ACKERMAN BARGAINING by Christopher Voss
While buying
Slow. It. Down. Going too fast is one of the mistakes all negotiators are prone to making
Put a smile on your face
Label your counterpart’s fears to diffuse their power. We all want to talk about the happy stuff, but remember, the faster you interrupt action in your counterpart’s amygdala, the part of the brain that generates fear, the faster you can generate feelings of safety, well-being, and trust.
A trap into which many fall is to take what other people say literally. I started to see that while people played the game of conversation, it was in the game beneath the game, where few played, that all the leverage lived.
“No” is the start of the negotiation, not the end of it. after I’d said “No” to him, I often found that I was open to hearing what he had to say.
“No” is often a decision, frequently temporary, to maintain the status quo. Change is scary, and “No” provides a little protection from that scariness.
Great negotiators seek “No” because they know that’s often when the real negotiation begins.
NO
■I am not yet ready to agree;
■You are making me feel uncomfortable;
■I do not understand;
■I don’t think I can afford it;
■I want something else;
■I need more information; or
■I want to talk it over with someone else.
Then, after pausing, ask solution-based questions or simply label their effect:
“What about this doesn’t work for you?”
“What would you need to make it work?”
“It seems like there’s something here that bothers you.”
When I read Camp’s book, I realized this was something we’d known as hostage negotiators for years. We’d learned that the quickest way to get a hostage-taker out was to take the time to talk them out, as opposed to “demanding” their surrender. Demanding their surrender, “telling” them to come out, always ended up creating a much longer standoff and occasionally, actually contributed to death.
It comes down to the deep and universal human need for autonomy. People need to feel in control. When you preserve a person’s autonomy by clearly giving them permission to say “No” to your ideas, the emotions calm, the effectiveness of the decisions go up, and the other party can really look at your proposal.
There are three voice tones available to negotiators:
1.The late-night FM DJ voice: Use selectively to make a point. Inflect your voice downward, keeping it calm and slow. When done properly, you create an aura of authority and trustworthiness without triggering defensiveness.
2.The positive/playful voice: Should be your default voice. It’s the voice of an easygoing, good-natured person. Your attitude is light and encouraging. The key here is to relax and smile while you’re talking.
3.The direct or assertive voice: Used rarely. Will cause problems and create pushback.
1.Set your target price (your goal).
2.Set your first offer at 65 percent of your target price.
3.Calculate three raises of decreasing increments (to 85, 95, and 100 percent).
4.Use lots of empathy and different ways of saying “No” to get the other side to counter (sprzeciwiać się) before you increase your offer.
5.When calculating the final amount, use precise, nonround numbers like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
6.On your final number, throw in a nonmonetary item (that they probably don’t want) to show you’re at your limit.
The genius of this system is that it incorporates the psychological tactics we’ve discussed—reciprocity, extreme anchors, loss aversion, and so on—without you needing to think about them.
If you’ll bear with me for a moment, I’ll go over the steps so you see what I mean.
First, the original offer of 65 percent of your target price will set an extreme anchor, a big slap in the face that might bring your counterpart right to their price limit. The shock of an extreme anchor will induce a fight-or-flight reaction in all but the most experienced negotiators, limiting their cognitive abilities and pushing them into rash action.
Now look at the progressive offer increases to 85, 95, and 100 percent of the target price. You’re going to drop these in sparingly: after the counterpart has made another offer on their end, and after you’ve thrown out a few calibrated questions to see if you can bait them into bidding against themselves.
When you make these offers, they work on various levels. First, they play on the norm of reciprocity; they inspire your counterpart to make a concession, too. Just like people are more likely to send Christmas cards to people who first send cards to them, they are more likely to make bargaining concessions to those who have made compromises in their direction.
Second, the diminishing size of the increases—notice that they decrease by half each time—convinces your counterpart that he’s squeezing you to the point of breaking. By the time they get to the last one, they’ll feel that they’ve really gotten every last drop.
This really juices their self-esteem. Researchers have found that people getting concessions (ustępstwa) often feel better about the bargaining process than those who are given a single firm, “fair” offer.
It works on our human nature. Notice that you can’t buy anything for $2, but you can buy a million things for $1.99. How does a cent change anything? It doesn’t. But it makes a difference every time. We just like $1.99 more than $2.00 even if we know it’s a trick
■Identify your counterpart’s negotiating style. Once you know whether they are Accommodator, Assertive, or Analyst, you’ll know the correct way to approach them.
■Prepare, prepare, prepare. When the pressure is on, you don’t rise to the occasion; you fall to your highest level of preparation. So design an ambitious but legitimate goal and then game out the labels, calibrated questions, and responses you’ll use to get there. That way, once you’re at the bargaining table, you won’t have to wing it.
■Get ready to take a punch. Kick-ass negotiators usually lead with an extreme anchor to knock you off your game. If you’re not ready, you’ll flee to your maximum without a fight. So prepare your dodging tactics to avoid getting sucked into the compromise trap.
■Set boundaries, and learn to take a punch or punch back, without anger. The guy across the table is not the problem; the situation is.
■Prepare an Ackerman plan. Before you head into the weeds of bargaining, you’ll need a plan of extreme anchor, calibrated questions, and well-defined offers. Remember: 65, 85, 95, 100 percent. Decreasing raises and ending on nonround numbers will get your counterpart to believe that he’s squeezing you for all you’re worth when you’re really getting to the number you want
Negotiation is a psychological investigation. You can gain a measure of confidence going into such an investigation with a simple preparatory exercise we advise all our clients to do. Basically, it’s a list of the primary tools you anticipate using, such as labels and calibrated questions, customized to the particular negotiation.
When the pressure is on, you don’t rise to the occasion—you fall to your highest level of preparation.
One note of caution before going into greater depth on this exercise: some negotiation experts fetishize preparation to such a degree that they advise people to create the equivalent of preordained scripts for exactly how the negotiation will unfold and the exact form and substance the agreement will take on. By now, after reading this far, you’ll understand why that’s a fool’s errand. Not only will such an approach make you less agile and creative at the table, it will make you more susceptible to those who are.
Based on my company’s experiences, I believe that good initial preparation for each negotiation yields at least a 7:1 rate of return on time saved renegotiating deals or clarifying implementation.
In the entertainment industry, they have a single document that summarizes a product for publicity and sales that they call a “one sheet.” Along the same lines, we want to produce a negotiation “one sheet” that summarizes the tools we are going to use.
It will have five short sections
SECTION I: THE GOAL
Think through best/worst-case scenarios but only write down a specific goal that represents the best case.
Typically, negotiation experts will tell you to prepare by making a list: your bottom line; what you really want; how you’re going to try to get there; and counters to your counterpart’s arguments.
But this typical preparation fails in many ways. It’s unimaginative and leads to the predictable bargaining dynamic of offer/counteroffer/meet in the middle. In other words, it gets results, but they’re often mediocre.
The centerpiece of the traditional preparation dynamic—and its greatest Achilles’ heel—is something called the BATNA.
Roger Fisher and William Ury coined the term in their 1981 bestseller, Getting to Yes, and it stands for Best Alternative To a Negotiated Agreement. Basically, it’s the best possible option you have if negotiations fail. Your last resort. Say you’re on a car lot trying to sell your old BMW 3-series. If you already have another dealer who’s given you a written offer for $10,000, that’s your BATNA.
The problem is that BATNA tricks negotiators into aiming low. Researchers have found that humans have a limited capacity for keeping focus in complex, stressful situations like negotiations. And so, once a negotiation is under way, we tend to gravitate toward the focus point that has the most psychological significance for us.
In that context, obsessing over a BATNA turns it into your target, and thereby sets the upper limit of what you will ask for. After you’ve spent hours on a BATNA, you mentally concede everything beyond it.
God knows aiming low is seductive. Self-esteem is a huge factor in negotiation, and many people set modest goals to protect it. It’s easier to claim victory when you aim low. That’s why some negotiation experts say that many people who think they have “win-win” goals really have a “wimp-win” mentality. The “wimp-win” negotiator focuses on his or her bottom line, and that’s where they end up.
So if BATNA isn’t your centerpiece, what should be?
I tell my clients that as part of their preparation they should think about the outcome extremes: best and worst. If you’ve got both ends covered, you’ll be ready for anything. So know what you cannot accept and have an idea about the best-case outcome, but keep in mind that since there’s information yet to be acquired from the other side, it’s quite possible that best case might be even better than you know.
Remember, never be so sure of what you want that you wouldn’t take something better. Once you’ve got flexibility in the forefront of your mind you come into a negotiation with a winning mindset.
Let’s say you’re selling old speakers because you need $100 to put toward a new set. If you concentrate on the $100 minimum, you’ll relax when you hear that number and that’s what you’ll get. But if you know that they are for sale in used audio stores for $140, you could set a high-end goal of $150, while remaining open to better things.
Now, while I counsel thinking about a best/worst range to give my clients the security of some structure, when it comes to what actually goes on your one sheet, my advice is to just stick with the high-end goal, as it will motivate and focus your psychological powers, priming you to think you are facing a “loss” for any term that falls short. Decades of goal-setting research is clear that people who set specific, challenging, but realistic goals end up getting better deals than those who don’t set goals or simply strive to do their best.
Bottom line: People who expect more (and articulate it) get more.
Here are the four steps for setting your goal:
■Set an optimistic but reasonable goal and define it clearly.
■Write it down.
■Discuss your goal with a colleague (this makes it harder to wimp out).
■Carry the written goal into the negotiation.
SECTION II: SUMMARY
Summarize and write out in just a couple of sentences the known facts that have led up to the negotiation.
You’re going to have to have something to talk about beyond a self-serving assessment of what you want. And you had better be ready to respond with tactical empathy to your counterpart’s arguments; unless they’re incompetent, the other party will come prepared to argue an interpretation of the facts that favors them.
Get on the same page at the outset.
You have to clearly describe the lay of the land before you can think about acting in its confines. Why are you there? What do you want? What do they want? Why?
You must be able to summarize a situation in a way that your counterpart will respond with a “That’s right.” If they don’t, you haven’t done it right.
SECTION III: LABELS/ACCUSATION AUDIT
Prepare three to five labels to perform an accusation audit.
Anticipate how your counterpart feels about these facts you’ve just summarized. Make a concise list of any accusations they might make—no matter how unfair or ridiculous they might be. Then turn each accusation into a list of no more than five labels and spend a little time role-playing it.
There are fill-in-the-blank labels that can be used in nearly every situation to extract information from your counterpart, or defuse an accusation:
It seems like _________ is valuable to you.
It seems like you don’t like _________.
It seems like you value __________.
It seems like _________ makes it easier.
It seems like you’re reluctant to _________.
As an example, if you’re trying to renegotiate an apartment lease to allow subletters and you know the landlord is opposed to them, your prepared labels would be on the lines of “It seems as though you’re not a fan of subletters” or “It seems like you want stability with your tenants.”
SECTION IV: CALIBRATED QUESTIONS
Prepare three to five calibrated questions to reveal value to you and your counterpart and identify and overcome potential deal killers.
Effective negotiators look past their counterparts’ stated positions (what the party demands) and delve into their underlying motivations (what is making them want what they want). Motivations are what they are worried about and what they hope for, even lust for.
Figuring out what the other party is worried about sounds simple, but our basic human expectations about negotiation often get in the way. Most of us tend to assume that the needs of the other side conflict with our own. We tend to limit our field of vision to our issues and problems, and forget that the other side has its own unique issues based on its own unique worldview. Great negotiators get past these blinders by being relentlessly curious about what is really motivating the other side.
Harry Potter author J. K. Rowling has a great quote that sums up this concept: “You must accept the reality of other people. You think that reality is up for negotiation, that we think it’s whatever you say it is. You must accept that we are as real as you are; you must accept that you are not God.”
There will be a small group of “What” and “How” questions that you will find yourself using in nearly every situation. Here are a few of them:
What are we trying to accomplish?
How is that worthwhile?
What’s the core issue here?
How does that affect things?
What’s the biggest challenge you face?
How does this fit into what the objective is?
QUESTIONS TO IDENTIFY BEHIND-THE-TABLE DEAL KILLERS
When implementation happens by committee, the support of that committee is key. You’ll want to tailor your calibrated questions to identify and unearth the motivations of those behind the table, including:
How does this affect the rest of your team?
How on board are the people not on this call?
What do your colleagues see as their main challenges in this area?
QUESTIONS TO IDENTIFY AND DIFFUSE DEAL-KILLING ISSUES
Internal negotiating influence often sits with the people who are most comfortable with things as they are. Change may make them look as if they haven’t been doing their job. Your dilemma in such a negotiation is how to make them look good in the face of that change.
You’ll be tempted to concentrate on money, but put that aside for now. A surprisingly high percentage of negotiations hinge on something outside dollars and cents. Often they have more to do with self-esteem, status, autonomy, and other nonfinancial needs.
Think about their perceived losses. Never forget that a loss stings at least twice as much as an equivalent gain.
For example, the guy across the table may be hesitating to install the new accounting system he needs (and you are selling) because he doesn’t want to screw anything up before his annual review in four months’ time. Instead of lowering your price, you can offer to help impress his boss, and do it safely, by promising to finish the installation in ninety days, guaranteed.
QUESTIONS TO USE TO UNEARTH THE DEAL-KILLING ISSUES
What are we up against here?
What is the biggest challenge you face?
How does making a deal with us affect things?
What happens if you do nothing?
What does doing nothing cost you?
How does making this deal resonate with what your company prides itself on?
It’s often very effective to ask these in groups of two or three as they are similar enough that they help your counterpart think about the same thing from different angles.
Every situation is unique, of course, but choosing the right mix of these questions will lead your counterpart to reveal information about what they want and need—and simultaneously push them to see things from your point of view.
Be ready to execute follow-up labels to their answers to your calibrated questions.
Having labels prepared will allow you to quickly turn your counterpart’s responses back to them, which will keep them feeding you new and expanding information. Again, these are fill-in-the-blank labels that you can use quickly without tons of thought:
It seems like __________ is important.
It seems you feel like my company is in a unique position to __________.
It seems like you are worried that __________.
SECTION V: NONCASH OFFERS
Prepare a list of noncash items possessed by your counterpart that would be valuable.
Ask yourself: “What could they give that would almost get us to do it for free?” Think of the anecdote I told a few chapters ago about my work for the lawyers’ association: My counterpart’s interest was to pay me as little cash as possible in order to look good in front of his board. We came upon the idea that they pay in part by publishing a cover story about me in their magazine. That was low-cost for them and it advanced my interests considerably.
For more information on my company, The Black Swan Group, any additional information or guidance we can give you on negotiation, or for contacting me about speaking to your company, please visit our website at www.blackswanltd.com.
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