Monday, May 11, 2015
Keep Time and Emotion from Killing a Negotiation
Anthony K. Tjan
JULY 21, 2014
Time and emotion — these are the two things most often wasted during a negotiation. We simply spend too much time on items that don’t really matter, because we let our emotions override any semblance of logic. It is a natural human response to act negatively, reactively, and emotionally to any negotiation points that are counter to one’s pre-disposed positions. It is also poor negotiation practice.
The mere fact of having a position lies at the root of why we get caught up in the drama of a negotiation, rather than focusing on the plotline or ending (i.e. goal) toward which we are striving. In business school, students are sometimes taught the difference between position-based versus interest-based negotiation. When you focus on the differences between your positions rather than the commonality of your interests, little progress can be made. There is nothing necessarily wrong with having a going-in negotiating position, and we can’t really avoid having pre-existing assumptions and desires. But when we don’t get what we want and frustration ensues, what can we do? The key is to understand five areas that can both help move a negotiation forward and in doing so usually advance us to where we want to be:
Understand the common goal and common interest. Make sure you fully digest and articulate any areas of common interest. Is it simply to maximize value for the company or are there instances, for example, where the greater common goal may be to get a deal done to sell a business rather than optimize its value by waiting? One of the best ways of making this happen is to simply to have both sides articulate their goals and interests in writing and share them to ensure clarity and alignment.
Understand the underlying and ancillary motivations of the other side. Oftentimes there are conflating or conflicting interests at hand. As much as possible, you need to understand the total “motivational picture” of your counterparty. For example, at our firm we have been in negotiations where we ultimately learned that what appeared to be irrational negotiating by the other side was driven by how they were compensated for the deal. Where possible, uncover if those negotiating for other side have any personal remuneration at stake, and how that changes with different outcomes – it will drive behavior.
Be transparent and explain the why of your points. It can be surprising how seldom people explain the why of a position for which they are fighting. Take even the previous example on personal deal compensation. If something is going to impact you personally, it may be better for you to disclose it — at least the other party will understand. So often it is taken for granted that the other side fully appreciates why you are asking for a term or condition when they actually have little clue. Before you can do this, you also need to make sure you fully understand your own why for each of your points!
Calculate the materiality of each point. Much of the time sink of negotiations is unfortunately spent on elements that don’t really matter — things that will not materialize, or if they do won’t have a major impact. Legal and tax counsel is always critical and highly valuable, but can sometimes also be the tail that wags the dog. Once I was leading an important negotiation where we debated at length with legal and tax experts over “edge scenarios” that might negatively impact us. This went on for two days until I took a step back to actually calculate what our largest dollar exposure could be. It turned out to be less than the cost of of preparing a structure to avoid it and likely less than the professional and legal fees we had already accumulated thinking about it! Do the math and calculate how material a point is — then determine if it is really worth fighting for in the bigger picture.
Look for points that have an asymmetry in value. Once you understand the math of a negotiation, look where there may be asymmetry. There are always points where there is a fundamental difference in how each side perceives the value. To be effective in negotiation you need to comprehend the balance of trade on every key point. Basically, look where your currency is worth more. Consider, for example, the purchase of a house. If the eventual price is the most important currency for you, then see where there may be a different lever (a different “currency”) to trade for your desired lower price. Sometimes a seller may care more about the timing or certainty of a closing than the price. Taking out a financial contingency, or letting the close happen on whatever time frame the seller wants, may gain you disproportionate benefit in the price. Remember the bigger context and have the empathy and rationality to think about it from the other side.
Following the five rules above will eliminate a large amount of futile negotiation on things that don’t matter, or things that matter much more for one side than the other. The goal of any negotiation is to reach agreement, but unfortunately the journey there is usually painful. We find ourselves “stuck” on terms or conditions we feel are must-haves, and lose perspective as to why we want the things we think we want. It does not need to be like that. Focus on the two or three scenarios that really matter for each side and have reasonable probability of being realized, as opposed to every edge scenario. In the end it probably won’t be a contract that saves you. It will be the quality of your relationship, your rationality, and, yes, your ability to do effective subsequent negotiation (definitive documents are rarely definitive). The reality is that you are more likely to get a fair deal — and even get the opportunity, from time to time, to have your cake and eat it too — if you stay disciplined on the underlying architecture and rationality of each negotiation point. Good luck, and happy negotiating.
Sunday, May 10, 2015
First, a range shapes expectations about an acceptable counteroffer. When there’s a number explicitly framed as a floor, people assume you’re unlikely to take something below it. They don’t necessarily make the same assumption with a single number.
Second, there’s the politeness effect. People are much less likely to go way below the bottom number of a range because they feel like it would be insulting. Similar qualms aren’t nearly as strong with single-point offers. And offering a range is generally seen as a sign of flexibility, even when the actual numbers are relatively high.
The researchers conducted a series of five experiments. In each case, a bolstering range led to better counteroffers, higher estimates of the lowest price someone would take, and a resolution—whereas starting with a single extremely high number had the negative effect of simply shutting down more negotiations or having them end in an impasse.
They also found that a bracketing range, where you put a floor below the number you really want and a ceiling above, doesn’t work nearly as well.
An experiment pitting two people negotiating over the sale of a used car found that a bolstering range led to an average counteroffer nearly $200 dollars higher than a single-point offer, and a higher-end settlement ($6,985 versus $6,776). Bolstering ranges also outperformed bracket ranges and extremely high, single-point offers.
But the bigger payday isn’t the only benefit of offering a bolstering range. People sometimes forget that it’s not all about money, that the relationship with a superior afterwards matters as well.
Across the experiments, people offering the higher range weren’t seen as any more aggressive or obnoxious than those who offered a single point, even though the high end of their range was a much larger amount. They were also seen as more flexible and confident.
So if you’re not making the first offer in a negotiation, consider doing so (the research on how that anchors negotiations is well established), and once you do, make it a bolstering range.
Psych study abstract re. 1st offers:
J Pers Soc Psychol. 2001 Oct;81(4):657-69.
First offers as anchors: the role of perspective-taking and negotiator focus.
Galinsky AD1, Mussweiler T.
Three experiments explored the role of first offers, perspective-taking, and negotiator self-focus in determining distributive outcomes in a negotiation. Across 3 experiments, whichever party, the buyer or seller, made the 1st offer obtained a better outcome. In addition, 1st offers were a strong predictor of final settlement prices. However, when the negotiator who did not make a 1st offer focused on information that was inconsistent with the implications of the opponent's 1st offer, the advantageous effect of making the 1st offer was eliminated: Thinking about one's opponent's alternatives to the negotiation (Experiment 1), one's opponent's reservation price (Experiment 2), or one's own target (Experiment 3) all negated the effect of 1st offers on outcomes. These effects occurred for both face-to-face negotiations and E-mail negotiations. Implications for negotiations and perspective-taking are discussed.
I think that in the workplace, that attitude has a hugely positive effect, whether it’s in how we relate to our peers or how we are as a leader, or how we relate to clients and customers. A positive disposition toward another person creates the kind of resonance that builds trust and loyalty and makes interactions harmonious. And the opposite of that — when you do nothing to show that you care — creates distrust, disharmony, and causes huge dysfunction at home and in business.
Monday, February 23, 2015
Monday, January 26, 2015
Act as if you are your boss' intern (ie. work you ass off to make his life easy, and learn everything you can). Always. Put yourself in that position, learn and grow like that.
Whether you are actually an intern, or a General Manager reporting to a board or a CEO.
Also: modesty and ambition.
Thursday, November 6, 2014
So simple yet so powerful. I've been living by these rules for a while now and... it's basically a new (more enjoyable) life.
1. They make a work to-do list the day before.
2. They get a full night's rest.
3. They avoid hitting snooze.
4. They exercise.
5. They practice a morning ritual.
6. They eat breakfast.
7. They arrive at the office on time.
8. They check in with their boss and/or employees.
9. They tackle the big projects first.
10. They avoid morning meetings.
11. They allot time for following up on messages.
12. They take a mid-morning break.
Thursday, June 19, 2014
by Judith White
The first thing negotiation experts teach is to “separate the people from the problem.” The vast majority of the time, this is sound advice. But as a psychologist, I know that approximately 1% of the time, people are the problem. And in such cases, normal negotiation strategies just don’t work. Here’s how to recognize that rare situation and what to do about it.
First, determine what sort of person or people you’re trying to negotiate with (i.e. your counterparty).
Here are two types of counterparties you should negotiate with, even when it seems difficult.
1. Emotional counterparties. Emotion in and of itself shouldn’t preclude you from reaching a successful agreement – it’s natural for people to feel strong emotion in a conflict situation. Once the conflict is identified and addressed, and parties are allowed to vent, emotion usually dissipates. Keep in mind that some people (and cultures) simply express more feelings than others. Also, some negotiators use emotion strategically to influence the other party. Recognize the emotion, but don’t let it stop you from negotiating.
2. Unreasonable counterparties. We often think people are being unreasonable when they don’t agree with our logic and evidence. But more often, people who disagree with us are simply seeing different problems, and even different sets of facts, than we are. Even if you think the other party is being unreasonable, it’s still possible to bridge the gap and close a deal.
But here are two types of counterparties you should never negotiate with:
1. A counterparty who alternates between conciliation and provocation. People are usually more provocative, or difficult to deal with, at the outset of a negotiation. Then they become more conciliatory as the outlines of a settlement develop. Beware the person who is conciliatory at first, then becomes provocative — and then when you’re about to walk away becomes conciliatory again, and then provocative again. This behavior suggests that he will never be satisfied, nor finished, with the negotiation. What he wants is not a negotiated settlement, but control — over the process and over you. The time and energy it will take to continue will eventually outweigh any potential gains you could achieve through negotiation.
2. A counterparty who persists in seeing people in terms of absolute good and evil. Negotiation is a method for resolving conflicts of interest, not for adjudicating who is at fault. Most people, once they understand this, are willing to exchange concessions in order to satisfy their underlying interests. Watch out for someone who describes people as absolutely good and blameless, or as absolutely evil and responsible. This behavior suggests that he or she lacks the mindset necessary for negotiation. What this person wants is for evil people to be held accountable and punished, and because you are in a conflict with her, you may fall into that category. Walking away would deprive her of the opportunity to punish you. Therefore, if you negotiate, you can expect the process to be painful. You can also expect not to receive meaningful concessions, because this type of person does not believe you deserve them.
Even the best negotiators cannot reach a win-win outcome with people like this, as their underlying interests can’t be addressed with a settlement. The best negotiation advice and practice will not help you in these rare situations. Instead, here are four steps you should take:
Be realistic. This person is not going to change. There is no negotiation strategy you can use to make him or her change. Your goal should be to extricate yourself with the most gains (or least losses) possible. Let’s say you have a tenant behind on the rent. It’s worth negotiating with an emotional, even unreasonable tenant. Deep down, her primary interest is to keep the apartment. She can ultimately be trusted to act in her own interest. On the other hand, it’s not worth negotiating with an alternatively conciliatory, then provocative tenant who blames his neighbors and the property manager for his situation. Deep down, his primary interest is not the apartment; it’s his need to control the people around him.
Stop making concessions. The purpose of concessions is to reach an agreement, but since you’ll never do that (no matter how much you’re willing to give up!), don’t waste your time. That doesn’t mean you won’t incur significant losses. Your goal should be to minimize those losses. For example, if someone on your team fits the description of a no-win negotiator, you may already have made many concessions and picked up her share of the work, while she has yet to follow through on her promises to you. Enough! Do whatever is necessary to get the project finished, but stop making offers to her.
Reduce your interdependence. Take whatever steps you can to reduce your interdependence with this person. You don’t want to depend on him for anything, or owe him anything, going forward. This means, for example, that a lump sum payment for services is better than a payment plan. Working independently on separate pieces of a project is better than working together on the whole thing. If you must continue to work with this person, remember that even very immature children can still play nicely side-by-side if each is given his or her own set of toys.
Make it public, hold them accountable, and use a third party if you can. Avoid private discussions, if possible. Get everything out in the open and put everything in writing. Try to bump accountability to the next level, so someone higher up has to take action if the other party does not follow through on his or her obligations. If you can utilize a third party, like a mediator, arbitrator, or judge, then do so.
Remember, 99 times out of 100, your counterpart has rational underlying interests that you will eventually discover with patience and the right strategies. The secret to negotiating, after all, is to find out what the other party wants and how much it’s worth to him. In those rare cases when your counterparty wants to use the negotiation to control or punish you, however, it doesn’t matter how much it’s worth to him. It’s worth more to you to be free of him and able to get on with your business. Isn’t it?
Monday, December 23, 2013
The most interesting thing about it is that in my past experiences, I have sadly gone through counter examples to nearly all of these points. This further reinforces my conviction that this document is spot on.
Anyway, highly recommended reading. On my end, I will keep this presentation in my toolkit.
Sunday, December 22, 2013
The 5 concepts the author brings up are as follows and bolded. My comments follow.
1. Banish empty praise.
And banish empty compliments as well (which is the actual definition of tough love of course)
2. Set expectations high.
This brings us back to the "aim high" principle I am fond of. "Shoot for the moon, if you miss you'll end up with the stars".
3. Articulate clear goals – and goal posts along the way.
Yes, yes, yes. Setting attainable intermediary goal does wonders.
4. Failure isn’t defeat.
This is where the U.S. have an edge on so many other cultures. Grit, resolve in the face of failure.
5. Say thank you.
Her supervisor is spread so thin that he is putting out proverbial fires all day. “He has the time to tell us what we did wrong,” she said. “He doesn’t have time to tell us when we do something well.”
N°5 is a big one, however let me improve on it. Saying "thank you" in a management setting is actually not that great because it puts us in a "selfish" position. Thank you entails somebody did something for US, because WE asked for it.
Therefore let's replace "thank you" by "congratulations" / "good job" and similar expressions... This entails somebody did not do something because he was asked to do it, but that he did something because it had to be done and because it was for the greater good.
When I think back to best managers I ever had or have been in contact with, they all strictly applied this concept. It wasn't about them, it was about the task at hand.
Last but not least:
- tough love can only work when the manager has actual expertise and added value to bring to his team and collaborators.
- let's not forget the love part. Sounds very hippy, but without the love part, we would just be tyrants.
Friday, December 20, 2013
When You Criticize Someone, You Make It Harder for that Person to Change
by Daniel Goleman
“If everything worked out perfectly in your life, what would you be doing in ten years?”
Such a question opens us up to fresh possibilities, to reflect on what matters most to us, and even what deep values might guide us through life. This approach gives managers a tool for coaching their teams to get better results.
Contrast that mind-opening query with a conversation about what’s wrong with you, and what you need to do to fix yourself. That line of thinking shuts us down, puts us on the defensive, and narrows our possibilities to rescue operations. Managers should keep this in mind, particularly during performance reviews.
That question about your perfect life in ten years comes from Richard Boyatzis, a professor at the Weatherhead School of Management at Case Western, and an old friend and colleague. His recent research on the best approach to coaching has used brain imaging to analyze how coaching affects the brain differently when you focus on dreams instead of failings. These findings have great implications for how to best help someone – or yourself — improve.
As I quoted Boyatzis in my book Focus: The Hidden Driver of Excellence, “Talking about your positive goals and dreams activates brain centers that open you up to new possibilities. But if you change the conversation to what you should do to fix yourself, it closes you down.”
Working with colleagues at Cleveland Clinic, Boyatzis put people through a positive, dreams-first interview or a negative, problems-focused one while their brains were scanned. The positive interview elicited activity in reward circuitry and areas for good memories and upbeat feelings – a brain signature of the open hopefulness we feel when embracing an inspiring vision. In contrast, the negative interview activated brain circuitry for anxiety, the same areas that activate when we feel sad and worried. In the latter state, the anxiety and defensiveness elicited make it more difficult to focus on the possibilities for improvement.
Of course a manager needs to help people face what’s not working. As Boyatzis put it, “You need the negative focus to survive, but a positive one to thrive. You need both, but in the right ratio.”
Barbara Frederickson, a psychologist at the University of North Carolina, finds that positive feelings enlarge the aperture of our attention to embrace a wider range of possibility and to motivate us to work toward a better future. She finds that people who do well in their private and work lives alike generally have a higher ratio of positive states to negative ones during their day.
Being in the positive mood range activates brain circuits that remind us of how good we will feel when we reach a goal, according to research by Richard Davidson at the University of Wisconsin. That’s the circuit that keeps us working away at the small steps we need to take toward a larger goal – whether finishing a major project or a change in our own behavior.
This brain circuitry — vital for working toward our goals — runs on dopamine, a feel-good brain chemical, along with endogenous opioids like endorphins, the “runner’s high” neurotransmitters. This chemical brew fuels drive and tags it with satisfying dollops of pleasure. That may be why maintaining a positive view pays off for performance, as Frederickson’s research has found: it energizes us, lets us focus better, be more flexible in our thinking, and connect effectively with the people around us.
Managers and coaches can keep this in mind. Boyatzis makes the case that understanding a person’s dreams can open a conversation about what it would take to fulfill those hopes. And that can lead to concrete learning goals. Often those goals are improving capacities like conscientiousness, listening, collaboration and the like – which can yield better performance.
Boyatzis tells of an executive MBA student, a manager who wanted to build better work relationships. The manager had an engineering background; when it came to getting a task done, “all he saw was the task,” says Boyatzis, “not the people he worked with to get it done.”
His learning curve involved tuning in to how other people felt. For a low-risk chance to practice this he took on coaching his son’s soccer team – and making the effort to notice how team members felt as he coached them. That became a habit he took back to work.
By starting with the positive goal he wanted to achieve – richer work relationships – rather than framing it as a personal flaw he wanted to overcome, he made achieving his goal that much easier.
Bottom line: don’t focus on only on weaknesses, but on hopes and dreams. It’s what our brains are wired to do.
Friday, July 27, 2012
It's strange how through friends, collegues, books, movies, TV... you can hear about a concept your whole life, perfectly understand it, find it rational and yet you still do not apply it up until when you have been abused over and over so much that you reach a breaking point.
Why? Why? Why?
Here's the first concept I will now live by. Always ask yourself why? Why, why, why?
For those of you that play Poker, I'll use this analogy: a good player will always ask himself why is his opponent betting so small on the flop, why is he checking the turn, why is he betting so small on the river, why did he take 1 minute to make up his mind?
Hence in life, never, ever, ever, take anything at face value when interracting with another human being, whether they are friends, family and especially if they are collegues / professional relations.
You get a phone call from an ex collegue out of the blue? Even if it's only small talk, ask yourself, why? You get invited to lunch by someone you havn't talked to in years? Why? Someone is keeping in regular contact with you even though you have little in commun, why? A friend you havn't talked to in months invites you to an event out of the blue? Why? A collegue who used to be a political threat to you is now kind and helpful? Why?
Never ever take anything at face value, always dig deeper to figure out what the real motives are. Everyone has an agenda, no matter how cliché this sounds.
It is a sad state of affairs when you need to question the motives of not only colleagues but friends and loved ones, but hey... maybe after a while it becomes second nature and makes it easier.
I now understand that true trust can only be built by asking "why" repeatedly and repeatedly getting a satisfying answer. How many why's does it take will depend on your level of paranoia, and I just upped mine by 300%.
Keep your cards close to the chest / never reveal information you do not have to
Here's a very simple one, that I have not lived by up until today.
Let's start with a poker analogy again: you just won a pot before showdown, do you show your hand? No.
Never ever ever disclose information if you do not have to or if you do not have a specific reason to do so.
Do not think for one second that disclosing information to someone will create / reinforce a potential trusting/friendship relationship between the both of you. Any cynical minded person, or worst, any conscious manipulator, will take that information in and see it as a free win. You are the sucker in this case. A manipulator may even shoot back some benign information to make you feel as if you are both exchanging on the same level, while he's actually sucking you dry.
The core of this concept is: being an open, direct and straightforward guy opens you up to manipulation.
Why should I reveal this information?
What can I gain from it?
What risks am I exposing myself to?
These are questions that I need to always be asking myself.
Both of these concepts basically boil down to trust, and what I only now discovered is that trust is not given then taken away if broken, trust is built slowly and surely from the grounds up... and even then it should be considered as fragile.
Wednesday, February 1, 2012
Saturday, September 17, 2011
- Jules Claretie (translated from French by yours truly)
The original quote, in French, is the following:
"Tout homme qui dirige, qui fait quelque chose, a contre lui ceux qui voudraient faire la même chose, ceux qui font précisément le contraire, et surtout la grande armée des gens beaucoup plus sévères, qui ne font rien."
- Jules Claretie
Tuesday, September 6, 2011
By KELLY K. SPORS
Thinking about starting a business? Make sure you're cut out for it first.
In this bleak economy, lots of people are contemplating striking out on their own -- whether they're frustrated job seekers or people who are already employed but getting antsy about their company's prospects.
For some people, entrepreneurship is the best option around, a way to build wealth and do something you love without answering to somebody else. But it's also a huge financial gamble -- and some people, unfortunately, will discover too late that it's not the right fit for them.
Building a successful business can take years filled with setbacks, long hours and little reward. Certain personalities thrive on the challenge and embrace the sacrifices. But it can be a hard switch for someone who has spent years sitting in a cubicle with a steady paycheck.
So, how can you figure out whether you're suited for self-employment? We spoke with entrepreneurship researchers, academics and psychologists to come up with a list of questions you should ask yourself before making a big leap. Entrepreneurs, of course, come from all sorts of backgrounds, with all sorts of personalities. But our experts agreed that certain attributes improve the odds people will be successful and happy about their decision.
Keep in mind that any self-analysis is only as useful as the truthfulness of the answers -- and most people aren't exactly the best judges of their own character. So, you might enlist a friend's help.
Here, then, are 10 questions to ask to see whether you're up for the challenge of entrepreneurship.
Click here for the full article.
What was recommended to me as the absolute essential reading on the topic of starting a business:
The Successful Business Plan, by Rhonda Abrams.
Forbes calls The Successful Business Plan one of the best books for small businesses.
Wednesday, August 31, 2011
Yet another original point of view on a work related myth by HBR, backed by psychologogy and data.
Those with harmonious passion engage in their work because it brings them intrinsic joy. They have a sense of control of their work, and their work is in harmony with their other activities in life. At the same time, they know when to disengage, and are better at turning off the work switch when they wish to enjoy other activities or when further engagement becomes too risky. As a result, their work doesn't conflict with the other areas of their lives.
In contrast, those with obsessive passion display higher levels of negative affect over time and display more maladaptive behaviors. They report higher levels of negative affect during and after activity engagement; they can hardly ever stop thinking about their work, and they get quite frustrated when they are prevented from working. They also persist when it's risky to do so (just like a pathological gambler). A reason for this is that their work forms a very large part of their self-concept. To protect their selves, they display more self-protective behaviors, such as aggression, especially when their identity is threatened.
Wednesday, August 24, 2011
Monday, July 4, 2011
I'll take away three main points from it:
- "how many mediocre people would it take to collectively beat Kasparov in a chess match?"
- Mediocre minds can also destroy the value or contribution of a great mind. No matter how good Kasparov is at chess, he would not do well playing doubles with a mediocre chess player against Bobby Fisher alone.
- Leaders need to make tough decisions all the time. One decision is easy: find the best people and empower them to do great things.
This only reinforces my belief that a management style that recognizes indivudual contribution and results is the way to go.
Wednesday, May 25, 2011
I'm posting this as food for thoughts only. If I overcome my bloglazyness spell, I'll be finalizing this... shortly... Yeah.
Negotiating vs bargaining
This blog post will focus on deal negociations that involve multiple points of various importance to each parties (such as a series of contractual points). It does not cover "haggling" or "bargaining", which in my personal opinion implies a discussion around one or two points at the most(such as the price of the souvenir you want to buy during your exotic vacation), where either the stronger willed man wins, or where if both men haggle as much they end up both being unsatisfied.
My key concepts
The bottom line / The make or break
Clearly identify it. Have it confirmed by your management, so you know where you stand (this ensures you're covered).
Negotiating is chess
Define the points you can concede, the "pawns" that you can "sacrifice". Define the "make or breaks", the kings and queens that you cannot let go of.
The action plan and setting priorities
How and when will you bring up each points to be discussed. Hierarchize them. Which will be presented first, and last? And why? What are the interconections between each points? Will discussing one bring up another? Will conceding one bring up another? Will obtaining what you want on one open up an other attack path for the opposing party?
Empathy and 3 moves ahead
Chess again. Force yourself, before the actual meeting, to put yourself in the other party's shoes. This requires effort do be done correctly, especially when thinking several moves ahead.
Understanding that negotiations are not set in a limited timeframe, no matter what is said or what the environment tends to lead you to believe (a business trip in a far away country to discuss specific points for example). Do not be time's hostage. Understand that negotiating is all about setting milestones.
If during one meeting I express discontent regarding a specific point, but do not discuss it further, I've just set a milestone. It'll be easier for me to get back to it next time.
Choosing your battles
See priorities and sacrificing pawns.
The fall back position
What is your fallback position if you need to retreat? Key concept in the chess playing: think of the most probably opposition(s) and your fallback position.
- we want 100% exclusivity.
- not possible
- ok we want 100% exclusivity on sector B (where 100% of sector B is your actual priority).
It's often best to "let them come"
Assess when this is the case, and when it isn't.
Empathy, during the meet
Empathy : have the other party understand you understand his position. Have him believe it. Too many negociations are straightforward powers truggles, where ego quickly comes in. Aknowledging the other's opinion opens so many doors. We are no longer in an ego battle, we are now back in a rational discussion where each opinion is rationally assessed.
Negotiation... is 90% of preparation.
When we are at the tables, negotiating... either we are ready or we are not. If something comes up to which we do not have an answer, we do not reply. We will get back to them later.
Negotiation... is NOT a fight.
Never deal staggering blows (to deals or egos). Never ever deliver a blow that will leave your counterpart reeling, wincing...
If ever you have hard hitting facts or hard hitting comments to deliver, they need to be prepared and they need to be smoothly transitionned into.
Sure, you may feel like the king of the world when you're the tables bulldozer... but this type of attidude will always come back and bite you, short or long term. Hurt someone's ego and they will probably never forget it.
Take your time when replying. There is no rush.
When formulating an answer, take your time, breath, understand, then ...spend 10 to 15 seconds acknoweldging your counterpart's position. Convince him you understand his point of view.
The emotional aspect
The emotional aspect of a negotiation is absolutely key. No matter how the discussions went, all parties leaving the room must be happy and in good spirits. So even if you just put an end to a negotiation with an overpowered, overzealous and full of bad intention corporation who trie to have their laywers make you sign a deal with the devil, you need to show the other party sympathy and respect. Make them feel like there was no harm done, and leave the door open to future discussions.
The diving board analogy, applied to negociation
- FIRST climb the ladder ,
- THEN move ahead on the board,
- THEN dive
- and FINALLY, feel the water on your fingertips...
The importance of roles in (group) negociation
Make sure you predefine what your mask will be, and stick to it. Aknowledge there is some is some acting to negotiating. It's part of the game, especially when hierarchy is involved.
Make sure your body language (and eye language) do not convey agressivity, but open-mindness and cool laid back professionalism.
Negociating is like poker, you need to have a mask and make sure you and your emotions cannot be read.
Monday, May 9, 2011
In the mist of all this, I've been wondering what I can attribute this success to, as I sometimes have a hard time cleary identifying my "success factors" (beyond the great management and training I received in my early years).
Obviously there is a bit of luck involved (see my previous post), but it's not like I can tell my CEO "send me to negociate that deal, I'll do good 'cause I'm a lucky guy...".
So this morning driving to work I reflected on what could be my "non-measurable" success factors when contacting a potential partner, negociating a potential deal and following through in building a strong relationship. Well, I've identified the following 4, that I truly believe make the difference in early stages of business building.
Dress perfectly. Be on time. Follow up and follow through. Do what you say. De totally dependable.
Be transparent, clearly define your objectives, your motives. Be straightforward. People who know you are honnest and have integrity will be more at ease when working with you.
Only if you actually have it (if not, dont fake it, you'll loose their trust).
Conveying expertise will reassure your potential partner. If you know what you're talking about, and most importantly, if you actually bring added value for your partner, this is a huge step in securing a good partnership.
If your potential partner is reassured about the fact you are easy to work with (not to be mistaken with someone who can be walked on all over) and always keep your cool when analysing tough situations, well he'll be more inclined to work with you than your competitor who gets red in the face at each contract clause negociation...
So there you have it: conveying professionalism, trust, expertise and serenity. Ingredients for success in my opinion.
Tuesday, February 15, 2011
Sunday, November 21, 2010
Even more interesting according to me, is this page: Sample business plans. Here you will find quite a few Business Plans from LSE students as well as from students of the University of Montana and Cornell.
Higly educational and entertaining in my opinion.
Tuesday, October 19, 2010
Well did I get it? No. And yes it sucks. But lets try to look at the bright side: within 6 months, I've been taught 2 or 3 MAJOR life lessons. They all hurt, badly, but hey I'm 30, so I'll recover.
Let me very briefly outline them, and maybe I'll post some detailed thoughts on each of them at a later date. Then again, maybe not.
Lesson 1: never, ever, ever trust anybody in the corporate and business world. Every one has an agenda. Of course, a fun part about business is meeting and working with great people with whom you travel, eat well, party, and of course build good business... This obviously builds strong links, which can blurr the lines. Just never forget, no matter how much fun you have and no matter how much great business you build... the simple fact is that your interests vary and everyone has different agendas. Never loose sight of that or you will get burned.
Lesson 2: the corporate world is not a meritocracy. See previous posts. Definitly not.
Lesson 3: power is TAKEN, not given. Do NOT expect to be given anyting, and never rely on "the good judgement" of anyone. TAKE what you want.
I'll end this short entry by copy/pasting this short blog post from Jeffrey Pfeffer that more adequatly sums up my current dark thoughts. The original can be found here.
Take Care of Yourself First
9:31 AM Wednesday July 14, 2010
by Jeffrey Pfeffer
Drafts of my new book on power (and the HBR article drawn from it) provoke strong reactions. One reason is that I show little concern for any aspect of organizational effectiveness. In stark contrast to virtually all of the management literature, I focus on ensuring that people build the insights and skills that will ensure their organizational survival and success.
My perspective is that organizations — which have laid off millions, which have workplaces filled with disengaged and dissatisfied employees, and which regularly, even in partnerships, cast people aside — can (and do) take care of themselves. My point of view is quite consistent with the popular idea of employees as free agents and the evidence on the ever-weakening bonds between people and their employers.
This is not to say that by helping people help themselves I am in any away against organizational effectiveness. A manager's success and the success of her employer are positively related. But let's be clear — this relationship is often small and sometimes absent. In the world of financial services, Stan O'Neal of Merrill Lynch and Frederick Raines of Fannie Mae were just two of many executives who oversaw the downfall of their companies while walking away with many millions of dollars. At lower levels, research shows that salary and job progression depend on educational credentials, years of experience, social similarity, and political skill, not just performance (either individual or organizational). It's not enough to do good work. People who are not politically skilled will be outmaneuvered.
This basic fact of organizational life hit me again just the other day as a woman who had effectively run one of the centers at Stanford Business School for more than a decade sat in my office on the verge of tears. As part of a staff survey, one of her recently-hired subordinates had sabotaged her by questioning her efforts and commitment. The center directors she had served so well — and who, by the way, up until that point had consistently praised her — chose not to get involved. Now she is on her way out, good work, helpful demeanor, and center success notwithstanding.
Should my friend have been caught by surprise? Or should she have been more aware of what her "colleague" might be up to, and how she might protect herself? Focused on getting the work done and confident in its quality, she learned, as many others have, that organizational life is not always fair.
The first and most important message in my course on the "Paths to Power" (pdf) and in the writing I do on that subject is that you need to take care of yourself — and do so by whatever means necessary. Don't rely on the kindness of strangers, much less the unselfish support of colleagues or the good auspices of your employer. You have to fend for yourself, or like my friend and soon-to-be former coworker, you may find yourself in a bad situation.
Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, where he has taught since 1979. His forthcoming book from HarperBusiness is Power: Why Some People Have It and Others Don't.
Monday, August 30, 2010
"It's crazy to take little in between jobs just because they look good on your resume. That's like saving sex for your old age. Do what you love and work for whom you admire the most, and you've given yourself the best chance in life you can."
"I asked him what he wanted to do for his career, and he replied that he wanted to go into a particular field, but thought he should work for McKinsey for a few years first to add to his resume. To me that's like saving sex for your old age. It makes no sense."
At first I agreed wholeheartedly, however after a bit of consideration, I realised this advice may ignore long term aspects of a career decision. I'm still kind of torn on this one.
Thursday, August 26, 2010
you have used the funds of the bank to speculate in the breadstuffs of
the country. When you won, you divided the profits amongst you, and
when you lost, you charged it to the Bank. ... You are a den of vipers
and thieves.—Andrew Jackson, 1834, on closing the Second Bank of the
Saturday, August 21, 2010
It's like everyone start's dissapearing at 45... And it's freaking me out.
I'm still too young to find out what happens to the seniors (maybe that's what that locked room in the basement near the furnace is for?), and I can only imagine dreadful tales of being layed off because they're too expensive or don't fit the corporate image or whatever... and then having these "old" (HUGE quotes here) spending the little cash they were able to save up in a company that has 90% chance of failing...
Shit. Any insight here is welcomed.
Tuesday, August 17, 2010
However I will add my two cents to this huge pile of pennies by sharing the good advice I received in the past as well as my preparation strategies. What follows recaps all the steps I take before asking for a raise. I've been roughly using this method for 7 years now and for 8 or 9 negotiations (I'm loosing count), and with good success.
Disclaimer 1: this article is obviously tailored towards people working in sales and marketing. I imagine the dynamics of asking for a raise when working in other sectors (public, creative, IT...) may be different. Hope this helps anyway.
Disclaimer 2: I've been working for French companies ever since I started out therefore all management related conversations, salary negotiations and the likes were in French. The vocabulary I will be using here might not be the most finely tuned, so focus on concepts not form. Thanks.
Before we discuss preparation, I want to share a piece of advice that was in my case of invaluable help when i started out. Most of us create mental barriers that make asking for a raise a real ordeal. In my case I was apprehensive of asking a raise for a reason I couldn't quite put my finger on. It was a mixed feeling of fear of being scorned for daring to ask a raise (you should have seen my first CEOs and VPs :p), being told a big fat NO!, getting my work thoroughly criticized, pissing my boss off and what not...
Well this psychological barrier came crashing down with this one simple piece of advice from a great manager of mine.
What he told me was this: "You have nothing to loose by asking for a raise. You are taking zero risk. Managers, VPs, CEOs... they deal with this all the time and they will NOT loose respect or consideration for you if you "dare" to ask for a raise. In fact, some may even loose respect for you if you do NOT ask for a raise. So loose all the stress and go ask for what you want.",
In my case, this discussion injected rational facts in my irrational barrier. Try to find your barrier and calmly assess why it is not rational. Break it down and get over it.
Preparation and methodology
1/ Steer clear from emotional waters. Raw facts, data and accomplishments only.
First off, always stick with facts and figures. Stay away from the emotional realm. If you have a good working relationship with your manager, some sort of privileged bond or anything similar (are you working for your family's company?), do not try to exploit it and play off it. Do not tread in emotional waters.
Do not invoke pity ("pitttyyyy pleeeaaase my rent just went up"), sympathy ("I would really appreciate it if...") or invoke what you think is right ("you KNOW I deserve this!").
Focus exclusively on raw facts and accomplishments. This means that when the time comes your brain won't go into overdrive with any emotional stimuli you may conjure up. You will be cool headed and discussing pure facts.
2/ Past, present and future
How do you prepare for the discussions? Easy: you focus on EVERY valuable thing you've done in the past, everything valuable you are doing now and everything valuable you will or could be doing in the future.
Brainstorm. Take three pieces of paper: write down EVERYTHING you've done in the past... up to the smallest meaningful task you can think of. Organize everything in categories: business development, marketing, reporting, department organization... Then categorize them by order of importance taking in account the VALUE your work has brought to the organization.
Do the same for the present, focusing on expected results your projects will yield.
And for the future... First focus on short term: "taking in account this year's growth it's not unrealistic to imagine next year's growth will be of X%..." or "Taking in account the increase of staff it's not unrealistic to imagine I will be organizing X additional events next year..."
Secondly, and this is where it gets subtle, talking about the future is the opportunity for you to send out signals to your management regarding the longer term career evolutions you may be thinking of and to position yourself. "Not only will this year's growth be of X%, but I believe I now have the experience necessary to build a team to tackle such and such new project"... So write down the subtle messages you want to convey as well.
Past, present and future and the value you bring to the company: these are the keys.
3/ Industry averages
Your negotiations need to be grounded and reasonable. You need to go in there knowing where you stand, what you can reasonable ask for and what you can expect. To know exactly where you stand, research industry salary averages.
Google it. Find several sources. Make sure you factor in all bonuses, material benefits, maybe even cost of living etc... You need to be prepared to counter any arguments such as "Yeah but that data is for people working in Paris, we live in a small country town so you need to cut these averages by 25%..." or "Yeah but you have a company car when usually [insert job title here]s don't have one... that's at least worth 15% of your salary..." etc...
4/ Aim high, always
So once you have determined all the great things you've done for the company in the past and present, what you will do in the future and where you stand compared to industry averages, it's time to think of a number... Of how much a raise you want.
Well here's the part that takes a bit of balls and a poker face. Aim high, always. I admit I did not use to believe in demanding relatively outrageous figures (please note the "RELATIVELY")... because I used to think that I lived in a rational and reasonable world (type B anyone?) and that my boss would not start haggling if I asked for a reasonable figure. Well... word to the wise: BOSSES HAGGLE. It's in their blood. It's how they got there. It's why they're bosses.
So aim HIGH. You want your boss to be taken slightly aback by the figure you're asking... and you want to back it up with all the great things you've done and you could do.
Do NOT bring up the industry averages and wage study unless your boss starts haggling and being unreasonable. The core focus should be what you bring to the company and the figure you believe is reasonable (remember: poker face!). Bringing up the average wages might at first derail the conversation to the figures and sources, while you should be talking about YOUR salary.
5/ Preparing the negotiation
You need to be prepared for the hard hitting counter arguments that your boss is going to throw at you. Trust me, bosses have so much more experience than us in the matter, they will destabilize you if they want to. They've heard all the basic arguments and requests, and they know what they're going to counter you with before you even start.
So, take a piece of paper and write down... everything you do NOT WANT TO HEAR your boss say. Stuff like:
- Sorry, salary discussions for all employees will only be taking place in 5 months. What makes you think you're different?
- Sorry, we don't have the budget.
- Are you serious? Have you seen sales levels this year? No way.
- No. And if you're not happy you can leave at any time.
- Your salary is within industry averages. End of discussion.
- Your salary is above industry averages. Are you kidding?
- Look, I am very satisfied with your work... but let's talk again in 6 months.
- I can't pay you more then your colleagues, that would be unfair to the rest of the team.
- I could pay someone else just as competent as you for less. So no.
After you're sure you listed EVERYTHING you do not want to hear, start working on the counter arguments.
Now all this process takes a little empathy, so work on projecting yourself in the boss' seat. Also, this little exercise can always be taken one step further. You can also work on countering your boss' counter argument...But don't go overboard. 1st and second level should be enough.
6/ Strategy - when and how to ask
When to ask?
That's a tough one... In a structured company, there's often yearly reviews and a specific timetable for salary discussions.
Well in my opinion... F that... Anticipate... be the first in line... be the first to fire the shot (before your colleagues...)... However I've never worked in super structured humongous organizations... So in that case I can't really give out advice.
If your company's HR isn't structured... then it's a free for all. You need to know how to assess when management might be opened to the suggestion and most of all use the momentum you will have created after closing a big deal or finalizing the organization of some big project. Basically, you need GREAT news to go in (good won't cut it).
It's called being in a position of strength :D.
How to ask?
If you have a good working relationship with management: start informal with your direct supervisor. Ask him. If he's ok with you moving ahead with the plan (and you secured his support), go formal: send an e-mail TO THE DECISION MAKER (CC your direct supervisor) stating how after X time in the company you now wish to seize this opportunity to debrief regarding your activity and your participation to the corporate mission (blablabla etc etc)... IN ORDER TO DISCUSS A RAISE.
Don't sugar coat it, be direct, just lay it out there. That way everyone is on the same page. However I would not discuss actual amounts and figures in the email.
The basic layout of the email should be a condensed version of your past, present and future spiel. Add all the necessary politeness and respect formulas, but go straight to the point. Again, have it reviewed by your direct supervisor before it's sent out.
What will potentially happen is that your manager and the decision maker will have a meeting on the topic. If so, try to be there and have a briefing with your manager before going in.
If you are not conveyed to the meeting, have the briefing anyway and give out your fully detailed past present and future spiel to your manager.
If you do not have a good relationship with your management, going formal immediately is the only way. Email your direct supervisor asking for the necessary meetings and face time with the decision makers. The content of the email should be the same.
7/ Prepare your exit strategy
Ok so by now you're ready to ask and your ready to negotiate. However one crucial point that is nearly always overlooked by many articles found on the web is your EXIT STRATEGY. If you want to have a lasting impact, or if you want to be in the right position to go back to your boss to continue the negotiation at a later date, you need to prepare your exit.
You also need to be ready for a refusal.
Let's try to imagine the possible outcomes AFTER your negotiation is closed. Let's imagine there's no more room for discussion and the outcomes are final:
A/ Acceptance by your boss. He gives you exactly what you want (whether its the slightly high figure you asked for or the real figure you were aiming for).
B/ Your boss accepts you deserve a raise, but the raise is lower than your expectations.
C/ Your boss postpones the discussions or the raises to a later date.
D/ Your boss refuses any raise whatsoever.
E/ Your boss refuses a raise and shoots you down ("if you're not happy, you can go elsewhere!").
These 5 scenarios require 5 very different attitudes. I would recommend the following:
A/ Ok, 1st off... STAY COOL. You need to remain layed back, relaxed and professional. No tears of joy :D. However it's important to convey your satisfaction. Basically just tell your boss you are very satisfied with what you just agreed on and you are happy that he agreed to hear you out on this. Plus, he won't be disappointed etc etc...
B/ My philosophy is "everything won no longer needs to be won". As above, remain laid back and pro, but you need to convey a slight form of disappointment. You could finish with something along the lines of "thank you for having heard me out on the topic, and I appreciate the gesture even though as you know it did not meet my expectations and I hope we will have the opportunity to re-discuss a possible raise in 6 months time. Nonetheless, I'm happy you value my work and you will not be disappointed..."
C/ In this case, and after having exhausted all options (bonuses, material benefits...), you need to get a firm commitment from your boss regarding the date or time period when you can discuss the topic again. The sooner the better obviously.
D/ In this case, you can be in two positions:
- a position of weakness: you do not have any other job prospects, you are attached to the company, job, city, current salary etc... and you are not considering leaving. In this case, the most important is to take it like a gentleman, while still pointing out your disappointment and trying to get a commitment for a new discussion in the future. Example: "Well obviously I am disappointed but I hope we can agree to meet again in the future to re-discuss this topic?"
- a relative position of strength: you are ready to leave, you are aware of opportunities, you have already gone to a few interviews etc...
Ok so in this situation, you should have a harder stance and be relatively clear. Basically your message should be: "I have to admit I am disappointed (emphasize the disappointment). You know I am doing great work, and I do not understand this decision".
In this situation, when you are exchanging very harsh words with your boss, you need to make sure your behavior stays balanced, cool and pro. What you are basically stating are FACTS. Expressing your disappointment is NOT an attack. You are just basically telling straight to your boss' face that you are not happy, and well... he's the boss... the ball is in his court and he needs to know that everything is up to him now.
Go back to your office, go back home... and start preparing to leave.
E/ If you are in a position of weakness, I guess the advice here is similarly to situation D, except you need to make sure you show your boss that him shooting you down doesn't affect you 'cause you have a thick hide. Basically remain relatively cool and pro... and say what you have to say without ever reacting to his harsh attacks unless you have hard facts to counter them. NEVER EVER react to him telling you you can always go elsewhere if you want to. He's baiting you and/or testing you here, or he really means it. In any case, do not react. Stick with raw facts.
If you are in a position of strength, the advice is still the same as D/. The reason being is unless you have a firm commitment from another company (which is a very specific scenario I will not cover in this post, as I have never been in such a situation), you never ever want to expose your hand and expose yourself to risk. So act just like you were not in a position of strength and try to secure a future negotiation date.
However if the situation really gets out of hand... as it happened to me once before... well in that case, and only if your back is up against the wall... time to pull out the big guns I guess... "Ok, I hear what you're saying and I'm sorry and disappointed to hear it. Taking in account this talk I think it's clear I will not in this company be able to reach the salary level I know I'm worth, and that's a shame taking in account everything else about the job and the company suits me."
8/ Final thoughts
After spending all the necessary time on your preparation, playing out the discussions over and over in your head and getting pumped before going in... you absolutely need to keep the following 3 points in mind:
- first, the discussion will NOT go as you expect it to. No matter how much planning you put into this, it will NOT go as planned. Remember the reason you plan is to make sure you have the necessary ammo to liven up the discussion, not to try and anticipate the discussion word by word. The discussion will NOT go as planned.
- secondly, at the end of the day... the decision to give you a raise or not is your BOSS' decision and no one else's, and there's nothing you can do about it. Unless you are a business star straight out of a Hollywood movie (by that I mean a fictional character), you will not instantly change your boss' mind from "no raise" to "oh wait I didn't know this guy was a star performer, he needs a 300% raise!"... Even super skilled negotiators can end up in front of a wall.
The contrary also applies: if your boss believes you deserve a raise, you will probably get it without getting the opportunity to lay out all your planned arguments.
- and finally a salary negotiation is NOT a ONE SHOT. It's a process, just like climbing a mountain. You NEED TO SET MILESTONES (one of my most important concepts in business life... I'll blog about this at a later date). Even if your boss gives you a big fat NO!, you just set a milestone, and you can get back in his face after an appropriate lapse of time.
If you are facing a wall, start climbing, digging or finding an alternate route.
Some other unorganized thoughts to finish this post that ended up being way longer than I initially thought :D
- Start by focusing on a raise. If that gets you know where, start shifting your focus to bonuses and/or material benefits. Remember, "everything won no longer needs to be won".
- Do not worry if you are in a position of strength (ready to leave) or weakness (not ready to leave). As we've seen earlier, it shouldn't affect the preparation nor the actual discussion. You're behavior should always be the same. Also remember to make sure you cannot be "read".
- Never, ever, ever bluff. Saying stuff like "if I don't get this raise I'm leaving!" then not leaving when your boss laughs in your face will totally and utterly destroy your credibility. Forget raises for several years...
- A position of strength is something you BUILD: good results, good self marketing, good job searching etc... However never show off your position of strength. Make sure your boss subtly understands it... but don't overplay it. An employee is always replaceable and bosses have egos. They don't like to be put against a wall.
- IMO never ever use a colleague's salary as a comparison point or negotiation tactic. You will get shot down so bad it may close the discussion.
- And finally, for all the young guns out there with an over-sized entitlement complex... note the following: HARD WORK COMES BEFORE A RAISE. It's NOT the other way around. Never ever put yourself in a blackmailing situation where you are basically not doing your best until you get that raise you think you deserve. In that case, IMO you should be either FIRED by your management or actively looking for a job that suits you better.