Improving Negotiation Skills by Thomas Noble Part 5

Rule 3: Planning

Rule 3.1: Develop a flexible negotiation plan.
"I am convinced that you need to approach each negotiation with a well conceived game plan." 26

Master Negotiators develop strategies for each phase of the negotiation process: opening, middle game, and end game. Like master chess players, they come to the table knowing how they are going to open. They understand that, from there, strategies have to be flexible because how their opponents respond to opening offers is unpredictable. Nevertheless, they plan ahead as much as possible.
Freund suggests the follow simple format for developing a negotiating plan:
• What do I want?
• Where do I start?
• When do I move?
• How do I close? 27

While a Novice Negotiator may do some planning, he does not plan thoroughly. For example, a Master Negotiator will always develop a closing strategy. He knows whether he wants to close sooner rather than later and whether he wants extensive documentation or if an outline of the deal will do.
Rule 3.2: Plan your first move carefully.
Initial offers define the parameters of the "negotiation zone". The negotiation zone is that range in which negotiators bargain. In every negotiation the parties define the negotiation zone. You get to decide where one end of the zone is located, and your opponent decides the other end. Master Negotiators understand that where leverage is relatively equal, there is always a tendency to meet in the middle. Where the middle is ultimately located depends on where they start. Therefore, they put a lot of time and energy to developing and justifying their initial offers.
"As a rule, negotiators lead richer, fuller, more rewarding lives than non-negotiators. That's because in reaching for more, they almost always get it." 28

Master Negotiators make the highest (or lowest, as the case may be) first offer they can justify, while being careful not to go beyond that point. 29
"One of the cardinal rules of Power Negotiating is you should ask the other side for more than you expect to get. ... What you should be asking for is your MPP - your maximum plausible position." 30
"... research on setting goals discloses a simple but powerful fact: The more specific your vision of what you want and the more committed you are to that vision, the more likely you are to obtain it. ... Research on negotiation confirms that anyone who is willing to take the time to develop higher expectations will do significantly better and do so without putting his relationship or reputation with others at risk."31
" ... my general approach to the opening proposal lies well between the extremes of outrage and undue moderation. I advise making a first offer that is sufficiently reasonable to be viewed constructively by the other side and thus evoke a positive response. On the other hand, it should give you enough room to move deliberately to your expectation without being forced to stretch."32

Justification is critical. Having a reason for every element of the offer greatly enhances its chances of success. Research indicates that if you ask someone for a favor, he or she will be more likely to do it when you give him a reason. 33
"To avoid appearing arbitrary, express a rationale for your position." 34
"Negotiating often comes down to a battle of cogency. The more logical your arguments in support of a point, the greater your chances of resolving it on satisfactory terms." 35
"The starting point you select should always be defensible." 36
"I always caution my clients against putting a figure on the table that they can't back up with a plausible rationale." 37
"The harder it is to come up with logic to support your position - the more you have to back into reasons that leave you feeling uncomfortable - the more concerned you should be that your counterpart will perceive your position as overreaching. So, developing a rationale furnishes a useful litmus test to determine whether the position you're taking is defensible." 38
If I had to name the single most important rule for a negotiator to follow it would be this one. Where you start is critical to where you wind up. If you start too high, your opponent will either be ridiculous to the other extreme, or he will not talk to you. If you start too low, the bullies will kick sand in your face!

"The goal of an effective negotiator is to have expectations that are high enough to present a real challenge but realistic enough to promote good working relationships. ... If you are basically a cooperative person, raise your expectations. Respectfully ask for more. Insist a bit. You will be amazed at the results." 39
"The truly gifted negotiator, then, is one whose initial position is exaggerated enough to allow for a series of concessions that will yield a desirable final offer from the opponent, yet is not so outlandish as to be seen as illegitimate from the start." 40
Master Negotiators understand the law of contrast.41 At the end of the day, after concessions are made, the other party will be satisfied with the deal only after the other party has made concessions. 42

Master Negotiators know when and when not to make a first offer. My daddy always taught me to never make the first offer, but this is certainly not correct. There may be a number of good reasons to make the first offer, including motivation, lack of leverage, superior information, and to take control of an issue such as price. 43
Master Negotiators know that first offers are almost artificially high. They do not get upset over that; they simply respond appropriately.
Rule 3.3: Goals are more important than bottom lines.
"What is the practical effect of having your bottom line become your dominant reference point in a negotiation? Over a lifetime of negotiating, your results will tend to hover at a point just above this minimum acceptable level. ... With experience, you should be able to keep both your goal and your bottom line in view at the same time without losing your goal focus. Research suggests that the best negotiators have this ability."44
"Your goal is only as effective as your commitment to it. ... you should make sure it is justified and supported by solid arguments." 45
Rule 3.4: Plan to make concessions.

Making concessions triggers the law of reciprocity.46 When you make a concession, the other party will usually respond with one. Indeed, he will feel compelled to do so.47 The flip side of this rule is that when you do someone a favor, they will feel indebted to you for it.48
"Most of us find it highly disagreeable to be in a state of obligation. It weighs heavily on us and demands to be removed."49
"People need to feel that they have 'earned' concessions even when you are willing to give them away for free." 50
"You are not going to prevail on all issues that arise in a negotiation, so save yourself for the significant ones. Let your counterpart take home a few trophies, too, especially on issues that aren't that important to you or where the point he is making is unassailable." 51
"... I'm convinced there's a vital psychological dimension here. Each party needs to experience the satisfaction of seeing the other side move, in order to feel that the resulting agreement has been adequately bargained. Your refusal to budge will leave your counterpart with a nagging sense of having failed as a negotiator, an ominous mind-set that is potentially hazardous to the deal."52
Rule 3.5: Understand when and how to mediate.

Master Negotiators know when a mediator will facilitate settlement and when a mediator is unnecessary. Master Negotiators know when arbitration is preferable to going to court.
Novice Negotiators wait too long before employing a mediator. They let problems fester and parties become too invested in their positions. By the time they get around to mediation, they have wasted considerable resources and the momentum toward trial is formidable. The time to mediate is as soon as the negotiations founder, in cases where the parties employ a mediator out of necessity, or as soon as all parties have enough information to bargain intelligently, in cases where they are mediating by choice (because that is their preferred method of negotiating).
Master Negotiators are usually master manipulators, and mediation is no exception. Novices come to mediation and act combative with the mediator or exclude the mediator from all relevant discussions, relegating the mediator to the function of courier. Master Negotiators understand that the mediator can help them sell their proposals. They arm the mediator with persuasive arguments, legal briefs, or material evidence in support of their proposals. They add a dash of charm and encourage their clients to endear himself or herself to the mediator.
Rule 3.5: Have a theme.
Lawyers who argue their cases to juries know the importance of having a simple, unifying theme. Johnnie Cochran's theme in the O.J. Simpson murder trial of "if it doesn't fit, you must acquit" is a sound example. Master Negotiators understand that this same technique works in negotiations.
"A positioning theme is a crisp, memorable phrase or framework that defines the problem you are attempting to solve in the negotiation".53