tork & grunt's guide to effective negotiations

TORK & GRUNT’SGUIDE TOEFFECTIVE

NEGOTIATIONS

Mammoth Strategies

Bob Harvey

Copyright © 2008 Bob Harvey

First published in 2008 by:

Marshall Cavendish Limited5th Floor32–38 Saffron HillLondon EC1N 8FHUnited KingdomT: +44 (0)20 7421 8120F: +44 (0)20 7421 [email protected]

The right of Bob Harvey to be identified as the author of this work has been assertedby him in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved

No part of this publication may be reproduced, stored in a retrieval system or trans-mitted in any form or by any means including photocopying, electronic, mechanical,recording or otherwise, without the prior written permission of the rights holders,application for which must be made to the publisher.

A CIP record for this book is available from the British Library

ISBN 978-0-462-09923-1

Cartoons by David Mostyn

Designed and typeset by Phoenix Photosetting,Lordswood, Chatham, Kent

Printed and bound in Great Britain byCPI Mackays, Chatham ME5 8TD

To Cuthbert John, my father, who has been a constant source of encouragement

Contents

Introduction vii

Part One – Background to negotiation

1 Fundamentals of negotiation 3

2 Who is this person? 26

3 What’s this all about? 44

Part Two – Preparation for negotiation

4 Knowing what you want 59

5 Establishing what the other side wants 78

6 Information and opportunities 94

7 Establishing a measurable way of judging the outcome 104

8 Knowing and believing your Walk-Away Option 118

Part Three – Doing the deal

9 Playing games and handling gamesmanship 137

10 Handling personalities and working as a team 156

11 Strategies, tactics and handling foul play 177

Part Four – Summarizing the process

12 Tork and Grunt pass it on 191

Acknowledgements 198

About the Author 199

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Introduction

Tork and Grunt are two cavemen. Tork and Grunt learn to commu-nicate and negotiate. Through them you will learn everything youneed to know about conducting a successful negotiation and reach-ing a win-win outcome.

They show how conventional bargaining from opposing positionsgenerally fails to reach a satisfactory conclusion and how it is impor-tant to identify all the issues affecting both parties. They discoverthey need an overall approach – a Mammoth Strategy – if they are toachieve something that suits both parties.

Tork & Grunt’s Guide to Effective Negotiations demonstrates individualone-on-one deals as well as formal negotiations between teams fromthe two sides. It explains the importance of detailed preparation andthe value of a flexible and open mindset. It explains the importanceof understanding body language and appreciating both sides of thedebate.

You will learn how a creative approach, exploring a broad range ofoptions, can generate new ideas and produce positive results. Bothsides achieve an outcome which satisfies their objectives. And it’s notjust about work, commerce and business. It’s about all aspects of life,because everyone communicates and negotiates every day.

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TORK & GRUNT’S GUIDE TO EFFECTIVE NEGOTIATIONS

Tork & Grunt’s Guide to Effective Negotiations is about understandingwhat motivates people and how to make yourself understood. It’sabout making everyday interactions effective and successful, gettingon with people, and negotiating deals that work for everyone and,most importantly, will last well into the future.

PART ONE

Background to negotiation

1

Fundamentals of negotiation

The caveman and the mammoth

A strange bird flaps noisily across the sky, screeching its morning call.Tork stirs in his sleep, rubs his eyes and awakens. Then he reaches forhis spear and creeps out of the cave. The first streaks of the morningsun glow on the horizon but it is still cold and Tork shivers. He is coldand hungry. Tork must go hunting for food to feed his family.

He picks up his flint-tipped spear and heads for the forest where heknows he will find his prey. He stalks through the undergrowth withhis spear raised to his shoulder, ready to attack. He smiles as he tracksthe footprints in the soft ground but as he takes another step for-ward, a twig snaps loudly under his foot. He freezes. There is a rustlein the bushes ahead of him and suddenly a beast appears, startled bythe noise Tork has made. Its bright eyes focus on Tork, and the twocreatures stare coldly at each other.

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Like Tork, the beast is scared; they are competing for survival. Kill orbe killed – this is the only language they know. If food were plentifulthere would be no conflict, which teaches us the first ground ruleof negotiation.

Ground Rule 1: Someone’s got something you want

Whatever the situation, a negotiation starts whenone party wants something that is specifically avail-able from the other party. This can be asstraightforward as shopping or as extreme as terri-torial warfare.

Although negotiations are not necessarily based on conflicting inter-ests, you tend to think that people approach a negotiation fromopposing positions.


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Suddenly a beast appears, startled by the noise

In the case of the caveman and the sabre-toothed tiger it’s critical,and there’s no compromise. In order for one to survive, the othermust either be sacrificed, or else head for the hills. The situation willonly change if the issue of scarcity is resolved because if there wereplenty of food for all, the caveman and the beast would not have toresort to trying to kill each other.

The immediate problem with this particular negotiation is that thereis no opportunity for communication, no common language, norany mutual point of reference. Tork cannot sit down and discussalternative options. There’s no room for creative proposals. Even ifthey both became vegetarians they still wouldn’t have a languagewith which to communicate, and could end up fighting over therights to the cabbage patch. Tork and his wife, Speek, may notalways agree with each other, but at least they can communicateand understand each other. When the parties communicate, theycan appreciate each other’s needs. This teaches us the secondground rule of negotiation.

Ground Rule 2: Understand – and be understood

The importance of communication.

Without communication there is no understand-ing and similarly without understanding, there isno communication. A workable negotiation isbased on the ability to communicate and under-

stand both points of view. Tork and the sabre-toothed tiger don’thave a common language.

When they meet in the forest, an unspoken communication passesbetween the two adversaries. The tiger recognizes a threat and roars.Tork focuses on the vulnerable soft spot beneath the shoulder blade.He balances his spear and launches his attack, rushing forward andthrusting the spear deep into the animal’s body.

The negotiation is over and Tork is the winner. The animal gives adesperate roar and collapses on the ground, seriously wounded. But

FUNDAMENTALS OF NEGOTIATION

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just as Tork is shouting triumphantly, calling the tribe to help himdrag his trophy back to the cave, there is a crash in the undergrowth.

The tiger’s mate has heard the noise and charges out threateningly.She stands staring at him, roaring and snarling. Tork trips and falls,cutting his head, then jumps up and races off through the junglebefore the animal can leap at him.

Has Tork run fast enough? Have his tribe folk come to his rescue? Willthe animal strike again or turn and run? Was the negotiation suc-cessful? No; a successful negotiation must have a lasting outcomebecause you have to live with it in the future. Tork has won one con-frontation only to face another because the matter has been onlytemporarily resolved.

When Tork and the tiger faced each other they both have the samethoughts going through their minds. Tork’s goes like this:

‘Breakfast!’

‘Greeow! Greeow! Greeow!’ roars the tiger in reply, meaning –roughly translated – ‘Here comes my early lunch!’

Tork lets out a blood-curdling shout:

‘Ha! I’ll get you before you get me!’

And there it might have ended, if Tork’s shouts had not alerted thebeast’s mate. Then the conflict starts all over again and might havecontinued indefinitely if Tork had not raced off home for urgentmedical attention. At least he can rely on his beloved wife, Speek, tolisten to him and understand him.

Ground Rule 3: Plan for the future

The history of the world is a story of conflicting interestsleading to wars, conquests and domination. However, asrecent decades have taught us vividly, it is one thing towin a war and quite a different matter to win the peace.When the conflict is over you must establish a situation


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that both parties can live with. This may mean that both sides haveto accept fundamental changes. If they do not, there is every possi-bility that conflict will re-emerge and the vanquished will rise to fightanother day.

Remember the ground rules

By now, you are probably thinking that this is all far removed fromthe sort of regular negotiations you face in your everyday life. You areprobably asking yourself why this chapter is talking about fightingfor survival in the Stone Age and going to war over territorial bound-aries in the twenty-first century.

What you want to know is how to win an argument; how to recon-cile conflicting interests in the course of day-to-day negotiations. Youwant to know how to persuade someone else to come around toyour point of view.

The following chapters start with the basics and go on to examinewhat negotiation is all about. They outline an alternative way to worktowards lasting, positive results based on the three ground rulesof negotiation:


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Rough & Tough or Soft & Sweet

People tend to use the same war-like vocabulary whether they arenegotiating a business deal or resolving a personal disagreement.However, there is a better way to negotiate than by resorting to ver-bal conflict.

You saw how negotiation is generally viewed as a clash of opposingideas, a fight to maximize gain and/or minimize loss. The cavemanand the sabre-toothed tiger each wanted to kill the other, so therewas no obvious room for compromise. Their positions and demandswere irreconcilable because they appeared to have totally conflictinginterests. In the end, the confrontation was inconclusive. They wereboth injured and ultimately fled.

Is this the way many negotiations pan out, and was this an unsuc-cessful conclusion?

Sometimes the best option is the walk-away option

At first sight, giving up and walking away looks like failure. But inreality, if the parties walk away they have achieved the one objectivethat was paramount: they are still alive to fight another day!

This isn’t the WOW factor. It’s the WAO factor: the Walk-AwayOption. In any negotiation there’s a limit to how much you shouldsacrifice and it may be wise to walk away. On this particular occasion,the problem was that it was impossible for the parties to achieve


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both their short-term objective of finding food and the long-termobjective of staying alive.

In many negotiations:

➣ You take a position➣ You attack➣ You defend➣ You make sacrifices➣ You make gains➣ You make concessions➣ You demand more

But in the end, you either compromise or take the walk-away option.Or, if there’s a man with a spear, or a ferocious tiger chasing you, youtake the run-away option.

Bargaining often means nobody gets what they really want

When you say: ‘I’ll meet you halfway,’ it means that nobody getswhat they really want, and everyone has to reach a compromiseaway from their stated position. This is not a satisfactory way to con-duct a negotiation, and yet most people think this is whatnegotiation is all about.

Let’s say you want to pay someone 500, they want to charge you1,000, and in the end you strike a deal for 750. Perhaps there is somedegree of satisfaction because you think you’ve forced the other sideto make a concession in your favour. Equally, you might feelaggrieved at having to spend more than you’d initially planned.Similarly, the other party is unhappy at receiving less than theywanted in the transaction.

Is conflict the essence of negotiation?

Let’s imagine that you are the boss and you want something done.What is wrong with being rough and tough and insisting that youget your way? You’d demand that the job be done exactly the wayyou want it done. And, if your subordinate disagrees with you, surelyhe or she should play soft and sweet and reason with you in a way


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that respects your relative positions and ensures that this relationshipis maintained.

Well, the truth is that this approach is inefficient for both you andyour colleague because there is nothing much to discuss. It’s a take-it-or-leave-it approach that stems from a fixed position on bothsides. Suppose instead, that rather than arguing from your position,you argue about what you both want to achieve?

What difference might it make if you negotiated towards the object -ive rather than negotiating away from where you are starting from?The next section will explore this in more detail.

You have to believe you got the best deal you could

In every effective negotiation it is essential that both parties are sat-isfied. They may not be entirely happy, and they may have beenhoping for something better. But they must both believe they haveeach got the best deal they could in the circumstances. This is onlypossible when the two parties know each other’s objectives and candiscuss, understand and appreciate them in a search for a mutuallyacceptable resolution.

This doesn’t mean gentle reconciliation, with the parties being softand sweet with each other. Nor does it mean that you have to thinkin military language about ‘defending your position’ or ‘fighting forwhat you want’.

What you will discover as you examine negotiation in more detail isthat conventional bargaining is generally unsatisfactory. I call thisconfrontational bargaining process Positional Negotiationbecause it’s based on arguing away from your particular position.

This describes an interaction in which you choose your position andargue from your own individual standpoint. You intend movingaway as little as possible from your personal stated position.

What generally happens is that you end up with an outcome whichsatisfies neither party and consequently will not last. It breaks Rule 3– it fails to plan for the future because you are left with both parties


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resentful at getting less than they wanted out of the deal. So, whattactics will deliver a lasting outcome?

Is it best to be aggressively masculine . . .?

Away on the other side of the hill lives another tribe. They havealways kept themselves separate from Tork’s people. Their leader isGrunt the Hunter, a straightforward chap with a rather rough andtough style about him. He is devoted to his wife, Natter, who was hischildhood sweetheart. Natter adores Grunt and will do anything andeverything to keep him happy. She is the epitome of the soft andsweet partner.

When it comes to domestic arguments, who wins? Is it Grunt, who ismacho, rough and tough, fighting for what he wants? Or is it Natterwho is always gentle, understanding and conciliatory?


11Grunt and Natter have very different styles of communication

Even at home, Grunt is looking for conquest: he is determined to winthe argument, and to persuade Natter to come around to his pointof view. As a negotiation continues he digs in, reinforcing his positionand refusing to yield. He will threaten Natter and be determined toargue for the final position he has already decided upon.

He will aim to diminish whatever offer she proposes and keep push-ing and increasing his argument. He will keep his final positionhidden from her and will probably distrust any arguments she pro-poses. Above all, he will make it clear that their relationship will sufferif he doesn’t get what he wants.

. . . or is it better to be submissively feminine?

As a loving spouse, Natter’s objective in a negotiation is to reachagreement. When Grunt’s position becomes entrenched she willpropose alternative deals, and she will counter his threats with alter-native offers.

Her objective is to find out what he will settle for and agree to it. Shewill accept changes, back down from her opening position and – incontrast to her husband’s stance – she will be prepared to revealwhat her final position is. She will tend to trust him and concede tohis demands in the interests of maintaining the relationship.

Positional Negotiation describes where both parties look at a situ ation in terms of the fixed positions they are occupying. The parties argue in terms of how far they are prepared to move in orderto achieve an outcome. The Rough & Tough negotiator is inflexible,while the Soft & Sweet negotiator will back down and make conces-sions in order to reach agreement.

Neither party achieves what they want. The solution is a compromiseand as such is unstable.

It’s never that simple

Of course, neither of the tactics described above is absolute, andmost positional negotiations involve a constant switching of


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Positional Negotiation

Rough & Tough Soft & Sweet

Going for conquest Going for agreement

Dig in Suggest deals

Threaten Offer

Go for what you’ll settle for Go for what they’ll settle for

Argue for own position Argue for agreement

Push hard Back down

Conceal final position Reveal final position

Increase argument Avoid argument

Distrust Trust

Be hard Be soft

Make demands as a condition ofmaintaining the relationship

Concede in the interests ofmaintaining the relationship


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strategies between being tough and being soft. This technique iscovered later in the book in the section describing Black Hat –White Hat strategy, but neither hard nor soft tactics will movethings on if the parties are entrenched in their positions. Negotiationisn’t about sticking to a position; it’s about achieving an outcome,getting what you want. As long as the two parties are focused onpositions – whether defending their own position or attacking theposition of the other party – then the negotiation risks simply goinground in circles until one or other party yields. That’s not the way toreach a lasting solution. The debate can go on interminably as longas both parties are looking at where they are, rather than where theywant to be.

Just suppose that instead of demanding what had to be done, Grunthad talked about the outcome he wanted to achieve. And just sup-pose that, instead of agreeing to Grunt’s course of action, Natter hadput forward her own ideas on how he might get what he wanted.This way, they would each have been focusing on the directionthey should follow in order to move towards achieving their common objective.

This is the crux of the matter. The successful negotiator needs tobreak out of the positional mindset and establish a different frame-work. The objective is to find an outcome that will satisfy bothparties. It sounds obvious, and most of what you will learn aboutnegotiation will seem obvious once you start to examine the subjectmore closely.

What stops people from being successful in the deals they make andthe disputes they seek to resolve is their characteristic tendency to becentred on positions and personalities, rather than on opportunitiesand outcomes.

Tork meets Grunt in the forest

Let’s take another look at Tork. He is hunting once again, this timeavoiding the ferocious sabre-toothed tigers. He heads off into theforest with his spear and finds that the tribe from over the hill, led byGrunt the Hunter, have trapped and slaughtered a hairy mammoth.

A group of them are squatting around the carcass, hacking it intochunks to carry back to their cave.

Tork sees the food, and he wants some of it for himself and his tribe.As he approaches the group, Grunt looks up at him with a mixture ofcuriosity and aggression.


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Tork finds that Grunt and his companions have been successfulin their hunt for food

He turns to his fellow hunters and asks:

‘Who is this chap? What’s going on here? How do we handlethis?’

Pause for a moment, and you will see the Rules of Negotiation inaction.


Whatever he does, he must ensure that it leadstowards an outcome which both sides can live with. Ifhe proceeds with positional negotiation, one or otherparty is going to feel that they have made concessionsand lost out. Tork will have less food than he wouldlike and the neighbours will have to part with some oftheir hard-won trophy.


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So, now what? Tork can play rough and tough:

‘Share the food with me, or else!’

Or he can play soft and sweet:

‘I am hungry; please share your food with me.’

If they say yes to either request the negotiation is over. But if they sayno, how does Tork proceed? He is outnumbered. So, even if he isvery fleet-footed, there is not much he can do proactively. If he seizesa lump of meat and runs off back to his cave as fast as he can, theneighbours will probably chase after him and seek some sort of retribution.

Tork has to keep Ground Rule 3 in mind.


Grunt’s tribe have food and Tork wants some ofit. If Tork is to get what he wants you have tohope the two tribes have a common language,because this is where Ground Rule 2 comes intoforce.


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The four criteria of negotiation

To optimize the situation you need a framework for negotiation: a setof principles which both parties can accept and work to. This frame-work is bounded by a set of standards for negotiation – four Ss.

Sensible : Straightforward : Sustaining : Satisfying

A negotiation should be sensible,appropriate and workable

There are times when one’s position and survival are so threatenedthat war is the only option. But, by and large, conflict is not sensible.It is generally inappropriate and rarely achieves a workable outcome.By the time a truce or surrender is finally signed, both sides have paida high price and the basis of the original disagreement often remainsunresolved. Then you have the challenge of finding a way to win thepeace, which means starting negotiations all over again.

Throughout history there are examples of how one side has won thebattle only to lose the war. In other words, one side has achieved ashort-term gain but has failed to resolve the issue in the longer term.

Although the negotiation starts when one party wants somethingfrom another party, it only becomes active when the other partyshows some willingness to consider entering into the deal. In Tork’scase, Grunt and his tribe must be willing to reduce their stock of foodand decide on what basis they are prepared to do this. An effectivenegotiation seeks to acknowledge the grounds for a potential trans-action and agree the terms on which this transaction can take place.

The way in which the negotiation then proceeds must conform tothe first standard: it must be sensible, appropriate and workable.

The second standard expands on this, and clarifies just what is meantby adjectives such as ‘sensible’, ‘appropriate’ and ‘workable’.


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A negotiation should bestraightforward, efficient and smooth

The protocol of a negotiation requires effective communication. This means:

● Communicating your own position● Establishing beyond doubt that the other party understands your

position● Understanding the other party’s position

You achieve these three points through a constant exchange ofspeaking and listening, telling and hearing. To do that, you musthave a common language.

In the modern world of global corporations, people often work in alanguage which is not their mother tongue. Even when they believethey speak the same language there can be differences in usage andinterpretation. A good example in the language of negotiation is the phrase:

‘We’ll leave the offer on the table.’

In British English this means you will leave the offer open to furtherdiscussion and come back to it later. In American English the mean-ing is more negative. It implies that, while the offer has not beenrejected, it is put on one side because it is going nowhere.

In face-to-face negotiation it is important to give constant feedbackand ask for clarification, so that understanding is complete and therisk of misunderstanding is minimized. However, if the communica-tion is written, such misunderstandings can be dangerous. There isnot the real-time exchange of a conversation which makes clarifica-tion simpler.

In the situation that has just been described, Tork is still on his hunt-ing trip. He is hungry and needs food for his tribe. Similarly, Gruntand his people can explain that they too are hungry and that they


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A negotiation should sustain and notdamage or diminish the relationship ofthe parties involved

Conflict is not a good negotiating tool. You saw in Tork’s encounterwith the tiger that there was no clear outcome. A similar situationcould now confront Tork and his neighbours. Maybe Tork and Gruntalready co-exist on a friendly basis; alternatively, they may neverhave met face-to-face. Either way, it is important that the presentnegotiation does not damage or diminish their relationship. GroundRule 3 makes this point absolutely clear.

need to conserve the food resources so they have enough to surviveon in the coming weeks.

Tork and Grunt are each taking up a position, establishing a pointfrom which to make concessions. A position can mean anythingfrom a vague preference to an immovable principle. Tork needs tocommunicate with Grunt some facts about his position. He couldease the path of negotiation by removing any suggestion of hostilityand by discussing the problems his tribe faces in finding food.

This would fit the first standard of being sensible, appropriate andworkable as it immediately establishes some basis for possible co -operation. Tork could then go on to ask if they are willing to discussmutual issues and explore ways in which they can cooperate.

This follows the second standard of being straightforward, efficientand smooth. It clarifies why Tork wants to negotiate. He is givingGrunt and his tribe the opportunity of determining at the outsetwhether there is the potential for negotiation. Tork is moving awayfrom negotiating about a position and instead he is negotiatingabout areas of common interest.

But it’s not enough for a negotiation just to be sensible and straight-forward. It has to last, which is why the third criteria is critical if theprocess is to develop effectively.

Tork might realize that he would be pushing his luck. There is littlechance of the neighbours agreeing to share their food in a situationwhen there is always a shortage. However, if you assume that Torkwould not be happy to walk away empty-handed, you must askyourself: would it have been possible for him to have conducted thenegotiation in a way that achieved an outcome which met all the cri-teria of both parties?

Certainly he would not have achieved this through PositionalNegotiation. However, he might have stood a better chancethrough an alternative process I call Directional Negotiation,which is explored later. First, here is an example of a typicalPositional Negotiation and a typical compromise.

Home sweet home

From prehistoric caves to suburban houses. You have looked at ourcavemen and seen how they might negotiate; now let’s take a modern example.


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Now that they have met, and even though theyhaven’t yet started formal negotiations, the processhas been set in motion. Maybe they will now establisha new basis for future cooperation. Maybe the discus-sions will never get off the ground.

Grunt might tell him to go away, and Tork might do just that. Anunsatisfactory outcome for Tork – but it satisfies the WAO factor. Itcould even conform to the fourth standard:

A negotiation’s outcome should besatisfying, meeting the realisticexpectations of both parties

Jack’s house is on the market for 250,000; Robert and Rosemary havea budget of 200,000 but decide to view the property as it seemsfrom the particulars to be ideal for their needs and rather over-priced. After looking over Jack and Jill’s house, Robert opensnegotiations with a soft and sweet approach:

‘We really like your home, Jack, but we have a budget of 200,000and wonder if you would consider coming down in price.’

Jack knows he has pitched the price on the high side but wants toget the best price he can. He plays rough and tough:

‘We’ve had the place valued and we know what it’s worth. Weneed to think about our future plans and cannot afford to startgiving away 50,000.’

Jill adds:

‘You must know the value of property in this neighbourhood; weare not in a hurry to sell, so we can wait until we get what wewant.’

This is classic rough and tough style. Jack and Jill are arguing theirposition, pushing hard, digging in, not revealing their final positionand not trusting what Robert and Rosemary are saying.

Rosemary replies to Jill:

‘Of course I understand your position, and I am sure you knowthe market value of your home. On the other hand we can com-plete the sale and purchase quickly as we are renting at themoment. Perhaps we could offer a little more, even if it meantdelaying buying some of the new furniture we had planned topurchase. Or maybe you don’t want to take everything with you,especially if you are looking for a smaller place in the country.’

Rosemary’s style is soft and sweet. She is agreeing with the otherparty and is already suggesting they might pay a little more and thatthere could be other deals which they could discuss.

Jack still plays rough, and makes a grudging concession. They had nointention of taking their furniture, carpets and curtains with them as


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these would not suit the country cottage they have their eyes on.They will not reveal this to Robert and Rosemary because, in classicrough and tough style, they don’t trust them and they would neverreveal more than they had to in conducting the negotiation.

‘OK, I suppose we could do a deal on the furniture and fittings,but it’s all top-quality, and cost us a lot of money. I don’t knowwhat to say – we’ll have to work out a price.’

Again, Jack is concealing his position and leaving the other side tocome back with an offer. Rosemary steps in, gently trying to estab-lish a value for the furnishings:

‘We had to furnish our first home with second-hand furniture, andwe were surprised how little it cost us. It seems to have very littlevalue when you come to sell it. Carpets and curtains are never theright size when you move, and fashion changes so fast in furni-ture. I think you’d be lucky to get more than a few hundred,maybe a thousand for everything. It’s heartbreaking, isn’t it,when you know what it cost you?’

Robert joins the discussion:

‘I agree with my wife. And I agree with you that there are proper-ties in this area fetching 250,000 but there are also some around185,000. I think we could realistically offer you 215,000 toinclude all the furniture, curtains and carpets. It would mean thatwe would not be able to have the new furniture we planned on fora year or two, but we could gradually do one room at a time aswe can afford it. What do you think: 215,000 and you don’t haveto worry about house clearers and auction sales?’

Again, Robert and Rosemary are following the soft and sweet pat-tern, increasing their offer, agreeing with what Jack and Jill aresaying, backing down and almost revealing their final position.

Jack can see that selling to Robert and Rosemary could have severaladvantages. The sale would go through smoothly and they couldmove earlier than they had anticipated, and that would suit them.However he still needs to get the best price he can to conserve asmuch capital as possible. He keeps following a hard line.


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‘It has cost us a fortune to get this place looking this good, andyou’d be saving a lot of money with the house ready for you tomove in without having to spend anything. On the other hand,you say you are in a position to close a deal quickly, so perhapswe could come down to 235,000. If we do that, we’d want tocomplete the sale quickly.’

Rosemary responds:

‘We couldn’t stretch to 235,000; it’s just too much for us toafford. If we take our savings and borrow extra, we might be ableto raise 230,000, but that’s as far as we can go.’

Rosemary has revealed her final position and is doing everything shecan to avoid an argument. Jack now knows he cannot push the priceany higher, and replies:

‘Well, if that really is all you can manage then I suppose we will atleast be able to move quickly and not have to keep showing peo-ple round the house. What do you think, Jill?’

‘It’s not what we want, and I don’t want to make a commitmentand then find that Robert and Rosemary cannot go through withthe purchase. I think we must insist on a quick sale.’

Jack picks up on this and concludes:

‘Right, well, we will accept your offer of 230,000 but we insistthat the sale is completed by the end of the month.’

Finally they shake hands on the deal. As Robert and Rosemary drivehome, they are resentful of the fact that they are paying 30,000more than they had planned. As Jack and Jill stand at their front doorand watch them drive away, Jack turns to Jill and comments that theyare out-of-pocket by 20,000.

That’s what happens with positional negotiation. Both parties feelhard done by but, as we shall see later, the same negotiation couldhave been achieved more easily and more positively if the two par-ties had approached it differently.


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Summary

There are three basic rules to all negotiations:


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There are four criteria for conducting an effective negotiation:


A negotiation should be sensible,appropriate and workable

A negotiation should be straightforward,efficient and smooth

A negotiation should sustain and notdamage or diminish the relationship ofthe parties involved

A negotiation’s outcome should besatisfying, meeting the realisticexpectations of both parties

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2

Who is this person?

You have seen the three rules of negotiation, and the four standardsfor conducting an effective negotiation. Next are the three steps theparties take when they start to negotiate.

These are:

1. Consider the people who are involved.2. Establish what it is you are discussing.3. Determine how you are going to negotiate.

You can see this in Tork’s encounter in the last chapter. As Torkapproaches the group, they look at him with a mixture of curiosityand aggression. Grunt speaks:

‘Who is this person, what’s this all about, and how do we handlethis?’

Grunt encapsulates our three steps most succinctly:

1. Consider the people who are involved:Grunt asks: ‘Who is this person?’

2. Establish what it is you are discussing: Grunt asks: ‘What’s this all about?’

3. Determine how you are going to negotiate: Grunt asks: ‘How do we handle this?’

Who are you dealing with?

This chapter and the next examine the first two elements – the per-sonalities and the issues. The rest of the book looks at the mechanicsof negotiation.

The people aspect of a negotiation is the first consideration because,whether you are talking about a domestic dispute, a commercialcontract or an international treaty, it all starts with the personali-ties involved.

When Grunt asks: ‘Who is this person?’ you can picture them eyeingeach other. In any personal interaction, most people will start bylooking the other person up and down and making an assessment.This applies whether you are talking about a sales person and a cus-tomer, a teacher and a student, or a parent and a child.

First impressions are important

The parties each sum up the other and make judgements. You dothis when you meet someone face-to-face. Equally, you will use aninitial judgement in any type of contact. You don’t need to see peo-ple to form an opinion of them.

Where the contact is by telephone, you will make a judgement basedon their voice, their choice of words and their accent or dialect. If theinitial approach is written, you will judge the use of language as wellas how the document is structured, the quality of the paper, thestyle, layout and overall aesthetics. From this you will form animpression about the person or the organization sending it to you.

First impressions count for a lot but if you read too much into yourinitial reaction you can make serious mistakes. The fundamental mis-take is to judge the person, rather than evaluate the deal the personis looking for.

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Are you judging the person, or evaluating the deal on offer?

People do it all the time. When two parties make contact they makea judgement about each other before they consider what it is thateach is asking for. They use their assessment of the person as a toolto help them determine what the issue is, what the expectation ofthe other party is and what their position should be.

When you see an angry expression, you immediately assume you aregoing to have to put up a fight. When you see a smiling face you areinstinctively more receptive to the person, even before they speak. Ifyou see a pleading face, you imagine you are going to have to makesome concessions.

Pre-judgement based on skill, experience and human instinct canwork to your advantage. A skilled sales manager may use her experi-ence to sum up a customer from a first impression and be able toestimate what the customer is willing to spend on a particular prod-uct or service. She may also be able to dismiss contacts who are ‘justlooking’ so that she does not miss the opportunity to attend to cus-tomers who are more likely prospects.

After that first impression the two parties must establish a workingrelationship. The first consideration – going back to the initialground rules – is their communication with each other.

This can be either helped or hindered by how well they know eachother or each other’s personality. It can be an advantage to be nego-tiating with someone you know well, or who has a similar social,educational or cultural background. On the other hand, this maycomplicate the process. While friends and enemies may be twoextreme examples, the point is that all negotiation is a people-thingand getting to know the other party helps to build a basis for inter-action. Common ground, whether it is based on personalbackground or on the discovery of common interests, values andbeliefs, creates a link between the parties, connecting them with adegree of mutual trust.


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Are you letting your personal feelings cloud the issue?

It can be difficult to do business with friends because your personalrelationship gets in the way of commercial considerations.Maintaining the personal relationship becomes more important thanoptimizing the proposed transaction.

Looking at the opposite situation, you may find it difficult to do busi-ness with someone you do not like, even if the deal on offer is a goodone, because you do not want to give any benefit or advantage tosomeone you don’t get on with. What you can see from all of this isthat personal relationships, whether positive or negative, can get inthe way of achieving an efficient negotiation.

How to handle unavoidable differences

In addition, issues of gender, generation, status and culture can allhave an impact on any kind of negotiation. In a court of law, awoman in dispute with a man may deliberately choose to be repre-sented by a male solicitor so the element of male/female conflict isreduced. On the other hand, either party to a negotiation may delib-erately exploit a difference to gain an advantage. Children, fromtoddler to teenager, know exactly how to exploit this: a manipulativechild negotiating with a parent will use age or dependence to try towin sympathy.

Sorry officer, no speak the lingo

A language barrier can be a bonus: a motorist on holiday in a foreigncountry may plead his ignorance of that country’s laws in order to tryto avoid being given a speeding ticket. Sex rears its not-so-ugly headwhen a handsome man or attractive woman uses flirtatiousness as atool in a negotiation with a member of the opposite sex. Sometimessuch strategies are effective; at other times they can rebound with anunexpected outcome.

WHO IS THIS PERSON?

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Would it help if you involved a third party to act as anintermediary?

In family life a child may turn to an elder brother or adult relation tomediate with parents over a disagreement, so that the age differenceis less significant. Similarly, when there is a differential in the status ofthe two parties – a junior wishing to negotiate with a superior – thejunior may seek the support of a senior colleague.

When it comes to cross-cultural or international negotiations, a busi-ness executive negotiating with a foreigner will attempt to befamiliar with local cultural and social practices to avoid being at a dis-advantage. They will frequently engage the services of a local personto act as their agent in handling the discussions to ensure completecomprehension. Where there is any level of language barrier the par-ties will engage an interpreter to make sure the nuances of languageare fully understood.

In every case the parties are seeking to remove barriers to communi-cation and to come closer to achieving a basis for rapport. What ismore, in these examples they are specifically involving a third partyin their negotiations. This is covered in more detail later.

Choosing between the negotiation and the relationship

Negotiations are all about people, and personalities are central toevery interaction. Personal factors can complicate the issue, or theycan make it easier. If you allow personalities to over-influence you,you can end up taking an unwise decision based purely on personal-ity, that does not fully evaluate the issues under discussion.

‘He’s my friend. Give him whatever he wants.’

This is what you might say, basing your decision on a trusted per-sonal relationship. Or, equally prejudiced:

‘Don’t listen to her. She is jealous and is always unreasonable.’

You need to ask yourself what it is that you want. Do you want tomaintain the personal relationship, keeping friends as friends – or


30

equally, keeping enemies as enemies – or do you want to resolve theissue being negotiated?

There is not necessarily anything wrong with making the personalrelationship more important than the negotiation, as long as yourealize this is what you are doing. What is important is to be awarewhen you are sacrificing one objective in order to fulfil the other.Take the example of a domestic situation. The husband wants to goto a football match and the wife wants him to go shopping with her– and for various reasons they cannot do both. In this situation eitherparty may decide to relinquish their personal preference in the inter-ests of maintaining the relationship.

By contrast, in an international trade negotiation, Cuba may be will-ing to sell cigars to the US, knowing that the US consumersappreciate the quality and value of their products. However, the USmay decide that it wishes to maintain an embargo on trade withCuba for political reasons. There is nothing wrong with ranking apersonal or political consideration as more important than a negoti-ation, as long as you are aware of what you are doing.

So what is the answer? If you keep your distance, if you are cold anddispassionate and do not take personalities into account, you missthe opportunity to build on an existing relationship or on the factthat you do have some common understanding. On the other hand,if you let yourself be swayed by personal or political considerations,you may be unreasonably prejudiced or unfavourably influenced.

Separate the personalities from the problem

The only way to set the basis for an efficient negotiation is to be clearabout establishing a definite separation between your relationshipwith the personalities involved, and your attitude to the issues whichare being considered in the negotiation. Negotiation is a peoplebusiness, but people and business must be dealt with separately.

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Grunt looks at Tork. Tork is wearing funny clothes: his loincloth goesright over his shoulder, and what are those silly bits around hisankles? When Tork greets them, his voice is squeaky and some of thewords he uses mean nothing to Grunt and his companions.

Tork has a big old-fashioned spear so he is obviously out hunting.Grunt is amazed because nobody goes spear-hunting for mammothsthese days; it’s terribly out-of-date. Pits are much easier and morereliable. Grunt wonders how sophisticated Tork’s people are. Torklooks at the mammoth that Grunt and his companions are carvingup and licks his lips. Grunt guesses that Tork must be hungry.

Tork and Grunt enter negotiations


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First impressions are always important

WHO IS THIS PERSON?

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Tork looks at Grunt. Grunt and his companions are wearing tiny loin-cloths that only cover their bottoms. Tork thinks it shameless to walkaround with the chest fully exposed, and finds it rather offensive.

He is also surprised at their lack of greeting when he approached. Hehas been formal, following the etiquette of his own people, and hastalked at length about the weather before ritually offering blessingson them, their ancestors and their families. All Grunt has done wasstare at him, which any civilized man knows is over-familiar, almostrude. They ought to be offering hospitality but show no inclinationto share their magnificent kill.

Tork is perplexed and unsure how he should proceed.

Culture, tradition, language and territory

What you learn from the initial contact can provide you with usefulinformation for your negotiation. You need to verify your early inter-pretations, and be especially cautious when dealing with people of adifferent culture. When Tork and Grunt meet they are both per-plexed because what they see is unfamiliar. Each finds the other’sappearance rather quaint. How should they proceed?

Whether you are talking about a prehistoric caveman or a twenty-first century city trader, everyone has the same basic primeval desirefor territorial demarcation and the same psychological demand forrecognition and ego-protection. Everyone has their own values, andeven if you do not hold these same values yourself, it is a lot easier tonegotiate with the other party if you can at least understand wherethey are coming from.

As soon as they met, Tork and Grunt were forming opinions abouteach other and each other’s intentions, even though no real com-munication had yet taken place. Both parties made their initialevaluation of the situation and both started to assess their nextsteps. As they observed each other, they were drawn back to verybasic instincts.

Everyone protects their own identity and integrity

When you look at members of a younger generation you may be sur-prised by their priorities and some of the things they do. Peopleforget that their own parents were similarly perplexed by theiractions and ideas. Similarly, you can look back at history, look at theactions of governments of previous generations, and ask yourself:

‘How on earth did they arrive at that solution?’

Whether you are talking about the impulsive actions of teenagers orthe political actions of past governments, the answer to the questionis that they chose their options because they felt good about the val-ues on which they based their decisions and felt good about theoutcome they achieved. Their egos were validated, their values wereupheld and their self-esteem was preserved. Their decision was rightat the time because decisions are rooted in real-time and relate tothe values of the day.

This point is crucial to understanding the process of negotiation.There is always a tendency to judge past events by present values,and hindsight is an exact and unforgiving science. When you lookback at past events and try to understand them, you need to under-stand the perspective and realities of a past era. When you negotiatewith someone, you need to understand where they are coming from.

Everyone operates from their own perspective

When people talk about a ‘point of view’ they are using the vocabularyof perspective. Each party to a negotiation will operate primarily fromtheir own perspective – their own point of view – in a way they perceiveto be perfectly logical and rational. This was considered in the previoussection when you looked at gender, generation, status and culture.Because it’s not always easy to do this, people will often appoint anintermediary who can relate more easily with the other party.

But there’s more to it than being the same gender, race or national-ity. If you look back at history you can see how the whole socialcontext affects why people did the things they did and why thissometimes looks strange from a present-day perspective.


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Put yourself in the other party’s position

When people look back at the age of the British Empire, they areoften puzzled. They question how one civilization thought it appro-priate and justifiable to eliminate cultures and societies that hadexisted for many generations. You can start to find the answer if younow examine the British parliamentary debates that surrounded – forexample – the building of the railways in East Africa. There, you willfind discussion of the economic imperative to open up Africa to tradeand commerce. This you can understand, because current thinking isthat imperialism was essentially an economic movement born ofgreed and arrogance.

However, what you will also find as a strong thread in the parlia-mentary arguments is a passionate desire to evangelize and bringwestern education and values to areas that had been isolated fromthe outside world before the railway was conceived. The Victorianswanted to create economic wealth, and at the same time theyembodied a strong element of altruism in believing they had a mis-sion to ‘save’ the local population by converting them to Christianity.

If this sounds unbelievable to twenty-first century ears, you can goback to Hansard, the official record of British parliamentary debates,and look at what was being said in Parliament at that time. It isrevealing to discover that these were the clear values that were beingexpressed. You will make your own judgement as to whether youbelieve people were being open and honest in what they said, butmany other contemporary records support the thesis that idealismand religious fervour were important elements in the British colonialpsyche at that time.

You don’t have to agree with another person’s point of view,but you do have to understand and appreciate it

What actually happened in terms of the seizure of land and otherassets, and in terms of the violent wars of conquest, is a separateissue; what you can see is that the basic motivation was far from sim-ple territorial expansion and economic exploitation. Today, societychallenges and denounces colonialism because society has different

WHO IS THIS PERSON?

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values. By and large, people are arguably more tolerant and moreopen to different ideas.

In short, people today have a different perspective from people acentury ago. And when we try to look forward, it is challenging to tryto predict future attitudes.

➣ How do you think history will judge the American nation for theinvasions of first Afghanistan and then Iraq?

➣ Will multiculturalism be looked on in a positive or negative light?➣ Is Political Correctness a mature and correct way to interact with

other people or is it patronising and over-reacting?

All we can do is try to see a situation from many points of view, andtry to understand the various different perspectives. Usually we willsee the bare bones of a negotiating situation. If you look deeper intoimperialism, you can see colonization as a sort of negotiation, goingback to Rule One:

Someone’s got something you want

Colonization failed as a way of achieving this for many reasonsincluding its ultimate failure under Rule Three:

Plan for the future

One of the underlying reasons for failure was that, despite the benevolent and humanitarian assertions found in contemporary documentation, colonialism threatened two of the most import -ant elements of civilization: It denounced self esteem and it claimed territory.

You must acknowledge the other party’s territory and self-esteem

Personal integrity, the sense of self-worth and ego, is at the heart ofour individual values. If you are not allowed to be yourself, you willrebel against the other party and insist on your right to be who youare as an independent human individual. There will be a lack of com-munication and understanding, and ultimately the parties willpolarize into opposing positions.


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Once again, you can look at history for examples. In the negotiationsleading to the independence of India from the British Empire,Jawarhalal Nehru, then the future first Indian Prime Minister, said:

‘We want the right to make our own mistakes.’

The peoples of India did not want to be told what they could andcould not do. They claimed the right to act within their own personalintegrity. This is a classic negotiation scenario.

In every negotiation, each party wants to make its own choices inaccordance with its own values, and from its own perspective. It isonly when each party truly believes it is reaching the best availabledecision, that you have the basis for a positive solution. The final out-come may not be what each party had hoped for at the outset, butit must be one that each party agrees to as an acceptable resolution.

When you look at a formal negotiation like an armistice, even thoughit confirms that one party has won and one has lost, it now estab-lishes a new, non-combatant relationship, a workable way forward.

In one sense, ego is all about the territory you occupy mentally.Personal territory is an imperative which must be considered in anynegotiation. People are all animals at heart, occupying their ownspace in every sense, whether they are sitting with a group of friendsdrinking coffee and chatting socially or whether they are at theboardroom table discussing corporate policy.

Choosing where to negotiate

The selection of a location will make a clear statement about the rela-tionship between the parties. If one wishes to create the impressionof equality, it is important to select a neutral location, or to alternatebetween Home and Away. This will ensure that neither party has rea-son to be intimidated by being on the other’s territory; nor is eitherparty able to demonstrate territorial dominance.

It is highly significant that the talks to end the Vietnam War weredelayed for months because no agreement could be reached on theshape of the table around which the delegates would meet to

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negotiate. That was not a matter of aesthetics or whim; it was ahighly significant issue of the physical territory the parties would beseen to occupy.

What is more, the negotiating table was eventually situated in a neu-tral venue (Paris). The location of a negotiation often determines ahierarchy between the parties, which is why international alliancesare often concluded on neutral ground or at a relatively anony- mous location.

The Franco-German armistice in the First World War was concludedin a railway carriage in the middle of a forest, away from any public-ity so that no element of triumphalism could endanger the ongoingrelationship between the population and the invading power.

In more recent times, negotiations on the ongoing crisis in theMiddle East have been held in the United States, signifying on theone hand the removal of the negotiation from the theatre of the dis-pute, but at the same time confirming the dominant role of Americain influencing policy in the negotiations between the Arab andIsraeli peoples.

An acknowledgement of both real and virtual territory is fundamen-tal to understanding effective negotiation. You hear it in thevocabulary of negotiation:

‘We need space to manoeuvre … Where do we go from here …?We need to move on …’

The importance of showing respect

When you look at acknowledging and understanding ego, you come up against one of the buzz-words of the twenty-first century: Respect.

It is a word commonly used by people who feel themselves to besocially or economically disadvantaged. They demand respectbecause it is the essential element that validates their individual egoand their right to personal territory.


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When someone asks for respect, what is it that they are actually ask-ing for? In a sense it is recognition of their individuality – but how doyou recognize individuality? You do it by moving out of your ownmindset and temporarily putting yourself into the mindset – thebeliefs and values – of the other party. You set aside your own opin-ions (ego) and vacate your own position (territory) so you can seewhat your opinions and your position look like from a different per-spective.

In doing this, you show you are willing to explore – to use a territor -ial expression – where the other party is coming from. You areacknowledging and practising the real process of negotiation.

Now, back to the cavemen again

Grunt asks:

‘Who is this person?’

Having made his initial assessment he needs to find out more, and toestablish what it is that Tork wants to negotiate. From the length andsubstance of Tork’s opening greeting, Grunt realizes Tork is used torather more formality than his own tribe. He puts down his flint knifeand the bone he has been gnawing and raises his hand in his owntribe’s formal greeting. Then he adds a few words which he hopeswill be well-received:

‘Greetings to you, stranger. Blessings on your women and chil-dren.’

In doing this, he acknowledges Tork’s ego, and then he needs toaddress territory. He can invite Tork to join them, but in doing so heis both inviting him into his circle with his companions, and at thesame time effectively threatening him by outnumbering him. Hecleverly chooses a compromise and gestures to some rocks a fewyards away.

‘Let’s sit over there and talk.’

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Grunt’s companions watch as Tork and Grunt walk across and sitdown. Grunt makes sure that Tork can see the others. He also ensureshis companions can see him and overhear the conversation. Torkunderstands the strategy and complies.

There is still an imbalance in the negotiation, which is clear to Gruntas he sees Tork licking his lips. Grunt offers Tork a hunk of meat andthe balance is restored.

Tork is now revising his initial opinion of the other tribe. They clearlydon’t have the same traditions as his own people, but they havemade him comfortable by accommodating his psychological needsand his hunger. Grunt knows he has made all the right moves. Hehas carefully thought about the situation from Tork’s point of view,


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Get to know the person you are dealing with

knowing that he and his companions are in a strong and possiblythreatening position.

Now Grunt has to decide what to do next – but he is in no hurry todeclare his hand. That can wait while they get to know each other. Inparticular, he needs to assess whether the neighbour’s group is largeand threatening, or small and a potential ally in the struggle for survival.

When Tork has finished eating, Grunt talks about the mammoth theyhave hunted and asks Tork if he has had any success. Tork is carefulnot to reveal too much of the harsh situation of his people, who havenot eaten well in weeks. He does not wish to imply that his plight isdesperate, even though things are very tough right now. He tellsGrunt that he has been tracking the mammoth Grunt and his com-panions trapped and congratulates his neighbours on their success.This shows respect for Grunt, addressing his ego. He continues theconversation about food supplies, reverting to their common interest:

‘I like to hunt alone. Are there just the three of you who arehunters?’

Tork has been clever, not revealing that he is the only strong and fitadult male in his group, but at the same time asking Grunt a leadingquestion which may help identify the size of his group.

‘We need three of us to carry the meat back to our people. Howcould you manage alone if you were successful in your hunt?’

Tork thinks a moment:

‘One hunter can move silently, while the others wait to help whenI find the mammoth. If there were more of us there would be moredanger.’

There is now mutual respect, because each party has shown skill andintelligence in the way they conduct their business. A similar conver-sation could have taken place between a manufacturer and apotential supplier seeking to discover more about each other. Thereis an element of point-scoring in the exchange, but equally there is acommon language that establishes a basis for understanding. The

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two parties sit in silence, each considering the next move, thenGrunt speaks:

‘This is a harsh and difficult life.’

‘I agree, food is hard to find,’

responds Tork, not wanting to put himself at a disadvantage by mak-ing any requests at this stage and putting himself and his peopleunder an obligation to their neighbours.

Grunt pauses, then speaks again:

‘Perhaps we can help each other. There might be ways that wouldmake life easier for all of us.’

Tork thinks for a moment, then has an idea:

‘What we need is a strategy, something that would work for all ofus. Not just a survival strategy, we need a policy, a great, big,mammoth strategy, a way of working together so that we don’thave to worry about the day-to-day problems.’

Grunt laughed.

‘Mammoth strategy – that’s good. A strategy for dealing withmammoths and a big, strong strategy, a way of doing things thatwill work whenever we need to resolve an issue. I reckon you andI could come up with something that would suit all of us.’

And so they establish a personal relationship, and begin to negotiate.

Summary

Communication is at the heart of negotiation. There is no communi-cation without understanding, and the only way to ensure you areunderstanding and being understood is by constant active listening,emphasis and explanation, and by asking for clarification.

Personalities can help or hinder a negotiation. Whether or not youlike the other person is relevant, but must be put to one side: youmust separate the personalities from the problem.


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Who are you dealing with? A pre-negotiation checklist

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How do you relate to the other person?

Are you the same gender as theother party?

Is this an advantage or adisadvantage?

Are you the same status as theother party? Is he/she superior orinferior to you in the organizationor situation you are in?

Do you need to act in a differentway?

Are you culturally similar? Arethere any national, religious orracial issues which might affectyour conversation?

Should you appoint a third partywho would relate more effectivelyto the other person?

Do you have similar social andeducational backgrounds?

Should you negotiate throughyour local business agent, a legalrepresentative, an interpreter,someone closer to the other partyin status or age or of the samegender?

Are you both speaking yourmother-tongue? Do you have afluent and fully understoodcommon language?

Timing

Are you ready to hold thisnegotiation here and now?

What will be the effect if you delaythe negotiation?

Is the other party ready toproceed?

Can you agree when to proceed?

Location

Should you aim to hold thenegotiation on your own territory?

Would a neutral location be anadvantage?

Should you aim to hold thenegotiation on the other party’sterritory?

Is there a significant third partywhose territory could be usedadvantageously?

Common interest

Can you see possible areas ofcommon interest?

Are you willing to explorepossibilities?

Is the other party open toexpanding the negotiation?

Will they be persuaded to movefrom a fixed position?

3

What’s this all about?

In traditional Positional Negotiation, this is where things can start togo wrong. Grunt’s position is that he has food supplies. Tork’s posi-tion is that he doesn’t. If they focus on the present circumstances,they can see the situation only in terms of one party winning at theexpense of the other, which is generally the outcome of PositionalNegotiation.

There is another way to look at this. After all, what’s this all about?

Establishing the issues

It is vital to realize that the issue is not that Grunt has food and Torkdoes not; it’s all about the fact that food is scarce and hard to comeby. This is the critical issue, and the particular situations of Grunt andTork are the direct result of this central issue.

When the cave people find a mammoth they have plenty, but mammoth-hunting is hard work and not always successful. SupposeTork had met Grunt and his companions on the previous day, whenthey were all very hungry and desperately hunting. After the initialgreetings and formalities establishing a relationship and finding acomfortable neutral location to talk, their conversation might havegone something like this:

‘Seen any mammoths today?’

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‘I saw two together, over by the mountain.’

‘That’s always dangerous when there are two of them.’

‘Yes, the trouble is that if you manage to get one then the othercan come on after you.’

‘Suppose we got a crowd of us together and tried to separatethem, then we could limit the risk. What do you think?’

‘If we involved all our people who can run fast, it could work.Mind you, we’d have to work closely together.’

‘But then we could have enough food for all of us.’

Tork and Grunt have a common objective, which is to have enoughfood. That objective already existed on the day before Grunt and hiscompanions were successful, and it will be the same objective whenthe new stock they are dining off today is depleted. The present situ -ation, when Tork has no food and Grunt has plenty, does notcontradict the basic fact, which is that food is generally scarce and itis hard to feed everybody.

Moving in the right direction

Let’s look at what happens if you compare the process of PositionalNegotiation with Directional Negotiation, viewing the situationfrom a broader perspective.

Tork and Grunt will have a more efficient negotiation if they concen-trate on the issue, explore all the options and are open toinvestigating all the alternatives. If they keep personalities out of thediscussion and listen to each other’s point of view, concerns andneeds, they can discover whether there is a solution that works forboth of them.

It is in human nature to be so focused on your own position that youfail to see the opportunities which could satisfy both parties. Takinga creative approach requires a willingness to forget any preconceivedideas about what the outcome has to be, and an openness to con-sidering every option.

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You can illustrate this example if you take a look at two cavewomenwho live far away from Grunt and Tork, on the other side of themountain. They are Wizpa and Chat, and they have their own prob-lems surviving in these primeval times. Once again, one group hastrapped a mammoth while the other has been unsuccessful. Chatarrives on the scene to find Wizpa and her companions hard at workskinning the mighty beast.


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Positional Negotiation Directional Negotiation

Rough &Tough

Soft & Sweet Broader Perspective

Going forconquest

Going foragreement

Going for an appropriateoutcome

Dig in Suggest deals Focus on what it’s all about

Threaten Offer Explore

Go for whatyou’ll settle for

Go for whatthey’ll settle for

Establish what all the options are

Argue for ownposition

Argue foragreement

Look for mutually beneficialoptions

Push hard Back downListen, and be open to

alternatives

Conceal finalposition

Reveal finalposition

Don’t have any fixed finalposition

Increaseargument

Avoid argumentListen to reason, and respond

accordingly

Distrust Trust Take trust out of the equation

Be hard Be soft Be balanced

Make demandsas a condition ofmaintaining the

relationship

Concede in theinterests of

maintaining therelationship

Keep personalities out of it

‘I want that mammoth,’ shouts Chat.

‘You can’t have it. We found it and it’s ours!’ replies Wizpa.

‘You can’t possibly want all that – it’s huge,’ says Chat.

At this point Chat and Wizpa have taken up positions and are argu-ing about who should have the mammoth. The argument couldmove into Rough & Tough mode and become violent, or Chat mightplay it Soft & Sweet. Eventually they might agree to divide the car-cass, but would this serve their individual needs?

Think about it for a moment! What would happen is that both par-ties would be left disgruntled, having failed to maximize what theycould have got out of the negotiation.


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Fighting over the kill


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You must establish what both parties want from a negotiation

The problem with Chat and Wizpa is that they have not establishedwhat it is that each wants from the mammoth. The argu -ment continues.

‘We need all of the mammoth. We are cold at night and winter iscoming. We need to keep warm,’ retorts Wizpa.

Wizpa’s issue is that she and her group are cold, so they need the furof the mammoth to make clothes and bedding.

‘And my people are all hungry,’ answers Chat.

Chat’s issue is that she and her group are hungry, and they want toeat the mammoth.

‘Why are you hungry?’ says Wizpa. ‘The lake is full of fish.’

‘How can anybody catch a fish?’ asks Chat. ‘They swim tooquickly. And anyway, why are you cold? There is plenty of woodto burn?’

‘Only thunderstorms make fire,’ says Wizpa. ‘We can’t keep thefire after the storms, and we can’t make it ourselves. As for fish-ing, don’t you know how to make a harpoon?’

Chat’s people have no problem keeping warm in winter, but the onlysource of food they are familiar with is meat. On the other hand,Wizpa’s people have no problem taking fish from the lake for food,but they do not know how to keep warm without layers of fur cloth-ing and bedding. The debate continues.

Wizpa pauses for a moment, and then makes a proposal – a revolu-tionary win-win solution.

‘We will show you how to make harpoons and catch fish if youwill teach us how you make fire.’

Suddenly, the negotiation is not about the mammoth at all. It hasmoved on to skills which each can teach the other – and transfer ofskills means that there is a benefit to the receiver without any loss to

the giver. This proposal benefits both parties but Chat’s eyes are stillon the mammoth.

Chat thinks, and then offers a counter proposal:

‘What about the carcass? Once you’ve skinned it you’ll haveenough fur to keep you warm. What about all that meat? There’stoo much there for your group to eat and our people love to eatmeat.’

Wizpa looks for a further deal.

‘The meat is tough and hard. That’s why we don’t eat it. But thebones are really useful.’

Chat is surprised.

‘If you put the meat on the fire it is very good to eat. It becomestender. It tastes really good. You can cook it with plants and veg-etables, too. You say the bones are useful? Why would you wantto keep the bones? We just throw them away.’

Wizpa shakes her head in disbelief.

‘Bones can be carved into different shapes; we make all sorts ofthings with bones, including brooches and buckles for our clothes.You can sharpen pieces of bone to make knives and it’s perfect forharpoons, of course. That’s how we catch the fish.’

What was it all about?

It wasn’t about who should have the spoils of the hunt, it was aboutfinding sources of food and finding ways to keep warm at night.Once they established what it was all about, they created a win-win solution.

Solving each other’s problems by being creative

Now you have established that there is in fact no conflict betweenthe positions that Wizpa and Chat started from. The secret of thissuccess has been a willingness to move from a fixed position, to be


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creative and open to ideas. Once they focused on their needs theyquickly reach an ideal outcome.

Let’s look again at the negotiation you considered in Chapter One,with Jack and Jill selling their house to Robert and Rosemary.

It’s not just a matter of price

The first example of their negotiation focused primarily on the price.In reality, there were many other issues that surfaced in the course ofthe negotiation.

Jack and Jill were going to sell not only their house but also the con-tents. Although they said they were not in a hurry to sell, there wasconsiderable benefit in being able to sell to buyers who did notthemselves have a property to dispose of. They pitched the price oftheir property at 250,000, which was at the higher end of its valua-tion, and you saw that Robert and Rosemary knew there were similarproperties available at a range of prices lower than this.

Although Robert and Rosemary had a figure of 200,000 in mind,they were going to have to spend a significant sum on furnishingtheir new home.

This means Jack and Jill wanted to sell their home and much of thecontents, while Robert and Rosemary wanted to buy a house andmost of the necessary furnishings. This was what it was really allabout, but all of this only came out after initial disagreement and adegree of tension.

When you know the real issues, the negotiation can be moreefficient, smooth and straightforward

In the end, the figure of 230,000 was probably a fair and realisticprice for both parties. But it only appears so when you look at whatthe negotiation was really all about, and not when you examine itfrom the standpoint of the opening positions of the two parties.From that opening perspective, it seems that the 50,000 differentialcould never be bridged.


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How do you handle this?

You have looked in some detail at the matter of establishing what anegotiation is about, but finding out what the real issues are is onlyone step in the negotiation process; most negotiations involve a fur-ther stage. Generally negotiations take place on two levels at thesame time.

The What? And the How?

Firstly you need to establish what it is that you are negotiating about.Then you need to determine how the negotiation itself should beconducted – and, most importantly, how the parties can evaluateand judge the proposed outcomes.

A tough salesman will often try to establish a timescale in advance,telling a customer that the prices and deals he is quoting are onlyvalid if the customer signs up there and then.

At the other extreme, it may take days to draw up the timetable foran international negotiation, establishing the format and timetablefor a series of discussions, determining how evidence will be pre-sented, and deciding in advance what sort of agreement will beacceptable to both sides.

Examining the process of Directional Negotiation

Let’s take another look at Grunt and Tork, in the first example, whenTork finds his neighbours grouped around the carcass. Tork arriveson the scene and sees his neighbours eating. His stomach rumblesand he feels very hungry.

‘Give me some food,’ he shouts. ‘I haven’t eaten for three days!’

Grunt looks up and sees the stranger. He could say:

‘No, we are also hungry. We haven’t eaten all week!’

Tork has now stalled the negotiation. By focusing exclusively on hisown position he has tried to start the negotiation but has failed toconsider the other party’s position. Suppose he had said:


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‘I see you are hungry and eating well.’

In doing this Tork is deliberately seeing things from Grunt’s point ofview and Grunt cannot disagree with what Tork is saying. Gruntmight then have replied:

‘Yes, it is a long time since we have eaten. Are you also hungry?’

Grunt can see from the expression on Tork’s face that he is, andGrunt’s approach is polite, inviting Tork to join them. This resolvesthe immediate imbalance without creating a longer term problem.Grunt and his people cannot eat a whole mammoth by themselves,and nor can Tork, so the main negotiation on whether they shouldall share their food is postponed.


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What did it take to resolve the negotiation?


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Summary

The negotiation process goes through six steps.

1. You set the scene. This means establishing a personal connection and deciding whenand where the negotiation should take place. The next step is:

2. You acknowledge both of your positions. You cannot ignore the realities of a situation, and the realities arethe positions you start with. However, having acknowledged thesituation, you can then start to look for the underlying issues.

3. You define the issues.The basic issue between Grunt and Tork is that food is scarce andhard to come by. You now need to explore and see if there areother issues that may be particularly important to either party. Inthe example of Chat and Wizpa, you again saw how the existingposition can cloud the issue; they both wanted the mammoth butthey wanted different parts and for different reasons. In any nego-tiation, you must continually pull the debate away fromconsiderations of positions, and to do this:

4. You identify the desired outcome.This may not be as straightforward as it was when Tork and Gruntagreed that food was scarce and hard to come by. There may bemany possible outcomes to a negotiation, and many ways ofachieving the outcomes, leading to the next stage:

5. You explore possible solutions.Even then, exploring and debating are not enough. You will notreach an acceptable resolution of the negotiation unless you agreein advance on how you will differentiate between good outcomesand bad outcomes, and between good and bad ways of achievingthe desired outcomes. This establishes the final stage of a negoti-ation, which is:

6. You establish how you will evaluate the options.As you can see, you are no longer negotiating about the positions,nor are you yet negotiating about the issue. You are determiningthe process of negotiation itself and agreeing on the parametersby which you will judge the options.


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Ground rule 1: negotiation starts becausesomeone’s got something you want

To summarize, this then is the process of Directional Negotiation:

1. You set the scene.2. You acknowledge both of your positions.3. You define the issues.4. You identify the desired outcome.5. You explore possible solutions.6. You establish how you will evaluate the options.

RECAPITULATION OF PART ONE

Negotiating strategies

There are two basic strategies: Positional Negotiation whichmeans arguing from where you start, or Directional Negotiationwhich means arguing towards what the parties want. Most peopleuse positional negotiation even though it leaves both sides dissatis-fied, whereas if you find the common objective that is underlying anegotiation, you can work towards a mutually rewarding outcome.

This book concerns itself with making directional negotiation workfor you, and the following chapters explore different aspects, tacticsand approaches. We have set out ground rules, criteria, scope and aprocess to make this work efficiently.

The three ground rules

There are three basic rules to all negotiations:

The scope of the negotiation

1. The People: consider the people who are involved.2. The Topic: establish what it is that you are discussing.2. The Method: determine how you are going to negotiate.

The criteria of the negotiation

Four criteria for conducting an effective negotiation:



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Ground rule 2: negotiation can onlycontinue if the parties can understandone another – and also be understood

Ground rule 3: negotiation is onlysuccessful if you plan for the future

Firstly, a negotiation should be sensible,appropriate and workable


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The six-step process of directional negotiation

1. You set the scene.2. You acknowledge both of your positions.3. You define the issues.4. You identify the desired outcome.5. You explore possible solutions.6. You establish how you evaluate the options.

In Part Two you will learn about all the necessary preparation thatestablishes the context and background for a negotiation. In PartThree you will learn the essential skills for handling the negotia-tion itself.

If it all sounds very complicated, be assured that homo sapiens hasbeen negotiating since he was hunting mammals. And while some ofhis contemporaries were making the same mistakes then as peoplestill make today with positional negotiation, others were learning thewinning strategies and tactics of directional negotiation arguingtowards a win-win solution.

Secondly, it should be straightforward,efficient and smooth

Finally, a negotiation’s outcome shouldbe satisfying, meeting the realisticexpectations of both parties

Thirdly, it’s important that a negotiationshould sustain and not damage or diminishthe relationship of the parties involved

PART TWO

Preparation for negotiation

4

Knowing what you want

Sometimes, what seems like a good idea ... isn’t

Some time later, after further discussions with Grunt, Tork rushesback to the cave, excited about the news he has for the family:

‘Listen, everyone! We are going to join forces with the people wholive on the other side of the valley and work together to trapmammoths. We’re going to live together as one big community.Isn’t it a great idea?’

His wife, brother, sisters, uncles, aunts, in-laws and all his relationslook at him with shocked expressions. His wife responds:

‘Will there be room for all of us? And anyway, I’ve only just fin-ished the cave-paintings in the living area. It’s looking so brightand cheerful; I don’t know that I like the idea of living down in thevalley.’

Tork’s sister joins in the conversation:

‘How many people are there in that tribe? I thought they were allyoung warriors; how many women and children are there?’

Tork’s father breaks out in a fit of coughing. Noisily clearing histhroat, he looks at Tork with a worried expression on his face:

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‘It’s very damp, down there in the valley, you know. The fog andmist hang low every morning. It won’t do my chest any good – Iget very wheezy in the winter. The air up here suits me, and I liketo sit out on the ledge and watch the sun go down. You knowthat, Tork.

‘It’s not much to ask for in my old age, just a place in the eveningsun to sit and watch the clouds drift by. I’ve done my bit over theyears, you know, been a hunter and raised a fine family. You can’texpect me to start moving around the countryside at my age. It’snot on, you know.’

Tork is taken aback, and rather flustered as he tries to respond totheir objections:

‘Well, the guys I met seem really nice. I don’t know if they havefamilies and I thought a change would be a good thing …

‘It just seemed like a great idea when we were talking about it …

‘We were thinking that ...’

Tork’s voice fades away. He had been full of enthusiasm for Grunt’sproposal that the two groups should cooperate and live together.The two of them had been so excited that they had readily agreed togo ahead without consulting their families, without thinking throughall the implications of the idea.

In their enthusiasm, neither of them had taken account of the manyissues and concerns that their families might have.

Meanwhile, down in the valley, Grunt sits down with his familygroup, smiles broadly and announces:

‘The people up on the mountain are going to come down hereand live with us. I met this chap Tork – nice bloke – and we reckonthat if we all hunt together then life will be a lot easier.’

The group is silent. Boss, the most senior member of the group,strokes his beard and looks Grunt in the eye:


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‘Your great-grandfather had the same thought, you know. Itseemed such a good idea, but in the end there was an argumentand our ancestors drove them back up the mountain.

‘Mountain people are very different, you know. They’re lazy andthey’re poor hunters. The women just stay in the cave and playwith the children. They’re not like us. It will never work out.’

Grunt’s two sisters, who both have teenage daughters, exchange slyglances. One turns to the other with a look of shock and dismay onher face:

‘Well, you know what those mountain men are after, don’t you?They want our daughters!’

Grunt realizes there are other things to consider apart from havingmore people to help with the hunting. Perhaps they should have

KNOWING WHAT YOU WANT

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Like Tork, Grunt lets his enthusiasm get the better of him


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talked about it more before hastily shaking hands on what hadseemed like a good idea at the time.

They had not asked themselves the first question of any negotiation:

‘Is this important, and is it urgent?’

When Tork was facing the tiger the timescale was critical – kill or bekilled. When Tork met Grunt, the topic they discussed was veryimportant to both of them – but it was not a matter that needed tobe decided there and then.

Confusing importance with urgency is a common fault you can makewhen you become deeply involved in wanting to resolve a situation.Tork and Grunt became so excited at the prospect of an easier lifethat they rushed to decisions without taking all the implications into account.

Fools rush in …

The message of this example is that it is not a good idea to rush intoan agreement unless circumstances demand instant action. Once ina while you may face a situation when you need to make a snap deci-sion. Far more often, it pays to take stock and assess all the issuesinvolved before coming to a decision that may have many ramifica-tions. Techniques for making quick decisions are examined later inthe book – but firstly this section looks at how you prepare yourselffor a negotiation.

Is this a good time to talk?

Tork and Grunt both rushed in and started trying to negotiate with-out first establishing whether the other parties were even interestedin negotiating. To maximise your bargaining power, you need to besure you’ve sorted the fundamentals. Is this the right time, the rightplace, and is the other side interested in talking? The following dia-gram is based on the Harvard Theory of Negotiation, and sets outthe critical path for laying the foundation for a negotiation.


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Meet face-to-face : first impressions

Establish appropriate approach

Formalities and exploratory remarks

Appoint third party negotiator

Decide not to proceed

Do I want to continue?

Yes

Unable to agree on timing Reach agreement on timing

Do both parties agree on location?

Agree on location

Open negotiations

Determine negotiation process

Gender Culture Age Status

Decide to proceed

Timing – are we both ready to proceed?

No

Postpone negotiation

Reschedule timing

No

Yes

No

Passive approach Active approach

Await proposal from other party Propose alternative location

Yes

Discuss alternatives

Unable to reach agreement

Decide not to negotiate

The first stepsin opening thenegotiationprocess

What will you talk about? What do you really, really want?

At the same time as being sure your timing is right and that the otherparty is ready, willing and able to negotiate, you must be clear aboutwhat it is that you really want out of the deal.

Just as importantly, why do you want it? Are there other ways ofachieving your objective? What is your acceptable WAO? If you startby finding the answers to these questions you are well-prepared tonegotiate sensibly towards the outcome you desire.

The importance of preparation

Every negotiation is about change. You saw in Part One how negoti-ation is often couched in phrases that relate to location, position andmovement. Negotiation involves changing your position from whereyou are at the moment to a new position – whether it’s about warand peace, buying and selling, hiring and firing, or agreeing what todo on a sunny afternoon.

To negotiate successfully about this change in position, you need toprepare yourself by knowing:

➣ Where you are at the moment➣ Where you would like to go➣ Where the other party or parties to the negotiation would like to go➣ And finally, where you are willing to go if you cannot go where

you would ideally want to go

Working out these positions is preparation that will often make thedifference between good and bad negotiation. When you considerall these positions before you start to negotiate, you not only clarifythings in our own mind, you also establish a clear and strong basisfor your discussions.

Furthermore, you lay the foundations for achieving a lasting out-come rather than a temporary solution.

Being realistic

Knowing your position does not mean you are adopting PositionalNegotiation; it just means you acknowledge how things stand at


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present and have an expectation of what you want. You will proba-bly also have some sort of road map in your head with variousoptions clearly defined.

Knowing what you want

Whether you are negotiating a family decision, like Tork and Grunt’splans to join forces as a community together down in the valley, orwhether it is a matter of a business transaction or a career move, youmust decide precisely what you want to achieve. Not more or less thesort of outcome you might settle for, but a clear picture of what it isthat you want, what it entails, and why you want it.

Tork knew he wanted an easier way to have enough food for himselfand his family but neither he nor Grunt had thought through all theimplications of the solution they hit on – which would mean relocat-ing Tork’s family and disrupting Grunt’s living arrangements.

Let’s take a contemporary example and examine the preparation youmight go through as part of a plan to make a career move.

Imagine you have been in the same job for three years and feel thatyou’ve gone as far as you can in your current employment. You hearthat one of your customers is setting up a new business, and youbelieve this could represent an interesting opportunity for you. You startby talking about this informally, to find out more about the companyand discover what openings there might be. If this looks promising, youmight then have an exploratory interview, and if this goes well, youcould be invited back to negotiate the possibility of a job.

Up to this point, there has been no actual negotiation. You havebeen going through a logical progression.

Setting your personal agenda

Having gone through the preliminaries, the next stage in your prepa-ration is to determine the criteria you will be considering. These willdepend on the type of work you are applying for. You will not – if youare serious about getting the best deal from your new employer –

It could be simply a matter of determining the job and the remuner-ation package, or it could be more complex and look somethinglike this:

➣ You will have an idea of the appointment you want in the com-pany, and what this means in terms of role and responsibility

➣ You will want be sure that you will have the support and assis-tance you need to perform your job effectively, with specific


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Timescale: you know your personal timescale. If you werecurrently unemployed, a new job would probably be a matter of some

urgency. On the other hand, if you are reasonably content in yourpresent employment, there is probably no need to be over-anxious to

finalize negotiations quickly and come to a quick decision.

Mutual benefit: you have determined that there is something eachof you wants from the other.

Desirable outcome: you both know that the subject of thenegotiation will be a mutually acceptable contract of employment.

Communication: you have established personal contact and haveno problem communicating.

Process: you also know how you will negotiate, because there is anaccepted procedure – the interview scenario – which you both accept as

the process for reaching a negotiated agreement.

simply be looking for a certain level of pay. You will have an idea ofthe salary and benefits you want, and you will also be ready to justifywhy you believe that your proposal is fair and reasonable.


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authority in terms of your authority to hire and fire, and to makecertain levels of expenditure

➣ You will want specific strategic authority to set policy, within theterms of the job specification

➣ You will know the salary you are looking for, and will want toensure that the ratio of fixed salary to performance bonus isacceptable to you

➣ You will know what additional benefits you expect in terms of per-sonal insurance, life and health cover, pension scheme andholiday entitlement

➣ Finally, and you will consider this in more detail in a moment, youwill know what your options are if the job offer does not match upto what you are looking for

Clearly, the more senior the appointment, the more critical some ofthese elements will be. But all of the above points apply to someextent to any level of employment. Even the most junior positioncarries with it certain rights, obligations, duties and privileges.

Knowing where you can afford to be flexible

The sum total of these criteria acts as a starting point for you, buttakes no account of what may be important to the other side. Again,that can be put to one side for a moment.

Clearly, potential employers will not want to pay you more than theythink you are worth. They may not wish to grant you privileges andbenefits they are not offering other employees in similar jobs. Becauseof this, it is important that you decide how flexible you are over thecriteria you have listed and think about the range of alternative out-comes which you are prepared to accept in each of the areas.

There may be a balance. Some points may be critical to your deci-sion, while you may be prepared to reduce your demands in someareas in return for an increased benefit in others.

The importance of the timescale

One crucial factor in any negotiation, quite apart from the simplemutual benefits of the transaction itself, is the question of urgency.

Are you in a hurry or can you afford to wait? Do you have a deadline?Is the other side anxious to conclude the deal quickly?

The package deal that one party is prepared to offer is almost alwaysrelated to the need and urgency with which the other party wants it.Generally, if you are not in a hurry to finalize a negotiation,whichever side you are on, you are in a stronger position.

If you are in business and critically short of funds, you may be forcedto borrow at a high rate of interest or sell a controlling share of yourbusiness in order to survive. If you are trying to buy a house and arein a position to move quickly because you are currently rentingaccommodation with a short-term lease, the person who is selling toyou may accept a lower offer because he or she knows you can closethe deal quickly. One person who needed money and concluded adeal which later proved to have cost him dearly was J.R.R. Tolkien,author of the fantasy trilogy Lord of the Rings.

In 1968, Tolkien sold the film rights to Lord of the Rings for 10,000pounds sterling in order to settle a personal tax bill. When the threefilms were eventually made, almost 40 years later, they grossedalmost three billion US dollars in box-office takings with a furthertwo billion dollars from additional sales and rentals of videos andthe merchandising programme of toys, games and other products.Even allowing for exchange-rate fluctuations and inflation, Tolkien’sprice represents a miniscule fraction of one per cent of thefilm’s earnings.

Was it a good deal or a bad deal?

In 1968, Tolkien needed money urgently. At that time, with thegrowth of television changing the pattern of social life, market ana-lysts across Europe were predicting the demise of the cinemaindustry, and theatres were being pulled down or converted toleisure centres and supermarkets. The offer of 10,000 probablylooked reasonable, and nobody could then have imagined that theeventual screen adaptations would prove to be in the all-time top tenof box-office money-earners.

The crucial points are that both the prevailing market conditions andthe seller’s need to conclude a deal were strong factors in enabling


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the purchaser to strike a bargain that now, with the benefit of hind-sight, seems to have been a steal.

Once you:

➣ know the timeframe➣ know what you want and➣ know how flexible you are prepared to be with your demands …

you will have taken three of the most important steps in preparingyourself. But setting a starting position and deciding on your finalposition are not enough.

Moving from ‘What?’ to ‘Why?’

If you can’t get what you want, and even the final negotiation fallsshort of what you are prepared to settle for, what will you do? Whatare the alternatives to achieving a negotiated agreement?

Sometimes you become over-attached to the subject of one particu-lar negotiation and end up making more concessions than you hadplanned. Alternatively, you walk away when your final offer isrefused, and have a sense of failure about the whole deal.

The reason this happens is because you lose sight of your motivation.You can become so focused on the one particular negotiation thatyou forget why you started on this course of action. If you go back tobasics, and you clarify the reasons why you want to make a deal, youcan see whether the present negotiation is the only solution, orwhether it is one of a range of possible alternatives. Furthermore,you can establish a course of action to follow, if all your negotiationsfall through. This is what is called the WAO – the Walk-Away Option.

The risks of seeing a single solution

Let’s return to Robert and Rosemary, who bought the house andmost of the furniture from Jack and Jill and are now settling in. Asthey relax one evening, Robert sees an announcement in the local


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paper for an auction sale with a photograph of a fine dining tableand set of chairs. He points it out to his wife:

‘This looks good. Why don’t we go along and bid for this?’

‘I agree, it does look rather smart,’ she replies. ‘But why do weneed more furniture?’

‘Your family are all coming over next month, and that old table istoo small to seat all of us. We need a larger table and it would begood to have a set of matching chairs. The estimated price is1,500–2,000. It’s an antique, and at that price it would be aninvestment.’

So they decide to go to the sale, with a budget of 2,000.

An auction is a tightly structured type of negotiation. The clearobjective is to strike a bargain between the seller and the bidders.The communication process is formal, with gestures and eye contactbetween the auctioneer and the potential purchaser to place andacknowledge a bid. The procedure and rules are understood byall parties.

The potential problem for buyers at an auction is that it is easy tobecome focused on winning the single negotiation of the auction, tobe carried away by the excitement of the bidding, and to end upspending more than was originally planned.

In this example, the antique suite rapidly reaches the estimatedprice and is finally sold for 2,200, above both the estimate and thebudget that Robert and Rosemary had set. They go home disap-pointed, and worried about accommodating the forthcoming visit oftheir relatives.

Even if they had continued bidding, and bought the suite, it wouldhave solved their guest problem but cost them more than theyplanned. Why have they failed to achieve the outcome they wanted?

The reason is straightforward. The motivation for buying furniture wasto be prepared for the visit of the relatives; this was why they went tothe auction sale. In fact, they had considered only one solution to theirproblem: the auction sale. Was this the only option? Of course not! But


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by focusing on the single negotiation and losing sight of their motiva-tion they failed to achieve the outcome they wanted.

Establishing alternative solutions

Let’s rewind the conversation:

‘This looks good, why don’t we go along and bid for this?’

‘I agree, it does look rather smart,’ she replies. ‘But why do weneed more furniture?’

‘Your family are all coming over next month, and that old table istoo small to seat all of us. We need a larger table and it would begood to have a set of matching chairs. The estimated price is1,500–2,000. It’s an antique, and at that price it would be aninvestment.’

Then Rosemary could reply:

‘Yes, you’re quite right; we must get a new table before the par-ents arrive. I agree that it would be good to have a qualityantique, but we can’t afford to pin our hopes on placing the win-ning bid. Let’s have a look around and see what else is available.’

That weekend they go round the furniture stores and find a goodmodern suite for 1,800. Rather than take a decision there and then,they still go to the auction, but drop out of the bidding at theirbudget limit of 2,000. Next day they buy the modern suite and haveenough left in their budget to purchase new crockery and cutlery intime for the visit of their guests.

What did they do that made this a good negotiating strategy?

➣ They went to the auction because this was one option to solvetheir problem of needing a new suite of furniture

➣ They researched the market and found an acceptable alternativein case their bid at auction was too low to conclude their purchase

➣ They went into the negotiation, but kept to their strategy andstopped at their budget limit


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➣ They achieved their objective of having the furniture – andthe bonus of new crockery and cutlery – in time for the visit oftheir guests

The point about this example is that Robert and Rosemary were clearabout what they wanted, which was to buy a new dining suite. It wasnot specifically to purchase the antique suite that they saw at thesalerooms. Even though they liked this, and decided it would be aninvestment, they had made a clear distinction in their minds andthey were not attached to a particular solution to the problem. Mostimportantly, they had a valid alternative if their bid at auction failed.

Often, when you think about negotiation, you are keen to determineyour ‘bottom line’ or ‘final offer’ but you do not always ensure thatyou have established your Walk-Away Option. To do this, you have tobe creative and know precisely why you are going into the negotia-tion in the first place.

Following the Rules of Preparation

You can summarize the process of preparation into five questionswhich help you to focus on the areas you need to think about beforeyou get down to discussions. These are easily remembered as When,Why, What, Where and How.

1. When is about Timing: When do you need to have this negotiation?

2. Why is about Motivation: Why do you want to have this negotiation?

3. What is about Results: What are the outcomes you want to achieve?

4. Where is about Flexibility: Where can you be flexible and where will you be rigid about con-cessions?

5. How is about your Walk-Away Option: How will you proceed if the negotiation fails?

At the beginning of this chapter you looked at Tork and Grunt andtheir decision that they should all live together, down in the valley.They hurried back to break the news to their shocked families and it


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looked as if that idea was a non-starter. You will remember one oftheir conversations in Part One:

‘Seen any mammoths today?’

‘I saw two together, over by the mountain.’

‘That’s always dangerous when there are two of them.’

‘Yes, the trouble is that if you manage to get one then the othercan come on after you.’

‘Suppose we got a crowd of us together and tried to separatethem, then we could limit the risk. What do you think?’



This is how their conversation continued:

‘So, why don’t you and your people move down in the valley, andwe can all live together? When we’re running low on food we’llget everyone together and go off hunting.’

Tork replied:

‘Sounds good to me. There’s no point in hanging around – I’ll goand tell everyone to pack up.’

Grunt smiled:

‘And I’ll tell my people to make room for you and your relations.’

Analyzing what Tork and Grunt decided

What could they have done differently? Now examine the situation,using the five rules of preparation.

1. Timing:Tork and Grunt had an ongoing problem but they had lived withit for years. The issue was important but improving matters wasnot a matter of urgency.


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➣ What they did: they acted impulsively and took a major deci-sion without considering all the implications

➣ First mistake: they didn’t need to rush into a decision2. Motivation:

Both groups had a difficult and dangerous way of life and wantedto find an easier way to have enough food.➣ What they did: they decided they would live together and

hunt as a combined group, then share the food they trapped➣ Second mistake: hunting together did not mean they neces-

sarily had to live together3. Results:

They wanted to hunt together – and share the spoils.➣ What they did: they planned to have the two communities

living together➣ Third mistake: they had never tried working together and

could not know whether hunting together would work – letalone the idea of living together

4. Flexibility: They both wanted a fair share of the hunt. They thought thiswould work well if they combined their living arrangements.➣ What they did: although Tork and Grunt were laid back

about the idea of living together, they saw it only from theirown point of view, and did not take into account the opinionsof all the other people involved. As for sharing out the food,they did not establish whether this should be on the basis ofnumbers, seniority, gender, hunting ability, or any other criteria

➣ Fourth mistake: hunting together would mean establishingnew rules and procedures that everyone could agree on. Livingtogether would mean embracing major changes and readjust-ments. They did not consider either of these areas in any detail

5. Walk-Away Option: There was none!➣ What they did: they went ahead and agreed on the plan,

leaving themselves without any option to think it through andconsult the others

➣ Fifth mistake: by doing this, they would probably later loseface with each other and lose the respect of their own commu-nities if they were subsequently forced to back down


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To summarize the mistakes that Tork and Grunt made:

➣ They made a quick decision when there was no urgency tochange the existing situation

➣ The solution they decided on went much further than was necessary

➣ They had no idea whether the idea they proposed would work inpractice

➣ There was no pressure to agree on the first idea they came up withsince they had the ongoing option of continuing as they had inthe past

➣ They were left without any face-saving option if either their ownor the other community rejected their proposal


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Five simple questions set the basis for change

From this simple example, you can see that lack of forethought andinadequate preparation can back-fire on the negotiators, the out-come and the prospect of resolving the issue at a later stage.

Now assume that Tork and Grunt have done their preparation andapproach the negotiation more carefully. This is how the conversa-tion might continue:

‘Suppose we got a crowd of us together and tried to separate themammoths, then we could limit the risk. What do you think?’



‘How could that work?’

‘There’s a lot to discuss, you know, and we’re each going to haveto talk to our people about it before we go ahead.’

Then their conversation could have continued, covering the fiveareas of preparation:

1. Timing: ‘Well, there’s no rush to change things; it’s been this way foryears and both our communities have survived up to now.’

2. Motivation: ‘Life here is a struggle; it would be good if we did not need tospend so much time out hunting.’

3. Results: ‘We could try hunting together, to see if we can work well togetherand find out whether we can develop a new joint strategy.’

4. Flexibility: ‘We will have to decide how the food should be shared, whetherit should be divided equally or whether some people should havea larger share than others.’


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‘We need to talk to our people and see whether they are willing totry it as an experiment. Maybe later we might even movetogether into one big settlement.’

5. Walk-Away Option: ‘If it doesn’t work out and our people can’t get on together, thenwe can always go back to the way things are at the moment.’

Summary

Before you enter into a negotiation, you need to be prepared.

You can do this by making sure you know the answers to five questions:

Now you are prepared … but what about the other side?

Considering your position

When When must you finalize this, is it urgent, what is yourtimescale?

Why Why are you negotiating – what is the background?

What What do you ideally want to get out of this?

Where Where can you be flexible and where must you berigid?

How How will you proceed if the negotiation fails, what isyour WAO?


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5

Establishing what the other side wants

Why don’t you want what I want?

When Tork spoke to the community about the plans to combinetheir living arrangements, he was surprised to find that his family didnot share his enthusiasm for the project. He jeopardized the projectby rushing in without any preparation, and subsequently the onlyway to repair the damage was to start the negotiation all over again,rethinking the way he presented the proposition that he and Grunthad initially rushed into.

What is the best way to start a negotiation?

You could just state what it is that you want to do, and see if theother party agrees to this course of action. Often that’s the way peo-ple announce a decision: they simply say what they are proposingwithout having considered what the other party might think, andcertainly without leaving an opportunity for discussion. Tork andGrunt both told their colleagues what they proposed to do in coldfactual terms:

‘Listen, everyone,’ Tork shouted. ‘We are going to join forces withthe people who live on the other side of the valley and worktogether to trap mammoths. We’re going to live with them as onebig community.’

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ESTABLISHING WHAT THE OTHER SIDE WANTS

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Meanwhile, Grunt sat down with his family group, smiled broadlyand announced:

‘The people up on the mountain are going to come down hereand live with us.’

Imagine the reaction of the family groups. Here was a proposal tomake a fundamental change to the living arrangements, apparentlyon a whim and with no thought to the social and organizationalupheaval this would represent. The immediate reaction of the twogroups was similar:

‘Why should we want to move?’

When someone suggests making changes, people are more inter-ested in the effects of the changes than in the detail of the changesthemselves. In classical sales language, they are more interested in‘Benefits’ than they are in ‘Features’.

In the same way, when you instigate a negotiation, you need toexplain and demonstrate to the other party the benefits of the courseof action you are proposing. The detail – the mechanics and logisticsof the change – are very much secondary to seeing what the advan-tages are.

When you were considering the way people look at the elements ofa negotiation, you saw that people put different values on differentaspects of the benefits package. Even if the transaction is purelyfinancial, the two parties may put a different value on the amountagreed depending on their personal circumstances.

When an organizational change is being negotiated, such as thechange in living arrangements that Tork and Grunt have in mind,benefits alone are rarely sufficient reason for people to accept theproposals. Whereas people may always say they want a better life,the reality is that they are generally quite contented to let things stayas they are, because people resist the upheaval of change.

The only thing that truly motivates them to risk the uncertainty ofmaking changes is when they are significantly dissatisfied with theirlot and strongly concerned about specific issues.

They are more likely to accept change if it promises to remove some-thing they dislike, than if it simply promises improvement. People aremost likely to react favourably when a proposal counteracts aninconvenience or eliminates a problem.

When companies go through mergers, acquisitions and take -overs, when government departments go through re-organizationand when new staff members join any organization, there is usuallyresistance to the changes. Even though the changes are always pre-sented as improvements to the previous organizational structure,they are rarely welcomed with open arms. The most effective way togain acceptance of such developments is by highlighting a numberof difficult issues and suggesting that the changes may resolve theproblems these create.

Another tactic is to highlight an opportunity that is particularlyappealing to the other party. Here, Robert and Rosemary are facinga decision about their garden. Firstly, Rosemary makes the mistake ofnegotiating without thinking about the reaction her proposal mighthave from Robert.

‘Robert, this garden is a real mess, and now that the weather isimproving it has got to be sorted out. I think we should extend thepaving and have a proper patio. Then we should build some deck-ing so it looks tidy and less of an eyesore. It shouldn’t be tooexpensive.’

Robert looks up from the sports section of his newspaper:

‘I’m not sure we would get much use out of it, you know. We’reaway quite a few weekends in summer and we manage at themoment with the garden furniture and our old barbecue. I thinkit would be an awful lot of work and quite expensive.’

‘I don’t think it need cost too much. You could lay the paving andfix the decking. I don’t think it would be extravagant.’

‘But Rosie, that’s a major project we’re talking about here …’

‘Well, if we don’t tidy up the garden then we certainly can’t haveyour new boss round for drinks or for dinner.’


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Rosemary has a vision of sitting out in the summer enjoying her glassof wine and a barbecue with the children. All Robert can see is eithera substantial price-tag or himself working weekends as a gardendesigner and contractor.

Suppose Rosemary had focused on the benefits to Robert andapproached things slightly differently:

‘Won’t it be lovely when we can sit out in the garden in the sum-mer? Perhaps you could have your new boss round and entertainsome of your golfing friends. Outdoor entertaining is very infor-mal and laid-back. Do you like the idea?’

‘Yes, I’d like to show our new house to some of the guys from theGolf Club. And you’re right, it is time you met my new boss ...’

Immediately, Robert sees significant benefit to himself, in the idea ofentertaining in the garden of their new home. Then Rosemary moveson to emphasize the value to Robert:

‘We could have a barbecue when the weather gets warmer. Youknow how people always love your barbecued chicken, Robert.’

She is painting a picture of Robert enjoying the benefits of animproved garden as he demonstrates his culinary skills to his bossand his friends. Then Robert realizes the picture is not quite right …

‘We will need some more outdoor furniture, and that gardenneeds sorting out. I can’t let them see it the way it is now. It’ssuch a mess and it’s a lot to maintain.’

At this point, Robert has created the opportunity for Rosemary tointroduce her ideas:

‘You know, Robert, the garden would be a lot more manageableif we put down some more paving. If we did that then you couldhave a proper built-in barbecue area.’

Again, she highlights the benefit to Robert – a proper built-in barbe-cue area – which leads him on to think about the practicalities ofthe idea:


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‘We could only put down a small area of paving because theground is too uneven. But then we could lead from the paved areato some decking where the land slopes down. That would savethe back-breaking job of mowing all that grass.’

‘I love the idea but I am not sure we could afford all of that. Theselandscape contractors charge a lot for paving.’

By this time, Robert is so keen on the idea that he is prepared to giveup some of his leisure time to turn the dream into reality:

‘Well, Rosie, it can’t be that difficult to put down paving slabs.Maybe I could do some of it and that would keep the cost down.’

‘I would like you to be able to entertain your boss properly. Let’sgo down to the garden centre this afternoon and get some ideas.’

Finally, Rosemary reiterates the key benefit to Robert: ‘to be able toentertain your boss properly,’ and then moves straight on to instigat-ing action while Robert is in complete agreement and before hechanges his mind.

In this example, not only has Rosemary let Robert identify both theproblem and the solution, she has also let him come up with the ideawithout her even mentioning it, allowing him then to take owner-ship of the project.

In the first conversation Robert saw Rosemary planning to spendmoney on the garden and him having to work hard in his leisuretime. In the second conversation, Robert saw himself entertaininghis buddies.

When Tork and Grunt tried to communicate their new ideas, neitherof them focused initially on the difficulties that beset their communi-ties. So, the immediate reaction was: ‘Why do we have to move?’

Tork could have started by saying: ‘We must find a way to increase oursupply of food. If we don’t do this then we are in danger of starvation.’In this way he would have focused the minds of his community on areal problem that needed urgent action. He would have gained their


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attention and, provided they agreed that there was a real problem,they would have listened to his proposals.

Alternatively, Tork and Grunt could have started by listening to whattheir community thought about their general situation beforeexplaining what they had in mind. If they had done this, the negoti-ations might have gone very differently. Suppose Tork had takenthis approach:

Tork rushes back to the cave, excited about the news he has forthe family:

‘Gather round, everyone, there’s something important I want totalk about. I think I have found an answer to some of the prob-lems we have, living up here on the hillside. I think I have found away that we can all live more comfortably and not need to workso hard.’

His wife, brother, sisters, uncles, aunts, in-laws and all his relationslook at him quizzically, and come across to join him.

‘Have you found a new spring of good, clean water?’ asks hiswife. ‘It would be so much easier if we didn’t have that long climbback up here every time we go to fetch water.’


‘It would be wonderful if we weren’t so isolated up here. I nevermeet anyone, and I would love to see some new faces.’

Tork’s father sighs and rubs his stomach hungrily:

‘There’s always a worry about food. If only there was some wayto increase the supply, but there just aren’t enough of us to getorganized. I know how hard it is for you Tork, out there huntingday after day, tracking and chasing. It’s tough on you, and itdoesn’t provide us with enough to eat.’


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Here are three issues which were all problematic:

1. The location of the settlement was some distance from a source ofdrinking water.

2. The community was isolated and lacked social connections.3. There was a problem with the food supply.

Tork had been thinking only about the third problem area, whereasin fact he has now come up with a potential solution to what wouldappear to be three of his community’s major concerns.

In the original example, Tork presented the outcome he envisaged(living with the neighbours in the valley) without first explaining theproblems they had and the way that he saw his solution would over-come these.


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Tork focuses on the key issues


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Even if he had started off by talking about the food problem and thehardship of hunting alone, he would have been arguing primarilyfrom his own personal point of view, rather than from the standpointof the whole community. If Tork had let his colleagues have their sayand let them reveal their hopes and fears, he could then have pre-sented his arguments in a way that addressed these concerns anddemonstrated how these problems would be alleviated.

In the last chapter, you looked at the initial preparation for a negoti-ation. You saw the importance of the five questions which needasking before you get into the negotiation itself:

➣ When: When must you finalize this, is it urgent, what is yourtimescale?

➣ Why: What is the background to this negotiation? ➣ What: What do you ideally want to get out of this?➣ Where: Where can you be flexible and where must you be rigid?➣ How: How will you proceed if the negotiation fails?

In this chapter, you consider the same five areas in a slightly differentorder. This time, you look at the information about the other sidethat would be useful in your negotiation:

➣ When: How urgent is this for them? When must they finalize this? Do they have a fixed timescale and does the timing workto your advantage?

➣ What: What do they ideally want to get out of this, and whatcan they offer you?

➣ Why: Why should they agree with your ideas – and whyshould they not?What’s going on inside their heads?Is there a hidden agenda?

➣ Where: Where are they willing to be flexible?What is important to them and where are they rigid?Do they and you have different critical factors?

➣ How: How strong are they?How far can they push their argument?What are their options if the negotiation fails?

In all of these areas, the most important factor is to be aware of thedifferences between what you find important and what the otherside considers important.

When is the right time?

Throughout this book you will come back to two things. One is theimportance of choosing the right time to negotiate. The other isappreciating whether or not timing is important from your ownpoint of view and from the point of view of the other party.

Negotiation is not just about what you say and how you say it; it iscritically about when you negotiate and when you intend to con-clude the negotiation and implement the agreement. Timing doesnot rely on eloquence or argument. Timing is ultimately commonsense and is dependent only on the ability to be sensitive to the otherperson’s thoughts and feelings.

Once again, you need to think from both points of view and to con-sider four critical timings:

1. When is the right time for you to negotiate?2. When is the right time for the other party to negotiate?3. As far as you are concerned, when would be the right time to

implement the agreement?4. As far as the other party is concerned, when would be the right

time to implement the agreement?

And, of course, even more important … when are the wrong times?

As a general rule, you want to commence implementing an agree-ment promptly after the negotiation is completed. You saw a goodexample of this in Rosemary’s decision to get Robert down to thegarden centre to look at paving and decking as soon as he hadreacted positively to her ideas.

When things are delayed they tend to revert to the way they werebefore. To quote the Scandinavian proverb: ‘Make haste slowly.’ Takeas much time as you need to make the right decision, but once it ismade, implement it swiftly. Even if the decision is to implement


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changes slowly, over a long period, it is important to start the agreedprogramme once the negotiation is completed.

What’s it all about?

In his alternative approach, Tork introduces the discussion by stimu-lating their curiosity and imagination:

‘Gather round, everyone, there’s something very important Iwant to talk about. I think I have found an answer to some of theproblems we have, living up here on the hillside.’

Immediately they hear this, members of the community will bethinking about their own particular problems. As you see, they comeright out and tell Tork exactly what they are unhappy about:

‘It would be so much easier if we didn’t have that long climb backup here every time we go to fetch water.’


‘It would be wonderful if we weren’t so isolated up here. I nevermeet anyone, and I would love to see some new faces.’

Tork’s father sighs and rubs his stomach hungrily:

‘There’s always a worry about food. If only there was some wayto increase the supply. But there just aren’t enough of us to getorganized.’

In addition to Tork’s prime concern – food supplies – they mentionwater supplies and social connections as being major issues for them.This gives Tork the opportunity to use their declared problems as thebasis for what he is about to propose. He could continue by saying:

‘What could we do that would give us a more secure supply offood, and easier access to water?’

In doing this, he is encouraging them to come up with the idea heand Grunt have already considered: the possibility of living andworking together. You need to remember precisely what it is that


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you want out of this negotiation. Do you want the kudos of havingcome up with the idea, or do you want to see the changes happen?

It is often easier to achieve the desired outcome if you can lead theother party into coming up with the idea themselves, as Rosemarydid with Robert. You may have to swallow your pride – but it is apowerful and effective strategy when applied skilfully.

Where the other party suggests an idea, it already has their endorse-ment. However, if you cannot manoeuvre the other party intoinitiating it, you need to try and work out what their reaction to yourproposal will be before you present it.

Of course, you can prepare yourself for logical arguments thatrespond to the thought process you have been following. But whenit comes to this stage, you must be prepared for a reaction that isquite unrelated to the way you see the issue. Other people see thingsdifferently. They have their own perspective.

Why, and why not!

If you have prepared your negotiation well, you know what you wantto achieve and why you want to achieve it. When you face the otherside in a negotiation, you must try to work out what their likely reac-tion will be – not only to negotiating, but also to your final objectiveand all that is entailed in achieving that final objective.

You also need to work out what false ideas they might have aboutthe reasons for your ideas.

Look at how Grunt’s sisters react to his ideas. Grunt sits down withhis family group, smiles broadly and announces:

‘The people up on the mountain are going to come down hereand live with us.’

His two sisters, who both have teenage daughters, exchange slyglances. One turns to the other with a look of shock and dismay onher face:


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‘Well, you know what those mountain men are after, don’t you?They want our daughters!’

People often have prime concerns which affect their reaction to anyproposed changes. Frequently they are not directly related to thenegotiation itself, and are often connected to personal, cultural orreligious considerations. In this instance, even if Grunt had been farmore careful in the way he made his initial introductions, thewomen’s first thought could well be to consider how the changesand upheaval would affect their children. This is their prime concernin all aspects of their daily lives.

For this reason, when you approach a negotiation and are confidentthat your timing is appropriate, your first thought must be to considerwhat are the prime concerns of the other side, with the knowledge


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Men don’t always see women’s point of view

that they may be totally unrelated to the issue you are seeking toresolve, as in the case of Grunt’s sisters and his teenage nieces.

In the second example, where Tork is addressing his community andhighlighting the hardships of living on the mountain, you can seehow he is attempting to address what he sees as the prime concernsof his community. His clear intention is to align his position withtheirs and then move from a common, agreed position – the exist -ence of some major problems with living in a small group on themountain – towards his proposal for a solution.

Where can you negotiate?

It is important to know where you are prepared to negotiateand where your position is fixed. Similarly, you need to find outthe same points for the other party, so that you know where youcan manoeuvre.

When you are talking about a straight financial transaction, youwould think that both sides would place an equal value on the deal.However, there are frequently other issues which may be of littleinterest to you, but are critically important to the other party. Even astalled negotiation can open up and move forward once you start tobe creative and look for additional options.

How far can you push them, and where would they go?

Assuming you have prepared yourself well, you will have a ‘walk-away option’ clear in your mind. Not just a price limit at which thenegotiation collapses but an alternative, a ‘Plan B’, which will be adifferent route either towards achieving the same overall objective orelse at least avoiding an unfavourable outcome.

The other side, if they are serious negotiators, will probably havedone the same. It will be greatly to your advantage if you can getsome idea of what they are thinking.

If you have no clear idea about this, your cautious course of actionwould be to imagine yourself in their position, wanting to strike the


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best deal for yourself. In their shoes, what would you have plotted asyour ‘Plan B?’

In the first example, of Rosemary’s plans for the garden, Rosemary’s‘Plan B’ is that if the garden is not to be improved, Robert’s boss can-not be entertained. If Robert had come back and reconsidered hisobjections in the light of this, there is a chance that her plans wouldhave gone ahead. A strong ‘Plan B’ can often be a lever which per-suades the other party to reconsider their position.

In this instance, Robert might have started to compromise and nego-tiate a simplified version of Rosemary’s plans for the garden.

A good ‘Plan B’ is a real walk-away option that you genuinely pro-pose to carry through if negotiations break down. The next sectionof the book looks at the tactics of using bluff and threats to force theother side to move. As you will see, this is not a safe strategy and canback-fire with serious consequences if your bluff is called.

One of the main reasons why pressure can be dangerous is that youmay not be aware of all the options available to the other party.

Let’s suppose you are negotiating a distributorship agreement foryour products in a territory. Both parties have a number of optionsapart from a straightforward deal. Both parties could be negotiatingwith other potential partners. Both parties could be considering anumber of variables such as the method and level of remuneration,the length of the agreement, the minimum performance require-ments and so forth.

You need to be ready with your own walk-away options; whether itis you or they who decide that no more concessions can be madeand that what is on the table is the best and final offer which canbe achieved.

Just remember that a negotiation is always taking place in the con-text of the current situation, and things may change overnight. Evenif you are unable to reach a decision at the moment, there is alwaysthe possibility that critical factors may change within a matter ofdays, or even hours, and you might find yourself back again at thenegotiating table.

If you do not bear this in mind, and end a meeting with angry words,you may have to make significant concessions to rebuild the rela-tionship – should you find yourself back in negotiation at a later date.

Through the When, What, Why, Where and How of the negotiationyou are constantly looking for ways to create more options, demon-strate alternative solutions and find opportunities to bridge the gapbetween you and the other party. This is the process that expertnegotiators use to find their win-win solutions.

Enlarging the pie

Negotiators sometimes say they are sharing a pie, and that this pieis a fixed size, so nobody can increase their share without someoneelse losing.


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Can they make enough to go round?

Before you consider ways of increasing the size of the pie, here is asummary of the key points for both sides:

Considering your position

Considering bothpositions

WhenWhen must you finalize this,is it urgent, what is yourtimescale?

When is the right time forboth parties in terms oftalking about this andputting it into effect?

Why Why are you negotiating –what is the background?

Why would they not agree,what are they thinking andis there a hidden agenda?

What What do you ideally want toget out of this?

You know what you want toget out of this, but what dothey want, and what canthey offer you?

WhereWhere can you be flexibleand where must you berigid?

Where are they willing to beflexible, and are the samethings important to bothparties?

HowHow will you proceed if thenegotiation fails, what isyour WAO?

How far can you push them,how strong are they andwhat are their options if thenegotiation fails?


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6

Information and opportunities

Creating choices

There is usually more than one solution to a problem. Sometimesyou are so focused on the first idea you come up with, that you neverconsider the possibility of any alternatives.

The reality is that most negotiations have many possible solutions.Some will benefit one party more than another but some may actu-ally benefit both parties without diminishing the benefit to eitherone of them.

In the example of Wizpa and Chat arguing about sharing the mam-moth, the reality was that their demands were perfectly compatible:Chat wanted the meat to eat while Wizpa wanted the skin and bonesto make clothing and tools.

The cartoon at the end of the last chapter showed Grunt lookingvery concerned at the prospect of having to share the pie betweenfive hungry people when he had divided it into four portions. Let’seavesdrop on the subsequent conversation:

Grunt looks up apprehensively as Tork approaches:

‘Can I help you, Tork?’ he says.

‘I was wondering if we could borrow your pie dish as ours is bro-ken. I can let you have it back tomorrow.’

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INFORMATION AND OPPORTUNITIES

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Sometimes the ‘pie’ is bigger than it looks. In this case Tork did notwant any part of the pie itself; he just wanted to borrow the dish thepie was in.

Sometimes everybody gets what they want

Even when a negotiation is purely financial, there may be otherissues apart from the price tag:

➣ Extended credit payment terms or cash discount➣ Delivered and installed or cash-and-carry➣ Extended warranty or ‘sold-as-seen’➣ Basic specification or with ‘optional extras’

Making a bigger pie

The smart way to prepare for a negotiation is to start by working outall the alternative packages which could be up for discussion. In


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other words, you increase the size of the pie before you start to cal-culate the size of the portions.

Obvious as this may seem, people are often blind to the variety ofalternative options that could be discussed. Their eyes will scandown to the price tag and they will focus on negotiating aroundthe price.

To put it another way, they will look at the detail of the proposalrather than consider the end objective the other party wishesto achieve.

Let’s consider this example, where both parties end up with a largerslice of a bigger pie.

George and Mary want to sell their house but they know it needssmartening up if they are to achieve the best price and sell quickly.They talk to an estate agent and are told that repainting the exteriorand tidying up the garden would certainly make the house lookmore attractive and help it to sell. However, if they really want tomaximize the price they achieve, they could add 15,000 to the mar-ket valuation simply by installing a fairly basic new kitchen. Georgeand Mary reckon they could afford to spend 5,000 and talk to a couple of specialist kitchen companies.

The first proposal works out at 10,000, twice what they haveplanned to spend. But the second company produces an attractivelayout which would work out at a total price of 7,000. George looksat Mary nervously, then turns to the sales consultant:

‘We are planning to move this summer and we want to do this sowe can get the best price when we sell. We can only afford 5,000.How could we save on these plans?’

The consultant sees an opportunity and puts the plans on one sidefor a moment.

‘When do you want to have the kitchen installed, and when doyou plan to put the house on the market?’

‘We’d like to go ahead as quickly as possible – in the next fewweeks – and then we’ll put the house on the market once we’vefinished decorating. The sooner the better.’

The consultant looks at her calendar.

‘So, that would be around the beginning of April. From youraddress, I can see you live in an up-and-coming part of town.I would imagine that a new kitchen would add at least 15,000–18,000 to your valuation.’

Mary responds quickly:

‘Yes, but we need to make as much profit as possible on our saleso that we don’t overstretch ourselves buying our new home. Wesimply cannot afford to lay out more than our 5,000 budget,what with all the costs of decorating and generally sprucing upthe place. Everything costs so much money, doesn’t it?’

The consultant nods sympathetically, then explains:

‘My point is this: a house in your part of town, smartly presentedwith a really beautiful kitchen, will probably sell beforeSeptember, don’t you think?’

George looks puzzled.

‘Well, yes, I’m sure it will. We want to be settled in our new placefor the summer. I would think it’s realistic in the present buoyantmarket conditions. But what has that got to do with the cost ofthe new kitchen?’

The consultant smiles, knowing she is about to clinch a good-sized sale.

‘The point is that we have a special promotion this month on ourGeneva range of kitchen units. If you place your order for thatrange before next weekend, we can offer you interest-free creditfor six months. You will have sold the house well within that time,so you won’t need to touch your savings to pay for the kitchen.You’ll be able to settle up when you have the proceeds from thehouse sale. In fact, rather than the basic design we have been


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considering for your house, I would suggest we look at somethingrather more luxurious, so the kitchen becomes a major selling fea-ture. What do you think?’

George and Mary need little persuading. They seize the opportunity,upgrade their ideas and invest 10,000. This increases the market valu ation of their home by over 25,000.

Looking back, you will see that when they went into the negotiationthey were focused on the fact that they had allocated a budget of5,000, which proved to be too small for even a basic renovation. Theconsultant explored the options, and when Mary told her that theywere planning to move within the coming months, she knew shecould make a proposal that would not only conserve their bank bal-ance, it would also both give her a bigger sale and give them a largerprofit. Both parties get a larger slice of a bigger pie.

Everybody wins because the kitchen consultant established that themotivation for George and Mary was not to spend their savings andcreate a beautiful kitchen they could enjoy themselves, but to makean investment in their property in order to increase the profit on thesale of their home.

In establishing the motivation behind the action she could producea deal that directly addressed their needs.

How did this happen? In essence all this came about because theconsultant asked questions.

The power of questions

Questions can work for you or against you. When a simple negotia-tion about a straightforward transaction starts, it is a formal processof responding to enquiries with factual information. The questionsare direct, specific and to the point:

‘How big is your kitchen?’

‘What styles can you offer?’

‘What appliances do you want?’

‘How soon can you deliver?’

When the questions go beyond immediate issues and start to involveother related factors, you start to see a development in the nature ofthe interaction.

One positive development is relationship-building. After the initialformality of an exchange of information, talk moves on to chattingand the exchange becomes less formal. When this happens, the par-ties start to develop an emotional connection, and while this createswarmth between them, it also arouses fear on both sides. Youremember the old warning:

‘Don’t get too close or they’ll take advantage of you.’

Whenever two parties start a negotiation, they put up a barrier thatkeeps them apart. Both parties know what they ideally want as theoutcome of the negotiation. They also know what they must have asa bare minimum and what they want to avoid at all costs. They arecaught by a need to bring down the barriers so they can negotiate,and a need to keep up their defences so that they protect their inter-ests. In the end, the process itself has to be a compromise. If they aretoo far apart they cannot communicate, but if they come too closethey both threaten and in turn are themselves threatened.

The way to remove this threat is by transforming the relationshipinto a partnership in which both sides are working towards a com-mon objective. By understanding the feelings of the other party youcan stimulate a real dialogue which moves both parties towards theoutcome both parties want.

George and Mary wanted to buy, and the consultant, Sheila, wantedto make a sale. From that analysis you see there was a clear commonobjective. What was not immediately clear was that each party had ahidden agenda. Uncovering this agenda created a better result forboth parties.

For Sheila, the hidden agenda was that the company was running aspecial promotion on the Geneva range of kitchen units. This gaveher the opportunity to increase the value of any sale she made, andthus increase the value of her commission.


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For George and Mary, the hidden agenda was that they were invest-ing in improving their home so they could increase the profit theywould make when they put it on the market. Whether you are askingquestions or making comments, you always risk revealing more ofyour position than you need to. Sheila was very careful in the ques-tions she asked. She said nothing about her particular interest inselling the Geneva range, except to the extent that it was of interestto George and Mary. When Mary told Sheila:

‘We are planning to move this summer …’

Mary revealed her position.

This could have worked to her disadvantage, since Sheila then knewit would not matter whether or not the units were particularly long-lasting. George and Mary were mainly concerned only with outwardappearances, and even if there were any complaints or quality issuesin a year or so, George and Mary would probably have moved on.

Similarly, when Sheila commented:

‘I would imagine that a new kitchen would add at least15,000–18,000 to your valuation …’

Mary might have taken offence at a comment about their personalaffairs. Fortunately, she was instead curious to know why Sheila hadasked the question.

In order to broaden the discussion, Sheila used a proven tactic ofmaking a statement with which she knew George and Mary wouldagree. This tactic is often effective in negotiation: making statementswith which the other side will agree, or asking questions to whichyou already know the answer. In doing this, the active party auto-matically sides with the passive party. Without any perceptiblechange in tone, both parties are now on the same side of the nego-tiating table.

Before you start asking any questions in the course of a negotiation,you must think through what the answers could be. Lawyers alwaysadvise their junior colleagues: ‘When you are in court, never aska question to which you don’t already know the answer.’ It is very


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important that when you ask questions you are aware that there is adelicate balance between pulling the parties closer together andpushing them further apart. You cannot just blurt out your thoughtswithout considering several possible outcomes:

➣ What will your question or comment reveal about you or yourposition?

➣ Will it change the other party’s opinion of you, and if so, how?➣ Will it force the other party to adopt a firm position and reduce

their flexibility?➣ Will their reaction or response be positive or negative?

When in doubt, wait for the other side to do the talking. Wheneveryou talk, you must remember that it can be just as easy to sabotagethe outcome as it is to achieve what you want.

How much information do you need to share in order to get theresult you want?

Look at what Sheila told George and Mary about the Geneva pro-motion: she only mentioned the six months interest-free purchasedeal. Perhaps the range was being discontinued, possibly because itwas rather old-fashioned or maybe it had a minor design fault.Perhaps Sheila received an extra bonus each time she sold theGeneva range.

It would not have been in her interest to reveal any of these factorsin her negotiation with George and Mary. This is the central questionof this chapter: how much information should you share whenyou negotiate?

Recognize the value of information

You live in a society with communication policies pulling in oppositedirections. With the increased dissemination of information throughinvestigative journalism, proactive media, satellite communicationsand, of course, the Internet, you have access to limitless quantities ofinformation and disinformation.


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On the other hand, despite this openness in everyday life, most gov-ernment departments and commercial operations run on a strictpolicy of Need to Know. Government or corporate employees aretold only what they need to know in order to do their work.Information is power, and you can control the balance of power bywhat you choose to say and by what you choose to leave unsaid.

In your preparation for a negotiation, you should classify the infor-mation into three categories:

1. What the other party needs to know in order to negotiate withyou.

2. What you are prepared to divulge in addition to this in the courseof negotiation.

3. What information you will hold back and not reveal under any cir-cumstances.

You can have soft borders between these categories, with headingssuch as information you absolutely must disclose, details you mightreveal under certain circumstances, and so forth.

When you are negotiating alone, you need to be clear in your ownmind about this. If you are part of a negotiating team, you mustensure that you all agree on what the boundaries are.

Controlling a negotiation is all about controlling the balance of infor-mation. This is where careful questioning becomes the vital tool. Asthe questioner, you talk less. You reveal less while encouraging theother side to reveal more. In this situation, you maintain control andmust remember that you are ‘thinking outside the box’ – exploringall the possible options.

So far in this section, you have looked at putting together your owncase, evaluating what the other side wants and expanding theoptions and opportunities. You now need to find a way of agreeingwith the other side about whether the solution is acceptable toboth parties.

You need to agree how you will agree. This sounds complicated butit is in fact straightforward.


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Summary:

➣ Information is power➣ Look for a hidden agenda➣ Ask questions to uncover motivation➣ Probe to reveal additional information➣ Categorize your information and be strategic in the way you

disclose it


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7

Establishing a measurable wayof judging the outcome

Rules are rules

When you looked at ‘How do you handle this?’ back in Chapter Three,you set out the process of Directional Negotiation:

1. You set the scene.2. You acknowledge the position of both yourself and the other

party.3. You define the issues.4. You identify the desired outcome.5. You explore possible solutions.6. You establish how you evaluate the various options.

In Chapters Two and Three you had already looked at positions andissues and in Chapter Four you considered what Tork and Gruntwanted to get out of the negotiation. In Chapter Five you looked athow Tork and Grunt might prepare themselves for what the otherside might be looking for. In Chapter Six you considered how theymight find answers which satisfied both sides by being creative inthe way they explored alternative options.

Now look at the last of the six points listed above. Consider how youcan measure whether any of the solutions you are evaluating actuallymeets the objectives of both sides.

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What tends to happen is that, when you think you have an agree-ment, you rely on your interpretation or ‘reading’ of thearrangement. This can be dangerous, because the only sort of read-ing that is reliable in a negotiation is to read what is written down.

Generally speaking, a verbal contract is not worth the paper it’s notwritten on! Lip-reading is for mime-artists and mind-reading isfor psychics!

But there is not always enough time to draw up a document thatclarifies everything, before you start talking. So, how do youresolve this?

Sometimes, one party thinks a negotiation is over and an acceptablesolution has been reached – only to find that the other party doesnot agree. It comes back once again to different perspectives, andthe way in which people see things differently.

What is needed in advance of a negotiation is an agreement on whatwill constitute an acceptable outcome. You need objective criteriaagainst which you can judge what has happened. You need ‘rules’that really are ‘rules’ so there is no misunderstanding.

Otherwise you may end up in the sort of mess that Wizpa and Chatgot themselves into, as you shall now see.

In Chapter Three, Wizpa and Chat were arguing over the carcass ofa mammoth. As they negotiated it became clear that while Chatwanted the meat for food, all Wizpa wanted were the fur and thebones to make clothing and tools. At the end of the example itlooked as if the matter was resolved, but in fact they never agreed ondetailed objective criteria in their negotiation.

Look at what happened as they tried to cooperate: Chat has beentrying to work out a solution, having discovered what Wizpa wants:

‘What about the carcass? Once you’ve skinned it you’ll haveenough fur to keep you warm. What about all that meat? There’stoo much there for your group to eat and we like to eat meat.’

Wizpa looks for a further deal.

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‘The meat is tough and hard. We don’t eat that but we alwaysneed the bones.’

Chat is surprised.

‘If you put the meat on the fire it is very good to eat. But why doyou want the bones?’

Wizpa shakes her head in disbelief.

‘Bone is perfect for harpoons, of course. That’s how we catch thefish.’

The conversation continues. Chat smiles broadly. She thinks she cansee a solution.

‘Right then. To start with, we’ll have the meat and you can havethe skin and bones. And I’ll show you how to start a fire to keepus warm, and I’ll cook some meat for us to eat – all this work willmake us hungry. You can start cutting up the front end, and I’lltake the back end.’

The two cavewomen start work, but unfortunately each is thinkingonly about her own side of the bargain, not about what the otherparty wants out of the agreement. The ‘rules’ they have agreed onare too vague and imprecise.

Chat doesn’t bother to remove the skin in one piece. She attacks herhalf of the carcass and hacks the meat into big joints, smashing andsplintering the bones as she does so.

Meanwhile, Wizpa carefully slices the meat off the bones, leaving aheap of slivers of meat lying in the dust and dirt while she trims thebones clean.

The danger of misunderstandings

This is an example of what happens when the criteria are not clearlyestablished. For Chat, all that mattered was butchering the carcassso there were large joints of meat. For Wizpa, on the other hand, the


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important thing was to remove the skin in one piece and then trimthe bones clean.

Each was focusing on what she wanted out of the bargain, withouttaking into account why they had been able to reach a deal. Theyhad not agreed on objective criteria that defined what they eachunderstood the agreement to be.

Neither Chat nor Wizpa finished up with what they wanted, eventhough they thought they had agreed. When it comes to the sort ofnegotiation you might find yourself entering into, you need to setnon-controversial, objective criteria so that what you get is what youwanted in the first place.

Many readers will be primarily concerned about financial negotia-tions, and may be wondering how one can achieve objective criteriain agreeing on a price for a product or service. This is a scenarioeveryone faces when they decide to sell personal possessions, and isnever more pertinent than when relocating and moving house.

Here is the dilemma that Jack and Jill faced when they were planningto move after selling their house to Robert and Rosemary.

Jack and Jill are looking at the 100-year-old long-case clock thatstands in their hallway. Jack sighs:

‘You know, my love, it just isn’t going to fit in the new place. Ithink the time has come to sell it and put the money into a newlounge suite.’

Jill is particularly attached to the old clock she remembers from whenit stood in her grandparents’ house. As a child she loved to stand andwatch the pendulum swing steadily to and fro, and was fascinatedby the loud tick-tock and the chimes that struck every hour. Sheinherited the clock when her grandmother died, so there is a personal connection with it. She would definitely miss the familyheirloom. Reluctantly, she agrees with her husband:

‘I know you’re right, Jack. But what would we get for it? Howshould we sell it? And look, we’re probably moving within amonth, so there’s not much time.’


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What are the key issues that Jack and Jill are considering in preparingfor their negotiation with a potential buyer? The two main points aretiming – always a fundamental consideration in any transaction –and price.

The timing issue might be avoided if Jack and Jill can enrol friends tohelp out with storage, by looking after the clock if they cannot com-plete the transaction before they move house. The valuation is lesseasily resolved. Let’s consider how you can establish the value of anyarticle, and what principles affect the decision.

Is it worth what it cost?

An obvious place to start when you fix a negotiating price is to iden-tify what an item cost originally, or would cost to replace today.

In the case of a manufactured product, the accounts department ofa company will calculate the cost based on the sum of the inputs –materials, labour and overheads – plus a profit margin based on theexpectation of a certain volume of sales.

But price, cost and value are three different things.

What it costs to produce a DVD of a movie that has already beenreleased around the world bears little relation to the price at which itwill be sold. Typically, the manufacturing costs of CDs and DVDs area tiny fraction of the selling price. The entertainment industryapproaches the price from the marketing standpoint of what themarket expects, or else what the market will bear, and then fixes itsprice accordingly.

Another consideration is the question of volume. If a product isexpected to be sold in thousands, the initial costs are amortized overa large number of units. The unit production costs will be substan-tially higher if there is to be only a short production run.

In most business, price is fixed according to market expectations.Cost is based on actual inputs together with a forecast of anticipatedsales volume revenue.


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But for Jack and Jill, cost does not enter the equation. The item is over100 years old. What it cost originally is simply not a consideration infixing their notional price.

What if they had been selling their four-year-old car? Would thathave presented a different set of criteria?

In this case, you would definitely be considering the original cost,and reducing this by an allowance for depreciation. This calculationwould depend on the condition of the vehicle, its mileage, and howit had been maintained.

As with the market for DVDs, there would also be a market expecta-tion of what such a car would fetch. Small cars in many countriestend to depreciate more slowly, quite apart from their actual cost.Small cars hold their value better than big cars because in the used-car market there is more demand for small cars than for largeexecutive cars. The market price does not move according to a sim-ple percentage of depreciation or basic calculation of wear and tear.

This is why car dealers will generally keep a close eye on markettrends, relying on constant market analysis statistics to keep themabreast of what particular models are likely to fetch in the market-place, with detailed calculations that take into account age andcondition. So, in the case of a consumer product like a car, there is astrong reliance on what the market will fetch rather than the simplecalculation of cost and depreciation.

And such a calculation is never simple.

Suppose Jill had finally persuaded Jack that it was time to sell histreasured classic 1969 Mercedes 280 SL sports car. He had bought itin a shabby run-down state, years ago, spending the bonus chequefrom his first job. He spent months restoring it to showroom con -dition and only takes it out on the road for the occasionalsummertime spin.

In this case, there is no point in considering either what he paid forit or even the cost of his time and the materials he invested in reno-vation. The 69 Mercedes 280 SL is now a collectors’ item worth tens


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of thousands of dollars and the potential market is global, ratherthan the local car dealer.

When you look at pricing this beautiful roadster you are not onlylooking at price plus inflation, rather than price less depreciation. Youare also looking at the global market opportunity.

And there is one further factor. So much for cost, and so much forprice – there is a much more nebulous consideration.

The concept of value.

Establishing value

Jack is attached to his Mercedes, just as Jill is attached to her familyheirloom. This emotional attachment adds to the value as far as Jackand Jill are each concerned, even though it is irrelevant to the mar-ket price of the product.

Emotional value can add to the market price or it can detract from it.If Jack’s Mercedes had at one time been owned by a Hollywood filmstar, it could significantly increase the price he could ask for it. Andif Jill’s clock had once chimed the hours for a famous author or composer, it could also add to its desirability, and the price itmight demand.

In a similar, opposite way, notoriety can detract from value, such asin the case of a property that has been the scene of violent crime orpersonal tragedy. Nothing has changed the bricks and mortar, thelocation or the condition of the property – but its history could affectwhat a vendor can expect it to fetch on the open market. The homeof Fred West, the British serial murderer, was demolished after hisconviction and the land cleared and left as an open space.

There would never have been any value in a home built on that site.

How much time do you have?

Finally, you return to the factor that has recurred throughout thisbook: time.


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Supposing Jack and Jill need to sell the clock quickly; they may haveto sell to an intermediary such as a dealer, rather than to the finalcustomer. The dealer then takes on the financing of the time lapsebetween his purchase and the eventual sale. If they go to auction,they may have the opportunity to present their clock to a number ofinterested dealers and perhaps some final customers as well – butequally, there may be no interest on the day of the auction sale andthey may have to resubmit the clock at a later date, incurring addi-tional expenses in auctioneer’s fees and storage costs.

All of these considerations are absolutely valid in our attempt todefine objective criteria to fix a ‘fair price’ for Jill’s heirloom. Whenyou enter into a buying or selling negotiation, you need to prepareyourself with a number of questions before you can determine a reasonable expectation of a final settlement which will satisfyboth parties:

➣ How urgently do you need to complete the negotiation, and arethere creative alternatives (such as temporary storage) which willquite literally ‘buy time’?

➣ Assuming it’s relevant, then what was the cost, depreciated orinflated, or alternatively what is the replacement cost?

➣ Are there other factors which could affect the market value of theitem?

➣ Are your demands or expectations influenced by emotional con-siderations about the value of the item?

➣ What will the market expect to pay?– to a dealer– to the final purchaser

➣ What is the state of the market for such items?

Now Jack and Jill can decide whether their expectations are realistic,and whether they can enter negotiations with a clear idea of whatthe item is worth to them, and what the market is likely to deliver.

What’s more, they can approach a negotiation with a confident atti-tude and from a strong bargaining position. Let’s see what happenswhen a local antiques dealer visits their home, and let’s look at howeach of the negotiating points can be confidently countered by Jill.


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‘This was my grandfather’s. He bought it after the First World Warfrom a second-hand furniture store. We were wondering what youwould give us for it.’

The dealer glances at the clock but does not want to appeartoo interested:

‘It’s not an antique, probably early twentieth century.’

Jill has done her research but she decides to play her cards close toher chest for the moment:

‘I know it’s not particularly old, because if you look carefully youcan see the date: 1901. It’s an heirloom, and I hate to sell it, butwe’ve decided it won’t fit in our new home.’

The dealer is confident that he can press his advantage and try to getJill to set the price:

‘You’re absolutely right. This sort of piece won’t fit in withmodern décor. What were you expecting to get for it?’

Jill isn’t yet going to reveal she knows what it is worth:

‘Well, you’re the local expert; you must know what you couldexpect to sell it for. What would you say it would be worth to acollector?’

‘Well, I’m a dealer, not a collector. I need a fair mark-up if I’m topay you and then keep it in store. I must admit it’s in good con-dition. I am prepared to offer you 400. I’m sure you weren’texpecting that sort of sum, were you?’

Jill pauses for a moment:

‘Indeed not, but then you are the expert. You can see that this isa Winterhalder & Hofmeier. I am very surprised that you wouldoffer me 400 when I know that a similar clock was sold at auctionin the city just three months ago for almost 4,000. So let’s agreeon some comparables …’


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As she says this, Jill reaches into a folder and takes out a sheaf ofpapers she has printed out from the websites of dealers specializingin long-case clocks.

Setting benchmarks

Let’s pause here for a moment. You can see the criteria each side hasbeen working to. Jill decided she would let the dealer suggest the pricerather than disclose what she already knew. He started by suggestingit was ‘second-hand’ rather than antique. He wanted to set a ‘used-goods’ benchmark, in the hope that he could push the price down.

When Jill said that the clock wouldn’t fit in with the décor of the newhouse, the dealer moved his negotiation sideways. Now he ignoredthe age of the clock and focused on the criteria of current marketfashion and expectations. He suggested there was a limited marketfor such items.

Finally, he pointed out that there would be a significant marginbetween what he would pay for the clock and what he might expectto sell it for. Jill knew this, but she wanted to push him into naming astarting figure, and when he said 400, she knew he was either igno-rant of the clock’s true value, or else he was trying to get a bargain.

At this point she came in with what she had established as herbenchmark for setting a fair price: she was working on the basis ofauction prices achieved recently for similar items. This was neitherher personal valuation, nor was it derived from what the clock cost.Her valuation was based on objective criteria which were clear his-torical records of fact. Up to this point, she had been careful not todisclose what she knew about the true value of the clock. From nowon, both parties knew where they stood and had objective criteria onwhich to base the negotiation.

When a negotiation concerns a straightforward financial transactionthere are generally three crucial factors involved:

1. What is the product or service?2. What is the price?3. When is the delivery?


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In a simple retail environment, the product is identified, the price isfixed, the purchaser pays the price and then takes the product home.

Since everything is visible and tangible, there is no need for ‘agreedobjective criteria’. These criteria are part of contemporary retail-ing convention.

When you are dealing with a non-standard product – as in the caseof Jack and Jill with the long-case clock and the classic car – objectivecriteria help both parties to establish a market value for that product.

These criteria might include cost price and depreciation. Equally,they will probably reflect current market value and whether there isa need to make the sale quickly.

But what about more complex negotiations, such as a service con-tract or a building permit; what objective criteria can you then use?One proposal is to cite external factors which affect both parties andare outside their individual control.

Examples of legislative restrictions that limit your individual negoti-ating power would include:

➣ Employment law – in the case of a contract of employment➣ Building regulations – in the case of construction work➣ Health and safety legislation – in respect of either or both of the

above➣ Currency regulations – in respect of a foreign trade contract

In addition to legal obligations, there are also common practices andconventions which affect negotiations, or established proceduresthat are always followed in particular situations. The way to avoidmisunderstanding and further conflict is for both parties to stateclearly what the proposed solution looks like to them. With a littleforethought, it could have gone differently for Wizpa and Chat …

Chat smiles broadly. She thinks she can see a solution.

‘Right then. To start with, we’ll have the meat and you can havethe skin and bones. You can start cutting up the front end, and I’lltake the back end.’ Then she adds: ‘Keep the joints as big as pos-sible, even if it means smashing the bones.’


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Wizpa considers Chat’s proposal, then responds:

‘If I smash the bones, how will I make harpoons and fish hooks? Ilike to keep the bones as large as possible and scrape them clean.We can’t carve the bones if they are all covered in grease and gristle.’

Chat is surprised.

‘Well, that doesn’t help me. We want the meat in big pieces oth-erwise it can’t be smoked or salted. We’re not bothered about thebones because we only chuck them away!’

Wizpa pauses, realizing they will have to agree on how they handlethis – otherwise, neither of them will be happy. Once they can seethe other point of view (back to Chapter Two’s discussion of per-spective) they appreciate how they can work together so that theyboth achieve a workable outcome.


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Often, both parties can get what they want in negotiation

Chat turns to Wizpa.

‘Suppose we say we will cut up the meat so that:

➣ the skin is in one piece for curing and making clothes➣ the joints of meat are mostly at least as big as a wild gourd➣ the bones are kept whole and scraped clean

That would satisfy both of us, wouldn’t it?’

This proposal works, and the reason is that there can be no argu-ment about whether or not they are doing what was agreed. Chatand Wizpa set objective criteria based on something they can bothagree on.

When agreeing criteria, ‘give and take’ are very important. Weshould be reasonable, especially at this early stage of the negotia-tion. Any disagreement should be based on principle rather thanresult from argumentative pressure. After all, you are not yet dis-cussing the matter you want to negotiate; you are simply trying tofind a formula that works for both parties, and it is in both intereststo work towards making this happen.

The only golden rule at this stage in the negotiations is – onceagain – time.

Where time is critically important – one party insists on rapid com-pletion of a negotiation – this can overrule any other considerations.

At times of war, when people want to make urgent and instant deci-sions, theoretical values of all types of property become grosslydistorted by the realities of the situation. Having said that, it is gen-erally true to say there is no single rule that outweighs another; twoprinciples, such as depreciated cost and current market value, can bothbe valid objective criteria for a negotiated settlement. The two par-ties will argue in favour of one or the other way of measurement, andwill finally need to find a measure they are both prepared to accept.

After protracted discussions, if you still consider that the other side isbeing unrealistic, you can choose either to walk away, or to proceedeven though you know you will be measuring the outcome in a way


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you consider to be inappropriate. It could still work – it might evenwork in your favour – but you need to be aware that you are com-peting on an uneven playing field.

This is why the WAO is critically important. Establishing that walk-away option is one of the ways expert negotiators demonstratetheir skills.

The next section looks at the skills of the negotiating table, body lan-guage, and the use of both forceful threats and gentle persuasion. Itconsiders what tactics are appropriate if the other side plays dirtyand – most importantly – how to end the negotiation with a realisticalternative when it seems it will be impossible to ‘do the deal’.

Summary

Set objective criteria to measure the outcome of a negotiation:

➣ What is the cost in material and other terms of doing nothing andsimply maintaining the status quo?

➣ In a financial transaction, what was the original cost of an item,depreciated or inflated?

➣ Again, in a financial transaction, what is the cost of replacing theitem?

➣ Are there any external factors that affect the negotiation – politi-cal considerations, global conditions, social pressures?

➣ What are the market conditions that affect this negotiation?

Be aware of personal or subjective criteria which could be affectingyour decision:

➣ How urgently do you need to complete the negotiation?➣ Can you ‘buy time’ one way or another?➣ Do you have personal reasons affecting the value you place on

the deal?


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8

Knowing and believing yourWalk-Away Option

From theories to tactics

Previous chapters have looked at theories, and at the Who, the Whatand the How of negotiations. They have considered the factors thatkeep the parties apart and the factors that can bring them together.Analysis of the negotiation process has shown ways of being morecreative in the search for settlement, and the need for a way of independently evaluating the final outcome in terms of yourprior expectations.

These are all fundamental elements of negotiation. Once you knowwhat you want and you believe you have a pretty good idea of whatthe other side wants, it’s time to focus on tactics.

But what if you lack a strong bargaining position? The other partymay be more powerful than you are; this could be a matter of size,wealth, or influence. How will you ever come to a mutually accept-able agreement?

Creating a safety net

When the other party is more powerful, it’s natural to go on thedefensive. You fear you might yield to this stronger power, and youtry to find a way of ensuring that you give away as little as possible.

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The way you would generally do this is to establish your ‘bottomline’, which is the point beyond which you will not negotiate. It is thehighest price you are prepared to pay, the lowest sum you are pre-pared to accept, the longest delay you are prepared to endure or theleast favourable terms that you are prepared to tolerate.

It might be an unpleasant and uncomfortable place where youwould definitely prefer not to go but, if you have to, you will becauseanything less acceptable would be even worse. On the other hand, itcould be almost as appealing as your preferred option so you arespoilt for choice.

To start by calculating an undesirable WAO hardly feels like the basisfor a win-win solution, but it’s a vital safety net. It’s a bit like thelifeboats on a liner or the life jackets underneath the aircraft seat.They are not something you like to think about but it’s reassuring toknow they are there. You saw this in the auction rooms, when Robertand Rosemary decided that they would not bid more than 2,000 forthe dining room suite they had seen.

In an auction situation, where the only variable is the price, it isalways a sound policy to set a ‘bottom-line’ of the maximum figureso you ensure you are not tempted to pay out more than you wereprepared to. However, the auction room was only one possible solu-tion to the problem that Robert and Rosemary were trying to resolve.The objective was not to acquire the specific furniture on offer but toacquire a dining room suite, because their existing furniture was nolonger suitable for their needs.

In a single-solution negotiation, such as the auction of a specificitem, the ‘bottom-line’ strategy works as a safety net. But very fewnegotiations involve one single possible solution. You are more likelyto be negotiating around one possible solution out of many options.

Let’s imagine you have been commissioned to put together an artcollection for an investor with a budget of 10 million. You might nothave sufficient funds to be able to purchase a painting by Picasso ora van Gogh, but there will be other paintings with investment poten-tial that will fit within your budget. To think only in terms of Picasso

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and van Gogh would stunt your ability to think creatively around theproblem and come up with alternative solutions.

All too often, the concept of a bottom-line number in a negotiationbecomes just a way of saving face in the anticipation of probable fail-ure. None of this establishes the right mindset for a negotiation.

The important point about the example of Robert and Rosemary isthat the ‘bottom-line’ was only one part of the preparation they did.They had also already determined what they would do if the auctionbidding went over their budget: they had established their Walk-Away Option – their WAO. Should they be unsuccessful at theauction, they would buy an alternative modern suite from a highstreet store.

If they had not established their WAO, they would have been back atsquare one after the failure in the saleroom.

The importance of being realistic

Robert and Rosemary might have been less specific about theiroptions, and could have handled the situation differently. They couldhave decided that if, they didn’t manage to purchase the diningsuite at auction, they could borrow one from neighbours for the par-ents’ visit. Or they could put two smaller tables together. Or theycould buy something cheap from a second-hand shop.

The trouble with this is that they are not really establishing a realisticalternative. They might be saying to themselves …

‘There are lots of alternatives if we don’t get the one we want atthe auction,’

… but in reality none of these is a real, viable option they would wantto proceed with. Psychologically, they would be adding together allthe alternatives in their head and arriving at what seems like anaggregate solution. But it isn’t an aggregate and it doesn’t add up!The reality is that each of these supposed alternatives is actually justa part of the answer – but none is really practical.


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When you establish your WAO it must be realistic and viable, and notjust a list of vague possibilities.

Another danger is to adopt the philosophy of:

‘We’ll cross that bridge when we come to it.’

You can be so committed to one possible outcome that you cannotface the possibility that it might not happen. You have set your hearton the one option; you are so convinced this is the perfect outcomethat you don’t want to consider any alternative. You are like the eter-nal optimist pinning the solution to life’s problems on buying a ticketeach week for the national lottery. If you are in this situation, of hav-ing only one option in mind, you are in a weak negotiating positionand in danger of paying a high price for your lack of preparation,planning and realism.

Creating a strong position

Robert is finding the new house and growing family putting a strainon the family budget. He is successful in his job as an area sales manager on a salary of 40,000 but feels ready to take on newresponsibilities. The annual salary review is coming up, and he hasdecided that before trying to negotiate a substantial increase in pay,he will test the market and see what other opportunities exist.

In this situation, Robert is being creative. He wants to go into hisannual review knowing what his market value is. When he looks atpositions advertised in the trade press, he sees that his current salaryis at the lower end of the scale. Pay levels range between 40,000 and52,000 in various positions advertised over a one-month period.

This gives him ammunition for his negotiation. However, his fall-backposition at this stage is that he will have to accept whatever mightbe offered, and then start looking around if he is not happy withthe new pay structure. He doesn’t have a WAO, and he needs to create one.

Robert decides to test the market and increase his options by reply-ing to an advertisement for the position of regional sales manager


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with XY Technics, a company in a similar field. Having been success-ful at the initial interview, he is asked to come back to discuss theposition in more detail and to see whether the salary packageis attractive.

The company is impressed with Robert’s record and is prepared tooffer him 45,000 plus a bonus package that would add another5,000 at the end of the year, based on current turnover adjusted forprice inflation. He is delighted with the proposal and promises togive the company his firm decision within a week.

Robert then has to evaluate all the pros and cons of the offer. Thenew post would involve more travelling, and hence more nightsaway from home. In addition, it would mean a cutback in holidayentitlement from 20 to 15 days. He decides to talk to his boss, Colin,before taking a decision.

‘You wanted to see me, Robert. What’s on your mind?’

‘The thing is, Colin, I really enjoy my job but with the childrengrowing up we’re finding ourselves increasingly stretched finan-cially. You’ve seen my area turnover grow steadily and I’mlooking for a new challenge. To be honest, I’ve been looking for abigger opportunity and I’ve been offered a position which wouldgive me more responsibility and more money.’

‘I appreciate what you’re saying, Robert, and I was going to talkabout this with you when it came to the review meeting. We’vebeen pleased with what you’ve achieved and we are looking topromote you in six months, when Jack retires in September. Thatwould mean taking over a larger area and we could certainly talkabout more money. What’s the offer the other people are mak-ing?’

‘They’ve offered me a total package of 50,000 including thebonus.’

‘So, we would have to better that.’


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‘Well, I’ve been very happy working here, but I have to thinkabout the family and the longer term. What could you offer me ifI took over from Jack in September?’

‘Your bonus is pencilled in at 3,500 for this year’s review. Supposewe made that 5,000 and raised the basic from 40,000 to43,000. Then, when you take the promotion in September, wecould make the basic 47,000 with the prospect of a 5,000 bonusnext time around. How does that sound?’

The strength of Robert’s negotiating tactic is that he went into hisnegotiation with a fallback position of 50,000 from the new com-pany. He wasn’t keen on losing some of his holiday entitlement, butsince Colin had not asked for all the details of the other job, he didn’t need to tell Colin the disadvantages of the proposal hehad received.

Colin knew that people are creatures of habit and avoid change. Hecalculated that the offer of promotion without the upheaval ofchanging jobs and with a significant pay increase was a good one. Now it would be down to how much Robert wanted to move companies.

Robert now has an offer that gives him the same money in total overthe next 12 months, and still gives him his 20 days’ holiday entitle-ment. However, he knows that Jack’s job isn’t much of a challenge,even though it has a larger sales territory. Robert really wants thepotential of the job with the new company, and a few days later, thephone rings:

‘Hi Robert, this is Arthur from XY Technics. I wondered if you’dcome to a decision about that job we discussed?’

‘Well, Arthur, I am very tempted by your offer, but my companyhas just told me I’m in for promotion in September and it wouldmean a total package of 52,000. The other factor, which isimportant to me as a family man, is that I currently enjoy 20 dayspaid leave and your company only offers 15. That extra week isworth a lot to me.’


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‘Hmm … I understand where you’re coming from on that one.Although, frankly, now my kids are teenagers I dread family holi-days and almost look forward to getting back to my desk! I’ll haveto call you tomorrow when I’ve had a word with my colleagues.’

Arthur now has a problem. He can see that Robert wants the chal-lenge of working for XY Technics, but he can’t start making anexception over holiday entitlement and have one member of thesales department having more holidays than the others. On themoney side, he can afford to be a little flexible if he keeps the basicsalary about the same and increases the performance bonus. Itwould also give Robert an incentive to get his teeth into the chal-lenge of a new job.

The next day he calls Robert back.

‘You’ll be pleased to know I’ve been thinking about improving ouroffer to you, Robert, and I know how keen you are to step up to anew challenge. I am sure you’ll appreciate that we cannot makean exception on holidays because we have a policy across theboard for all staff at that level. However, I can see the industry ismoving towards increasing holidays and probably by next yearwe’ll have to change our terms for everyone … which doesn’thelp you in the short term.

‘However, I have a proposition which I hope you will find attrac-tive. At XY we have a policy of allowing up to two weeks’additional leave on an unpaid basis to any of our employees whochoose to take it. That week of extra holiday represents roughly2½ per cent differential in financial terms; so if we increased yourpay by 2½ per cent you could take an extra week unpaid and stillbe no worse off.

‘Now, the offer from your present employer, of rising from 43 to47, plus a bonus of five, averages out at roughly 50,000 over thenext 12 months.

‘I can offer you 46 as an immediate basic salary, with a bonus of5,000 based on current turnover and the potential to double that


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if you increase turnover by more than 15 per cent in the full year.How does that sound to you?’

Here was a classic win-win scenario. Arthur had made a small adjust-ment to the basic salary which gave Robert a substantial immediateincrease. He then structured the bonus so that even if Robert did nomore than maintain the territory sales, Robert would match themoney his present employer was offering and give himself the abilityto take the extra week unpaid without losing out. By structuringRobert’s package with a substantial performance bonus, Arthur gaveRobert a great financial incentive to build sales in the territory fromthe moment he accepted the position.

Robert’s walk-away option in each case was the other job – but didColin and Arthur have walk-away options? Absolutely! If Robert left,Colin could change his plans for Jack’s succession and restructureRobert’s region. For Arthur, if Robert decided to stay with his currentemployer, it was simply a question of looking at the next person onthe list of people he had already seen for a first interview.

Both of these are strong walk-away options, provided Robert is anaverage sort of employee. If Robert were a highly specialized scien-tist, leading the world in cutting-edge research, Colin would have aproblem in creating a walk-away option. Losing Robert could ser -iously affect the company’s R&D programme. In this situation theroles would have been reversed and the stronger party would havebeen Robert, not Colin.

Power is in the hands of the person who knows ‘What Next’?

What is becoming apparent as you explore different negotiating situations is that the stronger party is not necessarily the one who isinitially in the dominant position; it is the one who has the betterwalk-away option.

Sometimes the WAO is expressed in the same terms for both parties.In the case of Robert, Colin and Arthur, it was money and terms ofemployment for all three of them. At other times the WAO may not


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be in common currency, and the other side in the negotiation maynot be able to influence the course of events.

Let’s look at George and Mary facing a major decision about theirfuture life together. They have no children and are both in their earlyforties. George is in a well-paid job but is weary of the commercial ratrace and yearns to get out and be his own boss. He and Mary sharean interest in holistic therapies. Mary is a qualified homeopath andGeorge has been studying physiotherapy at evening classes. He hasbeen with the same employer since leaving college and has built upa healthy pension fund. Every Monday morning the prospect ofgoing to work at the office looks less appealing. One Sunday after-noon they sit down after lunch and discuss their future:

‘You know, Mary, I’ve been thinking we could take life more easily. I’m tired of working with Amethyst Holdings. I’ve trav-elled, I’ve set up new offices, I’ve worked all hours and quitefrankly I am bored. How would you feel about doing some-thing different?’

‘Well, George, I love my little therapy business. I’m getting quitewell known and you know that the national association keepchasing me to become an examiner on the national standardscommittee. You and I share an interest in health and fitness andwith your physiotherapy we could build our own practice. Howwould you feel about that?’

‘There’s no reason why we couldn’t sell up and find somethingsmaller, maybe a storefront with an apartment upstairs or a littleplace on the outskirts of town. There’s not much outstanding nowon the mortgage, I’ve got a healthy pension fund with the com-pany and we could keep paying into that for a few more years.We planned to take some time off next month, so let’s have a lookaround and get some ideas of what’s on the market.’

A few weeks later, George and Mary tour around looking at proper-ties and find the perfect place: a former bakery in a small village justa few miles from their present home. They immediately put theirhome on the market and in a couple of months they are able to


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make an offer on the bakery, conditional on planning permission foralternative use as a health centre.

George knows it’s now time to talk to his boss, Bradley, and explainhis plans for the future:

‘So, George, you wanted tosee me for a chat. Nothingwrong, I hope? Your depart-ment is turning in recordresults as usual. Is somethingbothering you?’

‘Well, Bradley, Mary and Ihave been talking and come tosome pretty major decisions.We’ve decided it’s time tomove on and start our ownbusiness opening a health cen-tre in the old bakery atWolverton. We’ve exchangedcontracts on our house and onthe old bakery and we haveplanning approval. So, nowit’s all in the hands of the legalpeople.’

‘So you’re pretty set on thisidea then? How do the num-bers stack up?’

‘I’ve got another nine months before I qualify as a physio, butMary already has a thriving practice and quite a reputation.We’ve made a good profit on our home, so I reckon we can sur-vive until I’m qualified. It’ll be tight, and there’s quite a lot to doon the property, but it should work out.’

‘And this means you’re leaving us? I hope you’ll stay long enoughto train up Bill to take over the reins?’


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The Planning Committee wasfaced with a choice betweenseeing the old bakery stay ina run-down state untilsomeone else came alongand bought it as a food shop(the committee’s WAO – butan unlikely development) oraccepting George and Mary’sproposal, which would seethe property restored,occupied and generatingproperty taxes.

In the event, the committeeaccepted the proposal todevelop the premises as ahealth centre, thus realisticallyfacing up to general trends inhigh street retailing andensuring that the propertywas once again contributingto council revenues.

‘I’m not in a rush to go, but I don’t believe it’s healthy for a com-pany if someone hangs around once a decision is taken.’

‘I understand that, George, but maybe we can work somethingout to mutual advantage. After all, you’re going to need quite acashflow to cover the building alterations, I imagine. Let me put aproposal to you.’

Bradley knows that George’s experience and expertise are valuableto the company and he would be sorry to lose that after all thegrowth George had helped the company to achieve. At the sametime, he knows that Bill is snapping at George’s heels and eager foradditional responsibility. He knows he will lose Bill to a competitor ifhe can’t find a new challenge for him soon. Bradley’s WAO is toaccept George’s resignation and promote Bill immediately – but thatcould mean a lack of continuity and a difficult transition. He wants tominimize that if he can while keeping Bill motivated.

For George, the negotiation seems simple. He will agree a period ofnotice with Bradley – hopefully two or three months – which willgive him an income while he and Mary sort out their move and starton the structural work. There will be a lean period while the buildingalterations are being completed and he takes his final examinations– but after that the future looks promising. George’s WAO is that ifBradley decides to let him go straightaway he will have to fall backon the capital they have realized from their house sale.

Bradley lays out his proposition to George:

‘George, we value your contribution and will be sad to lose you.At the same time, I know you and Mary are passionate aboutyour interest in health and fitness and I believe you could be verysuccessful with your new project. I also know Bill is looking for amore challenging position and I am sure you could induct himinto your job without stunting his ideas. Had you considered cut-ting back for a few months, maybe working part-time or evenleaving us but retaining a consultancy role to the company?’

George is taken aback. He had no idea the company would be opento such an idea. But Bradley is being creative and looking beyond theemployer/employee box that George has been mentally locked into.


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Bradley’s proposal is a win-win solution. George has time to devoteto his new project, and he has an ongoing income over the next fewmonths. Bill will get the promotion he is hoping for and Bradley hasthe security of George shadowing and guiding Bill while Bill is adjust-ing to his new role. Also, the company will continue to have accessto George’s 20-years’ experience in the industry for at least a fewmore months.

Bradley continues:

‘Obviously you want to think this over, George, and I need to seehow this would work out in practical terms. But you never know,you might welcome the continuing association with the companythat you have put so much into. I take it you’re in favour, in principle.’

‘Absolutely, Brad, I’ll certainly be interested to see what this lookslike on paper. You’re right about Bill. He has itchy feet, so we needto get this sorted out in the next week or so. Otherwise, he’s goingto be taking more odd days off when he says he’s at the dentistbut we suspect he’s talking to other companies!’

‘I’ll have something drawn up and we’ll talk again in a couple ofdays. I think that, since it looks as if you’ll be leaving us one wayor the other, you won’t mind if I start talking to Bill, will you?’

‘I think it’s essential. And you know, I really look forward tocoaching him into my old job.’

Of course, if George had been moving out of town, Bradley might nothave been able to make such an attractive offer. In that situation therewould have been little he could do to persuade George to stay. Noamount of money could have persuaded George to stop pursuing hisdream; the house was effectively sold and the new premises bought.George had apparently ‘burnt his boats’. But despite this, Bradleycame up with a solution that worked to everyone’s advantage.

How to create the Walk-Away Option

You have seen that the power in any negotiation is in the hands ofwhoever has the better WAO. Logically, developing a strong WAO is


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a critical part of the preparation for any negotiation. Going back toour basic principles, this means:

➣ Establishing what alternative options you can develop if you areunable to get what you want

➣ Developing these ideas into real alternatives, not just vague ideas➣ Working out what the other side wants and how they are likely to

react and proceed➣ Deciding on a WAO for the various decisions or attitudes the other

side might take

George had not really thought through his negotiation with Bradley.He went to see him just to hand in his notice. But if cashflow hadbeen more critical for George and Mary, they would have needed tothink through the negotiation much more thoroughly.

Working out the WAOs

Here are some of the WAOs that George could have considered.These are based on the worst possible outcome, which would bethat Bradley would accept his resignation and let him go there andthen. George’s thoughts for a walk-away option might have been:

1. We will have to live on our capital until the health centre is gener-ating a positive cashflow.

2. I could do most of the renovation work myself, using skilled tradespeople when I need them.

3. I could get a part-time job so that we still have some money com-ing in until I qualify.

With a little analysis and forethought, George could have made plansfor a situation in which Bradley tries to get him to stay. George’sthoughts then might have been:

4. I’ll withdraw my notice and hang on for another year while Marygets the new business up and running.

5. I can see if Bradley will let me ease off and start handing over myresponsibilities.

6. I can refuse to stay, and see what period of notice we can agree.


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In the earlier example, George had probably already positioned him-self at Option 6. He had not considered the possibility of Bradley justshowing him the door and giving him the minimum financial en -titlement, and he certainly hadn’t considered Option 4 as even aremote possibility. Look at the various steps to follow in working outthe WAO:

➣ Step 1 – analyze all the possible alternatives

George and Mary should have sat down and thought things throughin more detail before George handed in his resignation. They neededa clear picture of what they could realistically take as their next step,in reply to the various responses that the company might make.

➣ Step 2 – develop the various alternatives to see exactlywhat is involved

Having done that, George and Mary next needed to discuss andinvestigate their options in more detail. Here are just some of thepoints which would need to be talked through:

1. If George had to take another job for six months:i. What were the opportunities?ii. How realistic were they?iii. What could he have expected to earn?iv. Would he be better off delaying his resignation until their plans

had progressed further?2. As for doing the renovation work himself:

i. How realistic was this idea? ii. Most of us can slap on a coat of paint and do basic DIY – but

would this have been enough? iii. Would there be any complicated building work, electrical re-

wiring or essential plumbing that would need qualifiedtradesmen?

3. Would living on their capital seriously damage their security?i. How much would they need?ii. For how long?

4. Could George tolerate staying on at work, given the upheaval ofthe removal and all their long-term plans for the health centre?

➣ Step 3 – evaluate the possible attitudes and actions ofthe other side

It is vital to try to determine what the other side’s position is likely tobe. George needed to ask himself some critical questions:

1. Would Bradley react strongly and show him the door?2. Would he be sympathetic and supportive to his plans?3. Is there a policy about paying people off and not having them

work their notice? If so, what might that mean in financial terms?4. Would Bradley consider letting him reduce his workload and work

on a different basis, part-time or as a consultant, during the tran-sition in the management of the department?

➣ Step 4 – decide on a definitive option for each possibleoutcome

Finally, George and Mary needed to determine their best WAO tomatch their judgement of the likely position of the other side. It is nogood thinking vaguely in terms of ‘I have lots of options’ or the clas-sic get-out clause, ‘I’m keeping all my options open’ which generallymeans ‘I haven’t thought about what might happen next.’

The WAO must be a serious alternative and it must be appropriate toa specific response from the other side. Unless you do this – if youhave only a vague, generalized idea of what you might do next –you are no longer in control of your own future.

It’s all about staying in control

And that is the nub of this chapter. When you know exactly what youwill do if you don’t get what you want, you are in control. Nobody isgoing to push you into doing something you don’t want, or into set-tling for less than you are prepared for. Even if you face theworst-case scenario, you already know in some detail what your nextstep will be. So, you stay in control.

George let his emotions get in the way of his negotiation. He wasweary of working for Amethyst Holdings and had decided to quit.He was so focused on his new project that he was blind to the


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opportunities that might exist in the interim. Given all the facts, whatcould he have done differently?

If Bradley had been desperate not to lose Bill, he could have seizedGeorge’s resignation as a way of creating a job that would keep Billin the company. By declaring all his intentions, George had made itvery easy for Bradley to move quickly and replace him. A bettercourse of action for George would have been to have an informalchat with Bradley, discussing his long-term plans, rather than layingall his cards on the table from the outset. Suppose he had said:

‘I wanted to tell you about Mary’s business. You know we’re bothinto health and fitness, and Mary has a flourishing practice as ahomeopath. Well, we’ve decided to downsize our living-spaceand we’re in the process of moving out to Wolverton. We’ve takenover the old bakery, and we’ve been granted planning approvalto turn it into a local health centre. I’ve been thinking about join-ing her sometime in the future but first I need to complete myphysiotherapy studies. I thought we should have a chat to seehow this might fit in with the development of my role in the com-pany.’

At this stage George has not been negotiating. He is merely floatingan idea, without any timescale and without any threatening implica-tions. This gives him a chance to do what he was not able to doearlier, namely Step 3 of the WAO development process – to evaluatethe possible attitudes and actions of the other side.

Realistically keeping all the options open

This leaves all his options open. Under the employment legislation inmost countries around the world (though not in the USA), Bradleywould find it difficult to terminate an employee of 20 years’ standingwith no cause, and without a substantial financial settlement, soBradley’s options are somewhat limited. However, the knowledge ofGeorge’s possible long-term plans does give him an opportunity todiscuss with him ways of gradually winding down his involvement inthe company, if that would be of interest to George.


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George could then go away, formulate his next steps and work outhis walk-away options for any future negotiations about his positionin the company. He has maintained the most valuable position ofany negotiation: he is in control.

Summary

Knowing your WAO is the single most important element of goinginto a negotiation. You should spend as much time on determiningyour WAO alternatives as you should in working out your ideal out-come. If you do so, you can be absolutely confident at every stage ofthe negotiation. If you fail to do this, you put yourself at the mercy ofwhatever outcome the negotiation achieves.

➣ Step 1 – analyze all the possible alternatives➣ Step 2 – develop the various alternatives to see just what is

involved➣ Step 3 – evaluate the possible attitudes and actions of the other

side➣ Step 4 – decide on a definitive option for each possible outcome

SUMMARY OF PART TWO

➣ Know what you want➣ Know what the other side wants➣ Know and exploit the power and value of information➣ Know and agree on how you will measure the outcome➣ Know what you will do if you can’t achieve what you really want


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PART THREE

Doing the deal

9

Playing games and handlinggamesmanship

Playing by the rules

By this stage you are probably about to ask the inevitable question:

‘But what if the other side hasn’t read the book? What if they justcarry on with positional negotiation? I may understand the dif-ference between position and direction but that doesn’t workunless they also understand and will play by the same rules.’

Negotiation is all about the to and fro of communication. It is notabout winning a game; it is about moving towards a common object ive. If it were about playing a game, you would often find thata negotiation is going nowhere because one side is playing footballwhile the other side is playing tennis.

When one side is playing by one set of rules and the other side isplaying by a different set of rules, or doesn’t understand the conven-tions of the game, there is no communication, no game, nocommon objective and no result.

A negotiation starts with the initial steps of acknowledging the mutualpositions of the two parties involved and moving towards identifyingmutually desirable outcomes. Having done this, the two parties canthen explore possible solutions and evaluate the various options.

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When the other side won’t play along with this, and insists on stat-ing a position and then arguing around that position, you need toreappraise the situation. You have several options.

In sporting terminology, you can try different shots, play soft or firm,or cry: ‘Foul!’ but as long as they are waving a tennis racquet and youare kicking a football there simply will not be any meaningful com-munication. In fact, there is not much you can do as long as theyinsist on doing things their way and ignoring what you are doingand saying from your side.

People who are set on a particular sum of money or determined toachieve the specific outcome that they personally favour will oftenbe blind to any alternatives. There is no point in arguing in circlesaround their position. This will only lead to a shouting match, eachattack stimulating an ever fiercer counter-attack. Confrontationbuilds barriers around the positions and pushes the two parties fur-ther away from each other, with a diminishing hope of everachieving a negotiated settlement. The harder you reject their ideas,the harder they push back, and in the end both parties are squeezeddry – and probably exhausted.

What alternative options do you have? You can stop trying to getthem to play the game your way, and instead you can let them playtheir own game.

Taking the wind out of their sails

Once you realize that it is going to be difficult to have a mature andreasoned debate, you should encourage the other side to pursuetheir argument. What then happens is that both sides can see wherethis particular approach is leading and what the outcome is likely tobe. When they strike out, you must pull them along rather thanrebuff them. You must resist the temptation to argue and just letthem have their say.

What then happens is that once the other side has followed the argu-ment through to its logical conclusion, they and you can both lookat the likely outcome, and see how far it is from what you individu-ally want to achieve.


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Often the other side will come to see that their proposal does not infact achieve their objectives. This then yields the scope to discusswhat might be mutually acceptable.

When you are letting the other side develop their argument aroundtheir position, you must be careful to remain impassive, so you donot give the impression that you are agreeing as the debate pro-gresses. Of course you want to argue but this is not the rightmoment. Let them elaborate their ideas and draw them out. Ask forclarification so they know you have been listening and that they havebeen heard.

It may be contrary to your instinctive nature to bite your lip and letthem put their case, but it propels them towards elaborating theirideas and talking these through to the logical conclusion.

Smiling and nodding

When it comes to listening, there is a fundamental gender differencethroughout Europe and North America in what people mean as theysmile and nod when listening to the other person’s argument.

Generally, men see smiling and nodding as a gesture of agreementto what is being said, whereas women smile and nod to show theyhave followed the argument and understand what is being said. Inother words, when women listen and nod it does not necessarilymean they are agreeing to what the other party is proposing.

As always in negotiations and all forms of communication, especiallyacross cultural, age and gender boundaries, it is important to avoidgiving out the wrong signals, and to understand the meaningbehind the signals you are receiving. Let’s return to George andMary, our forty-something couple with no children and a comfort-able level of income. They are relaxing one evening, looking throughholiday brochures and planning their summer vacation:

‘I really think the Algarve in Portugal looks great,’ says George.‘The climate is excellent, there’s good food and wine, and plentyof things to see and do.’

PLAYING GAMES AND HANDLING GAMESMANSHIP

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Mary is studying a brochure of Provence, admiring the pictures ofAvignon and Aix-en-Provence.

‘But surely France would be more enjoyable. We can fly to thesouth and pick up a car. It’s so sophisticated, with all those won-derful restaurants. Don’t you think the Algarve is, well, a bitrural?’

‘Good Lord, no! This hotel looks superb; just look at all the facili-ties!’

‘But the Hotel Europe in Avignon is famous, and has some veryreasonable packages. It would make a wonderful base for touringaround, and there’s a lot to do in and around Avignon.’

George and Mary are going to carry on, endlessly arguing from theirpositions, until one of them adopts the directional strategy I am proposing, and encourages the other to expand on their proposal.George decides to try this approach:

‘I don’t understand. What is so appealing about Avignon?’

Mary thinks she is making progress, and perks up.

‘There’s so much to do, even just in the town itself. Smart littlebars to sit and enjoy a drink and watch the world go by, a tradi-tional market and lots of picturesque backstreets where you coulddo your photography.’

‘OK, but what would you do that you couldn’t do in the Algarve?’

‘Well, I want to buy some winter clothes, and the shopping iswonderful in France. There are wonderful little boutiques with allthe famous names at much better prices than here at home. ThenI thought we might drive down to Marseilles one day so I can lookat the big department stores.’

Now George has established that what is behind Mary’s preferencefor Avignon is not the scenery or culture but the shopping. This iswhy she prefers the idea of France as compared to Portugal. Georgehas no interest in haut couture; he has his own reasons for prefer-ring Portugal:


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‘But I don’t want to be stuck in a city; I have enough of city lifeback here at home. That’s why I’d prefer Portugal.’

For a moment, George is back in his ‘position’. Then he realizes hewill not make any progress unless he takes the discussion forward.Before he can pursue his discussion Mary draws him out into reveal-ing his motivation …

‘Anyway, why are you so keen on the Algarve? What’s so specialabout that part of Portugal? Surely Lisbon would have more buzzand life?’

And now you can discover what is behind George’s negotiat-ing position:

‘Well, it’s the golf. More top class golf courses than anywhere elsein Europe, combined with a superb climate and top class hotels.One day I really want to play in Scotland, but I didn’t dare sug-gest Scotland with rain for climate and haggis and chips fordinner.’

Mary chuckled.

‘I don’t think you’re being fair to Scotland – but you’re right. Iwant sunshine after the awful winter we’re having this year. So itlooks as if we’re both set on things we want from the holiday. Iwant to be able to shop-till-I-drop for sophisticated Europeanfashion and you want to be out there on the greens hitting a lit-tle ball into a hole in the ground.’

‘OK, you don’t appreciate golf, and I don’t appreciate your needto constantly change your wardrobe. But we both knew thisbefore we were married. My dream was to play the top golfcourses around the world and your dream was to afford to bedressed in the finest fashions. How can we ensure that we eachget what we want out of this vacation?’

This impassive strategy – listening to the other side explain theirposition – demands a fair degree of restraint and self-discipline. InGeorge and Mary’s case it works because they are used to discussingsituations and working out solutions together. In a more formal


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negotiation it is less easy for you to stand back and listen to some-thing you find totally unacceptable. However, you are never going tomake any progress until the other party believes they have had theopportunity to put their full proposal, and that you have listened,heard and understood where they are coming from.

When Fisher, Ury and Patton outlined this situation in their seminalwork Getting to Yes, they concluded that the other side would prob-ably use three tactics when they negotiated with you. They would:

1. Forcefully assert their position and point of view.2. Attack any ideas or proposals you put forward.3. Launch a personal attack on you.

The best way of responding to these tactics is to start by getting tothe bottom of things.

Find out why they are pushing their proposition

You can start by following the tactics that both George and Maryused when negotiating about their holiday plans. Let’s look at arather different example when, back at JK Engineering, Robert isnegotiating with a client, Alice, who is buying equipment for a newproduction line at her factory.

‘Well, Alice, it seems as if we’re still going round in circles and notmaking much progress. You’ve seen our offer. You have asked forthe XK150, which is the unit you have on your other productionlines, so you are familiar with its performance and reliability. Fora bulk order of ten we could deliver them to you, as you request,in the second half of August, at a price of 15,000 per unit, includ-ing shipping.’

‘The specifications are right but 15,000 is too expensive. I can getthese from Mexico for 12,000. That’s a 20 per cent saving.’

‘You know our list price is 17,950 and you know I’ve guaranteedthe delivery date. That really is our best price.’

‘I tracked down this dynamic new Mexican company. They canmatch your specification right down to the last detail. It’s no good


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sitting there complacently. I want you to stop making fat marginsand work with medium-sized manufacturers like us, helping us tobuild our business. We need to get this production line up andrunning straight after the summer break, and we need a morecompetitive price. You’re typical of the local companies: you justchurn out the products and wait for someone like me to comealong and pay your high prices. You’ve never had competitionbefore, and now you don’t know how to handle it!’

Alice is getting angry and her attack is increasingly personal. Robertpauses for a moment to let things settle before replying:

‘I want to find a way to help you to get that new production lineup on time and running profitably. There’s no way I can go anylower on price. We’ll be making a minimal margin, and I can onlygo this low because you are a valued long-term customer andwe’d like to keep working with you. What I’m offering you is avery fair price and I cannot discount any more than we have donealready. Let’s have another look at the project.’

This negotiation is going nowhere. Robert needs the answersto some questions. In particular, since they have always had agood business relationship, why has Alice decided to look fora new supplier?

Why is Alice insisting on such a big price reduction? JK Engineeringare market leaders for quality and value and Alice has neverdemanded major price reductions in the past. If the Mexican com-pany is so good, why is she still talking to him? What’s stopping herfrom ordering from Mexico?

Robert looks back at the quotation his company has offered and con-siders the key features of his proposition: the XK150, standardspecifications. There is nothing else in the market in that niche;everything competitive is either too big or too small.

Robert will have to start suggesting alternatives, and see where thatleads. He needs more information from Alice, so he re-opens theconversation:


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‘What’s going on here, Alice? We’ve always enjoyed an excellentbusiness relationship.’

‘Let me explain the situation. You remember the new Explorerproduct range we previewed at the International Trade Fair? It’seasier for us to produce, it’s much cheaper than our existingranges and it’s getting a fantastic response from the trade. Wehave to get into volume production much faster than we antici-pated. The timing is critical if we are to catch the winter sales,and we need to keep the production costs down. I must work to avery tight capital budget, which is why we have been looking atalternative sources.

‘On the one hand, we would like to continue dealing with some-one we know and trust. On the other hand I am looking at thedifference between a total capital cost of 120,000 and your priceof 150,000. The Explorer is a volume market product at a budgetprice. You see the problem. Now, what can you do for us?’

‘So, let me get this straight: you need to equip the production linefor the new Explorer range within a capital budget of around120,000 and have it fully operational in August, so that you canget the production running to meet the winter sales season. HaveI understood you correctly?’

‘There is no way we can stretch to 150,000. And apart from thecapital cost, your XK150 is pretty heavy on power, so the runningcosts of those machines in energy alone will be a major elementin the unit costings right across our Explorer product range.’

‘I hear what you’re saying, and I understand you need to controlcosts. Suppose we could come up with a way to reduce the energycosts, but keep your production level the same?’

‘That would be great! But you know the energy consumption ofthe XK150. Do the sums and you’ll see why we’re concernedabout the costs with ten units all working long shifts.’

‘You are quite right, Alice. But my point is that the Explorer pro-duction line doesn’t need the XK150! You’ll have more thanenough output if you take the XK135, and it’s much cheaper to


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run. When we discussed this you were talking about setting up anew production line, and our quote was naturally based on yourtraditional manufacturing process and the old product range –which simply wasn’t cheap to produce. If you set up the new pro-duction line based on the XK135 you can make energy savingswith no loss of capacity. Let me put some figures together and geta detailed specification to you this afternoon, then you can gothrough it with your technical people.’

‘What about delivery? That’s the other big issue; I can bring theMexican machines in under budget but delivery is as critical asprice on this whole project. You know what it’s like, dealing witha new supplier: you’re adding an unknown into the equation.’

‘We can deliver ten machines as early in August as you can takethem. We can also look into putting one of our engineers on aplacement with you, to work with your people on the installation.As far as your budget is concerned, I am sure we can give you anattractive package. Does that give you what you’re looking for?

‘Put it all in writing. I think we might have the outline of a realis-tic deal. It looks as if we can do business.’

The power of listening

Alice had been arguing about the price of the XK150, when her realobjective was to set up the new production line for the new productrange, on time, within a fixed budget. When Alice saw that Robertwas inflexible about the price, she became angry and frustrated.

Robert’s tactic was to practise Active Listening. He had to drawout the argument and let Alice know she had been heard before hecould effectively respond and make a fresh proposal. He did this byfeeding back her own argument to her, so she knew he understoodher point of view:

‘So let me get this straight: you need to equip the production linefor the new Explorer range within a capital budget of around120,000 and have it fully operational in August, so you can getthe production running to meet the winter sales season.’


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He shows that he wants to understand her position by then ask-ing her:

‘Have I understood you correctly?’

By doing this, he is no longer in opposition to Alice, but (metaphor-ically speaking) he has moved around the negotiating table, andjoined alongside her, identifying with a common objective.

Of course, he might have had to apologize and admit defeat if therewere no way he could provide the right equipment in the righttimescale at the right price. On the other hand, he might have beenable to be creative in his response by suggesting some other financ-ing arrangement, such as a leasing deal, that would meet Alice’sconcerns about working within the restraints of her capital budget.

In the example here, Robert is able to come up with a win-win solu-tion. He can offer Alice a unit that is more than adequate for thisparticular operation, at a lower capital cost and cheaper to run. Nowthat he knows both her budget and her delivery requirements, hecan produce a detailed proposal incorporating added value, such astechnical assistance during the start-up period for the new produc-tion line.

➣ The first rule of not playing their gameDon’t try to attack a position by maintaining your own position.Try to find out what is behind the opponents’ position by drawingthem on, letting them have their say and making it clear that youhave heard. Once you know WHY they are so adamant about theirposition, you can start to identify their underlying aims andrespond with a proposal which addresses these specific objectives.

Find out how deeply-felt or realistic their objections are

The next tactic you are likely to see from the other side is that theywill attack any ideas or proposals you have put forward. Any parentwill vouch for just how demoralizing this can be when childrenbecome ‘difficult’. In commercial negotiations, it can be every bit asfrustrating. You may find yourself in a situation in which both parties


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feel unable to say anything to which the other side will give any credence!

In this type of negotiation, you instinctively want to defend yourposition and argue right back. But you can, in fact, be far more effect -ive if you take a very different approach and encourage the attack.When you invite more criticism and push the other side to expandon their objections, they are forced to clarify their thinking and pro-duce solid, reasoned debate. You have to dismantle your defenceand let the opponents try to destroy your argument. George andMary’s discussion could have gone rather differently:

‘I really fancy France. I love the idea of Provence at that time ofyear.’

‘But Portugal would be so much better and cheaper.’

‘Just a minute – what have you got against France? Tell me whymy idea is so wrong.’

‘For a start, France is full of the French! Remember that weekendin Paris? The French are rude, arrogant, and they hate foreign-ers.’

‘You’re quite right: once you land in France it feels very foreign.And I agree, when we went to Paris back then, we quickly learnedhow snobbish some of them can be. Everyone knows the Frenchcan be very individualistic. And it doesn’t seem to make any dif-ference how hard you try to speak their language – they’ll eitherpretend not to understand or just talk back to you in English. Butthere’s so much more to France than Paris, and the people arevery different outside the big cities. Apart from the undeniablefact that France is full of French people, what other objections doyou have?’

‘France is so expensive.’

‘Yes, it would be more expensive than Portugal. But if we’re stay-ing at the Hotel Europe you’ve got to remember it has a Michelinstar and the standard is going to be much higher than the sort ofroadside motel we stay at when we’re up north visiting your


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parents. We’re not back-packers any longer, George, and it’sabout time we spent some serious money on a holiday! The Eurois a strong currency so we’re going to find continental Europepricey – but we will get superb service, gourmet food and beauti-ful accommodation. I think it’s worth being extravagant. Do youthink we should be roughing it? Don’t you think we deserve a lit-tle luxury?’

‘Well, I suppose you’re right about prices across Europe, but that’snot all. You’re talking about staying in Avignon and frankly, Idon’t like the idea of being stuck in a town. I spend too much ofmy life in the city and I like to get out and about.’

‘I agree with you. I want to be out and about, I don’t want tospend all my days in the grounds of an hotel, lying on a sun-bedby a pool eating over-priced club-sandwiches for lunch. But it’sgood to have a comfortable base to come home to, and in theevenings we want some sophistication, different places to dineout, maybe a nightclub, or the cinema. Hotels can be very dullplaces in the evenings. Of course we want to tour around, andProvence is the perfect base. You couldn’t ask for more to see anddo, all within an hour’s drive of our hotel.’

‘But that’s the point! If I want to do anything, I am going to haveto get in the car to go and do it!’

‘I’m like you. Back home, I hate driving. What I like about the ideaof Avignon is that we can walk everywhere in the town. As for acar, I thought it would be rather fun to pick up a convertible atthe airport rather than a boring ordinary saloon car. There’s alovely coupé available at a very reasonable price if we book it allas a package with the flight and hotel. You’ve always wanted aconvertible and we’ve always said we didn’t have the weather forit at home. You know you’d enjoy that!’

‘Well, that is rather appealing, but it still seems that if I am goingto do the things I want to do, I am going to have to spend a lotof time driving around.’


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‘So, what is it you particularly want to do? I just don’t see whatyou’re getting at. We can have a wonderful hotel with superbfacilities at an excellent package price, in a beautiful, sophisti-cated town with all the attractions the region offers. What iswrong with that idea? What more could you ask for?’

‘Well, er, golf, actually.’

Eventually, Mary’s persistence pays off and George reveals that whathe really wants is a golfing holiday. He has never mentioned this –but he has made two sweeping generalizations:

‘The French are rude, arrogant, and they hate foreigners.

‘France is so expensive.’

He also had some specific complaints about Avignon:

‘If I want to do anything, I am going to have to get in the car togo and do it!

‘I spend too much of my life in the city and I like to get out andabout.’

Mary does nothing to counter these arguments. In fact, she agreeswith him:

‘You’re quite right: once you land in France it feels very foreign.And I agree, when we went to Paris back then, we quickly learnedhow snobbish some of them can be …

‘Yes, it would be more expensive than Portugal … The Euro is astrong currency so we’re going to find continental Europe pricey …

‘I’m like you. Back home, I hate driving.

‘I agree with you. I want to be out and about. I don’t want tospend all my days in the grounds of an hotel.’

Mary’s strategy drew out his objections and she kept asking him forhis opinion:

‘Tell me why my idea is so wrong?


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‘I think it’s worth being extravagant. Do you think we should beroughing it? Don’t you think we deserve a little luxury?

‘You’ve always wanted a convertible and we’ve always said wedidn’t have the weather for it at home. Wouldn’t you enjoy that?

‘What more could you ask for?’

Throughout the conversation, she constantly agreed with him andencouraged him to come up with new objections. As a result, shecould then uncover what was behind his argument … a desire for agolfing holiday.

In the initial phases of the negotiation it looked as if George wasimmovable. Once Mary had let George have his say and oftenagreed with him in much of what he said, she could defuse thedebate and lead him to the realization that:

➣ He would actually enjoy staying in a good hotel➣ He would appreciate a degree of luxury➣ It would be pleasant to have the sophistication of a stylish town to

wander around in the evenings➣ He would relish driving a sports car in the sunshine

Later, she found the one piece of persuasive evidence she needed toclinch her argument. Her master stroke was a leaflet she downloadedfrom the French Tourist Board: Golf Pass Provence – enjoy the freedomof our 15 fine golf courses.

➣ The second rule of not playing their gameSupport and encourage the opposing party to spell out theirobjections. Don’t try to argue with them. Keep asking them forclarification, and agree whenever you can. Ultimately, you willuncover the real reason behind their objections.

Switch their personal attack back to the problem

In the last example, Mary let George have his say and spell out all thereasons why he didn’t fancy her idea for their summer vacation.Should the discussion get personal, the same strategy works equallywell. Don’t defend yourself; let the other side be angry and get it off


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their chest. What is really happening is that they are frustrated aboutthe situation and are taking it out on the only visible, tangible repre-sentation of the problem … you.

Now take another look at Robert’s negotiation with Alice, where wesaw a good example of this. Alice was frustrated and started to insultRobert and his company:

‘It’s no good sitting there complacently … You’re typical of thelocal companies … you’ve never had competition before, andnow you don’t know how to handle it!’

Robert said nothing by way of self defence; he believed that, deepdown, Alice liked dealing with JK Engineering and that this anger wasfrustration arising from the complexity and challenges of setting upthe new production line. Consequently he deflected her comments:

‘I want to find a way to help you to get that new production lineup on time and running profitably … Let’s have another look atthe project.’

Having vented her frustration, Alice comes back to discuss the prob-lem in a less personal way:

‘Let me explain the situation ... We have to get into volume pro-duction much faster than we anticipated … and we need to keepthe production costs down. I must work to a very tight capitalbudget, which is why we have been looking at alternativesources.’

The reality of the situation was that Alice wasn’t really upset withRobert and his company. She was overwhelmed by the scale of theproject she was working on and the budget constraints she had towork to.

The power of silence

Faced with an angry and vindictive opponent, the first importantrule is to keep cool. You have to ignore the personal insults and for-get them as fast as they come.


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At the same time, you can pause and use silence to let the tempera-ture drop. The other party may use your pause to repeat themselvesor become even more worked up – but you can just give them timeto say what they want to say.

Silence is not passive; silence is a very powerful way of forcing theother side to keep talking. They will carry on, expanding on theirargument in more detail which, as you have seen in the previousexamples, gives you more information about their position and givesyou time to formulate your response.

By keeping quiet after asking a question, you force the other side togive a detailed answer, expand on their reasoning and justify theirresponse.

While silence may appear to be a stalemate it is in fact a dynamic andpressured phase of a negotiation.

➣ The third rule of not playing their gameDon’t take anything personally. See any negatives as the otherside’s frustration about the issues and not as criticism of you oryour colleagues. Understand the other side’s frustration, andpause. Use silence to move the discussion along.

Breaking the deadlock

In all the examples of this chapter you have been encouraging theother side and not delaying the process with argument. Another wayof resolving a negotiation is by raising and exploring the issuesthrough the involvement of a third party facilitator.

The facilitator’s role is rarely proposed as that of a mediator. In gen-eral the facilitator is seen as an expert, who is engaged to find asolution which meets the objectives and criteria of all parties. This isimportant as both parties need to feel that the facilitator has theirindividual personal interests at heart, and has been engaged to helpthem get what they want.

Suppose George and Mary had started their vacation plans by callingin to consult Shirley, their local travel agent:


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‘Hello there, what can I do for you today?’

‘We’re starting to think about our summer holiday.’

‘We’ve got as far as agreeing that it will be two weeks and it willbe in continental Europe.’

‘Well, that’s everything from the Arctic Circle to the Greek Islands!Let’s start with one or two details.’

Shirley now sets out some of the parameters, establishing traveldates and some broad categories of holiday:

‘Were you thinking of a beach holiday, a touring holiday, lakesand mountains, cultural sights …?’

‘I like to have a base so I don’t feel I am living out of a suitcase.’

‘I would like to be surrounded by lots to do. And I do like to buyclothes when I’m abroad.’

‘I enjoy my games of golf, and I would like to play some differentcourses while we’re away.’

‘I think we both agree we’re old enough to enjoy a bit of luxuryand sophistication.’

‘And I guess you’d like some sunshine, too? Give me a couple ofhours while you do your shopping and I should have some ideasif you call back this afternoon.’

In this situation we are developing an independent solution, or ashortlist of possible solutions, around which the parties can negoti-ate. You have seen several examples of people building their ownideas together to create their own fixed position, and then eacharguing around and about.

When you use a professional to perform a specialist function – suchas an architect, a wedding planner, a business consultant, an interiordesigner or a travel agent – you don’t have two diverse positions todebate; you have a single source of options. The specialist createsthese choices based on the requirements of the two parties. At the


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same time the specialist performs the role of being a third-party facili tator between the opposing parties.

At each stage the parties look at the specialist’s ideas in terms of theextent to which their own personal objectives are met. When Georgeand Mary return to continue their discussions with Shirley, George islooking for golf courses and Mary is looking for comfort, sophistica-tion and shopping. Shirley is not doing her job properly unless she isable to show how her proposals meet both of these criteria.

In an earlier chapter you looked at the need to establish independentcriteria for judging an outcome, and in a sense the use of a third-party specialist invokes similar principles.

Both parties see the specialist as able to represent their individualinterests in an objective way, and are open to being persuaded thattheir interests are being acknowledged and incorporated into thesingle solution.

➣ The fourth rule of not playing their gameAvoid conflict and argument by appointing an expert who willproduce an independent solution, that can be modified in discus-sion to take account of the individual criteria of the two parties.Keep the initial brief as broad as possible to avoid stunting thespecialist’s creativity and be open to exploring new ideas in thecourse of the consultations.

Summary

In this chapter you have considered how to deal with an opponentwho wants to play a different game.

You have seen how you can progress the negotiation by letting theother side fully develop their argument without your interruptions.You have also seen how you can progress the negotiation by lettingthe other side attack your proposal with no defence from you.In both situations, you have seen how this serves to clarify theother side’s position and gives you scope to explore alternativesand compromises.


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You then saw that it is important to separate the personalities fromthe problem and not take personal attacks as serious accusations.You need to realize that such insults stem from frustration at thecomplexity of the problem, and that your best response is to deflectthe attack from yourself and on to the basic issues of the negotiation.

In all these cases, the common element has been to encourage theother party to expand on and clarify the key points of their argument– whether proposing their own ideas or attacking yours.

Another way of exploring the issues and options is to appoint a spe-cialist who is briefed by both parties on what they want to achieve.This specialist is effectively a mediator who has to come up withan independent solution which will satisfy both parties, withinset parameters.

Here are the four principal courses of action which work when youcannot persuade the other party to move from PositionalNegotiation to Directional Negotiation.

1. Let them argue their case and don’t interrupt them.2. Support and encourage them to attack your case.3. Don’t defend yourself if they attack you personally – but do redi-

rect this attack from yourself and on to the problem.4. Appoint a professional specialist to work on an independent single

solution which takes account of the criteria of both parties.


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10

Handling personalities andworking as a team

People are different

There is something of a fashion in the twenty-first century to treatpeople as if they were all the same.

Part of this is the result of major changes in social organization.Society has gone to great lengths to undo the injustices of discrimi-nation. The public environment is designed with convenient accessfor everyone, regardless of any physical disability or impairment. Andincreasingly, society is moving towards offering equal opportunity ofemployment and advancement to everyone, regardless of gender,race or creed. This is a huge development from the unjust legislation,discrimination and practices of past centuries.

But people are different.

In the attempt to be just and fair, individual preferences are oftenoverlooked and there is a move towards total standardization in theway things are done. The consequence is that there are sweepinggeneralizations about what people expect and these overlook essen-tial differences in human personalities. Everyone has their ownperspective, and this viewpoint is the result of an accumulation offactors and influences. The fundamental basis of all interpersonalcommunication and negotiation is that people are different.

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Are you Head, Heart or Gut?

There are many classifications of personality type and just as manybooks that attempt to categorize behaviour patterns. This chapterwill focus on just three basic types, following a principle that is some5,000 years old. It can be seen in many ancient religions and is stillpractised today in the traditional teachings of Ayurvedic medicine.

This is a very simple demarcation, according to whether people areprincipally motivated by their logic, their emotions or their instinct,and which I shall refer to as Head, Heart and Gut people.

Head people are the logical, methodical thinkers, who love detail,facts, and analysis. Typically they are accountants, engineers, survey-ors, scientists: people who deal with factual information and whoneed to know all the background and statistics before they can cometo a decision.

Heart people are always influenced by human considerations; theyare people-people. Typically they are teachers, nurses, humanresource executives and social workers. They tend to base their decisions on the human factors and social impact of any nego -tiated changes.

Gut people want action. They are get-up-and-go people who wantto get on with the job. Often they are in positions of authority insociety – such as Police or the Armed Forces. Or they may have salesand marketing jobs where they are measured by their results. Theylike challenges, they move quickly to reach a decision and theyexpect instant action. They dislike delays and hate having to attendto detail.

The author confesses

Nobody is a pure, 100 per cent Head, Heart or Gut person. Most ofus are predominantly one type, with elements of one or both of theother types.

Personally, I am very much a Gut person. I tend to be impetuousand often charge into projects without thinking through the

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consequences in the way a Head person would; or considering thefull effect my actions would have on others, which is what a Heartperson would do. I am far from methodical in my daily routine, andby nature very untidy.

In contrast to this, when it comes to holidays, I will spend weeksreading and planning with maps and guide books with all the dedi-cation of the most devoted Head person.

So, while nobody is purely one particular type, you do have youressential personality traits to the extent that your friends and col-leagues will have some initial expectation of how you will react toany given set of circumstances.

At this moment you can probably categorize people with whom youcome into contact every day. You probably find it much easier to fitneighbours and colleagues into a category than you do to categorizeyourself. When you do decide, you will probably tend to considerthat your own type is the ‘right’ one.

However, there are no rights and wrongs in this, no better or worsecategories. Everyone has their own particular strengths, and every-one contributes in some way to the overall mix that makesteam-working effective. What is important is to learn to identify thecore characteristics in others. What motivates them? What is impor-tant to them? What principles govern their decisions?

Know your enemy

When negotiating, you will achieve your objectives more easily if youcan identify the core personality type of the other party and play tothis. If the other party is a Head person, they will want facts and figures, logical analysis and a cautious approach to changing thestatus quo.

A Gut person will want action, and will be keen to see an outcomewhich offers a quick solution so everyone can move on. A Heart per-son’s main consideration will be the human impact of the outcome.


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Identifying the personality type, even in this simple form, is an effec-tive way of seeing things from the other person’s perspective ratherthan your own. This means you can construct your negotiationaround the sort of things that are important to the other side. Ofcourse, you may not be able to offer all that they are hoping toachieve – but at least you can empathize with their prime motiva-tion. Take the example of Tork and Grunt again.

In a further attempt to achieve local harmony and bring the tribestogether, Tork and Grunt have teamed up with Chat and Wizpa andare planning to make their case to a mass meeting of the local inhab-itants. The four of them meet up in advance to discuss tactics underthe leadership of Tork. See if you can decide whether each of themcan best be described as a Gut, Head or Heart person.

Tork starts things off by saying:

‘I called this meeting after my discussions with my friend, Grunt,because I know we all share a common belief that we can build abetter future for ourselves and our children if we come together asone large community – including those of us who live up on thehill, those of us who live down in the valley, and those of us wholive on the other side of the mountain and by the lake. Do I haveyour broad agreement that we want to create a wider communityembracing all these territories?’

Tork looks around the group who are all nodding in approval.

Chat says:

‘It’s the only logical way forward. We can either hide away onopposite sides of the mountain, worrying about people on theother side whom we consider foreigners, or we can come togetherand cooperate. Each community has one or more skills it canshare; that’s what Wizpa and I found out. We can teach eachother, but more importantly we could start to trade our special-izations.’


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Grunt:

‘You mean you want to steal our hunting secrets! That doesn’tseem such a good idea. My people have learned their skills overgenerations. I just want to avoid anything that gets in the way ofgetting on with day-to-day life.’

Wizpa:

‘It’s not a matter of stealing. It’s all about sharing for the greatercommon good. I can’t see my people wanting to dig pits andspear mammoths. Please! That’s gross! What we’re talking aboutis basic economics. If we share, we all benefit.’

Chat:

‘I don’t see it that way at all, either of you. What I see is a betterlife for our children. I don’t want them to grow up frightened ofthe people on this side of the mountain. I want them to be able toplay anywhere without us mothers worrying that strangers mightcapture them to be used as servants and slaves. I want mydaughters to choose their own husbands, not be carried off by aband of hunters.’

Tork:

‘Now, just a minute, let’s not get heated about this. Why don’twe take this one step at a time? I want to finish all this talkingand get back to more important things.’

Grunt:

‘I know you do, Tork. So, let’s follow a proper negotiating proce-dure:

➣ What is the present situation?➣ What are the issues?➣ What do we want to achieve?➣ What options are available to us?➣ How do we measure the outcome?’


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In this example, Grunt and Chat are both Head people, both want-ing to be logical and methodical. Tork is a Gut person, who wants toget on with hunting, while Wizpa is a Heart person, concerned aboutthe children of the tribe. Different personalities – but they all wantthe same outcome.

So far you have looked at negotiations in one-on-one scenarios. Butin business and diplomacy, negotiations are frequently undertakenbetween teams and may involve three or more parties, each arguingfor their own particular interests.

In the examples of negotiation you have looked at, the conclusionhas been that the ideal way to progress and resolve an issue isthrough Directional Negotiation. But how can you continue toadopt this strategy if you are working in a team? You may be onlyone party amongst several competing interests. Let’s look at howmulti-party negotiations operate in practice.


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The tribes seek a solution that serves everyone

Multi-party negotiations

Major negotiations generally represent a number of interests on eachside. It is important that each team initially prepares its own positionamongst themselves, so they can develop a basic proposition thatcovers all of their interests. There are examples when there will bemore than two teams, as in a building development project. If theproject is for you to construct a garage beside your house, there willnot be many interests other than those of yourself, your neighbours,and the local council (planning officials, building inspectors, etc).

Where this is a commercial project, the negotiation could involve acommercial developer, local government, the environmental lobbyand other competing commercial interests – together with local res-idents, trades unions or pressure groups with particular socialconcerns such as environmental or conservation groups.

Here are some examples of projects that could be highly contro -versial and are likely to involve a number of other partiesin neg otiations:

➣ A medical research establishment testing drugs on animals wouldimmediately attract the attention of animal rights activists andlocal residents on the one hand, as well as pharmaceutical com-panies and scientific research companies on the other

➣ A nightclub and casino in a mainly residential area could attractthe attention of religious groups who object to gambling on thegrounds of religion. Local residents might also object at theprospect of late night noise disturbing the peace of a residentialarea

➣ A marina and holiday resort development on the site of coastalmarshland would arouse objections from naturalists wanting tomaintain the wildlife habitat of the wetlands and the resident birdpopulation

The importance of being prepared

All negotiations involve proposals for change and objections tochange. That’s why there is a negotiation.


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Projects that are going to make fundamental changes to how youlive or to your environment, or which involve behaviour that is con-trary to some people’s personal ethical beliefs, will attract objectionsfrom pressure groups. In your preparation, you must do your best toexplore every possible area of objection the other side – or other par-ties – might come up with, so that you are prepared in advance todeal with issues raised. Nothing in a negotiation is more importantthan being prepared for the unexpected.

In a multi-party negotiation – which in government matters candevelop into a Public Inquiry lasting weeks or months – the main dif-ference from other formats of negotiation is that the discussionforum is largely removed. Much of the analysis and examination liesin the hands of the independent chairperson.

The Chair’s role is to consider the arguments of each party and helpto find common ground, as well as identifying individual interests.The Chair will have to consider all the arguments and the impact ofalternative outcomes. At the end of the hearing, he or she will ana-lyze all the arguments that have been put forward and makerecommendations to whatever authority is responsible for making aruling and reaching a final decision.

In a multi-party negotiation there is limited opportunity for interac-tion. As a result, the tactic comes down to producing a detailedproposition that is sufficiently comprehensive to persuade the third-party arbitrator of the appropriateness of one particular solution.

In many two-party negotiations you are also concerned with a teamof negotiators rather than just two individuals. So, let us now con-sider the whole subject of how to negotiate as two teamsconfronting one another.

Team play

This book deals primarily with a negotiation between two parties. Ina major negotiation, each side will be represented by a team.

Each team will have a leader who attempts to coordinate all of itsinterests into one proposition. The team will comprise various team


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members who can each represent a particular interest which is atstake. The leader must always be aware that without strong leader-ship there is the possibility that the negotiations could break downinto a number of petty disputes over special interests, with the resultthat the bigger picture – the need to achieve a workable and lastingsettlement – is pushed to one side.

What are the general tactics of negotiating as a team? How doesdirectional negotiation work when your case is being presented by ateam of two or more? Should the tactic be to rally all the teamtowards the common objective and present a united front? Giventhe difficulties of establishing an outcome which is acceptable to allparties, should the team all follow the same process? Or should theyadopt different approaches in order to achieve the best result?

The united front

Just imagine for a moment that you are facing a united front of ateam of four negotiators, all saying the same thing in the same way;do you think it would be easy for either team to arrive at a mutuallyacceptable outcome? I doubt it!

Flexibility is essential if there is to be a mutually acceptable outcomeand the constructive approach is to acknowledge and appreciate dif-ferences so that ultimately you can find common ground and thefoundation for a solution.

Black hat – white hat

When you operate as a negotiating team, you should allocate differ-ent roles and functions to different team members. Even if there areonly two members in your team, there are two different roles thesetwo people should adopt: the ‘Good Guy’ and the ‘Bad Guy’ or, touse Hollywood terminology, White Hat and Black Hat.

In every old Hollywood cowboy film, the ‘good guys’ wore whitehats while the ‘bad guys’ wore black hats. In a tough negotiation youprobably start off by thinking of yourself in white hats and the otherside in black hats. However, within your own negotiating team you


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should allocate different strategic roles to team members, and theBlack Hat and the White Hat are just two of the key roles that needto be cast in your team.

Leader

This is the person who has the prime responsibility for contact withthe other side. It will not always be the most senior member of theteam – but it will be the person who, more than the other teammembers, will have to live with the outcome and make it work. Itcould be a sales manager. The sales director might also be a teammember since, as a director, he or she will take the ultimate respon-sibility on behalf of the company. But he or she should allow themanager to lead the discussions.

Scribe

The Scribe is the person who takes notes and keeps a record of thevarious points raised in the course of the negotiation. He will speakless than the other team members but is in a position to pull thenegotiation back on course if it starts going back over ground thathas already been covered.

Black Hat

The person who ‘wears the black hat’ will play rough and tough andargue in a positional style, always stressing the side’s point of viewand arguing against any concessions which the other side may tryto win.

White Hat

The person ‘wearing the white hat’ will argue soft and sweet, and tryto identify most closely with the ideas that the other side puts for-ward. White Hat will be constantly positive about the negotiation,while Black Hat will often appear difficult and unwilling to cooperate.


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Boffin

The Boffin is the technical expert who can bring in technical consid-erations that may expand or limit the discussion. This person couldbe a scientist or, equally, a legal or financial expert. If there are justtwo on each team, Black Hat and White Hat are the roles they shouldadopt, incorporating other roles as needed.

Switching roles

The Leader’s role is to find common ground and identify the stickingpoints. He or she will open the negotiation but will leave much of thediscussion to White Hat and Black Hat.

These two key members can be most effective if, at least once inthe course of the negotiation, they ‘change hats’ and swap roles. Agood time to do this would be when the other side introduces a newidea or element into the discussion. Unexpectedly, the other sidemay find that Black Hat is sympathetic to their proposal, or even in


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Members of the negotiating team each have their own roles

agreement. At the same time White Hat starts to find reasons toobject. The other team has no sooner found a friend and ally than itfinds it has a new adversary.

The benefit of this tactic is that the other team has established atrusting relationship with the person who was previously White Hatand it is therefore predisposed to listen to this person, even thoughhe or she is now Black Hat.

As for the former Black Hat, with whom they had been having somedifficulties, the other team is now obliged to reconsider its opinionsince this person is in the role of White Hat, and is now listening tonew ideas with a positive attitude.

Jack and Jill demonstrate this when it comes down to the nitty-grittyof negotiating to sell their antique long-case clock:

‘This was my grandfather’s; he bought it after the First World Warfrom a second-hand furniture store. We were wondering what youwould give us for it.’

Charles Jackson, the dealer, glances at the clock but does not want toappear too interested,

‘It’s not an antique, probably early twentieth century.’

Jill is currently in the role of Leader. She initiated the negotiation andis ultimately the person most affected by the outcome. She had doneher research but she decides to play her cards close to her chest forthe moment:

‘I know it’s not particularly old, because if you look carefully youcan see the date: 1901. It’s an heirloom, and I hate to sell it, butwe’ve decided it won’t fit in our new home.’

Charles is confident that he can press his advantage, and tries to seewhether he can get Jill to set the price:

‘You’re absolutely right; this sort of piece won’t fit in with moderndécor. What were you expecting to get for it?’

Jill isn’t yet going to reveal that she knows what it was worth.


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‘Well, you’re the local expert; you must know what you couldexpect to sell it for. What would you say it would be worth to acollector?’

‘Well, I am a dealer, not a collector, and I need a fair mark-up if Iam to pay you and then keep it in store. I must admit it’s in goodcondition, and I am prepared to offer you 400. I’m sure youweren’t expecting that sort of sum, were you?’

At his point, Jack steps in, wearing the White Hat,

‘Well, that’s a tidy price for an old clock, Jill, and 400 will come invery useful at the new house.’

Charles now feels he has an ally in Jack, but he hasn’t reckoned thatJill would have spent an evening on the Internet researching long-case clocks.

Jill pauses for a moment, and puts on the Black Hat:

‘I don’t know who you are trying to fool, Mr Jackson. I thoughtyou were an expert. You can see this is a Winterhalder &Hofmeier, so I think you’ve a nerve offering me 400. You do fol-low the local auction prices, don’t you? And you know that asimilar clock went for almost 4,000 at auction in the city justthree months ago. So let’s stop messing around. Either you clearlydon’t know your business or else you’re trying to rip me off! Whichis it?’

Jack then steps in, discarding his White Hat and also becoming aBlack Hat:

‘That’s terrible! I had no idea this was so valuable. How dare youmake such an insulting offer?’

Charles has only one option; he has to plead ignorance.

‘Let me have a closer look. I had no idea it was a Winterhalder &Hofmeier. I do apologize for not being more professional. Yes, Ican see the signature, and you’re quite right. My apologies toboth of you.’


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Jill now grasps the White Hat role, not wanting to have both her hus-band and herself adopting an adversarial position which would onlylead to confrontation:

‘Well, I must admit, it took me some time to find the markings.But given the design, the timekeeping movement, and the signa-ture, you can see that it does all tie up, doesn’t it? Don’t you thinkit’s a rather fine specimen? I’m sure you know collectors whowould be interested, and if you take it off our hands it will save usthe delays and frustrations of the auction house.’

In this brief negotiation, the Black Hat – White Hat strategy quicklyestablished that Jack and Jill were not going to be put at a disadvan-tage and Charles was forced to make an apology.

You can also see the benefit of preparation, since Jill’s research paidoff when she was able to show not only that she knew the clock wasan antique – but also that she knew the market price, thus establish-ing independent criteria on the basis of which the negotiation couldbe assessed.

Who sits where?

Chapter Two recounted the negotiations at the end of the VietnamWar, when procedures were subjected to a lengthy delay because ofa lack of agreement over the shape of the table around which dele-gates would sit for the formal sessions. Even in a less formal meeting,the decision as to who sits where is tactically important.

If there are five in each team, this should be the seating plan:

Boffin

White Hat

Leader Leader

Scribe

Black Hat


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While you cannot dictate where the other side sit, it is probable that

the other side’s Leader will sit opposite the Leader of the home team.

Black Hat and White Hat should be separated, with White Hat sitting

next to the leader and the Scribe sitting at the other side of

the Leader.


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The negotiating team in position and ready for the kick-off

This looks like a soccer formation with a solid, positive ‘centre’ for-mation to the team, and the attacks likely to come from the wings.The leader will ‘kick off’, supported initially by White Hat with theScribe keeping the proceedings on course. As the negotiation devel-ops, both Boffin and Black Hat will join the play.

While the essential strategies remain the same as in a one-on-onenegotiation, the main difference comes from the formality of a team

negotiation. The Leaders should make the first move and introducetheir teams.

The ‘home’ side should offer appropriate hospitality and start theconversation with polite social chat. This breaks the ice and sets themood for more serious matters. When you are the ‘away’ team, visiting the other side on their ‘home ground’, it is important not toallow the home team any advantage. You can achieve this by takingthe initiative: start the conversation with social small-talk and establish a friendly context. Alternatively, if you foresee a hostilenegotiation, you can politely decline their hospitality and suggestthat you get straight down to business.

Whether you are at home or away, you want to start the negotiationfrom a position of strength.

Rehearsals

In a major negotiation you will have thoroughly prepared your teamand know what it is that you want to achieve. You will have in minda number of key issues you want to cover and you will know yourWAO. It’s a good idea to rehearse some of the possible scenarios inadvance, with your Leader on one side of the table and the rest ofthe team on the other.

The Leader will then present his case and the other team memberswill role-play in opposition, countering the Leader’s arguments asthey hear them from the perspective of the other side. It is useful ifall team members stay ‘in character’ during this exercise, and makea genuine attempt to find fault with the Leader’s proposals. Oftenyou can discover aspects of the situation that you had been blind towhen you were totally involved in your own arguments and seeingthings only from your own perspective.

To enable the team to make the most of a rehearsal, they shouldplay their roles convincingly and be difficult, truculent – perhaps losing their temper or being totally unreasonable at times – so thewhole team can work out how they might handle a number of different situations.


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Once the role play ends, the team should discuss and analyze whatthey have learned, and decide whether they need to amend theirown proposal. They can also discuss whether they need to adoptspecific tactics if the opposition should decide to follow a particularline of argument.

In the rehearsal process, it is not merely a matter of rehearsing whatyou want to say, it is also very important to be aware of how effectively you are communicating. This brings us to the subjectof paralanguage.

Paralanguage

Paralanguage is human language that is not conventional verbal lan-guage. It includes gesticulation, intonation, facial expression and, inparticular, body language.

Understanding and using paralanguage is a useful additional com-munication tool which you can incorporate as part of your strategy.An additional benefit of rehearsal is the opportunity to assess all thecommunicating messages you are transmitting, both verbal andnon-verbal, and to ensure that your paralanguage sends out thesame messages as your verbal language.

I know I personally have a tendency to look too stern and not smilemuch. As a public speaker I can be too forceful in my delivery, andcome across as being dogmatic, almost hectoring the audiencerather than conversing with them. In the finals of the 2003 WorldPublic Speaking Championships, this distanced me from my audi-ence when I should have been relating more closely with them, andprobably cost me a place in the top three. However, I did walk awayhaving learned a lesson I will never forget, about the importance ofparalanguage.

There is a lot of discussion around the importance of paralanguage.Much of this is centred on NLP – Neuro-Linguistic Programming –which was created by Richard Bandler and John Grinder in the early1970s from what they called ‘modelling’.


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The central premise is that people learn and communicate in differ-ent ways, either aurally through hearing, visually through seeing,or kinaesthetically through physical experience.

To communicate most effectively with people, you need to use allthree modes. Body language can be used, with gesticulation andexpression to accentuate these modes and hence increase effectivecommunication. At the heart of NLP is the principle of modelling andthis is a technique which is easy to learn and can be incorporatedinto your communication tactics in any negotiation.

Modelling – the art of copycat communication

To achieve a rapport with someone, you can improve your commu-nication by modelling or mirroring their behaviour. When they crosstheir legs, you should cross your legs. When they lean forward, youshould lean forward and if they smile, you should smile back.

The first time you try this, you will probably feel rather self-consciousbut it will soon become a habit, and you will find that communica-tion does become easier. Some of these are things you doinstinctively from an early age, such as laughing when someone elselaughs, or yawning when someone else yawns. Other modelling iseasily learnt once you overcome your initial embarrassment.

Understanding body language

Body language, like NLP, is a vast subject and one on which there aremany books all claiming various degrees of scientific authenticity.Personally, I find excessive gesticulation distracting, and avoid tryingto match all my words with appropriate gestures.

I would recommend concentrating more on the words you use, thanfocusing too intensely on making all the right physical movements toaccompany your message. There is however one simple rule I believeis worth remembering, and is easy to incorporate into the way youhold yourself in a negotiation.

Whether you are talking or listening, you generally want to appear tobe open. When you maintain an ‘open’ posture, with the shouldersback and the head upright, you encourage openness in your ownmanner and project this openness towards the other party.

Sometimes, when you are deep in thought, you will hunch yourshoulders and look down, which closes up your posture and makesyou look unreceptive. This is certainly not the message you usuallywant to put across. When you look across the table to the otherparty, you can easily identify openness or a lack of receptiveness fromtheir posture. And when you see them turn to one side, or fold theirarms, you know they are avoiding what you are saying or resistingyour proposition. Without a word being spoken by them, they havealready given you a response to which you can reply confidently.

Making it an occasion … or not!

Every detail of the negotiation is communicating something, andneeds to be evaluated in terms of the messages it sends out.

Where there is a choice of location, should the meeting be in a mod-est meeting room or in the company boardroom? Should the coffeecome from a beverage machine or be freshly brewed? Should theteam be ‘suited and booted’ or more casually dressed? Would it beappropriate for a senior executive to welcome the visitors, even if heor she is not involved in the actual negotiation?

Most of us will at some time have been to see our bank managerabout raising money. The psychology of this meeting can be quitecomplex. If, as a student looking for a loan, you dress too smartly,will the bank manager think you are living an over-extravagantlifestyle? On the other hand, if you appear scruffy or unkempt willthe bank manager see this as being disrespectful?

Every aspect of a negotiation contributes to setting the scene andwill ultimately influence how you are heard. In every detail of theway you conduct yourself, you are projecting a degree of willingnessto negotiate openly and a desire to reach a mutually acceptable out-come. It is rarely to your advantage to come to the table with anaggressive and uncooperative attitude.


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However, the same may not be true of the other side. In the nextchapter we shall look at how you can deal with a difficult adversarywho is determined to drive a hard bargain – to the extent of usingwhat you might consider ‘dirty tricks’.

So, a summary of the key points about personalities and team negotiations:

Summary

People are different. Just because they are different, this does notmake them any better or worse than you are. Everybody has onedominant personality trait, described here as Head, Heart or Gut.When you can identify the key trait in your adversary, you candevelop your argument to relate to that trait.

When a negotiation involves a number of parties, you will probablynot have an interactive opportunity to discuss your proposition. Youwill have to draw together every aspect of your argument and pro-posal into a formal case, which you will probably have to present toan independent assessor. It is the assessor’s job to evaluate all theinterests and submissions and draw up recommendations to theauthority responsible for taking the final decision.

In this situation, detailed preparation is of the highest importancesince there is little if any opportunity to debate the issues at alater stage.

In a two-party negotiation, where more than one person is repre-senting each side, different team members should adopt differentroles. The two basic roles are White Hat and Black Hat, representingthe nice guy and nasty guy, or soft and hard approaches. Additionalroles in a larger team can include Leader, Scribe and Boffin, eachwith specific roles that give a balance to the team’s presentation.

Rehearsals give a team an opportunity to act out their proposals andto gauge the possible reactions from the other side. In doing thisthey should practise, not only the words they propose to use, butalso their non-verbal communication. The team should be aware of


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and practise some of the basic principles of modelling and body language and should, in general, present an open and willing demeanour.

Finally, it is essential to remember that every detail of preparation hassome impact on the negotiation and should be carefully considered;from the room, hospitality and protocol right down to whether busi-ness or casual dress is appropriate on this occasion.


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11

Strategies, tactics and handlingfoul play

Starting on the right foot

There are many tactics you can adopt to gain an initial advantage,and others you can adopt in the course of a negotiation, to ensurethat you are not pushed into an unsatisfactory result. Before you lookat handling how you should deal with a difficult opponent, let’s firstconsider your initial stance in any negotiation.

High moral ground

When you are negotiating you wantthe other side to concede – eitherbecause you know your cause to bejust and that what you are asking for isfair and reasonable, or because youwant to give yourself an advantageyou do not currently have.

Given this basis, it is logical to appear utterly reasonable and level-headed in the way you start to present your case.

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Visible goodwill is thestrongest negotiationstrategy. Don’t letsomebody else determineyour behaviour.

DR. S.U. SUNREI – SONY CORP.

Even if you are entering into a negotiation in which the other sidehas initially appeared difficult, you should ignore this and startafresh, on a friendly and ‘grown-up’ basis.

By doing this, you take the high moral ground and project a per-ceived intention to be fair. At a later stage you may need to be morebrusque in your style, and this will be looked at later in the chapter.

Establishing an advantage

Robert has a meeting with Alice to negotiate the details of the con-tract discussed in Chapter Nine. The meeting is to be at Alice’s officesand so, to ensure that Alice does not have too great an advantagefrom being the ‘home team’, he makes a phone call in advance tosort out some details.

‘Hello, Alice, I’m calling about our meeting on Friday. Have yougot a minute to go through a couple of things?

‘Fine! Firstly, there will be four of us; I’m bringing along someonefrom the research department who has been designing the modi-fications you asked for, and one of our finance guys who’s beenre-costing everything to take account of both the modificationsand the high value of the order. Then, my director will be in tow– just to make sure I don’t sell the family jewels.

‘Can you email me to let me know who’ll be there on your side?’

Robert has set the scene and made sure there won’t be any surprises.He will see from Alice’s email whether she is fielding a heavyweightteam, and if she decides to be flanked at board level he can alwaysbring more senior people to support him. Robert continues:

‘One other thing: here at JK we relax the dress code at the end ofthe week and have a ‘dress-down Friday’– although we don’tallow jeans or shorts. I was wondering, what’s the rule at youroffices? I’d hate to arrive in a sweater and find you and your colleagues all in suits!’


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Again, Robert is pre-empting the possibility of being made to feeluncomfortable. If his team had arrived dressed formally and foundthat Alice’s offices also had a ‘dress-down Friday’ policy, he wouldhave started with a disadvantage. Alice reassures him that they tooopt for casual wear on Fridays.

‘Just one other point; I think we’ve agreed ten o’clock till twelve.Is this still OK with you? We have a management meeting backhere at one, and it would be very convenient if we could be awayfrom your offices by twelve fifteen. Does that present any prob-lems?’

Robert is making sure he is not caught out by Alice dragging themeeting on through the lunch break and into Friday afternoon. ButAlice has other ideas:

‘Well, Robert, we had thought we would bring in some sand-wiches and carry on through lunch. Then, after lunch we wouldrather like to show you the factory and how the new machinerywill fit into the production flow.’

Robert has a problem, now. He knows that boardroom lunches atAlice’s office are usually more than ‘sending out for sandwiches’ andgenerally include beer and wine – especially on a Friday afternoon. Ifthe negotiation is tough, the generous hospitality could make it hardto get the best deal. By offering hospitality, Alice is upping the stakesin her attempt to appear generous and reasonable, and she knowsfull well that alcohol could lubricate the negotiating machinery inher favour.

‘That would be a great way to end the week, but I’m afraid wehave a rather heavy agenda for our meeting back here. On theother hand, while I’ve come to know your factory quite well overthe years, I’m sure it would be really useful to familiarize my col-leagues with your operation. How would it be if we arrived atnine-thirty and had a quick look round before the meeting? Thatway they will be able to put things into context and have a betterpicture of exactly what the contract entails. I’d also like Bruce, mydirector, to see how you’re expanding.’

STRATEGIES, TACTICS AND HANDLING FOUL PLAY

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‘I understand. Let me check up and get back to you.’

Next morning, Robert finds the following email in his inbox:

Hi Robert,

Regret we cannot do an earlier start. Maybe there will be anopportunity at a later date.

Alice

Robert is surprised at Alice’s response and curious as to whether therelationship is cooling off. He makes a mental note and decides totake no further action until the meeting on Friday.

Meanwhile, Alice is taking a hard line. Her initial plan to soften up JKEngineering with generous hospitality has been unavoidablythwarted by Robert’s other commitments and so she decides to tryother tactics to retain the upper hand.

She knows that being the ‘home team’ is not always an advantage.For one thing, Robert has now set a fixed timescale for the meeting.However, she has one or two other ideas to try, to force Robert’shand. Like Robert, she now decides to wait until Friday before takingany other action.

The old saying is that ‘attack is the best form of defence’. When theother side is confronted by a cool and calm negotiator, some oppo-nents will disregard decorum and will attack and become aggressive,or start using dishonest tactics in order to try to undermine the otherside’s position. Robert may be faced with a difficult opponent, and inthis situation he will need to follow a four-step process:

1. Realize what is going on and identify the tactic.2. Resist the temptation to respond in kind.3. Challenge the other side about their actions.4. Finally, take a step back from the subject of the negotiation and

re-establish the rules of procedure if the other side starts to playtough.

Below-the-belt tactics from the other side are designed to put you ata disadvantage. They include physical factors, psychological pres-


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sure, factual inaccuracies and personal attack. You must be alert toany signs that the other side are breaking the rules of the game – andthe first thing you have to do is identify exactly what’s going on.

At the same time, if you are unjustifiably over-sensitive it will reflectbadly on you. While Alice will know whether she is being tactical,Robert has to work out what she and her team are up to. This is notan easy game to play, especially when you are on the receiving end.

What’s going on?

When you find that your team is seated uncomfortably, squeezedbetween the table and the central heating radiator on the wall, youshould immediately ask yourself whether this is just the unfortunatelayout of the room, or whether you are being manipulated. It is per-fectly reasonable to ask, right at the outset, if the table can be movedover, or if there is an alternative meeting room, rather than start themeeting feeling uncomfortable.

The effect of raising the issue straightaway is to cancel out anyadvantage the other side might believe they have achieved by thistactic. The general rule for dealing with all types of foul play is toaddress it quickly, or pre-empt it if possible. Robert took steps inadvance to pre-empt Alice gaining an advantage in respect of whowould be at the meeting, and to establish a fixed time-frame for themeeting. You cannot pre-empt everything without appearing unrea-sonably controlling but you can take swift action when you suspectyou are being manoeuvred, and in doing so you cancel out the effectof the other side’s tactics.

Don’t take it personally!

When you react to a tactic by responding personally, you project alack of self-confidence. This comes back to the importance of separ -ating the personalities from the problems, which applies just asmuch to the subject under discussion as it does to the process of thenegotiation. Look at the alternative outcomes in the above exampleabout the seating in the meeting room. Robert could have taken thematter personally and said:

‘Look, Alice, are you trying to roast us here, pushing us up againstthe radiator?’

Alice might then become angry, especially if she has struggled tofind a meeting-room available and has not had time to check the lay-out. Her annoyance or even anger will then gnaw away throughoutthe meeting, poisoning the atmosphere.

On the other hand, Robert could say:

‘We’re a bit cramped over this side of the table. Do you think wecould shift it over a foot or two? There seems to be plenty of roomover on your side.’

This response makes no accusations. If Alice has been trying anunderhand tactic to make Robert’s team uncomfortable, the effect isneutralized. If not, no harm is done by Robert’s words and the situa-tion is resolved so that Robert and his team are comfortable.

At the same time, provided Robert chooses his tone of voice verycarefully, his comment: ‘There seems to be plenty of room over onyour side,’ communicates to Alice in the gentlest possible way thatif this was a deliberate ploy, it has been noticed. He sends out a discreet message to Alice that he and his team are not going tobe manipulated.

In an extreme case, Robert could take polite but decisive action:

‘Since all your other meeting rooms are booked this morning,Alice, and this means there isn’t anywhere here where we canmeet comfortably, then I suggest we jump in our cars and godown the road to the Black Horse Hotel and have our meetingthere. I know the manager and I’m sure he’ll let us have one ofthe small private dining rooms. We often use them for businessmeetings.’

Robert is being polite and practical in his suggestion, and at thesame time he has cancelled out any advantage Alice might havehoped to achieve if she was, in fact, being tactical. Furthermore, ifthere was a genuine shortage of meeting-room space at Alice’soffices, Robert has come to the rescue.


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Being economical with the truth

It is usually easy to spot lies, or else to verify whether or not a baldstatement is true or false. It is less easy to spot partial truths, where astatement is designed to imply more than it actually says. The lan-guage of estate agents is often joked about and can offer us manyexamples of partial truth and misleading language:

Bijou SmallCosy CrampedHomely Cramped and clutteredDeceptively spacious Looks crampedScope for improvement Needs renovatingDevelopment potential Derelict

The whole truth and nothing but the truth?

In negotiations you are not obliged to be so honest and open thatyou put yourself at a disadvantage. The old Latin maxim of caveatemptor (‘let the buyer beware!’) applies in negotiations, just as in allbuying and selling transactions. However, you must remember oneof the basic rules, the need for a lasting outcome: if you are to con-tinue in a relationship of some sort with the other party you shouldnot create ill will by being deliberately misleading.

This is another example in which you need to follow the principle ofwatching the process carefully, to be quite sure you see and under-stand what is going on. When a statement appears incomplete, youmust ask for clarification. This is shown in these examples, goingback to Jack and Jill in Chapter One, selling their house to Robertand Rosemary.

Jill made a bald statement:

‘The rewiring set us back 1,000.’

And Rosemary immediately sought to clarify the information:

‘Was that a complete re-wiring or just part of the house?’


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Rosemary verifies the extent of the renovations. Later, Jill is talkingabout the kitchen:

‘The kitchen fixtures and fittings are all included.’

And again Rosemary makes sure the information is precise:

‘Obviously that includes the built-in appliances like the hob andtwin ovens, but what about the dishwasher? That’s not built-in.Is it included?’

When any factual statement is made, it is your responsibility to makesure both parties have the same understanding of what has beensaid. You should never assume that the other side is being deliber-ately misleading. Any response should be a polite request forclarification, not an accusation of attempted deception. If there isattempted deception, once again, you will have pre-empted it.

Another part of the negotiation process that needs delicate handlingis to know when you are going to have final agreement.

It is not easy to establish this at the outset of a negotiation withoutappearing to be pressurizing the other side – but it is critical to estab-lish this in your own mind so you do not reach your final positionwhile the other side intends to carry on negotiating. You may bedeceived into thinking that the other side is empowered to make afinal agreement, when in fact they need higher authorization ormight insist on more time to consider their proposal. Time is import -ant throughout the negotiation and it is critical in determining theconclusion of the process.

I’ve come out of my way to see you

Salesmen who make home visits have a standard way of negotiating,pressing consumers into making high value purchases like kitchenrenovations or other types of major home improvement in thecourse of one visit. The technique is legal but high-pressure, startingwith an advance telephone confirmation that both husband and wifewill be available for the appointment. Having established that, thetechnique is to start early in the negotiation with the question:


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‘If I can answer all your questions so you are completely satisfiedwith my answers, are you willing to make a decision tonight?’

The salesman then refuses to start discussions until he has theiragreement – so the first part of the negotiation is determine theprocess of the negotiation itself. If they say they want time to thinkthings over, or if they say they intend to see other potential sup -pliers, he will probably respond along these lines:

‘I’ve come out of my way to see you this evening and it’s notworth my while to spend the evening explaining to you how wecan offer you the best products at the best prices if you’re not pre-pared to come to a decision once I have answered all yourquestions to your complete satisfaction. Also, I can give you asubstantial discount on our list price – but only if you keep yourside of the bargain and sign up tonight. After all, if I meet all yourobjections, how can you possibly want to delay finalizing yourpurchase?’

I am certainly not advocating that you should handle a serious busi-ness negotiation in this highly pressurized way. However, theprinciple is valid, as you can see when you observe how Robertopens his negotiation with Alice:

‘Well, Alice, we’re finally getting down to the details. You’ve metmy sales director, Colin. This is Julian who joined us recently fromHarvard Business School. Then I’ve brought Jack from engineeringand Naomi from finance along with me, so we can iron out all thedetails and ensure we get the new machinery manufactured andcommissioned to suit your production schedule. Let me runthrough what I see as the agenda for this meeting, and then I’dbe grateful if you would see if I’ve left out anything we need tocover.’

In essence, Robert is saying exactly the same thing as the home-improvements salesman, but saying it in a more acceptable way. Heis establishing all the points that need covering in order to clinch thedeal, in a way that is neither forceful nor offensive. He can even goone stage further:


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‘I am hoping we can finalize and agree everything with you andyour team today, Alice. Does that fit with your plans?’

While he cannot prevent Alice from going away to think about it, hecan judge to some extent how far he should go in making conces-sions if he has a clear idea as to what Alice wants to cover and howfinal Alice perceives the day’s meeting is going to be.

Insults and tantrums

In some cultures, negotiations will be less restrained than in others.In some discussions, such as divorce proceedings or trades unions’negotiations, emotions may run high. You might be kept waiting, ordistracted by deliberate interruptions. You might find that the otherside treats you as inferior or ignorant.

In every case where there is some sort of discourtesy, it will only bean effective tactic for the opposition if you are seen to be affectedby it.

All human communication relies on some degree of reciprocity. Youare in control of how you react, and you can choose how yourespond. When you are driving in traffic and another motorist yells atyou or gesticulates obscenely, it will only have an effect if you reactto the insult. If you ignore it, it will have no effect whatsoever.

When it comes to heated emotions and flare-ups of temper, thesame golden rule applies as in all tactical fouls: you must notice itand you must ensure that the other side knows it has been noticed.But you don’t need to let it have any impact.

Accept that something may be said in the heat of the moment or asa deliberate ploy, and then choose a calculated response, not anemotional one.

The walk-out

In tense negotiations, the other side might call your bluff and call ahalt to negotiations. They might gather up their papers and get up


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from the table. How can you rescue the process if the other sidethreatens to end everything?

Firstly, you must realize that this is not a declaration of an actual deci-sion; it is a deliberate tactic. They are ignoring the process and tryingto get you either to change the process, or to change your positionsignificantly – or both. They are not trying to end the negotiation;they are trying to extend it on their terms. Just be aware of what isgoing on and make sure not only that you know what they are up to,but also that they know you know and understand their game.

Secondly, you need to pull them back from the brink and debate thebenefits of the broad outcome you are both hoping to achieve. Youmust reassure them that you are committed to reaching a solutionwhich satisfies everyone, and you need to explore alternative optionswhich might break the present impasse. Perhaps they need to con-sult further with their colleagues. Perhaps they need to see youroutline proposals in more detail, possibly submitted in writing sothey can go away and study them further.

Everything you will say must be based on the premise that both sideswant to reach an acceptable outcome. It will rapidly become clear tothe other party that they cannot get the outcome they want if nego-tiations are discontinued.

Having established this key principle, you need to see whether thecurrent process of negotiation needs to be reappraised. In particular,you should ensure you have definitive ways of objectively measuringthe outcome. It may be that you need an independent arbitrator, orthat both sides need more information from each other.

At the end of the day, perhaps there is no scope for a mutuallyacceptable outcome, and both parties prefer to return to the statusquo. But this can never be more than a short term hiatus in theprocess of resolving the unsatisfactory situation which drove the par-ties to the negotiating table in the first place.

Even when you are told to take it or leave it, you always have yourWAO, and you always have the final choice.


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Summary

All negotiations are tactical. The more work you do before the actualnegotiation – by way of preparation of your arguments, your WAOs,the details of the process to be followed and the basis for evaluatingthe final outcome – the less scope there is for surprise tactics whenthe parties meet.

When you reach the negotiating table you may be confronted withfoul play. You should confront tactics with tactics:

➣ Realize what is going onIdentify the tactic, be on your guard and notice what is going on.

➣ Resist the temptation to respond in kindWhile you keep your cool and are fully prepared, you will occupythe moral high ground. If you descend to the level of the otherside, you will lose this advantage.

➣ Blow the whistle on foul playFirmly but politely, challenge the other side about their actions.It’s possible you are being over-sensitive, and for this reason youmust couch your words carefully, to avoid fencing-in the otherside and making unjust accusations. At the same time, if they arehitting below the belt, you need to make sure they know you havespotted their ruse.

➣ Call timeoutWhen the other side starts to play tough, and things have come toa head, you must get the negotiations back on course. Take a stepback from the subject of the negotiation and re-establish the rulesof procedure.

Back on the hillside, 20 years on, Tork and Grunt are talking to theirgrandchildren.


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PART FOUR

Summarizing the process

12

Tork and Grunt pass it on

The meeting of the elders

Tork, Grunt, Wizpa, Chat and all the members of the enlarged tribeare meeting on the hillside.

All the families are present for this community meeting. The toddlersare running around playing tag, laughing and squealing. Theteenagers are teasing and flirting, and the youngsters are playinggames with pebbles and sticks or racing beetles across rocks. Torkstands to address them formally:

‘I have been invited by our noble chief, Alto to start our gatheringand address you today. I have chosen to take this opportunity tohighlight learning from which the tribe might benefit. So it is thatI choose to talk to you about the time when Grunt and I first met,and how we came to live not as separate tribes but as a commongroup. We developed what we called our Mammoth Strategy, anew way of working together, sharing the work, sharing thespoils of our hunting and foraging and sharing our knowledgeand skills.

‘When we first met, we saw things only from our own point ofview. We argued for what we wanted, and there is nothing nec-essarily wrong with that. When we face our enemies from acrossthe water, we fight for our people, for our families and for thesake of the next generation. But when Grunt and I met – just aswhen Wizpa and Chat first met – we could not see that if weunderstood what each other wanted, we might find a way thatwe could both be happy with the outcome of our negotiation.

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‘We learned some things that have been very useful to us over theyears, and this is what I want to share with you at this time:

‘Discussion starts when someone’s got something you want. Ifyou can understand each other, then you can talk about it. Whenyou do, you need to make sure that whatever you agree is goingto work, not just there and then, but into the future.

‘When you start talking, the proposals you put forward must beSensible : Straightforward : Sustaining : Satisfying.

‘You need to think about the person you’re dealing with:

➣ Are you similar, and does this help?➣ Is this the right time and place for both of you? ➣ At the end of the day, are you both looking for similar out-

comes?

‘Once you’re clear about this, and are ready to proceed, you needto set the scene. You respect each other and acknowledge yourdifferences. You agree what you want and you start to talk aboutwhat the options are. Most importantly, you agree on how youwill measure the options and the outcomes. It’s no good if youhave a different view of how things will turn out.

‘All the time, you keep respect for each other. That’s how we havemanaged to resolve our differences and all sit down here togethertoday.

‘Once all the parties have agreed about how they are going tonegotiate – and that can be quite a complicated process – then youcan get down to the serious business of working out a solution.’

Chukka, a fine young hunter with a reputation for being hot-headed,jumps up and seizes the talking post that any speaker steps up towhen they wish to address the group. He is clearly confused andwants to make his point:

‘Mr Tork and honoured elders! I cannot understand how you canspend so much time talking, talking, talking when you are facedwith an enemy. Surely the important thing is to protect your own


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interests, attack before you are attacked, look after your own peo-ple and loved ones. How can you insist on all this soft talk?’

Tork smiles wryly and glances across to Grunt. It is Grunt who stepsforward to respond.

‘Young Chukka, I remember when I was your age, swift of foot,sure of sight and steady with my hunting spear. Like you, I toowanted to settle differences quickly, without all this talk. But whatwe elders have all learned is that there is often a way for all par-ties to have what they want without giving up what they valueand wish to protect. That scar on your shoulder is an honourablemark for your fight to defend your honour last year – but remem-ber that your attacker, Jellus from across the valley,misunderstood what you were doing when he saw you holding hiswife in your arms.’

Chukka nods.

TORK AND GRUNT PASS IT ON

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Chukka demands action

‘You’re right, she had fallen and hurt her leg, I was running backhome so that Wizpa and the other women could attend to herinjury. Jellus jumped to the wrong conclusion.’

Tork turns to respond:

‘And the reason Jellus jumped to the wrong conclusion wasbecause there hadn’t been any of what you call “talk, talk, talk”.

‘Thank you, Chukka. You have given us a fine example of just whyit is so important to establish understanding before we enter anydiscussion or precipitate any drastic action.’

He smiles and pauses:

‘When we start to negotiate, the power of our action does notcome from shouting or threatening. There are stronger weaponsthan these.

‘Information is power. The more we know about the backgroundto the negotiation, the better equipped we are to argue. Maybethe other side are not telling the whole story; perhaps they havea hidden agenda. Keep asking questions, keep checking whatthey say and don’t automatically reveal everything you know.Remember, and I’ll say it again: Information is Power.

‘Another important point is that you have to agree on how youmeasure the result of the negotiation. When we first moved downinto the valley to live with Grunt’s people, we agreed that, if aftertwo moons we were finding life easier and food more plentiful, wewould plan to integrate our families and our way of life on a per-manent basis. Everyone agreed on that. If we hadn’t had thosecriteria then we might have started arguing about whether or notwe wanted to continue. And of course, when you set these crite-ria, you have to make sure you’re not letting self-interest get inthe way of your objectivity. As it happens, we then all decided thatthe air was cooler up here on the mountain, and when Wizpafound the springs up here in the forest there was fresh clean waterfor everyone.’

A voice booms out from the row behind him. It’s his wife, Speek.


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‘Timing! Don’t forget timing! You’ve forgotten how you andGrunt rushed into things in the first place.’

For a moment Tork almost loses his composure, and blushes from earto ear at his wife’s interruption. He forces a smile.

‘Thank you, dear wife. I was about to say that it’s extremelyimportant not to let Urgency overcome Importance. Sometimeswe can be swept away by enthusiasm and rush into doing thewrong deal at the wrong time.’

He pauses for a moment. He has lost his train of thought but quicklyremembers what he wants to say next.

‘Another vital part of any negotiation is the What if? It’s whatGrunt and I call our WAO: our Walk-away Option. We all knowwhat we’ll do if we get what we want from a negotiation – but itis very important indeed to be confident about what we’ll do ifthings don’t go the way we would like them to. Sometimes you’llneed a whole list of WAOs to cover all sorts of possible eventuali-ties. It can be tedious – but you’re in a stronger position, the moreyou prepare.

‘I’ve talked enough. Let me hand over to my dear friend, Grunt,to say something about group negotiations, when the elderscome to negotiate with the elders of another tribe.’

Grunt rises, leading a round of appreciative applause for his col-league. He decides to add a touch of humour and reaches for a largesack he has brought with him.

‘When there’s a team of you negotiating, it’s all a bit of a game.You decide who’s going to play which part in the negotiations, solet me show you how we line up. And I’ll need some help fromsome of you youngsters.’

Grunt picks out five children from the front row and lines them upfacing the assembled group.

‘I’m going to give you all roles in this play. There’s the Leader, theBoffin and the Scribe. Then there’s the White Hat, who is very niceand polite, and there’s the Black Hat who is difficult and argu-mentative. Now, who wants to be who?’


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The children shout and squeal, and Grunt finally allocates the rolesand lines them up again with their hats.

‘The Leader takes the centre seat in our line-up with the Scribe onhis right, to keep a record of everything. The White Hat sits on hisleft, friendly and supportive. Then on one end we have the Boffin,ready to answer any tricky technical points. And at the other endwe have the Black Hat who can liven things up if they get stuck.This arrangement always works because each person takes careof a particular aspect of the negotiation. It’s very professional andever since we adopted this system we’ve had no problems withborder disputes or any other disagreements with the neighbour-ing tribes.’

Grunt gives a broad smile and lets the children take a bow. He thenhands the stage back to Tork.


The children demonstrate the process

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‘That really sums up everything from our side, when we negoti-ate. But it’s not always quite that easy.

‘Sometimes the other side can be very argumentative and not playby the rules. When this happens, let them. Just encourage them sothey get it all off their chest. Don’t take it personally, make sureyou keep the argument strictly about the issue and don’t betempted to let personalities be dragged into it. If you can’t resolveit between yourselves, find an independent specialist you bothrespect and let him or her come in with an objective assessment.

‘Understanding. Patience. Respect. Information. Timing.

‘These are the lessons we have learned as we came together toform our community. We have never been afraid to negotiate, nomatter how powerful the other side might be.

‘We have learned that you get what you want in life by givingother people what they want. Since most people are focused onlyon what they want, this strategy has enabled us to achieve whatwe want without anybody making any major sacrifices or conces-sions. One day we may need to make concessions – but we knowthat as long as we have our WAO we can discuss, debate andnegotiate on any issue, and always know we are secure in havinga future we are happy to live with.

‘That’s all I ever wanted in my life, and I am proud of what wehave all achieved.’

Tork dabs his eyes as the emotion wells up, then takes his place withhis fellow-elders.

Throughout this book, Tork has taught you everything you need toknow about communication and negotiation, and summarized it infive words: Understanding. Patience. Respect. Information. Timing.

Negotiation is the pathway to making changes for the better. In thefamous words of John F. Kennedy:

‘Let us never negotiate out of fear. But let us never fear to negotiate.’


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AcknowledgementsFirst thanks must go to my publisher, Martin Liu at Cyan, who sawand liked the idea of Tork and Grunt as a vehicle for a series of bookson different areas of modern business skills. The second book, Tork &Grunt’s Guide to Great Presentations looks at effective communica-tions in presentations and speeches and more titles will follow, onleadership, successful strategies for life and other areas of communi-cation. This book started when I was working as a coach with a CEO,tackling issues around inter-personal communication skills. I was fas-cinated by the research I did at that time into the HarvardNegotiation Project and I have drawn extensively on Getting to Yes:Negotiating Agreement Without Giving In written by Roger Fisher andWilliam L. Ury with Bruce Patton as editor, published globally byPenguin Books.

I would also like to credit the work of W. Roy Whitten and the lateK. Bradford Brown, joint founders of the international More to Lifeproject (http://www.moretolife.org). Their training programmeshave taught me a great deal about the way people interact and,most importantly, the ways in which we so often misunderstandboth others and ourselves.

This book would never have been completed without the supportand encouragement of many friends along the way. In particular, mythanks go to Eric Yang, who first asked me if I could write a book andFi Law, who first told me that I could. The Book Cooks, LesleyMorrissey and Jo Parfitt and my editor Fiona Cowan contributedtremendous professional support and many friends have at differenttimes read parts of the manuscript and kept my writing on track.

My cartoonist, David Mostyn, embraced the concept with enthusi-asm and has brought the characters to life just as I intended.

Finally, my gratitude to Tony Neate of the School of Channelling,(http://schoolofchannelling.co.uk/) who taught me how to accesspersonal creativity in a way that has made writing a pleasure and ajoy, and has led me to be become a tutor in this field and start to passthis on to others.

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About the authorBob Harvey is the author of twohighly entertaining and informativebooks on cutting-edge communi -cation techniques:

Tork & Grunt’s Guide toEffective Negotiations

Tork & Grunt’s Guide toGreat Presentations.

Bob graduated with an honoursdegree in Economics and is a Fellowof the Royal Society of Arts. In thepast, he has held the title of UK

Public Speaking Champion together with the title for ImpromptuSpeaking. His career has encompassed brand management, sales,writing for magazine columns and broadcasting.

Today, Bob specializes in designing, scripting and delivering all types of corporate communications. He set up his company,Messages into Words, to help businesses get their message acrossand has worked with many of the world’s largest corporations indeveloping their corporate communications. He also runs extremelypopular and successful workshops on communication techniquesand personal management skills.

Bob can be contacted via his company’s websites: www.messagesintowords.com and www.bobharvey.co.uk

For those readers wishing to explore Tork and Grunt’s world, pleasevisit www.TorkandGrunt.com

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Tork & Grunt’s Guide to Great Presentations is a story told through thelives of Tork and Grunt and their fellow cave-people where Grunt isstanding for election as the new chief. With Tork’s guidance, helearns how to structure and deliver his electioneering presentationsand speeches. Using stories from their Stone Age life, as well as modern-day examples, this practical and engaging book exploresmany aspects of speaking in public, from scripting to delivery,including the use of PowerPoint and Keynote.

In this book you’ll discover:

➣ Content is the key to an outstanding presentation➣ The risks of speaking are really great opportunities➣ How to engage the audience in conversation; not bore them with

commentary➣ The fundamental structures of the Goldilocks Principle and the

Beethoven Imperative➣ How to develop a theme and tell a story➣ The ten commandments for using PowerPoint or Keynote with

dramatic effect➣ The difference between ‘audience support’ and ‘speaker support’➣ Techniques for overcoming stress and creating your comfort zone➣ The basics of stagecraft and projecting personal charisma

You win with arrows, not bullets. You win by pointing the audienceclearly in the right direction, not by hitting them with random andconfusing ‘bullet point’ statements.

ISBN 978-0-462-09924-8 / £9.99 Paperback

ALSO BY BOB HARVEY

tork & grunt's guide to effective negotiations

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