Why Do Some Negotiations Fail?

Let's face it, not every negotiation is going to end with resounding success. That sucks, there's no doubt about it, but you can almost always learn something from failure. I would encourage you to do a post-mortem on each of your major negotiations to see if you can learn something from them, but this is especially important in cases where you end up with bad deals or no deal at all.

The following is a short list of areas of concern for most negotiators.  Rate yourself - how well would you say you are performing in each of these areas.  Try and put yourself in the shoes of your counterpart. How would you react if you were hearing the same information?

1. Goal Setting: Good goals allow for negotiators to operate with a Zone Of Possible Agreement (ZOPA).  They don't have to be rigid or set in stone, but they should give you direction in your negotiations.  Without an idea of where you're going, how will you know when you get there?
   
2. Emotions & Body Language: We've talked about some of the "intangibles" of negotiating on this blog before.  Don't underestimate the impact of emotions or ignore the information you may be able to receive via body language. Don't forget to examine your own emotions.  Are you letting emotions cloud your thinking or negotiation tactics? Taking these intangibles into account can only help you!
   
3. Communication: This is critical to the success of any negotiation. Ensure that everyone understands how the negotiations are progressing and put it in writing! Any complex negotiation will inevitably have milestones of agreement that will need to be reached before the group can progress. If these milestones are captures accurately and communicated to all interested parties you will significantly reduce the risk that a further milestone will be compromised by a failure to adequately understand what has gone before to prepare the way. 
4. Listen: This is practically a sub-point of communication, but it's so important that it deserves its own place on the list. Don't be afraid to shut up. Maybe you know everything there is to know about this negotiation. Maybe you are the world's foremost expert on this subject. Maybe you are certain you know exactly what the other side is going to say.  Then again, maybe you don't. You can learn a lot just by letting someone else do the talking. 
5. Stay on target...stay on target: Ok, I worked really hard to fit a Star Wars reference in here so stay with me. Agendas are worth their weight in gold. Send one out to the interested parties some time in advance to allow for changes and suggestions. Once you have a solid agenda this helps everyone prepare for the areas of interest that will be discussed in your negotiations that day.  This will help you avoid a free-for-all style negotiation where everyone with a stake in the outcome tries to assert their goals at the same time.
   

Hopefully this will help you with your next negotiation review. Remember, making mistakes isn't what can make you a poor negotiator, but failing to learn from your mistakes will!

What Are You Saying That You Aren't Saying?

Ok, that's a bit cryptic, so what do I mean? Body Language. Whether or not you are consciously aware of the signals you are sending and receiving, body language plays an important role in how your message is perceived by your negotiation partner(s).

To be sure, there are many, many ways that we communicate non-verbally. Further, there is no set way in which a particular hand gesture, posture or eye movement will have a definitive meaning. Many of those subtle non-verbal clues will vary from person to person. However there are some steps you can take to help you better understand your own non-verbal cues and those of others.

Be aware what your body language is signaling to the other side. How do you act when you are nervous, angry, happy, confused, agreeable, disagreeable, etc. By taking stock of some of your own non-verbal communication, you may more quickly pick up on those same signals in others. Additionally, if you are working on your "pokerface" when it comes to negotiations, being able to shed some of these non-verbal clues will help you ensure that you don't unintentionally give away information in a negotiation.

The more difficult step is connecting the body language of your counterpart to information that can help you better understand how your communication is being received and perceived by your negotiation counterpart. Much of the time, you may have to rely on time and experience to provide such information, but you may be able to shortcut the process by following up when your counterpart is sending some non-verbal cues such as crossing arms over the chest, looking away, doodling or otherwise fidgeting. For example, if you are discussing payment terms and your counterpart suddenly crosses their arms, you can follow up by saying "Is there anything about the payment terms I've just described that you think we should discuss?"

This important skill of understanding non-verbal communication will not come overnight and takes some work, but it will help you better see how the negotiation process affects the other party and provides clues about problem areas that may require further discussion. Good luck!

Eat Up - You'll Need Your Strength!

No matter how well you prepare for any negotiation, there are always unknowns that you won't have control over. One of these, is the intricacies and complexities of an individual’s personal life and its effect upon the negotiation.

I once negotiated a complex and high-risk deal with a woman on the counter-party’s team who was engaged to be married. We had a series of in-person negotiations that followed a cycle of decent progress and discussion in the morning followed by difficult and unproductive afternoons. As the day progressed, she became withdrawn and sullen, stubborn and uncompromising.

At the recap at the end of each day, our internal team would brainstorm what we could to in order to achieve success and expedite the progress of the negotiations. All of us noticed that this woman ate very little during the day despite the plethora of lunches and snacks available. During the course of idle chatter during one of the breaks, I learned that this lead woman negotiator was on a strict diet to lose weight before the wedding.

Food and the associated acute mental energy it provides is a critical tool in any negotiation. Beginning the next day, we stocked the conference room with fresh cut fruit and many healthy snack alternatives. We managed the flow of negotiations to start earlier in the day, shortly after breakfast when the energy level was the highest. We learned quickly to hit the hard issues in the morning followed by the easier issues in the afternoon.

To be mentally acute, eat right! In-person, day long negotiation sessions take a lot of energy. Food is key to maintaining energy. Don't skip meals! Look into healthy alternatives - this is better for everyone involved so you don't mix the sugar high with the inevitable sugar crash.

Deal World Rule #7 - Simplicity

The Simplicity Principle. One of the maxims we live by in the WieseLaw Contract Studio is – “Simple, But Not Easy.” In the world of deal making, there are far too many people who have an unfortunate talent for making things overly complex.

You should do the opposite – bring refreshing simplicity to your deals by doing the following:

• Have Courage. Reduce to what is needed. People, especially lawyers, often feel the need to overcomplicate deals. Have the courage to include only what is needed.
• Shorter is better. Although it is harder to craft short, tight and concise deals, we know they are more effective. As Blaise Pascal* once famously said:

“I'm sorry this letter is so long, I did not have time to make it shorter.”

*This quote, in one form or another, has also been variously attributed to Mark Twain, George Bernard Shaw, Voltaire, Winston Churchill, Marcel Proust, Rudyard Kipling, Henry David Thoreau, Abe Lincoln, Ben Franklin, and Larry Thomas, among others.

• Patience. Go Slow to Go Fast – Take time on the front end to get all the needed understanding and information to determine what is important and what is unimportant. This is the step most often ignored.
• Design. Create a deal structure and process that is designed to support the clearest deal making.
• Experience. Leverage your lessons of the past and apply them forward toward creating a deal that focuses on what is important and not on what is unimportant.
• Deal Maps. Map out the deal with a picture. Work through the actual deal from start to finish with a deal map.
• Listen. Understand and factor in the interests of the other parties.
• Capture all interests.

Some of these ideas are discussed by John Maeda in The Laws of Simplicity.

Do you embrace the power of simplicity in your deal making? If so, congratulations. If not, start today.

Understanding Contracts - What's Your Strategy?

OK, you made it, you have a deal. It's great, it's perfect - life is good and now you just want to get on with the business of fulfilling your end of the bargain. But, how do you make sure that the people responsible for carrying out agreement actually understand what they are supposed to do?

Chances are you aren't going to find too many people excited to dive into the language of the contract every time they have a question or a question about upcoming contractual milestones. You are going to need some kind of summary - a way to help the business people understand what they have to do without drowning them in the finer legal points. One strategy we've had a lot of success with at the Studio is to use Mind Mapping software to create a Deal Map. A visual summary of important deal terms. We use MindMap Pro to help us create our Deal Maps.

There is definitely a craft to Deal Mapping. The need to be legally accurate and easy to understand can take some teamwork between you and your attorney/legal department. But the payoff can be realized in having greater certainty about important contractual elements and a confidence that each new deal will be implemented accurately and on time.

For an example of a simple Deal Map, click here.

The Importance of Trust in Negotiations

Trust is a delicate, often mis-understood and, far too often, abused dimension relating to all kinds of human interactions, but since this is a blog about negotiation, we'll stick to that today, trust me.

First off, why is trust so important in negotiations? Simply put, if I can't trust you to fulfill your end of the bargain, my incentive for making good on my end diminishes greatly. What is the point of faithfully executing my duties under our agreement if you aren't going to live up to your end of the deal? However, trust goes deeper than that and comes into play much earlier than at the time the agreement is finalized. From the outset of a negotiation, trust plays an important role - both emotionally and logically. As explained by the folks at ChangingMinds.org trust has two major facets - Emotion and Logic:

Emotionally, it is where you expose your vulnerabilities to people, but believing they will not take advantage of your openness. Logically, it is where you have assessed the probabilities of gain and loss, calculating expected utility based on hard performance data, and concluded that the person in question will behave in a predictable manner. In practice, trust is a bit of both.

So, how do you go about building trust? While each situation is going to differ depending on the various factors involved, the following ideas should provide a starting point:

1. Establish a line of communication: This is a crucial first step to help you avoid problems down the line that may crop up as the result of misunderstandings. If you haven't established a line of communication before problems exist, it may be harder to gain their trust when other issues are clouding your relationship.
2. Explain yourself: This goes hand in hand with establishing lines of communication. How many times have you found yourself shaking your head at the other side's demands? What are they thinking!? Communication is a two-way street. Explain your reasoning behind your negotiation position and ask for reciprocity. If both sides have more information, that can easily lead to creative solutions that might not have been obvious when you are guessing about the motivation and reasoning of the other side.
3. Guard your reputation: It takes a lot of work to establish a good reputation and only one false step to ruin it. Your reputation can go a long way to paving the way for trust to grow in a negotiation. The opposite is also true - your bad reputation will make things much more difficult.

Once you have established trust in a negotiation, you will have a powerful tool to help you leverage your position and get the deal done! For more ideas, check out Deepak Malhotra's great article: Six Ways To Build Trust In Negotiations.

Deal World Rule #6 - Laws of Behavior

There are certain laws of behavior that have become widely accepted over the passage of time. Knowing these laws and how to apply them can enhance your negotiation skills. Allow us to share a couple of our favorites:

The Law of Reciprocity. Simply stated, others will reciprocate in kind based upon the way you treat them. When you give and take in a negotiation, make sure you do so with this law in mind.

For example:

• Set up any concessions with a clear label and definition of what value you are giving up – this invites reciprocity.
• Create a deal culture that fosters a spirit of reciprocity at the outset – announce
• that you expect to create a fair deal for all parties.
• Make contingent concessions – I will yield on X if you yield on Y.
• Release your concessions over time, not all at once – hold some reciprocity ammo in reserve for future exchange.

These ideas are discussed by Deepak Malhotra in Negotiation Genius.

The Law of Reinforcement. Simply stated, people learn to repeat behaviors that are rewarded. This works for good and bad behavior. Reward the behaviors you want to encourage, and not those you want to discourage. Some guidelines you could apply to your deals:

• Be the Change – Act the way you want to be treated.
• Quickly make the connection – Immediately praise desired behavior.
• Be Clear – Your reward should be clear and consistent, such as a nod, offering of an Altoid mint, open smile, eye contact, or a sincere thank-you or compliment.
• Reward behaviors, not moods or intentions – Don’t get caught up in trying to reward an attitude of the other party, stick to behaviors.
• Ignore bad behavior – if that does not work, punish it.

Some of these ideas are discussed by Leigh Thompson in The Truth About Negotiations.

Are you mindful of the laws of behavior during your negotiations? If so, congratulations. If not, start today.