Nov 1, 2010

How to Negotiate Effectively

 

Consider showing your hand. Giving away information generally weakens your position. However, you might want to disclose your BATNA, if you are convinced your counterpart is underestimating your choices.

Counter -- no matter what. Even if your counterpart makes you an ideal first offer, demand concessions. Accepting a first offer, says Galinsky, will lead your counterpart to regret the offer -- and be more likely to seek future concessions.

Take when you give. Harvard Business School professor Deepak Malhotra has tips on getting the most from giving in. Whenever you are forced to make a concession, make sure your opposite recognizes that you have done so by clearly identifying the move as such. And, if you can do it diplomatically, make the concession contingent on a reciprocal concession. You might also break any planned concessions into smaller increments -- if, say, you are willing to boost a bid by $10,000, offer $7,500 first and then later offer the other $2,500.

Avoid consistency traps. Some negotiators exploit the human fondness for consistency by proposing what seems like a harmless standard and then using it to reach a conclusion that runs counter to your interests -- and holding you to it. Don't answer a leading question or agree to a statement without knowing where it could go or why it is important, writes Shell. And if you do agree, qualify or rephrase the agreement in the broadest terms possible.

Table Manners

Face to face or remote? New research by Roderick Swaab, an assistant professor of organizational behavior at INSEAD, suggests that face-to-face meetings are important when the two parties don't know each other and need to establish a rapport. When they know but don't like each other, face-to-face encounters may only make things worse.

Seating arrangements. Negotiating across a table produces a competitive or defensive atmosphere -- or even a combative one, behaviorists say. Working at the corner of a table, or with your counterpart to your side, creates a more collaborative environment.

Keep quiet -- except to ask questions. Silence can be a powerful weapon. Many people find it uncomfortable and fill it with conversation, divulging information or revising their offer in the process. The best negotiators listen more than they talk and know that asking questions is a proven method of gathering intelligence and fending off questions.

Mimic your opponent. People often unconsciously mimic the mannerisms of partners in conversation, and research shows that it works: Waiters who mimic customers, for example, get bigger tips. In negotiations, Adam D. Galinsky reports, mimicry generates more rapport and "interest-based deals" and "joint gains."

Engage in the theatrics of negotiation. Look visibly put off, or even flinch, at your opposite's proposals. And use tangential issues as opportunities for misdirection: By making a big deal about issues you don't really care about, you can concede them later at no real cost.

Your Place or Mine?

Most people presume there is a home-court advantage in negotiation, and there is some evidence to back that up. But there are often good reasons to take the talks to your counterpart. Michael Rainey, a dispute resolution practitioner who teaches at Pepperdine University, weighs the choices.

Playing an away game. Negotiating on your opposite's turf signals respect and accommodation tempered with confidence, says Rainey. It gives you an opportunity to gather intelligence about your counterpart and the culture in which he or she operates. Finally, it makes it harder for the other side to claim "the file's at the office."

Home-field advantage. If your office walls reflect power or influence that you want to impress upon your counterpart, conducting the negotiations within them will send that message. But, notes Rainey, your opposite will have the same advantages you would have at his or her site.

Resources

Inc.com maintains a library of articles about negotiation at inc.com/negotiating and at inc.com/negotiating-to-buy-a-business.

Harvard Business School makes a lot of scholarly research by its faculty members available free online; articles about negotiation are at hbswk.hbs.edu/topics/negotiations.html. Harvard Law School's Program on Negotiation offers more analysis at pon.harvard.edu.

The Negotiation Experts, a consultancy that provides negotiation training, offers free articles and case studies at negotiations.com.

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