknown terrain, however.

When making a deal in a landscape of ambiguity, it's imperative to use at least two tools (deal map and compass) and one strategy (relationship building). Today we'll discuss the first tool:

The Deal Map: Be sure that you can visualize your deal. One way to create a deal map is to draw a picture of your desired destination, then fill the map in backwards as you go through negotiations. The visual landscape of your desire mixed with what is actually happening will form the landscape. When you take a look at it, you'll recognize bridges, barriers and gaps to your desired destination. With each deal you'll get better, and more effective strategies and tactics will come to mind. Eventually, you'll become a deal cartographer. If you can draw your deal, you'll fully understand it.

With a Deal Map you can navigate your way through all obstacles by turning them into opportunities, and you'll therefore find yourself where you want to be. If you don't like where you're headed, reroute. Here's an example of a simple Deal Map we created at WieseLaw.

Next week we'll discuss the second essential tool for a successful negotiation, The Compass. Stay tuned! Meantime, make sure you strategize your next deal by creating a Deal Map of your own.

Photo from webresourcesdepot.com

"Tommy Can You Hear Me?"*

*A song written by the great Pete Townshend of The Who

The one who listens is the one who has the power in the conversation. Why? Because listening will guide you to create an accurate picture of the deal in the parties' minds. The negotiation pro, Stuart Diamond, describes this as painting pictures in the mind of the parties. The mind is the most important tool to effectively achieve your goals in a negotiation. Paint your master piece by asking good questions and by truly listening to the answers.

Here are some good questions to ask next time you want to paint pictures in the minds of the parties:

• What problem will this deal solve?
• Why are we solving it this way?
• What is the value proposition of this deal?
• What is your biggest fear of this transaction?
• How did you develop your business model?
• Can you walk me through a sample transaction from the beginning to the end?

Adopt the mindset of a listener and you will be well on your way to being a rockstar dealmaker.

(photo from http://www.seeklogo.com/)

Negotiation Steps for Wimps

Are you a negotiaphobe? Does the thought of actively participating in a debate-like discussion run chills through your spine? It’s OK – negotiaphobia is more common than one might think. The fact of the matter is that we spend so much of our time negotiating that it’s truly an integral skill to possess.

So, you’re a negotiation wimp … who cares? All you need to do is follow these five steps – which we pulled from the one and only One Minute Negotiator by Don Hutson and George Lucas – and you’ll be a pro:

STEP 1: PREPARE

Know who your opponent is. Do your best to understand his or her stance before you enter the negotiation. On the contrary, know your own stance. Do your research so you can cover all bases in case your opponent throws a curveball at you.

STEP 2: PARTNER WITH SOMEONE ON YOUR SIDE

Find yourself a strong ally before you enter the negotiation. Learn from him or her possible selling points you may not have thought of yourself. Having an ally will also pump you up with confidence, knowing you’re not the only one who believes in your case.

STEP 3: USE A CHECKLIST

The worst thing you could do is go into your negotiation and forget everything you stand for. Take a moment to write everything down. If you’re more visual, use a mind map. If you’re more of a perfectionist, write yourself a script. Don’t be ashamed to bring your checklist with you while negotiating; you may feel silly but you sure as heck won’t when you nail all your points.

STEP 4: ROLEPLAY

Role-playing is not just for children and theater geeks; hard-core negotiators do it, too. Find someone, perhaps your ally, who knows all your hard-selling points, and have him or her throw some sticks in your spokes – this will prepare you for the real negotiation and you’ll be far more prepared.

STEP 5: ALWAYS BE HARD ON DEAL POINTS AND SOFT ON PEOPLE

You don’t want to go into your negotiation like a harda** -- that usually doesn’t go over well. It’s intimidating and has a track record of pissing people off. Instead, lay down the law with your points, but be as kind as can be when addressing your opponent. You want him or her to like you and eventually agree with you. Entering your negotiation on your high horse is most likely not going to be effective. Stay grounded on your points, stay sweet to your opponent.

So, negotiation wimps, you have no excuses now! Just try out these five negotiation tips and you’re sure to be a pro soon. Negotiaphobia, what’s that?

[Photo from KingofGeorge.blogspot.com]

The Brilliant Negotiator Within

I saw this young kid at the bike shop trying to convince his parents to get him a bike. He was a brilliant negotiator. His dad finally agreed to his complex proposal for a new set of wheels. This made me think that negotiation is an innate skill that we all possess but, with time, lose touch with. We supposedly “grow up” and in the process become negotiation wimps. Think back to when you were a child and tried to convince your parents to let you do things. You probably had a good success ratio.

It’s a common misconception that either you’re born to negotiate or you’re not, but I think that negotiation is a mindset and skill we all possess and need to reconnect with. When we were kids, we were authentic, we knew what we wanted and we knew what buttons to push so our parents would cave. As an adult, we struggle to be authentic, are often confused about what we want and treat everyone the same.

Brilliant negotiators are born inside us all, they just tend to die through the process of growing up. If you can overcome this irony and reconnect with the mindset and skills in your mental storage locker, you will be well on your way to becoming a great negotiator … AGAIN.

The mindset and skill children have are the same as the framework that Stuart Diamond, author of Getting More, says should be used for each and every negotiation.

• Be authentic and know the desired goal(s)
• Understand the other side and act accordingly (each person is different we must figure out how to connect with them versus overpowering them – focus on them versus yourself).
• Figure out what it will take to persuade the others in this deal.

We all negotiate 20 to 40 hours a week. In fact, the value of your life is the sum total of the deals you negotiate. Why not reconnect to your brilliant negotiator within and kick some ass. Connecting to your natural brilliance comes from focus, practice, desire and persistence or, in simpler terms, from acting like you did when you were a kid.

(Photo from lovingyourchild.com)

Getting to "No" You

I have recently learned getting to "yes" is often proceeded by saying "no." A couple months back I was offered what I considered to be a dream job: great pay, international travel, the ability to work from home. Naturally, I jumped on the opportunity. I told my boss, my friends, my family – everyone – about my new gig. I purchased fancy clothes so I could be more businesslike. I spent all the money I knew I’d be getting before I saw a dime of it. After days of indecisiveness and tiring debates with myself, it hit me like a brick in the face: this job wasn’t right for me. I couldn’t quite voice why not, but I knew I had to say “no” to this seemingly unbeatable offer.

Saying "no" to that opportunity lead me to something that felt right: WieseLaw Contract Studio. Here I am surrounded by business-igniters and thought leaders, jokesters and geniuses. Though I bid adieu to the prospect of designer clothes and trips around the world, I said hello to something even better. And look: after just a few weeks’ time, they taught me how magical it can be to say “no.”

This concept may seem a bit strange at first, but it’s something we should all try to embrace and find comfort in. Nobody gets ahead by being a pushover, and they shouldn’t. What gets people far in life is having opinions and making definitive decisions. Here are a couple pointers to help you say “no:”

- Get over it: saying “no” doesn’t make you a bad person. It makes you a decision-maker.

- If you go into a negotiation and are slightly uncomfortable with it, get it out on the table. Let the person know right away that you’re leaning towards no.

- Remember what “no” often times leads to: an opportunity to say “yes.”

So next time something does not feel right, have the courage to say "no." And remember, when someone says "no" to you, don't sweat it -- they may be trying to open a different door down the road.

The Looming NFL Lockout & the Shrinking Pie

AP Photo/Haraz N. Ghanbari

Back on October 12, 2010, the owners of the 32 NFL franchises met behind closed doors in Chicago. Dominating the news with respect to this meeting is the looming 2011 work stoppage predicted by many NFL reporters and insiders. I'll leave it to them to keep breaking down the minutiae of the various back and forth barrages between the owners and the players' union (the "NFLPA"). Where I think this dispute gets really interesting is breaking down what is at stake and doing a little negotiation analysis.

The NFL is a money-making machine. It just prints money. It is estimated that the NFL revenue for the 2009 season is in the ballpark of $8 billion. One estimate from the Wall Street Journal (article here) is that even if a new deal is reached with the NFLPA in time to save the season, losses from merchandising licensees and sponsorships could total as much as $1 billion (OUCH!). If the lockout continues through regular season games, the NFL stands to lose as much as $8 million per game canceled.

The real down-side here for both players and owners is that for both players and owners, the negotiation situation gets worse - especially after March 1, 2011. As the revenue pie starts shrinking, the proposals will begin to shrink as well. Additionally, owners want to take a bigger piece of the NFL revenue set aside for player salaries and use that extra cash (roughly $1 billion) to reinvest in a host of projects aimed at long-term revenue growth for the teams and, ultimately, players as well.

Pushing the owners and the "NFL" is the large amount of debt carried by the league and its teams on which they have to make interest payments on whether games are played or not. In addition, costs are always increasing, new stadiums / box seats are being built each year, coach and staff salaries, etc.

On the other side of the coin is the NFLPA representing the players interests. According to the NFLPA the average length of an NFL career is about 3.5 seasons. A lockout is devastating to an NFL prospect trying to make an NFL roster in a lockout year. There will be a whole crop of younger NFL prospects in next year's college class for teams to choose from. Striking while the iron is hot can be key, especially for the "lesser-knowns" in the league. For every Randy Moss, Tom Brady or Chris Johnson in the league there are many others who's future is much less certain.

Still, the owners, and the NFL for that matter, don't have much of a product without the players and one of the primary issues players have with shrinking salaries is the feeling that while they define the NFL product, they are being treated more or less like interchangeable parts while the owners reap huge profits. Much of the early wrangling between the NFLPA and owners has been the NFLPA asking to see the books. Basically as "show us why we shouldn't be making more money" request. 

Taking into account the added wildcards of the Supreme Court American Needle Inc. v. NFL and the NFL's hiring of Robert Batterman - the NY Lawyer who led NHL owners through the season-long lockout of 2004-05, you have all the makings for an epic and acrimonious negotiation. Once again, the NFL lives up to its reputation for being the best soap opera on TV!

Term and Termination - A Translation

Term.

One of the more clear-cut, "no-duh" contract clauses is the Term of the Agreement clause. Simply put the "Term" of the contract spells out how long the parties intend their agreement to last and should be included in every agreement. 

Being able to clearly identify the duration of a given agreement is essential information to properly managing your deal portfolio. Once the deal is inked ensure that you note the date the agreement ends with some appropriate appropriate reminders that the end is near. This helps you to begin the process of evaluating the deal with enough lead time to make decisions about renewal, renegotiation or shopping around for a new business partner. 

In addition, many Term clauses include "auto-renew" or "evergreen" clauses which allow for the contract to keep renewing unless terminated by one of the parties. The deadlines for terminating auto-renewals is often 60-90 days prior to the actual date the contract renews. If you have the appropriate reminders in place, you greatly reduce the risk of unwittingly continuing an unwanted partnership.

Termination.

This is your exit strategy, that is, how the parties can end their contractual relationship. Generally, you can boil down most types of termination to "for-cause" and "not-for-cause" clauses. 

In the case of "for-cause" termination clauses there can be a wide variety of reasons for ending the agreement. What happens if one of the parties is acquired by a third party? What if one of the parties enters bankruptcy? What if one of the parties breaches a material term of the agreement (such as failing to pay!)? "For-Cause" termination clauses allow you to exit a partnership that isn't working as planned and accounts for some foreseeable events that would make a continued partnership unfavorable.

"Not-for-cause" clauses allow one or both of the parties to wind up the agreement for any reason or no reason at all. Needless to say, that gives the party with the right to terminate without cause some serious power over the relationship. If you are in the position of having a partner with this power, be sure to negotiate a transition period into that decision so that you have enough time to change gears in case your partner decides to terminate early. 

Many business and strategic decisions drive the length of the term and the exit strategies available to either party when entering into an agreement. Just remember - The value of your business (and your life) is the sum total of its deals!

Negotiation Stress

I was talking to a friend recently that is leaving their job for a new one. The hunt for her replacement is ongoing and in a surprisingly logical move the company asked her to describe some traits that would help them find a successful candidate. One of her suggestions that stuck out in my mind was to ask how the candidate deals with stress and to have them cite some specific examples. In her particular field there is a definite busy season requiring long hours and great attention to detail which all adds up to some serious stress. The first candidate they talked to said that they never really have to deal with stress and that in the event that they were stressed out they would most likely try an ignore the problem.  Needless to say, they weren't exactly impressed with that answer.

Similarly, negotiations can often be stressful and having a grasp on what areas drive stress as well as strategies for coping with stress are necessary skills for negotiators. Negotiation has its share of conflict scenarios. Generally speaking you are trying to get the most you can from someone else while giving up the least to get it (a VERY generic definition). These kinds of interpersonal conflicts can be one source of stress. 

Another area of stress is "the unknown." It's really never the things you already know that cause you problems in negotiation. The more information you can gather about an upcoming negotiation, the better you'll be able to cope. If you know what to expect from your counterpart and can nail down a workable schedule in advance, this can go a long way to easing the tension (or at least give you a light at the end of the tunnel). In my experience, a lot of this type of stress is anticipatory in nature. That is, once you jump in and learn what you couldn't know beforehand, things tend to look up.

For some interesting reading on the effects of anticipatory stress on negotiators, check out Kathleen O'Connor & Josh Arnold's SSRN article Fear & Loathing in Negotiation: How Anticipatory Stress Affects Bargainers

Coping with stress is different for everyone and some are much better at it than others. My advice comes down to my experience and generally speaking my coping strategies boil down to three primary outlets: Exercise, Discussion and Brainstorming. 

Exercise: I find that the endorphins from at least 20 minutes of physical exertion don't hurt anything (except maybe my atrophied muscles) when things are not going according to plan. At the very least, you can turn some of that pent up negative energy to good use. This may not be an option for everyone - the key is to find a way to channel pent up negative energy towards a positive, reinforcing activity.

Discussion: Sometimes just talking out the problem helps you get some perspective. I try to stay away from solutions at first since the primary focus for me is exploration. Why did this upset me? Is it the message or the delivery? Are there other outside stressors contributing to the situation? Stepping back from the situation has often allowed me to consider options that never occurred to me in the heat of the moment. 

Brainstorming: Once you've identified problem areas and taken some time to burn off some of that excess energy, it's helpful to start taking concrete steps to solve your dilemma. Brainstorming is a great first step. This doesn't have to be a formalized process (most of my best ideas come while relaxing in a hot shower), but the key is to let your brain tackle the problem without constraints. Not every solution will be feasible, but the whole point of brainstorming is to attack a problem with creative ideas. 

For some further suggestions and reading, check out MindTools Stress Management Techniques page. Lots of great ideas!

Contracts - What's Your Methodology?

Part of our ongoing commitment to our philosophy of doing deals (The Value of Your Business is The Sum Total of Its Deals) is the methodology we employ to help each deal capture the potential "whole value." Part of the fun of doing deals (yeah, it really is fun) is that each new deal presents new challenges and new ways of capturing value. 

Below is a picture that shows an overview of our Whole Value Methodology (you can click the link to download a much more legible pdf). We are constantly refining our approach, because we just keep learning new things.

One of the greatest challenges facing new and small businesses (and many large and established businesses unfortunately) is developing a measured approach to doing deals. One of the best ways to implement a methodology like that outlined above is to work with an attorney to develop some standard contracts for some of your more common deals. You may not always be able to use your standard contract depending on the customer or vendor, but you will always be able to compare the terms to your standard and negotiate from a position of better understanding. 

Still, negotiation is only one piece of the methodology. In order to effectively use your standards, you need to ensure that you have followed all steps in the methodology. For instance, how will you know you've reached your intended destination if you never outlined where you wanted to the deal to end up?

Finally, just as we're refining our methodology on an ongoing basis based on what we've learned, be sure you're doing the same! If you find a better tool, better methodology, better contract, better anything... run with it!

Time to Drop Anchor?

Well, not ever blog post title is going to be a winner, but you have to start somewhere, right?

Last week, I talked about how perceptions often lead to faulty decision-making. I wanted to follow up by talking about Anchoring (and Adjustment) which can lead to altered perceptions and focusing issues in negotiations.

So what is anchoring? Anchoring can refer to a couple of related things. 

First, Anchoring can be employed as a negotiation technique. Most often one party will attempt to set the tone of a negotiation by leading with a specific number, contract terms, etc. The hope being that wherever negotiations go, the final agreement will be shaped by the initial "anchor." This can definitely backfire. In some cases, your negotiation opponent may be willing or even expecting to give up more than you ask them. In such a case, an anchor acts as a minimum they will push back against - especially if they see it as more favorable than what they had initially hoped.

Second, Anchoring can also refer to the focusing effect that happens when the way information is presented tends to skew our perception of how a given scenario will play out.  The best example I can think of here is the amount of money you are supposed to drop on an engagement ring - the ol' 2 months salary line. I'm pretty sure most ring shoppers don't figure it out to the penny, but I am certain many of them ballpark the amount they spend using the 2 months salary benchmark. Most people can't afford an expense that equals 2 months salary and end up going into debt (thus spending even more taking interest into account). While you can't put a price on love, you can certainly do better in accessing your own budgetary constraints than "2 months salary" would dictate. At any rate, the size of the diamond really won't affect future marital bliss or lack thereof (and if it will...might I suggest a nice, airtight pre-nup?).

This second instance of anchoring (sometimes referred to as a focusing illusion or cognitive bias) can be very difficult to accurately account for because our own biases inform our perceptions. The best strategy to overcome this type anchor is preparation. If you have a clear picture of your destination and the objectives you need to meet in order to ensure a favorable outcome, you'll be less likely to change your goals mid-stream in response to anchors introduced during the course of negotiations. 

If you are interested in some more academic reading - check out Tversky & Kahneman's Judgment under Uncertainty: Heuristics and Biases.

How Did I Miss That!?

Image Source: Stock.xchng - Egahen

One of the most common problems that people face in any decision-making process is a perceived lack of information. Unfortunately, the reason the phrase "hindsight is 20/20" is so cliche is due to the fact that looking back on the situation, so many poor decisions seem highly avoidable. In negotiations, Max Bazerman and Dolly Chugh have coined the term "Bounded Awareness" to describe the phenomenon of failing to "see" and use accessible information. In their words, a "'focusing failure' results from a misalignment between the information needed for a good decision and the information included in the decision-making process." You can read the full article - Bounded Awareness: Focusing Failures in Negotiation - by clicking the link.

Max and Dolly (how fun are those names together?) bring up some interesting points, that bear discussion. First, how do we get stuck in the trap of "Bounded Awareness"? They suggest that a decision-maker is headed for trouble when faced with (1) other tasks competing for attention; (2) a clearly defined goal, with narrow assumptions (see - The Awareness Test and think Inattentional Blindness); (3) affective information (i.e., it's a lot easier to see how this course of action will affect us today rather than to sit back and consider how this decision will affect the future. We tend to "go with our gut".); or (4) information with self-relevance (we're always going to be better at evaluating how information affects us rather than how it will affect others).

Now, if only identifying these "focusing failures" made it just as easy to avoid them... How do I expand my awareness in negotiations? Some strategies for solving the problem of Bounded Awareness come from Negotiation Genius by Deepak Malhotra & Max Bazerman. First off, knowing that you are likely to be susceptible to certain biases and ignoring certain types of information can help you be on guard for such information. As a corollary to that advice, keep a record of your past successes and failures. Use what you learned in those situations to help break the boundaries. Finally, bring in outside opinions. Affective Information and Information with Self-Relevance won't affect everyone similarly. Explain the situation to other team members and check your reactions against objective opinions. 

Using these strategies in your next negotiation will help you overcome your blind spots and help you see outside your normal level of awareness in order to drive greater value. Good luck!

The Scarcity Mindset

You have probably been introduced to the idea of Abundance v. Scarcity from Stephen Covey's The 7 Habits of Highly Effective People. In the book a Scarcity mindset is characterized as viewing the world through a lens of limitation. Opportunities are few, most options are impractical and it's a battle to see who can take the most from whom.

For example, I was speaking to a friend recently about the pervasive scarcity mindset that exists in her workplace - This Is Yours, This Is Mine, This Is Non-Negotiable. This mindset manifests itself in the daily office "turf wars" to see who will get their share of the budget. This has had a trickle-down effect to most departments which has led to a high degree of unhappiness and dissatisfaction among employees.

Entering into any negotiation situation, it can be easy to get into a mindset of Scarcity. There are a lot of "things" out that drive that thinking: limited resources, limited money, limited time. You can be pretty sure that not too many people are walking around these days saying "Gosh, if I only knew how to spend more of this surplus cash I have laying around..." 

On the other end of the spectrum is the Abundance Mindset. Abundance doesn't mean that you are irresponsible or careless with the resources and opportunities that exist, rather, it is a mindset that seeks to do more these resources and opportunities than "what we've always done." 

Often times, you'll hear negotiators talk about Expanding the Pie. This involves brainstorming ways to take "what we've always done" to "what we should be doing." In essence, we are talking about creating value in negotiation - not always an easy thing to do. It requires negotiation counterparts to work together, to communicate their wants, needs, and interests.  For some amazing ideas to help you develop a framework for creating value in your next negotiation, See Negotiation Genius, by Deepak Malhotra & Max H. Bazerman, Chapter 2 & The ICON Negotiation model (explanation here). The strategies discussed in these resources will help you begin to see value in negotiations that are marked by a Scarcity Mindset. 

When Better Becomes Perfect.

One of the thoughts we recently put up on our "Ideas" page (Better is Perfect) got me thinking about how to explain this succinct, yet possibly complex idea. When people are confronted with a new contract they are often a little apprehensive about what kind of work it is going to take to get a deal they can live with. You may be unsure what protections you need, how the ownership of the work product will affect your future business and what "gotchas" may exist to act as stumbling blocks in the future. Additionally, it may be difficult for people to feel like they can push back on their deals because they fear losing the business. 

So how do you get Better deals? Whenever we start working with a new client that will be executing multiple contracts which require the same basic format (e.g., master services agreements or independent contractor agreements), we forge a master template for doing those types of deals which takes into account your specific needs and problems. This has two primary benefits: (1) If you are able to get the deal signed as is, you can be sure you have a great deal in place; and (2) If you are in a situation where you have to negotiate a deal, you have a metric for measuring whatever deal is presented. Through use of your master template and negotiating from that template you'll have a concrete way of knowing when your deals get better.

Now the logical leap comes in: Better is Perfect. That might seem like a stretch, but if you are able to take a proposed deal that, in the past, you would have signed without any changes and compare it to a deal where you were able to get some of your Master Template changes incorporated, you have a deal that is not only better, it's perfect! Now, I'm sure it's not perfect in the sense that you got everything you could have ever wanted in any deal. But one of the key principles of doing any deal is that both sides should be able to walk away from the bargain ready and willing to do another deal together. If you are able to put all these steps together, you'll realize that Better is Perfect.

Tapping The Power of Relationships Through Negotiation

I imagine that you all have heard and read - to the point of cliché - that we all negotiate, to a greater or lesser degree, each day. What may fall by the wayside is the importance of relationships and the ways in which we leverage those relationships in our every day negotiations.

Thinking back to when I was a lot younger and a bit less responsible with my choices, my parents often leveraged our relationship to help me "see" that what I wanted to do and what I should do were two different things. While I don't recommend guilt-tripping your vendors or telling them that "you aren't upset, just disappointed" there are plenty of ways to leverage your relationships within the context of negotiation.

We are all going to have varying viewpoints with respect to what constitutes a "good" relationship with our negotiation counterparts.  In their book Getting Together - Building Relationships As We Negotiate, Roger Fisher & Scott Brown suggest that a good working relationship is one that can deal well with differences. We don't have to see eye-to-eye on every issue that crops up between us. In fact, if we did, there would be little need to negotiate in the first place. The important facet of the relationship is that we can work together to come up with creative solutions without wanting to gouge out the other person's eyes. Avoid sweeping disagreements under the rug, but at the same time be willing to use trade-offs to balance your competing substantive interests.

When someone says that they are "leveraging a relationship" this often has a negative connotation - something like a nice way of saying "I'm going to use them to achieve my ends." However, you can leverage relationships without damaging them.  Try some of these ideas from the Getting Together book:

1. Be unconditionally constructive.  If your negotiation counterpart sees that you are consistently seeking to build rather than tear down, they will be encouraged in their efforts to help reach mutually beneficial solutions to do the same.
2. Be wholly trustworthy, but not wholly trusting. Follow through is probably the most important way to establish and maintain a good working relationship. If you don't do what you say you will do, the other side looses incentive to perform. 
3. Persuasion, Not Coercion. It is easy to feel hijacked when one side begins making demands on you in a "my way or the highway" manner. Seek to bring your counterpart around to your point of view rather than cramming it down their throats.

By utilizing these tips you will be able to maximize the value of your good working relationship!

Handling Awkward and Embarrassing Situations with Humor

Here's a great story from our very own Kendra Richgels, who knows how to think on her feet given even the most unexpected surprises...enjoy!

It was mid-afternoon on the second day of an extremely difficult negotiation involving 20+ individuals.  Tensions were high and the mood was serious.

Suddenly, I received a note from my female negotiation partner.  “Do you have a sewing kit and do you know how to sew?”  I looked over and one of the buttons on her carefully selected new coat dress had fallen off from a key section of the dress.  Turns out the buttons were metal buttons and were slicing through the threads holding the buttons in place.

We had precious few hours left to complete the deal and were moving into a critical part of the day with a small group selected to complete the legal terms.  We had found the attorneys from the other party oblivious to our charm and were finding it tough to crack their serious and difficult nature.  Due to the timeframe, location and logistics, leaving for a wardrobe change was not an option.  We devised a workaround for this button without calling attention to the issue.  An hour or so later, a second button popped off.  No longer able to contain her laughter at the absurdity of the situation, my colleague burst into laughter, announcing to the tension filled room that she must apologize, but her dress was exploding. 

We all know that appearance in a negotiation is critical.  The right clothing goes a long way to setting the tone for the negotiation.  However, wardrobe malfunctions happen to everyone.  The exploding dress continued to lose buttons throughout the remainder of the long evening, a situation we handled with laughter and seeking assistance with the other part’s team to laughingly find alternative button holding solutions.  The humor of the situation connected the parties and continued to act as the spigot to release the tension built in a room.  The way we handled the situation exemplified exactly what we were looking to do in the negotiation - to improvise practically and creatively in the scene at hand.

The “Exploding Dress” story exemplifies how an absurd situation handled correctly can be turned into a positive outcome with the use of humor.  Often, the ability to use humor as a connector between the parties presents itself unexpectedly.  Having a responsive sense of humor in contentious settings weaves together laughing matters and deeply serious ones. 

Negotiation Strategies - Let The Mind Games Begin!

You made it! You're here! Negotiation time baby! You put in the time to prepare, you've examined the situation from different perspectives and now it's time to meet with the other side and have all that hard work blown out of the water. Ok, not really, but another key point to keep in mind as you engage in negotiations is that there will be surprises and sometimes you may have to change your approach despite the hard work you put into preparing. With that, let's get down to the nitty gritty!

Of the many great things I've learned since I became a member of the WieseLaw Contract Studio, the most important thing is that taking some time to evaluate your strengths and then playing towards those strengths will net you exponential gains vs. incremental gains when you focus on "fixing" your weaknesses. The same holds true in negotiation and especially negotiation styles and strategies. Take some time evaluate your strengths and weaknesses. When it comes to negotiation styles most people will settle into one of two camps: soft or hard. Within these two camps there are numerous strategies that can be used effectively regardless of where you stand.

A true "soft" negotiator isn't a meek, passive pushover. A soft negotiator is concerned with relationships and maintaining the peace throughout the negotiation process. A soft negotiator would rather persuade you to agree with them than to push a solution without consensus. Managing conflict is not exactly the forte of a soft negotiator, but collaboration is where they will shine.

A true "hard" negotiator isn't irrational or unwilling to examine different points of view. A hard negotiator views negotiation as a competition. This drives them to discover as much as they can about the situation and their negotiation partners. A hard negotiator drives a hard bargain, but they are well informed and expect to be rewarded for their hard work.

Negotiation strategies tend to revolve around these two basic polarities (and their many, many variants). It can be very tempting for a hard negotiator to stick to a positional bargaining strategy where they assume limited or fixed resources exist ensuring a "win-lose" outcome. Similarly, a soft negotiator may adopt an accommodating strategy in order to strengthen a relationship causing them to give in where they really aren't achieving their goals.

The key here is to work with your strengths to develop negotiation strategies that will lead to better agreements that will be more likely to be honored by all parties to the agreement.  William Hernandez Requejo and John L. Graham in their book,  Global Negotiation: The New Rules, have some great suggestions for doing this:

1. Establish common goals of what this "collaboration" would create. A more workable deal? Some common long term goals? A closer partnership?
2. Establish the rules of engagement. The purpose of the exercise is to resolve differences in creative ways that work better for both parties. All ideas are possibilities, and research shows that combining ideas from different cultures can result in better outcomes than those from a single culture.
3. Trust is key, and difficult to establish in many cultures. Certain techniques might speed that process a little. Being offsite, for example. Establishing physical proximity that unconsciously signals intimacy.
4. Add diversity (gender, culture, extroverts, different work specialties, experts, outsiders) to the group. Indeed, the diversity associated with international teams and alliances is the real goldmine of creativity in negotiations.
5. Use storytelling. This both helps establish who you are and what point of view you are bringing to this collaboration.
6. Work in small groups. Add physical movement. Tell the participants to relax, play, sing, have fun, and silence is ok.
7. Work holistically and using visuals. If, for example, there are three sticking points where neither side is happy, agree to work on those points by spending a short time – 10 minutes – on each point where both sides offer "crazy" suggestions. Use techniques of improvisation. Neither side should be offended by the crazy ideas. No one should criticize. Explain that by exploring crazy ideas that better ideas are often generated.
8. Sleep on it. This enables the unconscious to work on the problems, and gives negotiators time to collect opinions before meeting again the next day. Other kinds of breaks, coffee, etc. are also helpful. The overnight part is particularly important. 
9. Doing this process over several sessions allows both sides to feel that progress is being made, and actually generates better and more polished ideas that both sides can invest in.
10. It is the process of creating something together, rather than the specific proposals, which creates bonding around a shared task and establishes new ways of working together. Each side feels honored and all can feel that something is being accomplished.

We hope that taking time to evaluate your negotiation strengths and then playing to those strengths in a creative and thoughtful manner will help you achieve amazing results from your next negotiation. Keep at it and please feel free to share any experiences and stories you have with us.

Fun With Seesaws, Or In Other Words: Leverage!

All right, we've got you all prepped for your negotiation and we've got you thinking about the importance of where you're going to hold your negotiations. Now, we need to spend some time thinking about how LEVERAGE will affect your negotiations and how you can affect the leverage in any deal.

Begin by evaluating the Leverage situation as early as possible into the Negotiation. Time is a huge factor in determining Leverage and many times, the seconds ticking off the clock alone can change the balance of power in a negotiation. If you know that deadlines and time pressures will only become greater for yourself or the other party based on the timing of negotiations, this can be a powerful tool for you to affect the outcome.

Next, take some time to think about the surrounding environment and circumstances in which you are negotiating. Sometimes things are great, everyone is amicable and life is good.  Sometimes it's not quite like that. If you can identify the points of friction and understand how the underlying circumstances within the organizations at the table could affect the outcome of the negotiation, you'll be prepared for stormy weather if you encounter it.

Your actions and those of your negotiation partner can also be indicators of Leverage. Some things to watch for:

• Neediness - Are you eager, willing, bending over backwards to get things done? 
• Emotions - People blowing their tops and becoming emotional can signal important crossroads in your negotiation that might have otherwise seemed unimportant.
• Drafting Control - Often times, the initial draft becomes an anchor for the negotiations. If drafting the agreement is taken up by the other party, don't be sucked into using their paper as your anchor.
• Individuals Involved - The number of people involved and their prestige within the organization is a great barometer as to how important this negotiation will be. 

During the course of your negotiation, there are several actions you can take that will either help you to boost your own Leverage or to reduce the strength of your opponent's Leverage.

Boosting Your Leverage:

• Create alternatives
• Match your offerings to their needs
• Discount their alternatives
• Create a deeper relationship

Reducing Their Leverage:

• Be disinterested
• Identify deficiencies
• Expand the scope of your project
• Establish an exit strategy

Finally, remember that when dealing with Leverage, PERCEPTION IS REALITY.  So when you are prepared to serve up your Leverage, remember that this can be done in a variety of ways:

• Present it - Just let the other side see the strength of your position
• Leak it - Drop hints, provide strategic leaks, don't give it all away, but show enough to bolster your position.
• Feign it - Fake it until you make it! (We don't really follow or like this strategy, but it is often employed and you should be aware that it could be used against you!)

Have fun on the Seesaw! We hope you have the tools to stay ahead of the leverage game and keep yourself in as strong a position of Leverage, from beginning to end, as possible.

Next week: Negotiation Strategies - Let The Mind Games Begin!