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Negotiating Skills for Managers

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Negotiating Skills for Managers

Steven P Cohen

A Briefcase Book

Copyright © 2002 by The McGraw-Hill Companies, Inc All rights reserved Manufactured in the United States of America Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher

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What Differences Does It Make to DistinguishBetween Interests and Positions? 8How Do You Deal with Positional Bargainers? 10

Is Money Really the Interest? 12Primary (Fundamental) and Secondary

Looking Beyond Our Personal Interests 15

Manager’s Checklist for Chapter 1 20

2 BATNA—Choosing Whether to Walk Away 23

Understanding Our BATNA Offers Choices 25What Is Our Walking-in BATNA? 27

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3 Are We Ready? Inoculation Protects the Parties 39

Substantive Inoculation: Knowing the Subject 40

In Negotiation, the Past Has No Future 41Selling the Product to the Salesperson 42

Inoculation as a Tool for Improving Your BATNA 43What Information Do We Need About Ourselves? 44What Information Do We Need About Other Parties? 46Preparing for Negotiation on Your Own 46

Inoculation Includes Process as Well as Substance 50Internal and External Inoculation 52

When Inoculation Is Impossible 54Manager’s Checklist for Chapter 3 55

4 Preparation Part One: Stakeholders,

Understanding the Subject Matter 61

Strengthening and Weakening BATNAs 66Reasons to Prepare for Negotiation 67Manager’s Checklist for Chapter 4 68

5 Preparation Part Two: Developing a Strategy

Record Your Assumptions About Stakeholders’ Interests 73

Using Your Interest Map in Negotiation 79

Contents vi

Be Prepared for Hot Buttons 79

Manager’s Checklist for Chapter 5 82

6 Communication: Key to Effective Negotiating 84

Manager’s Checklist for Chapter 6 95

7 Emotions: Dealing with Ourselves and Others 96

Do Emotions Belong in Negotiation? 96Recognizing and Prioritizing Emotions 97

Are You Negotiating to Solve a Problem

Confidence-Building Measures 100Only One Person Can Get Angry at a Time 101Reacting to Emotional Outbursts 102

8 Dealing with Annoyance and Leveling

Building Confidence in Your Counterpart 116

I Understand You, But That Doesn’t Mean

Contents vii

Expectations 119Early Wins Can Be Traded Away Later 122

Manager’s Checklist for Chapter 8 123

9 Globalism Starts at Home: Cross-Cultural Issues 125

Nationality Is Not the Only Difference 125

You Can’t Tell a Book by Its Cover 129

Offense as a Cultural Barrier 132Overcoming Cultural Obstacles 132

Manager’s Checklist for Chapter 9 137

10 Creativity and Bargaining Chips 138

Separating People from the Problem 145

Check the Appeal of Creative Elements—One by One 147

Confirming Mutual Understanding 148Open Your Mind and Expand the Possibilities 149Manager’s Checklist for Chapter 10 149

Building Confidence and Comfort 156

Multitasking 166It’s Not Over Until It’s Over 167

Manager’s Checklist for Chapter 11 168

12 The Seven Pillars of Negotiational Wisdom 171

Paying Attention to Priorities 171

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When I told my father of my plans to develop a firm izing in training people how to negotiate, he was quite sur-prised When I indicated that many people feel the need tobecome more confident, he was dumbfounded “Don’t peopleknow negotiating is fun?” he asked But he’s good at it and likes

special-to make deals The aim of this book is special-to help you get good at it

as well and to increase your confidence and the resultingrewards that can come from concluding an effective negotiation

The title of this book is Negotiating Skills for Managers, but

a more descriptive title would include the subtitle “andEveryone Else.” Negotiation is a universal human activity—weall engage in bargaining at one level or another on a pretty reg-ular basis And while we all need good negotiation skills in busi-ness, these skills are valuable in our personal lives as well Several years ago, in a response to a follow-up form askingfor a long-term evaluation of our flagship negotiation course, aparticipant responded that he had not used negotiation in hisprofessional life—but he had used it to save his marriage I hopethis book will enhance your professional skills as a negotiator;and then you can view any personal impact simply as an addi-tional benefit

Plan of the Book

Negotiating Skills For Managers has 12 chapters In the first 10

we discuss negotiation paradigms, philosophical underpinnings,and specific tools and techniques You’ll find a detailed review ofthe idea of “interests” and BATNA (Best Alternative To a

Negotiated Agreement)—two things all negotiators need to

xi

Copyright 2002 by The McGraw-Hill Companies, Inc Click Here for Terms of Use

Preface xii

understand There’s also a discussion of the Interest Map©, acrucial preparation tool introduced in Chapter 5 and used insubsequent chapters The two final chapters bring it all together,with Chapter 11 focusing on the negotiation process and

Chapter 12 summarizing what I call the Seven Pillars OfNegotiational Wisdom©

You’ll find that Negotiating Skills for Managers does not

pro-mulgate a series of hard-and-fast rights and wrongs Effectivenegotiators know that each negotiation has unique characteris-tics and being flexible can make the difference between effec-tiveness and wasted time This book emphasizes that youshould not view negotiation as a competitive exercise, and thatthe best way to conduct a successful negotiation is for all par-ties to be satisfied when you conclude the agreement

Special Features

The idea behind the books in the Briefcase Books series is togive you practical information written in a friendly person-to-person style The chapters are short, deal with tactical issues,and include lots of examples They also feature numerousboxed sidebars designed to give you different types of specificinformation Here’s a description of these sidebars and howthey’re used in this book

These boxes are designed to give you tips and tacticsthat will help you more effectively implement themethods described in this book

These boxes provide warnings for where things could

go wrong when you’re trying to prepare for and take a negotiation

under-These boxes highlight insider tips for taking advantage

of the practices you’ll learn about in this book

Preface xiii

Acknowledgments

While any mistakes in Negotiating Skills for Managers are my

responsibility, I have been lucky enough to have received helpand support from my wife, Andréa F F MacLeod, and my col-league Marsha M Vaughan John Woods, of CWL PublishingEnterprises, made the whole project possible, from his innova-tive formatting of the Briefcase Books series to his pointed edi-torial comments—and his effective prodding Joan Patersonserved as editor and had a lot to do with finalizing the manu-script that has become this book In addition, Nancy Woods andBob Magnan, also of CWL, had a hand in creating the finalproduct you have before you

This book also owes a considerable debt to ideas from leagues within The Negotiation Skills Company, Inc.: AnthonyAdamopoulos, Esq., Mary Ellen Shea, Ron Scruggs, DeniseDelaney, Curtis Johnson, and Paul Cohen, Esq Of the manyothers who have contributed to my understanding, MarshallDerby, Felicity Barber, Ricardo Altimera-Vega, and the late

col-Every subject has its special jargon and terms.Theseboxes provide definitions of these concepts

It’s always important to have examples of what othershave done,either well or not so well Find such stories

in these boxes

This identifies boxes where you’ll find specific dures you can follow to take advantage of the book’sadvice

proce-How can you make sure you won’t make a mistakewhen negotiating? You can’t,but these boxes will giveyou practical advice on how to minimize the possibility

Preface xiv

Anthony Hyde stand out My daughters Julia and Abigail havekept me on my negotiating toes all their life

Fundamentally, however, my most significant negotiationlearning took place at the knee of my father, Martin E Cohen Iowe it all to him

For further information and advice about negotiation, youare invited to visit the Web site of The Negotiation Skills

Company, Inc.: www.negotiationskills.com.

About the Author

Steven P Cohen is the founder and head of The NegotiationSkills Company, Inc., a consulting and training organization thathas presented negotiation skills training to people from morethan 40 countries His clients come from business sectors asdiverse as healthcare and the manufacture of nuclear weapons.The Negotiation Skills Company’s mission statement is simple:

to advance the cause of civility in negotiation to the benefit ofall participants

The breadth of Steve Cohen’s experience, negotiating in thepublic and private sectors and working with people from all overthe world, has given him a unique perspective on the do’s and

don’ts of negotiation In Negotiating Skills for Managers, Steve

offers his negotiation experience, communication skills, andteaching techniques to a broader audience

His company’s award-winning Web site,

www.negotiation-skills.com, has subscribers from over 70 countries, on every

continent except Antarctica You can contact Steve attnsc@negotiationskills.com

About the Author xv

Copyright 2002 by The McGraw-Hill Companies, Inc Click Here for Terms of Use

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Negotiating Skills for Managers

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Negotiating is not a competitive sport.

Paul Murphy is on an extended business trip and getting prettysick of staying in hotel rooms that all look alike even thoughthey’re in different cities His company has a relationship withthe hotel chain where he’s been staying, but the business deal isfor the least expensive room How can he improve the accom-modations when he checks into the next hotel?

Sally Marks manages a team in the design department of anautomobile manufacturing company A directive has arrivedfrom the marketing department indicating the top priority forthe next design cycle is to develop a vehicle that weighs nomore than a ton, has space for five passengers, can cruise at 75miles per hour for extended periods, complies with increasinglystrict exhaust emission standards, and can fit into small urbanparking spaces The marketing department also wants manu-facturing costs held substantially below any previous cars hergroup has designed—yet use high-tech materials

1

Competitive Versus Collaborative

Decision Making

1

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Sally and her team’s delivery on this combination of tions will require the cooperation of members of teams frommanufacturing, purchasing, and testing segments of the compa-

specifica-ny In addition, Sally has to cope with regulatory issues as well

as external suppliers in order to accomplish her task

When Fred and Jane Yancey and their two kids moved into theirnew home, it needed a lot of fixing up as well as an addition.Some of their neighbors have been very friendly—as well asunderstanding about the noise of construction machinery—butothers have complained to the local building inspectors withouttalking first to Fred or Jane The Yanceys are the first African-American family to move into the neighborhood They wonderwhether the complaints to the building inspector relate to theconstruction itself or whether other factors are involved

As chief of her firm’s team selling processors to a public sectorutility company in China, Angela MacKenzie has to contendwith competitors from the U.S and other countries But she iseven more challenged by the process of figuring out how muchprogress she and her colleagues are making convincing the rep-resentatives of the Chinese utility company of the value of theprocessors they are selling

Every day, all over the world, people find themselves in ilar situations They want to accomplish a particular task, clarify

sim-a relsim-ationship, or simply find resources to sim-achieve more thsim-anthey might by making a deal with someone else They need tonegotiate to get from their starting point to their objective

Negotiating Skills for Managers is designed to help its

read-ers undread-erstand and utilize a process that is fundamental to ness—and the rest of life

busi-What Is Negotiation?

When people want to do something together—buy or sell anitem, make a business deal, decide where to go for dinner—they need to use some sort of mechanism for reaching an

Negotiating Skills for Managers 2