TableofContents

TitlePageDedicationIntroductionSectionOne-PlayingthePowerNegotiatingGame

Chapter1-AskforMoreThanYouExpecttoGetBracketing

Chapter2-NeverSayYestotheFirstOfferSomethingMustBeWrong

Chapter3-FlinchatProposalsChapter4-AvoidConfrontationalNegotiationChapter5-TheReluctantSellerandtheReluctantBuyerChapter6-UsetheViseTechniqueChapter7-HandlingthePersonWhoHasNoAuthoritytoDecide

TheOtherSideLovestoUseHigherAuthorityTheCounterGambitstoHigherAuthority

Chapter8-TheDecliningValueofServicesChapter9-NeverOffertoSplittheDifferenceChapter10-HandlingImpassesChapter11-HandlingStalematesChapter12-HandlingDeadlocksChapter13-AlwaysAskforaTrade-OffChapter14-GoodGuy/BadGuy

CounterGambitstoGoodGuy/BadGuyChapter15-Nibbling

LookOutforPeopleNibblingonYouPreventtheOtherSideFromNibblingonYouPreventingPost-NegotiationNibbles

Chapter16-HowtoTaperConcessionsChapter17-TheWithdrawinganOfferGambit

Chapter18-PositioningforEasyAcceptanceChapter19-TheDecoyChapter20-TheRedHerringChapter21-Cherrypicking

BuyersLoveCherryPicking—SellersHateItChapter22-TheDeliberateMistakeChapter23-TheDefaultChapter24-EscalationChapter25-PlantedInformationChapter26-GettheOtherSidetoCommitFirstChapter27-ActingDumbIsSmartChapter28-Don’tLettheOtherSideWritetheContractChapter29-ReadtheContractEveryTimeChapter30-FunnyMoneyChapter31-PeopleBelieveWhatTheySeeinWritingChapter32-ConcentrateontheIssuesChapter33-AlwaysCongratulatetheOtherSideSectionTwo-ResolvingToughNegotiatingProblems

Chapter34-TheArtofMediationTheImportanceofMediationWhyMediationWorksTheMediatorPerceivedasNeutralIsImportantTheProcessofMediationInitialContactWiththePartiesFirstPrivateMeetingSecondPrivateMeetingResolutionStage

Chapter35-TheArtofArbitrationSettingUptheArbitrationNeutralityoftheArbitratorsPreliminaryMeetingExchangeofInformationPriortotheFirstHearingTheArbitrationHearingConductoftheArbitrator

AnImportantDifferenceBetweenArbitrationandLitigationRenderinganAwardAftertheAward

Chapter36-TheArtofConflictResolutionSectionThree-NegotiatingPressurePoints

Chapter37-TimePressureTieUpAlltheDetailsUpFrontPeopleBecomeFlexibleUnderTimePressureAsNegotiationsDragon,PeopleBecomeMoreFlexibleAcceptanceTime

Chapter38-InformationpowerRule1:Don’tBeAfraidtoAdmitThatYouDon’tKnowRule2:Don’tBeAfraidtoAsktheQuestionRule3:AskOpen-EndedQuestionsRule4:WhereYouAsktheQuestionMakesaBigDifferenceRule5:AskOtherPeople—NotWithWhomYou’llNegotiateRule6:AskQuestionsforReasons,NotGatheringInformation

Chapter39-BeingPreparedtoWalkAwayDevelopingWalk-AwayPowerHowtoProjectWalk-AwayPower

Chapter40-TakeItorLeaveItRespondingtoTakeItorLeaveIt

Chapter41-TheFaitAccompliChapter42-TheHotPotatoChapter43-UltimatumsSectionFour-NegotiatingWithNon-Americans

Chapter44-HowAmericansNegotiateTheAmericanArtoftheDealHigh-Contextvs.Low-ContextNegotiationsGettingDowntoBusinessWithNon-Americans

Chapter45-HowtoDoBusinessWithAmericans:AGuideforNon-Americans

AmericansAreVerySuccinctAmericansAnswerQuestionsWithOneWordAmericansTalkinIdiomsAmericansAreVeryPatrioticTheAmericanClassSystemReligioninAmericaTheFrontierMentalityTimeIsMoneytoAmericansTheOpinionatedAmericanTheFriendlyAmericanBusinessCardsTippinginAmericaTheDiversePopulationofAmericaTheSelf-ReliantAmericanAFinalWordAboutAmericans

Chapter46-NegotiatingCharacteristicsofAmericansAmericansTendtoBeVeryDirectinOurCommunicationsAmericansResistMakingOutrageousInitialDemandsAmericansAreMoreLikelytoNegotiateAloneAmericansAreUncomfortableWithEmotionalDisplaysAmericansExpectShort-TermProfitsAmericansAreLessLikelytoSpeakaForeignLanguageAmericansAreNotWorldTravelersAmericansAreUncomfortableWithSilenceAmericansHatetoAdmitThatWeDon’tKnow

Chapter47-NegotiatingCharacteristicsofNon-AmericansEnglishPeopleFrenchPeopleGermanPeopleAsianPeopleRussianPeopleMiddleEasternPeople

SectionFive-UnderstandingthePlayers

Chapter48-BodyLanguage:HowtoReadPeople

WhyIt’sBettertoNegotiateFace-to-FaceTheHandshakeWheretoSitataConferenceWhentoGetDowntoBusinessEyeBlinkRateWatchfortheHeadTiltWhentheHandGoestotheHeadKeepYourEyesontheHandsWhatEyeglassWearersCanTellYouProxemicsIstheStudyofPersonalSpace

Chapter49-HiddenMeaningsinConversationOppositesThrowawaysLegitimizersJustifiersErasersDeceptionsPreparersExaggerationsTrialBalloonsNeuro-LinguisticOrientation

Chapter50-ThePersonalCharacteristicsofaPowerNegotiatorTheCouragetoProbeforMoreInformationThePatiencetoOutlasttheOtherNegotiatorTheCouragetoAskforMoreTheIntegritytoPressforaWin-WinSolutionTheWillingnesstoBeaGoodListener

Chapter51-TheAttitudesofaPowerNegotiatorTheWillingnesstoLiveWithAmbiguityBeResilientACompetitiveSpiritDon’tBeConflict-Averse

Chapter52-TheBeliefsofaPowerNegotiatorNegotiatingIsAlwaysaTwo-WayAffairNegotiatingIsPlayedbyaSetofRules“No”IsSimplyanOpeningNegotiatingPosition

SectionSix-DevelopingPowerOvertheOtherSide

Chapter53-LegitimatePowerOtherFormsofLegitimatePowerLegitimatePowerasanIntimidationFactorSomeTitlesDon’tMeanaThing

Chapter54-RewardPowerRewardPowerasanIntimidationFactor

Chapter55-CoercivePowerChapter56-ReverentPower

ReverentPowerasanIntimidatingFactorChapter57-CharismaticPower

CharismaticPowerasanIntimidatingFactorChapter58-ExpertisePower

ExpertisePowerasanIntimidatingFactorChapter59-SituationPowerChapter60-InformationPower

InformationPowerasanIntimationFactorChapter61-CombinationsofPowerChapter62-OtherFormsofPower

ThePowerofRiskSharingThePowerofConfusionThePowerofCommunicatingOptions

Chapter63-NegotiatingDrivesTheCompetitiveDriveTheSolutionalDriveThePersonalDriveTheOrganizationalDriveTheAttitudinalDrive

Chapter64-Win-WinNegotiatingRule1ofWin-WinNegotiatingRule2ofWin-WinNegotiatingRule3ofWin-WinNegotiatingRule4ofWin-WinNegotiating

Conclusion

AbouttheAuthorAudioCDandVideoProgramsCopyrightPage

Dedicatedto:

Mybeautifulwife,Gisela,whobroughtlovebackintomylife.

Andtoalltheattendeesofmyseminars,readersofmybooks,andlistenerstomyaudioprograms,whosharedtheirnegotiatingstorieswithme.

Andtomythreeamazingchildren:Julia,Dwight,andJohn.

Andtomybeautifulgrandchildren:AstridandThomas.

Introduction

WhatIsPowerNegotiating?

AlothashappenedsinceCareerPresspublishedthefirsteditionofthisbook15yearsago.Agreatdealhashappenedtome,andtherehasbeenagreatdealofchange in the world. The big change that affected us all, of course, was theInternet.Itissomucheasiertocommunicatewitheachotherthanitusedtobe.These days, I get up in the morning and answer e-mails that come in fromaround theworld overnight because theyworkwhen I sleep. These days, I’mjustaslikelytobeteachingPowerNegotiatinginShanghaiasIaminSeattle.

This thirdeditionverymuchreflects thebravenewworld inwhichwelive.You’ll find expanded chapters on negotiatingwith people fromother cultures.It’swhat I’ve learnedfromconductingPowerNegotiatingseminarsaround theworld, from Kuwait to Nigeria to China, and New Zealand to Iceland. Asdifferent as we are, I find that most people want the same thing from anegotiation:Theywant a fair deal for both sides. Theywant to use their newnegotiating skills to improve theirposition.Theywant tobe skilledenough tostoptheothersidefromtakingadvantageofthem.

This third edition includes chapters on two subjects that seem to fascinateattendeesatmyseminars:bodylanguageandhiddenmeaningsinConversation.Remember the high-tech/high-touch theory? It said that the more we contacteach other by machine, the more important those rare face-to-face meetingsbecome.Themorewe are isolated by e-mail and texting of increasingly briefmessages,themoreweyearntounderstandpeoplebetter.

You’llalsofindexpandedchaptersonmediationandarbitration.That’sabigshiftinournewworld,andaverywelcomeone.Takingtheotherpartytocourtis a very expensive and time-consuming way to resolve issues. The trend toreplace that with mediation (when people of good faith, guided by a trainedmediator, search for a solution acceptable to both sides)makes somuchmoresense.

Inthisedition,you’llfindthenewKeyPointstoRememberinvaluable.Ifyou

arereadingthisbookonyouriPadorKindle,you’llfindthesepointsvaluableasa last-minutebrushupbeforeyougo into anegotiation.Search for thephrase“KeyPoints,”andgothroughthemontheplaneasyouflytoyournegotiations.Ifyou’re reading this as agoodold-fashionedbook,you’ll findKeyPoints toRememberattheendofnearlyeverychapter.

A lot has changed in the last 15 years, butmuch has stayed the same. Theobjectiveofanegotiationisstilltocreateawin-winsolution,whichisacreativewaythatbothyouandtheotherpersoncanwalkawayfromthenegotiatingtablefeelingthatyou’vewon.

Win-win negotiators always talk about the two people who have only oneorange,butbothwantit.Theydecidethatthebesttheycandoissplittheorangedown themiddle,andeachsettle forhalfofwhat they reallyneed.Tobesurethatit’sfair,theydecidethatonewillcutandtheotherwillchoose.

Astheydiscusstheirunderlyingneedsinthenegotiation,however,theyfindthat one wants the orange to make juice, and the other needs it for the rindbecausehewantstobakeacake.Theyhavemagicallyfoundawaythatbothofthemcanwin,andneitherhastolose.

Oh,sure!Thatcouldhappenintherealworld,butitdoesn’thappenenoughtomake the concept meaningful. Let’s face it: When you’re sitting down in anegotiation, chances are that the other sidewants the same thing that you do.There’snotgoingtobeamagicalwin-winsolution.Ifthey’rebuying,theywantthelowestpriceandyouwantthehighestprice.Ifthey’reselling,theywantthehighest price and youwant the lowest. Theywant to takemoney out of yourpocketandputitrightintotheirs.

PowerNegotiatingtakesadifferentposition.Itteachesyouhowtowinatthenegotiatingtable,butleavetheotherpersonfeelingthatheorshewon.I’llteachyouhowtodothisanddoitinsuchawaythattheothersidepermanentlyfeelsthat theywon. They don’twake up the nextmorning thinking, “Now I knowwhatthatpersondidtome.WaituntilIseeheragain.”No!They’llbethinkingwhatagreattimetheyhadnegotiatingwithyouandhowtheycan’twaittoseeyouagain.

Theabilitytomakeothersfeel that theywonissoimportant thatI’dalmostgiveyou that as adefinitionof aPowerNegotiator.Twopeoplemight enter anegotiationinwhichthecircumstanceswerethesame.Perhapsthey’rebuyingorsellingrealestateorequipment.Bothmightconcludethenegotiationatexactly

the same price and terms, but the PowerNegotiator leaves the table with theotherpersonfeeling thatheorshewon.Thepoornegotiatorcomesawaywiththeotherpersonfeelingthatheorshelost.

IfyoulearnandapplythesecretsofPowerNegotiationthatI’llteachyouinthisbook,you’llneveragainfeelthatyoulosttotheotherperson.You’llalwayscomeawayfromthenegotiatingtableknowingthatyouwon,andknowingthatyouhaveimprovedyourrelationshipwiththeotherperson.

If you have any comments, suggestions, stories to share, complaints toregister, or questions to ask, please e-mail the author atRoger@RogerDawson.com.

SectionOne

PlayingthePowerNegotiatingGame

YouplayPowerNegotiatingbyasetofrules,justlikethegameofchess.Thebig difference between negotiating and chess is that, in negotiating, the otherpersondoesn’thavetoknowtherules.Theotherpersonwillrespondpredictablyto themoves thatyoumake—notbecauseofmetaphysicalmagic,butbecausethousands of my students have told me their negotiating experience over theyears,andfromthis feedbackweknowhowtheotherpersonwill react toanyPowerNegotiatingmoveyoumake.Noteverytimeofcourse,butthelikelihoodissohighthatwenowknowthatnegotiatingismoreofasciencethananart.

Ifyouplaychess,youknowthat thestrategicmovesof thegamearecalledgambits.WhenItellyouaboutnegotiatinggambits,I’mtalkingaboutastrategicmove that involves some risk. I’ll teach you how to select the appropriategambit.Yourskillinselectingtherightgambitandusingitattherighttimewillminimize the risk.BeginningGambits get the game started in your direction.Middle Gambits keep the game moving in your direction. You use EndingGambitswhenyougetreadytocheckmatetheotherpersonor,insalesparlance,closethesale.

In the first section of this book, I’ll teach you the Gambits of PowerNegotiating.You’ll learn theBeginningGambits: the things thatyoudo in theearlystagesofyourcontactwiththeotherperson,tobesurethatyou’resettingthestageforasuccessfulconclusion.Asthenegotiationprogresses,you’llfindthat every advancewill dependon the atmosphere that you create in the earlystages.Youshoulddetermine thedemands thatyoumake,andtheattitudeyoupresent with a carefully made plan that encompasses all elements of thenegotiation.

YourOpeningGambitswillwinorlosethegameforyou.Youmustbasetheiruseonacarefulevaluationoftheotherperson,themarket,andtheotherside’scompany.

Next, I’ll teach you theMiddleGambits that keep themomentum going in

yourfavor.Duringthisphase,differentthingscomeintoplay.Themovesmadebyeachsidecreatecurrentsthatswirlaroundtheparticipantsandpushthemindifferentdirections.You’lllearnhowtorespondtothesepressuresandcontinuetomasterthegame.

Finally, I’ll teach you Unethical Gambits, Negotiating Principles, and theEndingGambitsthatconcludethenegotiationwithyourgettingwhatyouwant,andwiththeotherpersonstillfeelingthatheorshewon.Thelastfewmomentscanmakeallthedifference.Justasinahorserace,there’sonlyonepointinthecontestthatcounts,andthat’sthefinishline.AsaPowerNegotiator,you’lllearnhow to smoothly control the process right down to thewire. Let’s get startedlearningtheGambitsofPowerNegotiating!

But first, a word (or two) about gender. A lot has happened to the use ofgenderinAmericanEnglishsinceIcameherefromEngland.JohnF.Kennedywouldnolongerbeallowedtosay,“(Ourgoalis)tolandamanontheMoon...and returning him safely to the Earth.” Bobby Kennedy wouldn’t win aCalifornia primary electionwith his slogan “Somemen see things as they areandsaywhy?Idreamthingsthatneverwereandsay,whynot?”

In thisbook, thepoliticallycorrect thing is torefer toeveryhumanasheorshe, him or her.With these new-fangled computers onwhichwewrite booksthesedays,itwouldonlytakemefiveminutestohaveitreadthatway.But,trustme:Youwouldhateit.Itwouldbelikewalkingbarefootthroughhotpebblesasyoustumbledaroundtryingtomakesenseofitall.EvenmybrillianteditorJodiBrandon,whowon’t letmeget awaywitha thing, tellsme, “Useeitherheorshe,andletthereadersknowatthestartthatonecouldmeantheother.”Sothat’swhatyou’llfindhere.(Ifyou’restillunhappy,Iencourageyoutoe-mailmeatRoger@RogerDawson.com)

BeginningNegotiatingGambits

Chapter1

AskforMoreThanYouExpecttoGet

One of the cardinal rules of PowerNegotiating is you should ask the otherside formore than you expect to get. HenryKissinger went so far as to say,“Effectivenessattheconferencetabledependsuponoverstatingone’sdemands.”Somereasonswhyyoushoulddothisare:

Whyshouldyouaskthestoreforabiggerdiscountthanyouthinkyouhaveachanceofgetting?Whyshouldyouaskyourbossforanexecutivesuite,althoughyouthinkyou’llbeluckytogetaprivateoffice?Ifyou’reapplyingforajob,whyshouldyouaskformoremoneyandbenefitsthanyouthinkthey’llgiveyou?Ifyou’redissatisfiedwithamealinarestaurant,whyshouldyouaskthemaitre’dtocanceltheentirebill,eventhoughyouthinktheywilltakeoffonlythechargefortheoffendingitem?

Ifyouhavethoughtaboutthis,youprobablycameupwithafewgoodreasonstoaskformorethanyouexpecttoget.Theobviousanswerisitgivesyousomenegotiating room. If you’re selling, you can always come down, but you cannevergoupinprice.Ifyou’rebuying,youcanalwaysgoup,butyoucannevercomedown.(WhenwegettoChapter14,I’llshowyouhowtonibbleformore.Some thingsareeasier togetat theendof thenegotiation than theyareat thebeginning.) What you should be asking for is your MPP—your maximumplausibleposition.Thisisthemostyoucanaskforandstillhavetheothersideseesomeplausibilityinyourposition.

Thelessyouknowabouttheotherside,thehigheryourinitialpositionshouldbe,fortworeasons:

1.Youmaybeoffinyourassumptions.Ifyoudon’tknowtheotherpersonorhisneedswell,hemaybewillingtopaymorethanyouthink.Ifhe’sselling,hemaybewillingtotakefarlessthanyouthink.

2.Ifthisisanewrelationship,you’llappearmorecooperativeifyou’reabletomakelargerconcessions.Thebetteryouknowtheotherpersonandhisneeds,themoreyoucanmodifyyourposition.Iftheothersidedoesn’tknowyou,theirinitialdemandsmaybemoreoutrageous.

Ifyou’reaskingformorethanyourmaximumplausibleposition,implysomeflexibility.Ifyourinitialpositionseemsoutrageoustotheotherpersonandyourattitudeis“takeitorleaveit,”youmaynotevengetthenegotiationsstarted.Theotherperson’s responsemaybe, “Thenwedon’thaveanything to talkabout.”You can get away with an outrageous opening position if you imply someflexibility.

Ifyou’rebuyingrealestatedirectlyfromtheseller,youmightsay,“Irealizethatyou’reasking$200,000forthepropertyand,basedoneverythingyouknow,itmayseemlikea fairprice toyou.Perhapsyouknowsomething that Idon’tknow,butbasedonalltheresearchthatI’vedone,itseemstomethatweshouldbe talking something closer to $160,000.” At that point the seller may bethinking, “That’s ridiculous. I’ll never sell it for that, but he does seem to besincere,sowhatdoIhavetoloseifIspendsometimenegotiatingwithhim,justtoseehowhighIcangethimtogo?”

If you’re a salesperson, you might say to the buyer, “We may be able tomodify this position once we know your needs more precisely, but based onwhatweknowsofarabout thequantitiesyou’dbeordering, thequalityof thepackaging,andnotneedingjust-in-timeinventory,ourbestpricewouldbeintheregionof$2.25perwidget.”Atthattheotherpersonwillprobablybethinking,“That’soutrageous,but theredoesseemtobesomeflexibility there,soI thinkI’llinvestsometimenegotiatingwithherandseehowlowIcangethertogo.”

Unlessyouarealreadyanexperiencednegotiator,hereistheproblemyouwillhavewiththis.YourrealMPPisprobablymuchhigherthanyouthinkitis.Weallfearbeingridiculedbytheotherperson(somethingthatI’lltalkmoreaboutlaterwhenwediscussCoercivePowerinChapter55).We’reallreluctanttotakeapositionthatwillcausetheotherpersontolaughatusorputusdown.Becauseofthisintimidation,youwillprobablyfeellikemodifyingyourMPPtothepointwhere you’re asking for less than themaximum amount that the other person

wouldthinkisplausible.

Anotherreasonforaskingformorethanyouexpecttogetwillbeobvioustoyouifyou’reapositivethinker:Youmightjustgetit.Youdon’tknowhowtheuniverse is aligned that day.Perhapsyourpatron saint is leaningover a cloudlookingdownatyouand thinking,“Wow, lookat thatniceperson.She’sbeenworkingsohardforsolongnow.Let’sjustgiveherabreak.”Youmightjustgetwhatyouaskforandtheonlywayyou’llfindoutistoaskforit.

In addition, asking formore than you expect to get increases the perceivedvalueofwhatyouareoffering.Ifyou’reapplyingforajobandaskingformoremoneythanyouexpecttoget,youimplantinthepersonneldirector’smindthethoughtthatyouareworththatmuch.Ifyou’resellingacarandaskingformorethanyouexpecttoget,itpositionsthebuyerintobelievingthatthecarisworthmore.

Anotheradvantageofaskingformorethanyouexpecttogetisitpreventsthenegotiation from deadlocking. Look at the Persian Gulf War. What were weaskingSaddamHussein to do? (Perhaps asking is not exactly the rightword.)PresidentGeorgeBush,inhisStateoftheUnionaddress,usedabeautifulpieceof alliteration, probably written by Peggy Noonan, to describe our openingnegotiatingposition.Hesaid,“I’mnotbragging, I’mnotbluffing,andI’mnotbullying.Therearethreethingsthismanhastodo.HehastogetoutofKuwait.He has to restore the legitimate government of Kuwait (don’t do what theSovietsdidinAfghanistanandinstallapuppetgovernment),andhehastomakereparationsforthedamagethathe’sdone.”

Thatwasaveryclearandpreciseopeningnegotiatingposition.Theproblemwasthatthiswasalsoourbottomline.Itwasalsotheleastforwhichwewereprepared to settle. No wonder the situation deadlocked. It had to deadlockbecausewedidn’tgiveSaddamHusseinroomtohaveawin.Ifwe’dhavesaid,“Okay.Wewantyouandall your cronies exiled.Wewant anon-Arabneutralgovernment installed in Baghdad.WewantUnitedNations supervision of theremovalofallmilitaryequipment.Inaddition,wewantyououtofKuwait,thelegitimateKuwaitigovernmentrestored,andreparationforthedamagesthatyoudid.” Then we could have gotten what we wanted and still given SaddamHusseinawin.

Iknowwhatyou’rethinking.You’rethinking,“Roger,SaddamHusseinwasnotonmyChristmascardlistlastyear.He’snotthekindofguyIwanttogivea

winto.”Iagreewiththat.However,itcreatesaprobleminnegotiation.Itcreatesdeadlocks.

SometimesYouWanttoCreateaDeadlock

From the Persian Gulf scenario, you could draw one of twoconclusions. The first is that our State Department negotiators areidiots. The second possibility is that this was a situation where wewantedtocreateadeadlock,becauseitservedourpurpose.Wehadnointentionofsettlingfor the three things thatGeorgeBushdemandedin his State of the Union address. General Schwarzkopf, in hisbiography,ItDoesn’tTakeaHero,said,“Theminutewegotthere,weunderstoodthatanythinglessthanamilitaryvictorywasadefeatforthe United States.” We couldn’t let Saddam Hussein pull 600,000troopsbackacross theborder, leavinguswonderingwhenhewouldchoose todo itagain.Weneededa reason togo inand takecareofhimmilitarily.

ThePersianGulfWarwasasituationwhereitservedourpurposetocreateadeadlock.Whatconcernsmeisthat,whenyou’reinvolvedinanegotiation,youareinadvertentlycreatingdeadlocks,becauseyoudon’thavethecouragetoaskformorethanyouexpecttoget.AfinalreasonwhyPowerNegotiatorssayyoushould ask formore than you expect to get is that it’s the onlyway you cancreateaclimatewheretheotherpersonfeelsthatheorshewon.

Ifyougo inwithyourbestofferup front, there’snowayyoucannegotiatewith the other side and leave them feeling that they won. These are theinexperiencednegotiators alwayswanting to startwith their best offer.This isthe job applicantwho thinks, “This is a tight jobmarket, and if I ask for toomuchmoney,theywon’tevenconsiderme.”

Thisisthepersonwho’ssellingahouseoracarandthinking,“IfIaskfortoomuch,they’lljustlaughatme.”Thisisthesalespersonwhoissayingtohersales

manager, “I’m going out on this proposal today, and I know it’s going to becompetitive.Iknowthey’regettingbidsfrompeopleallovertown.Letmecutthepriceupfront,orwewon’tstandachanceofgettingtheorder.”Negotiatorsknowthevalueofaskingformorethanyouexpecttoget.

Let’srecapthereasonsforaskingformorethanyouexpecttoget:

Youmightjustgetit.Itgivesyousomenegotiatingroom.Itraisestheperceivedvalueofwhatyou’reoffering.Itpreventsthenegotiationfromdeadlocking.Itcreatesaclimateinwhichtheothersidefeelsthattheywon.

Inhighlypublicizednegotiations,suchaswhenthefootballplayersorairlinepilots go on strike, the initial demands both sides make are outlandish. Iremember being involved in a union negotiation inwhich the initial demandswereunbelievablyoutrageous.Theunion’sdemandwastotripletheemployees’wages.Thecompany’sopeningwastomakeitanopenshop—inotherwords,avoluntaryunionthatwouldeffectivelydestroytheunion’spoweratthatlocation.

WhenSudaneserebelstookthreeRedCrossworkershostage,theydemanded$100millionfortheirrelease.Fortunately,nobodytookthisseriously,andtheyquickly dropped their demand to $2.5 million. Congressman Bill Richardson,whowouldlaterridehisnegotiatingskillsallthewaytobeingourambassadorto theUnitedNations, sat under a tree, ignoring the rebelswhowerewavinggunsathim.Heeventually secured their release for five tonsof rice, fouroldjeeps,andsomeradiosfromRedCrossreliefsupplies.

IrememberbeinginBeijing,China,whentheyfirststartedadmittingvisitors.I wanted a pedishaw ride to my hotel that was only two blocks away. (Apedishaw is like a rickshaw, but it has a bicycle on the front.) When thepedishawdriversrealizedthatIwasanAmerican,theywentwildwithdelight.Theyallgatheredaround,apparentlyoblivioustomypresence,andadvisedtheluckydriverhowtohandle thenegotiationswithme.Oneof themtoldhim toaskmefor$10,anothersaid$20,andfinally,theyagreedthat$50wouldbeanappropriateplacetostartthenegotiations.Ieventuallygavehim$1,whichwasmorethanaday’swages,andhewasveryhappy.

PowerNegotiatorsknowthattheinitialdemandsinthesetypesofnegotiationsare always extreme, so they don’t let it bother them. They know that as the

negotiationsprogress, theywillwork theirway toward themiddle,where theywill findasolution thatbothsidescanaccept.Then theycanbothcallapressconferenceandannouncethattheywoninthenegotiations.

HowAttorneysAskforMore

Anattorneyfriendofmine,JohnBroadfoot,fromAmarillo,Texas,tested this theory forme.Hewas representingabuyerofapieceofreal estate, and even though he had a good deal worked out, hethought, “I’ll see howRoger’s rule of ‘Asking forMore ThanYouExpecttoGet,’works.”Hedreamedup23paragraphsofrequeststomakeoftheseller.Someofthemwereridiculous.Hefeltsurethatatleasthalfofthemwouldbethrownoutrightaway.Tohisamazement,hefoundthatthesellerofthepropertytookstrongobjectiontoonlyoneof the sentences inoneof theparagraphs.Even then John, as Ihadtaughthim,didn’tgiveinrightaway.Heheldoutforacoupleofdays before he finally and reluctantly conceded. Although he hadgivenawayonlyonesentencein23paragraphsofrequests,thesellerstillfeltthathehadwoninthenegotiation.

Bracketing

Thenextquestionhastobe:Ifyou’reaskingformorethanyouexpecttoget,forhowmuchmorethanyouexpecttogetshouldyouask?Theansweristhatyou should bracket your objective. Your initial proposal should be an equaldistanceontheothersideofyourobjectiveastheirproposal.

Letmegiveyousomesimpleexamples:

Thecardealerisasking$15,000forthecar.Youwanttobuyitfor$13,000.Makeanopeningofferof$11,000.Oneofyouremployeesisaskingifshecanspend$400onanewdesk.Youthinkthat$325isreasonable.Youshouldtellherthatyoudon’twanthertoexceed$250.You’reasalesperson,andthebuyerisofferingyou$1.60foryourwidgets.Youcanlivewith$1.70.Bracketingtellsyouthatyoushouldstartat$1.80.Thenifyouendupinthemiddle,you’llstillmakeyourobjective.

Ofcourseit’snotalwaystrueyou’llendupinthemiddle,butthatisagoodassumption to make if you don’t have anything else on which to base youropeningposition.Assumeyou’llendupinthemiddle,betweenthetwoopeningnegotiatingpositions.Ifyoutrackthis,Ithinkthatyou’llbeamazedathowoftenithappens.

Inlittlethings.Yoursoncomestoyouandsaysheneeds$20forafishingtriphe’sgoingonthisweekend.Yousay,“Noway.I’mnotgoingtogiveyou$20.DoyourealizethatwhenIwasyourageIgot50centsaweekallowanceandIhadtoworkforthat?I’llgiveyou$10andnotapennymore.”

Yoursonsays,“Ican’tdoitfor$10,Dad.”

Nowyouhaveestablishedthenegotiatingrange.He’saskingfor$20.You’rewillingtopay$10.Seehowoftenyouendupat$15.Inourculture,splittingthedifferenceseemsfair.

BracketinginaLargeInternationalNegotiation

Inbigthings.In1982,we(theUnitedStates)werenegotiatingthepayoffof ahuge international loanwith thegovernmentofMexico.They were about to default on an $82 billion loan. Their chiefnegotiator was Jesus Herzog, their finance minister. TreasurySecretaryDonaldRegan andFederalReserveBoardChairmanPaulVolckerrepresentedourside.Inacreativesolution,weaskedMexicoto contribute huge amounts of petroleum to our strategic petroleumreserve,whichHerzogagreedtodo.Thatdidn’tsettleit,however.WeproposedtotheMexicansthattheypayusa$100millionnegotiating

fee, which was a politically acceptable way for them to pay usaccruedinterest.WhenPresidentLopezPortilloheardwhatwewereasking for, he went ballistic. He said the equivalent of, “You tellRonaldReagan to drop dead.We’re not paying theUnited States anegotiating fee. Not one peso.” Now we had the negotiating rangeestablished.Weaskedfor$100milliondollars.They’reofferingzero.Guess what they ended up paying us? That’s right: $50 milliondollars.

Inlittleandinbigthings,weendupsplittingthedifference.Withbracketing,PowerNegotiatorsareassuredthatifthathappens,theystillgetwhattheywant.Tobracket,yougettheotherpersontostatehisorherpositionfirst.Iftheotherpersoncangetyoutostateyourpositionfirst,thenheorshecanbracketyousothat,ifyouendupsplittingthedifference,assooftenhappens,theotherpersonends up getting what he or she wanted. That’s an underlying principle ofnegotiatingtowhichI’llreturnlater(inChapter26).Gettheotherpersontostatehisorherpositionfirst.Itmaynotbeasbadasyoufear,andit’stheonlywayyoucanbracketaproposal.

Conversely, don’t let theotherperson trickyou into committing first. If thestatusquoisfinewithyou,andthereisnopressureonyoutomakeamove,beboldenoughtosaytotheotherperson,“You’retheonewhoapproachedme.Theway things are satisfies me. If you want to do this, you’ll have to make aproposaltome.”

Anotherbenefitofbracketingisthatittellsyouhowbigyourconcessionscanbeasthenegotiationprogresses.Let’stakealookathowthiswouldworkwiththethreesituationsIdescribedearlier.Thecardealer isasking$15,000forthecar.Youwanttobuyitfor$13,000.Youmadeanopeningofferof$11,000.Thenifthedealercomesdownto$14,500,youcangoupto$11,500andyouwillstillhaveyourobjectivebracketed.Ifthedealer’snextmoveisto$14,200,youcanalsoshiftyourpositionby$300andgoto$11,800.

Oneofyouremployeesisaskingifshecanspend$400onanewdesk.Youthink$325isreasonable.Yousuggest$250.Iftheemployeerespondsbysaying

shemaybeabletogetwhatsheneedsfor$350,youcanrespondbytellingherthatyou’llbeabletofind$300inthebudget.Becauseyou’vebothmoved$50,yourobjectivewillstillbeinthemiddle.

Rememberthebuyerofferingyou$1.60foryourwidgets?Youtoldthebuyerthatyourcompanywouldbelosingmoneyatapennylessthan$1.80.Yourgoalistoget$1.70.Thebuyercomesupto$1.63.Youcannowmovedownto$1.77and your goalwill still be in themiddle of the two proposals that are on thenegotiatingtable.In thatway,youcanmoveinonyour targetandknowif theothersideofferstosplitthedifference,youcanstillmakeyourgoal.

There is a danger in bracketing, however. You should not become sopredictable with your responses that the other side can detect your pattern ofconcessions. I illustrated this with mathematically computed concessions tomakemypointclear,butyoushouldvaryyourmovesslightlysoyourreasonformakingamovecannoteasilybedetermined.Later(inChapter16),I’llgointomoredetailonpatternsofconcessions.

AFableAboutAskingforMore

There was once a very old couple who lived in a dilapidatedthatched hut on a remote Pacific Island.One day, a hurricane blewthrough the village and demolished their home. Because they weremuch toooldandpoor to rebuild thehut, thecouplemoved inwiththeir daughter and her husband. This arrangement precipitated anunpleasant domestic situation, as the daughter’s hut was barely bigenoughforherself,herhusband,andtheirfourchildren,letalonethein-laws.

Thedaughterwenttothewisepersonofthevillage,explainedtheproblemandasked,“Whateverwillwedo?”

Thewisepersonpuffedslowlyonapipeandthenresponded,“Youhavechickens,don’tyou?”

“Yes,”shereplied,“wehave10chickens.”

“Thenbringthechickensintothehutwithyou.”

This seemed ludicrous to thedaughter, but she followed thewise

person’sadvice.Themovenaturallyexacerbatedtheproblem,andthesituationwas soon unbearable, for feathers aswell as hostilewordsflew around the hut. The daughter returned to the wise person,pleadingagainforadvice.

“Youhavepigs,doyounot?”

“Yes,wehavethreepigs.”

“Thenyoumustbringthepigsintoyourhutwithyou.”

That seemed to be ridiculous advice, but to question the wisepersonwasunthinkable,soshebroughtthepigsintothehut.Lifewasnow truly unlivable, with eight people, 10 chickens, and three pigssharingonetiny,noisyhut.Herhusbandcomplainedthathecouldn’theartheradioovertheracket.

The next day the daughter, fearing for her family’s sanity,approachedthewisepersonwithafinaldesperateplea.“Please,”shecried,“wecan’t live like this.Tellmewhat todoand I’lldo it,butpleasehelpus.”

This time, thewise person’s responsewas puzzling, but easier tofollow. “Remove the chickens and the pigs from your hut.” Shequickly evicted the animals, and the entire family lived happilytogetherfortherestoftheirdays.Themoralofthestoryisthatadealalwayslooksbetteraftersomethinghasbeenthrownout.

Askformorethanyouexpecttoget.Itseemslikesuchanobviousprinciple,but it’s something that you can count on in a negotiation. In thousands ofworkshop situations, and in tens of thousands of traceable real-life situations,thisissomethingparticipantshaveprovenrepeatedly.Themoreyouaskfor,themoreyou’regoingtoget.

Your objective should be to advance yourMPP—your maximum plausibleposition. If your initial proposal is extreme, imply some flexibility. Thisencourages the other side to negotiatewith you.The less youknowabout the

otherside,themoreyoushouldaskfor.Astrangerismorelikelytosurpriseyou,and you can build goodwill bymaking bigger concessions. Bracket the otherside’sproposal,sothatifyouendupsplittingthedifference,youstillgetwhatyouwant.Youcanbracketonly if youget theotherperson to statehisorherposition first. Continue bracketing as you zero in on your objective withconcessions.

KeyPointstoRemember

Askformorethanyouexpecttoget,forfivereasons:1.Youmightjustgetit.2.Itgivesyousomenegotiatingroom.3.Itraisestheperceivedvalueofwhatyou’reoffering.4.Itpreventsthenegotiationfromdeadlocking.5.Itcreatesaclimateinwhichtheothersidefeelstheywon.

Chapter2

NeverSayYestotheFirstOffer

Thereasonthatyoushouldneversayyestothefirstoffer(orcounteroffer)isthatitautomaticallytriggerstwothoughtsintheotherperson’smind.Let’ssaythatyou’rethinkingofbuyingasecondcar.Thepeopledownthestreethaveoneforsale,andthey’reasking$10,000.Thatissuchaterrificpriceontheperfectcar for you that you can’t wait to get down there, and snap it up beforesomebodyelsebeatsyoutoit.Onthewaythereyoustartthinkingthatitwouldbeamistaketoofferthemwhatthey’reasking,soyoudecidetomakeasuper-lowofferof$8,000just toseetheirreaction.Youshowupat theirhouse, lookthecarover, take it forashort testdrive,and thensay to theowners,“It’snotwhatI’mlookingfor,butI’llgiveyou$8,000.”

You’rewaiting for them to explodewith rage at such a lowoffer, butwhatactuallyhappens is that thehusband looksat thewifeandsays,“Whatdoyouthink,dear?”

Thewifesays,“Let’sgoaheadandgetridofit.”

Does this exchange make you jump for joy? Does it leave you thinking,“Wow, I can’t believewhat a deal I got. I couldn’t havegotten it for a pennyless”?

I don’t think so—you’re probably thinking: “I could have done better.Somethingmust bewrong.”Now let’s consider amore sophisticated exampleandput you in the other person’s shoes for amoment.Let’s say that you’re abuyerforamakerofaircraftenginesandyou’reabouttomeetwithasalespersonwho represents the manufacturer of engine bearings, something that’s a vitalcomponentforyou.

Yourregularsupplierhasletyoudown,andyouneedtomakeanemergencypurchasefromthisnewcompany.Itistheonlycompanythatcansupplywithin30dayswhatyouneedtopreventashutdownofyourassemblyline.Ifyoucan’tsupply the engines on time, it will invalidate your contract with the aircraftmanufacturer,whoprovides85percentofyourbusiness.

Underthesecircumstances,thepriceofthebearingsyouneedisdefinitelynota high priority. As your secretary announces the arrival of the salesperson,however, you think to yourself, “I’ll be a good negotiator. Just to see whathappens,I’llmakehimasuper-lowoffer.”

The salespersonmakeshispresentationandassuresyou thathecan shipontimetoyourspecifications.Hequotesyouapriceof$250eachforthebearings.Thissurprisesyoubecauseyouhavebeenpaying$275forthem.Youmanagetomask your surprise and respond with, “We’ve been paying only $175” (inbusiness,wecallthisalie,anditisdoneallthetime),towhichthesalespersonresponds,”Okay.Wecanmatchthat.”

Atthispoint,youalmostcertainlyhavetworesponses:1)“Icouldhavedonebetter,” and2) “Somethingmustbewrong.” In the thousandsof seminars thatI’veconductedover theyears,I’veposedasituationlike this toaudiencesandcan’t recallgettinganythingother than these tworesponses.Sometimespeoplereversethem,butusuallytheresponseisautomatic:“Icouldhavedonebetter,”and “Something must be wrong.” Let’s look at each of these responsesseparately.

Firstreaction: I could have done better. The interesting thing about this isthatitdoesn’thaveathingtodowiththeprice.Ithastodoonlywiththewaytheotherpersonreactstotheproposal.Whatifyou’doffered$7,000forthecar,or$6,000,and they toldyou rightaway that they’d take it?Wouldn’tyoustillthinkyoucouldhavedonebetter?Whatifthatbearingsalespersonhadagreedto$150or$125?Wouldn’tyoustillthinkyoucouldhavedonebetter?

“ICouldHaveDoneBetter”inaLandPurchase

Many years ago, I bought 100 acres of land in Eatonville,Washington, a beautiful little town justwest ofMountRainier. Thesellerwasasking$185,000for the land.IanalyzedthepropertyanddecidedthatifIcouldgetitfor$150,000,itwouldbeaterrificbuy.Ibracketedthatpriceandaskedtherealestateagenttopresentanofferto the seller at $115,050. (Specific numbers build credibility, soyou’re more likely to get them to accept an offer like this than tocounterit.Moreaboutthislater.)

Iwentback tomyhomeinLaHabraHeights,California, leavingthe agent topresent theoffer to the seller.Frankly, I thought I’dbeluckyiftheycamebackwithanykindofcounterofferonaproposalthislow.Tomyamazement,Igottheofferbackinthemailafewdayslater,acceptedatthepriceandtermsthatIhadproposed.I’msurethatIgotaterrificbuyontheland.Withinayear,I’dsold60oftheacresformore thanIpaidfor thewholehundred.Later, Isoldanother20acresformorethanIpaidforthewholehundred.Whentheyacceptedmy offer, I should have been thinking, “Wow. That’s terrific, Icouldn’thavegottena lowerprice.”That’swhat Ishouldhavebeenthinking,butIwasn’t.Iwasthinking,“Icouldhavedonebetter.”

Second reaction: Something must be wrong. My second reaction when Ireceived the accepted offer on the landwas, “Somethingmust bewrong. I’mgoingtotakeathoroughlookatthepreliminarytitlereport.SomethingmustbegoingonthatIdon’tunderstand,ifthey’rewillingtoacceptanofferthatIdidn’tthinktheywould.”

The second thoughtyou’dhavewhen the seller of that car saidyes toyourfirstofferisthatsomethingmustbewrong.Thesecondthoughtthatthebuyerofthe bearings will have is, “Something must be wrong. Maybe something’schangedinthemarketsinceIlastnegotiatedabearingcontract.Insteadofgoingahead, I think I’ll tell this salesperson that I’vegot tocheckwithacommitteeandthentalktosomeothersuppliers.”

Thesetworeactionswillgothroughanybody’smindifyousayyestothefirstoffer.Let’ssayyoursoncametoyouandsaid,“CouldIborrowthecartonight?”and you said, “Sure, Son, take it. Have a wonderful time.” Wouldn’t heautomatically think,“Icouldhavedonebetter. Icouldhavegotten$10for themovie out of this”? And wouldn’t he automatically think, “What’s going onhere?Why do they want me out of the house?What’s going on that I don’tunderstand”?

This is averyeasynegotiatingprinciple tounderstand,but it’sveryhard torememberwhen you’re in the thick of a negotiation.Youmay have formed a

mental picture of how you expect the other side to respond, and that’s adangerousthingtodo.NapoleonBonaparteoncesaid,“Theunforgivablesinofacommander is to‘formapicture’—toassumethat theenemywillactacertainwayinagivensituation,wheninfacthisresponsemaybealtogetherdifferent.”You’re expecting them to counter at a ridiculously low figure, and to yoursurprise,theotherperson’sproposalismuchmorereasonablethanyouexpectedittobe.

Here’sanexample:Youhavefinallypluckedupthecouragetoaskyourbossfor an increase. You’ve asked for a 15-percent increase in pay, but you thinkyou’llbeluckytoget10percent.Toyourastonishment,yourbosstellsyouthathe or she thinks you’re doing a terrific job, and would love to give you theincrease in pay. Do you find yourself thinking about what a wonderfullygenerous company you work for? I don’t think so. You’re probably wishingyou’daskedfora25-percentincrease.

Yoursonasksyoufor$100totakeaweekendhikingtrip.Yousay,“Noway.I’ll give you $50 and not a penny more.” In reality, you have bracketed hisproposal(seeChapter1)andexpecttosettlefor$75.Toyoursurpriseyoursonsays, “That would be tight, Dad, but okay. $50 would be great.” Are youthinkinghowcleveryouweretogethimdownto$50?Idon’tthinkso.You’reprobablywonderinghowmuchlesshewouldhavesettledfor.

You’resellingapieceofrealestatethatyouown.You’reasking$100,000.Abuyermakesanofferat$80,000,andyoucounterat$90,000.You’re thinkingthat you’ll end up at $85,000, but to your surprise, the buyer immediatelyaccepts the$90,000offer.Admit it—aren’tyouthinking that if they jumpedat$90,000,youcouldhavegottenthemupmore?

PowerNegotiatorsarecareful that theydon’t fall into the trapofsayingyestoo quickly, which automatically triggers in the other person’s mind thefollowing: “I could have done better, and next time I will.” A sophisticatedpersonwon’ttellyouthathefeltthathelostinthenegotiation,buthewilltuckitawayinthebackofhismind,thinking,“thenexttimeIdealwiththisperson,I’llbeatoughernegotiator.Iwon’tleaveanymoneyonthetablenexttime.”

SomethingMustBeWrong

Turningdownthefirstoffermaybetoughtodo,particularly ifyou’vebeencallingonthepersonformonths,andjustasyou’reabouttogiveup,shecomesthrough with a proposal. It will tempt you to grab what you can.When thishappens,beaPowerNegotiator—remembernottosayyestooquickly.

Many years ago, I was president of a real estate company in southernCalifornia that had 28 offices and 540 sales associates. One day, a magazinesalesman came in, trying to sell me advertising space in hismagazine. I wasfamiliar with the magazine, and knew it to be an excellent opportunity, so Iwantedmy company to be in it.Hemademe a very reasonable proposal thatrequiredamodest$2,000investment.

BecauseIlovetonegotiate,IstartedusingsomeGambitsonhimandgothimdowntotheincrediblylowpriceof$800.YoucanimaginewhatIwasthinkingatthatpoint.Right.Iwasthinking,“Holycow.IfIgothimdownfrom$2,000to$800injustafewminutes,IwonderhowlowIcangethimtogoifIkeeponnegotiating?” I used a Middle Gambit on him called Higher Authority (seeChapter 7). I said, “This looks fine. I do just have to run it by my board ofdirectors. Fortunately, they’remeeting tonight. Letme run it by them and getbacktoyouwiththefinalokay.”

Acoupleofdays later, Icalledhimbackandsaid,“You’llneverknowhowembarrassed I amabout this.Youknow, I really felt that Iwouldn’t have anyproblematallsellingtheboardofdirectorsonthat$800priceyouquotedme,but they’re so difficult to deal with right now. The budget has been givingeveryoneheadaches lately.Theydidcomebackwithacounteroffer,but it’ssolowthatitembarrassesmetotellyouwhatitis.”

Therewasalongpause,andhefinallysaid,“Howmuchdidtheyagreeto?”

“$500.”

“That’sokay.I’lltakeit,”hesaid.Ifeltcheated.AlthoughI’dnegotiatedhimdownfrom$2,000to$500,IstillfeltthatIcouldhavedonebetter.

There’sapostscript to this story. I’malways reluctant to tell stories suchasthisatmyseminars,forfearthatitmaygetbacktothepersonwithwhomIwasnegotiating.However,severalyearslater,IwasspeakingatthehugeCaliforniaAssociationofRealtorsconventionbeingheldthatyearinSanDiego.Itoldthisstoryinmytalk,neverimaginingthatthemagazinesalesmanwasstandingintheback of the room.As I finishedmy presentation, I saw him pushing hisway

through thecrowd. Ibracedmyself forwhat I expected tobeaverbalassault.However,heshookmyhandandsaidwithasmile,“Ican’tthankyouenoughforexplaining that tome. Ihadno idea the impact thatmy tendency to jumpataquickdealwashavingonpeople.I’llneverdothatagain.”

AtTimesYouShouldSayYestotheFirstOffer

Iusedtothinkthatitwasa100-percentrulethatyoushouldneversayyes to thefirstoffer—until IheardfromTimRush,arealestateexecutive in Los Angeles, who told me, “I was driving downHollywoodBoulevardlastnight,listeningtoyourcassettetapesinmycar.Istoppedatagasstationtousetherestroom.WhenIcamebacktomycar,somebodystuckaguninmyribsandsaid,‘Okay,buddy.Givemeyourwallet.’Well,I’djustbeenlisteningtoyourtapes,soIsaid,‘I’llgiveyouthecash,butletmekeepthewalletandthecreditcards.Fairenough?’Andhesaid,‘Buddy,youdidn’tlistentome,didyou?Givemethewallet!”’Inthislitigiousage,that’smydisclaimer:Sometimesyoushouldsayyestothefirstoffer,butit’salmosta100-percentrulethatyoushouldneverjumpatthefirstoffer.

KeyPointstoRemember

1.Neversayyestothefirstofferorcounterofferfromtheotherside.Itautomaticallytriggerstwothoughts:“Icouldhavedonebetter(nexttimeIwill),”and“Somethingmustbewrong.”

2.Thebigdangeriswhenyouhaveformedamentalpictureofhowtheotherpersonwillrespondtoyourproposalandheorshecomesbackmuchhigherthanyouexpected.Preparefor

thispossibilitysoitwon’tcatchyouoffguard.

Chapter3

FlinchatProposals

Power Negotiators know you should always flinch—react with shock andsurpriseat theotherside’sproposals.Let’ssayyou’re ina resortareaandyoustoptowatchacharcoalsketchartist.Hedoesn’thavethepriceposted,soyouaskhimhowmuchhe charges, andhe tells you$15. If that doesn’t appear toshockyou,hisnextwordswill be, “And$5extra for color.” If you still don’tappear shocked,hewill say, “Andwehave shippingcartonshere.You’llneedoneofthese,too.”

Perhaps you know someone who would never flinch like that because it’sbeneathhisorherdignity,thekindofpersonwhowouldwalkintoastore,andsaytotheclerk,“Howmuchisthecoat?”

Theclerkwouldrespond,“$2,000.”

Andthispersonwouldrespondwith,“That’snotbad!”Youshouldbehavingaheartattackinthebackground.Iknowitsoundsdumbandridiculous,butthetruthofthematteristhatwhenpeoplemakeaproposaltoyou,theyarewatchingforyour reaction.Theymaynot think for amoment thatyou’ll goalongwiththeirrequest.They’vejustthrownitouttoseewhatyourreactionwillbe.

Forexample:

Yousellcomputersandthebuyerasksyoutoincludeanextendedwarranty.You’rebuyingacarandthedealeroffersyouonlyafewhundreddollarsforyourtrade-in.Yousellcontractorsuppliesandthebuyerasksyoutodeliverittothejobsiteatnoextracharge.You’resellingyourhouseandthebuyerwantstomoveintwoweeksbeforethetransactioncloses.

Ineachofthesesituations,theothersidemaynothavethoughtforamomentthatyouwouldgoalongwiththerequest,butifyoudon’tflinch,heorshewill

automaticallythink,“MaybeIwillgetthemtogoalongwiththat.Ididn’tthinktheywould,butIthinkI’llbeatoughnegotiatorandseehowfarIcangetthemtogo.”

It’sveryinterestingtoobserveanegotiationwhenyouknowwhatbothsidesarethinking.Wouldn’t thatbefascinatingforyou?Wouldn’tyoulovetoknowwhat’sgoingon in theotherperson’smindwhenyou’renegotiatingwithher?WhenIconducttheone-ortwo-daySecretsofPowerNegotiatingseminars,webreak up into groups and do some negotiating to practice the principles that Iteach. I create a workshop and customize it to the industry in which theparticipantsare involved. If theyaremedicalequipmentsalespeople, theymayfindthemselvesnegotiatingthesaleoflasersurgeryequipmenttoahospital.Iftheyareownersofprint shops, theworkshopmay involve theacquisitionofasmallerprintingcompanyinanoutlyingtown.

Ibreaktheaudienceupintobuyers,sellers,andreferees.Therefereesareinaveryinterestingpositionbecausetheyhavebeeninontheplanningsessionsofboththebuyersandthesellers.Theyknoweachside’snegotiatingrange.Theyknowwhat theopeningoffer isgoing tobe,and theyknowhowfareachsidewillgo.Thesellersof theprintingcompanywouldgoaslowas$700,000,butthey may start as high as $2 million. The buyers may start at $400,000, butthey’re prepared to go to $1.5 million if they must. The negotiating range is$400,000to$2million,buttheacceptancerangeis$700,000to$1.5million.

Theacceptancerangeembracesthepricelevelsatwhichthebuyers’andthesellers’negotiatingrangesoverlap.Iftheydooverlapandthereisanacceptancerange,it’salmostcertainthatthefinalpricetowhichtheyagreewillfallwithinthisrange.Ifthetopofthebuyers’negotiatingrangeislowerthanthebottomofthe sellers’ negotiating range, then one or both sideswill have to compromisetheirobjectives.

Thenegotiationstartswitheachside trying toget theotherside toput theirofferonthetablefirst.Someonehastobreaktheice,sothesellersmaysuggestthe $2 million (which is the top of their negotiating range). They believe $2millionisridiculouslyhigh,andtheybarelyhavethenervetoproposeit.Theythinkthey’regoingtobe laughedoutof theroomtheminute theydo.Totheirsurprise, the buyers don’t appear to be that shocked. The sellers expect thebuyerstosay,“Youwantustodowhat?Youmustbeoutofyourminds.”Whattheyactuallyrespondwithismuchmilder,perhaps,“Wedon’tthinkthatwe’dbe

prepared to go that high.” In an instant, the negotiation changes its tune. Amoment ago, the $2 million had seemed to be an impossible goal. Now thesellers are thinking that perhaps they’re not as far apart as they previouslythought they were. Now they’re thinking, “Let’s hang in and be toughnegotiators.Maybewewillgetthismuch.”

Flinching is critical because most people believe what they see more thanwhattheyhear.Thevisualoverridestheauditoryinmostpeople.It’ssafeforyoutoassumethatatleast70percentofthepeoplewithwhomyounegotiatewillbevisuals.What theysee ismore important thanwhat theyhear. I’msureyou’vebeenexposedtosomeneuro-linguisticprogramming.Youknowthatpeopleareeithervisual,auditory,orkinesthetic(whattheyfeelisparamount).Thereareafew gustatory (taste) and olfactory (smell) people around, but not many, andthey’reusuallychefsorperfumeblenders.

Ifyou’dliketoknowwhatyouare,closeyoureyesfor10secondsandthinkofthehouseinwhichyoulivedwhenyouwere10yearsold.Youprobablysawthehouseinyourmind;you’reavisual.Perhapsyoudidn’tgetavisualpicture,butyouheardwhatwasgoingon,perhapstrainspassingbyorchildrenplaying.Thatmeansyou’reanauditory.NeilBermanisapsychotherapistfriendofmineinSantaFe,NewMexico.Hecan remembereveryconversationhe’severhadwith a patient, but if hemeets them in the supermarket, he doesn’t rememberthem.Theminutetheysaygoodmorningtohim,hethinks,“Ohyes,that’sthebipolarpersonalitywithantisocialtendencies.”

The thirdpossibility is thatyoudidn’t somuch see thehouse,orhearwhatwasgoingon,butyoujustgotafeelingforwhatitwaslikewhenyouwere10.Thatmakesyouakinesthetic.Assume thatpeople arevisual, unlessyouhavesomethingelsetogoon.Assumethatwhattheyseehasmoreimpactthanwhatthey hear. That’swhy it’s so important to respondwith a flinch to a proposalfrom the other side.Don’t dismiss flinching as childish or too theatrical untilyou’vehadachancetoseehoweffectiveitcanbe.It’ssoeffectivethatitusuallysurprisesmystudentswhentheyfirstuseit.Awomantoldmethatsheflinchedwhen selecting a bottle ofwine in one of Boston’s finest restaurants, and thewinestewardimmediatelydroppedthepricebyfivedollars.Amantoldmethatasimpleflinchcausedthesalespersontotake$2,000offthepriceofaCorvette.AspeakerfriendofmineattendedmyseminarinOrangeCounty,California,anddecidedtoseeifhecoulduseittogethisspeakingfeesup.Atthetime,hewasjust getting started and was charging $1,500. He went to a company and

proposedthattheyhirehimtodosomein-housetraining.Thetrainingdirectorsaid,“Wemightbeinterestedhavingyouworkforus,butthemostwecanpayyouis$1,500.”

Inthepast,hewouldhavesaid,“That’swhatIcharge.”Butnowhegaspedinsurpriseandsaid,“$1,500?Icouldn’taffordtodoitforjust$1,500.”

Thetrainingdirectorfrownedthoughtfully.“Well,”hesaid,“themostwe’veever offered any speaker is $2,500, so that’s the bestwe cando.”Thatmeant$1,000 in additional bottom-line profit dollars per speech tomy friend, and ittookhim15secondstodo.Notbadpay.

KeyPointstoRemember

1.Flinchinreactiontoaproposalfromtheotherside.Theymaynotexpecttogetwhattheyareaskingfor;however,ifyoudonotshowsurprise,you’recommunicatingthatitisapossibility.

2.Aconcessionoftenfollowsaflinch.Ifyoudon’tflinch,itmakestheotherpersonatoughernegotiator.

3.Assumethattheotherpersonisavisualunlessyouhavesomethingelseonwhichtogo.

4.Evenifyou’renotface-to-facewiththeotherperson,youshouldstillgaspinshockandsurprise.Telephoneflinchescanbeveryeffectivealso.

Chapter4

AvoidConfrontationalNegotiation

Whatyousayinthefirstfewmomentsofanegotiationoftensetstheclimateof the negotiation. The other person quickly gets a feel for whether you areworkingatawin-winsolution,orwhetheryouareatoughnegotiatorwhoisoutfor everything you can get. That is one problem that I have with the wayattorneysnegotiate—they’reveryconfrontationalnegotiators.Yougetthatwhiteenvelopeinthemailwithblack,raisedletteringinthetopleft-handcornerandyou think,“Oh,no!What is it this time?”Youopen the letter,andwhat is thefirstcommunicationfromthem?Itisathreat—whatthey’regoingtodotoyouifyoudonotgivethemwhattheywant.

AttorneysAreConfrontationalNegotiators

I was conducting a negotiating seminar for 50 attorneys wholitigatedmedicalmalpracticelawsuits,or,astheyprefertocallthem,physician liability lawsuits. I have never met an attorney who waseager to go to a negotiating seminar, although that iswhat they do,andthesepeoplewerenoexceptiontotherule.Theorganizationthatwas giving the attorneys their business told them that they wereexpected to attendmy seminar if they wanted to receive anymorecasesandworkfromtheorganization.

Theattorneysgavein,butweren’ttoohappyabouthavingtospendSaturday withme in the first place. However, once we got started,they became involved and were having a good time. I got themabsorbed in a workshop involving a surgeon being sued over anunfortunate incident involving a nun. I couldn’t believe howconfrontationaltheywerebeing.Mostofthemstartedwithaviciousthreatandthenbecamemoreabusivefromthatpointon.Ihadtostop

theexerciseandtellthemthatiftheywantedtoreallysettlethecasewithoutexpensivelitigation(andIseriouslydoubtedtheirmotivesonthatidea)thattheyshouldneverbeconfrontationalintheearlystagesofthenegotiation.

Becarefulwhatyousayatthebeginning.Iftheotherpersontakesapositionwith which you totally disagree, don’t argue. Arguing always intensifies theother person’s desire to prove himself or herself right.You’remuch better offagreeingwiththeotherpersoninitiallyandthenturningaroundusingtheFeel,Felt,Foundformula.

Respond with, “I understand exactly how you feel about that. Many otherpeople have felt exactly the same way as you do right now. [Now you havediffused thatcompetitive spirit.You’renotarguingwith them,you’reagreeingwiththem.]Butyouknowwhatwehavealwaysfound?Whenwetakeacloserlookatit,wehavealwaysfoundthat....”Let’slookatsomeexamples.

Youaresellingsomething,andtheotherpersonsays,“Yourpriceiswaytoohigh.”Ifyouarguewithhim,hehasapersonalstakeinprovingyouwrongandhimself right. Instead, you say, “I understandexactlyhowyou feel about that.Manyotherpeoplehavefeltexactlythesamewayasyoudowhentheyfirsthearthe price.When they take a closer look atwhatwe offer, however, they havealwaysfoundthatweofferthebestvalueinthemarketplace.”

NegotiatingsalarycontractsissomethingIcoverindetailinmyCareerPressbookSecretsofPowerSalaryNegotiating.Let’ssaythatyouareapplyingforajob, and the human resources director says, “I don’t think you have enoughexperienceinthisfield.”Ifyourespondwith,“I’vehandledmuchtougherjobsthanthisinthepast,”itmaycomeacrossas“I’mrightandyou’rewrong.”It’sjust going to force her to defend the position she’s taken. Instead, say, “Iunderstand exactly how you feel about that. Many other people would feelexactlythesamewayasyoudorightnow.However,therearesomeremarkablesimilaritiesbetweentheworkI’vebeendoingandwhatyou’relookingfor,thatarenotimmediatelyapparent.Letmetellyouwhattheyare.”

You’re a salesperson and the buyer says, “I hear that you people haveproblemsinyourshippingdepartment.”Arguingwithhimwillmakehimdoubtyour objectivity. Instead, say, “I understand how you could have heard thatbecauseI’veheardit, too.I thinkthatrumormayhavestartedafewyearsagowhenwe relocated ourwarehouse, but nowmajor companies such asGeneralMotorsandGeneralElectrictrustuswiththeirinventories,andweneverhaveaproblem.”

Theotherperson says, “I don’t believe inbuying fromoffshore suppliers. Ithinkweshouldkeep the jobs in thiscountry.”Themoreyouargue, themoreyou’llforcehimintodefendinghisposition.Instead,say,“Iunderstandexactlyhowyoufeelaboutthat,becausethesedaysmanyotherpeoplefeelexactlythesamewayasyoudo.Butdoyouknowwhatwehavefound?BecausetheinitialassemblyhasbeendoneinThailand,wehaveactuallybeenabletoincreaseourAmericanworkforcebymorethan42percentandthisiswhy....”Insteadofarguingup front,which creates confrontational negotiation, get in the habit ofagreeingandthenturningitaround.

Atmyseminars,Isometimesaskapersoninthefrontrowtostand.AsIholdmytwohandsout,withmypalmsfacingtowardthepersonI’veaskedtostand,Iaskhimtoplacehishandsagainstmine.Havingdonethat,andwithoutsayinganother word, I gently start to push against him. Automatically, without anyinstruction,healwaysbeginstopushback.Peopleshovewhenyoushovethem.Similarly, when you argue with someone, it automatically makes him or herwanttoargueback.

TheothergreatthingaboutFeel,Felt,Foundisthatitgivesyoutimetothink.Similarly, you sometimes catch other people at a badmoment.Youmay be asalespersonwhoiscallingtogetanappointment,andthebuyersaystoyou,“Idon’thaveanytimetowastetalkingtosomelyingscum-suckingsalesperson.”Youhaven’theardanythinglikethisbefore.Itshocksyou.Youdon’tknowwhattosay;butifyouhaveFeel,Felt,Foundinthebackofyourmind,youcansay,“I understand exactly how you feel about that. Many other people have feltexactlythesameway.However,Ihavealwaysfound....”Bythetimeyougetthere, you’ll have thought of something to say.You calmly say, “I understandexactlyhowyoufeelabout that.Manyotherpeoplehavefeltexactly thesameway. However . . . . ” Feel, Felt, Found gives you time to recover yourcomposure,andyouwillknowexactlywhattosay.

KeyPointstoRemember

1.Don’targuewithpeopleintheearlystagesofthenegotiationbecauseitcreatesconfrontation.

2.UsetheFeel,Felt,Foundformulatoturnthehostilityaround.3.HavingFeel,Felt,Foundinthebackofyourmindgivesyoutimetothinkwhentheothersidethrowssomeunexpectedhostilityyourway.

Chapter5

TheReluctantSellerandtheReluctantBuyer

Imagineforamomentthatyouownasailboat,andyouaredesperatetosellit.Itwasfunwhenyoufirstgotit,butnowyouhardlyevergooutontheboat,andthemaintenance and slip fees are eatingyoualive. It’s earlySundaymorning,andyou’vegivenupachancetoplaygolfwithyourbuddiesbecauseyouneedtobedownatthemarinacleaningyourboat.You’rescrubbingawayandcursingyour stupidity for having bought the boat in the first place. Just as you’rethinking, “I’m going to give this turkey away to the next person who comesalong,”youlookupandseeanexpensivelydressedmanwithayoungwomanonhisarmcomingdownthedock.He’swearingGucciloafers,whiteslacks,anda blue Burberry blazer topped off with a silk cravat. His young girlfriend iswearing high heels, a silk sheath dress, big sunglasses, and huge diamondearrings.

Theystopatyourboat,andthemansays,“That’safine-lookingboat,youngman.Byanychanceisitforsale?”

Hisgirlfriend snugglesup tohimand says, “Oh, let’s buy it, Poopsy.We’llhavesomuchfun.”

Youfeelyourheartstarttoburstwithjoy,andyourmindissinging,“Thankyou,Lord!Thankyou,Lord!”

Expressingthatsentimentisnotgoingtogetyouthebestpriceforyourboat,is it?How are you going to get the best price? PlayingReluctant Seller.Youkeeponscrubbingandsay,“You’rewelcometocomeaboard,althoughIhadn’tthoughtofsellingtheboat.”Yougivethematouroftheboat,andateverystepof theway,youtell themhowmuchyoulovetheboatandhowmuchfunyouhavesailingher.Finallyyoutellthem,“Icanseehowperfectthisboatwouldbeforyouandhowmuch funyou’dhavewith it,but I reallydon’t think Icouldeverbear topartwith it.However, just tobefair toyou,what is theverybestpriceyouwouldofferme?”

Power Negotiators know that this Reluctant Seller technique expands the

negotiating range before the negotiating begins. If you’ve done a good job ofbuildingtheotherperson’sdesiretoowntheboat,hewillhaveformedarangeinhis own mind. He may be thinking, “I would be willing to go to $30,000,$25,000wouldbeafairdeal,and$20,000wouldbeabargain.”Therefore,hisnegotiating range is from $20,000 to $30,000. Just by playing the ReluctantSeller,youwillhavemovedhimupthroughthatrange.Hemayevenofferyou$40,000. If you had appeared eager to sell, he may have offered you only$20,000.ByplayingtheReluctantSeller,youmaymovehimtothemid-point,orevenbeyondthehighpointofhisnegotiatingrange,before thenegotiationsevenstart.

OneofmyPowerNegotiators is anextremely richandpowerful investor, amanwhoownsrealestateallovertown.Heisverysuccessful—whatyoucouldjustifiablycallaheavyhitter.Helikeswheelinganddealing.

Likemanyinvestors,hisstrategyissimple:Buyapropertyattherightpriceandontherightterms,holdontoitandletitappreciate,thensellitatahigherprice.Manysmallerinvestorsbringhimpurchaseoffersforoneofhisholdings,eager to acquire one of his better-known properties. That’s when this well-seasonedinvestorknowshowtousetheReluctantSellerGambit.

Hereadstheofferquietly,andwhenhe’sfinished,heslidesitbackacrossthetableandscratchesaboveoneear,sayingsomethingsuchas,“Idon’tknow.Ofallmy properties, I have very special feelings for this one. I was thinking ofkeepingitandgivingittomydaughterforhercollegegraduationpresent,andIreallydon’tthinkIwouldpartwithitforanythinglessthanthefullaskingprice.Pleaseunderstand that thisparticularproperty isworthagreatdeal tome.Butlook,itwasgoodofyoutobringinanofferforme,andinallfairness,sothatyouwon’thavewastedyourtime,whatistheverybestpricethatyoufeelyoucould giveme?”Many times, I saw himmake thousands of dollars in a fewsecondsusingtheReluctantSellerphilosophy.PowerNegotiatorsalwaystrytoedge up the other side’s negotiating range before the real negotiating everbegins.

WhenYou’reDesperate,PlayReluctantSeller

A few years back, Donald Trump was in trouble. He was very

highly leveraged in realestate,and theNewYork realestatemarketwas about to collapse. He needed to raise cash quickly so that hecouldsurvivethecomingcrunch.HisbestopportunitywastoselltheSt. Moritz hotel. He had bought it three years before from theHelmsleys for $79 million. It was just around the corner from hisrecentlyacquiredflagshipPlazaHotel,sohedidn’tneeditanymore.AlanBond, a brashAustralian billionaire, expressed an interest.AsdesperatelyasTrumpneededtosell,hestillplayedReluctantSeller.

“Oh, Alan, not the St. Moritz. That’s my favorite property. I’mnever going to sell that. I’m going to put that in trust for mygrandchildren.AnythingelseIhaveisforsale;youcanmakemeanoffer,butnottheSt.Moritz.Butlook,Alan,just tobefair toyou—whatistheverybestpriceyouwouldgiveme?”

Unlessyourealizewhattheyaredoingtoyou,you’llgofromthelowpointofyournegotiatingrange,tothemid-point,maybeeventhehighpoint,beforethenegotiationevenstarts.AlanBondpaidTrump$160millionfortheSt.Moritz.ItgaveTrumpthecashheneededtosurvivethesubsequentrealestaterecession.

IrememberanoceanfrontcondominiumIboughtasaninvestment.Theownerwasaskinga fairprice for it. Itwasahot realestatemarketat the time,andIwasn’tsurehoweagertheownerwastosell,orifshehadanyotheroffersonit.Iwroteupthreeoffers,oneat the lowendofmynegotiatingrange,oneat themid-point, and one at the high end of what I was willing to pay. I made anappointmenttomeetwiththeseller,whohadmovedoutofthecondominiuminLongBeachandwaslivinginPasadena.

Aftertalkingtoherforawhile,Ideterminedshehadn’thadanyotheroffersandwaseagertosell.Ireachedintomybriefcase,whereIhadthethreeoffersfiled, andpulledout the lowest of them.She accepted it, andwhen I sold thecondominiumayearlater,itfetchedmorethantwicewhatIhadpaidforit.(Beawareyoucandothisonlywitha“ForSalebyOwner.”Ifarealestateagenthaslistedtheproperty,thatagentisworkingfortheseller,andisobligatedtotellthe

sellerifhe’sawarethatthebuyerwouldpaymore.Thisisanotherreasonwhyyoushouldalwayslistpropertywithanagentwhenyou’reselling.)

PowerNegotiatorsplayReluctantSellerwhenthey’reselling.Evenbeforethenegotiationstarts,itsqueezestheotherside’snegotiatingrange.TurnthisaroundandconsidertheReluctantBuyer.Putyourselfontheothersideofthedeskforamoment.Let’ssayyou’reinchargeofbuyingnewcomputerequipmentforyourcompany. How would you get a salesperson to give you the lowest possibleprice? Iwould let the salespersoncome in andhavehergo throughher entirepresentation.IwouldaskallthequestionsIcouldpossiblythinkof,andwhenIfinallycouldn’tthinkofanotherthingtoask,Iwouldsay,“Ireallyappreciateallthetimeyou’vetaken.You’veobviouslyputalotofworkintothispresentation,butunfortunatelyit’sjustnotthewaywewanttogo;however,Isurewishyouthebestofluck.”

Iwouldpausetoexaminethecrestfallenexpressiononthesalesperson’sface.I’dwatchher slowlypackageherpresentationmaterials.Thenat thevery lastmoment, justasherhandhit thedoorknobonthewayout,Iwouldcomebackwith amagic expression. There are somemagic expressions in negotiating. Ifyouusethematexactlytherightmoment,thepredictabilityoftheotherperson’sresponseisamazing.

I’dsay,“Youknow,Ireallydoappreciatethetimeyoutookwithme.Justtobefairtoyou,whatistheverylowestpriceyou’dtake?”

Would you agree with me that it’s a good bet that the first price thesalesperson quoted is not the real bottom line?Sure, it’s a good bet.The firstpriceasalespersonquotesiswhatIcallthe“wishnumber.”Thisiswhatsheiswishingtheotherpersonwouldagreeto.Iftheotherpersonagreed,shewouldprobablyburnrubberbacktohersalesofficeandruninscreaming,“Youcan’tbelievewhatjusthappenedtome.IwasoveratXYZCompanytomakeabidonthecomputerequipment theyneed for theirnewheadquarters. Iwentover theproposalandtheysaid,‘What’syourabsolutebottom-lineprice?’Iwasfeelinggood so I said, ‘Wenever budge off list price less a quantity discount, so thebottom line is $225,000,’ and held my breath. The president said, ‘It soundshigh,but if that’s thebestyoucando,goaheadandship it.’ Ican’tbelieve it.Let’sclosetheofficeandgocelebrate.”

Somewhere out there, there’s a “walk-away” price, a price at which thesalesperson will not or cannot sell. The other person doesn’t know what the

walk-away price is, so he or she has to do some probing, some seeking ofinformation.ThebuyerhastotrysomenegotiatingGambitstoseeifheorshecanfigureoutthesalesperson’swalk-awayprice.

WhenyouplayReluctantBuyer,thesalespersonisnotgoingtocomeallthewayfromthewishpricetothewalk-awayprice.Here’swhatwillhappen.WhenyouplayReluctantBuyer,thesalespersonwilltypicallygiveawayhalfofhisorher negotiating range. If that computer salesperson knows the bottom line is$175,000,$50,000belowthelistprice,shewillrespondtotheReluctantBuyerGambitwith,“Well, I tellyouwhat. It’s theendofourquarter,andwe’re inasales contest. If you’ll place the order today, I’ll give it to you for theunbelievably low price of $200,000.” She’ll give away half her negotiatingrange,justbecauseyouplayedReluctantBuyer.

Whenpeopledo this toyou, it’smerelyagame that they’replaying.PowerNegotiatorsdon’tgetupsetaboutit.Theyjustlearntoplaythenegotiatinggamebetter than the other side. When the other person does it to you, the correctresponsetothisGambitistogothroughthefollowingsequenceofGambits:

“Idon’tthinkthatthereisanyflexibilityintheprice,butifyou’lltellmewhatitwould take to get your business (getting the other side to commit first), I’lltake it tomypeople (HigherAuthority—amiddlenegotiatingGambit that I’llcoverlater),andI’llseewhatIcandoforyouwiththem(GoodGuy/BadGuy—anendingnegotiatingGambit).”

KeyPointstoRemember

1.AlwaysplayReluctantSeller.2.LookoutfortheReluctantBuyer.3.PlayingthisGambitisagreatwaytosqueezetheotherside’snegotiatingrangebeforethenegotiationevenstarts.

4.Theotherpersonwilltypicallygiveawayhalfofhisorhernegotiatingrangejustbecauseyouusethis.

5.Whenit’susedonyou,gettheotherpersontocommit,gotoHigherAuthority,andclosewithGoodGuy/BadGuy.

Chapter6

UsetheViseTechnique

The Vise is another very effective negotiating Gambit and what it willaccomplishwillamazeyou.Itisthesimplelittleexpression,“You’llhavetodobetter than that.” Here’s how Power Negotiators use it: Let’s say you own asmall steel company that sells steel products in bulk. You are calling on afabricatingplantwherethebuyerhaslistenedtoyourproposalandyourpricingstructure.You ignored his insistence that he’s happywith his present supplieranddidagoodjobofbuildingdesireforyourproduct.

Finally, the other person says to you, “I’m really happy with our presentvendor,butIguess itwouldn’tdoanyharmtohaveabackupsupplier tokeepthemontheirtoes.I’ll takeonecarloadifyoucangetthepricedownto$1.22perpound.”

YourespondwiththeViseGambitbycalmlysaying,“I’msorry.You’llhavetodobetterthanthat.”

An experienced negotiator will automatically respond with the CounterGambit,whichis,“ExactlyhowmuchbetterthanthatdoIhavetodo?”Inthis,thenegotiatoristryingtopinyoudowntoaspecific.However,itwillamazeyouhow often inexperienced negotiators will concede a big chunk of theirnegotiatingrangesimplybecauseyoudidthat.

What’s the next thing you should do, once you’ve said, “You’ll have to dobetterthanthat”?Youhaveit.Shutup!Don’tsayanotherword.Theothersidemay justmake a concession to you. Salespeople call this the silent close, andthey all learn it during the firstweek that they are in the business.Youmakeyourproposalandthenshutup.Theotherpersonmayjustsayyes,soit’sfoolishtosayaworduntilyoufindoutifheorshewillorwon’t.

Ioncewatchedtwosalespeopledothesilentcloseoneachother.Therewerethree of us sitting at a circular conference table. The salesman on my rightwantedtobuyapieceofrealestatefromthesalesmanonmyleft.Hemadehisproposalandthenshutup,justastheytaughthiminsalestrainingschool.The

more experienced salespersononmy leftmust have thought, “Sonof a gun. Ican’tbelievethis.He’sgoingtotrythesilentcloseonmoi?I’llteachhimathingortwo.Iwon’ttalk,either.”

Iwassittingbetweentwostrong-willedpeoplewhowerebothsilentlydaringtheothertobethenextonetotalk.Therewasdeadsilenceintheroom,exceptfor the grandfather clock ticking away in the background. I looked at each ofthem,andobviouslytheybothknewwhatwasgoingon.Neitheronewaswillingtogiveintotheother.Ididn’tknowhowthiswasevergoingtogetresolved.Itseemedasthoughhalfanhourwentby,althoughitwasprobablymorelikefiveminutes,becausesilenceseemslikesuchalongtimeinourculture(seeSectionFourtolearnhowpeoplefromothercultureswillusethisagainstus).

Finally, the more experienced salesperson broke the impasse by scrawling“decizion?” on a pad of paper and sliding it across to the other. He haddeliberatelymisspelledtheworddecision.Theyoungersalespersonlookedatitand without thinking said, “You misspelled decision.” And once he startedtalking,hecouldn’tstop.(Doyouknowasalespersonlikethat?Oncetheystarttalking,theycan’tstop?)Hewentontosay,“Ifyou’renotwillingtoacceptwhatI offered you, Imight bewilling to comeup another $2,000, but not a pennymore.”Herenegotiatedhisownproposalbeforehefoundoutiftheotherpersonwouldacceptitornot.

To use the Vise technique, Power Negotiators simply respond to the otherside’s proposal or counter-proposal with, “I’m sorry. You’ll have to do betterthanthat,”andthenshutup.

AclientcalledmeupafteraSecretsofPowerNegotiatingseminarthatIhadconductedfortheirmanagers,andtoldme,“Roger,Ithoughtyoumightliketoknowwejustmade$14,000usingoneoftheGambitsthatyoutaughtus.Wearehaving new equipment put into ourMiami office.Our standard procedure hasbeentogetbidsfromthreequalifiedvendorsandthentakethelowestbid.IwassittingheregoingoverthebidsandwasjustabouttookaytheoneI’ddecidedtoaccept. Then I remembered what you taught me about the Vise technique. Ithought, ‘What have I got to lose?’ and scrawled across it, ‘You’ll have to dobetterthanthis,’andmaileditbacktothem.Theircounter-proposalcameback$14,000lessthantheproposalthatIwaspreparedtoaccept.”

Youmaybethinking,“Roger,youdidn’ttellmewhetherthatwasa$50,000proposal,inwhichcaseitwouldhavebeenahugeconcession,oramulti-million

dollar proposal, in which case $14,000 wouldn’t have been that big a deal.”Don’t fall into the trap of negotiating percentages when you should benegotiatingdollars.Thepointwasthathemade$14,000inthetwominutesthatit took him to scrawl that counter-proposal across the bid, which meant thatwhile he was doing it, he was generating $420,000 per hour of bottom-lineprofits.That’sprettygoodmoney,isn’tit?

Thisisanothertrapintowhichattorneysfall.WhenIworkwithattorneys,it’sclearthatifthey’renegotiatinga$50,000lawsuit,theymightsendaletterbackand forth over $5,000. If it’s a million-dollar lawsuit, they’ll kick $50,000aroundasthoughitdoesn’tmeanathing,becausethey’rementallynegotiatingpercentages,notdollars.

Ifyoumakea$2,000concessiontoabuyer, itdoesn’tmatter if itgotyoua$10,000 sale or a million-dollar sale. It’s still $2,000 that you gave away.Therefore,itdoesn’tmakeanysenseforyoutocomebacktoyoursalesmanagerandsay,“Ihadtomakea$2,000concession,butit’sa$100,000sale.”Whatyoushould have been thinking was, “$2,000 is sitting in the middle of thenegotiating table.HowlongshouldIbewilling tospendnegotiatingfurther toseehowmuchofitIcouldget?”

Haveafeelforwhatyourtime’sworth.Don’tspendhalfanhournegotiatinga$10item(unlessyou’redoingitjustforthepractice).Evenifyougottheothersidetoconcedeallofthe$10,you’dbemakingmoneyonlyattherateof$20anhourforthehalf-houryouinvestedinthenegotiation.Toputthisinperspectivefor you, if youmake$100,000 a year, you’remaking about $50 anhour.Youshouldbe thinking to yourself, “Iswhat I’mdoing right nowgeneratingmorethan$50perhour?”Ifso, it’spartof thesolution. Ifyou’reaimlesslychattingwithsomeoneatthewatercooler,ortalkingaboutlastnight’stelevisionmovie,oranythingelsethatisnotgenerating$50anhour,it’spartoftheproblem.

Here’s thepoint.Whenyou’renegotiatingwithsomeone—whenyouhaveadealinfrontofyouthatyoucouldlivewith—butyou’rewonderingifyoucouldhanginalittlebitlongeranddoalittlebitbetter,you’renotmaking$50anhour.No,sir.No,ma’am.You’remaking$50aminuteandprobably$50asecond.

Ifthat’snotenough,rememberthatanegotiateddollarisabottom-linedollar.It’s not a gross-income dollar. This means that the $2,000 you may haveconcededinsecondsbecauseyouthoughtitwastheonlywayyoucouldgetthesale, isworthmany times that ingross salesdollars. I’ve trainedexecutivesat

discountretailersandhealthmaintenanceorganizations(HMOs)wheretheprofitmarginisonly2percent.Theydoabilliondollars’worthofbusinessayear,buttheybringinonly2percent inbottom-lineprofits.At theircompany,a$2,000concession at the negotiating table has the same impact on the bottom line asgettinga$100,000sale.

You’reprobablyinanindustrythatdoesbetterthanthat.Ihavetrainedpeopleatsomecompanieswherethebottomlineisanincredible25percentofthegrosssales,butthat’stheexception.Inthiscountry,theaverageprofitmarginisabout5percentofgrosssales,whichmeansthatprobablythe$2,000concessionyoumade is the equivalent ofmaking a $40,000 sale. Letme ask you something.Howlongwouldyoubewilling towork togeta$40,000sale?Anhour?Twohours?All day? I’vehadmany salesmanagers tellme, “For a$40,000 sale, Iexpectmysalespeopletoworkaslongasittakes.”

However fastpacedyourbusiness,you’reprobablywilling to spend severalhours to make a $40,000 sale. Why are you so willing to make a $2,000concessionatthenegotiatingtable?Ithasthesameimpactonthebottomlineasa$40,000saleifyou’reinabusinessthatgeneratesthetypical5percentbottom-lineprofit.

A negotiated dollar is a bottom-line dollar.You’ll nevermakemoney fasterthanyouwillwhenyou’renegotiating!PowerNegotiatorsshouldrespond toaproposalwith,“You’llhavetodobetterthanthat.”Whentheotherpersonusesiton them, they automatically respond with the Counter Gambit, “Exactly howmuchbetterthanthatdoIhavetodo?”

KeyPointstoRemember

1.Respondtoaproposalorcounter-proposalwiththeVisetechnique:“You’llhavetodobetterthanthat.”

2.Ifit’susedonyou,respondwiththeCounterGambit,“ExactlyhowmuchbetterthanthatdoIhavetodo?”Thiswillpintheotherpersondowntoaspecific.

3.Concentrateonthedollaramountthat’sbeingnegotiated.Don’tbedistractedbythegrossamountofthesaleandstartthinkinginpercentages.

4.Anegotiateddollarisabottom-linedollar.Beawareofwhatyourtimeisworthonanhourlybasis.

5.Youwillnevermakemoneyfasterthanyouwillwhenyou’rePowerNegotiating.

MiddleNegotiatingGambits

Chapter7

HandlingthePersonWhoHasNoAuthoritytoDecide

One of the most frustrating situations you can experience in negotiating istryingtonegotiatewiththepersonwhoclaimsthatheorshedoesnothavetheauthority to make a final decision. Unless you realize that this is simply anegotiatingtacticthatisbeingused,youhavethefeelingthatyouwillnevergettotalktotherealdecision-maker.

WhenIwaspresidentoftherealestatecompanyinCalifornia,Iwouldusetheboardofdirectorsasmyhigherauthority.Ihadsalespeoplevisitingtheofficeallthe time in hopes of selling me things, including advertising, photocopymachines, computer equipment, and so on. Iwould always negotiate the verylowestpricethatIcould,usingalloftheseGambits.ThenIwouldsaytothem,“This looks fine. Ido justhave to run itbymyboardofdirectors,but I’llgetbacktoyoutomorrowwiththefinalokay.”

Theverynextday,Iwouldgetbacktothemandsay,“Boy,aremydirectorstough todealwith rightnow. I felt sopositive that I could sell it to them,buttheyjustwon’tgoalongwithitunlessyoucanshaveanothercoupleofhundreddollarsofftheprice.”Invariably,Iwouldgetit.Therewasnoapprovalneededby the board of directors, and it never occurred tome that this deceptionwasunderhanded.Thepeoplewithwhomyoudealseeitaswellwithintherulesbywhichoneplaysthegameofnegotiating.

When the other person says to you that they have to take it to somecommittee,director,orthelegaldepartment,it’sprobablynottrue;however,itisaveryeffectivenegotiating tactic that they’reusingonyou.Let’s first lookatwhythisissuchaneffectivetactic,andthenI’lltellyouhowtohandleitwhentheothersidedecidestouseitonyou.

TheOtherSideLovestoUseHigherAuthority

Youwouldthinkthatifyouweregoingouttonegotiatesomething,youwouldwanttohavetheauthoritytomakeadecision.Atfirstglance,itwouldseemyouwouldhavemorepowerifyouweretosaytotheotherperson,“Ihavethepowertomakeadealwithyou.”

Youhaveatendencytosaytoyourmanager,“Letmehandlethis.Givemetheauthority to cut the best possible deal.” PowerNegotiators know that you putyourself in a weakened negotiating position when you do that. You shouldalways have a higher authoritywithwhomyou have to check before you canchangeyourproposalormakeadecision.Anynegotiatorwhopresentshimselfasthedecision-makerhasputhimselfataseverebargainingdisadvantage.Youhave to put your ego on the back-burner to do this, but you’ll find it veryeffective.

The reason that this is so effective is simple.When theotherpersonknowsthatyouhave the finalauthority tomakeadeal,heknows thathehasonly toconvinceyou.Hedoesn’thavetoworkquiteashardtogiveyouthebenefitsofhisproposal ifyou’re thefinalauthority.Onceyou’vegivenyourapproval,heknows thathehasconsummated thedeal.This isnot so ifyouare tellinghimthatyouhavetoanswertoahigherauthority.Whetheryouhavetogetapprovalfrom a region, head office,management, partners, or a board of directors, theotherpersonhas todomore toconvinceyou.Hemustmakeanoffer thatyoucan take to your higher authority and get approved. He knows that he mustcompletely win you over to his side so that you will want to persuade yourhigherauthoritytoagreetohisproposal.

Higher Authority works much better when the higher authority is a vagueentity,suchasacommitteeoraboardofdirectors.Forexample,haveyoueveractuallymetaloancommitteeatabank?Ineverhave.Bankersatmyseminarshaveconsistently toldme that for loansof$500,000or less, somebodyat thatbankcanmakeadecisionwithouthavingtogotoaloancommittee.However,theloanofficerknowsthatifshesaidtoyou,“Yourpackageisonthepresident’sdesk,”youwouldsay,“Well,let’sgotalktothepresidentrightnow.Let’sgetitresolved.”Youcan’tdothatwiththevagueentity.

IfyouusetheHigherAuthorityGambit,besurethatyourhigherauthorityisavagueentity, suchasapricingcommittee, thepeoplebackatcorporate,or the

marketingcommittee.Ifyoutelltheotherpersonthatyourmanagerwouldhavetoapproveit,what’sthefirstthoughtthattheyaregoingtohave?Itisgoingtobe,“ThenwhyamIwastingtimetalkingtoyou?Ifyourmanageristheonlyonewho can make a decision, get your manager down here.”When your higherauthorityisavagueentity,itappearstobeunapproachable.InalltheyearsItoldsalespeople I had to run it by my board of directors, I only once had asalespersonsay tome,“Whendoesyourboardofdirectorsmeet?Whencan Imake a presentation to them?” The use of Higher Authority puts pressure onpeoplewithoutconfrontation.

ARealEstateInvestorUsesHigherAuthority

BackwhenIhadthetimetodoit,Iinvestedinapartmentbuildingsandhouses.WhenIfirstboughtthebuildings,itfeltgreattotellthetenantsthatIownedtheproperty.Itwasanegotripforme.However,whenmy portfolio became substantial, I realized that itwasn’t thatmuchfunanymore,becausethetenantsassumedthattheownerofthepropertywasmadeofmoney,sowhywoulditbeaproblemtoreplacethe carpeting in their unit because of a small cigarette burn, or toreplace the drapes because of a small tear? Why would it be aproblem if the rentwas late thatmonth? In their eyes, Iwas rich. ImustbebecauseIhadallthatproperty.Whywasthisupsettingme?

Themoment I learned thepowerof theHigherAuthorityGambitand started a company that I calledPlazaProperties,manyof theseproblems went away. I became the president of that company thatwas, to the tenants, a propertymanagement companyhandling theirbuildingforavaguegroupofinvestorsouttheresomewhere.

Thenwhentheysaid,“We’vegotthiscigaretteburninthecarpet,and it needs to be replaced,” I’d say, “I don’t think I can get theownerstodothatforyoujustyet.I’lltellyouwhat,though:Youkeeptherentcominginonthefirstofthemonth,andinaboutsixmonths,I’llgo tobatforyouwith theowners.LetmeseewhatIcandoforyouwith themat that time.”(That’sGoodGuy/BadGuy,anEndingGambitI’llteachyouinChapter14.)Iftheywouldsay,“Roger,we’renotgoingtohavetherentuntil the15thofthemonth,”Iwouldsay,

“Wow,Iknowexactlyhowitgoes.Sometimesitcangetdifficult,buton this property, I just don’t have any leeway. The owners of thispropertytoldmethatiftherentisnotinbythefifthofthemonth,Ijusthavetofileanevictionnotice.Whatcanwedotogettherentinontime?”

The Higher Authority Gambit is a very effective way of pressuring peoplewithoutanyconfrontationoneitherside’spart.I’msurethatyoucanseewhytheother person loves using it onyou.Let’s look at the benefits to the other sidewhentheytellyouthattheyhavetogetyourproposalapprovedbyacommittee,director,orboss.Thisallowsthemtoputpressureonyouwithoutconfrontation.“We’d be wasting our time taking a proposal that high to the committee.” Itunbalancesyouasanegotiatorbecauseit’ssofrustratingtofeelthatyou’renotabletopresenttotherealdecision-maker.

Byinventingahigherauthoritywithwhomtheymustfirstseekapproval,theycansetasidethepressureofmakingadecisionforaslongasittakestoreviewthenegotiations.WhenIwasarealestatebroker,Iwouldteachouragentsthatbeforetheyputbuyersintotheircarstoshowthemanyproperty,theyshouldsaytothem,“JusttobecertainthatIunderstand,ifwefindexactlytherighthomeforyoutoday,isthereanyreasonwhyyouwouldn’tmakeadecisiontoday?”

The buyer may have interpreted this action as putting pressure on them todecide quickly. What it really accomplished here was that it eliminated theirright,underthepressureoftheclosingsituation,todelaybyinventingahigherauthority.Iftheagentdidnotdothis,theywouldveryoftendeferthedecisionbysaying,“Wecan’tdecidetodaybecauseUncleHarryishelpinguswiththedownpayment,andwehavetorunitbyhim.”

ItsetsthemupforusingtheVisetechnique:“You’llhavetodobetterthanthatifyouwanttogetitpastthecommittee.”Itputsyouinthepositionofneedingtheotherpersontobeonyoursideifit’stobeapprovedbythecommittee.Theycanmake suggestions to youwithout implying it’s something towhich they’dagree:“Ifyoucancomedownanother10percent,youmayhaveachanceofthecommitteeapprovingit.”

HigherAuthoritycanbeusedtoforceyouintoabiddingwar.“Thecommitteehasaskedmetogetfivebids,andthey’ll takethelowestone.”Also, theotherpersoncan squeezeyourpricewithout revealingwhatyou’reupagainst: “Thecommitteeismeetingtomorrowtomakeafinaldecision.Iknowthey’vealreadygottensomereally lowbids, so theremaynotbeanypoint inyoursubmittingone,butthere’salwaysachanceifyoucancomeinwithasuper-lowproposal.”

ItsetstheotherpersonuptouseGoodGuy/BadGuy:“Ifitwereuptome,I’dlovetokeepondoingbusinesswithyou,butthebeancountersonthecommitteecareonlyaboutthelowestprice.”Atthispoint,youmaybethinking,“Roger,Ican’t use this. I own a small company that manufactures patio furniture, andeverybodyknowsthatIownit.TheyknowthatIdon’thaveanybodyabovemewithwhomIhavetocheck.”

Sureyoucanuseit.Iownmyowncompany,too,buttherearedecisionsthatIwon’tmake unless I’ve checkedwith the people towhom I’ve delegated thatarea of responsibility. If somebody asks me about doing a seminar for theircompany,I’llsay,“Soundsgoodtome,butIhavetocheckwithmymarketingpeoplefirst.Fairenough?”Ifyouownyourowncompany,yourhigherauthoritybecomesthepeopleinyourorganizationtowhomyou’vedelegatedauthority.

In international negotiations, the president is careful to protect himself bymaintainingthepositionthathecannotmakeadecisionuntilhehasgottentheapprovalofhisnegotiatorsandtheSenate.

TheCounterGambitstoHigherAuthority

I’msurethatyoucanseewhypeoplelovetousetheHigherAuthorityGambitonyou.Fortunately, youcan learnhow tohandle this challenge smoothly andeffectively. Your first approach should be trying to remove the other person’sresort to higher authority before the negotiations even start, by getting him toadmitthathecouldmakeadecisioniftheproposalweretobeirresistible.

It’sexactlythesamethingthatthecardealerwilldotoyouwhen,beforeheletsyoutakeitforatestdrive,hesays,“LetmebesureIunderstand,ifyoulikethiscarasmuchasIknowyou’regoingtolikeit,isthereanyreasonwhyyou

wouldn’tmakeadecisiontoday?”Becausetheyknowthatiftheydon’tremovethe resort to higher authority up front, then there’s a danger that under thepressureofaskingforadecision,theotherpersonwillinventahigherauthorityasadelayingtactic,suchas“Look,I’dlovetogiveyouadecisiontoday,butIcan’tbecausemyfather-in-lawhastolookattheproperty(orthecar),orUncleJoeishelpinguswiththedownpaymentandweneedtotalktohimfirst.”

Oneofthemostfrustratingthingsthatyouencounteristakingyourproposalto the other person and having her say to you, “Well, that’s fine. Thanks forbringing me the proposal. I’ll talk to our committee (or our attorney or theowners)aboutit,andifitinterestsuswe’llgetbacktoyou.”Wheredoyougofrom there? If you’re smart enough to counter the Higher Authority Gambitbeforeyoustart,youcanremoveyourselffromthatdangeroussituation.

Beforeyoupresentyourproposal totheotherperson,beforeyouevenget itoutofyourbriefcase,youshouldcasuallysay,“LetmebesureIunderstand.Ifthisproposalmeetsallofyourneeds(That’sasbroadasanystatementcanbe,isn’tit?),isthereanyreasonwhyyouwouldn’tgivemeadecisiontoday?”

It’saharmlessthingfortheotherpersontoagreetobecausetheotherpersonis thinking, “If itmeets all ofmyneeds?Noproblem; there’s loadsofwiggleroomthere.”However,lookatwhatyou’veaccomplishedifyoucangetthemtorespondwith,“Well,sure.Ifitmeetsallofmyneeds,I’llgiveyouanokayrightnow.”

You’veeliminatedtheirrighttotellyouthattheywanttothinkitover.Iftheysaythat,yousay,“Well,letmegooveritonemoretime.TheremustbesomethingIdidn’tcoverclearlyenoughbecauseyoudidindicatetomeearlierthatyouwerewillingtomakeadecisiontoday.”You’veeliminatedtheirrighttoreferittoahigherauthority.You’veeliminatedtheirrighttosay,“Iwantourlegaldepartmenttoseeit,orthepurchasingcommitteetotakealookatit.”

Whatifyou’renotabletoremovetheirresorttoHigherAuthority?I’msurethatmanytimesyou’llsay,“Ifthisproposalmeetsallofyourneeds,isthereanyreasonwhyyouwouldn’tgivemeadecisiontoday?”andtheotherpersonwillreply,“I’msorry,butonaprojectofthissize,everythinghastogetapprovedbythe specificationscommittee. I’llhave to refer it to themfora finaldecision.”Here are the three steps that PowerNegotiators takewhen they’re not able toremovetheotherside’sresorttoHigherAuthority:

Step1—Appealtotheirego.Withasmileonyourface,say,“Theyalwaysfollowyourrecommendations,don’tthey?”Withsomepersonalitystylesthatisenoughofanappealtohisegothathe’llsay,“Well,Iguessyou’reright.IfIlikeit,thenyoucancountonit.”Oftenthey’llstillsay,“Yes,theyusuallyfollowmyrecommendations, but I can’t give you a decision until I’ve taken it to thecommittee.” If you realize that you’re dealing with egotistical people, trypreemptingtheirresorttoHigherAuthorityearlyinyourpresentationbysaying,“Doyouthinkthatifyoutookthistoyoursupervisor,she’dapproveit?”Oftenan ego-driven person will make the mistake of proudly telling you that hedoesn’thavetogetanybody’sapproval.

Step2—Gettheircommitmentthatthey’lltakeittothecommitteewithapositiverecommendation.Say,“Youwillrecommendittothem—won’tyou?”Hopefully,you’llgetaresponsesimilarto“Yes,it looksgoodtome.I’llgotobatforyouwiththem.”Gettingtheotherside’scommitmentthatthey’regoingto recommend it to the higher authority is very important because it’s at thispoint that theymay reveal that there really isn’t a committee. They really dohave the authority to make a decision and saying they had to check withsomeoneelsewasjustanegotiatingGambittheywereusingonyou.

HowHigherAuthorityWasUsedAgainstMe

rememberwhenIfirstcametothiscountryin1962;IwenttoworkforBankofAmericainMenloPark,California.Afterninemonths,IfoundthatIcouldn’tstandtheexcitementofworkinginthebankingindustry, so I looked around for something else. I applied for aposition as a management trainee at Montgomery Ward, thedepartmentstorechain.

Before I could go to work for them, themanager to whom theywould assign me for training had to approve. They sent me up toNapa, California, to interview with the local store manager, LouJohnson. Forwhatever reason, the interview didn’t gowell. I knewthatIwasn’tgoingtogetthejob—probablybecauseIwassonewinthecountry thatLoudidn’tbelieve that Iwashere to stay. Ihadnointention of going back to England, but I could understand hisconcern.Finally,hesaidtome,“Roger,thankyouforcominginfor

theinterview.I’llreportbacktothecommitteeattheheadoffice,andyou’llbehearingfromthem.”

I said to him, “You will recommend me to them, won’t you?”That’s stepnumber two: asking for a commitment that they’ll go inwithapositive recommendation. I sawhismind swinging fromonesidetotheother.Heapparentlydidn’twanttorecommendmetohiscommittee. On the other hand, he didn’t want the confrontation oftelling me that he wasn’t going to recommend me. His mind wentfrom one side to the other for a few minutes, and finally he said,“Well, yes, I guess I’m willing to give you a try.” With this, heimmediatelyrevealedthattherewasnohigherauthority.Therewasnocommittee.Hewastheonemakingthedecision.

In step two, PowerNegotiators get the other person’s commitment that shewillgoto thehigherauthoritywithapositiverecommendation.Thereareonlytwothingsthatcanhappennow.Eithershe’llsayyes,shewillrecommendittothem, or she’ll say no, shewon’t, because . . . . Eitherway you’vewon.Herendorsementwouldbepreferable,ofcourse,butanytimeyoucandrawoutanobjectionyou should say, “Hallelujah,” because objections are buying signals.People are not going to object to your price unless buying from you intereststhem. Ifbuying fromyoudoesn’t interest them, theydon’t carehowhighyoupriceyourproductorservice.

WhenYouDon’tCareWhatTheyCharge

For a while, I dated a woman who was really into interiordecorating.One day she excitedly draggedme down to theOrangeCountyDesignCenter to showmea couch covered inkidskin.Theleatherwas as soft and as supple as anything I’d ever felt.As I satthere,shesaid,“Isn’tthatawonderfulcouch?”

Isaid,“Noquestionaboutit.Thisisawonderfulcouch.”

Shesaid,“Andit’sonly$12,000.”

Isaid,“Isn’tthatamazing?Howcantheydoitforonly$12,000?”

Shesaid,“Youdon’thaveaproblemwiththeprice?”

“Idon’thaveaproblemwiththepriceatall.”Whydidn’tIhaveaproblemwiththeprice?BecauseIhadnointentionofpaying$12,000foracouch,regardlessofwhattheycovereditwith.Letmeaskyouthis:Ifbuyingthecouchinterestedme,wouldIhaveaproblemwiththeprice?Oh,you’dbetterbelieveI’dhaveaproblemwiththeprice!

Objectionsarebuyingsignals.Weknewinrealestatethatifwewereshowingproperty,andthepeoplewere“oooohingandaaahing”alloverasiftheylovedeverythingaboutit,theyweren’tgoingtobuy.Theseriousbuyersweretheoneswhoweresaying,“Well,thekitchen’snotasbigaswelike.Hatethatwallpaper.We’dprobablyendupknockingoutthatwall.”Thosewerethepeoplewhobuy.

Ifyou’reinsales, thinkabout it.Haveyouever inyourlifemadeabigsalewhere theperson lovedyourpriceup front?Ofcoursenot.All seriousbuyerscomplain about the price. Your biggest problem is not an objection; it’sindifference.Iwouldrathertheysaidtoyou,“Iwouldn’tbuywidgetsfromyourcompany if youwere the lastwidget vendor in theworld, because . . . ” thanhavethemsaytoyou,“I’vebeenusingthesamesourceofwidgetsforthepast10years,andtheydoafinejob.Iamjustnotinterestedintakingthetimetotalkto anyone else about making a change.” Indifference is your problem, notobjections,becausethereisalwaysareasonforobjectionsandpeoplejustmaychangetheirminds.

Letmeprovethistoyou.Givemetheoppositeofthewordlove.Ifyousaidhate, think again. As long as they are throwing plates at you, you havesomethingthereyoucanworkwith.Itisindifferencethat’stheoppositeoflove.Whenthey’resayingtoyou,likeRhettButlerinGonewiththeWind,“Frankly,mydear,Idon’tgiveadamn”—that’swhenyouknowthemovieisaboutover.Indifferenceisyourproblem,notobjections.Objectionsarebuyingsignals.

Whenyousaytothem,“Youwillrecommendittothem,won’tyou?”theycaneither sayyes, theywill,orno, theywon’t.Eitherwayyou’vewon.Thenyoucanmovetothenextstep.

Step3—Usethequalified“subject to”close.The“subject to”close is thesameonethatyourlifeinsuranceagentusesonyouwhenheorshesays,“Quitefrankly,Idon’tknowifwecangetthismuchinsuranceonsomeoneyourage.Itwould be ‘subject to’ you passing the physical anyway, sowhy don’twe justwriteupthepaperwork‘subjectto’youpassingthephysical?”Thelifeinsuranceagentknowsthatifyoucanfogamirrorduringthatphysical,heorshecangetyouthatinsurance.Thenitdoesn’tsoundasthoughyou’remakingasimportantadecisionasyoureallyare.

Thequalified“subjectto”closeinthisinstancewouldbe:“Let’sjustwriteupthepaperwork‘subjectto’therightofyourspecificationscommitteetorejecttheproposalwithina24-hourperiodforanyspecificationsreason.”Or,“Let’s justwriteup thepaperwork‘subject to’ therightofyour legaldepartment torejectthe proposal within a 24-hour period for any legal reasons.” Notice now thatyou’re not saying subject to their acceptance. You are saying subject to theirrighttodeclineitforaspecificreason.Iftheyaregoingtoreferittoanattorney,itwouldthenbealegalreason.Ifthey’regoingtoreferittotheirCPA,itwouldbea taxreason,andsoonandsoforth.Try toget itnaileddowntoaspecificreason.

Torecap,thethreestepstotakeifyouarenotabletogettheotherpersontowaivehisorherresorttoHigherAuthorityare:

1.Appealtotheotherperson’sego.2.Gettheotherperson’scommitmentthathewillrecommendittothehigherauthority.

3.Usethequalified“subjectto”close.

What’s the counter to theCounterGambit?What if someonewas trying toremoveyourresorttoHigherAuthoritylikethat?Iftheotherpersonsaystoyou,“Youdohavetheauthoritytomakeadecision,don’tyou?”youshouldsay,insomanywords,“Itdependsonwhatyou’reasking.There’sapointatwhichIhavetogotomymarketingcommittee.”

Let’s say you’re selling aluminum garden sheds to a chain of warehousehardwarecenters,andthey’reaskingyoutoparticipateintheirholidayweekendmailer.Your salesmanagerhas set aside$30,000 for this,but thebuyerat the

chainisaskingyoutocommitto$35,000.Youshouldshakeyourheadandsay,“Wow.That’salotmorethanIexpected.I’dhavetotakethattotheadvertisingcommittee. I’d feel comfortable giving you the go ahead at $25,000, butanythingabovethatI’dhavetoholdoffuntilIfindoutwhatthecommitteehastosay.”

Withoutcreatingaconfrontation,you’veputtheotherpersoninapositioninwhichhemightprefertogowiththe$25,000,ratherthanhavetheentiremaileron hold until you can get back to him. Note that you’ve also bracketed hisproposal. Assuming you end up splitting the difference, then you’ll still bewithinbudget.

One more thing about the Higher Authority Gambit. What if you havesomebodytryingtoforceyoutoadecisionbeforeyou’rereadytomakeit?Let’ssayyou’reanelectricalsubcontractor,andyou’renegotiatingashoppingcenterbid.Thegeneralcontractorispressuringyoutocommittoapriceandstartdate,andwantsadecisionrightnow.He’ssaying,“Harry, I loveyou likeabrother,butI’mrunningabusiness,notareligion.GivemewhatIneedonthisonerightnow,orI’llhavetogowithyourcompetitor.”(I’llshowyouinChapter37howapersonundertimepressuretendstobecomemuchmoreflexible.)

Howdoyouhandleit?Verysimply.Yousay,“Joe,I’mhappytogiveyouadecision.Infact,I’llgiveyouananswerrightnowifyouwantit.ButIhavetotellyou—ifyouforcemetoadecisionnow,theanswerhastobeno.Tomorrow,afterI’vehadachancetotalktomyestimatingpeople,theanswermightbeyes.Whydon’tyouwaituntiltomorrowandseewhathappens.Fairenough?”

Youmay find yourself in a situation inwhich escalating authority is beingusedonyou.Youthinkyouhavecutadeal,onlytofindthattheheadbuyerhasto approve it andwon’t.You sweeten the deal only to find the vice presidentwon’tgiveapproval.Escalatingauthorityis,inmymindoutrageouslyunethical,butyoudorunintoit.I’msurethatyou’veexperienceditwhentryingtobuyacar. After some preliminary negotiation, the salesperson surprises you byimmediately accepting your low offer.After getting you to commit to a price(whichsetsyouuppsychologicallytoaccepttheideathatyouwillbuythatcar),thesalespersonwillsaysomethinglike,“Well,thislooksgood.AllIhavetodoisrunthisbymymanagerandthecarisyours.”

Youcanfeelthecarkeysandownershipcertificateinyourhandsalready,andyouaresittingthereintheclosingroomcongratulatingyourselfongettingsuch

agooddeal,whenthesalespersonreturnswiththesalesmanager.Themanagersitsdownandreviewsthepricewithyou.Hesays,“Youknow,Fredwasalittleoutof linehere.”Fred looksproperlyembarrassed.“Thisprice isalmost$500underourfactoryinvoicecost.”Heproducesanofficial-lookingfactoryinvoice.“Ofcourse,youcan’tpossiblyaskustotakealossonthesale,canyou?”

Now, you feel embarrassed yourself. You’re not sure how to respond. Youthoughtyouhadadeal,andFred’shigherauthorityjustshotitdown.Unawarethatthedealercouldsellyouthecarfor5percentunderinvoiceandstillmakemoneybecauseoffactoryincentives,youfallforthesalesmanager’sappealtoyourbeingareasonablepersonandnudgeyourofferupby$200.

Again,youthinkyou’veboughtthecar,untilthesalesmanagerexplainsthatat this incredibly lowprice,heneeds togethismanager’sapproval.Andso itgoes.Youfindyourselfworkingyourwaythroughabattalionofmanagers,eachoneabletogetyoutoraiseyourofferbyasmallamount.Ifyoufindtheothersideusingescalatingauthorityonyou,remembertheCounterGambits.Youcanplaythisgamealso,bybringinginyourescalatinglevelsofauthority.Theotherperson will quickly catch on to what you’re doing and call a truce. At eachescalating level of authority, you should go back to your opening negotiatingposition.Don’tletthem“salamiclose”youbylettingeachlevelofauthoritycutoffanothersliceofyourmarkup.

Don’tthinkofitasafirmdealuntilyouhavefinalapprovalandtheinkisdryonthecontract.Ifyoustartmentallyspendingtheprofitsormentallydrivingthecar,you’ll be tooemotionally involved in the sale towalkaway.Don’tget sofrustratedthatyouloseyourtemperwiththemandwalkawayfromwhatcouldbeaprofitabletransactionforeverybody.Sure,thetacticisunfairandunethical,but this is a business and not a religion.You’re there to grease thewheels ofcommerce,nottoconvertthesinners.BeingabletouseandhandletheresorttoHigher Authority is critical to you when you’re Power Negotiating. Alwaysmaintainyourownresort toHigherAuthority.Always try to remove theotherperson’sresorttoahigherauthority.

KeyPointstoRemember

1.Don’tlettheothersideknowyouhavetheauthoritytomakea

decision.2.Yourhigherauthorityshouldbeavagueentityandnotanindividual.

3.Evenifyouownyourowncompany,youcanstillusethisbyreferringdownthroughyourorganization.

4.Leaveyouregoathomewhenyou’renegotiating.Don’tlettheotherpersontrickyouintoadmittingthatyouhaveauthority.

5.Attempttogettheotherpersontoadmitthathecouldapproveyourproposalifitmeetsallofhisneeds.Ifthatfails,gothroughthethreeCounterGambits:Appealtohisego,gethiscommitmentthathe’llrecommendtohishigherauthority,andgotoaqualified“subjectto”close.

6.Iftheyareforcingyoutomakeadecisionbeforeyou’rereadytodoso,offertodecide,butletthemknowthattheanswerwillbeno,unlesstheygiveyoutimetocheckwithyourpeople,andifthey’reusingescalatingauthorityonyou,reverttoyouropeningpositionateachlevel,andintroduceyourownlevelsofescalatingauthority.

Chapter8

TheDecliningValueofServices

Here’s something you can expect when dealing with another person: Anyconcessionyoumaketohimorherwillquicklyloseitsvalue.Thevalueofanymaterial object you buymay go up in value over the years, but the value ofservices always appears to decline rapidly after you have performed thoseservices.PowerNegotiatorsknowthat,anytimeyoumakeaconcessionto theother side in a negotiation, you should ask for a reciprocal concession rightaway.Thefavoryoudidtheothersidelosesvalueveryquickly.Twohoursfromnow,thevalueofitwillhavediminishedrapidly.

Real estate salespeople are very familiarwith the principle of the decliningvalueofservices.Whenasellerhasaproblemgettingridofaproperty,andtherealestatesalespersonofferstosolvethatproblemfora6-percentlistingfee,itdoesn’tsoundasthoughit’sanenormousamountofmoney.

However, the minute the realtor has performed the service by finding thebuyer, suddenly that 6 percent starts to sound like a tremendous amount ofmoney.“Sixpercent.That’s$12,000,”thesellerissaying.“Forwhat?Whatdidthey do? All they did was put it in amultiple listing service.” A Realtor didmuch more than that to market the property and negotiate the contract, butremember the principle. The value of a service always appears to diminishrapidlyafteryouhaveperformedthatservice.

I’msureyou’veexperiencedthat,haven’tyou?Apersonwithwhomyoudoasmallamountofbusinesshascalledyou.He is ina stateofpanicbecause thesupplierfromwhomhereceivesthebulkofhisbusinesshaslethimdownonashipment.Nowhisentireassemblylinehastoshutdowntomorrow,unlessyoucanworkmiraclesandgetashipmenttothemfirstthinginthemorning.Soundfamiliar?Youwork all day and through the night, rescheduling shipments allovertheplace.Againstallodds,you’reabletogetashipmenttherejustintimefor the assembly line to keep operating.You even show up at their plant andpersonallysupervisetheunloadingoftheshipment,andthebuyerlovesyouforit.Hecomesdowntothedock,whereyouaretriumphantlywipingthedirtoff

yourhands,andsays,“Ican’tbelieveyouwereable todothatforme.That isunbelievableservice.Youareincredible.Loveyou,loveyou,loveyou.”

Youreply,“Happytodoitforyou,Joe.That’sthekindofservicewecangivewhenwehaveto.Don’tyouthinkit’stimewelookedatmycompanybeingyourmainsupplier?”

Hereplies,“Thatdoessoundgood,butIdon’thavetimetotalkaboutitnowbecause I’vegot togetover to the assembly line andbe sure that it’s runningsmoothly.CometomyofficeMondaymorningat10o’clockandwe’llgooverit.Betteryet,comebyatnoonandI’llbuyyoulunch.Ireallyappreciatewhatyoudidforme.Youarefantastic.Loveyou,loveyou,loveyou.”Allweekendlong,youthinktoyourself,“Boy.HaveIgotthisonemade.Doesheoweme.”Mondayrollsaround,however,andnegotiatingwithhimisjustashardasever.Whatwentwrong?Thedecliningvalueofservicescameintoplay.Thevalueofaservicealwaysappearstodeclinerapidlyafteryouhaveperformedtheservice.

If youmake a concession during a negotiation, get a reciprocal concessionrightaway.Don’twait.Don’tbesittingtherethinkingthatbecauseyoudidthema favor, they oweyou and that theywillmake it up to you later.With all thegoodwill in the world, the value of what you did goes down rapidly in theirmind.

Forthesamereason,consultantsknowthatyoushouldalwaysnegotiateyourfeeupfront,notafterward.Plumbersknowthis,don’tthey?Theyknowthatthetimetonegotiatewithyouisbeforetheydothework,notafter.Ihadaplumberout tomy house.After looking at the problem, he slowly shook his head andsaid,“Mr.Dawson,Ihaveidentifiedtheproblem,andIcanfixitforyou.Itwillcostyou$150.”

Youknowhowlongit tookhimtodothework?Fiveminutes.Isaid,“Nowwaitaminute.You’regoingtochargeme$150forfiveminutesofwork?I’manationallyknownspeaker,andIdon’tmakethatkindofmoney.”

Hereplied,“Ididn’tmakethatkindofmoneyeither—whenIwasanationallyknownspeaker.”

KeyPointstoRemember

1.Thevalueofamaterialobjectmaygoup,butthevalueofservicesalwaysappearstogodown.

2.Don’tmakeaconcessionandtrustthattheothersidewillmakeituptoyoulater.

3.Negotiateyourfeebeforeyoudothework.

Chapter9

NeverOffertoSplittheDifference

In thiscountry,wehavea tremendoussenseof fairplay.Thisdictates tousthatifbothsidesgiveequally,thenit’sfair.IfFredputshishomeupforsaleat$200,000,Susanmakesanofferat$190,000,andbothFredandSusanareeagertocompromise,bothtendtobethinking,“Ifwesettledat$195,000thatwouldbe fair, because it’s equal.” Fairness depends on the opening negotiatingpositions Fred and Susan took. If the house is worth $190,000 and Fred washoldingtohisover-inflatedpriceonlytotakeadvantageofSusanhavingfallenin love with his house, then it’s not fair. If the house is worth $200,000 andSusaniswillingtopaythat,butistakingadvantageofFred’sfinancialproblems,thenitisn’tfair.

Splitting the difference is not necessarily fair. It depends on the openingnegotiatingpositionsthateachsidetook.Withthatmisconceptionremoved,letmepointoutthatPowerNegotiatorsknowthatsplittingthedifferencedoesnotmeansplitting itdown themiddle. Just split thedifference twice, and the splitbecomes 75/25 percent; furthermore, youmaybe able to get the other side tosplitthedifferencethreeormoretimes.

SplittingDoesn’tAlwaysMeanDowntheMiddle

IoncenegotiatedwithabankthathadablanketencumbranceoverseveralpropertiesIowned.Ihadsoldonepropertyoutfromundertheblanket,andourcontractentitled themtoa$32,000paydownof theloan.Iofferedthem$28,000.Igotthemtooffertosplitthedifferenceat $30,000. Over a period of weeks until this four-unit buildingclosed,Iwasabletogetthemtooffertosplitthedifferenceagainat$29,000andat$28,500,andfinallytheyagreedto$28,250.

Here’showthisGambitworks:Thefirstthingtorememberisyoushouldn’toffer to split thedifferenceyourself,but alwaysencourage theother person tooffertosplitthedifference.Let’ssaythatyou’reabuildingcontractor.Youhavebeenworkingongettingaremodelingjobthatyoubidat$86,000,andforwhichthey offered $75,000.You’ve been negotiating for awhile, duringwhich timeyou’vebeenable toget theownersof thepropertyup to$80,000, andyou’vecomedown to$84,000withyourproposal.Wheredoyougo fromthere?Youhaveastrongfeelingthatifyouofferedtosplitthedifference,theywouldagreetodoso,whichwouldmeanagreeingat$82,000.

Instead of offering to split the difference, here’s what you should do. Youshouldsay,“Well,Iguessthisisjustnotgoingtofly.Itseemslikesuchashamethough, when we’ve both spent somuch time working on this proposal.” (InChapter 37 I’ll teach you howpeople becomemore flexible in relationship tohow long they’ve been negotiating.) “We’ve spent so much time on thisproposal,andwe’vecomesoclosetoapricewithwhichwecouldbothlive.Itseemslikeashamethatit’sallgoingtocollapse,whenwe’reonly$4,000apart.”

Ifyoukeepstressingthetimethatyou’vespentonitandthesmallamountofmoney that you’re apart on the price, eventually the other people will say,“Look,whydon’twesplitthedifference?”

Youactalittledumbandsay,“Let’ssee,splittingthedifference,whatwouldthat mean? I’m at $84,000 and you’re at $80,000.What you’re telling me isyou’dcomeupto$82,000?IsthatwhatIhearyousaying?”

“Well,yes,” theysay.“Ifyou’llcomedownto$82,000, thenwe’llsettleforthat.” In doing this, you have immediately shifted the negotiating range from$80,000to$84,000.Thenegotiatingrangeisnow$82,000to$84,000,andyouhaveyettoconcedeadime.

Yousay,“$82,000soundsalotbetterthan$80,000.Tellyouwhat:Letmetalktomypartners[orwhateverotherhigherauthorityyou’vesetup]andseehowtheyfeelaboutit.I’lltellthemyoucameupto$82,000,andwe’llseeifwecan’tputittogethernow.I’llgetbacktoyoutomorrow.”

Thenextday,yougetbacktothemandyousay,“Wow,aremypartnerstoughtodealwithrightnow.IfeltsurethatIcouldgetthemtogoalongwith$82,000,

butwespent twohours lastnightgoingover the figuresagain,and they insistthatwe’lllosemoneyifwegoapennybelow$84,000.Butmygoodness.We’reonly$2,000apartonthisjobnow.Surely,we’renotgoingtoletitallfallapartwhenwe’re only $2,000 apart?” If you keep that up long enough, eventuallythey’lloffertosplitthedifferenceagain.

Ifyouareabletogetthemtosplitthedifferenceagain,thisGambithasmadeyouanextra$1,000ofbottom-lineprofit.However,evenifyoucan’tgetthemtosplitthedifferenceagain,andyouendupatthesame$82,000thatyouwouldhavedoneifyouhadofferedtosplit thedifference,somethingverysignificanthappenedhere.Whatwasthesignificantthingthathappened?Right.Theythinktheywonbecauseyougot them topropose splitting thedifferenceat$82,000.Thenyougotyourpartnerstoreluctantlyagreetoaproposaltheothersidehadmade. Ifyouhadsuggestedsplitting thedifference, thenyouwouldhavebeenputtingaproposalonthetableandforcingthemtoagreetoaproposalthatyouhadmade.

That may seem like a very subtle thing to you, but it’s very significant intermsofwhofelttheywonandwhofelttheylost.RememberthattheessenceofPowerNegotiatingistoalwaysleavetheothersidethinkingheorshewon.Therule is this:Neveroffer to split thedifference,but alwaysencourage theotherpersontooffertosplitthedifference.

KeyPointstoRemember

1.Don’tfallintothetrapofthinkingthatsplittingthedifferenceisthefairthingtodo.

2.Splittingthedifferencedoesn’tmeandownthemiddle,becauseyoucandoitmorethanonce.

3.Neveroffertosplitthedifferenceyourself,butencouragetheotherpersontooffertosplitthedifference.

4.Bygettingtheothersidetooffertosplitthedifference,youputtheminapositionofsuggestingthecompromise.Thenyoucanreluctantlyagreetotheirproposal,makingthemfeelthattheywon.

Chapter10

HandlingImpasses

Inextendednegotiations,youwillfrequentlyencounterimpasses,stalemates,anddeadlockswithpeople.Here’showIdefinethosethreeterms:

Impasse:Youareincompletedisagreementononeissue,anditthreatensthenegotiations.Stalemate:Bothsidesarestilltalking,butseemunabletomakeanyprogresstowardasolution.Deadlock:Thelackofprogresshasfrustratedbothsidessomuchthattheyseenopointintalkingtoeachotheranymore.

It’s easy for an inexperienced negotiator to confuse an impasse with adeadlock.Forexample,youmanufactureautoparts,andthepurchasingagentattheautomobilemanufacturerinDetroitsays,“You’llhavetocutyourpriceby5percentayearforthenextfiveyears,orwe’llhavetoresource.”Youknowit’simpossible to do that and still make a profit, so it’s easy to think you’vedeadlocked,whenyou’vereallyreachedonlyanimpasse.

You’reacontractorandabuildingownersaystoyou,“I’dlovetodobusinesswithyou,butyouchargetoomuch.Ihavethreeotherbidsthatarewaybelowwhat you’re asking.” Your firm policy is that you won’t participate in bidshopping, so it’s easy to think you’ve deadlockedwhen you’ve really reachedonlyanimpasse.

Youownaretailstoreandacustomerisyellingatyou,“Idon’twanttotalkaboutit.Takeitbackandgiveuscredit,orthenextpersonyouhearfromwillbemy attorney!” You know that the item would work properly if the customerwouldpermityou to teach themhow touse it.However, they’re soupset thatyouthinkyou’vereachedadeadlock.

You manufacture bath fixtures and the president of a plumbing supplycompany inNewJerseypokeshis cigar inyour face andgrowls, “Letme tellyouthefactsoflife,buddyboy.Yourcompetitionwillgiveme90days’credit,so ifyouwon’tdo that,wedon’thaveanything to talkabout.”Youknowthat

yourcompanyhasn’tmadeanexceptiontotheir30days’netruleinthe72yearsthey’vebeeninbusiness,soit’seasytothinkyou’vedeadlocked,whenyou’vereallyreachedanimpasse.

Allofthesemaysoundlikedeadlockstotheinexperiencednegotiator,buttothePowerNegotiator, they’reonly impasses.YoucanuseaveryeasyGambitwheneveryoureachanimpasse.It’scalledtheSet-AsideGambit.

TheSet-AsideGambitiswhatyoushouldusewhenyou’retalkingtoabuyerandshesaystoyou,“Wemightbeinterestedintalkingtoyou,butwehavetohaveaprototypefromyoubythefirstofthemonthforourannualsalesmeetinginNewOrleans.Ifyoucan’tmovethatquickly,let’snotwastetimeeventalkingaboutit.”

Evenifit’svirtuallyimpossibleforyoutomovethatquickly,youcanstillusetheSet-AsideGambit. “I understand exactlyhow important that is toyou, butlet’sjustsetthatasideforaminuteandtalkabouttheotherissues.Tellmeaboutthe specs on the job. Do you require us to use union labor? What kind ofpaymenttermsarewetalkingabout?”

WhenyouusetheSet-AsideGambit,youresolvemanyofthelittleissuesfirstto establish some momentum in the negotiation before leading up to the bigissues.AsI’ll teachyouinChapter64,don’tnarrowitdowntojustoneissue.(Withonlyoneissueonthetable, therehas tobeawinnerandtherehas tobeloser.)

By resolving the little issues first, youcreatemomentum thatwillmake thebig issues much easier to resolve. Inexperienced negotiators always seem tothinkthatyouneedtoresolvethebigissuesfirst.“Ifwecan’tgettogetheronthemajor things likepriceand terms,whywastemuchtimetalking to themaboutthelittleissues?”PowerNegotiatorsthatunderstandtheothersidewillbecomemuchmoreflexibleafteryou’vereachedagreementonthesmallissues.

KeyPointstoRemember

1.Don’tconfuseanimpassewithadeadlock.Truedeadlocksareveryrare,soyou’veprobablyreachedonlyanimpasse.

2.HandleanimpassewiththeSet-AsideGambit:“Let’sjustset

thatasideforamomentandtalkaboutsomeoftheotherissues,maywe?”

3.Createmomentumbyresolvingminorissuesfirst,butdon’tnarrowthenegotiationdowntoonlyoneissue.(SeeChapter64.)

Chapter11

HandlingStalemates

Somewhere between an impasse and a deadlock, you will sometimesencounterastalemate.That’swhenbothsidesarestilltalkingtoeachother,butseem unable tomake any progress toward a solution. Being in a stalemate issimilar tobeing“inirons,”whichisasailingexpressionmeaningthat theboathasstalledwithitsheadintothewind.Aboatwillnotsaildirectlyintothewind.Itwillsailalmostintothewind,butitwon’tsaildirectlyintoit.Tosailintothewind, you must sail about 30 degrees off course to starboard, and then tackacrossthewind30degreestoport.It’shardworktokeepresettingthesailsthatway,buteventuallyyou’llgetwhereyouwanttogo.

Totackacrossthewind,youmustkeepthebowoftheboatmovingthroughthewind. Ifyouhesitate,youcangetstuckwithyourbowin thewind. Ifyoulosemomentumasyoutack,there’snotenoughwindtomovethebowaround.Whenaskipper is“in irons,”heorshehas toact tocorrect theproblem.Thiscouldincluderesettingthesails,backingupthejibsailtopullthebowaround,wagglingthetillerorwheel,oranythingthatwillregainmomentum.Similarly,when negotiations stall, you must change the dynamics to reestablishmomentum. Here are some things that you can do, other than changing themonetaryamountinvolved:

Changethepeopleinthenegotiatingteam.Afavoriteexpressionthatattorneysuseis“Ihavetobeincourtthisafternoon,somypartnerCharliewillbetakingmyplace.”Thecourtmaybeatenniscourt,butit’satactfulwayofchangingtheteam.Changethevenuebysuggestingthatyoucontinuethediscussionoverlunchordinner.Removeamemberwhomayhaveirritatedtheotherside.Asophisticatednegotiatorwon’ttakeoffenseatbeingaskedtoleavebecauseheorshemayhaveplayedavaluableroleasaBadGuy.Nowit’stimetoalternatethepressureontheothersidebymakingtheconcessionofremovinghimorherfromyourteam.

Easethetensionbytalkingabouttheirhobbiesorapieceofgossipthat’sinthenews,orbytellingafunnystory.Explorethepossibilityofachangeinfinances,suchasextendedcredit,areduceddepositwiththeorder,orrestructuredpayments.Anyofthesemaybeenoughtochangethedynamicsandmoveyououtofthestalemate.Rememberthattheothersidemaybereluctanttoraisetheseissuesforfearofappearingtobeinpoorfinancialcondition.Discussmethodsofsharingtheriskwiththeotherside.Takingonacommitmentthatmayturnsourmightconcernthem.Trysuggestingthatoneyearfromnow,you’lltakebackanyunusedinventorythatisingoodconditionfora20-percentrestockingfee.Perhapsaweaselclauseinthecontractthatappliesshouldthemarketchangewillassuagetheirfears.Trychangingtheambianceinthenegotiatingroom.Ifthenegotiationshavebeenlow-keywithanemphasisonwin-win,trybecomingmorecompetitive.Ifthenegotiationshavebeenharddriving,tryswitchingtomoreofawin-winmode.Suggestachangeinspecifications,packaging,ordeliverymethodtoseeifthisshiftwillmakethepeoplethinkmorepositively.

Itmaybepossibletogetthemtooverlookanydifferenceofopinion,providedyouagreetoamethodofarbitratinganydispute,shoulditbecomeaprobleminthefuture.

Whenasailboatis“inirons”theskippermayknowexactlyhowtoresetthesails,butsometimeshesimplyhas to trydifferent things toseewhatworks.Ifnegotiations stalemate,youhave to trydifferent things to seewhatwill regainmomentumforyou.ItremindsmeofsomethingIwastoldmanyyearsagoabouta roadconstructioncrewinIndiabusilydigginga tunnel through thesideofahill.Itseemedlikeaveryprimitiveoperation;therewerethousandsofworkersarmedwithpicksandshovels,anditwasamazingthattheywouldevenattemptsuchanundertakingwithnothingbutlaborers.

Atouristwalkeduptotheforemanandaskedhim,“Howintheworlddoyougoaboutthis?”

“It’sverysimple,really,”heanswered.“Iblowawhistleandalltheworkersonthissidestartdiggingthroughthehill.Ontheothersideofthehill,wehaveanother crew of workers, and we tell them to start digging through the hilltowardus. If the twocrewsmeet in themiddle, thenwehavea tunnel. If they

don’tmeet,thenwehavetwotunnels.”

Handlingastalemateislikethat.Somethingwillhappenwhenyouchangethedynamicsinanattempttocreatemomentum,butyou’reneversurewhatitwillbe.

KeyPointstoRemember

1.Beawareofthedifferencebetweenanimpasse,astalemate,andadeadlock.Inastalemate,bothsidesstillwanttofindasolution,butneithercanseeawaytomoveforward.

2.Theresponsetoastalemateshouldbetochangethedynamicsofthenegotiationbyalteringoneoftheelements.

Chapter12

HandlingDeadlocks

In the previous two chapters, I’ve shown you how to handle the first twolevelsofproblems that canoccur: the impasseand the stalemate. If thingsgetanyworse,youmay reachadeadlock, something that Idefinedas“bothsidesare so frustratedwith the lackofprogress, that they seenopoint in talking toeachotheranymore.”

Deadlocksare rare,but ifyoudoreachone, theonlyway to resolve it is tobring in a third party—someone who will act as a mediator or arbitrator. Asyou’llseeinChapter34andChapter35,thereisamajordifferencebetweenanarbitratorandamediator.Inthecaseofanarbitrator,bothsidesagreebeforetheprocess starts that theywill abide by the decision of the arbitrator. If a unioncriticaltothepublic’swelfaregoesonstrike,suchastheunionoftransportationor sanitation workers, the federal government will eventually insist that anarbitratorbeappointed,andbothsideswillhavetosettleforthesolutionthatthearbitratorthinksisfair.Amediatordoesn’thavethatkindofpower.Amediatorissimplysomeonebroughtintofacilitateasolution.Heorsheactsasacatalyst,usinghisorherskillstoseekasolutionthatbothsideswillacceptasreasonable.

Inexperiencednegotiatorsarereluctanttobringinamediatorbecausetheyseetheir inability to resolveaproblemasbeinga failure.“Idon’twant toaskmysalesmanagerforhelpbecausehe’llthinkofmeasapoornegotiator”iswhatisrunning through their minds. Power Negotiators know that there are manyreasonswhyathirdpartycanresolveaproblem,otherthanthattheyarebetternegotiators.

An arbitrator or amediator can be effective only if both sides see them asreasonably neutral. Sometimes you must go to great lengths to assure thisperception. Ifyoubring inyourmanager to resolveadisputewithacustomer,whatisthechancethatyourcustomerwillperceivehimorherasneutral?Itissomewherebetweennilandzero.Yourmanagermustdosomethingtocreateafeelingofneutrality in theotherperson’smind.Theway todo this is foryourmanagertomakeasmallconcessiontotheotherpersonearlyinthemediation

process.

Yourmanagercomesinand,evenifhe’sfullyawareoftheproblem,says,“Ihaven’treallyhadachancetogetintothisyet.Whydon’tyoubothexplainyourpositionandletmeseeifIcancomeupwithasolutionthatyoucanbothlivewith?”Theterminologyisimportanthere.Byaskingbothsidestoexplaintheirpositions,heisprojectingthathecomestotheprocesswithoutprejudice.Also,notethathe’savoidingtheuseof“we”whenhereferstoyou.

Having patiently heard out both sides, he should then turn to you and say,“Areyoubeingfairpushingthat?Perhapsyoucouldgivealittleontheterms[orsomeotherdetail]?Couldyoulivewith60days?”Don’tfeelthatyourmanagerisfailingtosupportyou.Whatheistryingtodoispositionhimselfasneutralinyourcustomer’seyes.

Donotassumeyoumustavoidimpasses,stalemates,anddeadlocksatallcost.Anexperiencednegotiatorcanusethemastoolstopressuretheotherside.Onceyour mind-set is that a deadlock is unthinkable, it means you’re no longerwilling towalk away, and you have surrendered yourmost powerful pressurepoint(youredge),asyou’llseeinChapter17.

KeyPointstoRemember

1.Theonlywaytoresolveatruedeadlockisbybringinginathirdparty.

2.Thethirdpartyactsasamediatororanarbitrator.Mediatorscanonlyfacilitateasolution,butbothsidesagreeupfrontthattheywillabidebyanarbitrator’sfinaldecision.

3.Don’tseehavingtobringinathirdpersonasafailureonyourpart.Therearemanyreasonswhythirdpartiescanreachasolutionthatthepartiesinvolvedinthenegotiationcouldn’treachalone.

4.Thethirdpartyisseenasneutralbybothsides.Ifheorsheisnotneutral,heorsheshouldpositionhim-orherselfassuchbymakingasmallconcessiontotheothersideearlyinthenegotiation.

5.Keepanopenmindaboutthepossibilityofadeadlock.You

canonlydevelopyourfullpowerasaPowerNegotiatorifyou’rewillingtowalkaway.Byrefusingtoconsideradeadlock,you’regivingawayavaluablepressurepoint.

6.YoucanlearnmoreabouttheartofmediationandarbitrationinChapter34andChapter35.

Chapter13

AlwaysAskforaTrade-Off

TheTrade-OffGambit tellsyou that, any time theother sideasksyou for aconcession in the negotiations, you should automatically ask for something inreturn. The first time you use this Gambit, you’ll get back the money youinvested in this book many times over. From then on, using it will earn youthousands of dollars every year. Let’s look at a couple of ways of using theTrade-OffGambit.

Let’ssaythatyouhavesoldyourhouse,andthebuyersaskyouiftheycouldmovesomeoftheirfurnitureintothegaragethreedaysbeforeclosing.Althoughyouwouldn’twant to let themmove into thehousebeforeclosing,youseeanadvantageinlettingthemusethegarage.Itwillgetthememotionallyinvolvedand far less likely to create problems for you at closing. With that in mind,you’re almost eager tomake the concession, but Iwant you to remember therule: However small the concession they’re asking you for, always ask forsomethinginreturn.Saytothem,“Letmecheckwithmyfamily[vagueHigherAuthority],andseehowtheyfeelabout that,but letmeaskyouthis: Ifwedothatforyou,whatwillyoudoforus?”

Perhapsyousellforkliftsandyou’vesoldalargeordertoawarehouse-stylehardwarestore.They’verequesteddeliveryonAugust15th—30daysaheadoftheir grand opening. Then the operationsmanager for the chain calls you andsays,“We’rerunningaheadofscheduleonthestoreconstruction.We’rethinkingofmovingupthestoreopeningtotakeintheLaborDayweekend.Isthereanyway you couldmove up delivery of those forklifts to nextWednesday?”Youmaybethinking,“That’sgreat.They’resittinginourlocalwarehousereadytogo,soI’dmuchrathermoveuptheshipmentandgetpaidsooner.We’lldeliverthem tomorrow if youwant them.”Although your initial inclination is to say,“That’s fine,” I stillwantyou touse theTrade-OffGambit. Iwantyou tosay,“Quitefrankly,Idon’tknowwhetherwecangetthemtheresosoon.I’llhavetocheckwithmyschedulingpeople[notetheuseofavagueHigherAuthority]andseewhat theysayabout it.But letmeaskyou this: Ifwecando that foryou,

whatcanyoudoforus?”

Thefollowinghappenswhenyouaskforsomethinginreturn:Youmightjustgetsomething.Thebuyersofyourhousemaybewillingtoincreasethedeposit,buy your patio furniture, or give your dog a good home. The hardware storeownermayjusthavebeenthinking,“Boy,havewegotaproblemhere.Whatcanwegivethemasanincentivetogetthemtomovethisshipmentup?”Theymayjustconcedesomethingtoyou.Theymayjustsay,“I’lltellaccountingtocutthecheckforyoutoday,”or“Takecareofthisforme,andI’lluseyouagainforthestorethatwe’reopeninginChicagoinDecember.”

By asking for something in return, you elevate the value of the concession.Whenyou’renegotiating,whygiveanythingaway?Alwaysmakeabigdealoutofit.Youmayneedit.Later,youmaybedoingthewalkthroughwiththebuyersofthehouse,andthey’vefoundalightswitchthatdoesn’twork.You’reabletosay,“Doyouknowhowitinconveniencedustoletyoumoveyourfurnitureintothe garage?We did that for you, and now I want you to overlook this smallproblem.”Later youmay need to be able to go to the people at the hardwarestoreandsay,“DoyourememberlastAugustwhenyouneededmetomovethatshipmentupforyou?YouknowhowhardIhadtotalktomypeopletogetthemtorescheduleallourshipments?Wedidthatforyou,sodon’tmakemewaitforourmoney.Cutmethechecktoday,won’tyou?”Whenyouelevatethevalueoftheconcession,yousetitupforaTrade-Offlater.

Itstopsthegrinding-awayprocess.ThisisthekeyreasonwhyyoushouldusetheTrade-OffGambit.Iftheyknowthateverytimetheyaskyouforsomething,you’regoingtoaskforsomethinginreturn,thenitstopsthemconstantlycomingbackformore.Ican’ttellyouhowmanytimesastudentofminehascomeuptome at seminars, or calledmyoffice and said tome, “Roger, can youhelpmewith this? I thought I had a sweetheart of a deal put together. I didn’t think Iwouldhaveanyproblemsatallwiththisone.Butintheveryearlystages,theyaskedmeforasmallconcession.IwassohappytohavetheirbusinessthatItoldthem, ‘Sure, we can do that.’ A week later, they calledme for another smallconcession,andIsaid,‘Allright.IguessIcandothat.’Eversince,it’sbeenonedarnthingafteranother.Nowitlooksasthoughthewholethingisgoingtofallapartonme.”Heshouldhaveknownupfrontthatwhentheotherpersonaskedhimforthatfirstsmallconcession,heshouldhaveaskedforsomethinginreturn.“Ifwecandothatforyou,whatcanyoudoforus?”

AFortune50CompanyLearnsThisLesson

I once trained the top 50 salespeople at a Fortune 50 company.They have a Key Account Division that negotiates their largestaccountswith their biggest customers.A salesperson at the seminarhadjustmadea$43millionsale toanaircraftmanufacturer. (That’snot a record. When I trained people at a huge computermanufacturer’s headquarters, a salesperson in the audience had justcloseda$3-billionsale,andhewasinmyseminartakingnotes!)

This Key Account Division had its own vice president, and hecame up tome afterward to tellme, “Roger, that thing you told usabout trading offwas themost valuable lesson I’ve ever learned inanyseminar.I’vebeencomingtoseminarsforyearsandthoughtthatI’dhearditall,butI’dneverbeentaughtwhatamistakeitistomakeaconcessionwithoutaskingforsomethinginreturn.That’sgoingtosaveushundredsofthousandsofdollarsinthefuture.”

UsetheseGambitsthewaythatI’mteachingthemtoyou.Ifyouchangeevenaword, it candramaticallychange theeffect. If, for example,youchange thisfrom“Ifwecandothatforyou,whatcanyoudoforus?”to“Ifwedothatforyou,youwillhavetodothisforus,”youhavebecomeconfrontational.You’vebecome confrontational at a very sensitive point in the negotiations,when theothersideisunderpressureandisaskingyouforafavor.Don’tdoit. Itcouldcausethenegotiationtoblowupinyourface.Youmaybetemptedtoaskforaspecificconcessionbecauseyouthinkthatyou’llgetmorethatway.Idisagree.Ithinkyou’llgetmorebyleavingthesuggestionuptothem.

Don’tAskforSomethingSpecific

JackWilson,whoproducedmyvideo training tapes, toldme that

after I taught him this Gambit, he used it to save several thousanddollars.A television studio called him and said one of their cameraoperatorswassick.WouldJackmindiftheycalledoneofthecameraoperatorswhoJackhadundercontractandaskhimifhecouldfillin?Itwasjustacourtesycall,somethingtowhichJackwouldhavesaid,“Noproblem”inthepast.However,thistimehesaid,“IfIdothatforyou,whatwillyoudoforme?”Tohissurprise, theysaid,“Tellyouwhat. The next time you use our studio, if you run overtime,we’llwaivetheovertimecharge.”TheyhadjustconcededseveralthousanddollarstoJackonsomethingthatheneverwouldhaveaskedforinthepast,hadhenotknownthisgambit.

Whenyouaskwhattheywillgiveyouinreturn,theymaysay,“Nothing,”or“Youget tokeepourbusiness.That’swhatyouget.”That’s fine,becauseyouhadeverythingtogainbyaskingandhaven’tlostanything.Ifnecessary,youcanalwaysreverttoapositionofinsistingonaTrade-Offbysaying,“Idon’tthinkIcangetmypeople toagree to itunlessyou’reprepared toacceptacharge forexpeditedshipping,”or“unlessyou’rewillingtomoveupthepaymentdate.”

KeyPointstoRemember

1.Whenaskedforasmallconcessionbytheotherside,alwaysaskforsomethinginreturn.

2.Usethisexpression:“Ifwecandothatforyou,whatcanyoudoforme?”Youmayjustgetsomethinginreturn.ItelevatesthevalueoftheconcessionsoyoucanuseitasaTrade-Offlater.Mostimportantly,itstopsthegrindingprocess.

3.Don’tchangethewordingandaskforsomethingspecificinreturnbecausethat’sbeingtooconfrontational.

EndingNegotiatingGambits

Chapter14

GoodGuy/BadGuy

GoodGuy/Bad Guy is one of the best-known negotiating gambits. CharlesDickenswroteaboutitinhisbookGreatExpectations.Intheopeningsceneofthestory,theyounghero,Pip,isinthegraveyardwhenoutofthefogcomesalarge,veryfrighteningman.Thismanisaconvict,andhehaschainsaroundhislegs.HeasksPiptogointothevillageandbringbackfoodandafile,sohecanremovethechains.Theconvicthasadilemma,however.Hewantstoscarethechildintodoingashe’sasked,yethemustn’tputsomuchpressureonPipthathe’llbefrozeninplaceorboltintotowntotellthepoliceman.

The solution to the convict’s problem is to use the Good Guy/Bad GuyGambit.Taking some libertywith theoriginalwork,what the convict says, ineffect,is,“Youknow,Pip,IlikeyouandIwouldneverdoanythingtohurtyou.ButIhavetotellyouthatwaitingouthereinthemistisafriendofmineandhecanbeviolent,and I’m theonlyonewhocancontrolhim. If Idon’tget thesechainsoff—ifyoudon’thelpmegetthemoff—thenmyfriendmightcomeafteryou.Youhavetohelpme.Doyouunderstand?”GoodGuy/BadGuyisaveryeffectivewayofputtingpressureonpeople,withoutconfrontation.

I’m sure you have seenGoodGuy/BadGuyused in the old policemovies.Theofficersbringasuspectdowntothepolicestationforquestioning,andthefirst detective to interrogate him is a rough, tough, mean-looking guy. Hethreatensthesuspectwithallkindsofthingsthatthey’regoingtodotohimifhedoesn’t cooperate with them. Then, he’s mysteriously called away to take aphonecall,andtheseconddetective,who’sbroughtintolookaftertheprisonerwhilethefirstdetectiveisaway,isthewarmest,nicestguyintheworld.Hesitsdown andmakes friendswith the prisoner.Hegives hima cigarette and says,“Listenkid,it’sreallynotasbadasallthat.I’verathertakenalikingtoyou.Iknowtheropesaroundhere.Whydon’tyouletmeseewhatIcandoforyou?”It’sarealtemptationtothinktheGoodGuy’sonyoursidewhen,ofcourse,he

reallyisn’t.

Then theGoodGuywould go ahead and close onwhat salespeoplewouldrecognize as a minor point close. “All I think the detectives really need toknow,”hetellstheprisoner,“iswheredidyoubuythegun?”Whathewantstoknowis:“Wheredidyouhidethebody?”

Starting out with a minor point like that, and then working up from there,worksverywell,doesn’tit?Thecarsalespersonsaystoyou,“Ifyoudidinvestin this car, would you get the blue or the gray? Would you want the vinylupholstery or the leather?” Little decisions lead to big ones. The real estatesalespersonwhosays,“Ifyoudid invest in thishome,howwouldyouarrangethefurniture in the livingroom?”Or,“Whichof thesebedroomswouldbe thenurseryforyournewbaby?”Littledecisionsgrowtobigdecisions.

ADictatorAttemptsGoodGuy/BadGuy

BillRichardson,our formerUnitedNations ambassador, tells thisstory about General Cedras, the dictator of Haiti, using GoodGuy/BadGuy inFortunemagazine (May 26, 1996): “WithGeneralCedras of Haiti, I learned that he played good guy and that a topgeneral,PhilippeBiamby,playedbadguy,soIwasprepared.Duringourmeeting,Biambyleapeduponthetableandstartedscreaming,‘Idon’tliketheU.S.governmenttocallmeathug....Jenesuispasunthug.’ I remember turning toCedras asBiambywas doing this andsaying, ‘I don’t think he likesme verymuch.’ Cedras laughed andlaughed.Hesaid,‘Allright,Biamby,sitdown.’”

PeopleuseGoodGuy/BadGuyonyoumuchmore thanyoumightbelieve.Lookoutforitanytimeyoufindyourselfdealingwithtwopeople.Chancesare,you’llseeitbeingusedonyou,inoneformoranother.Forexample,youmaysell corporate health insurance plans for an HMO, and have made anappointment tomeetwith thevicepresidentofhumanresourcesatacompany

thatmanufactures lawnmowers.When thesecretary leadsyou in tomeetwiththevicepresident,you find toyour surprise that thepresidentof thecompanywantstositinandlisteninonyourpresentation.

That’snegotiating twoonone (that’snotgood, and I’ll tell youmore aboutwhyinChapter48onbodylanguage),butyougoaheadandeverythingappearsto be fine. You feel you have a good chance of closing the sale, until thepresidentlooksirritated.Hesaystohisvicepresident,“Look,Idon’tthinkthesepeopleareinterestedinmakingaseriousproposal tous,andI’vegot thingstodo.” Then he storms out. This really shakes you up if you’re not used tonegotiating.Then thevicepresident says, “Wow.Sometimeshegets thatway,butIreallyliketheplanyoupresented,andIthinkwecanstillworkthisout.Ifyoucouldbemoreflexiblewithyourprice,I thinkwecanstillput it together.Tellyouwhat—whydon’tyouletmeseewhatIcandoforyouwithhim?”Ifyoudon’trealizewhatthey’redoingtoyou,you’llhearyourselfsaysomethingsuch as, “What do you think the presidentwould agree to?”Then itwon’t belongbeforeyou’llhavethevicepresidentnegotiatingforyou—andheorsheisnotonyourside.

IfyouthinkI’mexaggeratingonthisone,considerthis:Haven’tyou,atonetimeoranother,saidtoacarsalesperson,“Whatdoyouthinkyoucouldgetyoursalesmanagertoagreeto?”asifthesalespersonisonyourside,notontheirs?Haven’tweall,atonetime,beenbuyingrealestateandhavefoundthepropertywe want to buy, so we say to the agent who has been helping us find theproperty, “What do you think the sellers would take?” Let me ask yousomething:Forwhomisyouragentworking?Whoispayingher?It’snotyou,isit? She is working for the seller, and yet she has effectively played GoodGuy/BadGuywithyou.LookoutforGoodGuy/BadGuy,becauseyourunintoitalot.

WhenIwasthepresidentofalargerealestatecompanyinCalifornia,wehadonebranchthatconsistentlylostmoney.Thebranchhadbeenopenaboutayear,butwehadsignedathree-yearleaseonthepremises,whichcommittedustotrytomake it work for twomore years. Nomatter how hard I tried, however, Icouldn’tfindawaytoeitherincreasetheincome,ordecreasetheexpensesoftheoffice.Thebiggestproblemwasthelease.Wewerepaying$1,700amonth,andthatoneexpensewaskillingourprofit.

I called the landlord, explainedmyproblem tohim, and tried to get him to

reducetherentto$1,400amonth,afigureatwhichwecouldhavemadeasmallprofit.Hesaid,“Youhavetwomoreyearsonthatleaseandwilljusthavetolivewith it.” I used all of the Gambits I knew, but nothing would budge him tochangehismind.ItlookedasthoughIwouldhavetoacceptthesituation.

Finally,ItriedtheGoodGuy/BadGuyGambitcombinedwithagreatdealoftimepressure.Severalweekslater,Icalledhimat5:50p.m.“Aboutthatlease,”Isaid.“Aproblemhascomeuphere.IwantyoutoknowthatIagreewithyourposition.Isignedathree-yearlease,therearemorethantwoyearsleftonit,andthere isn’t any question thatwe should livewith it. But here’s the problem. Ihavetogointomyboardofdirectors’meetinginhalfanhour,andthey’regoingtoaskmeifyou’vebeenwillingtoreducetheleaseto$1,400.IfIhavetotellthemno,they’lltellmetoclosetheoffice.”

Thelandlordprotested,“ButI’llsue.”

“Iknow.Iagreewithyouentirely,”Isaid.“I’msquarelyonyourside,buttheproblemis theboardofdirectorswithwhomIhave todeal. Ifyou threaten tosue,they’lljustsay,‘Okay,lethimsue.ThisisLosAngelesCounty,anditwilltakehimtwoyearstogetintocourt.’”

HisresponsedemonstrateshoweffectivetheGoodGuy/BadGuyGambitcanbe.Hesaid,“Wouldyougointothatboardmeetingandseewhatyoucandoforme?I’dbewillingtosplit thedifferenceandreducethe lease to$1,550,but iftheywon’t settle for that, I could drop it as low as $1,500.”TheGambit hadworked so well that he actually askedme to negotiate for himwith my ownboardofdirectors.

See how effective it can be in putting pressure on the other personwithoutconfrontation?WhatwouldhavehappenedifIhadsaidtohim,“Goaheadandsueme.It’ll takeyoutwoyearstogetintocourt”?Itwouldhaveupsethimsomuchthatwewouldhavespentthenexttwoyearstalkingtoeachotherthroughattorneys.Byusingavaguehigherauthorityasmybadguy, Iwasable toputincrediblepressureonhimwithouthavinghimgetupsetwithme.

CounterGambitstoGoodGuy/BadGuy

ThefirstCounterGambitistoidentifytheGambit.Althoughthereareotherways tohandle theproblem, thisone is soeffective that it’sprobably theonlyone you need to know. Good Guy/Bad Guy is so well-known it embarrassespeoplewhentheyarecaughtusingit.Whenyounoticetheotherpersonusingityou should smile and say, “Oh, come on—you aren’t going to play GoodGuy/BadGuywithme,areyou?Comeon, sitdown,and let’swork this thingout.”Usuallytheirembarrassmentwillcausethemtoretreatfromtheposition.

Youcouldrespondbycreatingabadguyofyourown.Tell themthatyou’dlovetodowhattheywant,butyouhavepeoplebackintheheadofficewhoareobsessedwithstickingtotheprogram.Youcanalwaysmakeafictitiousbadguyappearmoreunyieldingthanabadguywhoispresentatthenegotiation.

You could go over their heads to their supervisor. For example, if you’redealingwithabuyerandheadbuyeratadistributorship,youmaycalltheownerof thedistributorship and say, “YourpeoplewereplayingGoodGuy/BadGuywith me. You don’t approve, do you?” (Always be cautious of going oversomeone’shead.Thestrategycaneasilybackfirebecauseofthebadfeelingsitcancause.)

Sometimesjustlettingthebadguytalkresolvestheproblem,especiallyifhe’sbeingobnoxious.Eventually,hisownpeoplewillgettiredofhearingitandtellhimtoknockitoff.

You can counterGoodGuy/BadGuy by saying to theGoodGuy, “Look, Iunderstandwhatyoutwoaredoingtome.Fromnowon,anythingthathesays,I’mgoingtoattributetoyoualso.”Nowyouhavetwobadguystodealwith,soitdiffusestheGambit.Sometimesjustidentifyingthembothinyourownmindasbadguyswillhandleit,withoutyourhavingtocomeoutandaccusethem.

Iftheothersideshowsupwithanattorneyorcontrollerwhoisclearlytheretoplaybadguy,jumprightinandforestallhisorherrole.Saytohimorher,“I’msureyou’reheretoplaybadguy,butlet’snottakethatapproach.I’maseagertofindasolutiontothissituationasyouare,sowhydon’tweall takeawin-winapproach?Fairenough?”Thisreallytakesthewindoutoftheotherside’ssails.

KeyPointstoRemember

1.PeopleuseGoodGuy/BadGuymorethanyoumightbelieve.Lookoutforitwheneveryou’redealingwithtwoormorepeople.It’saneffectivewayofputtingpressureontheotherpersonwithoutcreatingconfrontation.Counteritbyidentifyingit.It’ssuchawell-knowntacticthatwhenyoucatchthemusingit,theygetembarrassedandbackoff.

2.Don’tbeconcernedthattheothersideknowswhatyou’redoing.Eveniftheydo,itcanstillbeapowerfultactic.Whenyou’rePowerNegotiatingwithsomeonewhounderstandsalloftheseGambits,itbecomesmorefun.It’slikeplayingchesswithapersonofequalskill,ratherthanwithsomeoneyoucaneasilyoutsmart.

Chapter15

Nibbling

PowerNegotiators know that by using theNibblingGambit, you can get alittlebitmore,evenafteryouhaveagreedoneverything.Youcanalsoget theother person to do things that she had refused to do earlier. Car salespeopleunderstandthis,don’tthey?Theyknowthatwhentheygetyouonthelot,akindofpsychologicalresistancehasbuiltuptothepurchase.Theyknowtofirstgetyouto thepointwhereyou’re thinking,“Yes,I’mgoingtobuyacar.Yes,I’mgoingtobuyithere.”Evenif itmeansclosingyouonanymakeandmodelofcar,evenastripped-downmodelthatcarrieslittleprofitforthem.Thentheycangetyouintotheclosingroomandstartaddingalltheotherlittleextrasthatreallybuildtheprofitintothecar.

TheprincipleofNibblingtellsyouthatyoucanaccomplishsomethingsmoreeasilywithaNibblelater inthenegotiations.ChildrenarebrilliantNibblers.Ifyouhaveteenagechildrenlivingathome,youknowthattheydon’thavetotakeanycoursesonnegotiating.Butyouhaveto—justtostandachanceofsurvivingthe whole process of bringing them up—because they’re naturally brilliantnegotiators.Notbecausetheylearnitinschool,butbecausewhenthey’relittle,everythingtheyget,theygetwithnegotiatingskills.

HowChildrenNibbletoGetWhatTheyWant

Whenmydaughter,Julia,graduatedfromhighschool,shewantedto get a great high school graduation gift from me. She had threethings on her hidden agenda.Number one, shewanted a five-weektrip toEurope.Number two, shewanted$1,200 in spendingmoney.Andnumberthree,shewantedanewsetofluggage.

Shewassmartenoughnottoaskforeverythingupfront.Shewasagoodnegotiator to first closemeon the trip, then comeback a fewweeks laterandshowmeinwriting that therecommendedspending

moneywas$1,200,andshegotmetocommittothat.(I’llstresstheimportanceof the“inwriting”part inChapter31.)Thenrightat thelastminute, shecame tomeandshesaid,“Dad,youwouldn’twantmegoingtoEuropewiththatrattyoldsetofluggage,wouldyou?Allthekidswillbetherewithnewluggage.”Andshegotthat,too.Hadshe asked for everything up front, I would have negotiated out theluggageandnegotiateddownthespendingmoney.

What’s happening here is that a person’s mind always works to reinforcedecisionsthatithasjustmade.PowerNegotiatorsknowhowthisworks,anduseittogettheothersidetoagreetosomethingthattheywouldn’thaveagreedtoearlierinthenegotiation.

WhyisNibblingsuchaneffectivetechnique?TofindoutwhyNibblingworksso well, a couple of psychologists did an extensive study at a racetrack inCanada.Theystudiedtheattitudeofpeopleimmediatelybeforetheyplacedthebet,andagainimmediatelyaftertheyplacedthebet.Theyfoundoutthatbeforethe people placed the bet, theywere uptight, unsure, and anxious about whattheywereabouttodo.Comparethistoalmostanyonewithwhomyounegotiate:Theymaynotknowyou,theymaynotknowyourcompany,andtheycertainlydon’tknowwhat’sgoing tocomeoutof this relationship.Chancesare they’reuptight,unsure,andanxious.

At the racetrack, the researchers found out that once people had made thedecisiontogoaheadandplacethebet,theysuddenlyfeltverygoodaboutwhattheyhadjustdoneandevenhadatendencytowanttodoublethebetbeforetheracestarted. Inessence, theirmindsdida flip-flopuntil theyhad finallymadethedecision.Before theydecided, theywere fighting it; once they’dmade thedecision,theysupportedit.

Ifyou’re agambler,you’vehad that sensation,haven’tyou?Watch themattheroulettetablesinAtlanticCityorLasVegas.Thegamblersplacetheirbets.The croupier spins the ball. At the very last moment, people are pushing outadditionalbets.Themindalwaysworks toreinforcedecisions that ithasmadeearlier.

IspokeataPhiladelphiaconventionwhenthePennsylvanialotteryprizewas$50million, andmany of the people in the audiencewere holding tickets. Toillustrate how people’s minds work to reinforce the decisions that they havemade, I tried to buy a lottery ticket from somebody in the audience. Do youthinkhewouldsellmeone?No,hewouldn’t—evenfor50 times thepurchaseprice. I’m sure that, before he bought that ticket, hewas uptight and anxiousaboutbettingmoneyona100-million-to-oneshot.

However,havingmadethedecision,herefusedtochangehismind.Themindworks to reinforce decisions that it has made earlier. One rule for PowerNegotiators is thatyoudon’tnecessarilyask foreverythingup front.Youwaitforamomentofagreementinthenegotiations,andthengobackandNibbleforalittleextra.

YoumightthinkofthePowerNegotiatingprocessaspushingaballuphill—alargerubberballthat’smuchbiggerthanyou.You’restrainingtoforceituptothe topof thehill.The topof thehill is themomentof first agreement in thenegotiations. Once you reach that point, then the ball moves easily down theothersideofthehill.Thisisbecausepeoplefeelgoodaftertheyhavemadetheinitialagreement.Theyfeelasenseofreliefthatthetensionandstressareover.Theirminds areworking to reinforce the decision that they’ve justmade, andthey’remore receptive to any additional suggestions youmay have.After theothersidehasagreedtomakeanykindofpurchasefromyou,it’stimeforthat“secondeffort.”

VinceLombardiandtheSecondEffort

VinceLombardi loved to talkabout the secondeffort.He’d showhisplayersfootballclipsofreceiverswhoalmostcaughttheball,butit just slipped through their fingers. But instead of giving up, theymadethesecondeffort.Theydoveandcaughttheballbeforeithittheground.Hewasalsoproudoffilmclipsoftherunningbackthatthedefensealmostbroughtdown,butwhostillwriggled freeandmadethe touchdown.Lombardi used to say that everyonemakes the firsteffort.Youwouldn’tbeon the teamifyoudidn’tknowhowtoplaythegamewell,andweredoingeverythingthecoachexpectsyoutodowhenyou’reonthefield.Everybody’sdoingthat.Theplayersonthe

otherteamaredoingthat.Theplayerswhowouldliketoreplaceyouontheteamarecapableofdoingthat.

Lombardiwasfondofpointingoutthatthedifferencebetweenthegoodplayersandthegreatplayersisthatthegreatonesalwaysmakethesecondeffort,despitetheirfirstfailure.Justdoingeverythingtheircoachexpects themtodo isn’tgoodenoughfor thegreatones; theymustgobeyondthat.

Let’s translate the second-effort philosophy into workplace situations. Ifyou’reareceptionist,youneedtorealizethatitisn’tenoughtoknowhowtodoyour job and do everything that your boss asks you to do.Your boss expectsanyoneinyourpositiontodothat.Youhaveto lookforopportunities tomaketheextraeffort.Perhapsyoulearnhowtohanginwithacomplainingcustomeralittle longer until you can satisfy herwithout having to turn her over to yourboss.

Ifyou’reanarchitect,youmustrealizethatitisn’tenoughtocreateadesignthatwill please your clients. Clients expect any architect in the country to dothat.Youhavetolearnalittlemoreaboutthecustomerthananyoneelsewould,sothatyoucancomeupwithadesignthatwillknockhisorhersocksoff.

Ifyou’reasalesperson,youmustunderstandthatyouwouldn’tbesellingforyourcompanyunlessyouknewhowtoplaythesellinggamewellandwereoutthere doing everything that your company expects you to do. However,everybody’sdoingthat.Thepeoplewhosellforyourcompetitionaredoingthat.The peoplewho apply for your job every day are capable of doing that. Thedifferencebetweenagoodsalespersonandagreatsalesperson is that thegreatones always make another effort. Even when they know their sales managerwould pat them on the back and tell them not to feel bad because they dideverything they could toget the sale, that’s not good enough for the superstarsalespeople.Theyalwaysmakeanothereffort.

Alwaysgoback at the end for that second effort. Perhaps as a receptionist,one of your duties is to sell extended warranty contracts on equipment that

customersbringinforrepair.Youexplaintheprogram,butthecustomerresists.Have the courage before the customer leaves tomake that second effort.Youmightsay,“Mr.Jones,couldwetakeonemorelookatthatextendedwarranty?What you may be overlooking is the preventative maintenance factor. If youknowthatrepairworkwon’tcostyouapenny,you’llcallusmuchsoonerthanyouwouldifyouhadtopayforit.Thesooneryouhaverepairsmade,thelongertheequipmentwilllast.Yes,it’sagooddealforus,butit’sanevenbetterdealforyou.”YouhaveagoodchanceofMr.Jonessaying,“Well,all right, ifyouthinkit’sthatimportant,I’llgoahead.”

As an architect, youmay have some trouble convincing your client that heshouldput thehighest-qualityofcarpet in the lobbyofhisnewhotel,andyouhavetobackoffthetopic.Afteryouhavereachedagreementontheotherissues,havethecouragetosay,“Couldwetakeanotherlookatupgradingthecarpetinthelobby?Irealizethatit’sahugeinvestment,butnothingprojectsthequalityimagebetterthanhavingyourguestssinkintoplushcarpetingthemomenttheyget into the door. I don’t recommend it for everybody, but with this type ofproject,Ireallythinkit’svery,veryimportant.”Andyouhaveagoodchanceofyourclientsaying,“Well,allright.Ifyouthinkit’sthatimportant,let’sgoaheadwithit.”Thisishowyoutalktheclientintoyourwayofthinkinginnegotiating.

Perhapsyou sell packagingequipment, andyouare trying to convinceyourcustomerthatheorsheshouldgowiththetop-of-the-linemodel,butheorshe’sbalkingat thatkindofexpense.Youbackoff,butcomebackandNibbleforitbeforeyouleave.Afteryouhavereachedagreementonalltheotherpoints,yousay, “Could we take another look at the top-of-the-line model? I don’trecommenditforeveryone,butwithyourkindofvolumeandgrowthpotential,Ireally think it’s the way for you to go, and all it means is an additionalinvestmentof$500amonth.”Andyouhaveagoodchanceofhimorhersaying,“Well,alright,ifyouthinkit’sthatimportant,let’sgoahead.”Alwaysgobackatthe end of the negotiations to make a second effort on something that youcouldn’tgetthemtoagreetoearlier.

LookOutforPeopleNibblingonYou

There is a point in the negotiation when you are very vulnerable, and thatpoint iswhenyou think that thenegotiationsareallover. I’dbewilling tobetthatyouhavebeen thevictimofaNibbleatone timeoranother.You’vebeensellingacaroratrucktosomeone.You’refinallyfeelinggoodbecauseyou’vefound thebuyer.Thepressureand the tensionof thenegotiationshavedrainedaway.He’ssittinginyouroffice,writingoutthecheck.Butjustashe’sabouttosign his name, he looks up and says, “That does include a full tank of gas,doesn’t it?” Here, you’re at your most vulnerable point in the negotiationsbecauseofthefollowingreasons:

You’vemadeasale,andarefeelinggood.Whenyoufeelgood,youtendtogivethingsawaythatyouotherwisewouldn’t.You’rethinking,“Oh,no.Ithoughtwehadresolvedeverything.Idon’twanttotakeachanceongoingbacktothebeginningandrenegotiatingthewholething.IfIdothat,Imightlosetheentiresale.PerhapsI’mbetteroffjustgivinginonthislittlepoint.”

You are at your most vulnerable just after the other person has made thedecisiontogoahead.LookoutforpeopleNibblingonyou.Makingahugesalehasexcitedyousomuchthatyoucan’twaittocallyoursalesmanagerandtellherwhatyou’vedone.Theotherpersontellsyouthatheneedstocallpurchasingandgetapurchaseordernumberforyou.Whilehe’sonthetelephone,heputshishandoverthemouthpieceandsays,“Bytheway,youcangiveus60daysonthis,can’tyou?Allofyourcompetitorswill.”Becauseyou’ve justmadeabigsale,andyou’reafraid toreopenthenegotiationsforfearof losing it,youwillhavetofighttoavoidthetendencytomaketheconcession.

(An aside to sales managers: When your salespeople have this happen tothem, they’renotgoing tocomeback toyouandsay,“Boy,was thatpersonagoodnegotiator.HeslidthatNibbleinonmeandbeforeIevenknewwhathe’ddone,I’dagreedto60-dayterms.”No!Yoursalespersonisgoingtocomebacktoyouandsay,“Igottheorder,butIhadtogivethem60-daytermstogetit.”)

PreventtheOtherSideFromNibblingonYou

Try to prevent the possibility of being Nibbled by using the following

techniques. Show them in writing what any additional concessions will costthem.List extended terms if you evermake them available, but showwhat itcoststhemtodothat.Listthecostoftraining,installation,extendedwarranties,andanythingelseforwhichtheymightNibble.Don’tgiveyourselftheauthorityto make any concessions. Protect yourself with the Higher Authority Gambit(seeChapter7)andGoodGuy/BadGuy (seeChapter14).Counter theNibblewhen theotherpersondoes it toyou.TheCounterGambit to theNibble is togentlymaketheotherpersonfeelcheap.Youhavetobecarefulaboutthewayyoudothisbecauseyou’reatasensitivepointinthenegotiation.Yousmileandsay,“Oh,comeon,younegotiatedafantasticpricewithme.Don’tmakeuswaitforourmoney,too.Fairenough?”That’stheCounterGambittotheNibblewhenit’susedagainstyou.Besurethatyoudoitwithabiggrinonyourface,sothattheydon’ttakeittooseriously.

Considerthesepointswhenyougointonegotiations:Aretheresomeelementsthat you are better off to bring up as aNibble, after you have reached initialagreement?Doyouhaveaplan tomakeasecondeffortonanything towhichyou can’t get them to agree the first time around? Are you prepared for thepossibilityofthemNibblingonyouatthelastmoment?

PreventingPost-NegotiationNibbles

Sometimes the other person wishes that he had Nibbled on you during thenegotiation,sohedecidestoNibbleonyouafterward.Thiscouldincludecertainscenarios. The other person agrees to 30-day terms, but deliberately takes 60daysormoretopay.Hepaysin30days,butstilldeductstheNet15discount.He requests free additional accounting breakdowns, sometimes just to delaypayment.Heprotestsachargeforinstallation,claimingthatyoudidn’tcoverthiswithhim.Herejectsachargefortraining,sayingthatyourcompetitiondoesn’tcharge.Hecontractsforacarloadshipment,butcallsatthelastmomenttocutthe shipment and insist on the carload price.He refuses to pay or slashes thebillingforengineeringcharges,althoughduringthenegotiation,hewaivedthisasideasunimportant.Herequestsextracertifications,andisunwillingtopayforthem.

You can avoidmost of this unpleasantness by negotiating all the details upfrontandgettingtheminwriting.Don’tleaveanythingto“Wecanworkthatoutlater.”Don’tbelazyandfeelthatifyouavoidanissue,youareclosertomakingthesale.UsetheGambitstocreateaclimateinwhichtheotherpersonfeelsthatheorshewon.Iftheothersidefelttheywon,thentheyaremuchlesslikelytoNibble—either during the negotiation or afterward. PowerNegotiators alwaystakeintoaccountthepossibilityofbeingabletoNibble.Timingisverycritical—catch the other parties when the tension is off, and they’re feeling goodbecausetheythinkthenegotiationsareallover.

On the other hand, look out for the other side Nibbling on you at the lastmoment,when you’re feeling good.At that point, you’re themost vulnerableand liable to make a concession, about which half an hour later you’ll bethinking,“WhyonEarthdidIdothat?Ididn’thavetodothat.We’dagreedoneverythingalready.”

KeyPointstoRemember

1.Withawell-timedNibble,youcangetthingsattheendofanegotiationthatyoucouldn’thavegottentheothersidetoagreetoearlier.Itworksbecausetheotherperson’smindreversesitselfafterithasmadeadecision.Hemayhavebeenfightingthethoughtofbuyingfromyouatthestartofthenegotiation.Afterhehasmadeadecisiontobuyfromyou,however,youcanNibbleforabiggerorder,upgradedproduct,oradditionalservices.

2.Beingwillingtomakethatadditionaleffortiswhatseparatesgreatsalespeoplefrommerelygoodsalespeople.

3.StoptheotherpersonfromNibblingonyoubyshowingher,inwriting,thecostofanyadditionalfeatures,services,orextendedterms,andbynotrevealingthatyouhavetheauthoritytomakeanyconcessions.

4.WhentheotherpersonNibblesonyou,respondbymakinghimfeelcheap,inagood-naturedway.

5.Avoidpost-negotiationNibblingbyaddressingandtyingupallthedetailsandusingGambitsthatcausethemtofeelthat

theyIwon.

Chapter16

HowtoTaperConcessions

Inextendednegotiationsoverprice,becarefulthatyoudon’tsetupapatternin theway thatyoumakeconcessions.Let’s say thatyou’resellingausedcarandyou’vegoneintothenegotiationwithapriceof$15,000,butyouwouldgoaslowas$14,000.Youhaveanegotiatingrangeof$1,000.

Thewayinwhichyougiveawaythat$1,000isverycritical.Thereareseveralmistakesthatyoushouldavoid:

Equal-sized concessions. This means giving away your $1,000 negotiatingrange in four incrementsof$250. Imaginewhat theotherperson is thinking ifyoudothat.Shedoesn’tknowhowfarshecanpushyou;allsheknowsisthateverytimeshepushes,shegetsanother$250.She’sgoingtokeeponpushing.Infact, it’s a mistake to make any two concessions of equal size. If you werebuyingthecar,andtheownermadea$250concessionandwhenpushed,madeanother$250concession,wouldn’tyoubetthatthenextconcessionwillbe$250also?

Anothermistakeismakingthefinalconcessionabigone.Let’ssaythatyoumadea$600concession,followedbya$400concession.Thenyoutelltheotherperson,“That’sabsolutelyourbottomline.Ican’tgiveyouapennymore.”Theproblemisthat$400istoobigaconcessiontobeyourfinalconcession.Ifyoumade a $600 concession, followed by a $400 concession, the other person isprobablythinkingthathe’ssurethathecangetatleastanother$100outofyou.He says, “We’re getting close. If you can come down another $100, we cantalk.” You refuse, telling him that you can’t even come down another $10,becauseyou’vegivenhimyourbottomlinealready.Bynow,theotherpersonisreallyupset,becausehe’sthinking,“Youjustmadea$400concessionandnowyouwon’tgivemeanother lousy$10.Whyareyoubeingsodifficult?”Avoidmakingthelastconcessionabigone,becauseitcancreatehostility.

Nevergiveitallawayupfront.Anothervariationofthepatternistogivetheentire$1,000negotiatingrangeawayinoneconcession.WhenIsetthisupasa

workshopatmyseminars,it’samazingtomehowmanyparticipantswillturntothepersonwithwhomthey’retonegotiateandsay,“Well,I’lltellyouwhathetold me.” Such naivete is a disastrous way to negotiate. I call it “UnilateralDisarmament.” It’swhat somepacifistswouldhaveusdo about nuclear arms:dismantleallournuclearweaponsandhopethattheIraniansandNorthKoreanswouldreciprocate.Idon’tthinkthat’sverysmart.

Ibetyou’rethinking,“HowonEarthwouldapersonbeabletogetmetodoastupidthinglikethat?”It’sactuallyveryeasy.Someonewholookedatyourcaryesterdaycallsyouupandsays,“We’velocatedthreecarsthatwelikeequallywell,sonowwe’rejustdowntoprice.Wethoughtthefairestthingtodowouldbetoletallthreeofyougiveusyourverylowestprice,sothatwecandecide.”Unlessyou’reaskillednegotiator,you’llpanicandcutyourprice to thebone,althoughtheyhaven’tgivenyouanyassurancethattherewon’tbeanotherroundofbiddinglater.

Anotherwaytheothersidecangetyoutogiveawayyourentirenegotiatingrange up front is with the “we don’t like to negotiate” ploy. Say you’re asalespersontryingtogetanewaccountwithacompany.Withalookofpainedsincerity on his face, their buyer says, “Letme tell you about thewaywe dobusinesshere.Backin1926,whenhefirststartedthecompany,ourfoundersaid,‘Let’s treat ourvendorswell.Let’snotnegotiatepriceswith them.Have themquotetheirlowestprice,andthentellthemwhetherwe’llacceptitornot.’That’sthewaywe’vealwaysdoneit.Justgivemeyourlowestprice,andI’llgiveyouayesorano.Becausewedon’tliketonegotiatehere.”

Thebuyerislying!Heorshelovestonegotiate.Thatisnegotiating—seeingifyoucangettheothersidetomakealloftheirconcessionsbeforethenegotiatingevenstarts.

Another mistake is giving a small concession to test the waters.We’re alltemptedtodothat.Youinitiallytelltheotherperson,“Well,Imightbeabletosqueezeanother$100offtheprice,butthatisaboutourlimit.”Iftheyrejectthat,youmight think, “This negotiation is not going to be as easy as I previouslythought.”Youofferthemanother$200.Thatstilldoesn’tgetthemtobuythecar,sointhenextroundyougiveawayanother$300andthenyouhave$400leftinyournegotiatingrange,andyouendupgivingthemthewholething.

Youseewhatyou’vedonethere?Youstartedwithasmallconcessionandyoubuiltuptoalargerconcession.You’llneverreachagreementdoingthat,because

everytimetheyaskyouforaconcession,itjustgetsbetterandbetterforthemandthey’llkeeponasking.

These patterns of concession making are wrong, because they createexpectations in the other person’smind.The bestway tomake concessions isfirst to offer a reasonable concession thatmight just cinch the deal.Maybe a$400concessionwouldn’tbeoutofline.Then,besurethatifyouhavetomakeanyfutureconcessions,theyaresmallerandsmaller.Yournextconcessionmightbe$300,andthen$200,andthen$100.Byreducingthesizeoftheconcessionsthatyou’remaking,youconvince theotherperson thathehaspushedyou justaboutasfarasyouwillpossiblygo.

Ifyouwanttotesthoweffectivethiscanbe,tryitonyourchildren.Waituntilthe next time they come to you formoney for a school outing or a book fair.Theyaskyoufor$100.Yousay,“Noway.DoyourealizethatwhenIwasyourage,myweeklyallowancewas50cents?Outof thatmoney, Ihad tobuymyownshoesandwalk10milestoschoolinthesnow,uphillbothways.Ihadtotake off my shoes and walk barefoot to save money (and other stories thatparents all over theworld tell their children).Noway am I going togiveyou$100.I’llgiveyou$50,butyouhavetoearntherest.”

“Ican’tdoiton$50,”yourchildrenprotestinhorror.

Now you have established the negotiating range with your child. They areasking for $100. You’re only offering $50. The negotiations progress at afrenziedpaceandyoumoveupto$60.Thenit’s$65andfinally$67.50.Bythetimeyou’vereached$67.50,youdon’thavetotellthemthattheyarenotgoingtodoanybetter; theyalreadyknowit.Bytaperingyourconcessions,youhavesubliminally communicated that they are not going to do any better than the$67.50thatyouareofferingthem.

However, Power Negotiators know how to do even better than that. PowerNegotiatorsknowhowtotakeawayaconcessionthattheyhavealreadyofferedtheotherside,andI’lltellyouhowtodothatinChapter17.

KeyPointstoRemember

1.Thewaythatyoumakeconcessionscancreateapatternof

expectationsintheotherperson’smind.2.Don’tmakeequal-sizedconcessions,becausetheothersidewillkeeponpushing.

3.Don’tmakeyourlastconcessionabigone,becauseitcreateshostility.

4.Neverconcedeyourentirenegotiatingrangejustbecausetheotherpersoncallsforyour“lastandfinal”proposal,orclaimsthatheorshe“doesn’tliketonegotiate.”

5.Tapertheconcessionstocommunicatethattheothersideisgettingthebestpossibledeal.

Chapter17

TheWithdrawinganOfferGambit

In this chapter, I’ll teach you how to conclude the negotiations veryeffectively.Youdon’thavetouseitwhentheotherpersonisnegotiatingingoodfaith with you. You use it only when you feel that the other side is simplygrindingawaytogetthelastpennyoffyourprice.Orwhenyouknowthattheother person wants to do business with you, but she’s thinking, “How muchwould Ibemakingperhour, if I spent a littlemore timenegotiatingwith thisperson?”

Let’s say that a group of friends got together and bought a cabin in themountains to use for a vacation home. There’s awhole group of owners, andthey’resharingtheuseofit.Onepartnerdropsoutofthesyndication,andyourneighbor comes to you and tells you about the cabin in the mountains. Yourinitial reaction to this is, “This sounds fantastic. I’d love todo something likethat.”However,you’re smart enough toplay theReluctantBuyerGambit (seeChapter5).

Yousay,“Iappreciateyourtellingmeaboutthat,butIjustdon’tthinkwe’dbeinterested right now. I’m so busy, I don’t thinkwe’d have the time to get upthere. But look, just to be fair to you,what is the very lowest price that youwouldsellashareinthehomefor?”

He’s been studying negotiating too, however, and he’s learned you shouldnever be the first one to name the price.He says, “Wehave a committee thatdecideson theprice [theHigherAuthorityGambit; seeChapter7]and Idon’tknowwhat that pricewould be. I can take them a proposal, but I don’t knowwhatthereactionwouldbe.”

Whenyoupresshimalittlemore,hefinallysays,“I’mprettysurethatthey’regoingtobeasking$20,000.”

Thisisalotlessthanyouexpected.Youwerewillingtogoto$30,000.Yourinitialreactionistojumpatitrightaway,butyou’resmartenoughtoremembertoflinch(seeChapter3).Youexclaim,“$20,000!Ohno,Icouldnevergoalong

with anything like that. That’s way toomuch. Tell youwhat—$16,000mightinterestme.Ifthey’reinterestedat$16,000,letmeknowandwe’lltalkaboutit.”

The next day he returns and decides to bring you into line by using theWithdrawinganOfferGambit.Hesays,“Iamembarrassedabout this. Iknowwe were talking $20,000 yesterday, but the committee decided that theywouldn’tsellashareforlessthan$24,000.”

Thisispsychologicallydevastatingtoyoufortworeasons:

Becauseyoufeelthatyoucreatedtheproblem—yousay,“Boy,IwishI’dneverrunintothatRogerDawsonandhisPowerNegotiating,becauseifIhadn’t,Iwouldhavenailedhimdownat$20,000yesterday.”You’vemadethemistaketellingyourfamilyallaboutit.They’reallexcitedaboutthehomeupinthemountains,andyou’vepassedthatcriticalpointinthenegotiationswhenyou’repreparedtowalkaway.

You say, “Joe what are you talking about? You said $20,000 yesterday.$24,000today.Isitgoingtobe$28,000tomorrow?What’sgoingonhere?”

Hesays,“Idofeelbad,butthat’swhatthey[HigherAuthority]decided.”

Yousay,“Joe,comeon.”

Joesays,“WellIdofeelbadaboutthis.Tellyouwhat,letmegobacktothemone more time, let me see what I can do for you with them.” (That’s GoodGuy/Bad Guy, isn’t it?) “If I can get it for you for the $20,000, are youinterested?”

“Ofcourse I’m interested. Iwant it.”Hehassoldyouat fullprice,andyoumaynothaverealizedwhathe’sdonetoyouuntilit’stoolate.

Letme give you another example, because it’s a very powerful negotiatingGambit. Let’s say that you sell widgets, and you quote the buyer a price of$1.80; thebuyeroffersyou$1.60.Younegotiatebackand forth, and finally itlooksasthoughhewillagreeto$1.72.What’sgoingthroughthebuyer’smindis“Igothimdownfrom$1.80to$1.72.IbetIcansqueezeanotherpennyoutofhim.IbetIcangetthissalespersonto$1.71.”Hesays,“Look,businessisreallytoughrightnow.I justcan’tdobusinesswithyouonthosewidgetsunlessyoucanbringtheorderinat$1.71perwidget.”

Hemaybeonlybaitingyou,justtryingittoseeifhecangetyoudown.Don’t

panicandfeelyouhavetomaketheconcessiontostayinthegame.Thewaytostopthisgrindingawayprocessistosay,“I’mnotsureifwecandothatornot,buttellyouwhat:IfIcanpossiblygetitforyou,Iwill.[That’sasubtleformofGoodGuy/BadGuy;seeChapter14.]Letmegoback,we’llfigureitoutagain,andseeifwecandoit.I’llgetbacktoyoutomorrow.”

Thenextday,youcomebackandpretendtowithdrawtheconcessionthatyoumade the day before. You say, “I’m really embarrassed about this, but we’vebeenupallnightfiguringoutthepriceofwidgets.Somebody,somewheredowntheline,hasmadeamistake.Wehadanincreaseinthecostofrawmaterialsthattheestimatordidn’t figure in. Iknowwewere talking$1.72yesterday,butwecan’tevensellittoyouforthat—$1.73isthelowestpricethatwecouldpossiblyofferyouonwidgets.”

What’s the buyer’s reaction?He’s going to get angry and say, “Hey,wait aminutebuddy.Weweretalking$1.72yesterday,and$1.72iswhatIwant.”Andimmediatelythebuyerforgets$1.71.TheWithdrawinganOfferGambitworkswellwhenyouwanttostopthebuyergrindingawayonyou.

Haven’tweallhadanapplianceorcarsalesperson,whenwewere trying toforcethepricealittlelower,say,“Letmegotomysalesmanager,andI’llseewhat I can do for you with him.” Then he comes back and says, “Am Iembarrassedaboutthis.Youknowthatadvertisedspecialweweretalkingabout?Ithoughtthatadwasstillineffect,butitendedlastSaturday.Ican’tevensellitto you at the price we were talking about.” Immediately, you forget futureconcessionsandwanttojumponthebandwagonatthepriceyou’dbeentalkingabout.YoucanalsoemploythisGambitbywithdrawingafeatureof theoffer,ratherthanraisingtheprice.

Herearesomeexamplesofdoingjustthat:Theappliancesalespersonsaystoyou,“Iknowweweretalkingaboutwaivingtheinstallationcharge,butmysalesmanager is now tellingme that at this pricewe just can’t do that; it’s such asteal.”Theair-conditionersalespersonsays toyou,“Iunderstand thatweweretalkingaboutincludingthecostofbuildingpermits,butatapricethislow,myestimatorsaretellingmewe’dbecrazytodothat.”

You’reasub-contractorandyousaytoyourgeneralcontractor,“Iknowyourequested60-dayterms,butatthisprice,we’dneedpaymentin30days.”

Youmarketcomputers,andyou tellyourcustomer,“Yes, I toldyou thatwewouldwaivethechargefortrainingyourpeople,butmypeoplearesayingthat

atthisprice,we’dhavetocharge.”

Don’tdoitwithsomethingbigbecausethatcouldreallyantagonizetheotherperson.

TheWithdrawinganOfferGambitisagamble,butitwillforceadecisionandusuallymake or break the deal.Whenever the other person uses this on you,don’t be afraid to counter by insisting that the other side resolve its internalproblemfirst,sothatyoucanthenresumetherealnegotiation.

KeyPointstoRemember

1.TheWithdrawinganOfferGambitisagamble,souseitonlyonsomeonewhoisgrindingawayonyou.Youcandoitbybackingoffyourlastpriceconcession,orbywithdrawinganoffertoincludefreight,installation,training,orextendedterms.

2.Toavoiddirectconfrontation,makethebadguyavagueHigherAuthority.Continuetopositionyourselfasontheotherperson’sside.

Chapter18

PositioningforEasyAcceptance

The Positioning for EasyAcceptanceGambit is important if you’re dealingwith people who have studied negotiating. If they’re proud of their ability tonegotiate,youcangetridiculouslyclosetoagreement,andtheentirenegotiationcouldstillfallapartonyou.Whenitdoes,it’sprobablynotthepriceortermsofthe agreement that caused the problem; it’s the ego of the other person as anegotiator.

Let’s say that you market advertising specialties, such as rulers with thecompany’s name on it, or customprinted baseball caps and t-shirts.You havemadeanappointmenttomeetwiththemanageratalocalappliancestore.Whatyoumaynotrealizeisthat,justbeforeyoushowedupinhisoffice,themanagersaidtotheownerofthestore,“Youjustwatchmenegotiatewiththisadvertisingspecialtyrepresentative.IknowwhatI’mdoing,andI’llgetusagoodprice.”

Nowhe’snotdoingaswellashehadpreviouslyhopedinthenegotiation,andhe’sreluctanttoagreetoyourproposalbecausehedoesn’twanttofeelhelosttoyou as a negotiator. That can happen, evenwhen the other person knows thatyourproposalisfairanditalsosatisfieshisneeds.Whenthishappens,youmustfindawaytomaketheotherpersonfeelgoodaboutgivingintoyou.YoumustPositionforEasyAcceptance.PowerNegotiatorsknowthatthebestwaytodothis is to make a small concession just at the last moment. The size of theconcessioncanberidiculouslysmall,andyoucanstillmakeitworkbecauseit’snotthesizeoftheconcessionthat’scritical,butthetiming.

Youmightsay,“Wejustcan’tbudgeanotherdimeontheprice,butItellyouwhat.Ifyou’llgoalongwiththeprice,I’llpersonallysupervisetheinstallation,just tobesurethatitallgoessmoothly.”Perhapsyouwereplanningtodothatanyway,butthepointisthatyou’vebeencourteousenoughtopositiontheotherpersonsothathecanrespond,“Well,allright.Ifyou’lldothatforme,we’llgoalongwiththeprice.”Thenhedoesn’tfeelthathelosttoyouinthenegotiation,he feels that he traded off. Positioning for EasyAcceptance is another reasonwhyyoushouldnevergoinwithyourbestofferupfront.Ifyouhaveofferedall

of your concessions already, before youget to the endof the negotiation, youwon’thaveanythingleftwithwhichtopositiontheotherside.

Herearesomeconcessionsyoucanusetopositiontheotherside:

You’resellingaboat,soyouoffertotakethebuyersoutandshowthemhowtosailit.Ifyousellofficeequipment,offertosetuptheirsuppliesonanautomaticreorderingsystem.You’resellingacar,soyouoffertoincludethesnowchains.Holdthispricefor90daysincasetheywanttoduplicatetheorder.You’rehiringsomeoneandcan’tpayhimorherwhatheorsheasked,butyouoffertoreviewitafter90days.Offer45-daytermsinsteadof30days.Offerthreeyearsforthepriceoftwoonanextendedservicewarranty.

Rememberthatit’sthetimingoftheconcessionthatcounts,notthesize.Theconcession canbe ridiculously small and still be effective.Using thisGambit,PowerNegotiatorscanmaketheotherpersonfeelgoodaboutgivingintothem.

Never,evergloat.Never,whenyouget throughnegotiating,saytotheotherperson, “Harry, you know, if you’d hung in there a little bit longer, I waspreparedtodothisandthisandthisforyou.”Harry’sgoingtosayunkindthingsaboutyourmommywhenyoudothat!

I realize in thenormalcourseofbusiness,you’dneverbe foolishenough togloatover theotherpersonbecauseyoufeltyouout-negotiatedhim.However,you get into troublewith this onewhen you’re negotiatingwith someone youknowwell.Perhapsyouhavebeenplayinggolfwiththispersonforyears.Nowyou’renegotiatingsomething.You’rehavingfunplayingthenegotiatinggame.Finally,hesaystoyou,“Allright.We’reallagreedandwe’renotgoingtobackout,butjustformyownsatisfaction,whatwasyourrealbottomlinethere?”Ofcourseyou’retemptedtobragalittle,butdon’tdoit.Hewillrememberthatforthenext20years.

When you’re done negotiating, congratulate.However poorly you think theother people may have done, congratulate them. Say, “Wow. Did you do afantasticjobnegotiatingwithme.IrealizeIdidn’tgetasgoodadealasIcouldhave,but frankly, itwasworth itbecauseI learnedsomuchaboutnegotiating.You were brilliant.” You want the other person to feel he or she won in the

negotiations.

AttorneysDon’tNeedMoreTrouble

Haveyoueverwatchedattorneysincourt?They’llcuteachothertoribbonsinsidethecourtroom.However,outsideyou’llseethedistrictattorney go up to the defense attorney and say, “Wow, were youbrilliantinthere.Youreallywere.True,yourguygot30years,butIdon’tthinkanybodycouldhavedoneabetterjobthanyoudid.”Thedistrict attorney understands that he’ll be in another courtroom onedaywiththatsamedefenseattorney,andhedoesn’twanttheattorneytofeelthatthisisapersonalcontest.Gloatingoveravictorywilljustmake the attorney more determined than ever to win the rematch.Rememberthatyouwillbedealingwiththatotherpersonagain.Youdon’twant her to feel that she lost to you. Itwouldmake her onlymoredeterminedtogetthebetterofyouinarematch.

KeyPointstoRemember

1.Iftheotherpersonisproudofhisorherabilitytonegotiate,hisorherneedtowinmaystopyoufromreachingagreement.

2.Positiontheotherpersontofeelgoodaboutgivingintoyouwithasmallconcessionmadejustatthelastmoment.

3.Becausetimingismoreimportantthanthesizeoftheconcession,theconcessioncanberidiculouslysmallandstillbeeffective.

4.Alwayscongratulatetheotherpersonwhenyougetthroughnegotiating,howeverpoorlyyouthinkheorshedid.

UnethicalNegotiatingGambits

Chapter19

TheDecoy

Theother side canuse theDecoyGambit to takeyour attention away fromwhatistherealissueinthenegotiation.PerhapsyouaresellingcustomgearstoalargemanufacturerofbulldozerslocatedinHouston.Youhavebeencallingonthis company for two years trying to get your foot in the door, but they haveneverbeenwillingtobudgefromtheirexistingsupplier.However,todayappearstobethedaywhenallyourpersistencewillpayoff.Thebuyerofferstogiveyoualargeorder,providingthatyoucancompleteshipmentina90-dayperiod.Bothofyouknowthatittypicallytakes120daystodesign,engineer,andmanufactureacustomgear.Thethoughtofgettingthesaleexcitesyou,butyourealizethata90-dayshipdateisvirtuallyimpossible.

Youcheckwiththepeopleatyourplant,andtheyconfirmthateven120dayswouldbeascrambleandthatnonrecurringengineeringcostswillbe$22,000.Asmuch as you fight for an accelerated production schedule, you can’t get yourpeopletobudge.It’sgoingtotake120daysandnotadayless,evenifyouhavetolosetheorderoverit.

Youreturntopresenttheproposaltotheotherside.Youshowhimapriceof$230,000for thegears,plus$22,000 innonrecurringengineeringcosts,F.O.B.(meaning that the customer pays the freight) from your plant in Toledo, withshipmentin120days.

Thebuyer insists thathemusthavedelivery in90days tocompletea largeshipmentthathiscompanyneedstodelivertoaconstructionprojectinBuenosAires.Thenegotiationhas takenonan airof twopeopledesperately trying tosolveaproblemtogether,butnothingyoucancomeupwithseemstosolvetheproblem.Thenegotiationsappeartohavestalemated.

Finally, thebuyer says, “Maybe there’s something thatwouldwork.Letmecheckwithmyshippingpeopleandseewhattheyhavetosay.I’llberightback.”He leaves the office for 15minutes. Yourmind is in turmoil, thinking of the

commission thatyou’ll lose ifyoucan’tput thissale together.By the time thebuyerreturns,you’realmostfrantic.

Thebuyerhas a concerned lookonhis faceand says, “I think I’ve foundaway,butIneedyourhelptoputittogether.Myguyinshippingsaysthatwecanair freight the gears to Argentina, but we’re going to have to pay off somecustomspeople.Todothis,IneedyoutowaivetheengineeringchargesandairfreightthemtousinHoustonatyourexpense.”

Unlessyou’reverycareful,thereliefoffindingasolutiontotheproblemwilloverwhelmyousomuchthatyou’llconcedethe$22,000engineeringchargeandagree to pick up a $6,000 airfreight bill. And it may be months before yourealize that thebuyerused theDecoyGambitonyou.Sixmonths lateryou’resitting in a hotel coffee shop inDallas, talking to a friend of yourswho sellssheetmetaltothebulldozercompany.Heasksyouhowyougotyourfootinthedoor,andyoutellhimthestory.

Yourfriendsays,“Idon’tbelievewhatthebuyertoldyou.Itdoesn’tringtruetome.Thosepeoplearethebest-organizedmanufacturingplantinthebusiness.They always work at least six months out. No way would they be orderingcustomgearsonly90daysout.”Onlythendoesitdawnonyouthattheshipmentdate neverwas the real issue.They could have livedwith 120 days.The shipdatewastheDecoyissue.Thebuyercreatedtheissueofanacceleratedshipmentdate simply so that he could trade it off later for the real issue: waiving theengineeringchargesandthefreight.

Severalyearsago,anassociationhiredmetodoaseminaratJohnPortman’sPeachtreeHotel inAtlanta.That’saWestinHotelandafabulousplace. It’s73storieshigh,oneofthetallesthotelsinthecountryandpossiblytheworld.It’saround,talltowerwithonly15orsopie-shapedroomsoneachfloor.

As Iwalked into the hotel, Iwaswonderingwhat I could do to provide anillustrationtothepeoplewhowouldbeintheseminarthefollowingday,toshowhoweffectivePowerNegotiatingcanbe.Aroomhadbeenprearrangedformebytheorganizationthathadhiredme,andIdecidedtoseewhatIcoulddoaboutnegotiatingdown thepriceof the room.Roomsat thePeachtree then typicallycost$135.Theyhadgivenmeaverygoodcorporaterateof$75.Nevertheless,IwasdeterminedtoseewhatIcoulddo,andwithin10minutesgotthemtoreducethepriceoftheroomto$37.50.

IusedtheDecoyGambitonthem.Theytoldmethattheyonlyhadatwin-size

roomforme.Understandthatiftheyhadsaidtheyonlyhadafull-sizeroom,Iwouldhaveaskedforatwinbed.Itdidn’tmatterwhatitwas,but Isaid,“Theassociation that hiredme booked this room amonth ahead of time. I am notgoingtoacceptatwin-sizeroom.”Thedeskclerkbroughtoutthemanager.Heexplainedthattheyhave1,074roomsinthehotel,guestsalreadyoccupied1,064ofthem,sotheyonlyhad10available,andIwouldhavetosettleforatwin-sizeroom.

IusedtheTrade-OffGambit(seeChapter13).Isaid,“Well,Imightbewillingtosettleforatwin-sizeroom,butifIdothatforyou,whatwillyoudoforme?”I thought theymightoffera freebreakfastorsomething like that.However, tomyamazementhesaid,“Wemightbeabletoadjustthepriceoftheroomalittlebit.Howwouldhalfpricebeforyou?”

Isaid,“Thatwouldbejustfine.”Then,astheygavemethekeytotheroom,the manager said, “Let me check just a moment. We may be able to dosomethingmore foryou.”Theymadea telephonecalland foundout that theydid have a queen-size room available. Maintenance had just finishedredecoratingit,andtheyweren’tsurewhethertheyhadreleasedityet.Iendedupgettinga$135queen-sizeroomforonly$37.50.(Otherthangivingmeaneatstoryfortheseminar,thisdidn’tbenefitmebecausetheorganizationthathiredmewaspayingforit,andtheygotthebenefitofthereduction.)

TheDecoyIusedwasthattheyonlyhadtwin-sizeroomsavailable,notking-sized.Thatwasn’t thereal issueatall,ofcourse;whatIwantedtoaccomplishwasareducedroomrate.Thesizeofthebedtooktheirattentionawayfromtherealissue.

Sometimestheothersidewillmakeabigshowofappearinghurtoroffendedby something that you did.WhenBillRichardson, our formerUnitedNationsambassador, was negotiating with a Muslim dictator, he was told, “Dictatorsoftentrytotakeadvantageofyouattheoutset.Theytrytocatchyouoffguard.”

Richardsonsaid:

AtthebeginningofmymeetingwiththedictatorIcrossedmylegsandthesolesofmyfeetwerevisible.Hegotupandlefttheroom.Iaskedtheinterpreter, “Whatdid Ido?”He said, “ThePresidentwas insulted thatyoucrossedyour legs.ToanArab that’sanasty insult,andyoushouldapologize.” I asked, “Is he coming back?” The interpreter said, “Yes,he’llcomeback.”Whenhedid,Imadethedecisionnot toapologize.I

wasn’tgoingtogrovel,andsay,“Hey,I’mrealsorryIcrossedmylegs.”Iplantedmyfeetandsaid,“Mr.President, letmeresume.”AndI thinkherespectedthat,becausethediscussionsgotbetter.Youtrytoshowthatyou’reahumbleperson,butatthesametime,youcan’tbackdown.Youcan’tshowweakness.Youkeepcomingatthem.

(Fortunemagazine,May26,1996)

WatchoutforpeoplewholureyouawayfromtherealissuewiththeDecoyGambit. Stay focused and isolate the objection. “Is that the only thing that’sbotheringyou?”Thengo toHigherAuthority andGoodGuy/BadGuy: “Let’sgetsomethinginwriting,andI’lltakeittomypeopleandseewhatIcandoforyou with them.” Then turn the tables: “We may be able to accelerate theshipment,butit’sgoingtoincreasethenonrecurringengineeringcharges.”

KeyPointstoRemember

1.Watchforissuesthattheothersidedeclaresimportant.2.Theymaybecreatingadecoythattheywilltrytotradeofflaterforsomethingtheyreallycareabout.

3.Don’tbethrownoffiftheyappeartobeoffendedbyaminorslight.

4.WatchoutforpeoplewholureyouawayfromtherealissuewiththeDecoyGambit.Stayfocusedandisolatetheobjection.

Chapter20

TheRedHerring

TheRedHerringGambit is a further twist on theDecoyGambit.With theDecoy,theotherpersonraisesaphonyissuetogetconcessionsonarealissue.With the Red Herring, the other person makes a phony demand that he willwithdraw, but only in exchange for a concession. If theRedHerring distractsyou, it’ll deceiveyou into thinking that it’sofmajor concern to theother sidewhenitmaynotbe.RedHerringisanEnglishfox-huntingexpression.Englandhas many vocal animal-rights activists, and their prime target has been foxhunting, a sport Oscar Wilde called “the unspeakable in pursuit of theuneatable.”

Herrings thathavebeendriedandsalted turndarkred, likesmokedsalmon.TheEnglishcallsuchredherrings“bloaters.”Opponentsof foxhuntingfoundthatiftheydraggedabloateracrossthepathofthehunt,itssmellwouldmaskthetrailofthefoxandconfusethedogs.Whenithappens,thehuntmasterwillcry,“Thoseblightershavefaultedmyhounds.”ThephraseredherringbecamepartoftheEnglishlanguageandcametomeantheraisingofanissuethatwoulddivertandconfuseopponents.

HowtheNorthKoreansUsedtheRedHerring

The classic example of the use of a red herring came during theKorean War armistice talks. Very early in the talks, the partiesconcernedagreed thatofficialsof threeneutralcountries,alongwiththeirownnationalnegotiators,wouldrepresenteachsideatthetable.TheSouthKorean side selected the countriesNorway,Sweden, andSwitzerland as their three neutral negotiators. The North Koreanschose Poland and Czechoslovakia, but couldn’t seem to choose athird. They suggested that the talks start, and theywould identify athirdcountrylater.

What theywere really doingwas leaving anopening for theRedHerringGambit.Whenthetimecameandtheyhadsetthestage,theyannouncedtheirselectionforthethirdcountry:theSovietUnion.Theinternationaloutcrywasunanimous:“TheSovietUnion?Nowwaitaminute.TheSovietUnionisn’taneutralcountry.”

TheNorthKoreansrespondedbysayingthattheSovietswerenotdirectlyinvolvedintheconflict,andtherewasnoreasonforthemtobeconsideredbiased.

They waged the battle of the Red (pardon the pun) Herring forquite a while, until the situation became absurd. What the NorthKoreanswereusing,besidetheRedHerringGambit,wasarepetitivetacticthatchildreneverywhereunderstand.

“Dad,”saysJunior,“mayIgotothemoviestonight?”

Filled with paternal authority, the father says, “No, Son. I don’twantyougoingtothemoviestonight.”

Juniorpleads,“Whynot,Dad?”

“Becauseyouwenttoamovielastweek.”

“Iknowthat,butwhycan’tIgotonight?”

Thefathersays,“Idon’twantyougoingtothemoviessomuch.”

“Whynot,Dad?Idon’tunderstand.”

By the time the father has repeated himself 10 or 12 times, he’sforgottenwhyhewasmakingsuchabigdealabout Juniorgoing tothemovieinthefirstplace.Hisreasoningseemstohavelostvalidity,and he begins to think of himself as making a mountain out of amolehill.

Thatwas the tactic theNorthKoreanswereusing tosupport theirRed Herring Gambit. They continued to insist that they couldn’tunderstand what the objection was to using the Soviet Union as aneutral thirdparty,until theobjectionsof theSouthKoreansseemedas ludicrousas thedemandsof theNorthKoreans.Thenegotiationshadstalemated.

Justasitseemedthatthepointlessarguingwouldcontinueforever,

the North Koreans announced that they would abandon theirinsistence on having the Soviets at the negotiating table, but theyexpectedareciprocalconcession.

Both sideshad agreed earlier that during thenegotiations, neitherside would rebuild their airstrips. The North Koreans realized laterthatthisleftthemataseveredisadvantagebecausetheUnitedStatescould fly planes off aircraft carriers, but North Korea needed theirrunways.TheNorthKoreansdecidedthatitwastimetousetheRedHerringGambit and suggested theSovietUnionas the thirdneutralcountry.Nowitwastimetonametheprice:Theywouldconcedeandchoose a different country to represent them, but only if the SouthKoreanswouldwaivetherestrictiononrebuildingtheairfields.

TheNorthKoreansneverthoughtthatwewouldpermittheSovietUnion to be part of the negotiations. However, they were able tomagicallycreateabargainingissueoutofthinairandthentradeitofflaterforanissueaboutwhichtheyreallycared.

KeyPointstoRemember

1.BealerttotheothersideusingaRedHerringonyou.2.Theymaybecreatinganissuethattheywilltrytotradeofflater.

3.Keepyoureyeontherealnegotiatingissuesanddon’tletthemlinktheRedHerringtoaconcessionyou’rereluctanttomake.

Chapter21

Cherrypicking

CherryPickingisaGambitabuyercanuseagainstasellerwithdevastatingeffect, unless the seller is a Power Negotiator and knows his or her options.Imagine that you’regettingbids fromcontractorson a remodeling job at yourhouse.Itinvolvesaddingasecondstoryofficeoveryourgarage.Youaskthreecontractors to submit bids and ask each of them to break down their bids bycomponent.

Which bid should you take? Contractor “A” at $36,850, contractor “B” at$36,050,orcontractor“C”at$37,650?Ifthechoiceisobvioustoyou,youareprobably obsessed with price. If the workmanship, reliability, start date,completion date, and quality ofmaterials and subcontractors usedwere of noimportancetoyou,thenyou’dobviouslychoosecontractor“B.”However,thereismuchmorethanpriceforyoutoconsiderandthebestbidforyoumaybethehighest.

ACherryPickercandobetterthanthat.HeorshewouldgotoContractor“B”and say, “Youare closeonyourbid,butyou’rehighon flooringby$500and

carpentryby$200.Ifyou’llmatchcontractor“A”onthosetwoitems,I’llgiveyouthejob.”Thiswouldcausethegeneralcontractortogobacktohisflooringand carpentry subcontractors and get them to rework their bids. You canunderstandwhycontractorsdon’tliketobreakdowntheirbidsintocomponents.

YoucouldalsoCherryPickonthetermsofaproposal.Let’ssaythatyou’rebuyingapieceof land in thecountry,and theseller isoffering it for$100,000with20percentdownandthebalancedueover10yearswith10percentinterestadded.Youmightasktheownertoquotehisorherlowestpriceforanall-cashdeal. He or she might agree to $90,000 for all cash. Then you ask what thelowest interest rate would be for a 50-percent-down transaction. The ownerquotes you 7 percent. Then you Cherry Pick the best features of bothcomponentsofthedealandoffer$90,000with20percentdownandthebalancecarriedbytheownerwith7percentinterestadded.

BuyersLoveCherryPicking—SellersHateIt

There’snoquestionthatinformationisthekeytoeffectiveCherryPickingandittakestime.However,ifyou’rethinkingofacquiringanewpieceofequipmentforyourcompany,youshouldshoparoundandaccumulate informationbeforemakingadecision.Callupandhaveothercompanies’salespeoplecomeinandmake apresentation toyou.You’ll find that onehas a goodpoint in a certainarea,anotherhasa lowprice,anda thirdhasagoodguarantee.Fromall theseinterviews,youpiecetogethertheidealpieceofequipment.

Then you go back to the one you like best and say, “I’d like to buy yourequipmentexcept, thatIwant toget the longerguarantee.OrIwant toget thefastershipping.”Inthisway,youcreatethetypeofdealandthekindofcontractthatyouwant.Buyersshouldpushforitemizedcontracts,whereassellersshouldavoid them. Because to me Cherry Picking is an unethical Gambit, theperpetratorislesslikelytodoittosomeoneheknowsandtruststhanheistoacomparative stranger. Sellers can forestall this tactic by building a personalrelationshipwiththebuyer.

AnotherwaytohandlepeoplewhowanttoCherryPickyouistoforestalltheGambit.Let’ssaythatyou’reacontractorwhoistryingtosellaremodelingjob

toahomeowner,andyouknowshe’sgoingtotalktoalltheothercontractorsintown. How do you forestall it? The answer is to know more about yourcompetitionthanthey’lleverlearn.Thehomeownersays,“IwanttocheckwithsomeotherpeoplebeforeImakemyfinaldecision.”

You respond, “I absolutely agree with you.” Always agree up front, right?Salespeopleshouldalwaysagreewithanyobjectionhoweverridiculousitisandthenworktoturnitaround.“Iabsolutelyagreewithyou.Youshouldcheckwithother companiesbeforeyoumake adecision.But look, letme saveyou sometime.Haveyou talked toTedSmithoveratABCConstruction?HeusesXYZcabinetsthathavethisfeature,thisfeature,andthisfeature;buttheydon’thavethis.Thenifyoutalktothenationaldepartmentstorecompanydownatthemall,thesalespersonwho’llcomeoutwillbeFredHarrison,andhe’lltellyouaboutmodelnumbersuchandsuch....”

Bythetimeyou’vegonethroughlettingherknowhowmuchyouknowaboutthecompetition,she’sgoingtothink,“WhyonEarthdoIneedtowastemytimetalking to all these other people, when this person knowsmore than I’ll everlearn?”

TodefendyourselfagainstCherryPicking,alwaysconsiderthealternativesoftheothersidebeforemakingaconcession.Thefeweralternativestheothersidehas,themorepoweryouhave.Ifyou,asaseller,refusetobudgeonyourprice,then you force the buyer to pay more from another supplier or use multiplesuppliers. In the case of the home remodeling job, this would mean that thehomeowner would have to bypass you as the general contractor and contractwith each subcontractor separately. This may require more knowledge orexpertise than theother sidepossesses,ormaycreate extraworkandpressurethatarenotworththesavings.

KeyPointstoRemember

1.Ifyou’rethebuyer,getitemizedbreakdownsofbids.2.Trytogetthemtomatchthelowestpriceoneachitem.3.Ifyou’retheseller,learnsomuchaboutyourcompetitorsthatthebuyerdoesn’twanttowastetimetalkingtothem.

4.Alsocalculatethealternativesavailabletotheotherside.You

havepowerinanegotiationwhenyouhavemorealternativesavailabletoyouthantheydo.

Chapter22

TheDeliberateMistake

TheDeliberateMistakeisaveryunethicaltactic,and,aswithanyconjob,itrequires a victim who also lacks ethics. The seller baits the hook when sheprepares a proposal and deliberately leaves out or under-prices one of theelements.Thiscouldbe thecarsalespersonwhorunsa tapeon thecostof thecar,but includesonly thepriceofaCDplayer,when thecaralsohasanMP3auxiliaryjack.Ifthebuyertakesthebait,hestartsthinkingthathenowhasanopportunity toputoneoveron thecarsalesperson.Hebecomeseager toclosethe deal before the salesperson spots the mistake. This eagerness makes thebuyerasloppynegotiator,andhemayenduppayingmoreforthecarthanifhehadpointedoutthemistake.Apartfromthat,thesalespersonstillhastheoptionof“discovering”themistakebeforethebuyerconsummatesthesaleand,withanaccusinglook,shamesthebuyerintopayingtheextraamount.

TheCounterGambitmaysoundhigh-minded,but it’sobvious:Never try togetawaywithanything. Ifyourgreeddoesn’tcostyouat thatmoment, itwillcertainly catch up with you later on down life’s road. Instead, point out themistake and say, “I assume that you’re not charging me for the MP3 jackbecauseyou’retryingtogetmetomakeadecisionnow?”

A variation of the Deliberate Mistake is the Erroneous Conclusion close.Usingthismethod,thesalespersonasksaquestionofthebuyer,butdeliberatelydraws an erroneous conclusion.When the buyer corrects the salesperson, shefindsthatshehasmadeacommitmenttobuy.Forexample,thecarsalespersonsays,“Ifyoudiddecidetoday,youwouldn’tneedtotakedeliverytoday,wouldyou?”Thebuyerresponds,“Well,ofcoursewe’dwanttotakeittoday.”

Therealestatesalespersonsays,“Youwouldn’twantthesellerstoincludetherefrigerator,wouldyou?”Thebuyershadn’tbeenthinkingofdoingthat,buttherefrigeratorlooksbetterthantheirsdoessotheyreply,“Doyouthinktheywouldincludeit?”Thesalespersonrespondswith,“Let’sincludeitinourofferandseewhathappens.”

Theboatsalespersonsays,“Youwouldn’texpectustoincludeaGPS,wouldyou?”Thebuyerseesanopportunitytogetsomethingfornothingandresponds,“Isurewould.”

Chapter23

TheDefault

The Default Gambit is one that involves a unilateral assumption thatobviouslyworkstotheadvantageofthesideproposingit,suchasthecompanythat sends a payment check to a vendor after having deducted 2 1/2 percent.Attached is a note that says, “All of our other vendors discount for paymentwithin15days, soweassumeyouwill, too.”Or the salespersonwhowritesapotentialbuyer,“BecauseIhaven’theardfromyouonyourchoiceofoptions,Iwillshipthedeluxemodel,unlessIhearfromyouwithin10days.”

TheDefaultGambitpreysonbusyorlazypeople;itassumesthatratherthantakeaction,theothersidewilltaketheeasywayoutandletyougetawaywithit.Onceyouhavefailedtorespond,thelawofprecedentcomesintoplay.Whenyou finally do object the perpetrator is able to say, “But you’ve never had aproblemwithitinthepast.”

AswithallunethicalGambits,calltheothersideonit,andgentlyexplainthatyouexpecttoseeahigherlevelofethicsfromtheminthefuture.Youmighte-mailthemtosay,forexample,“I’mdisappointedthatyoudeducted21/2percentfromthisinvoicewhenthatisnotwhatwehadagreedto.Pleaseremitbalancebyreturnmail.”

Chapter24

Escalation

I once knew a man who became very wealthy after he sold his real estatefranchisetoalargecorporation.Hehadbeenoneoftheoriginalpurchasersofaterritorywhenrealestatefranchisingwasnew,andthefounderofthecompanywas running around the country trying to sign up anyonewho believed in hisconcept.

Many years later, a huge New York corporation had bought the masterfranchiseandwasstartingtobuybacktheterritorialfranchises.AfterattendingoneofmySecretsofPowerNegotiatingseminars,heaskedmetojoinhimforadrink and asked me, “Roger, have you ever heard voices speak to you whenyou’renegotiating?”NotwantingtoadmititifIhad,Iaskedhimwhathewastalkingabout.Hetoldmethatafterhehadagreedtosellhisterritorialfranchiseto the new corporate owners forwhat he first thoughtwas a huge amount ofmoney,hestartedtohavesecondthoughts.

Becausehiswasthefirstfranchisethecorporationwasbuyingback,theyflewhimtoNewYorkforasigningceremonytobefollowedbyapressconferenceatwhich they would announce the corporation’s plans to buy back all thefranchises.“Thenightbeforetheceremony,Ihadtroublesleeping,”hetoldme.“I lay onmy bedwonderingwhether Iwas doing the right thing. Suddenly, Iheardavoicetalkingtome.”

“Whatwasitsaying?”Iaskedhim,halfexpectingahumorouspunchline.

“It said, ‘Joey,you’renotgettingenoughmoney.’Thenextmorning, Iwentdownandaskedforanotherhalfmilliondollars,andgotit.”

Joeywasdescribingaclassiccaseofescalation—raisingdemandsafterbothsides reached agreement. Of course it’s outrageous and unethical, but just asJoeythoughtheheardvoicestellinghimtodoitratherthanacceptresponsibilityforhis actions, theperpetratorsdon’t see anyharm in cutting thebestdealbyanymeanspossible.

Whyisanyoneeverallowedtogetawaywithsuchoutrageousbehavior?Toooften, the other side swallows its pride and concedes just as easily as thatcorporation conceded the extra halfmillion. In that case, the corporation paidrather than face the humiliation of having to call off the press conference. Inother cases, theother sidehas simplybecome too emotionally involved in thepurchasetobackout.

The history of big business is full of stories of peoplewho extorted a littlemoreoutofadealsimplybecausetheyhadenoughleveragetodoso.Frankly,Ihavemixedemotionsabouthowtorespond.Myhearttellsmethatifpeopledothat, you should call their bluff and walk away from the deal on principle.However, I alsobelieve inkeepingemotionsoutof anegotiation. If thatNewYorkcorporationwasabletopaytheextrahalfmillionandstillhaveitbeagooddeal (and itwas still a very good deal), then theywere right to swallow theirprideandpaythemoney.

IntegrityatAnyPrice

Fortunately, the history of big business is also full of stories ofpeople who would not sell their integrity at any price, such as therancherwhoshookhandsonadealtosellhislandinOrlando.Laterthatday, theOrlandoSentinelbroke thenews thatWaltDisneywassecretly buying up all the land to create Walt Disney World. Theranchercouldhaveheldoutandmademillionsmore,buthissenseofintegritystoppedhimfromdoingit.

When Henry Hollis sold the Palmer House hotel in Chicago toConradHilton,heshookhandsonHilton’sfirstofferof$19,385,000.Within a week, he received offers of more than a million dollarsabove that,butheneverwaveredonhisword.AsHiltonsaid inhisautobiography, “Ihavedonebusinesswithagreatmanymen inmytime.IdonotthinkIhaveeverhadagreaterexperiencethandealingwith this perfect gentleman. I felt throughout that Iwaswatching amasterinthegreatesttraditionsofAmericanbusiness.”

There are some responses to escalationother than swallowingyourprideorwalkingaway.Youmighttrythese:

ProtectyourselfwithHigherAuthority(seeChapter7).Tellthemthattheirsuggestiondoesnotoffendyou,butthatyourboardofdirectorswillneverrenegotiateadealonceithasbeenmade,andtheywillforceyoutowalkaway.ThenPositionforEasyAcceptance(seeChapter18)bytellingthemthat,althoughyoucannotbudgeontheprice,youmightbeabletoofferthemsomethingofvalueinanotherarea.Escalateyourdemandsinreturn.Tellthemthatyouaregladthattheywanttoreopenthenegotiationsbecauseyoursidehasbeenhavingsecondthoughtsalso.Ofcourse,youwouldneverrenegeonadeal,but,becausetheyhavechosentonegatetheoriginalproposal,yourpricehasnowgoneupalso.

ItisbettertoavoidEscalationthantohavetodealwithit.Avoiditbyusingthesetechniques:Tieupallthedetailsupfront.Don’tleaveanythingto“wecanwork that out later.” Unresolved issues invite Escalation. Build personalrelationshipswith theotherparties thatmake itharder for them tobe ruthless.Get large deposits so that it’s harder for them to back out. Build win-winnegotiationssothattheydon’twanttobackout.

Chapter25

PlantedInformation

Returning from a speaking engagement, I was discussing the presidentialpress conferencewithmy seatmate. “I don’t believe he’s telling the truth,” hetoldme.“ImetamanwhoknewsomeonewhoworksattheWhiteHouse,andhetoldmethepresidentdidknowallaboutitallalong.He’scoveringsomethingup.”What amazedme about thiswas I foundmyself believingwhat thismanwastellingme,ratherthanbelievingwhatIhadearlierheardthepresidentoftheUnited States say at the press conference.Why? Because we tend to believeinformationwehaveobtainedsurreptitiously.

PlantedInformationcanbeanastoundinglypowerful influencer.Asalesmanis making an impressive presentation to a board of directors. Flip charts andaudiovisualaidssurroundhim.Heisferventlymakingapleathattheygowithhiscompanybecauseitoffersthebestvalueinthemarketplace.Hebelievesthatnocompetitorcanundercuthisprices,andfeelsconfidentthathecanclosethesale at his askingprice of $820,000—until he sees oneof thedirectors pass anotetoanotherdirectorwhonodsandlaysthenoteonthetableinfrontofhim.

Curiositygetsthebetterofthesalesman.Hehastoseewhat’sonthatnote.Hefinishes his presentation, then approaches the table and dramatically leanstowardthem.“Gentlemen,doyouhaveanyquestions?”Outofthecornerofhiseye,hecannowseethenote.Evenreadingupsidedown,hecanseethatitsays,“Universal’spriceis$762,000.Let’sgowiththem.”

Thechairmanof theboard says, “Idohaveonequestion.Yourprice seemshigh.We’reobligatedtogowiththelowestpricethatmeetsourspecifications.Is$820,000 thebestyoucando?”Withinminutes, the salesmanhas loweredhispriceby$58,000.

Was the note real or was it Planted Information? Although it was just anunsubstantiated note scrawled on a piece of paper, the salesperson believed itbecauseheobtainedtheinformationsurreptitiously.Eveniftheyhadplantedit,could the salesperson cry foul later?No, because they didn’t tell him that the

competition’sbidwas$762,000.Heobtainedtheinformationsurreptitiously,andhemustacceptresponsibilityforhisassumptions.

Simply knowing about planted information will help you to diffuse thisunethical tactic.Any time that you are negotiating only based on informationthat the other side has chosen to tell you, you are extremely vulnerable tomanipulation.Whentheothersidemayhaveplantedtheinformationforyoutodiscover,youshouldbeevenmorevigilant.

NegotiatingPrinciples

Chapter26

GettheOtherSidetoCommitFirst

PowerNegotiatorsknowyou’reusuallybetteroffifyoucangettheothersidetocommittoapositionfirst.Severalreasonsareobvious:

Theirfirstoffermaybemuchbetterthanyouexpected.Itgivesyouinformationaboutthembeforeyouhavetotellthemanything.Itenablesyoutobrackettheirproposal(seeChapter1).Iftheystateapricefirst,youcanbracketthem,soifyouendupsplittingthedifference,you’llgetwhatyouwant.Iftheycangetyoutocommitfirst,theycanthenbracketyourproposal.Thenifyouendupsplittingthedifference,theygetwhattheywanted.

Toaneophytenegotiator,thismaysoundallwrong.Let’ssaythatyouhaveaneighborwhohasamotorboatparkedinhisdriveway.He’slivedthereforfiveyears,andyoucan’trecallhimevertakingitoutonthelake.Ifyoucangetitforagoodprice,you’dconsiderbuyingit.Askinghimhowmuchhewantsforhisboatmayseemlikeabadidea.Whatifhegetstheimpressionhehasaliveoneonhishandsanddeliberatelyinflatestheprice?Let’ssayafairpriceis$10,000,butyou’rehopingtostealitfor$5,000.

Whenyouapproachhim,hegetsgreedyandsays,“Thatboatisinbrand-newcondition. Ihaven’teven taken thecoveroff it infiveyears. Iwouldn’t takeapenny less than $15,000.”You could argue that, in letting him state his pricefirst, you have expanded the negotiating range andmade it harder for you toreach your goal. You can’t even bracket that range. If he wants $15,000 andyou’rewillingtopayonly$5,000,you’dhavetoaskhimtopayyou$5,000totakeitoffyourhandstoaccuratelybracket.Ifitseemsthatgettinghimtogofirstwas amistake, you’re forgetting that you can do several things to get him tomodify thatopeningofferwithouthaving tostateyouroffer first.Youcanusetheseapproaches:

Pleadpoor.“Mike,Idon’tthinkforamomentthatIcanaffordtobuyyourboatfromyou,butIdidnoticethatyouneveruseit,andIthoughtyoumightjustwanttosellittomeatagiveawayprice.”ApplythepressureofHigherAuthority.“Mike,mywifeisgoingtokillmeforevenaskingyouthis,but....”Usethepowerofcompetition.“Mike,I’vebeenlookingataboatsimilartoyoursthatseemslikearealbargain,butbeforeIgoaheadIthoughtI’dseewhatyouwouldwantforyours.”Byusingtheseapproaches,youmodifyMike’saspirationswithouthavingtocommittoaposition.Thelessyouknowabouttheothersideorthepropositionthatyou’renegotiating,themoreimportanttheprincipleofnotgoingfirstbecomes.

HowtheBeatlesWentFirstandLostMillions

IftheBeatles’managerBrianEpsteinhadunderstoodthisprinciple,hecouldhavemadetheFabFourmillionsmoreontheirfirstmovie.United Artists wanted to cash in on the popularity of the singinggroup,butwasreluctanttogooutonalimbbecausethestudiodidn’tknowhowlongtheBeatleswouldbepopular.Theycouldhavebeenafleeting success that fizzled out before their movie hit the screens.They planned it as an inexpensively made exploitation movie, andbudgeted only $300,000 tomake it. Thiswas clearly not enough topay theBeatles ahigh salary, soUnitedArtistsplanned tooffer theBeatlesasmuchas25percentoftheprofits.TheBeatlesweresuchaworldwidesensation in1963 that theproducerwasvery reluctant toaskthemtonametheirpricefirst,buthehadthecouragetostaywiththe rule. He offered Epstein $25,000 up front and asked him whatpercentageoftheprofitshethoughtwouldbefair.

Brian Epstein didn’t know the movie business and should havebeensmartenough toplayReluctantBuyer (seeChapter5)anduseGoodGuy/BadGuy(seeChapter14).Heshouldhavesaid,“Idon’tthinkthey’dbeinterestedin takingthe timetomakeamovie,but ifyou’llgivemeyourverybestoffer,I’lltakeittothemandseewhatIcan do for you with them.” Instead, his ego wouldn’t let him playdumb(seeChapter27),soheassertivelystatedthattheywouldhave

to get 7.5 percent of the profits or theywouldn’t do it. This slighttacticalerrorcostthegroupmillionswhendirectorRichardLester,toevery one’s surprise, created A Hard Day’s Night, a brilliantlyhumorousportrait of a day in the group’s life, became aworldwidesuccess.

If both sides have learned that they shouldn’t go first, you can’t sit thereforeverwithbothsidesrefusingtoputanumberonthetable,butasarule,youshouldalwaysfindoutwhattheothersidewantstodofirst.

Apart fromprice, you’re always better off to have the other person bring aproposaltoyouthanyouaretotakeonetothem.Somecraftynegotiatorsgotoincredible lengths to make it look as though the other side approached themwhen the reverse was true. Movie producer Sam Goldwyn once wanted toborrowacontractactorfromDarrylZanuck,butcouldn’treachZanuckbecausehewasinameeting.AftermanytriestoreachZanuck,anexasperatedGoldwynfinallyinsistedthatthecallbeputthrough.WhenDarrylZanuckfinallypickedup thephone,SamGoldwyn,whohad initiated thecall,blithelysaid,“Darryl,whatcanIdoforyoutoday?”

Lewis Kravitz, an Atlanta executive coach and former outplacementcounselor,counselspatienceandknowingwhennottospeak.Hetellsofayoungman he coachedwho had just been sacked and said hewaswilling to take a$2,000paycut to$28,000onhisnext job.ButKravitzcoachedhim to let theprospectiveemployermakethefirstmove.Inthiscase, theintervieweroffered$32,000, stunning theoverjoyed job-seeker intomomentary silence,which theinterviewer interpreted as dissatisfaction. He upped the offer to $34,000. “Innegotiating, he who speaks first generally comes out on the short end of thestick,”hesays.

KeyPointstoRemember

1.Youareatadisadvantageifyouhavetostateyourpricefirst.2.Don’tletthatstopyoufromtryingtomodifytheiropeningnegotiatingposition.(“Itwouldhavetobeagiveawayprice

butwemightbeinterested,”or“We’vealreadyturneddownanofferfor$10,000.”)

Chapter27

ActingDumbIsSmart

To Power Negotiators, smart is dumb and dumb is smart. When you arenegotiating, you’re better off acting as if you know less than everybody elsedoes,notmore.Thedumberyouact,thebetteroffyouare,unlessyourI.Q.sinkstoapointwhereyoulackanycredibility.

Thereisagoodreasonforthis.Withafewrareexceptions,humanbeingstendto help people that they see as less intelligent or informed, rather than takingadvantageofthem.Ofcourse,thereareafewruthlesspeopleouttherewhowilltry to take advantage ofweak people, butmost peoplewant to competewithpeopletheyseeasbrighter,andhelppeopletheyseeaslessbright.Thereasonforactingdumbis that itdiffuses thecompetitivespiritof theotherside.Howcanyoufightwithsomeonewhoisaskingyoutohelpthemnegotiatewithyou?Howcanyoucarryonanytypeofcompetitivebanterwithapersonwhosays,“Idon’tknow.Whatdoyouthink?”Mostpeople,whenfacedwith thissituation,feelsorryfortheotherperson,andgooutoftheirwaytohelphimorher.

DoyouremembertheTVshowColumbo?PeterFalkplayedadetectivewhowalkedaroundinanoldraincoatandamentalfog,chewingonanoldcigarbutt.He constantly wore an expression that suggested he had just misplacedsomethingandcouldn’trememberwhatitwas,letalonewherehehadleftit.Infact,hissuccesswasdirectlyattributabletohowsmarthewas—byactingdumb.Hisdemeanorwassodisarmingthatthemurdererscameclosetowantinghimtosolvehiscasesbecauseheappeared tobesohelpless.Thenegotiatorswho lettheir egos take control of them and come across as a sophisticated negotiatorcommit to things thatworkagainst them inanegotiation.These includebeingthefollowing:

Afastdecision-makerwhodoesn’tneedtimetothinkthingsover.Someonewhowouldnothavetocheckwithanyoneelsebeforegoingahead.Someonewhodoesn’thavetoconsultwithexpertsbeforecommitting.Someonewhowouldn’tstooptopleadingforaconcession.

Someonewhowouldneverbeoverriddenbyasupervisor.Someonewhodoesn’thavetokeepnotesabouttheprogressofthenegotiationandrefertothemfrequently.

ThePowerNegotiatorwhounderstandstheimportanceofactingdumbretainstheseoptions:

Requestingtimetothinkitoversoheorshecanthoroughlythinkthroughthedangersofaccepting,ortheopportunitiesthatmakingadditionaldemandsmightbring.Deferringadecisionwhileheorshecheckswithacommitteeorboardofdirectors.Askingfortimetoletlegalortechnicalexpertsreviewtheproposal.Pleadingforadditionalconcessions.UsingGoodGuy/BadGuytoputpressureontheothersidewithoutconfrontation.Takingtimetothinkundertheguiseofreviewingnotesaboutthenegotiation.

Iactdumbbyaskingforthedefinitionsofwords.Iftheothersidesaystome,“Roger,Ican’tbelieveyourhubrisinproposingthis,”Irespondwith,“Hubris...hubris . . .hmmm.Youknow, I’veheard thatwordbefore,but I’mnotquitesurewhatitmeans.Wouldyoumindexplainingittome?”OrImightsay,“Doyou mind going over those figures one more time? I know you’ve done it acoupleoftimesalready,butforsomereason,I’mnotgettingit.Doyoumind?”Thismakesthemthink:“WhataklutzI’vegotonmyhandsthis time.”Inthisway,Ilaytorestthecompetitivespiritthatcouldhavemadeacompromiseverydifficult formetoaccomplish.Nowtheothersidestopsfightingmeandstartstryingtohelpme.

Becarefulyou’renotactingdumbinyourareaofexpertise.Ifyou’reaheartsurgeon,don’tsay,“I’mnotsureifyouneedatriplebypassorifadoublewilldo.”Ifyou’reanarchitect,don’tsay,“Idon’tknowifthisbuildingwillstandupor not.” Win-win negotiating depends on the willingness of each side to beempathetictotheotherside’sposition.That’snotgoingtohappenifbothsidescontinue to compete with one another. Negotiators know that acting dumbdiffusesthatcompetitivespiritandopensthedoortowin-winsolutions.

KeyPointstoRemember

1.Actingdumbdiffusestheotherside’scompetitivespirit.2.Actingdumbencouragesthemtohelpyou.3.Askfordefinitionsofwords.4.Askthemtoexplainsomethingagain.5.Don’tactdumbinyourareaofexpertise.

Chapter28

Don’tLettheOtherSideWritetheContract

In a typical negotiation, you verbally negotiate the details, then put it intowriting later for both parties to review and approve. I’ve yet to run across asituation where we covered every detail in the verbal part of the negotiation.Therearealwayspointsthatweoverlookedwhenwewereverballynegotiatingthatwemustdetailinwriting.

Thenwehavetogettheothersidetoapproveornegotiatethepointswhenwesit down to sign the written agreement—that’s when the side that writes thecontracthasatremendousadvantageoverthesidethatdoesn’t.Chancesarethatthepersonwriting theagreementwill thinkofat leasthalfadozen things thatdidnotcomeupduringtheverbalnegotiations.Thatpersoncanthenwritetheclarification of that point to his or her advantage, leaving the other side tonegotiateachangeintheagreementwhenaskedtosignit.

Don’t let the other side write the contract, because it puts you at adisadvantage.Thisapplies tobriefcounter-proposals justasmuchas itdoestoagreementsthatarehundredsofpageslong.Forexample,arealestateagentmaybepresentinganoffertothesellersofafour-unitapartmentbuilding.Theselleragreestothegeneraltermsoftheoffer,butwantsthepricetobe$5,000higher.At that point, either the listing agent who represents the seller or the sellingagentwhorepresentsthebuyer,couldpullacounter-proposalformoutofhisorherbriefcase.Theycouldwriteoutabriefcounter-offerforthesellertosignthatthe selling agentwill present to the buyer for approval. It doesn’t have to becomplicated:“Offeraccepted,exceptthatpriceistobe$598,000”willsuffice.

Ifthelistingagentwritesthecounter-offer,however,heorshemightthinkofsome things that would benefit her seller. She might write, “Offer acceptedexcept that price tobe$598,000.Additional$5,000 tobedeposited in escrowuponacceptance.Counter-offertobeaccepteduponpresentationandwithin24hours.”

If the selling agent were to write the counter-offer, he might write, “Offer

accepted,exceptthatpriceistobe$598,000.Additional$5,000tobeaddedtothenotethattheselleriscarryingback.”

These additions are probably not big enough to be challenged by either aseller or a buyer who is eager to complete the transaction; however, theysubstantiallybenefitthesidewhowrotethebriefcounter-offer.Ifthepersonwhowritesaone-paragraphcounter-offercanaffectitsomuch,thinkhowmuchthatpersoncouldaffectamulti-pagecontract.

Rememberthatthismaynotjustbeamatteroftakingadvantageoftheotherside.Bothsidesmaygenuinelythinkthattheyhadreachedagreementonapoint,whereas their interpretationsmay be substantially differentwhen theywrite itout.

If you are to be theonewriting the contract, it’s a good idea to keepnotesthroughoutthenegotiationandputacheckinthemarginagainstanypointthatwillbepartofthefinalagreement.Thisdoesthefollowing:

Itremindsyoutoincludeallthepointsthatyouwanted.Whenyouwritethecontract,youmaybereluctanttoincludeapointintheagreementunlessyoucanspecificallyrecalltheothersideagreeingtoit.

Your notes will give you the confidence to include it, even if you don’trememberitclearly.

Ifyouhavebeenteamnegotiating,besure tohaveall theothermembersofyour teamreviewthecontractbeforeyoupresent it to theotherside.Youmayhave overlooked a point that you should have included, or you may havemisinterpretedapoint.It’scommonfortheleadnegotiatortoletherenthusiasmoverwhelmhertoapointthatshefeelsthattheothersideagreedtosomethingwhenitwaslessthancleartomoreindependentobservers.

I’m not a big believer in having attorneys conduct a negotiation for youbecause so fewof them are good negotiators.They tend to be confrontationalnegotiators because they’re used to threatening theother side into submission,andtheyareseldomopentocreativesolutionsbecausetheirfirstobligationistokeepyououtoftrouble,notmakeyoumoney.Rememberthatinlawschooltheyarenottaughthowtomakedeals,onlyhowtobreakdeals.

In our litigious society, there isn’tmuch point inmaking an agreement thatwon’t hold up in court, however, so it’s a good idea to have the agreement

approved by your attorney before you have it signed. In a complicatedagreement,whatyouprepareandhavetheothersidesignmaybenomorethanaletterofintent.Havetheattorneysworkonitlatertomakeitalegaldocument.It’sbetterthatyoudevoteyourenergytoreachinganagreement.

If you have prepared an agreement that you think the other side may bereluctant to sign, youmay be smart to include the expressionSubject to yourattorney’sapproval,toencouragethemtosignit.

Oncetheverbalnegotiationsareover,getamemorandumofagreementsignedasquicklyaspossible.The longeryougive thembefore theysee it inwriting,the greater the possibility that they’ll forgetwhat they agreed to and questionwhatyou’veprepared.

Also, make sure they understand the agreement. Don’t be tempted to havethem sign somethingwhen you know they’re not clear on the implications. Iftheydon’tunderstandandsomethinggoeswrong, theywillalwaysblameyou.Theywillneveracceptresponsibility.

Also be aware of a legal technicality. The side that writes the contract isresponsible for creating a contract free of ambiguities. If you ever end up incourtoveracontractconflict,thejudgewillruleagainstthesidethatcreatedthecontractiftheconflicthasbeencausedbyambiguityinthecontract.

I find it helpful to write out the agreement I want before I go into thenegotiations.Idon’tshowittotheotherside,butIfindithelpfultocompareitto the agreement that we eventually reach, so that I can see how well I did.Sometimesit’seasytogetexcitedbecausetheothersideismakingconcessionsthatyoudidn’texpecttoget.Thenyourenthusiasmcarriesyouforward,andyouagreetowhatyoufeelisafantasticdeal.Itmaybeagooddeal,butunlessyouhave clearly establishedyour criteriaup front, itmaynot be thedeal that youhopedtoget.

KeyPointstoRemember

1.Beingtheonetowritethecontractisabigadvantage.2.Whenyoustarttowriteoutaverbalagreement,youwillthinkofallkindsofthingsthatyoudidn’tthinkofwhenyouwere

verballynegotiating.3.Keepprecisenotesduringthenegotiationsothatyoucanbesuretoincludeeverythinginthewrittenagreement.

4.Haveyourothernegotiatingteammembersgooveryourwrittennotestobesureyoudidn’tleaveanythingout.

5.Considerpreparingtheagreementbeforeyoustartnegotiatingsothatyoucancompareyourobjectivestothefinalagreement.

Chapter29

ReadtheContractEveryTime

In this age of computer-generated contracts, it’s a sad fact that you have toreadoveracontracteverytimeitcomesacrossyourdesk.Intheolddays,whencontracts were typewritten, both sides would go through it and write in anychanges, and then each negotiatorwould initial the change.You could glancethrough the contract and quickly review any change that you hadmade or towhich you had agreed. Nowadays, with computer-generated contracts, we’remore likely togoback to thecomputer,make thechange,andprintoutanewcontract.

Here’s thedanger.Youmayhave refused tosignaclause inacontract.Theothersideagreestochangeitandsaysthey’llsendyouacorrectedcontractforyour signature.When it comes across your desk, you’re busy, so you quicklyreviewittoseethattheymadethechangeyouwanted,andthenturntothebackpageandsignit.Unfortunately,becauseyoudidn’ttakethetimetoreadovertheentire contract, you didn’t realize that they had also changed something else.Perhaps itwassomethingblatantsuchaschanging“F.O.B.factory” to“F.O.B.jobsite.”Oritmaybesuchaminorchangeinwordingthatyoudon’tdiscoverituntil years later when something goes wrong, and you need the contract toenforcesomeaction.Bythen,youmaynotevenrememberwhatyouagreedto,andyoucanonlyassumethat,becauseyousignedit,youmusthaveagreedtoit.

Iusedtothinkthatthiswouldbearareoccurrence—thattheothersidewouldvictimizeyoubysecretlychangingsomeotherpartofacontract.ThenIstartedaskingthepeopleatmyseminarsiftheyhadrunintoit.Asurprising20percentsaidthatyes,theyhadbeenvictimizedbythisunethicalconduct.

Somecontractscanbedozensofpageslong,soherearesometipsonhowtodothismoreeasily:

Holdthetwocontractsuptothelighttoseeiftheymatch.Scanthenewcontractintoyourcomputeranduseyourwordprocessingsoftwaretocomparethetwo.

UseawordprocessingprogramsuchasMicrosoftWordthatkeepstrackofallthechanges.Youcanprintoutthefinalversion,butyoucanalwayslooktoseethechangesthathavebeenmadealongtheway.Thisisespeciallyvaluableifyou’reinextendednegotiationswherethecontractisgoingbackandforthbydiskore-mail.

Yes,Iagreewithyou:Youhaveawonderfulcaseforalawsuitthattheothersidedefraudedyou—butwhyexposeyourselftothatkindoftrouble?Inthisageof computer-generated contracts, you should read the contract all the waythrough,beforeyousignit.

Chapter30

FunnyMoney

Thereareallkindsofwaystodescribethepriceofsomething.IfyouwenttotheBoeingAircraftCompanyandaskedthemwhatitcoststoflya747coasttocoast,theywouldn’ttellyou“$52,000dollars.”Theywouldtellyou11centsperpassengermile.Salespeoplecallthatbreakingitdowntotheridiculous.Haven’tweallhadarealestatesalespersonsaytous,“Doyourealizeyou’retalking35centsadayhere?You’renotgoingtolet35centsadaystandbetweenyouandyourdreamhomeareyou?”Itprobablydidn’toccurtoyouthat35centsaday,overthe30-yearlifeofarealestatemortgage, ismorethan$7,000.Toprotectthemselves,PowerNegotiatorsalwaysthinkinrealmoneyterms.

Whenthatsuppliertellsyouaboutafive-centincreaseonanitem,itmaynotseemimportantenoughtospendmuchtimeon—untilyoustartthinkingofhowmanyof those itemsyoubuyduringayear.Thenyoufind that there’senoughmoneysittingonthetabletomakeitwellworthyourwhiletodosomePowerNegotiating.

BreakingitDowntotheRidiculousinBed

Ioncedatedawomanwhohadexpensivetastes.Shetookmetoalinen store in Newport Beach to buy a set of sheets. They werebeautiful sheets, butwhen I foundout that theywere$1,400, Iwasastonishedandtoldthesalesclerkthatitwasthekindofopulencethatcausedthepeasantstostormthepalacegates.

She calmly looked at me and said, “Sir, I don’t think youunderstand. A fine set of sheets like this will last you at least fiveyears, so you’re really talking about only $280 a year.” Then shewhipped out a pocket calculator and frantically started punching innumbers.

“That’s only$5.38 aweek.That’s notmuch forwhat is probablythefinestsetofsheetsintheworld.”

Isaid,“That’sridiculous.”

Withoutcrackinga smile, shesaid,“I’mnot through.Witha fineset of sheets like this, you obviously would never sleep alone, sowe’re really talking only 38 cents per day, per person.”Now that’sreallybreakingitdowntotheridiculous.

HerearesomeotherexamplesofFunnyMoney:

Interestratesexpressedasapercentageratherthanadollaramount.Emphasizingtheamountofthemonthlypaymentsratherthanthetruecostoftheitem.Costperbrick,tile,orsquarefootratherthanthetotalcost.Anhourlyincreaseinpayperpersonratherthantheannualcostoftheincreasetothecompany.Insurancepremiumsasamonthlyamountratherthananannualcost.Thepriceoflandexpressedasthemonthlypayment.

Businesses know that if you’re not required to pull realmoney out of yourpurseorpocket,you’reinclinedtospendmore.It’swhycasinostheworldoverhave you convert your real money to gaming chips. It’s why restaurants arehappytoletyouuseacreditcardalthoughtheyhavetopayapercentagetothecredit card company. When I worked for a department store chain, we wereconstantlypushingourclerks tosignupcustomers foroneofourcreditcards,becauseweknewthatcreditcardcustomerswillspendmoreandtheywillalsobuy better-quality merchandise than a cash customer. Our motivation wasn’tentirelyfinancialinpushingcreditcards.Wealsoknewthatbecausecreditcardcustomers would buy better-quality merchandise, it would satisfy themmore,andtheywouldbemorepleasedwiththeirpurchases.

Whenyou’renegotiating,breaktheinvestmentdowntotheridiculousbecauseit does sound like less money, but learn to think in real money terms whensomeoneisofferingyouaprice.Don’tletpeopleusetheFunnyMoneyGambitonyou.

Chapter31

PeopleBelieveWhatTheySeeinWriting

Theprintedwordhasgreatpoweroverpeople.Mostpeoplebelievewhattheysee inwriting; even if theywon’t believe itwhen they just hear about it.TheCandidCamera people did a stunt to prove that a number of years back; youmay remember seeing it on television.Theyposteda signona roadnext to agolf course inDelaware that said“DelawareClosed.”AllenFunt stoodby thesign in a rented trooper’s uniform. He wasn’t even allowed to speak to thepeopleastheycameup,onlypointupat thesign.Whathappenedamazedme.Peoplewerecomingtoascreechinghaltandsayingthingslike“Howlongisitgoingtobeclosedfor?Mywifeandkidsareinside.”And“IsJerseystillopen?”

Peoplebelievewhattheyseeinwriting.That’swhyI’msuchabigbelieverinpresentation binders. When you sit down with someone and you open thepresentation binder and it says, “My company is the greatest widgetmanufacturer in the world.” Then you turn another page, and it says, “Ourworkersare thegreatestcraftsmenin thebusiness.”Youturnanotherpageandstart showing them reference letters from all your previous jobs. They find itbelievableevenwhentheyknowyoujustcamefromtheprintshopwithit.

Thisishowhotelsareabletogetpeopletocheckoutoftheroomsontime.Holiday Inns used to have a terrible time getting people to check out of theirroomsatnoon,until they learned the artof theprintedwordandposted thoselittlesignsonthebackofthedoor.Now,97percentofguestscheckoutoftheirrooms on time, without any question at all, because the written word is sobelievable.

Every chance you get, put things in writing. For example, if you havesalespeople selling foryou, andyouhave toput apricechange intoeffect,besurethattheyhaveitinwriting.Becausethere’saworldofdifferencebetweenthemsittingwithapotentialcustomerandsaying,“We’rehavingapriceincreaseat thestartofnextmonth, soyoushouldmakeacommitmentnow,”and themsaying,“LookatthisletterIjustgotfrommyboss.Itindicatesthatwe’rehaving

apriceincreaseonJuly1st.”Alwaysshowittopeopleinwritingwheneveryoucan. If you’re negotiating by telephone, back up what you’re saying by alsofaxingore-mailingthemtheinformation.

Ifyousellbig-ticketitemsanddon’thavethesoftwaretocreateproposals,I’dsuggest thatyoustopeverythingandorderthesoftwarerightnow.It’llpayforitselfonthefirstjob.Manyyearsago,IwasinAustraliaonalecturetour,andafirebrokeoutonthesecondfloorofmyhomeinCalifornia.WhenIreturnedIhad three contractors bid on repairing the damage. Two of them scrawled outbids by hand. They both bid around $24,000. The third contractor prepared averycomprehensivebidbycomputer.Everylittleitemwasspelledoutindetail.But his bidwas $49,000,more than twice asmuch. I accepted the higher bidbecause thepowerof theprintedwordwas sogreat that I just didn’t trust thehandwrittenbids.

What’s the bottom line? Because people don’t question what they see inwriting, you should always present written backup evidence to support yourproposal. If the negotiation includes expectations that the other sidewillmeetcertainrequirements,italsohelpstoconfirmthoserequirementsinwriting.

Chapter32

ConcentrateontheIssues

Power Negotiators know that they should always concentrate on the issuesand not be distracted by the actions of the other negotiators. Have you everwatched tennis on television and seen a highly emotional star like SerenaWilliamsscreamingat a lineumpire?Youwonder toyourself, “HowonEarthcan anybody play tennis against somebody like that? It’s such a game ofconcentration;itdoesn’tseemfair.”

Theansweristhatgoodtennisplayersunderstandthatonlyonethingaffectstheoutcomeof thegameof tennis.That’s themovementof theballacross thenet.Whattheotherplayerisdoingdoesn’taffecttheoutcomeofthegameatall,aslongasyouknowwhattheballisdoing.Inthatway,tennisplayerslearntoconcentrateontheball,notontheotherperson.

Whenyou’renegotiating,theballisthemovementoftheconcessionsacrossthenegotiatingtable.It’stheonlythingthataffectstheoutcomeofthegame;butit’ssoeasytogetthrownoffbywhattheotherpeoplearedoing,isn’tit?

LosingPerspectiveinaLargeTransaction

IrememberoncewantingtobuyalargerealestateprojectinSignalHill,California, thatcomprised18 four-unitbuildings. Iknew that Ihadtogetthepricefarlessthanthe$1.8millionthatthesellerswereasking for the property,whichwas owned free and clear by a largegroupofrealestateinvestors.Arealestateagenthadbroughtittomyattention,soIfeltobligatedtolethimpresentthefirstoffer,reservingtherighttogobackandnegotiatedirectlywiththesellersifhewasn’tabletogetmy$1.2millionofferaccepted.

Thelast thingintheworldtheagentwantedtodowaspresentanofferat$1.2million—$600,000belowtheaskingprice—butfinallyI

convincedhimtotryit,andoffhewenttopresenttheoffer.Bydoingthat, he made a tactical error. He shouldn’t have gone to them; heshould have had them come to him.You always havemore controlwhen you’re negotiating in your power base than if you go to theirpowerbase.(MoreaboutthatinChapter48onbodylanguage.)

Hecamebackafewhourslater,andIaskedhim,“Howdiditgo?”

“Itwasawful,justawful.I’msoembarrassed.”Hetoldme.“Igotintothislargeconferenceroom,andalloftheprincipalshadcomeinfor the reading of the offer. They broughtwith them their attorney,theirCPA,andtheirrealestatebroker.Iwasplanningtodothesilentcloseonthem.[Thatmeans toread theofferand thenbequiet.Thenext personwho talks loses in the negotiations.] The problemwas,therewasn’tanysilence.Igotdowntothe$1.2millionandtheysaid:‘Wait a minute. You’re coming in $600,000 low? We’re insulted.’Thentheyallgotupandstormedoutoftheroom.”

Isaid,“Nothingelsehappened?”

Hesaid,“Well,acoupleof theprincipalsstopped in thedoorwayontheirwayout,andtheysaid,‘We’renotgoingtocomedowntoapennylessthan$1.5million.’Itwasjustawful.Pleasedon’teveraskmetopresentanofferthatlowagain.”

I said,“Waitaminute.Youmean to tellme that, in fiveminutes,yougotthemtocomedown$300,000,andyoufeelbadaboutthewaythenegotiationswent?”

Seehoweasyitistobethrownoffbywhattheotherpeoplearedoing,ratherthanconcentratingontheissuesinanegotiation?It’s inconceivablethatafull-timeprofessionalnegotiator—say,an internationalnegotiator—wouldwalkoutofnegotiationsbecausehedoesn’tthinktheotherpeoplearefair.Hemaywalkout,butit’saspecificnegotiatingtactic,notbecausehe’supset.

Canyou imaginea toparmsnegotiatorshowingup in theWhiteHouseandthepresidentsaying,“Whatareyoudoinghere?IthoughtyouwereinGenevanegotiatingwiththeRussians.”

“Well,yes,Iwas,Mr.President,butthoseguysaresounfair.Youcan’ttrust

themandtheyneverkeeptheircommitments.Igotsoupset,thatIjustwalkedout.”PowerNegotiatorsdon’tdothat.Theyconcentrateontheissues,notonthepersonalities.Youshouldalwaysbethinking,“Wherearewenow,comparedtowherewewereanhouragooryesterdayorlastweek?”

Former Secretary of StateWarren Christopher said, “It’s okay to get upsetwhenyou’renegotiating,as longasyou’re incontrol,andyou’redoing itasaspecificnegotiating tactic.” It’swhenyou’reupset andoutof control that youalwayslose.

That’swhysalespeoplewillhavethishappentothem.Theyloseanaccount.They take it in to their sales manager, and they say, “Well, we lost this one.Don’twasteanytimetryingtosaveit.IdideverythingIcould.Ifanybodycouldhavesavedit,Iwouldhavesavedit.”

Thesalesmanagersays,“Well,justasapublicrelationsgesture,letmegivethe other side a call anyway.” The sales manager can hold it together, notnecessarily because he’s any brighter or sharper than the salesperson, butbecause he hasn’t become emotionally involved with the people the way thesalespersonhas.Don’tdothat.Learntoconcentrateontheissues.

Chapter33

AlwaysCongratulatetheOtherSide

Howeverpoorlyyouthinktheotherpersonmayhavedoneinthenegotiations,youshouldalwayscongratulatetheothersidewhenyou’rethroughnegotiating,Say,“Wow—didyoudoafantasticjobnegotiatingthat.IrealizethatIdidn’tgetasgoodadealasIcouldhave,butfrankly,itwasworthitbecauseIlearnedsomuchaboutnegotiating.Youwerebrilliant.”Youwant theotherpersontofeelthatheorshewoninthenegotiations.

WhenIpublishedanearlierbookonnegotiating,anewspaperrevieweditandtookexceptiontomysayingthatyoushouldalwayscongratulate,sayingthatitwas clearlymanipulative to congratulate theother sidewhenyoudidn’t reallythinkthattheyhadwon.Idisagree.Ilookuponitastheultimateincourtesyfortheconquerortocongratulatethevanquished.

WhentheBritishsentataskforcedowntheAtlantictorecapturetheFalklandIslands from the Argentineans, it was quite a rout. Within a few days, theArgentine navy lost most of its ships, and the victory for the English wasabsolute. The evening after the Argentinean admiral surrendered, the Englishadmiralinvitedhimonboardtodinewithhisofficersandcongratulatedhimonasplendidcampaign.

PowerNegotiatorsalwayswanttheotherpartiesthinkingthattheywoninthenegotiations. It starts by asking formore than you expect to get. It continuesthroughalloftheotherGambitsthataredesignedtoservicetheperceptionthatthey’rewinning.Itendswithcongratulatingtheotherside.

SectionTwo

ResolvingToughNegotiatingProblems

Thissectionwillshowyouwhat todowhenthegoinggetsrough.Inearlierchapters,youlearnedhowto:

Handleimpasses—bysettingasidethemajorissueandcreatingmomentumonminorissuesfirst.(SeeChapter10.)Handlestalemates—bychangingthedynamicsofthenegotiation.(SeeChapter11.)Handledeadlocks—bybringinginamediatororanarbitrator.(SeeChapter12.)

In this sectionyou’ll learn thedifferencebetweenmediationandarbitration.You’lllearnhowtosetupandconductamediationoranarbitration.Finally,youwill learn the fineartof conflict resolution.Howdo thosehostagenegotiatorsresolvethoselife-threateningconflicts?

Chapter34

TheArtofMediation

AsIexplainedinChapter12,thereisonlyonewaytoresolveadeadlock,andthat’stobringinathirdpartyasamediatororanarbitrator.Adeadlockis“whenbothsidesaresofrustratedwiththelackofprogress,theyseenopointintalkingto each other any more.” The UPS strike in the late 1990s got to that stage.Neither side would schedule another meeting because it wasn’t getting themanywhere.SecretaryofLaborAlexisHermanbecameamediator,andwasabletogetthemtocompromiseandresolvetheirdifferences.(MaybeIwenttoofarthere,butshedidgetthemtosignanewlaborcontract,atleast.)

There are major differences between mediation and arbitration, and it’simportantnot to confuse the two.Mediatorsdonothave thepower tomakeajudgmentor rulingas towhois rightandwhoiswrong.Theyare there tousetheirskillstofacilitateasolution.Arbitrationiswhenbothsidesagreeupfrontthat theywillgoalongwithwhat thearbitrator thinks is fair.Eachpartygiveshimorher thepower tomakea judgmentand imposea solution. Iam talkinghereofbindingarbitration;seethefollowingchapterforthedifferencesbetweenbindingandnonbindingarbitration.

Inmediation,bothsidescometothemeetingexpectingtocompromise.Theyareeagertoreachanagreementacceptabletobothparties.Anagreementisnotalwaysreachedbecausebothsideshavetoagree.Inarbitration,bothsideswanttowin.Theyarehopingthearbitratorwillseetheywererightandtheothersidewaswrong.Theywillpresenttheircaseasforcefullyastheycaninthehopeofan “award” from the arbitrator. A settlement is always reached, because thearbitratorhasthepowertoforceacceptanceofthe“award.”

Youcanhavebothmediationandarbitrationinthesamedispute.Forexample,whenGeneralMotors’employeeswentonstrikein1997,theyandthecompanymediatedasolution.However,theyarbitratedjustonepartoftheconflict.Wasthisalegalstrikeornot?

TheImportanceofMediation

Theprocessofmediationisgrowinginpopularity.It’sbecomelesseffectivefor parties to resolve their issues by going to court.By agreeing tomediate aconflict,thepartiesarefreeingupthecourtsystemformoreimportantmatters.Therearemanyadvantagestomediationoverlitigation.It’slessexpensive.It’sexpensivetolitigateissues.Unlessyoucangetanattorneytotakeyourcaseonacontingency basis, meaning the attorney gets nothing if you lose, but a largechunkofyoursettlementifhewins,expecttospendthousandsofdollarsbeforeyougettotrial.Yourattorneywillbillyouforextensivepretrialdiscoverythatwill include taking depositions from everyone even remotely involved, and agreatdealofotherpreparationwork.

In addition to being cheaper, it’s faster tomediate. It will takemonths andpossiblyyearsbeforeacivilsuitcomestotrial,andbeforeitdoes,thejudgewillinsist thatyoufirst try tomediateasettlement. It isconceivable tomediateanissuewithinhoursofthepartiesagreeingtodoso.Themediatordoesnotneedmuch time topreparebecause todo somaycompromiseneutrality.Hisorherpreparationislimitedtounderstandingbothsides’positions.Itisdifficulttogetacivilsuitheard incourt.Becauseof theexpense, the longdelay,and judges’reluctancetoclutterupthecourtcalendarwithmatters thatcouldbesettledbymediationorarbitration,veryfewcivildisputeseverreachacourtroom.

Amediatedsettlementisnotsubjecttoappeal.Youcanwinasettlementinalawsuit, only to find the award is delayed or even reversed on appeal. Thedefendant may file bankruptcy to escape paying the settlement. Inmediation,both sides agree to the settlement and are more likely to comply with thesettlement.Itenhancestheworkingrelationshipoftheparties.Ifbothsideshaveagreed in advance that theywillmediate any disputes, they can proceedwithconfidencethattheywillneverbeinvolvedinanuglylawsuit.

Amediatorunderstandstheproblembetterthanajudge.It’scommonpracticeto select amediator who’s an expert in the field of the dispute. A real estatespecialist would mediate over a building matter. An employment specialistwouldmediatealabordispute.Themediatorwhoisaspecialistwillunderstandtheissuesbetterthanajudge.Mediationislessdamagingtotherelationshipoftheparties.Youcanonlyreachagreementinmediationwhenbothpartiesagreeto the settlement. That’s not so in arbitration or civil suits. The parties in

mediation can continue their relationship without rancor. All details areconfidential.Mediatorsunderstandthattheymayneverrevealthedetailsofthemediation,notevenyears later.Allnotes takenby themediatoraredestroyed.Only the final agreement remains. Lawsuits becomematters of public record.Secrecymaybe abig advantage topeople and companieswhodonotwant itknown that they made a mistake, or don’t want to reveal that they offered asettlement.

WhyMediationWorks

Don’tbereluctanttousemediationtoresolveadispute.Don’tthink,“Idon’twant to bringmy boss into this, because then I’d be admitting that I’m not agoodenoughnegotiatortohandlethis.”It’snotthatyou’rebringinginabetternegotiator.It’sjustthattherearereasonswhymediationworkswhentheoriginalpartiescannotagree.

Amediatorcangotobothsidesseparatelyandsuggesttoeachthattheytakeamorereasonableposition.(Anarbitratorcanevenforcethisbytellingbothsidesto bring in a final solutionwithin 24 hours, telling them that hewill pick themore reasonable of the two proposals. This forces each side to be morereasonable because they each fear that theotherwill present amore attractiveplan.Itbecomes,ineffect,aclosed-bidauctionofideas.)

Amediator listensbetter to each sidebecausehedoesnothave to filter theinformationthroughaprejudicedposition.Becausehehaslessatstake,hemaywell hear something to which an opponent would be deaf. He can persuadebetter,becausebothsidesperceivehimashavinglesstogain.AsIpointedoutinmybookSecretsofPowerPersuasion,youlosemuchofyourabilitytopersuadeif thelistenerseesyouashavingsomethingtogain.Forexample,abuyerwillbelieveasalespersonmuchmorereadilyifheknowsthatthesalespersonisnotoncommission.

Whennegotiatingdirectly,you tend toassumethat, if theothersidefloatsatrialballoon, that theywouldbewillingtoagreetowhatthey’resuggesting.Amediatorcango toeachsideandproposea solutionwithout implying that theothersideiswillingtocomply.Amediatorcanoftengetbothsidesbacktothe

negotiating tablewithouthaving topromiseconcessions.Heorshe isoftenanexpert in the fieldwho can bring a fresh perspective to both parties, andwillhave experience in resolving similar disputes. Apart from the skills that thisexperience provides, it enables the mediator to bring perspective about whatwouldbeafairandreasonablesettlement.

TheMediatorPerceivedasNeutralIsImportant

AsImentionedinChapter12,themediatororarbitratormustbeperceivedasneutralbybothsides.Unlessperceivedasneutral,heorshecan’tbeeffective.For that reason, mediators go to great lengths to service that perception ofneutrality. A professional mediator would turn down an assignment if he haddone business with one side, but not the other. He would not accept anassignmentwhereonesidewasaclosesocialacquaintanceandnottheother.It’snot the friendship or the business relationship that is the problem; it’s theperceptionofneutrality.Ifhewereequallyfriendlywithbothparties,orhadhadsimilarbusinessexperienceswithbothparties,hecouldstillbeeffective.

Sometimesamediatorstartstheprocessingoodfaithandthenrealizesthatheknowsoneofthepeopleinvolved.Heshouldthenexplainthesituationtobothparties and offer to withdraw. If nobody objects, he may continue, but theproblem must be addressed. A group of psychologists once did a study todeterminetheeffectsofaneutralmediatoronthemediationprocess.Oneofthethings that they investigatedwaswhat could be done if themediatorwas notperceivedasneutral.Theanswertheycameupwithwassimplecommonsensewhenyou think about it.Amediator canovercome theperceptionof favoringoneside,byquicklymakingaconcessiontotheotherside.Thefollowingstorywillillustratehowthatworksinpractice.

Ionce tookpart inanegotiationof the saleofonecompany toanother.Wehad two teams of attorneys working, trying to resolve the differences. Afterweeks of negotiating, we appeared to reach an absolute deadlock.One of theattorneys resolved the deadlock when he was smart enough to say, “This isobviously going to take more time than I thought. I have to be in court thisafternoon,butI’ll tellyouwhat:Mypartner,Joe,willbeinafter lunchtotake

myplace.”

While the first attorneywas in court that afternoon, Joe came in to takehisplace.Hewascompletelynewtothesituation.Eachsidehadtoexplainwherewewereinthenegotiations.Joetookgreatpainstopositionhimselfasneutral.He did this by saying to his side, “Arewe being fair to them in pushing thatpoint?Maybewecouldgivealittlethere.”Thatcausedtheotherpersontothink,“Well,heseemsmuchmorereasonablethanthelastperson.Maybewecanfindawaypastthisafterall.”Havingpositionedhimselfasneutral,Joewasabletofindcommongroundinthenegotiationsthatgotuspastthedeadlock.Anytimeyou reach a deadlock in the negotiations, try bringing in a third-partywho isperceivedasreasonablyneutralbytheotherparties.

PositioningYourselfasNeutralCanTakeYears

President Carter was successful in mediating between Israel andEgyptatCampDavidinthelate1970sbecausehewasperceivedasneutralbyboth sides. It tookyears for theUnitedStates topositionitself as neutralwithEgypt.TheEgyptian leaders always sawus astheenemy,andtheSovietUnionastheirfriends.HenryKissingersawaremarkableopportunitytochangethat,andhejumpedatit.HewasinAnwarelSadat’sofficeatatimewhenSadatwastryingtogettheSovietstocleartheSuezCanal,whichwasshutdownbyshipwreckssunk during the war. He needed the fees he could collect fromshipping passing through the canal, which was the lifeblood ofEgypt’s economy. He needed to get the canal back in to operationquickly.

The Soviets were probably willing to do the work, but theirbureaucracywassogreat,theycouldn’tmovefastenough.Kissingersaid, “Would you like us to help you?” Sadat said, “Youwould dothat?”KissingerpickedupthetelephoneinSadat’sofficeandcalledPresidentNixonintheWhiteHouse.Withindays,thesixthfleetwason its way to the Suez. Kissinger andNixon started the process ofpositioning the United States as reasonably neutral between theIsraelis and the Egyptians—an act that eventually led to PresidentCarter’ssuccessasamediatoratCampDavid.

Today, the conflict between the Palestinians and the Israeliscontinues,andIseelittlechancethattheUnitedStatescaneffectivelymediateasolutionbecausetheothercountriesintheMiddleEastdonotperceiveusasneutral.WeareseenasafriendofIsrael.Idon’tseemuch chance of a resolution until an Arab country (such as SaudiArabiaortheUAE)stepsforwardtomediatetheproblem.

TheProcessofMediation

NeilBerman,mypsychotherapistfriend,toldmeoncethatforpsychotherapytowork,thetherapistmustconvincethepatientthatheknowswhatheisdoing,andheisusingaprocessonthepatientthatwillwork.It’snotnecessaryforthepatient tounderstandtheprocess; it isonlynecessaryfor thepatient tobelievethatthereisaprocess.Whenyougetdowntoit,theredoesn’tevenhavetobeaprocess.All thatmatters is that thepatientbelieves there isone.Similarly, theparticipants inamediationhave tobelieve themediatorhas special skills, andthatheorsheisusingaprovensystemthatworksforthebenefitofbothpartiesinvolvedinthenegotiation.Mediatorsmustdemonstratethatthey:

Areneutral.Understandthetopicofthenegotiation,whichmightbeconstruction,retailing,maritalstrife,orwhateverelsetheconflictisabout.Havepositiveexperienceinmediatingsimilarproblems.Willbeusingaprocessthatisprovensuccessful.

InitialContactWiththeParties

Themediatordoesthisbysettingupaconferencecall.Althoughthemediatorcouldcontactthepartiesbeforejointmeetings,it isseldomagoodidea.Ifoneparty feels that themediatorhasbeen toocozywith theotherpartybefore the

start of the mediation, it could sabotage the aura of neutrality. During theconferencecall,themediatorwillreaffirmthatmediationimpliesthewillingnesstocompromise.Hetellsthemtheprocesswillnotworkifeithersideinsistsonmaintaining their initial position, and is only interested in trying to prove theother sidewrong.Heemphasizes theneed tobe flexible, topreventdeadlockslater.Itiscriticaltothesuccessoftheprocess.

Then,themediatorexplainstheprocesstoeachside(forexample,whentheywill meet and how they will communicate). He emphasizes again that theprocess isprovenand, if followed,will result inahighprobabilityof success.Next,themediatorneedstoremoveeachside’sresorttoHigherAuthority(seeChapter 7). He should insist that the people attending themediation have theauthoritytomakeasettlement.Hemaynotprevailatthisbecause,forexample,a largecompanymaynotbewilling togivecarteblanche to thepeople in thefield,butheshouldtry.Atleastitwillremove“fictitious”higherauthorities,andpreventunpleasantsurpriseslaterintheprocess.

The mediator then asks each side to send him a written statement of theirpositions,andtoincludecopiesofanysupportingdocumentsthatareessentialtounderstandingtheirposition.Heasksthemtokeepthestatementbrief—nomorethanfourorfivepages.Eachpartyshouldalsosendthesameinformationtotheother party.Knowing that any information sent to themediator also has to besent to the other side prevents each party from unduly trying to influence themediator.Hewilldiscouragethepartiesfromsendinglargeamountsofbackupdocumentation.Bothsides’statementsshouldincludethefollowing:

Howthedisputecameabout.Theissuesthatthepartywantsresolved.Howthey’vebeendamagedbythedispute.Thesettlementthateachsideisrequesting.

Themediator tellseachside that,during thefirst jointmeeting, theywillbeexpectedtomakeanopeningstatementtopresenttheirpositions.Themediatorshouldthenschedulethefirstjointmeetingforassoonaspossible.Ifthepartiesareeagertogetstarted,andhavehighhopesthatanagreementwillbereached,it isbetter toactasquicklyaspossible.Themediatorwill typicallysetasideacomplete day for the mediation, so the initial meeting will be held in themorning. It shouldbeheldat themediator’sofficeor, failing that, inaneutrallocation.Themediatorwillstartwithanopeningstatement,inwhichheorshe

willemphasizethefollowing:

Hisorherbackgroundintheareaofthedisputeandsuccessrecordasamediator.Thatheisnotanarbitratororajudge,andthepartieshavenotgivenhimthepowertoimposeasettlement.Thattheyarenotheretoconvincethemediatorortheotherpartythattheyarerightorwrong.Theyareinmediationtodiscusstheirpositionsinthehopethattheycanreachamutuallysatisfactorycompromise.

Thepartiesshouldpresenttheirpositionstoeachother,ratherthanappealtothemediator.Themediatoraskspermissionto takenotes,butassures themthenoteswillbedestroyed,andeverythingsaidwillbeheldinconfidence.Nothingsaid would be admissible in court. Each party starts by making an openingstatement.Thisisacriticalpointinthemediation.Thepartiesmayhavebeeninconflictformonths.Chancesare,theyhavenotbeencommunicatingwitheachother.Now,theyfinallyhaveachancetopresenttheircasedirectlytotheotherside. It is enormously therapeutic for the parties to do this. They both feelrelievedthattheyhadtheirsay.They’realsorelievedthatthetraumaofhavingtomake the presentation is over. This puts them in a good frame ofmind toacceptacompromise.Ifeithersidepresentsanargumentwithoutbeingabletoproveit,themediatorwillgentlyremindthemthattheyshoulddealonlyinfactsandbe able to prove them.Themediator reads the personalities of the partieswhile this is going on. If they are dealing in facts and are respectful of eachother, there is a good chance that a settlement can be quickly reached. If thepartiesarefocusedonattackingeachother,themediatorwillhavehisworkcutoutforhim.Here’sarecapofwhatthefirstjointmeetingwillaccomplish:

Everybodyunderstandstheissuesthatledtothedispute.Eachsideknowswhattheothersideisaskingfor.Themediatorhasemphasizedtheimportanceofconcentratingonfacts,notemotions.Themediatorhasempathizedequallywithbothsides.Hehas“felttheirpain.”Bothpartiesareencouragedthataprocessisunderway,andtheyarehopefulthatasettlementwillbereached.

FirstPrivateMeeting

Next,themediatormeetsseparatelywitheachside,whiletheothersidewaitsin another room.He separately asks each side to rank their issues in order ofimportance.Heprobestodeterminethevalidityofeachissue.Hediscussesthestrengthoftheirpositionontheseissues,shouldthedisputeeventuallyendupincourt. By questioning the strength of each party’s arguments, the mediatornudgeseachofthemtoamoremoderateposition,wheretheyaremorewillingtocompromiseinordertoreachasettlement.

The mediator knows that each side has weaknesses in their arguments.Perhaps theydidn’t thoroughlyread thecontractbefore theysignedit.Perhapstheyknew therewere ambiguities in the contract, but chosenot topoint themout.Perhapstheycoloredtheirearlierstatements.Forexample,earliertheymayhave said, “Wehadno idea that thiswouldhappen.”During this phaseof themediation, they are willing to modify that position. Now it has become “Wewereawarethatthiscouldhappen.”Beingabletorevealtheweaknessesoftheirargumentinaconfidentialsettingisverytherapeutic.Thepartiesfeelbetteroncetheyhavegottenitoutintheopen.

SecondPrivateMeeting

Duringthesecondroundofmeetings,themediatorwilltrytogeteachsidetosuggestasettlement,whilepromisingnot to reveal thesuggestedsettlement totheotherside.Heletsthemmakethesuggestionratherthanmakingsuggestionshimself,becauseheknowsthatfirstsettlementofferscanbesurprisinglygood.

Next,themediatormightleteachotherknowinvaguetermshowfarapartthetwosidesare,andsuggest that they lethimrevealeachoffer to theotherside.With theoffersouton the table, themediationhasmoved toasignificantnewstage, the negotiating stage. All of the negotiating Gambits that I taught youearliercouldcomeintoplay.

ResolutionStage

After thepartieshavereachedagreement, theyshouldwriteoutasettlementagreement and sign it.Theywill probablywant tohave their attorneysdraft afinalagreementsothatitwouldstandupincourt.Themediatordoesnotpreparetheagreement,evenifheorsheisanattorney.Itisnotpropertorepresentbothparties, and it would make the mediator vulnerable to charges of conflict ofinterest. This overview of themediation processmay seem vague to you, butlookatwhatthemediatorhasaccomplished.Hestartedwithpeoplewhoweresodeadlocked in conflict that they wouldn’t even talk to each other. From thathopelessposition,themediatordidthefollowing:

Gotthemtalkingtoeachother.Gotthemtoagreetomakecompromises.Allowedthemtoventhostilitiesinacontrolledenvironment.Gotthemfocusedontheissues,ratherthanthepersonalitiesandemotions.Gotthemtotrustthemediator’sabilitytobringthemtoasettlement.Convincedthemthattheprocessofmediationhasvalueandwouldwork.Gotthemfocusedontheirmutualinterestsratherthantheirconflictingpositions.Gotthemtomakeaninitialsettlementoffer.Gotthepartiestotrustthattheothersidewouldlivebytheagreementreached.

KeyPointstoRemember

1.Thereisabigdifferencebetweenmediationandarbitration.2.Amediatordoesn’thavemuchpower.Heistheretofacilitateasolution.

3.Anarbitratorhasalotofpower.Withbindingarbitration,therewillbeawinnerandaloser.

4.Mediationisrapidlygrowinginpopularitybecauseit’ssomuchfasterandcheaperthatgoingtotrial.

5.Thereisnoappealprocessinmediationbecausebothsides

havereachedagreement.6.Mediatorscanbemoreeffectivethanjudgesbecausetheyoftenspecializeinanarrowfieldofexpertise.

7.Theevidencegivenduringmediationcanbekeptsecret,unlikeapublictrial.

8.Amediatorcannotbeeffectiveunlessheisperceivedasneutralbybothsides.

Chapter35

TheArtofArbitration

In the previous chapter, I told you how the mediation process works.Arbitrationissimilartomediationinsomerespects,butverydifferentinothers.The similarities are that they are both much faster and less expensive thanlitigation.Thebigdifferenceisthatwitharbitration,therewillbeawinnerandtherewillbealoser.Thepartiesdon’texpecttogothrougharbitrationandhavethe arbitrator suggest that they split their differences and settle. The arbitratormayworktohaveoneorbothsidesmodifytheirpositions,buteventuallyheorshemust pickone side’s positionover theother.Letmewalkyou through anarbitrationsothatyoucanseehowitdiffersfrommediation,whichissimpler,andlitigation,whichismorecomplex.

SettingUptheArbitration

Eachside tries toagreeonanarbitratorwhomtheyboth trustandrespect. IrecommendthatyouselectamemberoftheAmericanArbitrationAssociationtoassurethatheadherestothehighestethicalstandards.Theassociationhasstrictrules for theway theirmembers can arbitrate and produce an award thatwillstand up in court. The arbitrator should have experience in the area of thedispute.

Youmayneedthreearbitratorsif:

Bothpartiescannotagreeonanarbitratorwhomtheywouldbothtrustandrespect.Whenthathappens,eachsidewouldselectanarbitratorandthosearbitratorswouldselectathird.Itisacomplicateddisputewherearbitratorsinseveralareasofexpertisearerequired.Whenyouhavemorethanonearbitrator,thereshouldbeanoddnumber,

toavoiddeadlocks.Threeisusual.Theywillselectonetobethechairperson.Thispersonwilladministertheprocessandrunthehearing.Withtheconcurrenceoftheotherarbitrators,hewillhavetheauthoritytohandleproceduralmattersforthepanel,suchastheschedulingofmeetingsandtheissuanceofsubpoenas.

NeutralityoftheArbitrators

Thearbitratorsmustbeneutral,beseenasneutral,andbeacceptedasneutralbytheclaimant,therespondent,andeveryoneelseinvolved.Thisisevenmoreimportantinarbitrationthanit is inmediationbecauseofthecombativenatureofthearbitrationprocess.Attheend,oneofthepartiesisgoingtobeunhappy,becausethearbitratorchosetomakeanawardtotheotherside.Thereisnopointingoingthroughthiswholeprocessonlytohavetheawardoverturnedonappealbecausethelosingsideclaimedthatthearbitratorwasnotneutral.

Thearbitratormust reveal anypast contactwith theparties.Hemust revealany information thatmightevensuggestbias.Hemustavoidanycontactwithonesidewhentheotherisnotpresent(calledexpartecontact).Toavoidexpartecontact, an administrative assistant should handle any administrative details,suchasquestionsaboutthelocationandthetimingofthemeeting.

PreliminaryMeeting

The claimant, who is the person filing the arbitration demand and seekingrelief,andtherespondentarecalledtoapreliminarymeeting.Thisservesseveralpurposes.Itallowsthepartiestoventtheirfeelings.Itexploresthepossibilityofmediating the dispute, rather than arbitrating it,which is amuchmore hostileprocess.

After thepartieshavevented, theymaybothsee theadvantageofseekingawin-win solution through mediation, rather than exposing themselves to an

award that isbasicallywinner-take-all. If theyseekmediationat thispoint, thearbitratormustpointout that,althoughhecouldactastheirmediator, itwouldpreclude him from arbitrating the case later if they cannot agree throughmediation. The information that he would gather at the mediation, such assuggested settlementsbyeither side,wouldcompromisehis ability toarbitrateeffectively.Ifthepartiesnowwanttoattempttosettletheissuethemselves,thearbitratormustexcusehimself.

Theamountoftheclaimandanycounterclaimsmadesofarismadecleartoallsides.(Thearbitratorwillasktherespondentifheplanstocounterclaim.Thisavoidsalast-minutecounterclaimbeingusedasadelayingtactic.)Bynow,theymaybothhavecometorealizehowmuchtime,effort,andexpensewillgointoarbitration,andwillbemoreamenabletomediation.

Bothsidesagreeontheamountofdiscoverythateachsidewillrequire.Thearbitratordoesnothavethepowertoorderdiscoverythewaythatajudgedoes.Thismaybeoneofthereasonswhythepartieschosearbitrationoverlitigation.Hopefully,bothsideswillagreetoturnoverallrelevantdocumentation.Iftheywon’tagreetothat,thepreliminarymeetingisagoodplacetoagreeongroundrulesfordiscoveryandputatimelimitonit,sothisissuecannotbeusedlatertodelaytheprocedure.

The parties agree to a time schedule for the exchange of expert reports,depositions,andresponsestointerrogatories.Thepartiesagreetoahearingdate.Thepreliminarymeetingservesmanypurposes,nottheleastofwhichisthatthepartiesmaythendecidetomediateratherthanarbitrate.

ExchangeofInformationPriortotheFirstHearing

Eachsideshouldbeencouragedtoprepareandsubmit,totheothersideandtothe arbitrator, an Exhibit Book containing all of the relevant documentation.Eachsideshouldsubmitalistofexpertwitnessestheyplantocall,andalistofdocumentsandwitnessesthattheywantthearbitratortosubpoena.Theyshouldalso decide whether they want to have the hearing transcribed, which is anoptionalprocedurethatwouldbeattheparty’sexpense.

TheArbitrationHearing

Thehearingissimilartothetrialsthatyouseeontelevisionexceptthatthereis no audience and no jury. Theremay be only three people in the room: thearbitrator,theclaimant,andtherespondent.Theymayhaveanattorneypresentandtheattorneymayspeakforthemiftheywish.

Eachsidemakesanopeningstatement.Thenwitnessesarecalledandswornin.Witnessesarecross-examined.Rebuttalwitnessesmaybecalled.Theclosingarguments are given. Each side may object to a question if it is leading,irrelevant,oropinionwithoutfoundation.

ConductoftheArbitrator

Thearbitratorwillaskclarifyingquestionsofthewitnessesorparties.Hewillaskanyquestions thathefeelsare important,evenif thesubjectofhis inquiryhasnotbeenintroducedinevidence.Hewilllistencarefullytotheevidence,butbecarefulnottoreacttotheevidence.Heshouldnotnodhishead,forexample,because thismight implybias.He isconstantlyexamining theevidence for itsrelevancetothearbitrationandthecredibilityofthespeaker.

AnImportantDifferenceBetweenArbitrationandLitigation

Themostsignificantdifferencebetweenarbitrationandlitigationisthat,witharbitration,thereisnojury.Thearbitratorplaystheroleofbothjudgeandjury.Thearbitratorcannotaskthejurytoleavethecourtroomwhilehelistenstothearguments of the parties, as a judge can.He cannot call a sidebar to hear theissuebeyondthejury’shearing,asajudgecan.

Anarbitratorwilloftenhearinformationthatajurywouldnotbepermittedtohear, simplybecauseheor shehas to ruleon its relevance. It is better for thearbitratortoadmittheevidence,andconsideritsrelevancelaterwhenheorshemakeshisaward,thanrefusetoadmittheevidence,andhavehisawardvacatedonappeal.Hearsay,forexample,whichisinadmissibleincourt,isadmissibleinarbitration.Thearbitratorsimplydecidesifheshouldconsideritwhenrenderinganaward.

RenderinganAward

Within 30 days of the final hearing, the arbitratorwill render a decision inwritingtobothparties.Inabriefdocument,hestatestheamountthatthepartieswill recoveron their claims and counterclaims, or he candeny the claims.Hemaydisallowpartoftheclaimforaparticularreason.Forexample,hemayfindthat the respondentowes theclaimant$200,000for thecostofanewsailboat.He does not owe the claimant the $20,000 he spent traveling around theCaribbeanlookingforanewsailboat.Whatthearbitratorshouldnotdoismakeapartialawardwith thehope that itwillappeasebothparties; thatcouldhavebeenhandledbymediation.

Mostarbitrationisbindingarbitration.Bothsidesagreeupfrontthattheywillgoalongwithwhat thearbitratordecides.Inbindingarbitration, theprevailingpartycantakethearbitrator’sawardintocourtandhaveitrecorded,asthoughitwereajudgment.

Thereisthepossibilitythatthepartieswillnotagreetobindingarbitration.Ithappenswhenthenextstepwouldbealawsuit,unlesstheyagreetononbindingarbitration.Whenbothsidesagreetononbindingarbitration,theyaresaying,“Iagree togo through theprocessandget theopinionof thearbitrator.Whenhesideswithmeagainstyou,perhapsyou’llseetheweaknessofyourcase.Butifhesidesagainstme,Istillreservetherighttosueyou.”Ohboy!Iwouldhopethat they would have been good enough negotiators to avoid that kind ofdeadlock,butithappens.

Typically,bothsidesbear theirown legalexpenses, regardlessofwhowins,unlesstherewasanagreementinadvancethatstatedthattheloserwouldpaythe

winner’s expenses. The arbitrator will ignore requests that one side pays theotherside’slegalexpenses.Heorshedoesnotgiveareasonforhisaward.Juriesdon’thavetogiveareasonfortheirdecisions,andarbitratorsdon’teither.

AftertheAward

Ifthearbitratormakesanaward,theprevailingpartycanpresenttheawardtoa court and have it certified. The arbitrator does not get involved in how theawardisdecidedorhowitispaid.Heisthroughoncehehasrenderedhisawardordeniedanaward.Hesitsbackandhopesthatitwon’tbeoverturned.

Inmost states, thecourt cannotoverturnanaward simplybecause thecourtwouldnothavemadetheawardifithadheardthecase.Itcanonlyoverturntheawardifitquestionstheactionsofthearbitrator.Wastherefraudorcorruptioninvolved? Did the arbitrator act in a biased way? Hopefully, we can excludefraudorcorruption,whichmeansthattheonlyviablewaytooverturnanawardistoprovethatthearbitratorwasbiased.Doyouseewhyit’ssoimportantthatthearbitratordoeverythinghecantoprovetothepartiesthathe’sneutral?

Afterthearbitratorhasrenderedhisaward,hewilldestroyanynotesthathehastaken.Hewillreturnallpiecesofevidencetothepartiesafterverifyingthathehasnotmadeanynoteson them,oreven leftapaperclip.Thereshouldbenothingtoindicatehisthinkingwhileexaminingtheevidence.

In the previous two chapters, we have examined twomethods of resolvingdisputes other than going to court.As you can see, there is a huge differencebetweenthetwo.Withmediation,bothsidescometogetherinthehopethattheycan find a compromise that is acceptable to both sides.With arbitration, therewill be little, if any, compromise. Therewill be awinner and therewill be aloser.

Inthenextchapter,I’llteachyouhowtohandleconflictsituationsthataresofar out of control that they have gone beyondmediation or arbitration.You’lllearntheartofconflictresolution.

KeyPointstoRemember

1.Witharbitration,unlikemediation,therewillbeawinnerandtherewillbealoser.

2.Arbitrationisfasterandlessexpensivethanlitigation.3.Eachsidemustcarefullychooseanarbitratorthattheybothtrustandrespect.

4.Ifbothsidescannotapproveofanarbitrator,eachsideshouldchooseoneandcollectivelypickathird.

5.MembersoftheAmericanArbitrationAssociationadheretothehighestethicalstandards.Theassociationhasstrictrulesforthewaytheirmemberscanarbitrateandproduceanawardthatwillstanduptoacourtchallenge.

6.Arbitratorsmustbeneutral,beseenasneutral,andbeacceptedasneutralbytheclaimant,therespondent,andeveryoneelseinvolved.

7.Apreliminarymeetingexploresthepossibilityofmediatingthedispute,ratherthanarbitratingit,whichisamuchmorehostileprocess.

8.Bothsidesagreeontheamountofdiscoverythateachsidewillrequire.Thearbitratorcannotorderdiscoveryasajudgecan,whichisamajoradvantageoverlitigationifthepartieswantprivacy.

9.Hearsayisinadmissibleincourt,butadmissibleinarbitration.Thearbitratorsimplydecidesifheshouldconsideritwhenrenderinganaward.

10.Juriesdon’thavetogiveareasonfortheirdecisions,andarbitratorsdon’teither.

11.Aftertheaward,thearbitratorwilldestroyallnotes,andreturnallevidencetotheparties.

Chapter36

TheArtofConflictResolution

It seems like an everyday occurrence these days—at least it does in LosAngeleswhereIlive.Somebodyhasagunandthey’vetakenahostage.SWAT(SpecialWeapons and Tactics) teams are called in, barricades are set up, andnews helicopters circle overhead, transmitting the live drama, as policenegotiatorstrytoresolvetheconflict.

Sometimes it’s a botched robbery; sometimes it’s an angry employeeor ex-employee who wants to settle a grievance with a boss. Sometimes the issueseemsludicrouslyminor.InOrangeCountywerecentlyhadanangryparenttakeaschoolboardmemberhostageoveradisputeabouthischild’seducation.Howdothesehostagenegotiatorshandletheseconflictsituations?Andwhatcanwelearn from them that would be helpful in our day-to-day disagreements withothers?

Inthiscountry,wehadgivenverylittlethoughttohostagenegotiationsuntiltwomajorincidentsgalvanizedpublicattention:theAtticaStatePrisonsiegeinSeptember 1971 and the hostage-taking at theMunichOlympicGames a yearlater.

TheAtticaPrisonriotstillsstandsasoneofthemostdisastrousresolutionsofacrisisinhistory.Duringthefour-dayprisonerrebellionattheprisonlocated30mileseastofBuffalo,NewYork, theinmateskilledaguardandthreeinmates.After only four days,GovernorNelsonRockefeller ordered the state police totakebacktheprisonbyforce.Policegunfirekilled29inmatesand10hostages.Tocompoundtheerror,thepoliceinitiallyannouncedthattheprisonershadslitthehostages’throats.Theautopsyrevealedthetruth:thattheyhadbeenkilledbypolicefire.Theprisonersortheirfamiliesfiled1,280lawsuitsagainsttheprison,thefirstofwhichwassettled26yearslaterfor$4million.

Thebrutalhostagetakingatthe1972MunichOlympicGamesthefollowingyear, and a disastrously handled rescue attempt, killed 11 Israeli athletes, fivePalestinian terrorists, and a German police officer. The German police now

admit that theywerewoefullyunpreparedforwhathappened.TheyweremoreconcernedthattheworldwouldberemindedofHitler’sheavy-handeduseofthe1936Olympicgames forpropagandapurposes, andwere trying tokeepa lowprofile.

Because of this, Palestinian supporters had little trouble getting into thetraining compound and taking nine athletes hostage, in addition to killing twoathleteswhohadresistedthem.Fromthenon,thenegotiatorsmademistakeaftermistake.FollowingIsraeliPrimeMinisterGoldaMeir’surgingnottomakeanyconcessionstotheterrorists,notelephonelinesweresetupandtherewasalmostnocommunicationwiththeterrorists.Thepoliceallowedtheterroriststomovetheirhostagestotheairport,somethingthatwouldneverbeallowedbytoday’smoreenlightenedhostagenegotiators.

TheGermanspromisedtheterroristssafepassagetoCairo,althoughtheydidnotintendtoletthemleave.Suchdeception,weknownow,usuallyleadstoanenragedresponsewhenitisrevealed.Finally,whenforcewasusedtoovercomethe terrorists as they tried to board the getaway plane, it was woefullyinadequate.Onlyfivepoorly trainedsharpshooterswereused,and theyhadnonight-visiondevices,andlackedradiocontact.

AndjustasatAttica,thepolicetriedtocoveruptheirerrors.WhenfamiliesoftheIsraelivictimssuedtheGermangovernment,theydeniedthatanyrecords,“ballistic,forensic,orotherwise,”existed.Twentyyearsaftertheeventthewifeofoneof the slain athletes appearedonGerman televisionand receiveda callfrom an anonymous German who gave her 80 pages of stolen autopsy andballisticreports.Becauseofthis,theGermanauthoritieswereforcedtorevealastoreroomfullofmorethan3,000filesand900photographs.

Itwasa terribleyear forhostagenegotiators.More than1,000hostages losttheir lives, and 760 of those deaths occurred as police stormed the hostagelocations. Clearly, the existing strategy of refusing to negotiate with hostage-takersandtryingtooverwhelmthemwithforcewasnotworking.Thecurewasworsethanthedisease.

The New York Police Department developed a program to come up withbetter responses to crises such as hostage taking and suicide threats.TheyputLieutenantFrankBolzinchargeoftheprogram,assistedbyclinicalpsychologistHarvey Schlossberg. The program that they developed, and then tested in thestreets of New York, became the model for police departments around the

country.Because of this, it is unlikely that anyhostagewill lose his life oncenegotiatorshavearrivedatthesceneandmadecontactwiththehostage-taker.

InanextensivestudybytheUniversityofVermontofchildhostage-takings,itwas found that 98 percent of child hostages were released without physicalinjury.Also,farfeweroftheperpetratorsarebeingkilled,whichisparticularlysignificantwhenyou factor in the current trendof “PoliceAssistedSuicides.”Thisisatermthatpoliceapplytohostage-takerswhoare,inreality,committingsuicide.Theyareinvitingthepolicetokillthem.InCalifornianow,25percentofallpolicekillingsofhostage-takersareofficiallyclassifiedasPoliceAssistedSuicides.

During the NYPD study, Frank Bolz decided that there were five possibleresponsestoahostagesituation.Theyareasfollows:

1.Attackwithlittleornoattemptatnegotiation.(ThiswastheapproachtakenatAtticaandMunich,withdisastrousresults.)

2.Waitoutthesituationtoseewhatwouldhappen.(Thisisagoodapproachifyoudeterminethatnothingbadwillhappen.AsIexplaininmybookTheConfidentDecisionMaker,thisshouldbeyourfirstconsiderationwhenfacedwitha“doweordon’twe”typeofdecision.Whatwillhappenifyoudonothing?ThepeoplesurroundingthecompoundinWaco,Texas,shouldhaveknownthis.Nothingbadwashappeninginsidethecompound,andweshouldhavewaitedtoseewhatwouldhavedeveloped.)

3.Negotiatewithoutmakinganyconcessions.(ThiswasthepopularrallyingcryoftheReaganyears.Wewillnotnegotiatewithterrorists!)Itsoundsgoodtothepublic,butitisfoolishlyinflexible.Weshouldbenegotiatingwithterrorists,andthewillingnesstomakeminorconcessionsshouldbeapartofthenegotiation.Whatmustnothappenisfortheterroriststosucceedintheirmajordemands.Thatwouldobviouslyencourageotherstoemulatetheiractions.

4.Negotiateandlieaboutconcessions.Thisapproachusuallyappealstothepublic.AgunmanoncetookaclassofchildrenhostageataschoolinTuscaloosa,Alabama.GovernorGuyHuntvideotapedapardonofthehostage-takerandsentittohim.Hereleasedthechildren,butwasimmediatelyarrested.Thegovernorrescindedthepardonontechnicalgrounds,sayingthat1)youcanonlypardonaconvictedpersonand2)thatthepardonwasgivenunderduress.Thehostage-takerwasgivena

lifesentence.Atfirstglance,itseemstobeaneffectivetechnique.Whyshouldwebeconcernedaboutlyingtoviolentcriminals?However,thetacticoflyingtohostage-takersisaclassicexampleofashort-termgainandalong-termloss.Itaffectstheoutcomeofallsubsequentnegotiations,becauseitlimitsthenegotiator’sabilitytobuildtrustwiththehostage-taker.Ifthereisonethingwithwhichhostagenegotiatorsallagreeitisthis:Don’tlie(onmajorissues)toterrorists.

5.Negotiateandbewillingtomakeconcessions.

Theprogramtheydevelopedwasavariationofthelastapproach.Themodeltheydevelopedcallsforthenegotiatortobecalm,takeahumaneapproachtotheproblem,earnthehostage-taker’strust,andofferpartialsatisfactionbymakingminorconcessionstothehostage-taker.

Let’stakealookattheprocedureusedatatypicalcrisisscene,andaswedoso,let’sthinkofhowmuchofthiswouldapplytothetypeofcrisissituationinwhichwemightbe involved, suchas an angry customerwanting to cancel anorder. There are three types of crises to consider: suicide threats, barricadedsuspects,andhostage-taking.Therulesforeachofthesesituationsaresimilar.

The first officers to arrive on the scene must assess the seriousness of thesituation;securetheareafrompotentialaccomplices,thepress,andthecuriouspublic;judgethethreattohostagesandbystanders,andcallfortheappropriatebackupunits.Securing thearea isacriticalcomponent,particularly inhostagesituations.Inalmosteverycase,thesuspectmustbedeniedmobility.Tolethimleavetheareawillusuallyexacerbatethesituation.

InabankrobberyinHoughton,asmalltowninMichigan,a24-year-oldmanwalkedintoabankinthemiddleofwinter,tookatellerhostage,andstrappedabomb to her. He then demanded a getaway car from an employee, seriouslyinjuringthebankmanagerintheprocess.Police,whoquicklystoppedhim,onlyfoundoutaboutthebombwhentheyopenedthecardoorandtoldhimtogetout.He threatened to explode thebomband theybackedoff, but as theydid, theycalmly shot out all four tires. This stopped him from goingmore than a fewyards,becausehisdeflatedtiresstuckinthesnow.

Police surrounded the car and started to negotiate. Unfortunately for theperpetrator, thenegotiationdidnotgowell.Seventeenhours later, thestandoffended when police sharpshooters shot the robber as he wearily put down thebombdetonator.Thehostageescapedunhurt.Shootingout the tiresmayseem

likea risky thing todo,but securing theareaandnotgiving thehostage-takermobilityisalmostalwaystherightthingtodo.

Thenextstep is tobring in reinforcements.A teamofnegotiators,whowillmake contact with the suspect, identify their demands, and try to resolve theconflictwithoutlossoflifeorinjurytoanyone,issetup.Thisteamconsistsofaprimary negotiator, who will communicate with the suspect, and a backupnegotiator,whowill takenotesandofferadvice to theprimarynegotiator.Thethird member is the intelligence negotiator who gathers information byinterviewing anyone who knows the suspect. Particularly critical informationincludesthesuspect’scriminalrecordandmentalhealthrecord.

ThenaSWAT(SpecialWeaponsandTactics) teamisbrought in.Hopefully,theywon’tbeneeded,buttheyaretheretoneutralizethesuspectifnegotiationsfail.Thepoliceappointafieldcommandertosupervisetheentireoperation.Thefieldcommanderisveryawarethatifthesituationisnotresolvedsuccessfully,he will be the subject of very vocal and public criticism. Everyone from themayortothenewspapereditorswillbesecond-guessinghisjudgment.Toprotecthimselfandthereputationofhisdepartment,hewantstocompletetheoperationby thebook.Hewill insist that establishedproceduresbe followed.The smartonesuseachecklistsimilartotheonethatpilotsuseintheirpre-flightroutine.Thisensuresthattheydon’toverlookacriticalstepintheheightofthetrauma.

The first step of the negotiation process is for the primary negotiator toestablish communication with the suspect, and cut off his or her ability tocommunicate with anyone else. The primary negotiator should not have tocompeteforthesuspect’sattention.Inthisway,thesuspectbecomesdependentuponcommunicationwiththeprimarynegotiator,andaprocessoftrust-buildingbegins.Ifthesuspecthasaccesstoatelephone,hisabilitytocalloutwillbecutoff.Thepolicedonotwantthesuspectabletocommunicatewiththemediaoranyone else. They also want to deny access to information about policemaneuvers or tactics. Communication is usually by telephone. It is toodangeroustoallowthesuspectandthenegotiatortomeetface-to-face.

InHollywood dramas, youwill frequently see a situationwhere a friend orrelative of the suspect is allowed to talk face-to-face with the suspect. Tensemomentsensueasthefriend,relative,orloverriskshisorherlifebecauseheorshe loves thesuspectsomuch.Aftera tearfulembrace, thesuspectsurrenders.Thiswouldneverhappeninreallife.Foronething,thefriendorrelativemaybe

thecauseofthesuspect’srageandexacerbatethesituation.Theprimaryreason,though, is that all contact shouldbe through theprimarynegotiatorduring thefirstfewdays,sothathecangaincontrolofthesuspect’sworld.

Ifallelsefails,atrustedandtrainedpersonmightbebroughtintochangethedynamicsofthecrisis.In1993,thelocalsheriffwasbroughtinatWaco,Texas,but only becauseDavidKoreshknewand trusted him.WhenCubanprisonersrioted atOakdale, Louisiana, prison in 1987, negotiators brought in a Cuban-bornpriest.Bringinginathirdperson,perceivedasneutral,isakintobringinginamediator to resolve a deadlock, as I told you in Chapter 34. It is not donelightly.

Often,water,heat,andpowerareturnedoffalso,forseveraldifferentreasons.It prevents the suspect fromgathering information from television. It preventsthesuspect fromdisposingofdrugsorother incriminatingevidence. ItgivesatacticaladvantagetotheSWATteamwhocanuseinfraredvisiontomonitorthescene.Iteliminatescomforts,suchasheatandtoiletfacilities.Thiscanthenbeusedlaterasatrade-off.

Turning off the utilities also causes the suspect to bond with the hostages,making itmuch less likely that thesuspectwillharm them.Peoplewhosufferdeprivations together will bond. This was used very effectively in December1996 by negotiators at the hostage crisis at the official residence of Japan’sambassadortoPeru,incelebrationofEmperorAkihito’sbirthdayinLima,Peru.MRTA(TupacAmaruRevolutionaryMovement) terrorists tookmore than500guestshostage.ThesituationwascriticalbecausetheJapanesehadgonetogreatlengths to turn the ambassador’s residence into a fortress that could easily bedefendedfromattack.TheMRTAblewahugeholeinthewallofthecompound.Once in, itwasaneasybuilding todefendfromthe inside.Thepolicequicklyturned off all the utilities to the building. They wanted the terrorists to besufferingthesamedeprivationsas thehostages,knowingthat thiswouldcausethem to bond. But after a few days, they turned the utilities back on. If theybonded toomuch, thehostageswouldactually thwarta rescueattemptwhen itwaslaunched.Thesiegelastedfor126daysbeforethePeruvianArmedForcesstormed the building. Even though the hostages were held at gunpoint, theterroristshesitatedlongenoughthatnoneofthehostageswerekilled(onediedofaheartattack).Gettingtheperpetratorstobondwiththevictimscanhelpsavelives.

Time is the friend of the primary negotiator. Every moment that passeswithout a bad thing happening is bringing the situation closer to a peacefulresolution (unlike inHollywood dramas,where the passage of time is used tobuildtension).Amisseddeadlinecanbeabreakthroughforanegotiator.

Thehostage-takermightsay,“Unlessthegovernorofthestateisonthephoneby twelve noon, I’m going to kill a hostage!” Although this might cause aninexperiencednegotiatortopanic,itpleasestheprimarynegotiatorbecausenowhehasasuspectwhoiswilling tonegotiate.Also,heknowsthat ifhecangetpast noon without losing a hostage, the suspect has lost credibility, and hasgreatlyweakenedhisbargainingpower.Thatisnotascallousasitmaysoundtoyou,becauseveryfewhostageshaveeverbeenlostundersuchaspecificthreat.Hostagesgetlostinpassionatemoments,eitherveryearlyinthehostage-taking,whenpassionsarerunninghigh,orifthesuspectfeelsbetrayedbytheprimarynegotiator.

Therelationshipthattheprimarynegotiatorbuildswiththesuspectisthekeyto peaceful resolution of the crisis. For one thing, the primary negotiatorwillhavespentweeksinclasseslearningaboutthepersonalityofhostage-takersandpeoplewho publicly threaten to commit suicide.They are experts on neuroticbehavior and personality disorders. They thoroughly understand the suspect’sstateofmind,andknowhowtomanipulatethesuspectthroughthecrisis.Thisisonereasonwhyitisbetterthatonlythenegotiatingteam,whichconsistsoftheprimary negotiator, the backup negotiator, and the intelligence negotiator, areprivytotheactualnegotiation.

Even the fieldcommander,whomaybeveryexperienced incrises,willnotunderstandthenuancesoftheconversationbetweentheprimarynegotiatorandthesuspect.Hewillbe inclinedtooverreact.Whenhehears,forexample, thatthesuspectisdemanding$10million,orapressconferencewiththegovernor,he might see that as an impossible demand that will lead to violence. Theprimarynegotiatorhearsitonlyasanopeningnegotiatingposition,andisgladtohavesomespecificsonthetable.Nothingismoredangerousthanasuspectwhowon’ttalk.

The primary negotiator monitors the suspect’s state of mind. If he appearsvolatile, the negotiator will try to draw him into reasoned negotiations byofferingsmallconcessionsinreturnforminorreciprocalconcession.Inthisway,the negotiatormoves the suspect from thinkingwith his right brain, which is

erratic and volatile, to thinkingwith his left brain,which is logical andmuchmorecontrollable.Ifthesuspectistooquiet,itmaybeasignofdepression.Tocounter that thenegotiator reassures the suspect that there is awayout of thesituation,thatnobodyhastogethurt,andthathestillhasoptions.Heorshealsoworkstobuildtrustwiththesuspect.Heiscarefulnottosayanythingthatcouldlater be construed as deception by the suspect. He must comply with everypromiseorcommitmentthathemakes.

Above all, the primary negotiatorworks to get the suspect off the positionsthathehas taken,and focusedbackon theirmutual interests.Positionscanbe180degreesapart,andfocusingonthemobscuresthehugemutualintereststhatexistbetweenthenegotiatorandthesuspect.Thisisnottosaythattheprimarynegotiatorisafraidtobetoughwiththesuspect.Thethreatofphysicalforceisalwayspresent.This is particularly true if the suspect harms anybody. “If youharmasuspect,Ican’tprotectyou,”thenegotiatorinsists.“Itwillbeoutofmyhands.”

Timepasses.Thesuspectventshisemotions.Deadlinesaremissed.Demandsare modified. No concessions are made without something in return. (“Yourelease a hostage, and we’ll send in a sandwich.”) A forum for bargaining isestablished.Timewearsdownresolve.Acceptancetime(seeChapter37)causesthe suspect tomodifyhis demands and accept the realityof the situation.Thesuspectlearnstotrusttheprimarynegotiatorand,ifallgoeswell,surrenderstohiswill.

Whatcanwelearnfromthesetrainedhostagenegotiatorsthatwecanapplyinourdailylives?Whetheritisanangryspouse,anemployeethreateningtoquit,or a customer threatening to cancel an order, here are some of my rules forhandlingconflictinanysituation.

Containthesituationsothatitwon’tgetworse.Thatmaymeangettingasuitcaseoutofaspouse’shandwhenheorsheisthreateningtowalkoutthedoor.Itmaymeangettingthecarkeysoutofanangryteenager’shands,orgettingthatangrycustomertoagreetoaconferencecallorameeting.Allowtheangrypersontovent.Hostagenegotiatorswilltellyouthatyoumustdealwiththeotherpersonasheperceivesthesituation,notasyouperceiveit.HemayinsistthatAbrahamLincolnistalkingtohim.Youdon’thavetotellhimthatyouhearitalso,butyoumust

acknowledgehisperception—thatheishearingAbe’svoice.Translatedtoaday-to-daysituation,thismeansthattheotherperson’sangermaybeunjustified,butyoumustacknowledgethatangerasreal.Whentheotherpersonisangry,lookforthehurt.Angeralwaysfollowshurt.Whatwassaidordonethatcausedthispersontofeelhurtorthreatened?Acknowledgingthehurtgoesalongwaytowardreducingtheanger.

As quickly as you can, get him to tell you what it is he wants. Get himcommittedtoaposition.Whatwouldittaketoresolvetheproblem?Youdothisevenifyou’renotpreparedtomakeanyconcessionstotheothersideatall.Forexample,youmayhaveanemployeewhoisthreateningtoquitunlessyougivehimaraiseinpay.Youmayhaveafirmruleagainstgivingsomeoneanincreaseinpayifhe’sthreateningtoquit.That’suptoyou.Evenso,youshouldgethimtotellyouhowmuchofanincreaseinpayhewouldneedtostay.Quantifyingtheproblemgoesalongwaytosolvingit.

Gatheralltheinformationthatyoucan.Thinkoftheprimarynegotiatorusinghisinformationnegotiatortointervieweveryonewhoknowsthesuspect.Focusonthepersonmorethantheproblem.Thesolutionisalwayswiththeperson,notthe situation. The more you know about the person, the closer you are toresolution. In this stage,anotherproblemmaybe revealed.Moneymaynotbetherealreasonwhythatpersonisquitting.Hemaybeupsetbecausearivalwaspromoted before he was. He may have become romantically involved withanother employee and needs to create some distance between himself and theotherperson.Hemaybeactingonafalserumor.

Work to get the person off the position that he or she has taken. Get himfocusedonyourmutualinterests.Positionscanbe180degreesapart.“Youliedto me!” “No, I didn’t!” “You cheated me!” “No, I didn’t!” These are strongpositions thatare totallyopposed,but itdoesn’tmean thatyoudon’t stillhavestrong mutual interests. You may both have a strong mutual interest in thatemployee stayingwith your company.Both you and that angry customermaybothhaveagreatdealtogainfromcontinuingyourrelationship.

The problem is that,when you focus too strongly on positions, you can nolongerseeyourmutualinterests.TheclassicexampleofthatwastheColdWar.Wetookverystrongpositions.Wewerecallingthemanevilempire.TheywerepoundingtheirshoeontheUnitedNationstable,screamingthattheyweregoing

to bury us. Those are very strong positions. We both still had huge mutualinterests.We had a hugemutual interest in reducingmilitary expenditure.Weboth had a hugemutual interest in doing business together. They had all thattitanium.We needed it for our golf clubs!Butwe couldn’t see thatwhilewestayedsofocusedonourpositions!

Takealookat thelong-standingconflictbetweentheTaiwaneseandBeijinggovernment.Formorethanhalfacentury,theyhavestoodtoe-to-toewitheachother,threateningacatastrophicwar.TheUnitedStateshaspromisedtodefendthe island if themainland attacks.What is the conflict all about? Each side’spositionisveryclear:ThegovernmentinBeijingsaysthatTaiwanisaprovinceof mainland China. Taiwan claims to be an independent nation. Those twopositionsare180degreesapart.Ifyoufocusinsteadonmutualinterestsyouseeatotallydifferentpicture.TheTaiwaneseeconomyhasbeeninthedoldrumsformorethanadecade.ImprovedrelationsandbusinessdealingswithChinawouldcause its economy to boom. Mainland China, on the other hand, desperatelyneeds thebusiness skills that theTaiwanesecan teach them.Both sideswouldbenefitenormouslyfromaresolutionofthecrisis.

Theartofconflictresolutionistogetpeopleoffoftheirpositionsandfocusedbackontheirmutualinterests.

Only when you both have expressed what it would take to resolve theproblem, and you have gathered the information and worked to get peoplefocusedontheirmutualinterests,doyoumovetowhatmostpeoplethinkofasnegotiating—the reach-for-compromise part of it. Here’s where the mostimportantthoughtthatanegotiatorcanhavecomesintoplay.IcallitthePowerNegotiator’s Creed. The most important thought you can have when you arenegotiatingisnot“WhatcanIgetthemtogiveme?”Itis“WhatcanIgivethemthatwouldnottakeawayfrommyposition,butmaybeofvaluetothem?”

KeyPointstoRemember

1.AfterthedisastroushandlingoftheAtticaStatePrisonriotandtheMunichOlympichostage-taking,theNYPDstudiedwaysofhandlinghostagesituationswithaviewtoprotectingboththehostagesandtheperpetrator.

2.Weshouldbenegotiatingwithterrorists,butweshouldnotmakemajorconcessions.

3.Allhostageexpertsagreethatyoushouldnotlietohostage-takers,becauseitunderminestheabilityoflawenforcementtonegotiatefuturecrisissituations.

4.Thefirststepofthenegotiationprocessisfortheprimarynegotiatortoestablishcommunicationwiththesuspectandcutoffhisorherabilitytocommunicatewithanyoneelse.

5.Theperpetratormustbephysicallyandpsychologicallyisolated.

6.Bringinginfamilymemberstotalkwiththehostage-takerisrarelyproductivebecauseitmayevokeemotionaltraumaandexacerbatethesituation.

7.Negotiatorstestanydeadlinessetupbytheperpetrator.8.Theartofmediationistogetthepartiesoffthepositionsthattheyhavetaken,andfocusedbackontheirmutualinterests.

9.Whendealingwithanangryperson,firstcontainthesituationsothatitwon’tgetworse.Thenallowtheangrypersontovent.Lookforthehurt.Angeralwaysfollowshurt.

10.Gettheangrypersoncommittedtoaposition,andthengatheralltheinformationyoucan.

11.RememberthePowerNegotiator’sCreed.Themostimportantthoughtyoucanhavewhenyouarenegotiatingisnot“WhatcanIgetthemtogiveme?”Itis“WhatcanIgivethemthatwouldnottakeawayfrommyposition,butmaybeofvaluetothem?”

SectionThree

NegotiatingPressurePoints

Louis (Satchmo)Armstrongused to tell this story about his early days as amusician: “One night this big, bad-ass hood crashes my dressing room inChicagoandinstructsmethatIwillopeninsuch-and-suchaclubinNewYorkthe next night. I tell him I got this Chicago engagement and don’t plan notraveling, and I turn my back on him to show I’m so cool. Then I hear thissound:SNAP!CLICK!Iturnaround,andhehaspulledthisvastrevolveronmeand cocked it. Jesus, it looks like a cannon and sounds like death! So I lookdownatthatsteelandsay,‘Well,maybeIdoopeninNewYorktomorrow.’”

AsAlCaponeoncesaid,“Youcangetmuchfurtherwithakindwordandagunthanyoucanwithakindwordalone.”

Pullingagunonsomeoneduringanegotiationisthecrudestpressurepointofthemall.Iimaginethatit’sremarkablyeffective,butthere’sneveraneedforyoutodoit.Inthissection,I’llteachyousomepressurepointsthatyoucanusethatarejustaseffectiveandfarmoreacceptable.Manyofthemyoucouldusewiththe brutality of pulling a gun on someone, but usually you’re better off beingmoresubtle.Ifyouhavethepower,youdon’thavetoflauntit.

Chapter37

TimePressure

VilfredoParetopresumablynever studied the timeelement in anegotiation,yet the Pareto principle reveals the incredible pressure that time can put on anegotiation.Paretowasaneconomistinthe19thcentury.BorninParis,hespentmost of his life in Italy, where he studied the balance of wealth as it wasdistributed among the populace. In his book,Cours d’Economie Politique, hepointedout that 80percent of thewealthwas concentrated in thehandsof20percentofthepeople.

The interesting thing about the 80/20 rule is that it surfaces repeatedly inapparently unrelated fields. Sales managers tell me that 80 percent of theirbusinessisdoneby20percentofthesalespeople.Eventually,itoccurstothemthat theyshould fire the80percentand justkeep the20percent.Theproblemwiththatisthatthe80/20thenreappliesitselftotheremainder,andyou’rebackwiththesameproblem,onlywithasmallersalesforce.Schoolteachers tellme20percentofthechildrencause80percentoftrouble.Inseminars,20percentofthestudentsask80percentofthequestions.

Theruleinnegotiatingisthat80percentoftheconcessionsoccurinthelast20 percent of time available. If demands are presented early in a negotiation,neithersidemaywant tomakeconcessions,andtheentire transactionmayfallapart.On the other hand,more problems surface in the last 20 percent of thetime available to negotiate, both sides aremore willing tomake concessions.Think of the last time that you bought a piece of real estate. It probably tookabout 10weeks from the time you signed the initial contract to the time youactually became the owner of the property.Now think of the concessions thatweremade.Isn’tittruethatduringthelasttwoweeks,whenthingscameuptoberenegotiated,bothsidesbecamemoreflexible?

Somepeopleareunethicalenoughtouse thisagainstyou.Theyholdoutonelementsofthenegotiationthatcouldhavebeenbroughtupearlierandresolvedsimply. Then when you’re getting ready to finalize the arrangements, these

problems come up because they know you’ll be more flexible under timepressure.

TieUpAlltheDetailsUpFront

Onethingthistellsyouisthatyoushouldalwaystieupallthedetailsupfront.Don’t leave anything to, “Ohwell,we canwork that out later.”Amatter thatappearstobeoflittleimportanceupfrontcanbecomeaverybigproblemundertimepressure.

ProblemsinBigSkyCountry

I was in Kalispell, Montana, to do a seminar for the Montanagraduates of the Realtors’ Institute. These are the highest-trainedresidential real estate people in the state.Wewere doing an all-dayseminaronPowerNegotiating,andduring thebreak,anagentcameuptomeandsaid,“Perhapsyoucanhelpme.Ihaveabigproblem.ItlooksasthoughI’mgoingtoloseabigpartofmycommissiononaverylargetransaction.”

Iaskedhertotellmemore,andshesaid,“Monthsago,amancameintomyofficewantingmetolisthis$600,000home.I’dneverlistedanything so large, and I guess I didn’t express much confidencebecause when he asked me how much commission I charge, heflinched, and I fell for it. I told him six percent. He said, ‘That’s$36,000!That’s a lotofmoney.’ I said, ‘Look, ifyouhave tocomedownmuchonthepriceoftheproperty,we’llworkwithyouonthecommission.’That’sallIsaid,andInevergaveitasecondthought.

“Asluckwouldhaveit,Iendedupnotonlygettingthelisting,butIfoundthebuyeraswell.Hedidn’thave tocomedownmuchon theprice,sonowIhavealmostthefull$36,000commissioncomingintomyoffice,and theproperty isdue toclosenextweek.Yesterday,hecameintomyofficeandsaid:‘I’vebeenthinkingabouttheamountof

workthatyouhadtodoonthatsale....’”Remember,thevalueofservicesalwaysappearstodiminishrapidlyafterthoseserviceshavebeen performed (see Chapter 8). ‘You remember you told me thatyou’dworkwithmeonthecommission?’

.. .well,I’vebeenthinkingabouttheamountofworkyouhadtodo, and I’ve decided that $5,000 would be a fair commission foryou.’”Hewasonlyoffering$5,000whenshewasdue$36,000.Shewas almost panic-stricken. This illustrates that you shouldn’t leaveanything to “We can work that out later” because a little detail upfront can become a big problem later when you’re under timepressure.

Thatstoryalsoillustrateshowwealwaysthinkwehavetheweakerhandinnegotiations—whicheversidewe’reon.Infact,therealestateagent in Montana was in a very strong position, wasn’t she? As Iexplained to her, she had a written contact for the six percent. Ifanything, she had verbally modified it with a vague comment thatwouldn’tholdup incourtanyway.Shehadall thepower,butdidn’tthinkshehadany.

However,whyexposeyourselftothatkindofproblem?Tieupallthedetailsupfront.Whentheothersidesaystoyou,“Wecanworkthatoutlater,it’snotgoing tobeabigproblem,”bellsshouldstart to ringand lightsshouldstart toflash.Don’tletpeopledothattoyou.

PeopleBecomeFlexibleUnderTimePressure

The next thing Power Negotiators have learned about time is that peoplebecome flexible under time pressure. When do your children ask you forsomething?Whenmydaughter,Julia,wasattendingtheUniversityofSouthern

California, she lived in a sororityhouseandwould sometimescomehome forthe weekends and need money for books. When would she ask me? Seveno’clock on aMondaymorning, just as shewas racing out the door she’d say,“Dad,I’msorry,Iforgot;Ineed$60forbooks.”

I’dsay,“Julia,don’tdothistome.Iteachthisstuff.Howcomeyou’vebeenhomeallweekend,andwedidn’thaveachancetotalkaboutitbefore?”

“Ohsorry,Dad,Ididn’tthinkaboutituntilIgotreadytogo,butI’mlatenow.I’vegot togeton thefreeway,or I’llbe late forclass. If Ican’tgetmybookstoday, Iwon’tbeable togetmyassignment inon time.Please,canIhave themoneynow,andwe’ll talknextweekend?”Not thatchildrenaremanipulative,butinstinctively,overallthoseyearsofdealingwithadults,theyunderstandthatundertimepressure,peoplebecomemoreflexible.

WastheShapeoftheTableThatImportant?

It’s interesting to look at international negotiations and how timepressurehasaffectedtheoutcome.RemembertheVietnampeacetalksthat were held in Paris? You’ll recall that in the spring of 1968,Lyndon Johnson had announced hewouldn’t run for reelection andwould devote his time to the peace talks. He was eager to reach apeace agreement beforeNovember,when his vice president,HubertHumphrey, would be running for election. He sent our negotiator,Averell Harriman, to Paris with clear instructions: Get somethingdone,fast,andrightnow.Texas-style.

Averell Harriman rented a suite at the Ritz Hotel in Paris on aweek-to-weekbasis.TheVietnamesenegotiator,XuanThuy,rentedavilla in thecountrysidefor twoandhalfyears.ThentheVietnameseproceededtospendweekafterweekafterweektalkingtousabouttheshapeofthetable.

Did they really care about the shape of the table?Of course not.Theyweredoingtwothings.Numberone,theywereprojecting,verysuccessfully,thattheywerenotunderanytimepressure.They’dbeeninthewarfor30yearsorso,andanotheryearortwohereandtherewouldn’tbotherthemonewayortheother.Second,theyweretrying

to push us up against ourNovember deadline,which they did verysuccessfully. On November 1st, only five days before the election,Johnson stopped the bombing of Vietnam. Under that kind of timepressure,itwasawonderthathedidn’tgiveeverythingaway.

Whenyou’renegotiatingwithpeople,neverrevealthatyouhaveadeadline.Let’s say, for example, that you have flown toDallas to resolve a negotiationwithahoteldeveloperandyouhaveareturnflightat6p.m.Sure,you’reeagertocatch that flight—butdon’t let theotherpeopleknow. If theydoknowyouhavea6p.m. flight, be sure to let themknowyoualsohavea9p.m.backupflightor,forthatmatter, thatyoucanstayforaslongasit takestoworkoutamutuallysatisfactoryarrangement.

If they know you’re under time pressure, they could delay the bulk of thenegotiationsuntilthelastpossibleminute.Thenthere’sarealdangerthatyou’llgive things away under that kind of time pressure. In my Power Negotiatingseminars,Isetupexercisessothestudentscanpracticenegotiating.Theymayhave 15 minutes to complete a negotiation, and I impress on them theimportance of reaching agreement within that time limit. As I slowly walkaroundtheroomeavesdroppingontheprogressofthenegotiations,Icantellthatduring thefirst12minutes, theyhave troublemakinganyprogress.Bothsidesarestonewallingtheissuesandthereisverylittlegiveandtake.At12minutes,with80percentof the timeusedup, I take themicrophoneand tell them theyhaveonly threeminutes left.Then I continueperiodic announcements tokeepthetimepressureonthemandendwithacountdownofthesecondsfromfivetozero. It’sveryclear tosee that theymake80percentof theconcessions in thelast20percentofthetimeavailabletonegotiate.

What to do when both sides are approaching the same time deadline? Aninteresting question is raised when both sides are approaching the same timedeadline.Thiswouldbe true ifyou leaseyourofficespace, forexample.Let’ssay that your five-year lease is up in six months, and you must negotiate arenewalwithyourlandlord.Youmightthinktoyourself,“I’llusetimepressureonthelandlordtoget thebestdeal.I’llwaituntil thelastmomenttonegotiate

withhim.Thatwillputhimunderagreatdealoftimepressure.He’llknowthatifImoveout,theplacewillbevacantforseveralmonthsuntilhecanfindanewtenant.” That seems like a great strategy until you realize that there’s nodifference between that and the landlord refusing to negotiate until the lastminutetoputtimepressureonyou.

Thereyouhave a situationwhereboth sides are approaching the same timedeadline.Whichsideshouldusetimepressureandwhichsideshouldavoidit?Theansweristhatthesidethathasthemostpowercouldusetimepressure,butthe side with the least power should avoid time pressure and negotiate wellaheadofthedeadline.Fairenough,butwhohasthemostpower?Thesidewiththemostoptionshasthemostpower.Ifyoucan’treachanegotiatedrenewalofthelease,whohasthebestalternativesavailabletothem?

Todeterminethis,youmighttakeasheetofpaperanddrawalinedownthemiddle.Onthe leftside, listyouroptions ifyouareunable torenewthelease.Whatotherlocationsareavailabletoyou?Wouldtheycostmoreorless?Howmuchwoulditcostyoutomovethetelephonesandprintnewstationery?Wouldyourcustomersbeabletofindyouifyoumove?Ontheright-handsideofthepage, list the landlord’s options. How specialized is this building? How hardwoulditbeforhimtofindanewtenant?Wouldtheypaymoreorwouldhehaveto rent it for less? How much would he have to spend on improvements orremodeling to satisfy a new tenant? You must compensate for the fact that,whicheversideofthenegotiatingtableyou’reon,youalwaysthinkyouhavetheweakerhand.Afterall,youknowallabout thepressure that’sonyou,butyoudon’tknowaboutthepressurethat’sonthelandlord.Onethingthatmakesyouamorepowerfulnegotiator isunderstanding thatyoualways thinkyouhave theweaker hand and learning to compensate for that. When you list each side’salternatives in this way, you’ll probably end up with the conclusion that thelandlordhasmorealternativesthanyoudo.

Compensatefor that,but ifyoudosoandclearlythelandlordstillhasmorealternativesthanyoudo,he’stheonewhohasthepower.Youshouldavoidtimepressureandnegotiatetheleaserenewalwithplentyoftimetospare.However,ifclearlyyouhavemorealternativesavailabletoyouthanthelandlorddoes,puthimundertimepressurebynegotiatingatthelastmoment.

PuttingTimePressureontheWrongSide

In September 1994, former President Jimmy Carter, along withSenator SamNunn and formerChief of StaffColinPowell, flew toHaititoseeiftheycouldgetGeneralCedrastogiveuppowerwithoutourhavingtoinvadethecountrytoforcehimout.At theendoftheseconddayofnegotiations,PresidentClintoncalledPresidentCartertotellhimthathehadalreadystartedtheinvasion,andCarterhad30minutes to leave the country. Isn’t that an ultimate example ofapplying timepressure to anegotiation?Theonlyproblemwas thatClintonwasputtingtimepressureonthewrongside.Wehadall thepower in that negotiation becausewe had all the options. It shouldhavebeenCarterputtingtimepressureonCedras,notClintonputtingtimepressureonCarter.

AsNegotiationsDragon,PeopleBecomeMoreFlexible

Thelongeryoucankeeptheothersideinvolvedinthenegotiation,themorelikely the other side is tomove around to your point of view. The next timeyou’reinasituationwhereyou’rebeginningtothinkthatyou’llneverbudgetheother side, think of the tugboats in the Hudson River off Manhattan. A tinytugboatcanmovethathugeoceanlineraroundifitdoesitalittlebitatatime.However, if thetugboatcaptainweretobackoff,revupitsengines,andtrytoforce the ocean liner around, itwouldn’t do any good.Somepeople negotiatelikethat.Theyreachanimpasseinthenegotiationsthatfrustratesthem,sotheygetimpatientandtrytoforcetheothersidetochangetheirmind.Thinkofthattugboatinstead.Alittlebitatatime,itcanmovethelineraround.Ifyouhaveenoughpatience,youcanchangeanybody’smindalittlebitatatime.

Unfortunately, thisworksbothways.The longeryouspendinanegotiation,the more likely you are to make concessions. You may have flown to SanFrancisco to negotiate a large business deal. At 8 a.m., you’re in their officefeelingbright,fresh,anddeterminedtohanginandaccomplishallofyourgoals.Unfortunately,itdoesn’tgoaswellasyouhoped.Themorningdragsonwithoutany progress, so you break for lunch. Then the afternoon passes, and you’vereached agreement on only a few minor points. You call the airline andrescheduleforthemidnightred-eyeflight.Youbreakforsupperandcomebackdeterminedtogetsomethingdone.Lookout.Unlessyou’reverycareful,by10p.m.,you’llstartmakingconcessionsthatyouneverintendedtomakewhenyoustartedthatmorning.

Why does it work that way? Because your subconscious mind is nowscreamingatyou,“Youcan’twalkawayfromthisemptyhandedafterthetimeandeffortyou’ve spenton it.Youhave tobeable toput something together.”Anytimeyoupassthepointwhereyou’repreparedtowalkaway,youhavesetyourselfuptoloseinthenegotiations(moreaboutthisinChapter39).APowerNegotiator knows that you should disregard any timeormoney that youhaveinvestedinaprojectuptoanygivenpoint.Timeandmoneyaregone,whetheryoustrikeadealornot.Alwayslookatthetermsofanegotiationastheyexistatthatmomentandthink,“Disregardingallthetimeandmoneywe’vepouredintothisdealuptonow,shouldwegoahead?”

Never be reluctant to pull the plug if it doesn’t make sense anymore. It’smuchcheapertowriteoffyourinvestmentthanit istoplowaheadwithadealthatisn’trightforyoujustbecauseyouhavesomuchinvestedinit.That’soneof the things that makes Donald Trump such a powerful negotiator: He’s notafraid to pull the plug on a deal that no longermakes sense. For example, hespent $100million to acquire the site forTelevisionCity on theWestSide ofManhattan.He spentmillionsmore designing plans for the project thatwouldincludea150-storytower,theworld’stallest,andamagnificenttelevisionstudioto which he hoped to attract NBC. However, when he couldn’t negotiate theright tax concessions from the city, he shelved the entire project.Youhave tolookatanegotiationinthesameway.Forgetwhatyou’vealreadyinvested,andexaminewhetheritstillslooksgoodthewaythingsstandnow.

AcceptanceTime

Another way of using time to your advantage is what negotiators call“acceptance time.” Your initial proposal may be abhorrent to the other side.Absolutelynowaywilltheyevenconsiderit.Butifyoucanbepatientandleavethe proposal on the table long enough, the other side may eventually find itacceptable.Thetimeittakesapersontoacceptthisunacceptablesuggestionasthebesttheycandoisacceptancetime.Herearesomeexamples:

Death.Thismaytakeafewdecades,butwealllearntoacceptiteventually.Hijacking.Thehijackerwants$10millionandatickettofreedom.Hesettlesforthechancetosurrenderwithdignity.Sellingrealestate.Wethoughtwe’dgetamilliondollarsforthehomewe’vecometolove.Afterputtingitonthemarketforsixmonths,wereluctantlyacceptthatbuyersarenotgoingtoloveitasmuchaswedo.Corporatepromotions.Wehopedthatwe’dgetthevicepresidencyinNewYork.Afterananguishedweekend,weacceptthatthedistrictmanager’sjobinElPasomayhavetocomefirst.Collegeacceptance.WehadourheartsetonsendingoursontoStanford.Wereluctantlyacceptthat,withhisgrades,heisluckytogetintocommunitycollege.

Beawareof theacceptance timephenomenaandbepatient. Itmay take theother side awhile to consider your proposal seriously. Time is comparable tomoney.Theyarebothinvested,spent,saved,andwasted.Doinvestthetimetogo through every step of the negotiation, do use time pressure to gain theadvantage, and don’t yield to the temptation to rush to a conclusion. PowerNegotiatorsknowthattimeismoney.

KeyPointstoRemember

1.Eightypercentoftheconcessionsoccurinthelast20percentoftimeavailable.

2.Tieupallthedetailsupfront.Don’tleaveanythingto“Wecanworkthatoutlater.”

3.Peoplebecomeflexibleundertimepressure.4.Neverrevealthatyouhaveadeadline.5.Trytoestablishthattheothersidehasadeadline.6.Inasituationwherebothsidesareapproachingthesametimedeadline,thesidethathasthemostpowercouldusetimepressure,butthesidewiththeleastpowershouldavoidtimepressure,andnegotiatewellaheadofthedeadline.

7.Powerisdirectlyrelatedtotheoptionsthateachsidehasintheeventthattheycannotreachagreement.

8.Acceptancetimemeansthatyoushouldgivetheothersidetimetoacceptthattheywillnotgetasmuchastheyexpected.

Chapter38

Informationpower

Why do countries send spies into other countries? Why do professionalfootballteamsstudythereplaysoftheiropponents’games?Becauseknowledgeispower,andthemoreknowledgeonesideisabletoaccumulateabouttheother,thebetterchancethatsidehasforvictory.Iftwocountriesgotowar,thecountrythat has the most intelligence about the other has the advantage. That wascertainly true in thePersianGulfWar:TheCIAspieshadphotographedeverybuilding in Baghdad, and we were able to completely take out theircommunicationsystemsinthefirstfewbombingruns.

KnowWhattheOtherSideWillPropose

Governments spendbillionsofdollars findingoutabout theothersidebefore they’llgo intoanarms-control talk. Itwas interesting toseeHenryKissingerbeinginterviewedbeforeasummitmeeting.“Mr.Kissinger,” the interviewer said, “do you think it’s possible ournegotiatorsknowwhattheothersidewillproposeatthetalks,beforethey actually propose it?” He said, “Oh, absolutely—no questionabout it. It would be absolutely disastrous for us to go into anegotiationnotknowinginadvancewhattheothersidewasgoingtopropose.”

Canyouimaginethecostofgettingthatkindofinformation?TheCIA is very secretive about what it spends, but at an intelligencegathering conference in San Antonio, Mary Graham, the deputydirectorofintelligenceanda27-yearveteranattheCIA,letslipthatitspends$44billionayear.Ifourgovernmentthinksit’sthatimportant,shouldn’tweatleasttakesometimegatheringinformationbeforewegointoanegotiation?

WhenBillRichardson,ourformerUnitedNationsambassador,wasaskedbyFortunemagazinewhat it took to be a goodnegotiator, the first thinghe saidwas,“Youhavetobeagoodlistener.Youhavetorespecttheotherside’spointofview.Youhavetoknowwhatmakesyouradversarytick.”Whenaskedhowhe prepared for a negotiation, he again immediately went to informationgathering:“ItalktopeoplewhoknowtheguyI’llbenegotiatingwith.Italktoscholars,StateDepartmentexperts,andjournalists.BeforemeetingwithSaddamHussein,IreliedalotonIraq’sambassadortotheUnitedNations.HetoldmetobeveryhonestwithSaddam—not to pull anypunches.WithCastro, I learnedthathewasalwayshungryforinformationaboutAmerica.Sureenough,hewasfascinated by Steve Forbes, and fascinated with the congressional budgetimpasse.HefancieshimselfanexpertonU.S.politics.WithCedrasofHaiti, Ilearnedthatheplayedgoodguy,badguyfrequently.”

If two companies are planning tomerge, the company that knows themostwill usually end up with the better deal. If two salespeople are vying for anaccount, the salesperson who knows more about the company and itsrepresentativesstandsabetterchanceofbeingselectedfortheaccount.

Despite the obviousness of the important role that information plays in anegotiation,fewpeoplespendmuchtimeanalyzingtheothersidebeforestartinga negotiation. Even people who wouldn’t dream of skiing or scuba divingwithout taking lessons will jump into a negotiation that could cost themthousandsofdollarswithoutspendingadequate timegathering the informationtheyshouldhave.

Rule1:Don’tBeAfraidtoAdmitThatYouDon’tKnow

If you’re ahomeowner, thinkback towhenyouboughtyourpresenthome.Howmuchdidyouknowabout thesellersbeforeyoumadeanoffer?Didyouknowwhytheyweresellingandhowlongtheyhadbeentryingtosell?Didyoufindouthow theyhadarrivedat their askingprice?Howmuchdidyouknowabout their real needs and their real intentions in the negotiation? Very often

eventhelistingagentdoesn’tknow,doeshe?He’sbeenindirectcontactwiththesellerswhentheylistedtheproperty.However,whenaskedabouttheobjectivesof the sellers,hewillveryoften reply, “Well, Idon’tknow. Iknow theywantcash out, so they’re not willing to carry back paper, but I don’t know whatthey’regoingtodowiththecash.Ididn’tthinkitwasmyplacetoask.”

Inmyall-dayand two-dayseminars Ihave thestudentsbreak into teamsofnegotiators, with some assigned as buyers and others as sellers. I give themenough information to complete a successful negotiation. In fact, I purposelygiveeachsidediscoverablestrengthsandweaknesses.Itelleachsidethatiftheothersideasksthemaquestiontowhichtheyhavebeengivenananswer,theymaynotlie.Ifonesideunearthedonlyhalfofthesecarefullyplantedtidbitsofinformation,thatsidewouldbeinapowerfulpositiontocompleteasuccessfulnegotiation.

Unfortunately,nomatterhowmanytimesIdrillstudentsontheimportanceofgathering information—even to the point of assigning 10 minutes of thenegotiationforonlythat—theyarestillreluctanttodoathoroughjob.

Whyarepeople reluctant togather information?Because to find thingsout,you have to admit that you don’t know, and most of us are extraordinarilyreluctanttoadmitthatwedon’tknow.Letmegiveyouaquickexercisetoprovethispoint.I’mgoingtoaskyousixquestions,allofwhichyoucananswerwithanumber, but instead of having you try to guess the right number, I’llmake iteasierforyoubyaskingyoutoanswerwitharange.

If I asked you howmany states there are, instead of saying 50, you’d say,“Between49and51.”IfIaskedyouforthedistancefromLosAngelestoNewYork, youmight be less sure soyou’d say, “Between2,000 and4,000miles.”You could say fromone to amillion andbe100percent sure of course, but Iwantyoutobe90percentsurethattherightanswerfallswithintherangeyougive.Doyouhavetheidea?

Herearethequestions:

Q:HowmanyprovincesarethereinCanada?

Between______and______.

Q:HowmanywivesdidBrighamYounghave?

Between______and______.

Q:HowmuchdidwepaySpainforFloridain1819?

Between______and______.

Q:HowmanyPerryMasonnovelsdidErleStanleyGardnerwrite?

Between______and______.

Q:HowmanyeggsdochickenslayeachyearintheUnitedStates?

Between______and______.

Q:WhatisthelengthofNoah’sArkinfeet,accordingtoGenesis?

Between______and______.

Answers

A:Thereare10provincesinCanada(andtwoterritories).

A:BrighamYoung,theMormonleader,had27wives.

A:Wepaid$5millionforFlorida.

A:ErleStanleyGardnerwrote75PerryMasonnovels.

A:About67billioneggsarelaidintheUnitedStateseachyear.

A:Noah’sArkwas450feetlong.AccordingtoGenesis6:15,thearkwas300x50x30cubits,andacubitequals18inches.

Howdidyoudo?Didyougetthemallright?Probablynot,butthinkhoweasy

itwould have been to get them all right.All youwould have had to do is toadmit that you didn’t know, and make the range of your answer huge. Youprobablydidn’tdothatbecausejustlikeeveryoneelse,youdon’tliketoadmitthatyoudon’tknow.Thefirstruleforgatheringinformationis:Don’tbeover-confident.Admitthatyoudon’tknowandadmitthatanythingyoudoknowmaybewrong.

Rule2:Don’tBeAfraidtoAsktheQuestion

Iusedtobeafraidtoaskquestionsforfearthatthequestionwouldupsettheotherperson. Iwasoneof thosepeoplewhosay, “Wouldyoumind if I askedyou?”or “Would it embarrassyou to tellme?” I don’t do that anymore. I askthem,“Howmuchmoneydidyoumakelastyear?”Iftheydon’twanttotellyou,they won’t. Even if they don’t answer the question, you’ll still be gatheringinformation.

Goodreportersaskallkindsofquestionsthattheyknowtheotherpersonwillnotanswer,buttheyaskthemanyway.Itmightputpressureontheotherpersonorannoyhimsothatheblurtsoutsomethinghedidn’tintendto.Justjudgingtheotherperson’sreactiontothequestionmighttellyouagreatdeal.

YouCanSolveaToughProblemJustbyAsking

Sometimes people are involved in a conflict negotiation, andthey’reafraidtoasktheothersidewhattheywant.Manyyearsago,IwastheassistantmanageroftheMontgomeryWardstoreinAuburn,California.Ourcompany’spolicystoppedme,oranyotheremployee,from saying no to a customer. If we didn’t feel that a customer’scomplaint was justified, they would transfer the complaint up thecustomer-service ladder. This meant that if a customer keptcomplainingwithoutgettingsatisfactionforhisorhercomplaint,theproblemwouldeventuallyworkitswaytothechairmanoftheboardattheheadofficeinChicago.

AnelderlycouplehadboughtaFranklinstovefromthecompany’scatalog. They had installed it themselves and, according to theircomplaintletter,thestovehadmalfunctioned,blackeningthewallsoftheirhome,andburningaholeintheircarpet.

Everyone who tried to deal with this complaint assumed that itwould be very expensive to satisfy this couple, so everyone wasreluctant to admit blame and offer a settlement. The lettermade itswayfromdesktodeskuntilitcametorestonthedeskoftheregionalvicepresident.The last thinghewanted todowas let thecomplaintreachtheheadofficeinChicago,sohewrotetome,requestingthatIvisitthecoupleandtakesomepicturessothattheycouldestimatethecostofasettlement.

I drove out to their small cottage in the countryside andmet thepeoplewhowerecomplaining.Theywereasweet,trustingoldcouplewho had bought a stove out of the catalog and were genuinelydisappointedattheresults.Thehusbandcalmlyshowedmehowsootfrom the chimney had blackened the outside of his home. Then he

tookmeinsidetoshowmetheholeintheircarpetcausedbyhotcoalsfalling from the stove.He quickly convincedme that the stove hadmalfunctioned,andtheproblemwasn’tinthewaytheyhadinstalledit.

Fearing that we would be talking about a settlement of severalthousanddollars,IstartingwithaquestionthatIassumedmanyofourpeople had asked them before: “Exactly what do you think ourcompanyshoulddoforyou?Howcanwecompensateyouforthis?”

Tomy surprise, the husband answered, “You know,we’re retiredandhavealotoftimeonourhands.Thewallisamess,butwecancertainly clean it up. It’s no problem at all. However, we areconcernedabouttheholeinourcarpet.It’squitelarge,butwereallydon’texpectyoutoreplacetheentirecarpet. Ifwehadascatterrugthatwecouldputoverthehole,thatwouldtakecareofit.”

He was asking for so little that it stunnedme. Then I recoveredenoughtosay,“Doyoumeantotellmethatifwegaveyouascatterrug,thatwouldsolvetheproblem?”

“Oh,yes,”heanswered.“We’dbeveryhappywiththat.”

We all got into my car and drove straight to the store, where Ihelpedthemchooseabeautifulrugtoputovertheholeintheircarpet.I got them to sign a complete release form confirming that thesettlementsatisfiedthemandsentitofftotheregionalvicepresident.Severaldayslater,Igotaletterfromthevicepresidentcongratulatingmeon“whatwasobviouslyamasterfuljobofnegotiating.”Thatwasnonsense,ofcourse;Ihadsolvedtheproblemmerelybyaskingwhatnobodyhadthecouragetoaskbefore:“Whatexactlyisityouwant?”

This lesson servedmewell in the coming years as Iworkedmyway up the corporate ladder. I was able to easily solve customercomplaint problems simply because I bothered to get adequateinformation,startingwith“Whatdoyouwant?”

WhenIlaterbecamepresidentofalargerealestatecompany,Istartedusingthe lesson to solve theproblemofbuyerswhowerenothappywith thehomethey’d bought. The sellers of the home had usually moved out of the area,leavingthecompany—andme—tosolvetheproblem.

Iwouldsitmyvisitorsdowninmyoffice,and,withalargepieceofpaperinfrontofme,ask,“Please,Iwouldliketoknowexactlywhatyourcomplaintsare,andexactlywhatyouthinkweshoulddoforyouineachinstance.”

“Well,”theywouldsay,“thelightswitchinthelivingroomdoesn’twork.”Iwouldwriteonthepaper“Lightswitchinlivingroom.”Iwouldcontinuetoaskthemiftherewasanythingelseuntiltheyhadairedalloftheirgrievances,andcarefullywritethemdownonmypaper.

Whentheyranoutofcomplaints,Iwoulddrawalineacrossthesheetunderthelastitemandshowthepapertothem.ThenI’dnegotiatewhatwewouldorwouldn’tdoforthem.Mostpeoplearewillingtocompromise,andifIofferedtosendoutaplumbertofixtheleakingfaucet,theywouldbewillingtoreplacethelight switch in the living room.With thismethod,what theywantedwasclearfromthebeginning;theyhadlaidalloftheircardsout,faceup,andIwasinthecontrollingposition,becauseIcoulddecidewhatmyresponsewouldbe.

Doing it the otherway is foolish, but it’s thewaymost peoplewho handlecomplaintsdoit.Theyaskwhattheproblemisandthenhandleititembyitem.Thehomeownerscomplainthatthelightswitchdoesn’tworkandbecausethat’snot an expensive item, the person handling the complaint says, “No problem.We’ll takecareof it.”Thehomeownerswouldimmediately thinkthat itwouldbe easy to get more concessions and keep thinking of other things that werewrong. In negotiating terms, that’s called escalating the demands. By askingthemtocommitfirsttoalistofdemands,youputparametersonthedemands.

Ifyouwant to learnaboutanotherperson,nothingwillworkbetter than thedirectquestion.Inmyownexperience—nowthatI’mnolongerafraidtoask—I’vemet only a few peoplewhowere seriously averse to answering even themostpersonalquestions.Forexample,howmanypeoplegetoffendedwhenyouaskthem“Whywereyouinhospital?”Notverymany.

It’s a strange fact of human nature that we’re very willing to talk aboutourselves,yetwe’re reticentwhen it comes toaskingothersabout themselves.We fear thenasty look and the rebuff to a personal question.We refrain fromaskingbecauseweexpecttheresponse“That’snoneofyourbusiness.”Yethow

oftendowerespondthatwaytoothers?

AspresidentofarealestatecompanyinCalifornia,Iwantedtoencourageouragentstoknockondoorssearchingforleads.Realestatepeoplecallitfarming.Ifoundouragentsveryreluctanttodoit.IeventuallyformulatedaplanwhereIwould take each one of our 28 office managers out separately knocking ondoors,andwewouldplaytheinformationgame.Iwouldsay,“Okay.I’mgoingtoknockonthefirstdoor,andI’mgoingtoseehowmuchinformationIcangetfrom these people. You knock on the second door—see if you can get moreinformationthanIdid.”

Itwasamazingtoseetheamountofinformationthepeoplewouldvolunteerto a stranger on the doorstep. I could get them to tellmewhere theyworked,where theirwivesworked, sometimeshowmuchmoney theymade,how longthey’d been in the property, howmuch they paid for it, howmuch their loanpaymentswere, and so on. People are often eager to volunteer information, ifwe’llonlyask.

Askingformore information inyourdealingswithotherswillnotonlyhelpyou tobe abetter negotiator; itwill alsobe amajor factor inhelpingyougetwhatyouwantoutoflife.Askingquestionsisagoodhabitforyoutoadopt.Justask. Sounds easy, doesn’t it? Yet, most of us are squeamish about askingsomeoneaquestion.

When you get over your inhibitions about asking people, the number ofpeople willing to help you will surprise you. When I wanted to become aprofessionalspeaker,IcalledupDannyCox,whoisaspeakerIgreatlyadmire,and asked him if I could buy him lunch.Over lunch, hewillingly gaveme a$5,000seminaronhowtobesuccessfulasaspeaker.WheneverIseehimtoday,Iremindhimofhoweasyitwouldhavebeenforhimtotalkmeoutoftheidea.Instead,though,hewasveryencouraging.Itstillastoundsmehowpeoplewhohavespentalifetimeaccumulatingknowledgeinaparticularareaaremorethanwillingtosharethatinformationwithmewithoutanythoughtofcompensation.

Itseemsevenmoreincrediblethattheseexpertsareveryrarelyaskedtosharetheir expertise.Most people find experts intimidating, so the deep knowledgethattheyhavetoofferisneverfullyused.Whatasenselesswasteofavaluableresource—allbecauseofanirrationalfear.

Rule3:AskOpen-EndedQuestions

PowerNegotiatorsunderstandtheimportanceofaskingandoftakingthetimetodoitproperly.What’sthebestwaytoask?RudyardKiplingtalkedabouthissixhonestservingmen.Hesaid:

Ikeepsixhonestserving-men.(TheytaughtmeallIknew);TheirnamesareWhatandWhyandWhenandHowandWhereandWho.

OfKipling’ssixhonestservingmen,IlikeWhytheleast.Whycaneasilybeseenasaccusatory.“Whydidyoudothat?”impliescriticism.“Whatdidyoudonext?”doesn’timplyanycriticism.Ifyoureallyneedtoknowwhy,softenitbyrephrasingthequestionusingwhatinstead:“Youprobablyhadagoodreasonfordoingthat.Whatwasit?”LearntouseKipling’ssixhonestservingmentofindoutwhatyouneedtoknow.

You’ll get even more information if you learn how to ask open-endedquestions.Closed-endedquestionscanbeansweredwithayes,no,oraspecificanswer.Forexample,“Howoldareyou?”isaclosed-endquestion.You’llgetanumberandthat’sit.“Howdoyoufeelaboutbeingyourage?”isanopen-endedquestion. It invitesmore than justaspecificanswerresponse.“Whenmust thework be finished by?” is a closed-ended question. “Tell me about the timelimitationsonthejob”isanopen-endedrequestforinformation.

Hereare fouropen-endedGambitsyoucanuse toget information.First, tryrepeatingthequestion.Theysay,“Youchargetoomuch.”However, theydon’texplain why they feel that way, and you want to know why. You repeat thequestion:“Youfeelwechargetoomuch?”Veryoften,they’llcomebackwithacomplete explanationofwhy they said that.Or if they can’t substantiatewhattheysaidbecausetheywerejustthrowingitouttoseewhatyourresponsewouldbe,maybethey’llbackdown.

The secondGambit is to ask for feelings.Notwhat happened, but howdidthey feel about what happened? You’re a contractor, and your foreman says,“DidtheyevercussmeoutwhenIshoweduponthe job.Theairwas turningblue.” Instead of saying, “What caused that?” try saying, “How did you feelaboutthat?”Maybetheresponseyougetwillbe,“Iprobablydeservedit.Iwas

anhourlateandtheydidhavethreetruckloadsofconcretesittingthere,waitingforme.”

The third Gambit is to ask for reactions. The banker says, “The loancommitteeusually requires apersonal guarantee from small businessowners.”Insteadof assuming it’s theonlyway toget the loan, try saying, “Andwhat’syourreactiontothat?”Shemaycomebackwith,“Idon’tthinkit’snecessary,aslongasyou’llguaranteetomaintainadequatenetworthinyourcorporation.LetmeseewhatIcandoforyouwiththem.”

ThefourthGambitistoaskforrestatement.Theysay,“Yourpriceiswaytoohigh.”You respond, “I don’t understandwhy you say that.” Chances are thatinstead of repeating the same words, they’ll come back with a more detailedexplanationoftheproblem.

Let’srecapthefouropen-endedGambitsforgatheringinformation.

1.Repeatthequestion.“Youdon’tthinkwecanmeetthespecifications?”2.Askforfeelings.“Andhowdoyoufeelaboutthatpolicy?”3.Askforreactions.“Whatwasyourresponsetothat?”4.Askforrestatement.“Youdon’tthinkwe’llgetitdoneontime?”

Rule4:WhereYouAsktheQuestionMakesaBigDifference

PowerNegotiatorsalsoknow that the locationwhereyoudo theaskingcanmakeabigdifference.Ifyoumeetwithpeopleat theircorporateheadquarters,surrounded by their trappings of power and authority, and their formality ofdoingbusiness,it’stheleastlikelyplaceforyoutogetinformation.

People in theirworkenvironmentarealwayssurroundedby invisiblechainsofprotocol—whattheyfeeltheyshouldbetalkingaboutandwhattheyfeeltheyshouldn’t.Thatappliestoanexecutiveinheroffice, itappliestoasalespersononasalescall,anditappliestoaplumberfixingapipeinyourbasement.Whenpeople are in their work environments, they’re cautious about sharinginformation. Get them away from their work environments, and informationflowsmuchmorefreely.Anditdoesn’ttakemuch.Sometimesallthatittakesistogetthatvicepresidentdownthehalltohiscompanylunchroomforacupof

coffee.Often, that’sall it takes to relax the tensionsof thenegotiationandgetinformationflowing.Andifyoumeetforlunchatyourcountryclub,surroundedbyyourtrappingsofpowerandauthority,wherehe’spsychologicallyobligatedtoyoubecauseyou’rebuyingthelunch,thenthat’sevenbetter.

Rule5:AskOtherPeople—NotWithWhomYou’llNegotiate

Ifyougointoanegotiationknowingonlywhat theothersidehaschosentotellyou,youareveryvulnerable.Otherswilltellyouthingsthattheothersidewon’t,andtheywillbeabletoverifywhattheothersidehastoldyou.

Start by asking peoplewho’ve done businesswith the other side already. Ithink it will amaze you—even if you thought of them as competition—howmuchthey’rewillingtosharewithyou.Bepreparedtohorsetradeinformation.Don’trevealanythingthatyoudon’twantthemtoknow,buttheeasiestwaytogetpeopletoopenupistoofferinformationinreturn.

Peoplewhohavedonebusinesswiththeothersidecanbeespeciallyhelpfulinrevealingthecharacterofthepeoplewithwhomyou’vebeennegotiating.Canyou trust them? Do they bluff a great deal in negotiations, or are theystraightforwardintheirdealings?Willtheystandbehindtheirverbalagreements,ordoyouneedanattorneytoreadthefineprintinthecontracts?

Next, ask people further down the corporate ladder than the person withwhomyouplantodeal.Let’ssayyou’regoingtobenegotiatingwithsomeoneatthemainofficeofanationwideretailchain.Youmightcalluponeofthebranchofficesandgetanappointmenttostopbyandseethelocalmanager.

Dosomepreliminarynegotiatingwiththatperson.Hewilltellyoualot(eventhoughhe can’t negotiate thedeal) about how the companymakes a decision,whyonesupplierisacceptedoveranother,thespecificationfactorsconsidered,theprofitmarginsexpected,thewaythecompanynormallypays,andsoon.Besurethatyou’re“readingbetweenthelines”inthatkindofconversation.

Without you knowing it, the negotiations may have already begun. Forexample,thebranchmanagermaytellyou,“Theyneverworkwithlessthana40percentmarkup,”whenthatmaynotbethecaseatall.Andnevertellthebranch

manager anything youwouldn’t say to the people at his head office.Take theprecautionofassumingthatanythingyousaywillgetbacktothem.

Next,takeadvantageofpeer-groupsharing.Thisreferstothefactthatpeoplehaveanaturaltendencytoshareinformationwiththeirpeers.Atacocktailparty,you’ll find attorneys talking about their cases to other attorneys, when theywouldn’tconsider itethical toshare that informationwithanyoneoutside theirindustry.Doctorswill talkabout theirpatients tootherdoctors,butnotoutsidetheirprofession.

PowerNegotiatorsknowhowtousethisphenomenonbecauseitappliestoalloccupations, not just in the professions. Engineers, controllers, foremen, andtruckdriversallhaveallegiancestotheiroccupations,aswellastheiremployers.Put them together with each other and information that you couldn’t get anyotherwaywillflow.

Ifyou’re thinkingofbuyingausedpieceofequipment,haveyourdriverorequipment supervisor meet with his counterpart at the seller’s company. Ifyou’re thinking of buying another company, have your controller take theirbookkeeperouttolunch.Youcantakeanengineerfromyourcompanywithyoutovisitanothercompanyandletyourengineermixwiththeirengineers.You’llfind out that, unlike top management—the level at which you may benegotiating—engineers have a common bond that spreads throughout theirprofession, rather than just a vertical loyalty to the company for which theycurrentlywork.Allkindsofinformationwillpassbetweenthesetwo.

Naturally, you have to watch out that your person doesn’t give awayinformationthatcouldbedamagingtoyou,sobesureyoupicktherightperson.Cautionhercarefullyaboutwhatyou’rewilling to tell theothersideandwhatyou’re not willing to tell—the difference between the open agenda and yourhiddenagenda.Thenlethergotoit,challengingher toseehowmuchshecanfindout.Peer-groupinformationgatheringisveryeffective.

Rule6:AskQuestionsforReasons,NotGatheringInformation

Thoughtheprimaryreasonforaskingquestionsis togatherinformation,the

followingshowstherearemanyotherpurposesforaskingquestions:

Tocriticizetheotherside.Haveyouresolvedthedeliveryproblemsyouwerehaving?Howdidthatconsumerlawsuitworkout?WhydidyoucloseyourAtlantaofficeafteronlysixmonthsofoperation?WhydidUniversalpulltheirbusinessfromyou?IstheFTCinvestigationgoingforward?Youmayalreadyknowtheanswerstothesequestionsortheanswermaybeunimportanttoyou.Tomaketheothersidethink.AreyousurethatexpandingintoPuertoRicoistherightthingtodo?Howcomfortableareyouwithyournewadvertisingagency?Howwouldyourpeoplereacttoyourdoingbusinesswithus?Doesn’tgivingallofyourbusinesstothatvendormakeyounervous?Toeducatethem.Wereyouattheassociationmeetingwherewegotthepackagingawardoftheyear?DidyouseethereviewofourproductinNewsweek?WereyouawarethatwehaveanewplantinBangkok?WereyouawarethatourvicepresidentusedtobepresidentofUniversal?Todeclareyourposition.You’reawarethatexpertsregardourdeliverysystemasthebestintheindustry?Whywouldwebewillingtodothat?Doyouknowanybodyelsewhobelievesthat?Thenwhydo95percentofourcustomerscontinuetoincreasethesizeoftheirorders?Togetacommitment.Whichmodelwouldworkbestforyou?Howmanyshouldweshipyou?Willyouwantthedeluxepackagingorthemail-orderpackaging?Howquicklywillyouwantdelivery?Topullthetwosidesclosertogether.Thisisatechniqueusedfrequentlybymediatorsandarbitrators.Theysay:Canwebothagreeonthat?WhatwouldhappenifIcouldgetthemtoagreetoa5-percentincrease?Butwhatwouldyoudoiftheydecidetopicketyourstores?Youdon’treallyexpectthemtogoalongwiththat,doyou?

I think of the information-gathering process as similar to the game ofBattleship that I used toplaywhen Iwas ayoungster.Youcanbuy electronicversionsof it in toystores today,butwhen Iwasgrowingup inEnglandafterWorldWarII,notoyswerebeingmanufactured.Wehadtoentertainourselveswith littlegames thatwecouldcreatewithouthaving tobuyanything,and thegameofBattleshipwasgreatfun.

MycousinColinandIwouldsitatthetableacrossfromeachotherandbuildabarrierbetweenussothatwecouldn’tseethepieceofpaperthatwasinfront

oftheotherperson.Weusuallyconstructedthebarrierwithapileofbooks.Eachofuswouldtakeapieceofpaperanddrawahundreddifferentsquaresmarkedwiththealphabetdownonesideandnumbersalongthebottom.Onthisgraph,we would draw our fleet of battle ships, cruisers, and destroyers. My cousincouldn’tseewhereIhadlocatedmine,andIcouldn’tseewherehehadlocatedhis.Thenwewouldattempttobombeachother’sfleetsbycallingoutthegraphnumber.Whenwemade a successful hit,wewouldmark the position on ourchart,andindoingso,graduallybuildupapictureoftheotherperson’shiddenfleet.

Theparallelhereisthatthehiddenpieceofpaperinnegotiationsistheotherperson’shiddenagenda.Byjudiciousquestioning,youshouldtrytofindoutasmuchasyoupossiblycanabout thatperson’shiddenagendaandrecreate itonyoursidesothatyouknowexactlywherehe’scomingfromandwhathe’stryingtoachieve.

PowerNegotiatorsalwaysacceptcompleteresponsibilityforwhathappensinthe negotiations. Poor negotiators blame the other side for the way theyconductedthemselves.

PerformersNeverHaveaBadAudience

IwasconductinganegotiatingseminarintheSanFernandoValley,andcomedianSlappyWhitewasintheaudience.Duringthebreak,Itold him how much I admired comedians. “It must be fun to besuccessful like you,” I told him, “but coming up through thosecomedyclubswithalltheirhostileaudiencesmustbesheerhell.”

“Roger,”hetoldme,“I’veneverhadabadaudience.”

“Oh,comeon,Slappy,”Ireplied,“Whenyouwerestartingout,youmusthavehadsomeawfulaudiences.”

“I’ve never had a bad audience,” he repeated. “I’ve only hadaudiencesthatIdidn’tknowenoughabout.”

Asaprofessionalspeaker,Iacceptthatthereisnosuchthingasabad audience. There are only audiences about which the speakerdoesn’t know enough. I’ve builtmy reputation on the planning and

researchthatIdobeforeI’llgetupinfrontofanaudience.

Asanegotiator,Iacceptthatthere’snosuchthingasabadnegotiation.Thereare only negotiations in which we don’t know enough about the other side.Informationgathering is themost important thingwecando toassure that thenegotiationsgosmoothly.

KeyPointstoRemember

1.Goodinformationgatheringisessentialtosuccessfulnegotiating.

2.Don’tbeafraidtoadmitthatyoudon’tknow.3.Beagoodreporter.Askthetoughquestions.4.Don’tassumethatyouknowwhattheothersidewants.Getthemtotellyou.

5.Askopen-endedquestionsthatcannotbeansweredwithayesorno.Askingwhat,why,when,how,where,andwhowillteachyouallyouwanttoknow.

6.Becautiousaboutaskingwhy.Don’timplycriticism.7.Repeatthequestion.“Youdon’tthinkwecanmeetthespecifications?”

8.Askforfeelings.“Andhowdoyoufeelaboutthatpolicy?”9.Askforreactions.“Whatwasyourresponsetothat?”10.Askforrestatement.“Youdon’tthinkwe’llgetitdoneontime?”

11.Don’trelyonlyoninformationgiventoyoubytheotherside.

12.Peopleshareinformationmorereadilywhenawayfromtheirworkplace.

13.Usepeergroupinformation-gatheringtechniques.Peopleshareinformationmoreeasilywhentheyrelatetotheother

personbetter.

Chapter39

BeingPreparedtoWalkAway

Of all the negotiating pressure points, this one is the most powerful. It’sprojectingtotheothersidethatyouwillwalkawayfromthenegotiationsifyoucan’tgetwhatyouwant. If there’sone thing that I can impressuponyou thatwouldmakeyoua10-times-more-powerfulnegotiator,it’sthis:LearntodevelopWalk-Awaypower.Thedangeristhatthere’samentalpointthatyoupasswhenyouwillnolongerwalkaway.

There’sapointyoureachinthenegotiationswhenyoustartthinking,“I’mgoingtobuythiscar.I’mgoingtogetthebestpriceIpossiblycan,butI’mnotleavinghereuntilIgetit.”Oryouareanemployerandyou’rethinking,“I’mgoingtohirethisperson.I’mgoingtogetthemforthelowestsalaryandbenefitsthatIcan,butI’mnotgoingtoletthispersonslipthroughmyfingers.”You’relookingforworkandthinking,“Ihavetotakethisjob.I’mgoingtofightforthebestpayandbenefitsIcanget,butIhavetotakethisjob.”Youfallinlovewithanewhome,andyou’rethinking,“I’mgoingtobuythishouse.I’llgetthesellerdownaslowasIcan,butthisistheoneIwant.”Oryou’reasalespersonthinking,“Ihavetomakethissale.Ican’twalkoutofherewithoutacommitment.”

Theminuteyoupass thepointwhenyou’rewilling tosay,“I’mprepared towalkawayfromthis,”youloseinthenegotiations.Besureyoudon’tpassthatpoint.There’snosuchthingasasaleyouhavetomakeatanyprice,ortheonlycar or home for you, or a job or employee that you cannot do without. Theminute you pass the point when you think there is, you’ve lost in thenegotiations.

At seminars,whenpeople tellme that theymade amistake in negotiations,this is always a part of the problem. They passed the point where they were

willingtowalkaway.Someplaceinrelatingthestory,they’llsaytome,“ImadeupmymindthatIwasgoingtogetit,”andIknowthatwastheturningpointinthenegotiation.Itwasthepointatwhichtheylost.

HowtoMakeaThousandDollarsanHour

Manyyearsago,mydaughter,Julia,boughtherfirstcar.Shewentdowntothedealerandtest-droveafineusedcar.Shefellinlovewiththecar,andtheyknewit.Thenshecamebackandwantedmetogoback down with her, to renegotiate a better price. That’s a toughsituation, isn’t it? On the way down there, I said, “Julia, are youpreparedtocomehometonightwithoutthecar?”

Andshesaid,“No,I’mnot.Iwantit.Iwantit.”

I told her, “Julia, youmight aswell get your checkbook out andgivethemwhatthey’reaskingbecauseyou’vealreadysetyourselfuptoloseinthenegotiations.We’vegottobepreparedtowalkaway.”

Wewalked out of the showroom twice in the two hours that wespentnegotiatingandbought thecar for$2,000 less thanshewouldhave paid for it.Howmuchmoneywas shemakingwhile shewasnegotiating,bearing inmind that Iwaivedmynormal fee?Shewasmakingathousanddollarsanhour.We’dallgotoworkforathousanddollarsanhour,wouldn’twe?Youcan’tmakemoneyfasterthanyoucanwhenyou’renegotiating.

YoubecomeaPowerNegotiatorwhenyou learn toproject to theothersidethatyouwillwalkawayfromthejobifyoucan’tgetwhatyouwant.Ifyou’retheonewho’ssellingsomething,besurethatyou’vebuiltenoughdesirebeforeyou threaten to walk away. Obviously, if they don’t particularly want yourproduct or service yet and you threaten to walk away, you’re going to findyourselfstandingonthesidewalksaying,“Whathappened?”

Youshouldconsidersellingasafour-stepprocess:1.Prospecting.Lookingforpeoplewhowanttodobusinesswithyou.2.Qualifying.Determiningiftheycanaffordtodobusinesswithyou.3.Desire-building.Makingthemwantyourproductorserviceaboveeverybodyelse’s.

4.Closing.Gettingthecommitment.WalkingawayisastagefourGambit.Youuseitafteryou’vebuiltdesire,andyou’regoingforthecommitment.

Remember that theobjectiveis togetwhatyouwantbythreateningtowalkaway,not towalkaway.Don’te-mailmetosay,“Roger,you’dbesoproudofme. I just walked away from a million-dollar sale.” It’s like General Pattonsayingtohistroops,“Keeptheobjectiveclear.Theobjectofwarisnotforyoutodieforyourcountry,buttomaketheotherpoorbastarddieforhiscountry.”

Inaheavysituation,whenthere’sabigissueatstake,don’tthreatentowalkaway without the protection of Good Guy/Bad Guy. Don’t do it alone. Youshould have aGoodGuy left behind.Then, if you threaten towalk away andtheydon’t say,“Hey,wait aminute,whereareyougoing?Comeonback;wecanstillput this together.” If theydon’t say that, thenyoustillhave theGoodGuyleftbehind,whocansay,“Look,he’s justupsetrightnow.I thinkwecanstillputthistogether,ifyoucanbealittlebitmoreflexibleinyourpricing.”

DevelopingWalk-AwayPower

You developWalk-Away power by increasing your alternatives. Rememberthatthesidewiththemostoptionshasthemostpower.Ifyou’vefoundthehomeof your dreams and are planning on making an offer on it, here’s what youshoulddo:Youshouldfindacoupleofotherhomesthatyou’dlikejustaswell.Thatwayyou’llbeatoughernegotiatorwhenyou’redealingwiththesellerofthefirsthome.Insteadofthinkingthatthisistheonlyhomeinwhichyou’dbehappy,you’rethinking,“Noproblem.IfIdon’tgetagoodpriceonthisone,I’dbejustashappywithoneoftheothertwothatI’vepickedout.”Itdoesn’tmeanthat you’re not going to get the first one. It just means that when you giveyourselfoptions,yougiveyourselfpower.

Ifyou’re trying tobuyaboat fromanowner, first find twomoreboats thatwouldmake you just as happy. The side with the most options has the mostpower.Ifyouaretheonlybuyerwithwhomthesellerisdealing,andyouhavethreeboatsthatwouldmakeyouequallyhappy,youhaveenormouspowerasanegotiator.

HowtoProjectWalk-AwayPower

Letme tellyouhowtoprojectWalk-Awaypowerby tellingyouhowa realestate broker used it on me. I owned a couple of properties in Long Beach,California, about 50 miles from where I live. I wasn’t that familiar with themarketplace,andIwashavingtroublefindingagoodrealestateagenttohandleitforme.Finally,IheardaboutWalterSanford,arealestatebrokerwhoseemedtobeveryaggressive in thewayhewentaboutbusiness.Heseemed tobe thekindofpersonthatIwantedtohaverepresentingmeinthesaleofthisproperty.

Icalledhimandsaid,“I’vegotacoupleofpropertiesveryclosetoyourrealestate office. I’d like you to list them forme.”His responsewas: “Imight bepreparedtorepresentyou.Whencanyoucometomyofficesothatwecantalkaboutit?”Ilikedthat.HeclearlywasfamiliarwithPowerNegotiating.Numberone,hewaspreparedtowalkwayfromthelisting.Hedidn’ttakethetypicalrealestate attitude of “Wow, for two listings, I’ll drop everything and come rightnow.”Hesaid:“Imightbepreparedtorepresentyou.”

Second,heknewthatyoushouldalwaystrytonegotiateinyourownterritory.Hewasa lotbetteroff ifhecould talkmeintocomingtohisoffice than ifhecametomyhometodiscussit.

Third,hewasstartingtheprocessofgettingmetofollowinstructions.Ifyoucangetpeopletostartdoingwhatyouaskthemtodo,evenifit’saverysmallthing, you start to take command of the relationship. Amomentum begins tobuildthatendsupwith:“Beardown,thefourthcopy’syours.”

Imadeanappointment for threeor fourdays laterandwent tohisoffice tomeetwith him.Meanwhile, he had checked out the properties and prepared acouple of information folders with his suggested selling prices. These prices

werewaybelowwhatIhadhopedthepropertieswereworth.

By thispoint,however, Ihaddevelopeda lotofconfidence inhimandwasthinking,“Well,hedoesknowthe territorya lotbetter thanIdo.EitherI trusthimor Idon’t. I’llgoalongwithhisproposed listingprices.”Thenhe said tome:“Roger,youdounderstandthatIwon’tworkwithanythinglessthananine-monthlisting,don’tyou?”

I said: “Wait a minute, Walter. Nine months, when we’ve never workedtogetherbefore?Idon’t thinkI’mprepared to takemypropertyoff themarketforninemonths.”

Whathedidnextwasverybright.Hestoodup,closed the folders thathe’dbeen consulting, and reached across the deskwith his hand extended, saying,“Mr.Dawson,I’mverysorry,butIguesswewon’tbedoingbusiness togetherafterall.”

Hewas prepared towalk away from the listings if he couldn’t getwhat hewanted.Wheredidthatputme?NowIwasinthepositionofhavingtonegotiatewithhimtogethimtoacceptthelistings.

Ofcourse,hehadnoideathathewasdealingwithsuchagreatnegotiator.Iwasabletogethimall thewaydowntosixmonthsonthoselistings,whichisprobablywhathewantedinthefirstplace!

I admired that.You should always ask formore thanyouexpect toget—sothatyousetupaclimateinwhichtheotherpersoncanwininthenegotiations.The important issue here is to communicate to the other side that you’reprepared to walk away. What will typically happen for you is what happenswhenyou’reinthestoresinMexico.Whenyou’repreparedtowalkoutof thestore,theywillcomeracingoutafteryou.PowerNegotiatorsknowthatlearningtocommunicatesubtlytotheothersidethatyou’repreparedtowalkawayisthemostpowerfulGambitofthemall.

KeyPointstoRemember

1.Alwaysprojectthatyou’repreparedtowalkaway.2.Onceyouprojectthatyouwon’twalkaway,you’reprojectingthatyouhavenooptions,andyouhavelostallyourpower.

3.Sellingisafour-stepprocess:prospecting,qualifying,desire-building,andclosing.

4.Theobjectiveisnottowalkaway.Yourobjectiveistogetconcessionsfromtheothersidebecausetheyareconvincedthatyouwillwalkaway.

5.Inaseriousnegotiation,protectyourselfwithGoodGuy/BadGuy.

6.DevelopWalk-Awaypowerbydevelopingoptionsbeforeyoustartnegotiating.

7.Learningtocommunicatetotheothersidethatyou’repreparedtowalkawayisthemostpowerfulGambitofthemall.

Chapter40

TakeItorLeaveIt

Inthelastchapter,Itoldyouthatprojectingthatyou’repreparedtowalkawayisthemostpowerfulpressurepointofthemall.Ifyouuseit,however,besurethat you’re gentle when you tell them that you’re prepared to walk away.Remember that theobjective is togetwhatyouwantbyprojecting thatyou’repreparedtowalkaway.Theobjectiveisnottowalkaway—anyidiotcandothat.

Ifyou’retoobluntinthewayyouprojectthis,youmayantagonizethem,sobecareful.Don’tusethatobnoxiousexpression“takeitorleaveit.”Evenpeopleofgoodwillwho feel that they’rewilling tomeetyourdemandsmay recoil ifyouusethat.Instead,usemoresubtleexpressionssuchas“Sorry,butthathastobemywalk-awayprice,”or“Weneverdeviatefromourpublishedpricelist.”

WhatNottoDoinaNegotiation

The“takeitorleaveit”approachtounionnegotiationsevenhasaname:Boulwarism.LemuelBoulwarewasheadoflaborrelationsforGeneralElectricduringthe1950sand1960s.Hisnegotiatingmethodwas tomakeoneoffer thathe thoughtwas fair to the company, theunion,andthestockholders,andneverdeviatefromit.This“takeitorleave it” attitude obviously creates bad feelings because it doesn’tgivetheunionnegotiatorsachancetohaveawinfortheirmembers.I’msure it didn’t escapeBoulware’s attention that if theunion tookthefirstoffer,thememberswouldbegintowonderwhytheyneededaunion.In1964,theNationalLaborRelationsBoardfoundGEguiltyofnotbargainingingoodfaith.Evenworse,Boulware’sintransigencecaused13unionstojoininawalkoutagainstthecompanyin1969.

AgreatwaytobefirmwithoutbeingoffensiveistousetheHigherAuthorityGambit.Whocould takeoffensewhenyou say, “I’d love todobetter, but thepeople back at head office won’t let me”? You can put a lot of pressure onpeoplewithoutconfrontationusingHigherAuthority.

IknewamanwhoownedasmallhotelinManhattan.Oneoftheproblemshefacedwasfriendswhowantedtostayfreeofcharge.Hesolvedtheproblembyestablishing amother-in-law rate.Theywould call up to see if hehad a roomfree,andhewouldsay,“ItellyouwhatI’lldo.I’llgiveyoumymother-in-lawrate.Thisiswhatshepayswhenshestayshere.Nobodystaysforless.”Inthatway, he was firmly telling them “no freebies,” but he was doing it in a verydiplomaticway.

RespondingtoTakeItorLeaveIt

Whensomebodyusestheblunt,“takeitorleaveit”approachonyou(anditmaybemoresubtlyexpressed,suchas“That’sourprice;wedon’tnegotiate”),youhavethreeoptions:

1.Callhisbluff.Tellhimthatyourhigherauthorityinsistsonconcessions,andifthatremainstheirposition,there’snowaythatyoucanputthistogether.Perhapsyouwalkoutandhopethatthey’llcallyouback.

Beforeyouconsider thisdrastic response,considerwhether theothernegotiatorhasmuchtolosefromyourwalkingaway.Ifit’sasalesclerkina retailstorewho isnotoncommission,he’llprobablyhave little, ifanything,toloseandwillletyouwalk.Ineverhadanylucknegotiatingpricewithcommunists,forexample,becauseprofitwasnotamotivatingfactor for them. Even if I bribed them, there was nothing they couldspendmoneyonanyway.

WhyIt’sToughtoNegotiateWithCommunists

IremembercheckingintoahotelinEastBerlinafewweeksafter thewallhadcomedown,butwhile thecitywasstill incommunisthands.Itwas4a.m.andIhadjustdriveninfromZermatt,Switzerland—amonstrousdrive.Frankly, Iwas lostanddidn’tevenrealizethatIwasinEastBerlinuntilthedeskclerkrefusedtobudgeontheroomrate.Myinitialsuggestionwas that,because itwasalready4:00a.m.,henotchargemeforthefirstnight,andIwouldpayforthefollowingnight.Herefused.Itriedfor50percentoffthefirstnight,andfinally25percentoff,alltonoavail.Eventuallyhesaid,“MaybetheydothatinWestBerlin,butwedon’tdoithere.”

I said, “Wait aminute. I’m inEastBerlin?Howdid I gethere?Ididn’tseeanywall.”

“Thewall isdown,”hebluntly toldme.Well, Ihadheardthatnews,butIalwaysthoughtthatthewallwasahugething,several feet thick. I could swear that I’d seen pictures ofpeoplestandingontopofthething.Ididn’trealizethatitwasmainly poured concrete slabs stood up on end that werecomparativelyeasytoremove.Consequently,Ihaddrivenpastwhereitusedtobewithoutseeinganysignofit.OnceIknewthatIwasdealingwithacommunist,Igaveuptryingtogetaconcession fromhim.Hehadno incentive inhis system thatwouldmakehimwanttopleaseme.

Beforeyouwalkout,considerhowmuchtheotherpersonhastolosebylettingyoudothat.If theyhavenothingtolose,youprobablywon’tgetanywherebywalkingout.

2.Goovertheperson’shead.Thatdoesn’talwaysmeandemandingtoseehisbossorcallinghisbosstocomplain.Agentlerwayistoask,“Whoisauthorizedtomakeanexceptiontotherule?”Alittlestrongerwouldbetoask,“Wouldyoumindcheckingwithyoursupervisorandseeingifyoucangethertomakeanexceptiontotherule?I’msurethatifanybody

couldgethertodoit,itwouldbeyou.”Evenstrongerwouldbe,“Wouldyoumindifwetalkedtoyoursupervisoraboutthis?”

3.Findaface-savingwayfortheotherpersontomodifyhisorherintransigentposition.Ofcourse,thisisthemostdesirablewaytohandle“takeitorleaveit.”Itisespeciallyeffectiveiftheothernegotiatorhassomethingtogainbyfindingawayaroundtheimpasse,whichwouldbetrueifyou’redealingwiththeownerofabusinessorsomeoneoncommission.“Icanunderstandwhyyoufeelsostrongly,”yousay,“butsurelyifIwerewillingtopayyouabonus,you’dbewillingtomakeanexceptiontotherule,wouldn’tyou,Joe?”Oryoumighttry,“Joe,letmeaskyousomething.Whatwouldittakeforyoutochangeyourpositiononthat,justalittlebit,andjustthisonetime?”

KeyPointstoRemember

1.Avoidtheobnoxiousexpression“takeitorleaveit.”Itmakespeopledigintheirheels.

2.YoucanputalotofpressureonpeoplewithoutconfrontationusingtheHigherAuthorityGambit.“I’dlovetodothat,butIcan’tsellittomypeople.”

3.Respondtoa“takeitorleaveit”attitudebya)callinghisbluff,b)goingovertheperson’sheadinatactfulway,orc)findingaface-savingwayfortheotherpersontogiveintoyou.

Chapter41

TheFaitAccompli

Faitaccompli isaFrenchexpressionmeaning“it isdone.”Forexample,bythe16thhole,TigerWoods’svictorywasafaitaccompli.

AsanegotiatingGambit,ittakesonaslightlydifferentmeaning.

Ifyouhaveeversentsomeoneacheckforlessthanthey’reaskingandmarkedthebackofthecheck“Paymentinfullisacknowledged,”youhaveusedtheFaitAccompliGambit.It’swhenonenegotiatorsimplyassumestheotherwillacceptthe assumed settlement rather than go to the trouble of reopening thenegotiations. Itworks on the principle that it’s a lot easier to beg forgivenessthanitistogetpermission.

InCaliforniaandotherstates,FaitAccomplibecamesocommonintheautorepairindustrythatwepassedlawsagainstit.Itwascommonforservicestationstofixyourcarwithoutgettingyourapprovaloftheestimate,figuringthattherewasn’tmuchyoucoulddoaboutitoncetheyhadfixedthecar,andtheycouldholdituntilyoupaidforit.

AfriendofmineownedanoutdooradvertisingcompanyinAsheville,NorthCarolina. He was negotiating with a farmer who had let trees grow on hispropertyuntil theyobscuredoneofMike’sbillboards, reducingitscommercialvalue to zero.Mike tried to negotiate a good faith payment in return for thefarmer lettinghimtrimback the trees,but thefarmerdemandedanoutrageousamountofmoneybecausehethoughtMikehadnooptions.MikedecidedtousetheFaitAccompliGambitonhim.

Onemorninghehadfourofhisworkerssneakontothefarmer’spropertyandfireuptheirchainsawsinunison.Beforethefarmercouldreachforhisshotgun,thetreesweredownandhisworkerswerebackoverthefenceanddrivingoff.Later in theday,Mikewentby toapologizefor themisunderstandingandwasabletoreachamuchmorereasonablesettlementwiththefarmer.

TheFaitAccompliCanBeDangerous

TheFaitAccompliGambitdoesnotengenderwarmfeelingsfromonesidetoanother.WhenBatmanmovieproducersPeterGuberandJon Peters were offered key positions at Sony Studios, when theywerealreadyundercontracttoWarnerBrothers,theydecidedtosignanyway and present the Fait Accompli to Steve Ross, their boss atWarner.RosswentballisticatthewayGuberandPetershadhandledthisanddecidedtofightthemonit.

It ended up costingGuber and Petersmore than $500million tobuy out their contract. It was a bad choice of negotiating tacticbecauseRossprobablywouldhave released themwithoutpenalty ifthey had not antagonized him somuch.What does this teach you?Don’tuseaFaitAccompliunlessyoudon’tcarehowtheothersidereacts,becauseitwon’tendearyoutothem.

SometimesFaitAccompli isdone sooutrageously thatyouhave to smileatthe nerve of the person who does it to you. When I was young, I lent anexpensivecameratoanoldermanwhohadbeenanimportantmentortome.Hepromptlypawneditandsentmethepawnticket.Attachedwasanotethatsaid,“Sorryaboutthis,butIhadtohavethemoney.Thisisaveryimportantlessonforyoutolearninlife—don’ttrustanybody.”

Morerecently,aspeaker’sagentbookedmetodoaspeechandcollectedthespeakingfeefromthecompany,butdidn’tsendmemyshare,whichwasmorethan$6,500.Hetoldmybusinessmanagerthathehadspent themoneytopayhis creditors, whowere turning nasty.When pressed for a reason for stealingfrommelikethis,hesaid,“IjustfiguredthatRogerwasrichanddidn’tneedthemoneynearlyasmuchasIdid.”Hisaudacitystunnedandamusedussomuchthatwelethimmakepaymentstous.

MoresubtleformsofFaitAccompliareeffectivewaysofputtingpressureon

the other side. If you have been overcharged, sending them a check for thecorrect amountwith a “paid in full” endorsement on thebackmaybe simplerthanarguingthepoint.Ifyouaresigningacontractanddisagreewithanyofthepoints,make the changes and send the corrected contract back to them. Theymay well accept the changes rather than take the trouble to reopen thenegotiations.

KeyPointstoRemember

1.FaitaccompliisaFrenchexpressionthatmeans“itisdone.”2.AsanegotiatingGambit,ittakesonaslightlydifferentmeaning.Itreferstosendingtheothersideanagreementtosignthatassumestheywillmaketheconcessionsyourequested.

3.Thetacticcaninfuriatetheotherside,sodon’tuseitifyou’reconcernedabouttheirreaction.

Chapter42

TheHotPotato

The next pressure point is theHot Potato. That’swhen somebodywants togiveyouhisorherproblemandmakeityourproblem.It’sliketossingyouahotpotatoatabarbecue.

WhatHotPotatoesareyoutossed?Doyoueverhear“Wejustdon’thaveitinthebudget”?Whoseproblemisitthattheydidn’tbudgetproperlyforyourfineproductorservice?It’stheirproblem,right?Notyours.Butthey’dliketotossittoyouandmakeityours.

How about “I can’t authorize that”? Whose problem is it that he hasn’tdevelopedthetrustofthepeopletowhomhereports?It’shis,right?Notyours.Buthe’dliketotossittoyouandmakeityours.

Ifyou’reacontractor,customershaveprobablycalledyoutosay,“Ineedyouto move my job up. If you’re not here first thing in the morning, this entireprojectcomestoascreechinghalt.”Whoseschedulingproblemisthat?Theirs,right?Notyours.Butwhatthey’dliketodoistossyoutheirproblemandmakeityours.

Whatyoushoulddoiswhattheinternationalnegotiatorswouldtellyoutodowhentheothersidetriestogiveyouitsproblems.I’vefoundoutfrommystudyof international negotiations that exactly the same principles apply—the samerules that applied for the negotiators inGeneva during arms-control talks alsoapply to youwhen the other side is putting pressure on you.The same thingsapply,andthesameresponsesareappropriate.

Here’showtheinternationalnegotiatorswouldtellyoutorespondtotheHotPotato:First, test it forvalidity.This iswhat internationalnegotiatorsdowhentheothersidetriestogivethemtheirproblem.Youhavetofindoutrightawaywhetheritreallyisadealkillerthatthey’vetossedyou,orwhetherisitsimplysomething they threw onto the negotiating table to judge your response. Youmust findout rightaway.Later is too late. Ifyouworkon theirproblem, theysoonbelievethatnowit’syourproblemandit’stoolatetotestitforvalidity.

I used to be president of a 28-office real estate company in SouthernCalifornia.Inrealestate,weusedtogettossedtheHotPotatoallthetime,suchasfromthebuyer,whowouldcomeintooneofourofficesandsay,“Wehaveonly$10,000toputdown.”Eveninblue-collarareas,thatwouldbeaverylowdownpayment.Ourrealestateagentcouldpossiblyworkwithit,butitwouldbetough.

Itaughttheagentstotestitforvalidityrightaway—totellthebuyers,“Maybewecanworkwith$10,000.But letmeaskyou this: If I findexactly the rightproperty for you, in exactly the right neighborhood, the price and terms arefantastic,yourfamilyisgoingtoloveit,yourkidsaregoingtolovehavingtheirfriendsovertoplay,butittakes$15,000togetin,isthereanypointinshowingittoyou,orshouldIjustshowittomyotherbuyers?”

Onceinagreatwhiletheywouldrespond,“Don’tyouspeakEnglish?Watchmylips:$10,000isitandnotapennymore.Idon’tcarehowgoodabuyitis.”But nine times out of 10 theywould say, “Well,we didn’twant to touch ourcertificateofdeposit,butifit’sareallygoodbuy,wemight.OrmaybeUncleJoewouldhelpuswith thedownpayment.” Immediately, theagent foundout thattheproblemthebuyerstossedherwasnotthedealkillerthatithadappearedtobe.

If you sell home furnishings, one of your customersmight say, “We’ve got$20 a square yard for carpeting and that’s it.” If you catch that Hot Potato,insteadoftossingitback,youwillprobablystartthinkingofcuttingpricesrightaway—ifyouassumethatwhattheytoldyouwasfinal.Butinstead,youtestforvalidity up front, saying, “If I could show you a carpet that would give youdoublethewearandstillbelookinggoodfiveyearsfromnow,butcostonly10percentmore,you’dwanttotakealookatit,wouldn’tyou?”

Nine times out of 10 they’ll say, “Sure,we’ll look at it.” Immediately, youknow the price is not the deal buster that it appeared to be. Another way tocountertheHotPotatoof“Wedon’thaveitinthebudget”istosay,“Well,whohastheauthoritytoexceedthebudget?”Sometimesyou’llkickyourselfatwhathappens next. They’ll say, “Thatwould take a vice president’s authorization.”Yousay,“Youwant todo it,don’tyou?Whydon’tyoucall thevicepresidentand see if you can get an okay to exceed the budget?” He’ll pick up thetelephone, call the vice president, and argue for an okay. Sometimes, it’s thatsimple.Testforvalidityrightaway.

IrememberdoingaseminarfortheAssociatedGeneralContractorsofAlaska.Theyputmeupat theAnchorageHilton,andonmydepartureday,Ineededalatecheckout.Therewere twoyoungwomenstanding rightnext toeachotherbehindtheregistrationdesk,andIsaidtooneofthem,“Wouldyougivemea6p.m.checkoutinmyroom,please?”

Shesaid,“Mr.Dawson,wecoulddothatforyou,butwe’dhavetochargeyouforanextrahalf-day.”

Testing for validity, I said, “Who would have the authority to waive thatcharge?”

Shepointed to thewoman standingnext to her and said, “Shewould.”Thewomanstandingrightnexttoher!

Isaidtotheotherwoman,“Andhowwouldyoufeelaboutthat?”

Shesaid,“Oh,sure.Thatwouldbefine.Goahead.”

Anotherwaytohandlethe“wedon’thaveit inthebudgetHotPotato”is toaskthemwhentheirbudgetyearends.Here’showthatpaidoffforme.

HowThisGambitMadeMe$6,300

Itrainedthe80salespeopleatoneofthetopHMOsinCalifornia.Afew weeks before the meeting, the training director called me andsuggested we have dinner so that she could fill me in on how thecompany operates. Because I figured that shewas going to pay fordinner,IpickedthetopFrenchrestaurant inOrangeCounty,andwehadagreatdinner.

AsdessertwasservedIsaid,“Youknowwhatyoushoulddo?YoushouldinvestinasetofmyaudioCDsforeachofyoursalespeoplesothattheyhavetheadvantageofacontinuouslearningprocess.”AsIsaidthat,Iwasmentallycomputingthat80salespeopleat$79persetofCDswouldbeanother$6,300incomeontopofthespeakingfeetowhichthey’dalreadyagreed.

She thought about it and said, “Roger, that probablywould be agoodidea,butwejustdon’thaveitinthebudget.”

I need to make a confession here. I’m very ashamed of what Ithoughtnext,butIwanttoshareitwithyoubecauseitmayhelpyouifyou’veeverhadthesamethought.Ithought,“IwonderifIcutthepricewhethershewouldsayyes.”Isn’tthatashamefulthought?Shehadn’tsaidathingaboutthetapescostingtoomuch.Shehadn’ttoldmethatshemightbetemptedifIloweredmyprice.Shehadsimplytoldmethatshedidn’thaveitinthebudget.

Fortunately,Icaughtmyselfandinsteadtestedforvalidity.Iasked,“Whendoesyourbudgetyearend?”ThiswasAugust,andIthoughtthatshewouldtellmeDecember31st.

Tomysurprise,shesaid,“AttheendofSeptember.”

“SoyouwouldhaveitinthebudgetonOctober1st?”

“Yes,Isupposethatwewould.”

“Then,noproblem.I’llshipyouthetapesandbillyouonOctober1st.Fairenough?”

“Thatwouldbe fine,”she toldme. In less than30seconds, Ihadmadea$6,300salebecauseIknewthatwhenshetossedmewhatwasessentiallyherproblem,Ishouldtestforvalidity.

Iwas feelingsogoodabout this thatwhen thewaiterbrought thebill, Islidmycreditcard into the leathercase.Hetook itaway,andshe quietly said, “Roger, wewere thinking of paying for dinner.” Ithought, “Roger, therearedayswhennothinggoes right.Yousufferthroughthose.Thisisadaywhennothingcangowrong,sowhynotrelishit?”Icalledthewaiterbackandtoldhimthatwegavehimthewrongcreditcard.

Lookoutforpeoplegivingyoutheirproblems.Youhaveenoughofyourown,don’t you? It’s like the businessman who was pacing the floor at night. Hecouldn’tsleep,andhiswifewasgettingfrantic.“Darling,what’sbotheringyou?Whydon’tyoucometobed?”Hesaid,“Well,wehavethishugeloanpayment

duetomorrow,andthebankmanagerisagoodfriendofours.Ijusthatetofacehimandsaythatwe’renotgoingtohavethemoneytopayhim.”

Hiswifepickedup the telephone, called their friend thebankmanager, andsaid, “That loan payment we have coming due tomorrow, we don’t have themoneytopayit.”

Thehusbandexploded.Hesaid,“Whatdidyoudothatfor?That’swhatIwasafraidof.”

Hiswifesaid,“Well,dear,nowit’shisproblem,andyoucancometobed.”

Don’tletotherpeoplegiveyoutheirproblems.

KeyPointstoRemember

1.Bewareoftheothersidegivingyoutheirproblems.2.Testforvaliditywhentheydo.Isthisreallyadealkiller?3.Don’tbuyintotheirproceduralproblems.Iftheydon’thaveitinthebudget,theycanchangethebudget.Ifitgoesagainstcompanyprocedure,theycanchangetheprocedure.

Chapter43

Ultimatums

Ultimatums are very high-profile statements that tend to strike fear intoinexperiencednegotiators.Terroristsareholdingaplanefullofhostagesandtellnegotiatorsthat,unlesstheirdemandsaremet,theywillstartshootinghostagesatnoononthefollowingday.Anultimatumisapowerfulpressurepoint,butithasonemajorflawasagambit:Ifyousaythatyouaregoingtoshootthefirsthostage at noon tomorrow, what had you better be prepared to do at noontomorrow? That’s right. Shoot the first hostage. Because if 12:01 p.m. rollsaround andyouhaven’t done that, youhave just lost all of your power in thenegotiation.

Thesameweaknessappliestoanultimatuminabusinessnegotiation.Ifyoutellasupplierthatunlessshecandeliverbynoontomorrowyouwillgowithhercompetitor, what had you better be prepared to do at noon tomorrow? That’sright:Gowithher competitor.Because if thedeadlinepasses andyouhaven’tdone that, youhave just lost all of your power in the negotiation.You shouldonly use ultimatums as a pressure point if you are willing to follow through.Don’tbluff,becausealltheothersidehastodoiswaitthroughyourdeadlinetofindoutthatyouwereonlybluffingandyourthreathadnoteethinit.

Whenyouunderstandtheweakness inusingultimatumsasapressurepoint,youcaneasilyfigureoutthatthestrongestCounterGambitistocalltheirbluffand let the deadline pass. There are other less blatant responses, however. Ifsomeonegivesyouanultimatum,youhavefourwaystorespond,andIlistthemhereinincreasinglevelsofintensity:

1.Testtheultimatumassoonasyoucan.Theytellyouthattheshipmentmustbetherebynoontomorrow.Testtheultimatumbyaskingifhavingapartialshipmenttherebynoonwouldsolvetheirproblem.Couldyouairfreightenoughforthemtokeeptheirassemblylinegoingandsurfaceshipthebalance?

2.Refusetoaccepttheultimatum.Tellthemthatyouhavenoideaifyoucanmakethatdeadlineornot,butthattheycanbeassuredthatyou’re

doingeverythinghumanlypossibletogetitdone.3.Playfortime.Timeisthecoinoftherealmwhenonesideisthreateningtheotherwithanultimatum.Thelongertheygoonwithoutcarryingoutthethreat,thelesslikelytheyaretofollowthroughwiththethreat.Terroristnegotiatorsalwaysplayfortime.Thishappensinhostagenegotiationswheretheperpetratorsaredemandingagetawayhelicopterorcar.Thepolicenegotiatorplaysfortimebysayingthatheneedstogetthegovernor’sapprovalorthatthegetawaycarisonitsway,butit’sstuckintraffic.Asthetimepasses,thescalestipupwarddramaticallyinfavorofthenegotiators.

4.Bluffyourwaythroughandlettheultimatumpass.Ifitworks,it’sthebestalternativebecauseitnotonlysolvesthisimmediatecrisis,butitalsoletsthemknowthatyou’renotgoingtoletthempushyouaroundinthefuture.Bluffingtakescourage,however,andyoushouldn’tdoitcapriciously.Getalltheinformationyoucanaboutthesituation.Theessentialthingtofindoutiswhetheranythinghaschanged.Sinceyousignedthecontractwiththem,hasanewsupplierappearedwhocouldsupplythemontimeandforlessmoney?Ifyouhaveacontractoranoptiontobuy,havetheyhadabetterofferfromsomeoneelse?Ifnothingelsehaschanged,youmaybesafeintakingthechance.Whatyou’retryingtouncover,ofcourse,isiftheywanttocontinuetherelationshipwithyou,oriftheultimatumistheirmethodofgettingyououtofthepicture.

KeyPointstoRemember

1.Onlyuseultimatumswhenyouarepreparedtodowhatyouthreatenedtodo.

2.Don’ttellpeoplethatthepriceisonlygoodiftheybuynowunlessyoumeanit.

3.Experiencednegotiatorsalwaystestultimatums.4.Respondtoanultimatumby:a)testingit,b)refusingtoacceptit,c)playingfortime,andd)bluffingandlettingthedeadlinepass.

SectionFour

NegotiatingWithNon-Americans

At my Secrets of Power Negotiating seminars, I am usually asked aboutnegotiatingwithnon-AmericansandnewAmericans—theimmigrantswhobringtheir customs and values with them. It seems just about everyone has had afrustratingexperiencedealingeitherwithanon-American,orapersonofforeignorigin.Although I’ve been living in theUnited States since I emigrated fromEngland in1962andahavebeenaproudcitizenof thiscountrysince1972, Ican relate to the difficulty of dealing with non-Americans. Along with myexperienceofmovingherefromEnglandandadaptingtotheAmericanwayofdoingthings,Ihavealsotraveledto113othercountriesaroundtheworld.

Becauseofmybackground,IknowhowdifferentAmericaisfromanyothercountry on Earth. America is deceptively different to non-Americans becausemany of them have had a great deal of exposure to American culture fromwatchingourmoviesand television shows.Moviesand televisiondon’t revealwhatisintheAmericanheartandmind,however,andthat’swhatdeterminesourapproachtobusiness.

Conversely,wetendtolookatnon-Americansandthinkweunderstandthem.True,theymaydressinWesternbusinesssuitsandspeakourlanguage,butthatdoesn’tmeanthattheirtraditionalvaluesandmindsetshavechanged.TheymaypreferAmericanmusicandmovies,buttheirbeliefsintheirwayoflifeandthevaluesthattheyplaceontheirtraditionsareasstrongasever.

Ibelieve that,underneathallofourapparentsimilarities, there lieenormousdifferencesinourapproachestobusiness.Inthissection,I’ll trytounravelthemysteriesofnegotiatingwithnon-AmericansandnewAmericans.

Chapter44

HowAmericansNegotiate

TheAmericanArtoftheDeal

NewYork realestate investorDonaldTrumpwroteabest-sellingbook,TheArtoftheDeal,thatdetailedmanyofhisearlyrealestatenegotiations.ThetitleandthepremiseofthebookilluminatetheoverridingconcernofmostAmericannegotiators: the cutting of the deal. We do live in a very deal-consciousenvironment.

Isupposethatsociologistswouldtellyouthatweconcentratemoreoncuttingthedealthanothernationsbecausewearesuchamobileanddiversesocietythatwehave littlesenseof roots. Insteadof trusting thepeopleand theway thingsaredone,asiscommonaroundtheworld,weplaceallofourtrustincreatinganunbreakabledeal.“Willitholdupincourt?”wedemand,asthoughanyonewhodoesn’tconsiderthepossibilityofhavingtodefendthedealincourtisnaïve.

Sociologistswouldalsopointoutthatthisisarecentchangeinthefabricofour society. During the first half of the 20th century, we still looked tocommunity pressures to enforce our obligations. To renege on a deal wasunthinkablebecauseofthedishonorthatitwouldbringusinourcommunity.Wealso had our religious community to police any thoughts of reneging on acommitment.Itwouldbeunthinkabletoletdownourpriest,minister,orrabbi.Also, before television commandeered our leisure time,we belonged tomanycommunity organizations. We did not stray far because the members of ourLions,Kiwanis, orOptimist club—or themembers of ourPTAorMasonic orElks lodge—mightostracizeus.Sadly, thatwayof life is lost tous in the21stcentury.Nowwhatarelefttousarethedealandanall-too-commonresorttothecourtstoenforcethedealatallcosts.Thedealisfinite,thedealisstatic,andthe

dealhasbeenmadeandcannotbechanged.

Most non-Americans completely reject our dependence on the deal. Shouldthey choose to sign a contract at all, it is simply an expression of anunderstanding that existed on a particular date. It is a formal expression of arelationshipthatnowexistsbetweentheparties.Aswithanyotherrelationship,itmustmolditselftochangingconditions.

MostAmericansareastoundedtolearnthatyoucansignacontractinKoreaand have it mean nothing six months later. “But we signed a contract,” theAmericanshowl.

“Yes,” their Korean counterpart patiently explains. “We signed a contractbasedon theconditions that existed sixmonthsagowhenwe signed it.Thoseconditionsnolongerexist,sothecontractwesignedismeaningless.”

“Foul,” cries theAmerican. “You are trying to cheatme.”Not at all.Whatseemstoustobedisreputableactionisnottothem,andweshouldnotattempttopaintitassuch.Itismerelytheirwayofdoingthings.

Americans are often delighted to find that they had so little trouble gettingtheirArabtradingpartnerstosignacontract.Thentheyarehorrifiedtofindoutthat in the Arab world, signing the contract announces the start of thenegotiations, not the end.A signed contractmeans less in their culture than aletter of intent does in ours. I am not putting this down, and you should noteither.Whatwe shoulddo is recognize thatdifferentnationalities andcultureshavedifferentwaysofdoingthings,anditbehoovesustolearn,understand,andappreciatethoseways.

ItwillcomeasnosurprisetoyoutolearnthatAmericansresorttolegalactionmore quickly and frequently than any other people on Earth. This would belaughable to a businessman in India, where the civil legal system is close tononexistent.The country’s trial courts currently have a backlogof close to 30millioncases.Thechief justiceoftheDelhicourtsestimatesthat itwouldtake466 years to clear the backlog. In 2010, the courts finally decided the UnionCarbidecasethatwasfiledmorethan25yearspreviously.

Clearly, Indiansmust rely on their faith in the personwith whom they aredoingbusiness.IremembertryingtoexplaintoanIndiantheAmericancustomof the bride and groom signing a prenuptial agreement before theymarry.Hewas incredulous. “Why on earth would you marry someone that you did not

trust,” he wanted to know. What I couldn’t make him understand was thatwantingtoputanagreementinlegallyacceptablewrittenformdoesnotdenotedistrusttoanAmerican.

InAmerica,legalactionissocommonthatcompaniescontinuetodobusinesswith a company that is suing them.We see it as a normal way to resolve adisputeandnoreasonforrancor.Inmostforeigncountries,thereissuchalossoffaceinvolvedinbeingsuedbyanothercompanythattheywillrefusetodealin any way with a company that is suing them. When I lecture in China,businesspeopleareincredulouswhenItellthemthat,inAmerica,onecompanycansueanotherandstillcontinuetodobusinesswitheachother.InChina,thatwouldneverhappen.

High-Contextvs.Low-ContextNegotiations

The word context describes the degree of importance attached to therelationshipbetweentheparties,asopposedtothedetailsofthecontract.Whenthe relationship is paramount,we call it a high-context negotiation.When thedeal is the thing, we call it a low-context negotiation. Different nationalitiesplace greater or lesser importance on context—the environment in which theproposal is made. These cultures are listed from high-context to low-context:Asia, Middle East, Russia, Spain, Italy, France, England, United States,Scandinavia,Germany,Switzerland.

Communicationisalsolow-contextintheUnitedStates.Bythat,Imeanthatwordsandexpressionsmeanthesame,regardlessofwheretheyaresaid.“No”means“no,”whetheritiswhisperedonadate,oryelledatyoubyyourboss.Wetakethatforgrantedinthiscountry.I’veevenseent-shirtswornbywomen(whoare presumably students of linguistics) that say, “What part of ‘No’ don’t youunderstand?” That is not so in high-context countries, where, in order tounderstandwhatwassaid,youwouldhavetounderstandwhosaidittowhom,wherethecommentwasmade,andinwhatcontextitwasmade.

To give you an example of this from my experience, let’s suppose thatDwight,anAmerican,hasbeentoseeaplay,andyouaskhimhowheenjoyedit.Dwightmightsay,“Itwasquitegood.”Themeaningofthatisverycleartoan

American. It means that Dwight thought the play was very good. Now let’ssupposethatitwasRodney,anEnglishmanwhowenttoseetheplay.Whenhesays, “It was quite good,” that couldmean a whole range of things. It couldmeanitwasawful,but“I’mapoliteenoughfellowtonotsaythattotheauthorinpublic.”Ifthepersonwhogavehimtheticketsaskedhimhowheenjoyedtheplay, “quite good” could mean that the play was average but he appreciatedbeinggiventhetickets.IfRodney’ssonwrotetheplay,“quitegood”couldmean“outstanding,butI’mnotabouttogiveyouaswelledhead.”

When Scottish golfer Colin Montgomerie played in the U.S. Open at theOlympicClub in SanFrancisco, a reporter from theLos Angeles Times askedhimhowhehadmanagedtheimpressivefeatofplayinganentireroundwithoutbeinginasinglesandtrap.Montgomeriereplied,“Well,Iamquitegood.”Thereporter took this to be an arrogant response, and wrote it up in a blisteringattackonMontgomerie’spersonality.Thatwasunfair,becauseIthinkthatwhatthe golfer intended to conveywas awry, self-deprecating response. If he hadknown that American English is a low-context language, he would probablyhavesaid,“Well,Iamfairlygood.”It’sathoughtthatanAmericanwouldhaveconveyedbysaying,“It’sbecauseIplayedthiscourseoncebefore.”

YouwillneedatranslatortodobusinessinChina.Beawareofthedifficultiesthat heor shewill have translatingEnglish intoChinese andvice-versa.First,findoutifyouaredealingwithatranslator(whowilltranslatewhatyousay)oran interpreter (who will translate what you mean). Interpreters take pride inunderstanding the intent of your speech, rather than literal translation of yourwords.

Chineseisaveryhigh-contextlanguage.WhenIfirstgaveseminarsinChina,Iwas very careful to talk about their child, not their children.Because of thecountry’s one child-policy, I didn’t want to offend anyone (or have thegovernmentthinkthatIwasdisrespectfultotheirpolicies).Myinterpreter,PaulYeh, explained to me that it didn’t matter how I said it, because there is nosingular or plural in Chinese. If someone tells you in Chinese that they arebuildingahouse,youdon’tknowiftheymeanonehouseorathousandhouses.Youmustlistentotheconversationtofigureitout.

Chinese doesn’t have tenses either. If some tells you in Chinese that they“buildahouse”youdon’tknowifitmeanstheyarebuildingahouse,theyweregoingtobuildahouse, theydidbuildahouse,or theywillbuildahouse.You

havetolistentotheconversationandfigureitout.

Paul, who is based in Taiwan, and is one of Mandarin’s top translators,explainedtomethatitismucheasiertotranslateEnglishintoChinesethantheother way around. Because English is a very specific language, it’s easy totranslateintoChinese.ButwithChinese,youmighthavetolistentoaparagraphor two to get themeaning ofwhat is being said before you can translate intoEnglish.

Thefirstthingweshouldlearnaboutnegotiatingwithnon-Americansisthatthedealisnotthemajorissuetothem.Theyputfarmoretrustintherelationshipbetweentheparties.Istheregoodbloodbetweentheparties?Ifthereisonlybadblood,noamountof legalmaneuveringwillmake therelationshipworthwhile.Whileyouaretryingtohammeroutthefinepointsofthedeal,theyarespendingtimeassessingthefinepointsofyourcharacter.

GettingDowntoBusinessWithNon-Americans

Nowlet’sconcentrateontheothermajormistakethatweAmericansmakeindealingwithnon-Americans:Wewanttogetdowntobusinesstooquickly.

Nobody gets down to business faster than Americans do. Typically, weexchange a few pleasantries to ease any tension, and then get right down tohammeringout thedetailsof thedeal.Wesocializeafterward.Non-Americansmaytakedays,weeks,orevenmonthsbeforetheyfeelcomfortablemovingfromthe getting-to-know-you stage to the point where they feel good about doingbusiness.

When theShahof Iran fell frompower, the real estate companyofwhich Iwas president in Southern California did a huge amount of business withIranians (they prefer to be called Persians)whowere fleeing the new regime,oftenwithmillionsincashtoinvest.Often,Iwouldwatchourpeoplemakethemistake of trying to talk business too quickly, which caused the Iranians todistrustthem.Welearnedquicklythattheywantedtositanddrinkteaforseveralhoursastheysizedusup.

Ifyoufly toJapantoconductbusiness,youmayhavetosocializeformany

daysbeforetheyfeelthatit’sappropriatetotalkbusiness.Becareful,however,that they’re not just trying to push you up against a time deadline. At myseminars,manypeoplehavetoldmethattheirjoyatbeingtreatedsowellsoonturned to chagrin as they realized how difficult it would be to get down tobusinessatall.Theyhave toldmehorrorstoriesofnotbeingable tonegotiateuntiltheywereinthelimousineonthewaybacktotheairport.It’satwo-hourrideouttoNaritaAirport,butthatisnegotiatingunderexcessivetimepressure.Terrifiedatthethoughtofgoinghomeempty-handed,theywentstraighttotheirbottomline.

Whennegotiatingwithnon-Americans,weAmericanswoulddomuchbetterifwewouldslowdown.Wetendtospeakfirst,thenlistentotheresponse,andobserve the behavior of the other negotiators. Non-Americans tell us that weshouldreversethatorder.Weshouldobservefirst,thenlisten,andfinallyspeak.In fact, reacting slowly to the proposal of the other side is amark of respect.Yoursilencedoesnotindicateacceptanceoftheirproposal,merelythatyouaregivingittheconsiderationitdeserves.

Americansfallintotwomajortrapswhendealingwithnon-Americans:1.Weover-emphasizethedealanddon’tattachenoughimportancetotherelationshipoftheparties.

2.Wegetdowntobusinesstooquickly.

Thetwoarecloselyrelated,ofcourse.Buildingarelationshipwiththeothersidetothepointwhereyoufeelcomfortablewiththemtakestime.Enlargingonthatrelationshiptothepointwhereyoutrusttheotherperson,anddon’thavetorelyonthecontractbeingairtight,takesagreatdealoftime.

KeyPointstoRemember

1.Americansfocusongettingthecontractsigned.2.Otherculturesfocusontherelationshipoftheparties.3.ToAmericans,thecontractistheendofthenegotiations.4.ToKoreans,thecontractwouldbevoidifcircumstanceschange.

5.ToArabs,thecontractsigningsignalsthestartofthenegotiations.

6.Americanscansueeachotherandstilldobusiness.Thatwouldbeunthinkableinmostothercountries.

7.High-contextnegotiationmeansthattherelationshipbetweenthepartiesisparamount.

8.Low-contextnegotiatingfocusesongettingthecontractsigned.

9.AmericanEnglishisalow-contextlanguage.Whatissaidisclearlyunderstood.Chineseisahigh-contextlanguage.Youmustlistentotheconversationtounderstandthemeaning.

10.Americansgetdowntobusinessveryquicklyandsocializelater.Othercultureswanttospendtimegettingtoknowtheothersidebeforetheywillstartnegotiating.

Chapter45

HowtoDoBusinessWithAmericans:AGuideforNon-Americans

I’vebeeninthiscountrysinceIemigratedfromEnglandin1962,andI’mstilllearningaboutAmericans.Thatmakesthischapteraworkinprogress.I’mgoingtogiveyousomeobservationsaboutAmericansandthewaytheydobusiness.This is fornon-Americans. Ifyou’reanAmericanyoumightwant to skip thischapter,becauseyouwon’tagreewitheverythingIsay,andIdon’twanttoupsetyou.Ontheotherhand,youmighttaketheenlightenedviewpointthat,inordertounderstandothercultures,youmustfirstunderstandyourown.

AmericansAreVerySuccinct

This is the first thing that I had to learn when I came to this country.Americanscansayinafewwordswhatothernationals,particularlytheEnglish,take all day to say. An Englishman might walk out of his front door in themorningandsay,“Whatawonderfulday!Ifeelpositivelyoverwhelmedbythebeauty of the morning!” An American would say, “Great day!” and it meansexactlythesamething.

I noticed this in the press briefings during the Gulf War. The Britishinformationofficerwouldannouncetothepress,“I’mverypleasedtoreportthatwe are on our battle plan, and if I may be so bold, slightly ahead of plan.Furthermore, Idon’thesitate tosay Ibelievewewill stayaheadofplan.”TheAmericaninformationofficerwouldgetupandwithaslygrinonhisfacesay,“We’rekickingbutt!”Itmeansexactlythesamething!Youasanon-Americanmightseethissuccinctnessasbeingveryblunt,butAmericansdon’tmeananyoffensebyit.

AmericansAnswerQuestionsWithOneWord

WhenAmericansaskyouhowyoulikeyourhotel, theydon’twanttoknowyourreactiontoyourhotel.Theyjustwantreassurancethatyou’recontent.Youcananswertheirinquirywithoneword,andthewordis“Great!”Thesamegoesforanyotherquestionthatstartswith“Howdidyoulike...”or“Howwasthe...”or“Didyoulike...?”

Areyoureadytopractice?Herewego:

Question:“HowdidyoulikeAmerica?”

Answer:“Great!”

Question:“HowdoyoulikeAmericans?

Answer:“Great!”

Question:“Howareyouenjoyingyourstay?”

Answer:“Great!”

Question:“WhatdoyouthinkoftheAmericanhabitofansweringeveryquestionwithoneword?”

Answer:“Great!”

AmericansTalkinIdioms

Americans love idioms! An idiom is an expression that cannot be takenliterally.Whenyouhearone,you’llknowrightawaythatitcannotmeanwhatitactuallysays.MostAmericansusecopiousidiomswithoutevenrealizingit.MyChinese translator warnedme thatmy audiencewould not understand idiomsandIshouldavoidthem.IwentthroughmytalkinmymindandwasamazedathowmanyIusedwithoutrealizingit.

Herearesomeexamplesofidioms:

Hewasattheparty,butIgavehimawideberth.Ittookmeallnighttowadethroughthereport.

IfinallyranhimtoearthattheairportinNewYork.Itwasapieceofcake.Heonlyaddedfueltothefire.

Americansneed torealize that idiomscanbeveryconfusing topeoplefromothercultures.Justtogiveyouanideaofhowconfusingthissounds,thisiswhatweAmericanssoundliketoforeigners:

Hereallygot inmyhairwhenhepulledmy leg, so I lefthimhighanddry.Thisisstraightfromthehorse’smouth—Ifeellikeamilliondollars.He let thecatoutof thebag,soI took thebullby thehorns.Theearlybirdgetstheworm,soIstuckmyneckoutandspilledthebeans,whichknocked his socks off. We’re willing to bend over backward, we don’twanttoturnyouoff,and,becausewe’renotoutofthewoodsyet,we’llcoughup,becausewethinkyou’llscratchourback.

AmericansAreVeryPatriotic

There is only one way to answer a question such as “How do you likeAmerica?” That is with an enthusiastic outpouring of support. “What a greatcountry,”you should say, “I just love it here.”Americansdonotwant tohearthatyouwerestuckinunbelievable trafficonthewayfromtheairport,or thattheviolentlevelofcrimeshocksyou.

Your opinions aboutAmericansworking too hard or being toomaterialisticare much better left unpacked in your luggage at your hotel. It’s not thatAmericans are unrealistic about the problems. It’s just that they are verypaternalisticabouttheircountry.ThinkofAmericaastheirchild,andafavoriteoneatthat.Youwouldn’tdreamofcriticizingyourfriend’schild,wouldyou?

I’mamemberoftheTraveler’sCenturyClubinLosAngeles.Toqualifyformembership,youmusthavetraveledtomorethan100differentcountries.Whenpeople hear I’ve traveled so much, they often ask me, “If you could liveanywhereintheworld,wherewoulditbe?”Iwouldneveranswerthatquestionwith a direct response. I would precede my answer with a compliment toAmericabysaying,“IfIcouldn’tliveintheUnitedStates,Iwouldliveonthe

northshoreofLakeLemaninVeveyorMontreux,intheFrenchspeakingpartofSwitzerland.”

YoumayhearAmericanscriticizetheircountryandsometimesveryvocally.That’s an American prerogative. Free speech and the right of assembly areguaranteedinwritingbytheConstitution.Don’ttakethatcriticismtomeanthatthecomplainerwantstochangethewayofgovernment.

You may be amazed at the way presidents and members of Congress arequicklycriticizedforwhatmayappeartoyoutobeminorindiscretions.Itisnotso much puritanical outrage, although it’s true that Americans are muchnarrowermindedinthisregard.BritishactressEmmaThompson,whoportrayeda thinlydisguisedHillaryClinton in themoviePrimaryColors,wasasked forheropiniononaccusationsthatPresidentClintonhadhadsexwithanintern.“Idon’t quite understand it,” she said with exaggerated naiveté. “I couldunderstandwhatthefusswasaboutiftherewasahorseinvolvedorsomethinglike that.” Realize that American outrage over government scandals is ventedwith full confidence that the governmentwill not fall over exposing salaciousbehavior.

TheAmericanClassSystem

OneofthethingsthatIfirstlovedaboutAmericawhenIcameherewasthelack of a class system. My father drove a taxicab in London, and would beforever branded as working class. That would severely limit my ability toadvancemyself in society. (Things have improved inEngland since I left andhopefullynotbecauseIleft.MoreofthatwhenIteachyouhowtonegotiatewiththeEnglishinChapter47.)Americahaslittleofthisnonsense.

Youmayrun intosome“oldmoney”peoplewho inheritedgreatwealthandhavelittleconceptofwhatit’sliketoworktoadvancethemselves,buttheyarerare.MostAmericansarewheretheyarebecausetheyputforththeeffort.

My friendMichaelCrowe is also an immigrant fromEngland.He toldme,“ThedifferencebetweenEnglandandAmericaissimple.InEngland,ifaworkerisdiggingaditchandlooksuptoseeaRollsRoycepassby,hethinks,‘Iwonder

whohe’sstealingfrom?’InAmerica,theditchdiggerlooksupandthinks,‘OnedayI’mgoingtohaveoneofthoseRollsRoyces.’”

Inyourcountry,theprofileofwealthisprobablyapyramidshape.Thebaseofthepyramidisthepoorpeople.Abovethat,youhaveasmallermiddleclassandtheapexofthepyramidistheminorityofrichpeople.TheprofileofwealthinAmericaismorelikeakite.Afewverypoorpeople,risingtoalargemiddleandupper-middleclass,andtaperingofftoafewveryrichpeople.Ifyou’rehereforbusiness, almost all of your contactwill bewith themiddle and upper-middleclass.

BecauseofthelackofaclasssysteminAmerica, titlesareimportant.Titlesindicaterankandhowwellwe’redoing.TitlesalsoindicateearningsinAmerica,which is not so in other countries, where a general manager might supervisemanyothersmanagerswhoearnmorethanhedoes.TitlesareveryimportanttoAmericans.It’sourattemptataclasssystem.ClassinAmerica,ifyoucancallitthat, is based strictly onmoney. If you are financially successful, youwill beadmired, andyour familybackgroundor the school that you attendedwill notimpressanyone.Infact,Americanslovetobragabouttheirhumblebeginnings.WhyelsewouldItellyouthatmyfatherdroveataxicab?

ReligioninAmerica

I found it very hard to believe that America is one of the most religiouscountries in the world. Perhaps because the Constitution guarantees theseparationof church and state, you just don’t hearmuch about it. Perhaps it’sbecause there are so many different religions. Perhaps it’s because the mostreligious states are the rural ones that few newcomers visit. The truth is thatAmericansareverydevoutchurchgoers.AccordingtoaGalloppoll,41percentgo to church regularly (that’s down from 58 percent 20 years ago), and 80percentofthosewhodon’twilltellyouthattheyprayregularly.NinetypercentofpeoplepolledsaythattheybelieveinGod.ComparethattoEngland,whereonly15percentof thepeopleattendchurch,according toTearfund,oneof thelargestrelieforganizationsintheU.K.

This is important to you if you’re to do business inAmerica.Although the

subject of religion will hardly ever come up in business, you are probablydealingwithanAmericanwhofeelsstronglyabouthisorherfaith inGod.Becarefulyoudonotoffend,particularlyintheBibleBeltstatesthatsweepdownthrough thecenterofAmerica fromIowa toTexasandeast toSouthCarolina,whichisprobablythemostreligiousstateofall.

RamDassisanewage(metaphysical)religiousleaderandaveryentertainingspeaker. He tells a story about being invited to speak in Denver. The Baptistchurchwassponsoringhislecture,and,atthelastminute,thechurcheldersgotcoldfeet.Theirconcernwas:Wouldthismanbesayinganythingthatmightgoagainst their religion? He assured the church elders that he would not. “Willtherebeanypraying?”theyasked.“Notreally,”hetoldthem.“Atonepoint,wemayallholdhandsandpushawishforworldpeaceoutintotheuniverse.”“Wewishyouwouldn’tdothat,”theytoldhim.

TheFrontierMentality

UnderstandhowcloseeveryAmericanistobeinganimmigrant,anditwillgoalongwaytohelpingyouunderstandAmericans.AremarkablyhighpercentageofAmericans are actually immigrants. It’smore than20percent inCalifornia,the most diverse state. Nationwide, it is almost 10 percent. I don’t meanimmigrants from another state. I mean that they weren’t born in the UnitedStates.MostAmericans’parentsorgrandparentsimmigratedtothiscountry.

It makes Americans value their freedom above all things. Americans hatebeing toldwhat to do, particularly by their government.That attitude leads toseveralhard-to-understandfacetsofAmericanlife.Itleadstoaremarkablelackof city planning.MostEuropeans, for example, are happy to complywith thedesignstandardsoftheirvillage,sothattheentirecommunityhasaconforminglook.NotAmericans,because itwould takeawaya freedomfromgovernmentcontrolthattheycherish.Letmegiveyouanotherexample.

One of the most controversial issues in America is the right to bear arms.You’llseebumperstickersthatsay“Whengunsarebanned,onlycriminalswillhave them.” Nobody wants to stop people from hunting, but many peoplequestion why citizens need the right to own automatic weapons whose sole

purposeistokillpeople.Thatwillbehardforyoutounderstand,too,untilyouunderstand how strongly Americans feel the need to be free of governmentcontrol.

TimeIsMoneytoAmericans

Americanstellajokeabouttheattorneywhodiedandwenttoheaven.(That’snot the punch line!) St. Peter, who in Christianmythology is the personwhoadmits people to heaven, said to him, “Boy, arewe thrilled to have you here.We’veneverhada125-year-oldattorneybefore.”

Theattorneyprotested,“I’mnot125.I’m39.”

St.Peter said, “Theremust be someconfusion—according to thehours thatyou’vebilled....”

ThejokeisfunnytoAmericansbecauseitreferencesthehigh-pressureworldinwhichbusinessexecutiveslive.TimeisacommoditytoAmericans.Wetalkaboutsavingit,investingit,andspendingit.Asanon-American,you’llfindthepaceofbusiness lifeherestartling.Adealcanbeagooddeal,but it’sanevenbetterdealifthepersonwhoputittogethercanbragabouthowquicklyheputittogether. Michael Eisner, the chairman at Disney Corporation, ran into thepresidentofCapitalCities,theparentofABCtelevision,ataconferenceinSunValley,Idaho.HebroachedtheideaofDisneybuyingCapitalCities.Inlessthantwomonths,hehadpurchasedthecompanyfor$20billiondollars.Thespeedofthatdealwouldgivehimbraggingrightsatanycountryclubintheland.WhenanAmericanappearstoberushingyouintoadeal,heisnottryingtotrickyou.Heisjustdoingthingshisway.

YouwillfindlifeinAmericatobeveryhigh-pressure.Thereisagreatsenseofurgencytoseizeanopportunityandmakethemostofitwhileyoucan.SomeofthiscomesfromAmericansbeingsoyoung.Weareaveryyoungsociety.Partofitcomesfromthestrongsenseofindividualism.KatherineHepburnsaid,“Asonegoesthroughlife,onelearnsthatifyoudon’tpaddleyourowncanoe,youdon’tmove.”

Another part of it comes from theAmerican experience.Unless you’re old

enough to remember PearlHarbor, you have never lived through awar.Untilterrorists tore down the World Trade Towers in New York, Americans haveneverhadourveryexistencechallenged.That’sthekindoflifeexperiencethatmakespeople reevaluate theirpriorities anddetermine that theremaybemoreimportantthingsinlifethanmakingmoney.ToaGerman,itmaymakeperfectsense to spend threeweeks at a spa to rejuvenate theirmind and body.To anAmerican,atriptothespaismorelikelytomeanamassagebetweenbusinessmeetings.

TheOpinionatedAmerican

A line in aPaulMcCartney song talked about there being toomanypeoplereachingforapieceofcake.IthinkofthatlinewheneverIhearofanewprotestgroupthathassprungup.TherearetoomanypeopleinAmericatryingtopushtheirpointofviewonothers.Thereisnotacause,howeverobscure,thathasnotorganized into a protest group.Youwill findAmericans are frank, outspoken,andopinionated.Don’ttakethispersonally.AnAmericanbusinessmanmaysaytoyou,“That’shogwash,Hans,andyouknowit!”Don’ttakethisasapersonalattack. It’s just thatAmericans areused tobeingveryopen anddirect in theircommunications.

TheFriendlyAmerican

Americansareeagertohaveyoulikethemandsharetheiradmirationforwhatthey and their country have accomplished. There is a superficial level offriendlinessthatconfusesnon-Americans.Partof thiscomesfromthemobilityof the society. Very few Americans stay put for long. It’s unusual to meetsomeonewhowasbornin thesamestateas theoneinwhichtheynowreside.It’shard tobuild long-term friendships.Don’tbe confusedbyAmericanswhoappear to suddenly have become your bosom buddy. When I first moved toAmerica, I found that peoplewhom I hadmet only superficially at a party or

picnicwouldsaytome,“We’llhavetohaveyouovertothehouse.”Or“Let’sget togethersoon.”I thought thismeant that Ishouldpulloutmyappointmentcalendarandsetadate.Itdoesn’tmeanthatatall.

BusinessCards

Every American businessperson carries a business card, and business cardexchangesarecommonuponfirstmeetingsomebody.Inyourculture,itmaybeconsideredpolite tocarefullystudyandadmire thecard.Youdon’thave todothathere.It’sokaytostickitinyourpocketwithjustacursoryglance.

TippinginAmerica

Load up with one-dollar bills because it’s going to cost you a bundle inAmerica. Plan to add 15 percent to restaurant bills, bar bills, and taxi fares.Skycapswhocheckyourbagsatairportsandbellhopswhocarryyourbags toyourroomexpect$1perbag.Hoteldoormenexpectadollarwhenyouarriveforholdingthecabdooropenforyou,andagainwhentheycallacabforyouwhenyouleave.

Don’t be looking throughyour coins trying to figureout an appropriate tip.Tips fold inAmerica; theydon’tclink.Just roundup to thenextdollar. Ifyoucome from a country that doesn’t believe in tipping, all of this will seemoutrageoustoyou,butit’sthewayitworkshere.Don’twithholdorreducetipsevenforbadservice,particularlywhenyou’rewithbusinesspeople. Itwill justmakeyoulookcheap.

TheDiversePopulationofAmerica

AmericaisoneofthemostpopulatedcountriesonEarthandoneofthemostdiverse.Youwillcertainlyencounterpeoplefromallethnicbackgrounds.Ifyoucomefromahomogenouscountry,thiswillconfuseyou.MyfriendJackvisitedme from England and, as he looked around the restaurant, he said, “I can’tbelievehowmanynon-Americansthereareinthiscountry.”Itoldhim,“Thoseare not non-Americans, Jack. They are Americans. You’re the only non-Americanhere.”

California, where I live, is the most diverse state. Twenty percent ofCalifornia’sresidentswerenotevenbornintheUnitedStates.IfyouliveintheCityofLosAngelesandareaCaucasian,youaretheminority.Approximately20percentofthepopulationofLosAngelesisofAsiandescent,30percentisofMexicandescent,and10percentisAfricanAmericans.AsnewspapercolumnistCalvin Trillin remarked, “I believe in open immigration. It improves thediversityoftherestaurants.I’dletanybodyinexcepttheEnglish.”

Don’tassumethatyoucantellaperson’sstatusfromthewayheorshelooks.Youmayhaveanappointmentwiththepresidentofacompanythatdoes$100millionayearinsales.ThatpresidentmaybeAsianinappearance,orAfrican-American, or ofMexican descent.You just can’t tell.And you certainly can’tassumethatthepresidentwillbeaman.

TheSelf-ReliantAmerican

Individual accomplishment is glorified in America. From an early age,childrenareencouraged tobecompetitive,discover theirstrengths,andpursuetheirowndreams.ToAmericans,accomplishmentisking,evenwhenthattakestheindividualawaytoopportunitiesthatarefarawayfromhisorherfamilyorcommunity.Thismayseemverystrangetoyouifyou’refromJapan,wheretostandoutfromtheteamseemsarrogant,orfromAustralia,whereitwouldseemlikehubris,andthe“tallpoppy”alwaysgetscutdown.

American business executives are well-paid by world standards, but that isjustified by boards of directors and stockholders, because a single executivebroughtintorunacompanycandramaticallyaffectthefortunesofthecompany.Thiscompetitivenessextendsallthewaythroughtheorganization.Althoughin

recent years companies have tried to install quality circles and team problem-solving,itgoesagainstthegrain.Evendownontheassemblyline,workerswanttoout-workandout-produce their fellowemployees.Thecountry issuccessfulinlargepartbecauseAmericaisaverycompetitivesociety.

Youwillencounterthiscompetitivenessinyourbusinessdealings.Americanswanttowin.Theydonotwanttocompromise.Theywillcompromiseifthatisintheircompany’sbestinterest,butitisnotintheirheart.Thisisepitomizedinthesayingofa legendaryAmerican football coach,VinceLombardi.Youmayseethissloganproudlydisplayedonplaquesonthewallsofexecutivesuites.Itsays,“Winningisn’teverything,butmakingtheefforttowinis.”

America is also a ruthless society. The rewards are great for the individualwhosucceeds,but thosewho fail find little support.There isno such thingasterminationpayinAmerica.Anofficeworkerwholosesherjobwillbetoldat4:30 p.m. on a Friday afternoon and is expected to be out of the building by5:00.Thecompanyowesthatemployeenothingotherthananyearnedvacationdays that have not been taken, and that is a matter of company policy, notgovernment fiat. The employee will have been required to pay into a stateunemployment fundandwillbeable toappeal to thestateagencyforsurvivalbenefitsforjust13weeks.

AFinalWordAboutAmericans

“Obeautifulforspaciousskies,foramberwavesofgrain

Forpurplemountainmajesties,abovethefruitedplain

America!America!

GodshedHisgraceonthee,andcrownthygoodwithbrotherhood

Fromseatoshiningsea.”

That song, “America the Beautiful” by Katharine Lee Bates, is not thenationalanthem.TheAmericannationalanthemisabattlehymn.Somepacifistswanted tomake “America the Beautiful” the national anthem until theyweretoldthat,evenforAmericans,it’sjustalittletoonarcissistic.Americansarevery

proud of their country. They believe fervently that it’s the best country in theworld.I’llproveittoyou,andthey’lltellyou:“Eventhepeoplewhodon’tlikeitherewon’tleave.”

KeyPointstoRemember

1.Americansaresuccinct.Theydon’tspendallmorningsayingsomethingthatcanbesaidinawordortwo.

2.YouprobablycanansweranyquestionanAmericanwillaskyouwithoneword:“Great!”

3.Americanstalkinidioms.Don’ttakethemliterally,oryou’llquicklybelost.

4.Americanslovetheircountryandtheyexpectyoutoloveit,too.

5.TheAmericanclasssystemisbasedonhowmuchmoneyyou’vemade.

6.Americaisaveryreligiousnation.7.Americanslovetheirfreedomandhateanyformofgovernmentcontrol.

8.LifeinAmericaproceedsatahecticpace.9.Americaisaverydiversewithahighpercentageofimmigrantsfromothercountries.

Chapter46

NegotiatingCharacteristicsofAmericans

Let’s first lookat thecharacteristicsof the typicalAmericanwhonegotiateswith non-Americans, and then, in the following chapter, we’ll look at thecharacteristicsofforeignnegotiators.

AmericansTendtoBeVeryDirectinOurCommunications

Weuse idiomatic expressions such as “What’s your bottom line?” or “Howmuchprofitwouldyoumakeatthatfigure?”Or,wetrytoshifttheemphasisofthenegotiationsbysaying,“Let’slayourcardsonthetable,”or“Let’swrapthisoneuptonight.”We“tell it likeit is,”“shootfromthehip,”andtryto“hit thenail on thehead.”We seldom“beat around thebush.”Although I recommendthis kind of directnesswhen negotiatingwith otherAmericans because it putspressureontheotherside,realizethattonon-Americans,itmayseemtooabrupt,andsuchbluntnessmayoffendthem.

AmericansResistMakingOutrageousInitialDemands

Thisgoesbacktoourhopethatwecan“cutthedeal”and“getoutofDodge.”Becausewewanttoblitzthenegotiationsandwrapthemupquickly,wetendtothinkinmuchshortertimeframesthannon-Americans.We’rethinkingwecanconcludethenegotiationsinhours,whilethey’rethinkingitwilltakemanydays.Although a non-American may be comfortable making an outrageous initialdemandbecauseheknows that thepriceand termswillchangeenormouslyasthedaysgoby,weseethatasslowingthenegotiationsdownordrawingusinto

endlesshaggling.

AmericansAreMoreLikelytoNegotiateAlone

It’s not unusual to find a lone American negotiator showing up at aninternational negotiation, fully empowered todobusiness. (Hemaybe able toputtogetherateamofthreeifitincludeshisinterpreteranddriver.)Thenwhenheisledintothenegotiatingroom,hefindsthatheisfacedwithateamof10or12fromtheotherside.ThisisnotgoodfortheAmerican,becausehewillfeelpsychologicallyoverwhelmed,unlessthenegotiatingteamsareroughlythesamesize.However,theeffectofthisontheforeignteamconcernsmemore.

Non-Americansmayinterpretalonenegotiatoras“They’renotseriousaboutmaking a deal at thismeeting because they’ve only sent one negotiator. Thismust beonly a preliminary expedition.”Ornon-Americansget the impressionthat theAmerican ismerelygathering information to takeback tohis teamofnegotiators.

UnlesstheAmericanunderstandsthis,andtakespainstoexplainthatheistheentirenegotiatingteamandthatheisempoweredtonegotiatethedeal,hemaynotbe takenseriously.Thisputshimata seriousdisadvantagebecausehehasthen removed his resort to Higher Authority (see Chapter 7). If forced toemphasize his authority to negotiate, he should point out that he only hasauthoritytonegotiateuptoacertainpricepoint.Beyondthatpoint,hewillneedtogetauthorization.Ifpressedtorevealthatpricepoint,heshouldexplainthatheisnotempoweredtorevealit.

AmericansAreUncomfortableWithEmotionalDisplays

The English are themost uncomfortable of course, but Americans also seedisplayingemotionsinpublicasaweakness.IfanAmericanwifestartstocry,herhusbandinstantlyassumesthathehasdonesomethingdevastatinglycruelto

her.InMediterraneancountries,thehusbandsimplywonderswhatployhiswifehad concocted. This fear of an emotional reaction causes Americans to betentative in their negotiations with non-Americans, and if the other side doesexplodewith anger at one of our proposals,we tend to overreact. Instead,weshouldmerelyseeitasanegotiatingploythatmightbeperfectlyacceptableintheirculture.

AmericansExpectShort-TermProfits

Besides wanting to conclude the negotiations before we have built arelationshipwiththeotherside,wealsoexpectquickresultsfromthedealthatwecut.Welookatquarterlydividendswhileforeigninvestorsarelookingat10-yearplans.TheCEOsofmanyofthecompanieswhohavehiredmetotraintheirpeople, particularly those in the volatile high-tech industries, seem to spend alargepartoftheirdayworryingaboutWallStreet’sreactiontoeverymovetheymake.Tomanynon-Americans, thisemphasisonshort-termprofitand today’sstockpricecomesacross,unfairlyIthink,asa“fast-buck”mentality.Wheretheyare looking tobuilda long-termrelationshipwithus,weappear toconcentrateonlyonprofits,andthiscanbeoffensivetothem.

AmericansAreLessLikelytoSpeakaForeignLanguage

There’s no question that English is becoming the business language of theworld. Before she retired, mywife, Gisela, was the co-founder of one of themost successful product placement companies in Hollywood. She representedcompanieswhowantedtomarkettheirproductsbygettingthemintomoviesandtelevision.OneofherclientswasPhilips,thehugeDutchelectronicscompany.Since 1983,Philips has usedEnglish as their corporate language. I have doneseminarsinMexicoforinternationalcompaniessuchasGE,whereallbusinessisconductedinEnglish.

Whenever one European company merges with another company from a

differentEuropeancountry, theywillprobablyadoptEnglishas theircorporatelanguage because it is the foreign language that they will both have learned.ConferencesinEuropearetypicallyconductedinEnglishnowbecauseitisthecommondenominator language.MostEuropeanbusinesspeople can speak twoforeign languages, and one of them is always English. Most AsianbusinesspeoplecanatleastunderstandEnglish,eveniftheycannotspeakitwell.Sadly,hardlyanyAmericanscanspeakGermanor Japanese. Ifwedoknowaforeignlanguage,itisprobablySpanishorFrench.

According to a European Union study, 60 percent of Europeans speak asecond language. That compares to 26 percent in the United States, half ofwhomareimmigrantsfromanothercountry.

Torealizehowarrogantthismayappeartonon-Americans,youhaveonlytothinkofhowfrustratedyoubecamewhenyoufirstdinedinaParisianrestaurant.Whenthewaiterdidn’tappeartospeakanyEnglish,youprobablythoughtasIdid:“Thisisatouristrestaurant.TheymustgetEnglish-speakingpeopleinhereallthetime.WhyishebeingsodifficultbyrefusingtospeakEnglish?”

Unfortunately,thisattitudeisalltooprevalentwithAmericanbusinesspeople.Anyexpectationthat“Iftheywanttodobusinesswithustheyshouldlearnourlanguage” can come across as irritatingly arrogant to a non-American. Weshouldalwaysappearsurprisedanddelightedthattheyspeakevenafewwordsofourlanguage.Weshouldalwaysmakeanefforttospeakafewwordsoftheirlanguage,evenifit’sonlytosay“goodmorning”and“thankyou.”

Beingwillingtodobusinessintheirlanguageisparticularlyimportantifthisisyourfirstbusinessforayintotheircountry.Theywillwanttoknowthatyou’remakingacommitment todoingbusiness in theircountryandbereassured thatyou’renotjusttryingtotakeadvantageoftheeasyprofits.Itmaybeworththeexpenseofhavingyourprintingmaterials translated into their language just tomakethepointthatyou’retheretostay.IalwaysstartmyseminarsinChinawithafewsentencesinMandarin,whichdelightstheaudience.

AmericansAreNotWorldTravelers

America is one of the richest countries the world has ever known, butAmericansdonottravelnearlyasmuchasotheraffluentnations.InthesecuritycrackdownthatfollowedtheterroristattackontheWorldTradeTowersinNewYork,AmericansweresuddenlyrequiredtogetpassportstoreturnfromtripstoCanadaandMexico.Some18millionpeopleappliedforpassportsfor thefirsttime, which pushed the percentage of Americans holding passports to 21percent.Beforethat,itwasonly16percent.

Part of thatmakes sense. TheUnited States is a huge countrywith diverseclimatesandgeography.Ifyouwantworld-classskiing,mountainclimbing,orsurfingyoucandoit inAmerica.Partof it is location.Other thanCanadaandMexico,it’salongwaytoanywhereelse.Partofitisfear.Americansaretoldalot thesedays about the scaryworld inwhichwe live.WhatAmerica lacks ishistory.WhatyoucanlearnfromavisittoLondon,Rome,andParisispricelessinitsabilitytogiveyouaperspectiveontheworld.

Don’texpectAmericanstounderstandtheintricaciesofyourculture.

AmericansAreUncomfortableWithSilence

Fifteensecondsofsilencetousseemslikeaneternity.Doyourememberthelast time the soundwentoutonyour television?Youwereprobably thumpingthetopofthesetwithin15seconds.ParticularlytoAsians,whoarecomfortablewith periods of meditation, this impatience appears to be a weakness, and aweaknesstheycantakeadvantageof.Whendealingwithnon-Americans,don’tbeintimidatedbyperiodsofsilence.Seeitasachallengetonotbethenextoneto talk.After an extendedperiodof silence, thenext person to talk loses.Thenextpersontoopenhisorhermouthwillmakeaconcession.

Oneofmystudents,amortgagebanker, toldmeofnegotiating inShanghai,China.“Therewere20ofusaroundaconference table,”he toldme. “Tensofmillions of dollars inmortgages were at stake. Suddenly, the other side wentcompletelyquiet.Fortunately, Ihad learnedabout this tacticandwaspreparedforit.Iglancedatmywatch.Thirty-threeminuteswentbywithoutawordbeingspoken. Finally, one of their lawyers spoke up and made a concession thatenabledustoputthetransactiontogether.”

AmericansHatetoAdmitThatWeDon’tKnow

As I discussed in Chapter 38 on the importance of gathering information,Americans hate to admit that they don’t know. This is something that non-Americansknowandcanusetotheiradvantage.Youdon’thavetoanswereveryquestion.Youareperfectlyentitledtosay,“That’sprivilegedinformationatthisstage.”Orsimplytellthemthatyoudon’tknow,orarenotpermittedtoreleasetheinformationtheyseek.Noteveryquestiondeservesananswer.

Pleasepermitmetodoalittleflag-wavinghere.PeoplearoundtheworldstilladmireandrespectAmericansandparticularlyAmericanbusinesspeople.Theytrustusandseeusasstraightforwardinourbusinessdealings.ThisIbelieve.Inthischapter,IhavenotbeenpointingouttheshortcomingsofAmericansdealingwith non-Americans. I have been teaching you only how foreign negotiatorsmisperceiveAmericans.Fairenough?

KeyPointstoRemember

1.Americanstendtobeverydirectinourcommunications.2.Americansresistmakingoutrageousinitialdemands.3.Americansaremorelikelytonegotiatealone.4.Americansareuncomfortablewithemotionaldisplays.5.Americansexpectshort-termprofits.6.Americansarelesslikelytospeakaforeignlanguage.7.Americansarenotworldtravelers.Only21percentholdpassports.

8.Americansareuncomfortablewithsilence.9.Americanshatetoadmitthatwedon’tknow.

Chapter47

NegotiatingCharacteristicsofNon-Americans

There’sanoldjokethattherestaurantsinheavenhaveaGermanmanager,aFrenchmaitre d’,Englishwaiters, and an Italian cook.On theother hand, therestaurantsinhellhaveanItalianmanager,aGermanmaitred’,Frenchwaiters,andanEnglishcook.ComedianGeorgeCarlinusedtosay,“Ifthere’saheaven,there are German mechanics, Swiss hotels, French chefs, Italian lovers, andBritishpolice.Ifthere’sahell,thereareItalianmechanics,Frenchhotels,Britishchefs, Swiss lovers, and German police.” These are stereotypes, sure, but itwouldalsobewrong to ignorenationalbusinesscharacteristics in thenameofavoidinganystereotyping.

Let’s look at the negotiating characteristics of non-Americans. I would beguiltyofmassivestereotypingifIimpliedthatallpeoplefromthesecountriesorof these national backgrounds had these tendencies. However, it’s realisticenoughtoassumethatalargepercentageofpeoplefromthesecountriesbehavethisway.It’swellworthbeingawareofthepropensitiesandobservingthenon-Americanswithwhomyou’renegotiatingtoseeiftheydofitthemold.

EnglishPeople

Be sensitive to national origin. Great Britain includes England,Wales, andScotland. The United Kingdom also includes Northern Ireland. Of the fourcountries thatcomposetheU.K.,82percentareEnglish,sounless theyhaveabrogue, you can assume they are English. English people prefer to be calledEnglish, not British. Part of this sensitivity comes frommassive immigrationproblems.Untilthe1960s,anyonewhowasborninoneofthecolonies(whichincluded60percentofthelandsurfaceoftheEarthatonetime)carriedaBritishpassport andwas free to immigrate to England.A refrain youwill frequently

hearis“Idon’twishtobecalledBritish.IfyouareBritish,youmightbefromjustaboutanywhere.IamEnglish.”

Make appointments well in advance, because the English live by theircalendars. Be punctual, but never early. Ten minutes late is better than oneminute early for social engagements. The English are excessively polite.Remember that there aremore than60millionBritons jammed into a countryhalf the size of Oregon, and most of them live in the counties surroundingLondon.Insuchacrowdedcountry,itisimportanttohaveboundariesonone’sbehavior.UnderstandingthisisthekeytounderstandingtheEnglish.Ifsomeoneonacrowdedtrainstartedtoplayasaxophoneoff-key,itisunlikelythatanyonewouldprotest.InAmerica,thatpersonwouldbeyelleddown.

This is why youwill see such outrageous styles of dress and hairstyles onyoung people in England. It appears to an outsider that a youth with spikyorangehairwearingaleatheroutfitwithchromestudscanexistinharmonywitha bowler-hatted banker who carries an umbrella year-round and has ahandkerchiefstuffeduphissleeve.Thisisdeceptive.Theydon’tapproveofeachother’sbehavior—theyarejusttoopolitetoprotest.

Youwill find it rare for an English person to ask you a personal question.Althoughit’sacceptableinAmericatoopenaconversationwith“Whatdoyoudo?”or“Wheredoyoulive?”thatwouldbeahopelessinvasionofprivacytoanEnglish person. Because they are excessively polite, they would answer thequestionifyouaskedthem,butwouldneverreciprocatebyaskingyouwhatyoudo.

England is still a very class-conscious society, although that is changingrapidly. Indicative of the change is thatMargaret Thatcher, JohnMajor, TonyBlair,andGordonBrownwerethefirstfourprimeministerswhodidnotcomefrom the upper classes. And Scotsman Gordon Brown was the first primeminister not English-born. You will still run into a great deal of class-consciousness,especiallywitholderpeople.Iftheyareevasiveaboutwheretheylive,forexample,don’tpress thembecausetheymayfeelself-consciousaboutlivinginaworking-classsuburb.

TheEnglishdonotfeelatallcomfortabletalkingtostrangersinthesamewaythatAmericansdo.TheproperwaytoinitiateaconversationwithastrangerinEngland is tomention theweatherwith an innocuous comment such as “Niceday today,” or “Might get some rain.” If the response is one unintelligible

syllable thatsounds like“Harrumph,” theyarenotbeing impolite; theysimplydon’t feel comfortable talking to you at that time. If they want to pursue aconversation, they will respond with an equally innocuous response such as,“Myrosesneedsomerain,”or“Wouldn’tbesurprisedtoseerainatthistimeofyear. Wouldn’t be surprised at all.” You may then start a conversation, butremembertonotaskthemanypersonalquestions.

It’sokaytopolitelydeclinetheofferofteaorcoffee,whereasinmanypartsofthe world it’s an insult. Be aware that the English view Americans withsuspicion.WeareseenastooslickforEnglishtastes.TheyaresomewhatwaryofgettinginvolvedwithAmericansforfearofbeingbamboozledbyafasttalker.

The English business executive does not move at the frantic pace of theAmerican. I remember having lunch with my nephew when he worked forLloydsofLondon.Hetookmetoanoldtaverninthecitythathadbeenservinglunches in that location formore than 700years.We sat at a longbench-typetablewithagroupofthreeEnglishbusinessmen.Theyhadseveralginandtonicsbefore lunch, and then launched into ahuge roast beef andYorkshirepuddinglunch,washeddownwithtwobottlesofredwine.

Afteralargedessert,theyorderedbrandy.IputonmybestAmericanaccentandsaidtooneofthem,“Excuseme,buddy,couldIaskyousomething?Doyougobacktoworkafterabiglunchlikethat?”HisreplytoldagreatdealabouttheEnglish attitude towardwork and success.Hepolitely said, “Here inEngland,wehaveadifferentapproachtosuccessthandoyouchapsintheStates.Hereweconsiderthatsuccessinbusinessentitlesustoworklesshard.Youchapsthinkthatsuccessrequiresyoutoworkevenharder.”

FrenchPeople

IhaveneverhadthetroublewithFrenchpeoplethatmostAmericansseemtohave. I think thatmuch of that comes fromAmericans being exposed to onlyParisians.ParisistotheFrenchwhatNewYorkistoAmericans.It’sapressurecooker of frantic business activity—a very competitive environment—so theycomeacrossas lesscourteous thanwewouldprefer.Remember thatFrance isvery centralized. The government, the banking and industrial powers, and the

entertainmentandfashionindustryallemanatefromParis.

ApartfromthoselivinginParis,Frenchpeoplearewarmandfriendly.EveninParis, I find people treat you as you treat them. If you have a chip on yourshoulderandareexpectingtofindthemhostile,that’sexactlywhatyouwillget.Ifyouareexcitedandeagertomeetthemandexploretheirculture,you’llfindpeoplewhoareeagertosharewithyou.

TheFrench take pride in Paris being aworld center for high fashion.Theyappreciateelegance,sodressmoreformallythanyouwouldathome.Addsomeextratouches,suchasapocket-handkerchieforasilkscarf.RememberthattheFrenchpride themselveson their languageskills.This loveof languagemeansthat even thosewho speak a fewwords of Englishmay be reluctant to do sobecausetheydon’twanttospeakitpoorly.It’snotbecausetheyhavetheattitudeof “If you want to speak to me, you must learn my language.” Frenchbusinesspeople probably understand English well, even if they don’t feelcomfortable speaking it. (It’s true that there is a strongmovement to preventEnglishwordsfrombecomingapartoftheFrenchlanguage,butthat’sanothermatter.)

The French take pride in being eloquent, and love to argue and converse.Nothing is more enjoyable than an abstract argument over their morningcroissant and coffee. The point over which they are arguing is less importantthan the logic theyuse towin theirargument.TheFrenchare logical thinkers,andsellwithlogicandreasonratherthananappealtoemotion.InnegotiationswhentheFrenchsayyes,theymeanmaybe.Whentheysayno,itmeans,“Let’snegotiate.”

Just as everything in France is centered in Paris, so are French businessescentralized. In large corporations, offices are arranged by rank and spread outfromthepresident’ssuite.Similarly,authorityisorganizedtoemanatefromthetopdown.AswiththeEnglish,theFrenchvalueprincipleoverresult.Makingafastbuckisnotreasonenoughtoviolatetheirtraditionalwayofdoingbusiness.Bepunctual,because tobe late isan insult to theFrench.Shakehandsbrieflywhen you meet them. Kissing cheeks is for only close friends. Call all adultwomenMadame,evenifthey’resingle.

Aboveall,don’truinamealbytryingtotalkbusiness.AFrenchlunchcanlasttwohours, and canbe an exquisite experience.Unless your host starts talkingbusiness,avoidit.You’llbedoingyourselffarmoregoodbyshowingthemhow

much you appreciate their cuisine.Be prepared to pick up a huge bill for themeal. I remember hosting a dinner party at a French restaurantwhere a guestselectedaducksaladasanappetizer.IshouldhaveknownthatIwasintroublewhentheycarvedtheducktableside.Thisappetizeralonewas$80!

GermanPeople

Germany (and the German-speaking part of Switzerland) is a low-contextcountry;Germansputtheiremphasisonthedealratherthantherelationshipoftheparties,or theenvironment inwhich theysignedthecontract.Germansareoneof the fewnationalities to expectmoredetailed contracts thanAmericans.Theyreallyaremastersof thedeal that,once theyhavehammered itout, theywill never change. Shake hands firmly when you arrive and leave. Do bepunctual because it’s very important to them. Don’t put your hands in yourpocketswhenyou’retalkingbusiness,asitseemstoocasualtothem.Don’ttelljokesintheworkplace.Germansconsiderittotallyinappropriate.

Germans appear formal and aloof at first. It takes them a long time to getrelaxedwithyou.Inbusiness,theyaremuchmoreformalthanAmericans,bothin attitude and style. They have a formal and informal distinction in theirlanguage.Tousetheinformal(Du)stylewithasuperior,ratherthantheformal(Sie) style, would be a major mistake. Don’t call people by their first name,unlessinvitedtodoso.

Germansplacegreatemphasisontitles.Useyoursifyouhaveoneandrespecttheirs.AddresspeopleasHerr,Frau,orFräulein,followedbytheirprofessionaldesignation (for example, Herr Dokter Schmitt, or Frau Professor Schmitt).Germanworkerswhohaveworkedtogetherfordecadeswillstillcalleachotherbytitleandlastname.

Germans drive very fast. Posted speed limits are universally ignored.Remember that thefast lane is forovertakingonly,howeverfastyou’regoing.Youcanbedoing100mphinthefastlaneandstillhaveacarcomezoomingupbehindyouandflashingitslightsforyoutogetoutoftheway.

AsianPeople

Asians are very relationship-based. They far prefer to trust the personwithwhomtheynegotiatethantheydothecontracttheysigned.InThailandandotherAsiancountries,youmaybegreetedwithaslightbowandbothhandspointedtowardyouwithpalmstogether.Youshouldrespondwiththesamegreetingbutholdyourhandslevelwithorslightlyhigherthantheirs.Theheightofthehandsindicates the respect that the person has for the person they are meeting.Someonemeetinga servantmayholdhisorherhandswellbelow theirwaist.Someonemeetingaholyperson,oragreatleader,mighttouchhishandstohisforehead.Don’tgetcarriedaway,but indicate respectbyholdingyourhandsalittlehigherthantheirs.

Asiansoftenconsiderpromisesmadeduringthenegotiationasbeingmadetothe individuals who negotiated, not to the organization. Americans call thesigning of an agreement “the closing.” Asians consider it an opening of therelationship.WithAsians, it is very important to convey that youconsider thesigningof thecontract abeginning,not anending.Donot expect eyecontact,because they think it’s impolite. It’s not a signof shiftiness.Many aVietcongsoldiersufferedatthehandsofAmericantroopsbecausetheycouldn’tlooktheAmerican in theeye.TheAmericanassumed that thismeant theVietcongwaslying.

KoreanPeople

Koreansalsolookattheagreementasastartingpoint,notthefinalsolution.Theydon’tunderstandhowanyagreementcanbeexpected toanticipateeverypossibleeventuality,sotheyseeacontractasanexpressionofanunderstandingon the day that the contract was signed. If conditions change, they don’t feelboundbythecontracttheysigned.Yourresponsetothisshouldnotbetoplacelessemphasison thecontract,but todraftacontract that is flexibleenough tomovewithchangingconditions. Ifyoucanpredict a shift inconditions, ratherthan resisting it, you shouldaccept that it couldhappen, andprovidepenaltiesandrewardsforthewayeachsiderespondstothechangingconditions.

Koreans don’t believe in fault. They consider that, if they fail to stickwith

agreement, it is an act ofGod.Unfortunately, theymay have planned to takeadvantageofyouwiththis.

ChinesePeople

TheChinesehaveasaying:“Heging,heli,hefa.”Itmeansfirstexaminetherelationshipbetweentheparties,thenlookatwhatisright,andonlythenworryabout what the law says. Many Chinese now shake hands when they meetAmericans,butfirstwaittoseeiftheyoffertheirhands.ThetraditionalgreetingisaslightbowfromtheshouldersthatisalmostanexaggeratednodandismuchlesspronouncedthantheJapanesebow,whichisfromthewaist.

Appeartobelow-keyinyourapproach,becauseloudbehavioreasilyoffendstheChinese.TheChinesedobusinessbasedonbuildingarelationshipwithyou,but they are not above using this as a pressure point and accusing you ofbreakingafriendshipifyouhesitatetogoaheadwiththeproject.

A strong tendency in Chinese culture is to put the group’s needs ahead ofpersonalneeds.Rememberthatforthousandsofyears,Chinesefocuswasonthefamily unit and beyond that the needs of the village. Confucianism alsoemphasizes the importance of the family, the extended family, and thecommunity.

Chinese negotiators work in teams and arrive at group decisions. Thecommunistseliminatedreligionsfromtheculture,butConfucianismandTaoismare philosophies, not organized religions. Confucianism puts emphasis on theorganizationoffamily,village,andsociallife.Taoismstressestheimportanceofbeinginbalanceandharmonywithnature.Incidentally,TaoismispronouncedasthoughitstartswithaDnotaT,asindou-iz-uhm.

A part of this emphasis on the group dynamics is the Chinese concept ofGuanxi.Thisreferstothetime-honoredconceptofreciprocalconcessions.ItissubtleinitsapplicationbutitistheunderpinningofChinesesociety.Whenoneperson does a favor for the other, he expects something in return.He doesn’tspecifywhatheexpectsorwhenheexpects it, but theobligation incurredhasnowbecomepartofthefabricoftheirrelationship.YouwillencounterGuanxirelationships everywhere you go: in your dealings with business people andgovernmentofficials,andineveryotheraspectofChineselife.

AnotherstrongpartofChinesecultureisrespectforaperson’sposition.Trytounderstandtherankofthepeoplewithwhomyoudeal.Infantsareraisedwiththatkindofconcernforpositionanditstayswiththemthroughouttheirlives.Intheworkplace, age rather than ability usuallymakes promotions. Everyone isexpectedtodefertohisorherelders.

Youknow,ofcourse,thattheChineseattachgreatimportancetosavingface.Inbusinessmeetings,donotexpectthemtospeakoutinsupportoroppositiontoyoursuggestions.Theywillbeconcernedthattheymaylosefaceorcauseyouorotherstoloseface.

Every Chinese person is an entrepreneur at heart and loves to bargain andhaggle. Expect them to start high and be willing to make concessions. Youshoulddothesameandnotbeoffendedbywhatappearstoyoutobegrindingyoudownonprice.Havefunandenjoythebargaining.

JapanesePeople

In Japan, they are reluctant to say no. “Yes” to themmeans only that theyheardyou.Don’taskquestionsthattheycananswerwithayesorno;insteadaskopen-ended questions. “When can you do that?” is better than “Can you dothat?”

It is impolite for a Japanese person to say no to an elder. HoweverWesternized theymayhavebecome theystillhave troublewith this. Iknowamanwhoownsalargefencingcompany.HesoldouttoaJapanesecompanyandnow reports to a business executivewho is younger thanhe. “Roger,” he toldme,“I’vebeendealingwithhimforyearsnow,andIhaveneverknownhimtoturndownaproposal that Imade tohim.Theproblem is that I cannever tellwhetherhelikestheproposalorissouncomfortablesayingnotoanoldermanthathewould ratherapprove it.”When theJapanesesay,“Itwillbedifficult,”theymeanno.

Japanisaveryhigh-contextcountry.Inaculturethatvaluestactandcourtesyoverhonesty,wordsdonotalwaysmeanwhat theyappear tomean.There isabig difference between what they say (tatemae) and what they think (honne).“We” comes before “I” in Japan. The group is more important than theindividual, which is the opposite of American culture, which glorifies and

rewards independence.Topunishchildren inAmericayouground them—keepthemin.TopunishchildreninJapan,yousendthemoutofthehouse.

As with other Asian cultures that have been influenced by Confucius, theemphasis here is on the hierarchy.Observe how Japanese people bow to eachother.Thepersonlowestinthehierarchywillbowfirstandwillbowlowest.

TheconceptofWaisstrongintheculture.Wewouldtranslatethatasmeaningharmony. Theywant to find a harmonious solution to every problem. To thisend,theybelievethateverysituationhasuniquefactorsthatenablethemtobendasolutiontomaintainharmony.UntilWesternculturereachedJapaninthe19thcentury, they didn’t understand the concept of objectivity. From their point ofview,everythingissubjective.

The Japanese prefer to work in groups. Don’t try to identify the leadnegotiator,theonewhowillmakeorbreakthenegotiation.Thereprobablyisn’tone.Don’texpectmuchfeedbackonyourproposal,forseveralreasons:

ThereisahierarchyinJapanesecompanies.Individualsdonotwanttoembarrassthemselvesbyspeakingout.TheJapanesebusinesspersonwantstosavefaceandallowyoutosaveface.Theyareadversetoriskandthereforeunwillingtostatetheiropinionforfearthatitwillberejectedbythegroup.

AsItoldyou,theChinesehaveaconceptofGuanxi,meaningreciprocity.IfIdoafavorforyou,younowowemeafavor.TheJapanesecallthisKashi,whichliterallytranslatesasloan.Inrestaurants,youwillseeassociatespouringsakeorbeerfortheirfriends.It isacceptedascreatingasubtleformofobligationthatwillbereciprocated.At that level, it’scharming.ItbecomesmorecomplicatedwhenyourealizethatyourJapanesebusinessassociatesaredoingfavorsforyouinfullexpectationthatyouwillreturnthefavor.

TheopeningpositionthattheJapanesetakedependsonhowwelltheyknowyou. If theydon’t knowyouoryour industrywell, theywill start high,not totake advantage of you, but because they learn about you by judging yourreaction. It’s called the “banana no tataki uri” approach to negotiating, a termthatreferstothewaythatbananavendorswouldaskanoutrageouslyhighpricefrompeopletheydidn’tknowandthenloweritquicklyifthebuyerprotested.Itsoundsunethicaltous,butitdoesmakesense.Youdon’tknowthenegotiatingstyleofthestranger.Hemaybeaccustomedtohardbargaining.Ifyoustarthigh,

youwill quickly learn about themand take adifferent approach thenext timeyoudobusinesswiththem.

In my book The Confident Decision Maker (William Morrow, 1993), IdevotedachaptertoexplaininghowtheJapanesemakedecisions.Herearesomekeypoints:

Theymakedecisionsinlargegroups,sowehavetroublefiguringoutwhoismaking the decision. The truth is that no one person is making the decision.Theyconsiderdefiningtheproblemtobefarmoreimportantthansearchingforthe right answer.Thegroup is there to absorb information and feels that oncetheyfullyunderstandthesituation,thechoicewillbeobvious.Eachmemberofthe group will give their input, starting with the lowest-ranking person andmovinguptothetop.

Japaneseexecutivesseetheirjobasrequiringthemtocomeupwithcreativeideas,nottobeheldaccountablefortheresults.Whereasweprefertohaveonepersonmake the final decision so that he or she can be held accountable, theJapaneselettheentiregroupcollectivelymakethedecision.Wheneveryonehasgiven all of their input, the choicemaybeobvious to thegroup. If is still notobvious, theymayretreat,knowingthat theyneedtoabsorbmoreinformation.ThismakesAmericans frustrated because they feel nothing is happening. Thegoodpart of all this is that once theydodecide to go ahead, everybody is onboardandfullycommittedtothecourseofaction.

RussianPeople

I spent twoweeks in theSovietUnionwhenGorbachevwas trying topushthroughreforms.Frankly,Idoubtedthattheywouldevermakeatransitiontoafree market economy because the Russians are not entrepreneurial at heart.Understandthatthecommunistsystemremovedallincentivesfromtheirwayoflife.Banningreligionmeantthattherewasnomoralincentivetodogoodintheirsociety.Banningprofitableprivateenterprisemeant that therewasnofinancialincentive to dogood.Remember that, for 70years, they livedunder a systemwhereeverybodyworkedforthegovernment;therewasnootheremployer.

Moneywasalmostmeaningless to thembecauseeven if theyhadany, therewasn’tanything tobuywith it. (PresidentReaganloved to tell thestoryof theRussian who saved all his life for an automobile and got a permit from thegovernment to buy one. He took the money and the permit down to the carshowroomandsaid,“WhendoIgetmycar?”“Youwillgetyourcarinexactlysevenyears,”theytoldhim.“Sevenyears?”“Yes,onthisday,sevenyearsfromnow you will get your car.” “Will it be in the morning or the afternoon?”“Comrade,wearetalkingsevenyears.Whatdifferencedoesitmake?”“Becauseonthatday,inthemorning,theplumberhaspromisedtocome.”)AlthoughsomeRussianshavetakentocapitalismlikeaducktowater,formanyitisadifficulttransition,sodon’texpectthemtobemotivatedbyprofitthewaythatwewouldbe.

Russians are not afraid tomake tough initial demands. They expect you toexpress your respect for them. That might be considered patronizing to anAmerican.NotsowithRussians.Learnaboutthepersonwithwhomyouwillbenegotiating and let him know how impressed you are. Russians have a verybureaucraticmind-set,sotheyarenotafraidtosaytheydon’thavetheauthority.This will give you the most frustration. Russians have learned to protectthemselves from blame by getting a dozen other people to sign on to everydecision.ThisisathrowbacktotheoldSovietdays,whenmistakescouldhaveveryseriousrepercussions.

Anothermind-setyou’llencounteristhatRussiansthinkthat,unlesstheyareauthorized to do something, it is forbidden. We Americans think just theopposite.Wethinkthatifsomethingisnotforbidden,itisokaytoproceed.Theycansaynoendlesslytotestyourresolve.

Russians are not afraid to vocalize their concerns, even if it causes you tosquirm.Try to appreciate thisopenness andnot let it botheryou.Aswith anyangryperson,trytomovehimoffofthepositionthathehastakenandgethimrefocused on your mutual interests. (See Chapter 36 for more on conflictresolution.)Theyareself-centered.They’renotinterestedinwin-win.

Russia is a higher-context country than you would think. Youmay get theimpressionthattheyarehardandcoldintheirbusinessdealingsbecausetheyarevery direct.However, underlying that toughnegotiating style is a need to feelgoodaboutthepersonwithwhomtheyaredealing.ThisisdoneatadeeperlevelthanthesuperficialfriendlinessofAmericanbusinessrelationships.Don’tthink

thatbecauseyoudownedacaseofvodkawiththemandengagedinbearhugsallaroundthatyouhavebuiltatrustingrelationship.

If Russians say that something would be inconvenient, they mean that itwouldbeimpossible.Ittookmeawhiletofigurethisout,andI’mstillnotsurewhyitis,butpresumablyit’sbecauseofamisunderstandingintranslation.Forexample, I asked the desk clerk at ourMoscow hotel to move us to a largerroom.Shetoldme,“Thatwouldbeinconvenient.”ItookthattomeanthatifIpushedharder,Icouldgethertoaccommodateme.Thatwasn’twhathappenedatall.Shewastellingmethatitwasimpossible.Ittookmenearly15minutesofhardnegotiatingtogetusupgradedtoasuite!

MiddleEasternPeople

Besensitivetoethnicdifferenceswhenyou’renegotiatingintheMiddleEast.Above all, don’t refer to them as Arabs unless they come from the ArabianPeninsula, which includes Saudi Arabia, Iraq, Jordan, and the Gulf States.Egyptians do not appreciate being called Arabs, and Iranians are horrifiedbecause theyareproud tobePersians. In Iraq,80percentof thepopulation isArab, but they are reluctant to call themselves anArab nation. It is best stayawayfromthatdiscussion.

Doexpecttospendagreatdealoftime,perhapsmanydays,gettingtoknowthepersonbeforehefeelscomfortablenegotiatingwithyou.WhenpeoplefromtheMiddleEastsignacontract, theysee itas thestartofnegotiations,not theend. They sign the contract first and then negotiate.MostAmericanswho dobusinessthereunderstandthisandcallthem“contractcollectors.”It’simportanttounderstandthisandnotseeitasdevious;it’ssimplythewaytheydothings.Acontracttothemmeanslessthanaletterofintentdoestous.

In their world, the ground floor is where shopkeepers ply their trade, andshopkeepers are a lower class than businesspeople. Don’t insult your MiddleEasttradingpartnersbyaskingthemtodobusinessinaground-flooroffice.Thehighertheflooryouareon,themoretheyseeyouashavingprestige.

Don’tbeoffendedif theyshowuplateforanappointment,orperhapsdon’t

evenshowupatall.Appointmentsarenotthefirmcommitmentsthattheyareinthiscountry,andtimeingeneralisnotprizedthewaythatwevalueit.

You will often be overwhelmed with hospitality and gifts by the non-Americanswithwhomyou’llbenegotiating.Thisisanovertattempttowinyourfavor, and youmust dealwith it.Rather than giving offense by refusing theirfavors, thebestplan is to reciprocate,whicheliminates thepersonalobligationthatmayhavebeencreated.Andyouhavetwicethefun.

KeyPointstoRemember

1.Understandingnationalcharacteristicswillmakenegotiatingwithnon-Americanseasier.

2.TheEnglishdon’tfeelcomfortablespeakingtostrangersthewaythatAmericansdo.It’saclass-conscioussociety,sobewareofaskingthemwheretheyliveorwhattheydoforaliving.

3.FranceisthemostcentralizedlargecountryonEarth,soParisiansarelivingwithmorestressthanthoseinruralareas.FrenchbusinesspeopleprobablyunderstandEnglishwell,eveniftheydon’tfeelcomfortablespeakingit.

4.LikeAmerica,Germanyisalow-contextnegotiatingcountry.Gettingthecontractsignedismoreimportantthatbuildingtherelationship.Germansputgreatemphasisontitles.

5.Asiansvaluetherelationshipmorethanthecontract.Theyoftenthinkofthecontractasanagreementbetweenthepeoplewhosigneditratherthanwiththecompany.

6.Koreansseeacontractasanexpressionofanunderstandingonthedaythatthecontractwassigned.Ifconditionschange,theydon’tfeelboundbythecontracttheysigned.

7.Guanxi,thetime-honoredconceptofreciprocalconcessions,isabigpartofChinesebusinesslife.Youwillreceivegiftsandareexpectedtoreturnthefavor.TranslatingfromChinesetoEnglishisdifficultbecauseEnglishisafarmorespecificlanguage.

8.TheconceptofWaisstrongintheJapaneseculture.Wewould

translatethatasmeaningharmony.Theywanttofindaharmonioussolutiontoeveryproblem.Theymakedecisionsasagroup,notasahierarchy.Don’ttrytoidentifytheleadnegotiator,theonewhowillmakeorbreakthenegotiation.Thereprobablyisn’tone.

9.Russiansarenotafraidtomaketoughinitialdemands.Theyexpectyoutoexpressyourrespectforthem.Learnaboutthepersonwithwhomyouwillbenegotiating,andlethimknowhowimpressedyouare.

10.IntheMiddleEast,don’tcallpeopleArabsunlesstheyarefromtheArabianPeninsula,whichdoesnotincludeEgyptandIran.ExpecttospendmanydaysbuildingarelationshipbeforeArabswillfeelcomfortableenoughtoconductbusiness.

SectionFive

UnderstandingthePlayers

In the previous sections, I’ve concentrated on how to play the negotiatinggame. Now I want to focus on the importance of understanding the othernegotiatorandrealizingthatitisamajorkeytoPowerNegotiating.Peoplearedifferent. They throwwho they are into the negotiation. It affects the kind ofstrategythattheydevelop,itinfluenceswhichoftheGambitstheywilluseandhowtheywillusethem,anditdeterminestheirentirestyleofnegotiating.

Rememberthatyou’realwaysdealingwithanindividual,notanorganization,even ifyouarenegotiatingwithaunionbosswhoheadsupa10,000-memberunion. I don’t blame you for assuming the needs of his members dictate hisactions, but I believe that his personal needs guide his actions.A secretary ofstatemayhaveexplicitinstructionsfromthepresidentonhowheorsheshouldconductinternationalnegotiations,butpersonalneedsmaystilldominatehisorheractions.Understandtheperson,andyoucanoftendominatethenegotiations.

We’lllookatyouandseeifyouhavewhatittakestobeaPowerNegotiatoras I cover how to read the body language of the other side, and listen for themeanings that are hidden in theway they talk.Then you’ll learn the personalcharacteristics,attitudes,andbeliefsofPowerNegotiators.

People seem to think that somepeoplearebornwith thecharacteristics thatmake them successful negotiators. “Oh, he’s a born negotiator,” you’ll hearpeoplesay.Youknowthat’snottrue.Ichallengeyoutoopenanynewspaperinthelandandshowmeabirthannouncementthatsays,“AnegotiatorwasbornatSt. Bartholomew’s Hospital today.” No, people are not born negotiators.Negotiating is a learnable skill. In this section, I’ll teach you how to feelcomfortable with any style of negotiator, so you can easily read variousnegotiators and their approach to gettingwhat theywant. Then I’ll show youhowtoadaptyourstyleofnegotiatingtotheirs.

Chapter48

BodyLanguage:HowtoReadPeople

In this chapter, I’m going to teach you how Power Negotiators read bodylanguage.

Unfortunately,bodylanguageisasubjectwithwhichmanypeoplegetcarriedaway.Ithinkthat’strueofalotofotherareas,too.I’vemetpeoplewhobelieveinastrologysomuch that theywon’teven leave thehouseonaparticularday,when their sign’s not right. Some people believe so strongly in handwritinganalysis that they won’t hire someone whose handwriting doesn’t conform totheir system. I’ve even heard of people who believe they can spot someonewho’scommittedamurder fromtheway theywrite.Andyoumayhave lostajobopportunitybecauseyoudidn’tinterpretaRorschachinkblottestaccurately.

We don’twant to go that farwith body language. But it’s true that a greatamount of our communication is non-verbal. Remember we talked about thiswhenwewerediscussingflinching—the importanceof thevisual reaction toanegotiatingproposal?Asmuchas80percentofthereactionthatpeoplehavetowhatisgoingoninthenegotiationcanbenon-verbal.

Ifyouwanttoillustratehowmuchwecancommunicatewithoutspeaking,atyour next staff meeting, go around the room and ask everybody to tell yousomething non-verbally. For example, a thumbs-up gesture means good. Athumbs-downgesturemeansbad.Ashrugof theshouldersmeans indifference,andsoon.I’vedoneitwithasmanyas50peopleandhaven’tcomeupwithashortageofgestures.Isuspectthatyoucoulddoitwith100people,andstillbegoingstrong.Thereisanawfullotwecananddocommunicatenon-verbally.

Justtogiveyouanideaofwhatyoucancommunicatenon-verbally,let’sseeifwecanupwith20thingsyoucansaywithjustonehand:

1.Beckonaperson.2.Blesssomeone.IntheChristianworld,athree-fingerblessing(thethumb,andtheindexandmiddlefingers)representstheTrinity.

3.Tellsomeoneheistalkingtoomuchbyflappingyourthumbagainstyour

fourfingers.4.Askforthecheckinarestaurant.5.Giveyourselfpermissiontotellaliebycrossingyourfingers.6.Tellsomeoneyouthinkthathe’scrazybycirclingyourforefingernexttoyourhead.

7.Acknowledgesomeonebypointingyourforefingerwithyourfistclenchedintheshapeofapistol.

8.High-fivesomeonetoshareacelebration.9.Hitcharidewithaclenchedfistandpointingthumb.10.Staveoffbadluckbytappingtheknucklesofyourclosedfistagainstthesideofyourheadina“knockonwood”symbol.

11.Refertomoneybyrubbingyourthumbagainstyourindexandmiddlefinger.

12.Greetsomeonewithahandshake.13.Pledgeallegiancewithyourhandoveryourheart.14.Expressapprovalbypattingachildoradogonthehead.15.Tellsomeoneto“hangloose”byextendingyourthumbandlittlefingerandshakingyourhand.

16.Say“let’sleave,”byclenchingyourfistandshakingyourthumbtowardthedoor.

17.Asksomeonetotelephoneyoubyextendingyourlittlefingerandthumbandshakingyourhandnexttoyourear.

18.Indicatethatyou’reapacifist(orwishsomeonevictory)withthemiddleandindexfingerraisedinaV-shape.

19.Indicatethatyou’reaStarTrekfanbyraisingallyourdigits,palmout,andseparatingtheringandmiddlefingers—theVulcansalute.

20.Wavehelloorgoodbye.

And that’s just with one hand! Note that I’ve omitted all kinds of obscenegestures and all sorts of sports gestures such as theAtlantaBraves tomahawkchopandtheUniversityofTexaslonghornwave.

However, ifwegetcarriedaway,wecaneasilymisunderstandgestures.Forexample, womenmuchmore naturally cross their arms than domen. It’s justmorecomfortableposition for them. Ifwe interpret that as shuttingusoff,wecanbemisreadingthesituationcompletely.

Ifwe see somebody tug his earwhile he’s in conversationwith us, andweautomatically think that means he’s asking for more information—when in

actualfacttheirearmayjustbeitching—itcanbeabigmistake.

Particularly,ifyou’redealingwithpeopleofothernationalities,youcanmakeseriousmistakes.Doyouknowthat,whereasinthiscountrywhenyounodyourhead itmeansyesand toshakeyourheadmeansno, toanEskimoexactly theopposite is true? But let’s not get carried away. You probably you won’t benegotiatingwithmanyEskimos.

Allow me just tell you the story of probably the biggest non-verbalmisunderstandingofalltime.Backin1960,whenNeilArmstrongsteppedontothemoon and was asked: “What’s it like up there?” He replied non-verbally,usinganA-OKgesturewithhishand.

NowthatwasfineformillionsofAmericansthatwerewatching,becausetheA-OKgesture is traditionallyAmerican,andverywellunderstood.But for theother 600 million people watching on television, the gesture was completelymisunderstood.Because it’s very similar to a gesture that’s known around theworld, where, when the thumb is touched to the center finger, it’s a hostilegesture,borderingonobscene.YoumaythinkofitasanItaliangesture,butit’sworldwide.

OnecaneasilybelievethatsomeJapanesetelevisioncommentatormighthavesaidtotheother:“Whatdidhesay?Whatdidhesay?”

Andtheotheronemighthavesaid:“Idon’tknow,butheseemsawfulmad!”

Icanonlythinkofoneuniversalnon-verbalcommunication.Ihavetraveledin113differentcountries,tosomeofthemostremoteplacesonearth,andhavealwaysfoundthatasmilemeansthesamethingtoallraces.

WhyIt’sBettertoNegotiateFace-to-Face

Theimportanceofreadingbodylanguage tellsyou that it’susuallybetter tonegotiateface-to-faceratherthanoverthetelephone,orbyfaxing,e-mailing,ortextmessaging.

Let’ssaythatyoustoppedbyadeveloper’sofficetotakehimtolunchandgooverashoppingcenterprojectthathehascomingonlinesoon.

You see through the glasswall of his office that he’s on the phone, so youdecide towait outside.He’s leaning back in his chairwith his feet up on hisdesk,andthephonetuckedunderhischin.He’smakingasteeplingmotionwithhishands,asuresignofconfidence.Allofasudden,hisfeetcomedownoffthedesk,he’ssittingupright inhischair,andhestartspattinghispockets, lookingforapen.

He looks over to his secretary, touches his thumb to his forefinger andwaggleshishand.Sheknowswhat thismeans, so shegiveshimapenandhestartstowriteonhispadfuriously.Whenhegetshalfwaydownthepadandhe’sfinishedwriting, hedraws abig lineon thebottomof it andputs abig checkmarkthere.

Thenhestandsup,goesaroundthedesk,pushesthechairinunderhisdesk,andstartsleaningonthebackofhischairashetalks.

At that point, he sees youwaiting outside, gives you a thumbs-up sign andanothersignwiththethumbandtheforefingerseparatedslightly,toindicatethathe’llonlybeacoupleofminutes,andcontinuestolisten.

Thenaworried look comesonhis face and, ashe responds, he touches thesideofhisnose.It’sagoodsignthathe’seitherexaggeratingorlying.Whenhereaches down,making some further adjustments to the figures on his pad, hestarts to smile again and reaches for his coat and has it halfway on as heconcludestheconversationandhangsupthephone.

ThepointI’mmakinghereisthis:Lookathowmuchmoreyouknewaboutwhatwasgoingoninthatconversationthanthepersonontheotherendofthephonedid,eventhoughyoucouldn’thearaword.

That’swhy I suggest thatyouavoidnegotiatingover the telephone.Alwaysconsidermeetingthepersonface-to-facesoyoucanreadhisbodylanguage.Youdon’talwayshave togo,buthere’smyrule: Ifyou’rewonderingwhetheryouneedtogoornot,youneedtogo.

Particularly,youcantellmuchbetter ifhe’sgettingupset,soyoucanadjustyourresponsesappropriately.

The other bad thing about negotiating over the telephone is that you can’tshakehands.Andinthiscountry,ahandshaketosettleadealissuchapowerfulnegotiatingtoolthatyoushouldneverbeinasituationwhereyoucan’tsealthedealbydoingit.

Another important thing to remember is that people believe what they seemuchmore readily than they believewhat they hear. For example, if I say toyou:“Well,I’mnotgoingtoletitworryme,”butwhenIsayittoyouIhavemyhands inmypockets,my shoulders are slouched,myhead is hung low, and Ihaveaworriedexpressiononmyface,whichwouldyoubelieve?AmIworriedornot?Ofcourse,you’dbelievewhatyousawratherthanwhatyouheard.

If you’re an analytical, our session on body language will not be nearlydetailed enough for you. It’ll appear very superficial. But if you’re likeme, Ithinkyou’lllearnenoughinthischaptertogetyoustartedinyourstudyofbodylanguage.

I’ll give you some basic fundamentals that you canworkwith that directlyapplytothenegotiatingprocess.Fromthere,youcancontinueyourownstudy.

Therearetwokeyplaceswhereyoucouldcontinuetostudy.Oneiswaitinginanairport,andtheotheriswatchingtelevisionwithoutthesound.

Insteadofgettingfrustratedbythewaitattheairport,startgettingfascinatedbythepeoplearoundyou.

Observethepeoplewhoarebeyondyourhearingrange.Youcan’thearthem,but you can see them. Study their posture and their body language. Try tointerpretwhatthey’redoing,particularlythepeoplethatareabsorbedwithacellphone conversation. Try to figure out to whom theymight be talking. Is it aspouse,alover,acustomer,oranemployee?Youcanprobablytellwithalittlepractice,justbyreadingtheirbodylanguage.

Remember, though, thatonlyachange inbody language isavalid signal toread.Don’tassumebecausesomebodyhashisarmsfoldedthathe’shostile.Thething to watch for is when something is apparently said that causes him tosuddenlyfoldhisarms.That’swhenbodylanguagebecomessignificant.

I once met with an expert on body language who was frequently hired byattorneys to be present in the courtroom to watch the body language of thewitnesses.Thisiswhathetoldmeisthekeyissue:“Watchforchangesinbodylanguage. Just because a witness may have a habit of scratching his nose, itdoesn’tmeanthathe’snecessarily lying. Itmayjustmean thathehasan itchynose. But if, when asked a certain question, all of a sudden his handinvoluntarily goes up to the side of his nose, it’s a pretty good indication thathe’slying.”

Incidentally, you canwatch that samegesturewhenyou’rewatching a late-night host start his show.He typically says: “We’ve got a great show for youtonight.”Butsometimesyou’llseehishandinvoluntarilygouptothesideofhisnose,indicatingthathereallydoesn’tthinkit’sthatgreatashow.

Backtothewitnessinthecourtroom.Hetoldme:“Justbecausetheirfingermaygototheircollarfrequently,itdoesn’tnecessarilymeanthattheyfeelalotofpressure. Itmaybe that theyhaveabrandnewshirton,whichhasn’tbeenwashedyet,andit’sstiffanduncomfortable.

“However, ifunder thepressureofaparticularpartof thequestioning, thentheir hand goes to their collar, it definitely means they feel they’re underpressure.”

Thisiswheremyfriendwouldstepin,bringittohisattorney’sattention,andduringcross-examination,theattorneywouldre-emphasizethispointtotryandfindoutwhatwasreallygoingoninthewitness’smind.

Now let’s consider the actual negotiating session and how body languageplaysapart.

TheHandshake

Therearemanydifferentwaysofshakinghands.Generally,inthiscountry,anacceptablehandshakeisfirm,butnottoostrong.Severalsteadyshakes.Usuallywedon’tusetheotherhand,althoughwithawell-knownacquaintancewemayshakewithbothhands.Inotherwords,weputourlefthandoverthebackoftheotherperson’shand.Manypeopleconsiderthisalittletooforward,particularlywhenyoumeetforthefirsttime.It’scalledthepoliticians’handshake.

Anothervariationofthisisgraspingtheotherperson’sforearmwithyourfreehand.That’sknownastheministers’handshake.

Andyetagain,there’sputtingyourhandontheotherperson’sshoulderasyoushakehishand.That’sasuresignalthathewantsyouforacommittee!

Be careful about any variation from the standard, familiar handshake.Obviously,adamppalmisthesignofnervousness,solookforthepersonwho

wipeshishandontheircoatasheraiseshishandtoshakeyours.

Afewyearsago,itwasunheardofforagentlemantoofferhishandtoaladybefore she had indicated that shewanted to shake hands, but now, in today’senlightenedsociety,menshouldofferahandtowomeninabusinesssituation.

I’mstillveryconsciousof this, as I travelaround thecountrygivingPowerNegotiating seminars. The customs are clearly different in different parts ofAmerica. In the South (for example, Alabama, Mississippi, the FloridaPanhandle,andsoon),I’mstillreluctanttooffertoshakealady’shand.It’salsotrue in theBibleBeltstates(suchasOklahoma,Kansas,andNebraska).Sobecareful,andbesurethatyou’reinaccordwiththelocalcustomsinthatarea.

WheretoSitataConference

Power Negotiators understand that the way you sit around the negotiatingtablecanaffecttheoutcome.

If you’re alone and negotiating against two other people, such as the vicepresident in charge of construction and the president of the developmentcompany,besureyoudon’tseatyourselfbetweenthem.Becauseifyoudo,theycanexchangeglancesandsignalsbetweeneachother,withoutyoubeingabletocatchthem.Also,ofcourse,youcan’twatchthebodylanguagesaseasilyasyoucould if you had them seated across the table from you. And you’re in theuncomfortable position of having tomove your head back and forth as if youwereatatennistournament.

Howdoyoucontrolwheretheysit?Besurethatyouhavethemsitdownfirst,andthenpositionyourselfacrossthetable,notonthesameside.

Whenalargegroupisnegotiating,andthereareequalnumbersoneachside,it’s typical for them to sit on opposite sides of the table. If the groups areunevenly numbered, then the larger group will try and maintain that sameseparationsothattheirlargernumbers,ononesideofthetable,candominatetheotherside.

However,ifyou’reamemberofthesmallergroup,you’llwanttoattempttosplituptheseatingarrangementsothatyourteamisdispersedamongtheother

membersoftheirgroup.Ittendstoeliminatethatfeelingofbeingoverpowered.

Whentwopeoplewhoareonthesamenegotiatingteamsittogether,theytendtobeperceivedas speakingwithonevoice. If theysplitup, theyappear tobepresentingtwoopinions—whichgivesthemmorestrength.Ifyouhaveoneotherpersononyourside,buttheybringinthreepeople,andyou’resittingataroundtable,youwouldn’twanttosittogether.

WhentoGetDowntoBusiness

Having met everybody and seated yourself at the table, the next thing toconsider is this:When should the small talk stop and the serious negotiatingbegin? PowerNegotiators know that it’s always good to relieve tensionswithsomeinconsequentialbantertogeteverybodyfeelingcomfortableandreadytogo.Butwhendoyougetdowntobusiness?

PowerNegotiatorswatchforthecoatbuttonphenomenon.Menwillnormallykeeptheircoatjacketbuttoneduntiltheyfeelmorecomfortablewithyou.Ifyouhavemembersofthegroupwhostillhavetheircoatsbuttoned,keeponwiththesmalltalkuntiltheyreachdownandrelaxbyopeningtheirjacket.Therewasasurvey done once at a wedding reception, where the person doing the surveydidn’tknowwhetherthepeoplewhowerethereweremembersofthefamily,orjust invited guests. Theywere able to tell with 80-percent accuracywhowasthere as a member of the family, because their coats were unbuttoned. Thepeoplewhowerestrangerstothegroupkepttheircoatsbuttonedmuchlonger.

Herearesomeothersignsthattheyarerelaxedenoughforyoutostarttalkingbusiness:

Shouldersarehangingloose.Handsarerelaxedandarejustusedtoemphasizeapoint.Voiceiseasy-goingwithconsistentpitch,timbre,andspeed.Eyesarenotblinkingrapidly.Handsareseparated,notclutchedtogether.Slightsmileontheirface.

EyeBlinkRate

Asyoulookaroundthenegotiatingtable,trytostudyhowfrequentlypeople’seyesblink.Ifyouhaven’tdonethisbefore,you’llprobablybesurprisedathowfrequentlyweblinkoureyes;upto60timesaminuteisnotunusual(althoughsomepeoplearemuchslower:around15to20blinksperminute).You’llneedthis information later because when a person’s eye blink rate changesdramatically, you’ll know that he’s either very alert towhat you’re saying, orunderahighdegreeoftension—andmaynotbetellingthetruth.

Watching television is another fascinatingway to study body language.Trywatchingnewscommentatorswiththesoundturnedoff.Watchfortheblinkingoftheeyes.You’llbeamazedathowmuchyoucantellaboutthekindofstorythat they’re relating. In England, they have an expression that says “he’s ablinking liar.” Probably without realizing that he was reading body language,he’snoticedthattheotherperson’seyesareblinkingataveryrapidrate.Thisisa very sure indication that the person is exaggerating, is lying, or feels veryuncomfortablewithwhathe’shavingtosay.

Ifyouwatchnewscommentatorswiththesoundoff,soyoucanconcentratebetter, you’ll be amazed to see the different frequency of eye blinks. Whenthey’reuncomfortablewithanewsstorythey’rehavingtoread,you’llseetheireyeblinkrategoupmaybefourorfivetimes.

WatchfortheHeadTilt

Thetiltoftheheadtellsyouwhetherpeoplearepayingattentiontoyouornot.Peoplewhoseheadsarecompletelyuprightastheylookatyouareprobablynotpaying attention.A slight tilt to thehead, particularly if their handgoesup totheirchin,isaverygoodindicationthatthey’repayingattention.

Wespeakerslearntostudythis.Wecanspotthemembersoftheaudiencewhoarepayingcloseattentionbythetiltofthehead.Andifwehavealargesegmentoftheaudiencewhoissittingwithperfectlystraightheads,eveniftheyhaveasmileontheirfaceandappeartobepayingattention,weknowthatthey’renot.

Whenthathappens,we’lldirectaquestion to thatsegmentof theaudienceforwhicharesponseisrequired.Orwe’llchangepace,or insomewaymakethatsectionoftheaudiencemorealert.

Ofcourse,ifaspeakernoticesthatthepeopleareleaningtowardthedoor,it’sagoodbodylanguagesignthatthey’relosinginterest!

WhentheHandGoestotheHead

Watchcarefullyanytimethehandgoestothehead.Astrokingofthechinwiththethumbandforefingerindicatesthey’reveryinterestedinwhatyou’resaying.Knucklesfolded,andunderthechin,revealthesametypeofinterest.Butwhenthechingoesintotheheelofthehandandtheheadleansonthehand,it’saclearsignofboredom.

Whenapersonstrokesthesideofhisnose,it’salmostaclearindicationthathe is exaggeratingor lying toyou, unless it’s a normalnervousmannerismofhis.

Whenapersontugsathisear,heissayingtoyou,“Iwanttohearmoreaboutwhatyouhavetosay.”

When a person scratches the top of his head, he is embarrassed oruncomfortablewithwhat’s going on.Youmightwant to back off and changedirection.

KeepYourEyesontheHands

Whatcanwe learn from thehands?Weknow that fingersdrummingon thetabletop indicates impatience.We know that under severe strain, people maywringtheirhands.Watchforsteepling,too.Steeplingmeanstwohandswithjustthe tipsof thefingers touching,without theheelsof thehandsmeeting. It’sanindication of supreme confidence. It’s very difficult to do that when you’re

extremelynervous.Ifyouseesomebodydoingthat,youknowhefeelshimselftobeinasuperiorposition.

Whenamanbringsoneormorehandstohischest,it’sasignofopennessandsincerity. Although when a woman does it, it tends to be one of shock orprotectiveness.

Squeezing thebridgeof thenose, particularlywhenhe also closeshis eyes,meansthepersonisreallyconcentratingonwhat’sgoingon.

Ahandplacedatthebackoftheneck,whetherit’safingerinsidethecollarorapalmrubbingthebackoftheneck,isalmostasuresignofannoyance.Peoplereallydogethotunderthecollar,andtheyreallydofeelthatyou’reapaininthenecksometimes.

WhatEyeglassWearersCanTellYou

What can you tell from a personwhowears glasses?Well, you knowwhatlookingoverthetopoftheeyeglassesmeans.Itsays:“Idon’tbelieveyou,”or“Idisapprove.” Someonewho repeatedly cleans his glasses, and this can happenthreeorfourtimesanhourduringanegotiation,istellingyouthesamethingasapipesmokerwho’sconstantlyrelightinghispipe:Heneedsmoretimetothinkaboutit.Whenweseethat,aPowerNegotiatorwilleitherstoptalking,or talkabout something inconsequential, while the other side mulls over the moreimportantpoints.

Anytimesomebodyputssomethinginhismouth,whetherit’stheearpieceoftheir glasses, or a pen or pencil, think of it as needingmore nourishment.Helikeswhathehears,buthewantstohearmore.

Ofcourse,ifsomebodytookoffhisglassessuddenlyandtossedthemonthetable, you’d know that he was upset with you and was shutting you off. Butwatchforthiswhenit’samoresubtlesignal,too,whenhe’sjustlayingdownhisglasses.Ifsomeonetakesoffhiseyeglassesandlaysthemdownonthetable,itmeanshe’snolongerlisteningtoyou.

ProxemicsIstheStudyofPersonalSpace

Anotherfascinatingpartofbodylanguageistoconsiderhowmuchspaceyoushouldgiveapersonwhenyou’recommunicatingwithhim.Thisstudyofhowcloseyoushouldgettoanotherpersoninthenegotiatingprocesshasanamealltoitself:proxemics.

Researchershavedeterminedthatanythinglessthan18inchesistheintimatezone.Youshouldn’tintrudeuponitwithoutpermission.From11/2to4feetisthe personal zone. Beyond 4 feet is the public zone, where you can feelcomfortablewithstrangers.

Therearealotofvariableshere.Oneisthenationalbackgroundofthepersontowhomyou’retalking.Peoplewhocomefromverycrowdedcountries,suchasEngland, where I was raised, or Japan, are more comfortable in a crowdedenvironmentthanAmericanstendtobe.Atthesametime,wecanshutourselvesoffmore easily.We can be alone in a crowdmuchmore comfortably than anAmerican who’s more used to wide open spaces. You can get closer to anEnglishmanoraJapanesepersonwithouthimfeelingpressured.

Of course the same applies to someonewho’s raised in a city, such as LosAngeles,Chicago,orNewYork,asopposedtosomeonewhoisraisedinawide-open,ruralenvironment.

Theothervariable isyoursize in relationship to theperson towhomyou’retalking.Ifyou’re talking tosomeonewho’sconsiderablyshorter thanyou,youmust standback considerably further thanyouwouldwith someoneyourownheight.Otherwise,you’d tend tooverpower thatperson.Anotherway thatyoucanlessenthisoverpoweringeffectistoturnsidewaysalittlebit,asyoutalktotheperson,soyoudon’tprojectagiganticwall.

Knowing about body language can give you an important edge innegotiations.Andthereisonetimewhenitcanbeinvaluableandthat’swhenthepersonwithwhomyou’re dealing is a student of body language. If youknowthatheisstudyingyourbodylanguage,youhaveagreatopportunitytouseyourbodylanguagetoinfluencehisthinking.

Iliketomirrorpeople’sbodylanguageforawhile.Iftheycrosstheirlegsorarms,Icrossmine.IfIseethattheyspotthis,Iknowthattheyarestudyingmybodylanguage!

KeyPointstoRemember

1.Asmuchas80percentofthereactionthatpeoplehavetowhatgoesoninthenegotiationcanbenon-verbal.

2.Beawareofculturedifferences.Withtheexceptionofasmile,whichisuniversal,differentgesturescanmeandifferentthingstodifferentcultures.

3.Studypeopleinairports,andontelevisionwiththesoundturnedoff,toappreciatehowmuchyoucanlearnnon-verbally.

4.Studyhowpeopleshakeyourhand.Ittellsyoualot.5.Ataconference,don’tsitbetweentworepresentativesfromtheothersidebecauseyoucan’treadtheirbodylanguage,andareatadisadvantage,havingtoturnyourheadbackandforth.

6.Ifyouandyourpartnerareoutnumbered,don’tsittogether.Yourargumentshavemorestrengthifyouseparate.

7.Don’tstartbusinessuntiltheyhaveunbuttonedtheirjacketsandtheirbodylanguageisrelaxed.

8.Afasteyeblinkratesindicatesthattheotherpersonisnotcomfortablewithwhatyouorheissaying.

9.Whenpeoplearepayingattention,theirheadsareslightlyinclined.

10.Payattentionwhenaperson’shandmovestohishead.Whathedoesnexttellsyoualot.

11.Beawareofproxemics.Knowhowcloseyoucanbetoanotherpersonwithoutmakinghimfeeluncomfortable.

12.Youruseofbodylanguageiscriticalwhenyourealizethattheotherpersonisstudyingyourbodylanguage.

Chapter49

HiddenMeaningsinConversation

AsifIhaven’tgivenyouenoughchallengeswithlearningallthenegotiatingtactics,learninghowtoanalyzethedifferentpersonalitiesyou’llbedealingwith,andcarefullywatching language, Inowwant toaddonemoredimension to it.Thatislookingforhiddenmeaningsinconversation.

WhenthepresidentoftheUnitedStatesmakesaspeech,heinvariablyreadsit,particularlyifitinvolvesforeignaffairs.Thisisbecauseeverysinglewordinthat speech will be analyzed—will be put under a microscope by the othercountries—todetermineexactlywhathemeanttosay.And,veryoften,whatisleftoutofaspeechwillbejustasmeaningfulaswhatwasputin.

Ifyouknewthatsomeonewho’sveryskilledatanalyzingconversationwouldbeanalyzingeverywordthatyousaidinthenegotiation,youwouldhavetobeverycautious.Notonlymustyoubeskillfulinanalyzingtheirhiddenmeanings,butyoumustalsobecarefulnottogiveawayyourown.

Iwasonceinvolvedinanegotiationthatwouldhaveledtothemergeroftwocompanies.Oneof theskeletons thatwehad inourclosetwas thatoneofourmajor stockholders was in serious financial straits and was very eager tocompletethemergeratanyprice.Wedidn’twanttheothersidetoknowthis,ofcourse.

Atonepointinthenegotiations,thepresidentoftheothercompanysaid,“I’mconcernedaboutyourrelationshipwithMr.X.Ifeelthatifweranacreditcheckonhim,we’dfindthathehasseriousfinancialproblems.”Themannerinwhichthestatementwasmadepuzzledme.Hedidn’t say,“Weranacreditcheckonhim,” which he was perfectly within his rights to do. He didn’t start off hissentencewith“Asyou’rewellaware,soandsohascreditproblems.”Hesaid,“Ifwewere to run a credit check.”This alertedme to the fact that hewas incontactwithsomeonewithinourorganizationwhohadpassedthis informationontohim.

Lateron,inaconversationhehadwithme,hesaid,“Roger,you’reanoutside

director of the corporation.” (Thatmeans that, although I sat on the board ofdirectors, I didn’twork for the corporation.)He continued, “I understand thatyou recentlyspentanentiredayat thecorporation, interviewingallof thekeyemployees.That’sastrangethingforanoutsidedirectortodo.Whydidyoudothat?”

I’d done it because I suspected therewere some severe conflictswithin theranksof theorganization.Ithadn’t turnedoutasbadlyasIfeared,butIdidn’tquite know how to respond to his question. Then I remembered how he hadphrasedtheearlierquestion,duringthenegotiations,andmysuspicionthattherewas someonewithinourcompanywhowas feedinghim informationbasedonthat response. I immediately knew that he already readmy confidential reportfromthatday’sactivities.Irespondedwithaseriesofquestionsthatcausedhimtorevealthenameofthecollaborator.

Thelessonhereistolistenvery,verycarefullytothewordsthatpeopleuse.Ifsomething strikes you as beingvery strange, then jot it down,word forword,andanalyzeitlater.Veryoften,peoplecansayonethingandmeanexactlytheopposite.

Opposites

Let’stakealookatafewofthoseexpressionsthatprobablymeanexactlytheoppositeofhow they sound. If someone startsoff a conversationwith “Inmyhumbleopinion,”heprobablymeansexactly theopposite.He’snothumble.Infact,he’segotistical.He’ssogreatthathecanprofesstobehumble.

Whenyouaskanopinionofsomeoneandthatpersonresponds,“Well,he’safine church-going person,” this probably means that church attendance is hisonlyattribute.Andifsomeonesaystoyou,“Wecanworkoutthedetailslater,”thatprobablymeansthatthere’squiteabitofnegotiatingtobedoneyet.You’renot in as close agreement as this personwants you to believe.The classic, ofcourse is, “Don’t worry.” If your daughter calls you up at 3 a.m. and says,“Daddy,don’tworry,”whatshouldyoudo?Startworrying!

Throwaways

There’sanothergroupofexpressionsthatshouldreallyalertyoubecausetheyprecedeavery importantpartof theconversation.They’recalled throwaways,such as “As you are aware,” “Incidentally,” “Before I forget,” “I justremembered,” and “By theway.” “As you’re aware”may be used as follows.“As you’re aware,we control 51 percent of the proxy votes in the company.”Well,ofcourseyouwerenotawareofthat.It’samajorpoint,andtheyjusttriedtodrop it inat the tailendofasentence.“Incidentally,”“beforeI forget,”and“by the way” are throwaway expressions that usually precede a monumentalannouncement.

The classic use of a throwaway took place when President Truman wasmeetingwithChurchillandStalin inPotsdamat theendofWorldWarII.ThewarinEuropewasover,andthewarwithJapanwasstillgoingon.TrumantoldChurchillthatwehadsuccessfullytestedanatomicbombjustthreedaysbefore,buthehadnottoldStalin.Hefeltobligatedtotellhim,butdidn’twanttorevealthatitwasanatomicbombforfearthatitwouldhelptheSovietstodevelopone.Attheendoftheday’smeetings,TrumanwalkedovertoStalinandsaid,“Oh,by theway,Mr. Stalin,we have a newweapon of unusual destructive force.”You can tell that Truman was trying to downplay the importance of thisannouncementbyusingthethrowaway“bytheway.”

Stalin’s responsewasequally fascinating.Hereplied,“Oh,yes,we’reawareofthat.”Weassumedthathewaslying,andthathedidnotknowthattheAllieshadanatomicbomb.Itwasnearly50years later,after theColdWarwasoverandtheSovietUnionhadcollapsed,thatwefoundoutthathedidknow.HehadplacedaspyinLosAlamosthatwaskeepinghiminformed.Thatnight,hecalledtheRussianscientists,whowerefrantically trying todeveloptheirownatomicbomb,andtoldthemtohurryupandgetitfinished.

Frequently, these throwaways, such as “incidentally” and “by the way,”precedethemostdramaticpronouncements.Perkupwhenyouhearthem!

Legitimizers

These are expressions such as “frankly,” “honestly,” and “to tell the truth.”They’reusuallyusedtotrytolegitimizeastatementthatisnotcompletelytrue.When somebody says to you, “Honestly, I don’t think we could live with aproposallikethat,”whatdoeshemeanbyhonestly?Hashebeendishonestuptonow?Orcoulditbethathe’sjusttryingtoaddalittlemoreconvincingpowertowhathe’stellingyou?Eventhen,he’snotbeingstrictlyhonestwithyou.

Anotherpopularlegitimizeris“inactualfact.”Afactisafact.Tryingtomakeitsoundgranderbyaddingactualtoitrevealsapretense.HaroldGeneen,whenhewas president of ITT, once exploded over themisuse of theword factandwroteascathingmemotoallhispeoplethatsaid:

“Yesterday, we put in a long hard-driving meeting mostly seeking thefactsonwhicheasymanagementdecisionscouldbe thenmade. I thinkthemostimportantconclusiontobedrawnissimple.Thereisnowordinthe English language that more strongly conveys the intent ofincontrovertibility, i.e. ‘final and reliable reality’ than the word ‘fact.’However, noword ismore honored by its breach in actual usage. Forexample,thereareandwesawyesterday:

‘Apparentfacts’‘Assumedfacts’‘ReportedFacts’‘Hoped-forfacts’‘Acceptedfacts’-andmanyothersofsimilarderivation.Inmostcasesthesewerenotfactsatall.”

Another legitimizer that has become popular on evening news shows is theexpression “exactly right.” Anchor Brian Williams says to Anne Thompson,“That has become a big problem, hasn’t it,Anne?” andAnne sycophanticallyreplies,“That’sexactlyright,Brian.”Itiseitherrightoritisn’t!Addingexactlydetractsfromthestatement.

OneofthefavoritelegitimizersinAmericanliteratureisamongthelastwordsofGoneWiththeWind,byMargaretMitchell,whenRhettButlersaystoScarletO’Hara,“Frankly,mydear,Idon’tgiveadamn.”(In2005,theAmericanFilmInstitutevoted it thenumber-onemovie lineofall time.)Studentsof languageand of hiddenmeanings in conversationwould instantly pounce on thatwordfrankly.It’salegitimizer.He’stryingtomakelegitimatewhathereallydoesn’tbelieve.Infact,hedidgiveadamn.AndwhenAlexanderRipleywroteScarlett,

thesequeltoGoneWiththeWind,welearnedthatonlyRhett’sloveforScarlettcouldsaveherfromthegallows.

Justifiers

Justifiers arewords that lay the foundation for failure, such as “I’ll trymybest”or“I’llseewhatIcando.I’lltrytokeepitunder$300.”Theseexpressionsfall farshortofafirmcommitment,don’t they?Andthey’repreparingyouforthe fact that theymight fail, so,unlessyou’rewilling to livewith that, at thatpoint,challengeit.Evenworseiswhenajustifierischangedtothepluraltense.Insteadof saying “I’ll give it every effort,” all of a sudden it becomes “We’llgive iteveryeffort,”hidingbehind thegroup.Nosalespersonworthhisorhersaltwouldeveraccepttheexcuseof“Well,I’dliketothinkitover.”Butifthe“I”changesto“we,”thenreallylookout!

If,duringtheentirenegotiation,apersonhasbeensaying“Well,Idon’tthinkI can afford to pay that much,” or, “I wouldn’t be willing to do that,” or, “Iwouldhavetogetyouto...,”andthenallofasuddenthepersonswitchesto“Well, we’ll have to think it over and we’ll give you a decision tomorrow,”you’re in serious trouble. You’d better get back in there and do some moreselling,becauseit’sjustnotgoingtofly.Switchingfrom“I’lltry”to“we’lltry”isaclearattemptatevasion.

Erasers

Therearemanyerasers.Thetwomostpopularonesare“but”and“however.”Whatyouhavetolearnaboutthesewordsisthattheyeraseeverythingthathasgonebefore them.Someone can tell you for tenminutes howmuchheor sheenjoysyourproduct,andthepersoncanlooklikeheorsheiscertaintobuy.Butif this 10-minute discourse ends with a “but” or a “however,” erase those 10minutesandknowthatyou’llhavetostartagain.Becausetheeraserwordbutorhoweverliterallyeraseseverythingthat’sgoneonbefore.

Deceptions

Whentheeraserisprecededbyasentencesuchas“I’mjustacountryboy,but. . . ” or “I’m no student of law; however, . . . ” or “I never graduated fromcollege,but...”or“I’veneverfullyunderstoodit;however...”or“It’snoneofmybusiness,but . . . ” thesearecalleddeceptions.And that’sexactlywhattheyare.

For example, somebody once said, “I’m just a country boy” to LyndonJohnsonwhenhewasintheWhiteHouse.LyndonJohnson,whohimselfwasacountryboy, exploded and said, “Listen,mister, in this town,when somebodysaysthattome,Ifeellikeputtingmyhandonmywallet.”Ifsomebodysaystoyou that they’re no student of the law, they might not be, but you can restassured that they know exactly what they’re talking about in this particularinstance.

Preparers

A group of sentences that are very important to salespeople are calledpreparers.Whenasalespersonsays toyou,“Idon’tmeantobepersonal,”youcanbesurethatheorsheisabouttobecomeverypersonal.“Idon’tmeantobepersonal,butwhendidyoufileforbankruptcy?”Whenhesays,“Idon’twanttointrude,”whatisheabouttodo?Intrude!

Exaggerations

Another way to prepare people for a potentially difficult question is toexaggerate it.Let’s say that someonewants to askyouwhatyour incomewas

lastyear,becausehe’sfillingoutacreditapplicationforyou.Hemaysaytoyou,“Thisisveryembarrassing,but....”Inthosethreeseconds,allkindsofthingsarerunningthroughyourmindabouthowembarrassingthiscouldbe.Andwhenyoufindoutthattheonlythinghe’saskingforisyourincome,it’smucheasiertotake.

Someonemightsay toyou,“Ineedabig,bigfavor.”You’re thinkingshe isgoing toask for$1000,orat least$500.Whensheasksyou for$50, it seemslikesuchasmallamount.

TrialBalloons

Inthenegotiatingprocess,youwillfrequentlyencounter trialballoons.Trialballoonsarethesentencesthatstartoffwith“Ihaven’tgivenitalotofthought,but...”or“Justsupposethatwe...”or“Offthetopofmyhead,Iwouldthinkthat...”or“Whatwouldhappenifwe...?”Peoplewhohavemadeuptheirminds that they’d like to trysomething,but they’renotsure ifyou’llgoalongwithit,senduptheselittletrialballoons.

Thistellsyoutwothings.First,ittellsyouthatthispersonwouldacceptwhathe is suggesting, however little thought the person claims to have given thematter.Ineffectthen,thepersonhasnarrowedhisnegotiatingrange.Italsotellsyou that the person is not sure you’ll accept it, so you can probably do a lotbetterifyoupushalittleharder.

Neuro-LinguisticOrientation

Another important part of hiddenmeaning in conversation is the realizationthatpeopletendtobeorientedtowardoneoftheirsenses.Bythat,Imeanthatweall interpreteverythingweexperience throughourdifferent senses (seeing,hearing,feeling,touching,ortasting),andmostofushaveanorientationtowardoneofthosesenses.

Taste and smell are seldom a predominant sense. The three most popularsenses you’ll encounter are seeing, hearing, and feeling. You can tell whichorientationapersonhasbythekindoflanguagethepersonuses.

Let’s suppose, for example, that three people get together and attend asymphony concert. The three people are an oil painter, a piano player, and apoet.Now,iftheyfollowtheirprofessions,youwouldexpectthattheoilpainterwouldbeprimarily sight-oriented.Whathe seeswill bemuchmore importantthanwhathefeelsorhears.Thepianoplayerwillbeorientedtohearing.Whathe hearswill bemore important thanwhat he sees or feels. The poetwill beorientedtohisfeelings.Whathefeelswillbemoreimportantthanwhatheseesor hears. Each one of themwill come awaywith a different interpretation ofwhathappened.

Although theorientationsofpeopleyou’llmeet inanegotiationmaynotbethatpronounced,theystillexist,andtheycanstillbeimportanttoyourstrategy.The peoplemay tell youwhich orientation they have from the way that theyexpressthemselves.Forexample,apersonwhoseorientationisthroughsound,likeapianoplayer,willsay,“Thatsoundsgoodtome”or“Ihearyou.”Andthepersonwhoprimarilyisafeeling-typeperson,likethepoet,willsaythingslike,“Ifeelgoodaboutthis”or“Icanwarmuptothatsuggestion.”

Ifyou’redealingwithsomeonewhoisprimarilyvisual,you’llwanttouseapresentationbinderorgotoachalkboardanddrawitoutforhimorhersothepersoncanactuallyseeit.Thiswon’tbesoimportantwithsomeonewhohasanaudio orientation. In fact, you could even turn off somebody like this. Thepersonmightevenresentyouvisuallyexplainingwhatyoujustsaid.His innerlanguagemaybesaying,“Youdon’thavetopaintmeapicture.Iheardyouthefirsttime.”Besureyoumirrortheconversationsofpeople.Ifpeopleareintheaudiomode,they’resaying,“Thatsoundsgoodtome.”

Don’trespondwith“That looksgoodtome,too.”Amongpeoplewhostudythat kindof thing, that’s called a crossed response.Aswith the studyofbodylanguage,therearepeoplewhocangetcompletelycarriedawaywiththestudyofhiddenmeanings inconversation.What I’vegivenyouhere,ofcourse, is avery brief overview.As you becomemore aware of the subject, as you studymorecloselywhatpeoplesay,andasyoulearntointerpretwithmoreskillwhatpeople say, you’ll become more interested in it, and your knowledge willautomaticallygrow.

KeyPointstoRemember

1.Ifyourecordedandtranscribedanegotiation,youwouldbeabletodetectallkindsofhiddenmeaningsinthewaythingsweresaid.

2.Someexpressionsalertyoutothingsthatmeantheoppositeofwhatisbeingsaid.Forexample,“inmyhumbleopinion,”“he’safinechurch-goingperson,”and“don’tworry”arewhatwecallopposites.

3.Throwawayssuchas“asyouareaware,”“incidentally,”“beforeIforget,”and“bytheway”precedeimportantpronouncements.

4.Legitimizersareusuallyusedtotrytolegitimizeastatementthatisnotcompletelytrue,suchas“frankly,”“honestly,”and“totellthetruth.”

5.Justifiersareusedtoprepareyoufortheothersidenotdoingwhattheyoffered.Examplesinclude“I’lltrymybest,”“I’llseewhatIcando,”or“I’lltrytokeepitunder$300.”Evenworseis“We’lltry.”

6.Erasersarewordsthateraseeverythingthathasgonebeforethemsuchas“but”and“however.”

7.Whentheeraserisprecededbyasentence,suchas“I’mjustacountryboy,but...,”“I’mnostudentoflaw;however...,”“Inevergraduatedfromcollege,but...,”“I’veneverfullyunderstoodit,however...,”or“It’snoneofmybusinessbut...,”thesearecalleddeceptions.

8.Preparersprepareyoufordifficultquestions.“Idon’tmeantobepersonal”and“Idon’tmeantointrude”pavethewayforthespeakertodojustthat.

9.Exaggerationsmakeiteasyforyoutogetsomething.Someonemightsaytoyou,“Ineedabig,bigfavor.”You’rethinkingsheisgoingtoaskfor$1000,oratleast$500.Whensheasksyoufor$50,itseemslikesuchasmallamount.

10.Trialballoonstellyouthattheothersidewillacceptwhattheyareproposing.

11.Listentothewaypeopletalk.Itwillrevealwhethertheyarevisuals,auditories,orfeelingpeople.Rephraseyourtalktomatchtheirs.

Chapter50

ThePersonalCharacteristicsofaPowerNegotiator

To be a Power Negotiator, you need to have or develop these personalcharacteristics:thecouragetoprobeformoreinformation,thepatiencetooutlastthe other negotiator, the courage to ask for more than you expect to get, theintegritytopressforwin-winsolutions,andthewillingnesstobeagoodlistener.Inthischapter,wewilltakealookateachoftheseinmoredetail.

TheCouragetoProbeforMoreInformation

Poornegotiatorsarealwaysreluctant toquestionanything theothersays,sotheynegotiateknowingonlywhattheothersidehaschosentotellthem.PowerNegotiatorsareconstantlychallengingwhattheyknowabouttheothersideand,what is more important, the assumptions that they have made based on thatknowledge.Youshouldadoptmanyoftheapproachesofinvestigativereportersasyougatherinformation.

Askthetoughquestions—theonesthatyoufeelsuretheywon’tanswer.Eveniftheydon’tanswer,youwilllearnbyjudgingtheirreactiontobeingasked.Askthesamequestionofseveralpeopletoseeifyougetthesameresponses.Askthesame question several times during an extended negotiation to see if you getconsistent answers. As you know, I devoted Chapter 38 to the importance ofgatheringinformationbeforeandduringthenegotiation.

ThePatiencetoOutlasttheOtherNegotiator

Patienceisavirtuetoagoodnegotiator.Iremembergoingaroundthecountryonapresstourtopromoteanearlierbookonnegotiating.

Acoupleoftimes,Ishowedupattelevisionstations,andtheinterviewersaidtome,“Youdon’tlooklikeanegotiator.”Iknewwhattheymeantanditdidn’toffendme.Theymeant,“Wethoughtyou’dlooktougher.Wethoughtyou’dlookmeaner.” Perhaps from seeing movies about union negotiators, many peoplethinkofnegotiatorsastough,ruthlesspeoplewhowillpullanyruthlessstunttotrick theother side into losing.Nothing couldbe further from the truth.Goodnegotiatorsareverypatientpeoplewhowon’tlettimepressurebullythemintomakingadealthatisnotineveryone’sbestinterests.

Remember theVietnam peace talks?AverellHarriman rented a suite at theRitzHotel inParisonaweek-to-weekbasis.TheVietnamesenegotiator,XuanThuy, rented a villa in the countryside for two and half years. With yourgovernment, your people, and the world press breathing down your neck forresults,ittakescouragetoshowthatmuchpatience,butit’sveryeffective.

TheCouragetoAskforMore

Former Secretary of State HenryKissinger once said, “Effectiveness at theconference table depends upon overstating one’s demands.” Apart fromprojectingthewillingnesstowalkawayifyoucan’tgetwhatyouwant,Idon’tthinkthatthereisanythingmoreimportantthanunderstandingthisprincipleandhavingthecouragetoapplyit.

We all lack courage sometimes simplybecausewe fear ridicule.RememberwhenItaughtyouabouttheBracketingGambitinChapter1?Itoldyouthatyoushould make a super-low offer, which brackets your objective, when buyingsomething. Then again, I told you that when you’re selling something, makeyourinitialproposalsohighthatitbracketsyourrealobjective.

You should always advance your maximum plausible position. Sometimesthat’s hard to do. We simply don’t have the courage to make those far-outproposals because we’re afraid the other side will laugh at us. The fear ofridiculestopsusfromaccomplishingmanythingswithourlives.TobeaPower

Negotiator, you must get over that fear. You must be able to comfortablyadvance yourmaximumplausible position and not apologize for it. (I’ll teachyoumoreaboutfearinChapter55onCoercivePower.)

TheIntegritytoPressforaWin-WinSolution

StraightUp,byJamesRamseyUllman,wasanexcellentbiographyofyoungmountainclimberJohnHarlin,who,at30yearsofage,diedtryingtoclimbtheEiger Mountain diretissima—straight up. The author, a famous chronicler ofmountain-climbing events, wrote about Harlin’s life in the preface. He said:“Straightupisawayofservingadrink.Itisalsoawaytoclimbamountainandoflivingalife.”

Ibelievethatstraightupisthewaytonegotiate.Often,theopportunitytotakequickadvantageofaweakenedopponentwilltemptyou.You’llbeinasituationinwhichyouknowsomethingthat,iftheothersideknew,wouldmakethemlesseager tosettle.Having the integrity topushforawin-winsolution,evenwhenyouhavetheothersideontheropes isarareandpreciouscommodity.Idon’tmeanbythisthatyoumakecostlyconcessionstotheothersidebecauseyou’resocharitable.Idomeanthatyoucontinuetolookforwaystomakeconcessionstotheothersidethatdonottakeawayfromyourposition.

TheWillingnesstoBeaGoodListener

Only a good listener can be awin-win negotiator.Only a good listener candetecttheotherside’srealneedsinanegotiation.Herearesometipsforbeingagoodlistenerinpreparingforandconductingthenegotiation:

Increaseyourconcentrationbythinkingoflisteningasaninteractiveprocess.Leanforward.Tiltyourheadalittletoshowyou’repayingattention.

Askquestions.Givefeedback.Mirrorwhathesaid.Avoidboredombyplayingmindgames.Concentrateonwhatheissaying,notthestyleofdelivery.Youcandothisbypickingthelongestwordinasentenceorrephrasingwhathasjustbeensaid.Becauseyoucanlistenfourtimesfasterthanthespeakercanspeak,youneedtodosomething,oryourmindwillwander.

Increaseyourcomprehensionofwhat’sbeingsaidbytakingnotesrightfromthestartoftheconversation.Takealargepadofpaperwithyou.Headitwiththedateand the topic, and start tokeepbriefnotesonwhat’sbeing said.Paper ischeaperthanthetimeittakestogobackandgetthedetails.Thiscommunicatestotheotherpersonthatyoucareaboutwhathe’ssaying.Anadditionalbonusisthat when people see you’re writing things down, they tend to be a lot moreaccurateinwhatthey’retellingyou.Next,deferjudgingoftheotherpersonuntilhe’s through. If you immediately analyze someone as phony,manipulative, orself-serving,youtendtoshuthimoutandquitlisteningtohim.Justholdoffandwaituntilhe’sthroughbeforeyouevaluate.

Improve your ability to evaluate what’s said by asking the other person topresentherconclusionsfirst.Then,ifyoudon’tagreewithhercompletely,askher to supportherconclusions.Keepanopenminduntil shehas.Beawareofyourpersonalbiasesandbeconsciousofhowthey’recoloringyourreactions.Ifyouknowthatyoudon’tlikeattorneys,youcanevaluatetheinformationmuchmoreclearlywhenyou’reaware that this is causingyou todistrust thepersonwho’stalkingtoyou.

Perhaps you’re a person who can’t stand people trying to hype you. Youautomatically resist what they have to say, whether it’s right or wrong, so beawareofthat.Itimprovesyourabilitytoevaluatewhatthey’resaying.Learntotakenoteswithadividednotepad,onewithalinedownthemiddle.Ontheleft,youlistthefactsastheywerepresented;ontheright,younoteyourevaluationofwhatwassaid.

KeyPointstoRemember

1.Havethecouragetoaskthetoughquestions.Ifyouarenegotiatingbasedonlyonwhattheothersidehaschosentotellyou,youareveryvulnerable.

2.Patienceisatremendousvirtue.Don’tbesoeagertoreachanagreementthatyouoverlookopportunitiestomaketheagreementbetterforbothsides.

3.Askingformorethanyouexpecttogettakescourage,butit’savitalpoint.Howgoodanegotiatoryouaredependsonyourabilitytooverstateyourinitialdemands.

4.Havetheintegritytopressforasolutionthatisbetterfortheotherside.Themostimportantthoughtyoucanhaveisnot“WhatcanIgetthemtogiveme?”Itis“WhatcanIgivethemthatwouldnottakeawayfrommyposition?”Whenyougivepeoplewhattheywant,theywillgiveyouwhatyouwant.

5.Listeningisaskill,justliketalking,butit’smoreimportant.Worktoimproveyourlisteningskills.

Chapter51

TheAttitudesofaPowerNegotiator

TheWillingnesstoLiveWithAmbiguity

APowerNegotiatorrelishestheideaofgoingintoanegotiationnotknowingwhether he’ll come out a hero, or if he’ll come out carrying his head in hishands. This willingness to live with ambiguity requires a particular attitude.Peoplewholikepeoplearemuchmorecomfortablewithambiguity.Peoplewhoprefer things to people are not as comfortable. For this reason, engineers,accountants, and architects—members of those professions that depend onaccuracy—haveatoughtimewithnegotiating.Theydon’tlikethepushandtheshoveofit.Theywouldratherhaveeverythinglaidoutinblackandwhite.

Letmegiveyoualittlequiztotestyourwillingnesstolivewithambiguity:1.Ifyou’regoingtoaparty,doyoufirstliketoknowwhoyou’relikelytomeetthere?

2.Ifyourspouseistakingyoutohavedinnerwithfriendsatarestaurant,doyouliketoknowexactlywhichrestaurantyouaregoingto?

3.Doyouliketoplanyourvacationstothesmallestdetail?

If you said “yes” to all three of these, you have a major problem withambiguity. To become a better negotiator, I suggest that you force yourself totoleratesituationsinwhichyoudon’tknowexactlywhattheoutcomewillbe.

I remember training a large group of architects once. To test their comfortlevelwithambiguity,Iaskedthemaseriesofquestionsthatcouldbeansweredwithanumber.Itoldthemthatiftheydidn’tknowtheanswertheycouldgivearange, and they could make the range as broad as they wished. One of thequestions I asked themwas: “Howmany licenseplates canyouderive fromacombinationofsixlettersandsixnumbers?”

To me, a good answer would have been “between 15 and 20 million.” Asuperblyaccurateanswerwouldhavebeen“between17and18million.”Theirresponsetothequestionfascinatedme.Theywantedtoknowiftheycouldusethe letter “I” and thenumber “1.”Theywanted toknow if they coulduse theletter “O” and the number “0.” I said, “What does it matter? Just give me arange.” They wouldn’t do that and insisted that I tell them if they could usesimilar-lookingnumbersandletters.

I noticed that the president of the companywas almost falling off his chairbecause he was laughing so much. Later he told me, “Roger, you don’tunderstand.Architectsaretrainedtobeprecise.Theycan’tlivewithambiguity.Theyhavetoknowifthatbuildingisgoingtostanduporfalldown.Theyhavezerotoleranceforambiguity.”

Itoldthemthattheycouldusesimilar-lookinglettersandnumbers.Onlythendidtheyallwhipouttheircalculatorsandstartfuriouslypunchinginnumberstogiveme the answer: exactly 17,576,000. That’s enough for every state exceptCaliforniaandTexas.

IcanvividlyrememberthemomentwhenIrealizedthatIwasuncomfortablewithambiguity.WhenIwasyoungIwasintomountainclimbingandhadflowntoNepal to trek to thebasecampofMountEverest.On theway, Iplanned tospendafewdaysinthecapitalofIndia,NewDelhi.Ididn’thavemuchmoney,soIarrangedabarebonestriptotheTajMahalinAgra.IfoundanIndianwhospokegoodEnglish, andwe rodeabusout there,which is a journeyofabout150miles.Agraturnedouttobeaprettyrundowncity—anenormouscontrasttothebeautyofthemonumentIhadcometosee.

Iwasstaringoutofthebuswindowatacoupleofbackpackerswindingtheirway through a crowdedmarketplace.They clearly had everything they ownedstrapped to their backs. I thought, “Howscary thatmust be tobe in a strangecountryandhavenightcomeandyoudon’tknowwhereyou’regoingtosleep.”

I had never thought about it before, but I suddenly realize that for thethousandsofnightsthatI’dbeenalive,IhadneverputmyselfinasituationinwhichIdidn’tknowwhereIwasgoingtosleepthatnight.Iconsideredmyselfan adventurous person. I had traveled the world and climbed dangerousmountains,butneveroncehadItrustedmyselftofindaplacetosleepwithoutplanningitinadvance.

The more I thought about this, the more I realized that I needed to do

somethingaboutthis.Icouldn’tgoonbeingsoscaredofambiguitythatIhadtothoroughlyplanaheadlikethat.

A few months later, I was scheduled to speak in Australia. Instead ofmeticulouslyplanningmy trip as Iusuallydid, Ibought a round-the-worldairticket.Withthistypeofticket,youdon’thavetoplanyourtripahead,youcancalltheairlineatthelastminuteandgetaseattoyournextdestination.Theonlyrestriction is thatyoucan’tbacktrack.Youhave tokeepmovingeither eastorwest.Thetriptookmeamonth,andIdidn’tbookanyofitaheadoftime,notevenanyhotelrooms.

I went from my home in Los Angeles to Tahiti, on to Australia for thespeakingengagement, and then toSingapore,Bangkok,Frankfurt, andParis. Ididn’thaveanytroublegettingataxiorrentingacarwhenIneededit.Ididn’thaveanytroublefindingahotel.

If you have an obsession with planning everything ahead of time, Irecommendthatexercisetoyou.Trytakingoffwithoutanyplans.Developsomeconfidence that you can handlewhatever comes up. Itwillmake you a betternegotiator,anditwillalsoraiseyourself-esteem.

Yourself-esteemisdirectlyrelatedtoyourabilitytohandlethingsiftheygowrong.Somepeoplearedevastatediftheircarwon’tstartinthemorning.Othershaveanenormousabilitytoplowthroughproblemsandnothavetheproblemsstopthem.

BeResilient

Ilovetheadjectiveresilient.Ialwaysusedtothinkthatitmeanstheabilitytowithstanddamage,butitdoesn’t.Itmeanstheabilitytorecoverfromdamage.Ifyou squeeze a beer can, it stays squeezed. It is not resilient. If you squeeze aplasticwaterbottle,itpopsbacktoitsoriginalshapebecauseitisveryresilient.

Resilience is a powerful characteristic for a negotiator. However muchplanningyoudo,itisunlikelythatthenegotiationwillgothewayyouplannedit.Therewillbeunpleasantsurprises.Therewillbedifficultiesthatwouldforcea lesser person to give up. If you have resilience, you have what it takes to

bouncebackfrommisfortune.

Mywife,Gisela,isveryresilient.ShewasborninGermanyinthemiddleofWorldWar II. Itwas bad enough being on the losing side of thatwar, but tocompound theproblem, shewas in theEastern sideof thecountry, facedwithbrutaldominationof theSoviet invasion.She,herparents, andher twin sister,Helga,managed toescape toWestGermanyand then,when shewas12yearsold,migratedtoPhiladelphia.Psychologiststellusthatmuchofourcharacterisformed during those early years, and I certainly believe that all those earlychallengesmadeherasresilientassheis.

Resilienceisagreatcharacteristicforaspeaker’swife.Veryoften,Ihavetotell Gisela that I’ll be away in Florida all next week, giving seminars. Shedoesn’t say, “What am I going to do while you’re away?” She has her ownfriendsandinterests.

She showed a great ability to bounce back frommisfortunewhenwewerevisitingAmalfi,abeautifuloldtownontheAmalfiCoastlinethatstretchesfromNaples, Italy, south to Sicily. Towering cliffs rise straight up from theMediterranean, and over the centuries the Italians have found a way to buildhomesup thosesteepcliffs. It’san incrediblybeautiful sight. InRoman times,theemperorswouldbuildtheirsummerretreatsonthetopofthosecliffs.Ifyouhaven’tbeenthere,besuretoaddittoyourbucketlist.It’ssomethingyouhavetoseebeforeyoudie.

WewereinAmalfiandwantedtovisitRavello,whichisanartist’scolonyatthetopofthecliffaboveAmalfi.WehadfalleninlovewithRavellowhenwerented a villa one summer in Positano,which is a beautiful town a fewmilesnorth,towardSorrentoandPompeii.TheonlyroadtoRavelloisanarrowtwo-lane road thatmiraculouslyclimbs thecliffswithdozensofhairpinbendscutsintotherocks.It’sa toughride,butwellworthit. IfyoucanfindabalconyinRavelloandgetyourself aglassofChiantiClassicowhileyou savor theviewthathasenchantedvisitors forcenturies,you’llagreewithme that lifedoesn’tgetmuchbetterthanthat.Youcansearchifyouwant,butyoumightaswelltakemyword for it: Life doesn’t getmuch better than that.Maybe it doeswith abottleofChiantiClassico.

Theproblemwasthatwecouldn’tfindataxitotakeusthere.Wewaitedatthetaxi stand for 15 minutes, but none showed up. I saw a sign that said “BusTickets,”andIsaidtoGisela,“PerhapswecouldgetabustoRavello?”

Shesaid,“Haveyoueverriddenabus?”

“Not since Imoved toLosAngeles 35 years ago, butwhen Iwas a kid inLondon,Irodebusesallthetime.Let’sgiveitatry.”Iboughtacoupleofticketsatthestore,andtheytoldmethatI’dhave50minutestowaitforthenextbus.”IsuggestedtoGiselathatwehavelunchandabottleofwineattherestaurantonthebeachwherewecouldkeepaneyeonthebusstop.Soonwecouldseethatmorepeopleweregatheringforthebusthancouldpossiblyfitonit.Isuggestedthatwelineupwiththem.Giselasaid,”It’ssobeautifulhere,Roger.Whydon’tyoulineupandsavemeaseat?I’llfinishthewine.”

Thebuspulledupandthecrowdattackedit.Ihadtoliterallyfightmywayontoit,butmanagedtoplunkmyselfdownontwoseatsinthebackrow.Thebuswas jam-packedwith people both sitting and standing. I frantically looked forGiselabutcouldn’tseeher.Thebusstartedtopullaway,andIgotaglimpseofherstandingonthecurbatthebusstop.Ibangedonthebackwindowofthebusyelling,“I’monthebus!I’monthebus!”butIcouldn’ttellifshe’dseenme.

Thepeoplenexttomesaid,“Whowasthat?”

“That’smywife!”

Theywereincredulous.“Youleftyourwifeatabusstopinastrangecountry!Howcouldyou?”

“Well,she’sGermanandshe’sveryresilient.She’llthinkofsomething,”Itoldthem,butinmyheartIknewthatIwasinserioustrouble.IwouldhavetospendtherestofmylifewatchingEmmaThompsonmoviestorecoverfromthatone.

As Icontemplatedmybleak future Icouldhear theotherpeopleon thebustalkingaboutwhathadhappened—sometimesinEnglish(“Canyoubelievethatidiot!”),sometimesinItalian(“Cicredicheidiota!”),andsometimesinFrench(“Mondieu!Sacrebleu!”).Sooneveryoneonthebusknewthat theidiot inthebackrowhadlefthiswifeatthebusstopinAmalfi,andIwassinkinglowerandlowerinmyseat.

Halfwayupthecorkscrewroad,a taxisuddenlyroaredbythebusandcut itoff. I saw Gisela get out of the cab and get on the front of the bus, yelling,“Roger,areyouonthisbus?”Isaid,“Yes,Dear.I’mbackhere!”Theentirebuseruptedinapplause,andoffwewenttoRavello.

That’s resilience. The ability to recover from misfortune. It’s a great

characteristic foranegotiator.When thingsdon’tgoasplanned, findaway tomakeitwork.

ACompetitiveSpirit

Good negotiators have an intense desire to win when they’re negotiating.Seeingnegotiatingasagameisabigpartofwhatmakesyougoodatit.It’sfuntowalkintothearenaandpityourskillsagainsttheskillsoftheotherperson.

Italwaysamazesmethatsalespeoplecanbesocompetitiveinsports,butsocowardlywhen it comes tohandlingbuyers.A salespersonmayenjoyplayingracquetball, so he sets up an early-morning game with a buyer before he’sscheduled to make a presentation to him. On the racquetball court, he’ll doeverythinghecan—withintherulesofthegame—tobeatthebuyer.Thentheyshoweroffandgototheofficetonegotiatethesale,and,themomentthebuyermentions price, the salesperson rolls over and feels that he’s at the buyer’smercy.

The more you think of negotiating as a game, the more competitive you’llbecome.Themorecompetitiveyoubecome,themorecourageousyoubecome,andthebetteryou’lldo.

Don’tBeConflict-Averse

Power Negotiators are not restrained by the need to be liked. AbrahamMaslowisfamousforhispyramidofhumanneeds,whichshowedourneedsas:

1.Survival.2.Security(theneedtoassureourcontinuedsurvival).3.Social(theneedtobelikedandacceptedbyothers).4.Self-esteem(theneedtoberespectedbyothers).5.Self-actualization(theneedtofeelfulfilled).

Power Negotiators are beyond stage three most of the time—they have

surpassed the need to be liked. Negotiation, almost by definition, is themanagement of conflict or at least opposing viewpoints. People who have anexaggerated need to be liked will not be good negotiators because they fearconflicttoomuch.

WhenItrainphysiciansIfrequentlygetthecommentthattheydonotthinkitwise to be too tough a negotiator because they need to build long-termrelationships with the people in their industry. I don’t think that you buildrelationshipsbymakingconcessionstopeople.Letmeaskyouthis:Ifyouhadgivenyourchildreneverythingtheyeveraskedfor,wouldyouhaveabetteroraworserelationshipthanyoudonow?Ithinkthatthosephysiciansareconfusingliking with respecting. When you’re negotiating, you want the other side torespectyou,notlikeyou.

Whatthesephysiciansarerevealingisthattheyareconflict-averse.Physiciansarethehealersoftheworld,notthefighters.That’snotagoodcharacteristicforanegotiator.Learntoenjoyagoodconflictaslongasitproducesahealthyresultforbothsides.

Does thismean that good negotiators are ruthless people whowin becausetheydon’tcareiftheotherpersonislosing?No,notatall.Itdoesmeanthatthemostimportantthingtothemistohammerawayattheproblemuntilasolutionwithwhicheveryonecanliveisfound.

KeyPointstoRemember

1.Learntofeelcomfortablewithambiguity,becausenegotiatingisthemanagementofafluidsituation.

2.Beresilient.Thenegotiationwillnevergoexactlyasyouplanned.Learntobouncebackfrommisfortune.

3.Thinkofnegotiatingasagametobewon.Bevigorouslycompetitive,butstillplaywithintherulesofthegame.

4.Don’tworryaboutbeingliked.Youdon’twanttheothersidetolikeyou;youwantthemtorespectyou.

5.Don’tbeconflict-averse.Learntoenjoyagoodconflict,aslongasitproducesahealthyresultforbothsides.

Chapter52

TheBeliefsofaPowerNegotiator

NegotiatingIsAlwaysaTwo-WayAffair

PowerNegotiatingisalwaysatwo-wayaffair.Thepressureisalwaysontheotherpersontocompromiseinthenegotiationsjustasmuchasitisonyou.Forexample,whenyou’rewalkingintoabankandapplyingforabusinessloan,youmay get very intimidated. You tend to look at that big bank, and you startthinking,“WhyonEarthwouldabigbanklikethiswanttolendmoneytolittleoldme?”Youlosesightofthepressurethat’sontheotherside.Thisbankspendsmillions of dollars a year in advertising to entice you to come in for a loan.Thereistremendouspressureonthebanktogetthosedepositsoutintheformofloans.Manypeopleat thatbankhave jobs that aredependenton theirmakingloans.

Agoodnegotiatorlearnstomentallycompensateforthefact thatwealwaysthinkwehavetheweakersideinthenegotiations.Asshestridesuptothatloanofficer’s desk, she thinks to herself, “I bet that loan officer just got a royalchewingout fromhisboss,who toldhim, ‘Ifyoucan’t findsomebody to lendmoneytotoday,wedon’tneedyouaroundhereanymore.’”

Rememberwhenyou’vehadakeyemployeecometoyoutoaskforaraiseinpay?Whatareyousittingtherethinking?You’rethinking,“IhopeIdon’tlosehimoverthis.Hehasdonesowellforme,alltheseyears.He’ssoskilledinwhathe’sdoing.IhavenoideawhereI’dfindareplacementforhim.”

He’sprobablysittingtherethinking,“Ihopethisdoesn’taffectmycareerplanwith the company. They’ve really been good to me over the years. Maybe Ishouldn’t push so hard. She’s been so nice to me.” You’re both sitting therethinking that you have theweaker hand in the negotiation. Power negotiators

learntomentallycompensateforthat.

Whydoesthishappen?Becauseeachsideknowsaboutthepressurethatisonhimorher,butdoesn’tknowaboutthepressurethatisontheotherside.Forthatreason,eachsidetypicallythinksthatithastheweakerhand.

Don’tbuyintoitwhenapotentialcustomersaystoyou,“I’vegothalfadozenotherguysthatwilldoitforlessmoneyanddoitjustaswell.”Don’tbuyintothat.Somethingbroughttheothersidetothenegotiatingtable.Thecustomerhaspressure, justasmuchasyouhave itonyou.Theminuteyoubelieve thatandlearntomentallycompensateforit,youbecomeamorepowerfulnegotiator.

NegotiatingIsPlayedbyaSetofRules

The second belief thatmakes you a good negotiator is that negotiating is agamethatisplayedbyasetofrules,justlikethegameofchess.Perhapswhenyou read some of the Gambits in Section One, you thought, “Roger, you’venevermetsomeoftheguysIhavetodealwithinmybusiness.TheymakeAttilathe Hun look like Katie Couric. They’re never going to fall for that kind ofthing.”

That’s fair enough, but I want you to buy a little blue sky from me untilyou’vehadachancetotrythemout.Repeatedly,studentsofminehavetoldme:“Ineverthoughtthatitwouldwork,butitdid.It’samazing.”ThefirsttimeyouFlinch, Nibble, or use the Vise on the other person, and walk out of thenegotiationswith$1,000inyourpocketthatyoudidn’texpecttoget,you’llbeabelievertoo.

TheViseinAction

I remember training theemployeesofa large savingsand loan inSouthern California. At a local hotel, they arranged an afternoonseminarfollowedbyacocktailpartyandadinner.Duringthecocktailparty,Iwastalkingtothepresidentofthesavingsandloanwhenthe

maitred’fromthehotelcameupwithtwobottlesofwineinhisarms.Heaskedthepresidentifhewouldlikewineservedwiththedinner.Whenasked,hetoldthepresidentthatthewinecost$22.50perbottle.ThepresidentwasabouttosayokaywhenIsaid,“You’llhavetodobetter than that.” The maitre d’ looked irritated, and the presidentlookedshocked.Themaitred’said,“Itellyouwhat.Ifyou’llserveitfor everybody, I’ll give it to you for $15 a bottle.” The president’sfacelitupandhewasabouttogivehisokaywhenIsaid,“Wewerethinkingmorelike$10abottle.”

This caused themaitre d’ to say, “I’m not going to negotiate theprice of wine with you—$13.50 is absolutely the best I can do.”Remember that thepresidenthadbeen in the seminar thatafternoonandhadheardme talkabout theViseGambit,butuntilhesaw it inaction,Idon’tthinkhethoughtthatitwouldwork.

PleasebuysomeblueskyfrommeuntilyougetachancetogetoutthereandtryouttheseGambits.Themostimportantbelieftohaveisthatnegotiatingisagamethatisplayedbyasetofrules.Ifyoulearntheruleswell,youcanplaythegamewell.

“No”IsSimplyanOpeningNegotiatingPosition

ToPowerNegotiators,thewordnoisneverarefusal.Itissimplyanopeningnegotiating position. Remember that the next time you take a proposal tosomebody—perhaps your boss or a potential customer—and he explodeswithrage and says, “Not you again, with another of your crazy ideas. HowmanytimesdoIhavetotellyouthatwe’renevergoingtodoit?Getoutofmyoffice,and quit wasting my time.” When that happens, remember that a PowerNegotiatordoesn’ttakeitasarefusal(Iknow—it’sclose);shetakesitonlytobeanopeningnegotiatingposition.Shethinkstoherself,“Isn’t thataninteresting

opening negotiating position? I wonder why he decided to start with thatapproach.”

Your childrenknow this, don’t they?You can tell your child, “I am sickofhearingaboutthis!Gotoyourroom!Idon’twanttoseeyouuntilthemorning!And ifyoueverbring thisupagain, Iwillgroundyou for amonth!”Do theyheararefusal?No!They’reupintheirroomthinking,“Wasn’tthataninterestingopeningnegotiatingposition?”

KeyPointstoRemember

1.Eachsidetypicallythinksthattheyhavetheweakerhandbecauseeachsideknowsaboutthepressurethatisonthem,butdoesn’tknowaboutthepressurethatisontheotherside.Forthatreason,youalwayshaveastrongerhandthanyouthinkyoudo.

2.Negotiatingisagamethatisplayedbyasetofrules,justlikethegameofchess.Youwillbepleasantlysurprisedbyhowwellthegambitswork!

3.Thewordnoisneverarefusaltoanegotiator;itisonlyanopeningnegotiatingposition.

SectionSix

DevelopingPowerOvertheOtherSide

Power. Control. Influence. That’s really at the heart of any interpersonalsituation, isn’t it? In negotiating, the personwith themost influence or powerwill gain the most concessions. If you allow other people to manipulate andintimidateyou,itisyourfaultifyou’renotgettingwhatyouwantoutoflife.If,ontheotherhand,youlearnwhatinfluencespeopleandhowtouseandcounterspecificmethods,youcantakecontrolofanysituation.

DevelopingpersonalpowerovertheothersideisanissuethatissocriticaltoPowerNegotiatingthatI’mgoingtodevoteallofthissectiontoit.

Inanynegotiation,onepersonalwaysfeelshe’seither theintimidatoror theperson being intimidated. You always feel that you either have control of theotherperson,ortheotherpersonhascontroloveryou.Inthissection,I’mgoingtoexplainwherethatfeelingcomesfromandhowtodealwithit.

AtaseminarinIowa,amanapproachedmeandsaid,“Roger,mywifetookyourPowerNegotiatingcourse,andI’veneverseensuchapersonalitychangeinallmylife.Shehasherownsmallbusiness,anditwasn’tdoingthatwell.Butonce she studied up on personal power and your Negotiating Gambits, it’samazingtoseethedifferenceinher.Sheturnedintoatiger,andshereallyturnedthatbusinessaround.”

Ihavealwaysbeenfascinatedbywhatcausesonepersontobeinfluencedbyanother, and, for the last decade, I havebeenabsorbedwith studyingpersonalpower. I’m going to teach you the essential things that give you power overpeople. In every situation inwhich one person exercises control over another,one ormore of these factors have been called into play.Whether it is a drillsergeantharassingaprivateinbootcamp,oraparenttryingtomaintaincontroloveranerrantchild,oneormoreofthesebasicpowerfactorsisbeingused.

Powerhasearnedanastyreputation,hasn’tit?InalettertoBishopCreighton,Lord Acton said, “Power tends to corrupt and absolute power corruptsabsolutely.”CharlesColtonsaid,“Powerwillintoxicatethebesthearts,aswine

thestrongestheads.Nomaniswiseenough,norgoodenoughtobetrustedwithunlimited power.” However, I don’t believe that power is inherently evil. Itreallyisn’tpowerthatcorrupts,isit?It’stheabuseofpower.Youwouldn’tsaythatwater isbadbecauseoccasionallywehave floodsandpeopledrown.Youwouldn’tsaythatairisbadbecauseweoccasionallyhavehurricanesandhomesare destroyed. It’s not power; it’s the abuse of power that corrupts. There istremendouspower in theocean’swaves,andyet,everyday,hundredsofeagersurfersridethetoweringcrests.Electricityhasthepowertolightachild’sroomatnight,andthepowertoelectrocuteaconvictedmurderer.Thepoweritselfisindependentof itsuse.ThepopehaspowerovermillionsofpeopleandsodidAdolfHitler.AsGeorgeBernardShawsaid,“Powerdoesnotcorruptman;fools,however,iftheygetintoapositionofpower,corruptpower.”

Power canbe avery constructive force.When I talk aboutpower, I amnotreferring to thewanton ruthlessness of a dictator, whether he is in politics orindustry;Isimplymeantheabilitytoinfluenceotherpeople.

WhatI’mgoingtocoverinthissectionarethethingsthatpeoplecandowhenthey’renegotiatingwithyoutocauseyoutoblinkfirstatthenegotiatingtable.Of course, these things are alsowhat cangiveyoupowerover theother side.Wheredoes thatabilitycome from? It comes fromoneormoreof theseeightelements.

Chapter53

LegitimatePower

LegitimatePowergoestoanyonewhohasatitle.Ithinkyou’llagreethatyouare always a little more intimidated by someone who has the title of vicepresident or doctor than youwould be by someonewhohas no title.WegainLegitimate Power instantly, because it goes to us themoment that the title isconferreduponus.

For example, the moment the chief justice swears in the president of theUnited States, the president receives the full power of the presidency,independentofanypersonalpowerthatmayhaveexistedmomentsbefore.Whata president doeswith that power from that point onmakes all the difference.Striking a balance between appearing presidential and appearing close to thepeople—justaregularguy(orgal!)—isdifficulttodo.

Titlesinfluencepeople,soifyouhaveatitle,don’tbeafraidtouseit.Don’tbe bashful about putting your title on your business cards and on yournameplate. If the title on your business card says vice president, you alreadyhaveaheadstartoversomeonewhosecardsayssalesperson.WhenIrantherealestate company, Iwould let the agentswhowere farming a territory putareamanager on their business cards. (Farmingmeans that they had staked out anareaof500homes,andtheywereknockingondoorsandmailingnewsletterstothosehomeownerstoestablishthemselvesasanexpertinthatcommunity.)Theytold me that having the title area manager on their cards made a dramaticdifferencetothewaypeopleacceptedthem.

If you don’t have an impressive title on your business card, this may besomethingyourcompanyshouldreview.Thestandarddesignationsforterritoriesarethatanareamanagerreportstoadistrictmanagerwhoreportstoaregionalmanager, so regional vice president appears to be the more impressive title.Occasionally, I run intoacompany thatdesignates titles theotherwayand theareamanagerisinchargeoftheWesternUnitedStates.Idon’tsuggestthattheychange,butbecauseit’straditionallydonetheotherway,areamanagertendsto

bealessimpressivetitlethanregionalmanager.

Legitimate Power also tells you that you should have them come to you ifpossible,ratherthannegotiatingintheirterritory,wheretheirtrappingsofpowersurroundthem.Ifyou’retakingthemsomewhere,itshouldalwaysbeinyourcarbecausethatgivesyoumorecontrol.Ifyou’retakingthemtolunch,itshouldbetoyourchoiceofrestaurant,nottotheirfavoriteplacewheretheywouldfeelincontrol.

Hereare fivesmall things thatPowerNegotiatorscando tobuild theirTitlePower:

1.Useyourtitleifyouhaveone.Ifyoudon’thaveatitle,seeifyoucangetone.

2.Useyourinitials.Forexample,describeyourselfasJ.R.Doe,ratherthanJohnDoe.Peoplewhodon’tknowyoumustthencallyouMr.Doeratherthancallingyoubyyourfirstname.

3.Ifpossible,negotiateinyouroffice,orinyoursurroundings,ratherthanintheirs.Thatwayyou’reinyourpowerbase,surroundedbythetrappingsofyourtitle.

4.Alwaysuseyourautomobilewhenyou’renegotiatingwithpeople;don’tletthemdrive.Realestatepeoplealwaysdothat,don’tthey?Whenthey’reinyourcar,youhavecontroloverthem.

5.Haveanassistantplaceandscreenyourcalls.Ipersonallydon’tlikeadministrativeassistantswhoplacecallsforpeople,butitdoesconveyLegitimatePower.

OtherFormsofLegitimatePower

ThereareotherformsofLegitimatePower.PositioninginthemarketplaceisaformofLegitimatePower.Ifyoucanclaimthatyourcompanyisthebiggest(orsmallest),orifyouclaimthatit’stheoldest(orthenewest),youhaveauthorityin themarketplace.Youcanclaim tobe themostglobal company,oryoucanclaimtospecialize.Youcantellpeoplethatyou’rebrandnew,soyou’retryingharder,orthatyou’vebeeninthebusinessfor40years.Itreallydoesn’tmatterhowyoupositionyourself;anykindofpositioninggivesyouLegitimatePower.

RespectforthelawisaformofLegitimatePower.Somepeopleobeythelawonly because of fear of punishment, but most of us also respect the law andfollow it becauseof that respect.There is almost no chanceof us getting intotroubleifwedrivewithoutadriver’slicenseinourpossession,butmostofthetime,wetakepainstoseethatwehaveitinourpocket.It’sveryhardtoenforceseatbeltlaws,butIstartedwearingminewhenCaliforniapassedaseatbeltlaw,simply because I take pride in showing respect for the law. Do you zoomthroughredlightsinthemiddleofthenightifthere’snobodyaround?Probablynot,becauseweseethebenefitofeveryoneobeyingtrafficlaws.

Tradition isaformofLegitimatePower. (Until thestartof the20thcentury,tradition and law were thought to be the only main influences on people’sbehavior.) If you can establish in the other person’smind that you have beendoing something for a long time, you can convince him or her that it’s validwithoutgivinganyotherreasonfordoingit.

An established procedure is another form of Legitimate Power. “We havealways done it this way” has power. That’s why price tags have LegitimatePower.Becausetheysay,“Here’sthewaythisworks.Weputapricetagonthemerchandise. You pick what you want and bring it to the cash register. Wecharge you what is on the price tag.” Simply because of this establishedprocedure,fewpeoplequestionpricetagsinthiscountry.

Conversely, theprocedureonacarlothasbeenestablisheddifferently.“Youlook at the price sticker and then you make us an offer” is the establishedprocedure, and even peoplewho hate to hagglewill follow procedure. PowerNegotiatorsknow touse“standardcontracts”whengetting theotherperson todowhatwewantthemtodo.“Thisisourstandardcontract.Thisistheonethateverybodysigns”issimplyconveyingthepowerofprocedurethatisaformofLegitimatePower.

The first element of personal power is Legitimate Power, which goes toanybodywhohasatitle,orhaspositionedhimselforherselfinthemarketplace,orwhohasprojectedthatanestablishedwayofdoingthingsexists.

LegitimatePowerasanIntimidationFactor

Ontheotherhand,whenyounegotiatewithotherpeople,don’tbeintimidatedbyatitle.Wealltendtobemoreintimidatedbysomeonewho’savicepresidentof a bank or the president of a corporation than we would by someone whodidn’t have a title. For example, let’s say that you’re looking for a particularmakeandmodelofcar.

Oneday, in theparking lot at agolf course,you find just thecar forwhichyou’ve been looking, and it has a “for sale” sign in the window. As you’repeering into the driver’s sidewindow, trying to get a look at themileage, theownerwalksup.Hetellsyouthatheissellingitfor$10,000.Thatseemsalittleoverpriced,butyoupromisetothinkaboutitandgetbacktohim.Hescribbleshisnameandtelephonenumberonascrapofpaperandtellsyoutogivehimacallattheofficeifyou’reinterested.

Youdecidethatyouwouldlovetohavethecar, ifyoucangethimdownto$6,000or$7,000.Youcallhimandsay,“Iwant tomakeanofferonyourcar.Whencanwegettogetherandtalkaboutit?”

“I’m really busy this week,” he responds. “But my office is downtown. Ifyou’dliketomeetmehere,Icangiveyouafewminutes.”Laterthatday,youlocatehisofficebuilding,andthelobbydirectoryguidesyouto the24thfloor,whereasecretaryushersyouintoapenthousesuitethroughdoorsbearinglarge,gold-engravedsignsthatsay“President.”

Inside the largeoffice, thewalls arecoveredwithplaquesanddiplomas, allextolling the great achievements and accomplishments of theman behind thedesk—thesameman thatyoumet in thegolfcourseparking lot.Hestandsupwhen you enter, shakes your hand, and then returns to his conversation,motioningyoutoachairfacingthedesk.He’stalkingaboutsellingsomesharesofstockon theSwissExchange,and itsounds likeamulti-million-dollardeal.Finally, he hangs up the phone, smiles, and says, “Now how about that car?You’renotgoingtoaskmetocomedownonmyprice,areyou?”

Nowhowdo you feel about presenting your $6,000 offer?You’re likely sointimidated that you will want to either excuse yourself politely, saying thatyou’vedecidednottobuythecaratall,orsay,“You’dletmehaveitfor$9,000,wouldn’tyou?”Atthatpoint,youprobablywishyouwerebuyingthecarfromafactoryworker.

Whatdoestheseller’spositionhavetodowiththevalueyouplaceonthecar?Absolutelynothing.If thecarisworth$6,000or$7,000toyou,it isworththe

samewhetheryouarebuyingitfromapersonwhoputscapsontoothpastetubesorthepresidentoftheUnitedStates.

In fact, if you analyze the situation more, you have assumed that thiscorporation’spresidentwouldbeunwillingtotakealowofferbecausehe’snotunderanypressuretosellhiscar.Thatcouldbewrong.Hemaybemuchmorewillingtoacceptlessmoney,becausehedoesn’tneedthemoneyordoesn’twantto spendmuch timeselling thecar.On theotherhand, thatblue-collarworkermaybeunderfinancialpressureandmayneedeverypennyofhisaskingprice.Don’t let a title intimidateyou soyou’reblind to theother factors that shouldtakeprecedenceinyourconsiderationofwhatpricetooffer.

SomeTitlesDon’tMeanaThing

A good reason not to let titles intimidate you is that some of them aremeaningless.WhenIfirstcametothiscountryin1962,Ihadonly$400,soIhadtogetajobquickly.IwenttoworkforBankofAmerica,whichwaswillingtotrainmeonthetellerline.Thatdidn’tmakesensetomebecauseIhadn’tevenlearned themoney yet.Americanmoney is very confusing to non-Americans.Wehavecoinsthatdon’thavenumbersonthem.Adimedoesn’tread10andanickel doesn’t read five.The slots on a telephonedon’t readdime andnickel;theyreadfiveand10.Tofurtherconfuseme,all thebillswere thesamecolorandsize.

Itwas confusing forme, but I needed a job and Iwasn’t going to questiontheir judgment.There Iwason the teller line,chanting tomyself,“Anickel isbigger than a dime even though it’s worth only half as much,” when a ladyapproachedmetogetacheckcashed.Isaid,“I’msorry,butthatcheckisabovemylimit.Wouldyoumindtakingitovertotheplatformtogetitokayedbyanofficer?”

Shesaid,“Don’tyouknowwhoIam?MyuncleisavicepresidentofBankofAmerica.”

BankofAmericawas,atthetime,thelargestbankintheworldandithad500or 600 branches, so this information immediately intimidated me. I took the

standard Nuremberg defense and explained that I was just doing what mysuperiors had toldme todo.Off shewent in a real huff. I turned to the tellerbesidemeandtoldher,“IthinkIjustgotmyselfintoalotoftrouble.I’vejustupsetthenieceofthevicepresidentofBankofAmerica.”

The other teller laughed and said, “Don’t you realize how many vicepresidentsBankofAmericahas?”Shepulledout thedirectory thatwas likeatelephone book. It listed hundreds of vice presidents. Titles are sometimesmeaningless.

SomeTitlesDon’tMeanMuch

My daughter, Julia, graduated from the University of SouthernCaliforniawithabusiness-financedegreeandwenttoworktorDeanWitter, theNewYorkstockbroker, in theirBeverlyHillsoffice.Oneday,shewastalkingaboutbecomingavicepresidentthere.Itoldher,“Julia,youmustsetrealisticgoalsinlife.That’sahugecorporation,anditmaytakeyouyearsandyearstobecomeavicepresident.”

Shereplied,“Oh,no.IthinkI’llbeavicepresidentbytheendoftheyear.”

Iaskedher,“HowmanyvicepresidentsdoesDeanWitterhave?”

She toldme,“Idon’tknow; itmustbe thousands.Wehave35 inthis one office.” That company understands that titles influencepeople.

It’s like the two people arguing that General Motors has so many vicepresidents,theyevenhaveavicepresidentinchargeofheadrests.Tosettletheargument,theyfinallycalledGeneralMotorsandsaidtotheoperator,“Maywespeaktoyourvicepresidentinchargeofheadrests?”

Theoperatorasked,“Certainly,Sir.Isthatpassengersideordriver’sside?”

Don’tbeinfluencedbytitles,butunderstandthattitlesdoinfluencepeople.

KeyPointstoRemember

1.Thefirstofeighttypesofinfluencingpower,LegitimatePowergoestoanyonewhohasatitle.

2.Wefindithardertonegotiatewithavicepresidentthanwedoasalespersonorabuyer.

3.Positioninginthemarketplace,bysayingwearetheoldest,newest,orbiggest,givesyouLegitimatePower.

4.Respectforthelawisanotherform.Whenyousay,“Ourmissionstatementprecludesthatpossibility,”youareappealingtotheirrespectforthelaw.

5.TraditionisanotherformofLegitimatePower.“Wehavealwaysdoneitthatway”isanexample.

6.Don’tbeintimidatedbytitlesorothertrappingsofposition,suchasafancyoffice.

7.Rememberthatsometitlesdon’tmeanathing.

Chapter54

RewardPower

Thesecondelementofpersonalpower isRewardPower.PowerNegotiatorsknowthat ifyoucanconvincetheothersidethatyouwouldrewardthem,youhave given yourself the power to influence them.Unfortunately,many peoplewhoaretryingtoselltheirproductorserviceneverdeveloptheself-confidencetoprojecttotheothersidethattheywouldberewardingthebuyer.Thesepeoplethinkthatthebuyerisrewardingthembyplacingtheorderwiththem.

RewardPowertakesonmanyforms.Moneyistheobviousone,buttherearemany more. Some other forms of reward power include praising the otherperson, forgiving the other person, the power to assign titles (manager, vicepresident, captain), the authority to assign work or vacation schedules, andmakingrecommendationstootherswhohavepower.

Ifyourcompanyhasgrown to thepointwhereyou’vedelegated the taskofselectingwhichworkergoestoajobandwhichdoesn’t,youmayhavedelegatedaway your personal power. Some presidents will relinquish power to theirpersonnel director when they give the personnel director the right to makepromotional moves and give increases in pay, and this gives the personneldirectorcontrol.

Whydodefense attorneys earn such incredible fees from their clients? It isbecause they have convinced the client that only they can secure an acquittal.Theyhaveconvincedthedefendantthat theywouldbeluckytoberepresentedbythem.Theyhavetheclientthinking,“IfIcouldgetthisattorneytorepresentme, thatwouldbereallysomething,becausehe’s thebest in thebusiness.Youcan’tdoanybetterthanthat.”Attorneyswhoseekoutclientsandtrytopersuadethoseclientstohirethemarerelegatedtothestatusofambulancechasers.

HowDefenseAttorneysOperate

I once had a successful criminal defense attorney inmy seminarandafterward Igot toaskhimaquestion that I’dalwayswanted toask.“Doyouaskyourclientsiftheyareguiltyornot?”Hetoldme,“Ohabsolutely!Ican’tdefendsomeoneunlessIknowiftheydiditornot.Imightspendafortunetryingtogetevidencetosupportaclient’salibionlytofindthatoutthatitneverhappened.”

“Howmanyofyourclientsareguilty?”

“I’vebeendefendingclients forover25yearsandI’veonlyoncehadaclientwhowas innocent.Therestallsaid, ‘Sure, Idid it.Justgetmeoffandoutofjail.’Rememberthatmyfeesareenormous.It’salmostagiventhatanyonewhowouldpaymyfeesisguiltyandthattheevidenceagainstthemisoverwhelming.”

Youwanttohavepoweroveryourcustomers?Justconvincethemthatyou’rethe only one who can solve their problem. Don’t sell on price! Selling byoffering the best price is saying, “There are lots of people out therewho cansolveyourproblembutI’lldoitforless.”

Ifyou’resellingaproductorservice,youmustbelievethatyou’rethebestinthebusiness.Thenyoumustknowhowtoconvinceyourcustomersofthat.Theycan’t do anybetter thanyou. If you’rewilling toput yourpersonal reputationand expertise, and those of your company, on the line to solve those buyers’problems,theyarenotrewardingyou—youarerewardingthem.

Ofcourse,youcan’tpushthattoofarbecauseitquicklybecomesarrogance,but don’t roll over the other way, thinking that your customers would berewardingyoubygivingyouanorder.I’veheardrumorsthatsomesalespeoplewill actually beg a buyer to give them just a small part of the company’sbusiness.Can you believe that?Doesn’t it sound like a dog begging for tablescraps?Whenyoutrulybelievethatyouarerewardingthebuyer,nottheotherwayaround,youwillfeelconfidentindemandingalloftheirbusiness.

Take a moment and jot down three reasons why someone with whom younegotiatewouldberewardedbydealingwithyou.Ifyou’reinsales,thinkofthe

reasons why picking you over one of your competitors would reward her. Ifyou’reapplyingforajoborapromotion,thinkofthreewaysinwhichpickingyouwouldrewardthatcompany.

Iwonderifoneofthereasonsyouwrotewasthat“Theygetme.”Thatshouldbe the number-one reason that they pick you and not your competitor—notbecauseof thequalityof theproductorservice thatyousell,butbecause theygetyou.Tobesuccessfulatprojectingrewardpower,youmustaddvaluetotheproductorservice;theymustseevalueinbuyingitfromyou.Youprobablyhavesome legitimate competition in your industry—companies that can deliver theverysimilarproductataverycompetitiveprice.Thedifferencehas tobeyou,and your knowledge of your product and service, your knowledge of theirproblems and opportunities, and your ability to be creative in solving theirproblemsandseizingtheiropportunities.

Iwonder howmany competitors you have forwhat you do?Two, three, orperhaps half a dozen? Guess howmany competitors I have as a professionalspeaker? There are 3,500 members of my association, the National SpeakersAssociation. Whenever I book a speaking engagement, there are 3,499 otherspeakerswithwhomIhadtocompetefortheprivilegeofbeinginfrontofthataudience.Meeting planners say tome, “Roger,with all that competition, howcanyouchargeasmuchasyoudo?”Itellthem,“BecauseI’mgood!”Thatmaysound very arrogant and egotistical to you, but you need to have that muchconfidenceinwhatyoudo.Youneedtohavethatmuchconfidencethatyoudowhatyoudobetter thananyoneelse.Thenumber-one reason theyshouldpickyouisthattheygetyouandtheonlywaytheygetyouistopickyou.

RewardPowerasanIntimidationFactor

PowerNegotiatorsunderstandthatanytimeyouperceivesomeoneasable torewardyou,youhavegivenhimthepowertointimidateyou.Ifyouthinkthatbuyerisrewardingyoubygivingyouanorder,you’vegivenhimthepowertointimidateyou.Thisiswhyyoufeelintimidatedwhenyou’remakingabigsalethanyoudowhenyou’remakingasmallone.Thepotentialrewardisgreater,soyoufeelintimidated.Ofcourse,that’sentirelysubjective,isn’tit?Whenyou’refirstgettingstarted,youmayfeelthatsenseofrewardovera$1,000sale.Later,itwilltakea$100,000saletogetyouexcited.

WhentheothersidestartsusingRewardPoweronyou,recognizeitanddon’tletitintimidateyou.SomepeopleareabsolutemastersatusingRewardPower.Whenthey’reaskingyouforaconcession,theyjusthappentomentionthattheyhave a big project coming on line next week, for which youmight be in therunning,orthey’lltalkabouttheiryachtdownattheharbor,ortheirskicabinupinthemountains.Theydon’tevenhavetocomeoutandtellyouthatifyoudidbusinesstogetheryou’dgettousethem;it’sjustimpliedRewardPower.Don’tletitirritateyou,butrecognizeitforwhatitisanddon’tletitthrowyouoff-baseinthenegotiations.

OnceyourecognizeRewardPowerandunderstandwhatthey’retryingtodotoyou,theirabilitytocontrolyouwithitgoesaway,andyoubecomealotmoreself-confidentasanegotiator.

KeyPointstoRemember

1.Youarerewardingthebuyerbyallowinghimtobuyyourfineproductorservice.Heisnotrewardingyoubybuyingfromyou.

2.Successfulpurveyorsofservices,suchasdefenseattorneys,areskilledatprojectingthatyouareluckytohavethemonyourside.

3.Don’tsellonprice!Sellingbyofferingthebestpriceissaying,“Therearelotsofpeopleouttherewhocansolveyourproblem,butI’lldoitforless.”

4.Thenumber-onereasonthattheypickyouandnotyourcompetitorisbecausetheygetyou.

5.LookoutforpeopleusingRewardPoweronyou.

Chapter55

CoercivePower

TheoppositesideofRewardPowerisCoercivePower.Anytimeyouperceivesomeoneasable topunishyou,hehaspoweroveryou.Youknowhowawfulyoufeelwhen thestate trooperpullsyouover to thesideof the roadandhe’sstandingthereandcanwriteyou,ornotwriteyou,aticket.Thepenaltymaynotbeverygreat,butthelevelofintimidationisverygreatindeed.

Incidentally,intherealestateindustryinCalifornia,there’sajokeaboutthis.Californiahasmore532,000licensedrealestateagents,whichmeansevery50thpersoniseitherabrokeroranagent.Ifyouthinkyouhavecompetitioninyourindustry,tryCaliforniarealestate.Thejokeisthatahighwaypatrolofficerpullsyouover to the sideof the roadand says, “Okaybuddy.Letme seeyour realestatelicense.”

Yousay,“Officer,don’tyoumeanmydriver’slicense?”

Hesays,“No,noteverybodyinCaliforniahasadriver’slicense.”

It’shardforus to thinkaboutusingcoercivepoweronotherpeople,but it’salwayspresentinanynegotiation.Ifyou’reaskingaclerkatthestoretotakeanitembackandgiveyouarefund,bothRewardPowerandCoercivePowerwillinfluence that clerk’s decision. If he gives you the refundgraciously, youwillrewardhimbythankinghim,anditwillbeapleasantexperience.Ifherefusestogive you the refund, you might get angry, and it will be an unpleasantexperience.

Here are some other forms of Coercive Power: the power to ridicule orembarrass; thepower toaffecta reputationby revealinga secret; thepower tocauseemotionalpainbybringinguppainfulexperiences;givingoutdifficultorpainful assignments; the power to waste your time; make you repeat anassignment;ortakeaclassagain,andthepowertolimityourfuture.

Let’s look at how Power Negotiators make Reward Power and CoercivePowerworktogetherasapowerfulinfluencingforce.ParentsuseRewardPower

andCoercivePowerwiththeirchildren:“Ifyougotobednow,I’llreadyouastory.”“Ifyoudon’teatyourcarrots,youcan’twatch television.”Salespeoplestressbenefitstotheircustomerstopersuadethemtobuy,andtrygentlytoimplythedangersofnotinvesting:“Makingthisinvestmentwilldowondersforyourbottomline.”“Doitnowbeforethecompetitiongetsthejumponyou.”

Managersusethecarrotandstickapproachtomotivatetheiremployees:“Doagood jobon this one, and it’ll reallymakeyou lookgood.” “Joe,watchmylips.Don’tmess up on this one.” Politicians use it tomaintain the balance ofworld peace: “Maintain a democratic government, andwe’ll give you favorednationstatus.”“Messwithus,andwe’vegot10,000nuclearwarheadsreadytotakeoffon15seconds’notice.”

Inanypersuasionsituation,theelementsofrewardandpunishmentarealwayspresent.Let’s say that your car is in the shop.They’re tellingyou itwon’t beready until tomorrow, but you must have it tonight. You let them knowspecificallyhowyoufeel.

What’sgoingonintherepairshopmanager’smindashelistenstoyou?Ifhegoes along with your request, you’ll reward him with your gratitude and apleasant, warm environment. If he doesn’t, he’s apprehensive that things willturnnasty.PowerNegotiatorsunderstandthesetwoelementsandknowhowtoapplybothofthemskillfully.

Peoplewho don’t understandPowerNegotiation use one, but not the other.They threatenCoercivePower,butdon’tunderstand that it canbemuchmorepowerful when coupled with Reward Power. You’ve seen people make thismistake,I’msure.Whenthecarisn’tready,poornegotiatorsgetangryandtrytoforcetheotherpersontogiveinagainsttheirwishes.“Ifmycarisn’treadyby5p.m., I’m going to sue you for everything you’ve got. I’ll own this place.”Applyingfeartacticsisaneffectivepersuader,butit’softendonesocrudelythatitbackfires.Then,iftheothersidedoescavein,theyoftencompoundtheerrorbygloatingovertheirvictory.

Let’stakealookathowamasterpersuaderusesbothrewardandpunishmenttoinfluenceanation.ThisisWinstonChurchillendingaspeechintheHouseofCommonsonJune4,1940,whenthewarwithGermanylookedtobelost.

We shall not flagnor fail.We shall goon to the end.We shall fight inFrance and on the seas and oceans; we shall fight with growingconfidence and growing strength in the air.We shall defend our island

whateverthecostmaybe;weshallfightonbeaches,landinggrounds,infields, in streetsandon thehills.Weshallneversurrenderandeven if,which Idonot for themomentbelieve, this islandora largepartof itwere subjugatedand starving, thenourempirebeyond the seas,armedandguardedbytheBritishFleet,willcarryonthestruggleuntilinGod’sgoodtimetheNewWorldwithallitspowerandmight,setsforthtotheliberationandrescueoftheOld.

It’s the last sentence that illustrates Winston Churchill’s genius as aninfluencerofpublicopinion.AlesserpersonwouldhavebeencontenttocheertheEnglishonandpresentagoodoldmotivationalspeechabouthow“Britonsnever will be slaves,” to quote Rule Britannia, a popular patriotic refrain.Churchillwas smarter than that.Henot only usedRewardPower, but he alsousedCoercivePowerbytellingthecountry that theycouldwell lose thebattleandbeoccupiedbyGermany.

Power Negotiators know the subtle application of both Reward Power andCoercive Power is much more effective. They imply that things will getunpleasantiftheydon’tgetwhattheywant.Whentheothersidelooksasthoughthey’re going to give in, however, they quickly switch to Reward Power byshowingtheirgratitude.“That’sgreat,Ireallyappreciateit.You’reverynice.”

Takeamomentnowandjotdownthreereasonswhysomeonewithwhomyounegotiatewouldbepunishedbynotconsummatingadealwithyou.Ifyou’reinsales,thinkofthereasonswhypickingoneofyourcompetitorsoveryouwouldpunish a customer. If you’re applying for a jobor a promotion, thinkof threewaysinwhichpickinganyoneelsewouldpunishthecompany.

Hopefully,oneofthereasonsyouwrotewasthat theydon’t“get”you.Thatshouldbethenumber-onereasonthattheyavoidchoosingyourcompetitor—notbecauseof thequalityof theproductorservice thatyousell,butbecause theydon’tgetyouiftheydothat.TobesuccessfulatprojectingCoercivePoweryoumustaddsomuchvaluetoyourproductorservice—thattheyfearnotbuyingit

fromyou.AswithRewardPower,thedifferencehastobeyou:yourknowledgeof your product and service. Your knowledge of their problems andopportunities.Yourability tobecreative in solving theirproblemsand seizingtheiropportunities.

RememberwhenwetalkedabouttheBracketingGambitinChapter1?Itoldyouthatyoushouldmakeyourinitialproposalsohighthatitbracketsyourrealobjective.Sometimes that’s intimidating foryou todo.You simplydon’thavethe courage tomake thoseway-out proposals, because you’re afraid the otherside will laugh at you. In my book The 13 Secrets of Power Performance(PrenticeHall),Igaveyoutheanswertothis:Youmustfigureoutwhatyoufearthe most and do it. As with Reward Power, the answer lies in experience.Althoughaneophytebusinesspersonmaybeuptightabouta$1,000negotiation,a more experienced businessperson will be philosophical about losing a$100,000negotiation.Althoughanewsalespersonmayfearlosinga$1,000sale,the experienced salespersonwill not let the loss of a $100,000 sale intimidatehim.

New salespeople always have trouble with Reward Power and CoercivePower.Whentheyfirstmakesalescalls, theyseeeverybuyerasbeingable torewardthembygivingthemtheorder,orpunishingthembyturningthemdown,orworseyet,ridiculingthemforwhattheyhaveproposed.Oncethey’vebeenatit forawhile, theyrecognize thatselling isanumbersgame just likeanythingelse.Ifthey’reworkinghardatitandtalkingtoagreatnumberofpeople,therealwayswillbeahighpercentageofpeoplewhowillturnthemdown.Oncetheyunderstandthatit’sanumbersgame,theirperceptionthatpeoplecanrewardorpunish them goes away, and they become a lot more self-confident in whatthey’redoing.

Anytimethatyouperceivesomeoneasabletocoerceyou,hehasthepowertointimidateyou;andoneofthegreatestcoerciveforcesweknowisthepowertoembarrasspeoplebyridiculingthem.

FearonaMountaintop

The fear of ridicule can stop us from accomplishingmany of thethingswe’dliketoaccomplishwithourlives.Manyyearsago,whenI

waslearningtoski,IwasskiingatMammothMountaininCaliforniawithRonandMartyMeripol,whoskiedmuchbetterthanIdid.Theysaid,“Roger,we’regoingtotakeyouuptothecornicetoday.”

Isaid,“Idon’tthinkI’mreadyforthecorniceyet.”

Theysaid,“Oh,comeon,Roger.Youcanmakeit.Let’sgo.”

We rode thegondolaup to the topof themountain,which is justover11,000feetabovesealevel.Icanstillfeelthetensioninthattinygondolaaswedriftedsilentlyupthesnow-coveredfaceofthisalmostverticalcliff.It’ssuchadauntingrunthateventhemostexperiencedskierswon’t talkas theyapproach the top.Theysit there insilence,deep in their private thoughts, forcing themselves to overcome thefearofwhatliesahead.

Finally,we slid into the terminal and steppedoutside into the icywind. I nervously put onmy skis and skied down about 300 yardswithmyfriends,untilwewerestandingat the topof thecornice.Acorniceisanoverhangofsnow,blownoverthecornerofthecliffbythesnow.TheskiershadcutaV-shapethroughthiscornice,outontothecliff.IwouldhavetoshootdownthisV-shapechute,ontothefaceof the cliff,which is almost vertical. If Imade just one slip, I’d godownthenext1,000feetonmyhead.

I stood there, lookingdown through this chute, and as I saw it, Ihad two options. Option number one was to hike back up to thegondolaand ridedown,but if Idid that,my friendswould laughatme. Option number two was to die! I chose to die, rather than beridiculed.That’showstrongthattypeoffearofpunishmentcanbe.

Recently, I skied down the cornice again with my children, andnowtheyhaveasignatthetopthatsays“Whenyourfriendssaygo—don’tbeafraidtosayno.”

UnderstandandfeelcomfortableusingCoercivePower.Whetheryouapprove

ornot,it’salwayspresentinthenegotiation,andyourabilitytouseiteffectivelyiscriticaltoyoursuccessasanegotiator.

KeyPointstoRemember

1.CoercivePowerissubjective.2.CoercivePowerispresentinanycommunication.3.Costingmoneyisabigone,buttherearemanyotherformsofCoercivePower.

4.Thenumber-onereasonthatcustomersavoidchoosingyourcompetitorshouldbebecausetheydon’tgetyouiftheydothat.

Chapter56

ReverentPower

ThefourthelementofpersonalpowerisReverentPower.Thispowercanbesaidofanybodywhohasaconsistentsetofvalues.Anobviousexampleofthisisa religious leader,who is saying,“Youcan trustmebecause Ihavea setofvalues,andIamnotgoingtodeviatefromthosevalues.”

You like and admire consistent behavior in your customers. They like andadmireitinyou.Ifyou’rewillingtotakeastandforyourprinciples,especiallyifitappearsyou’reriskingfinancialloss,itbuildstrustinotherpeople,andtheyloveyouforit.Forexample,youmightsellcomputersandyouhavethecouragetosaytoyourcustomers,“Ofcourse,you’dliketosavemoney.AndI’dfavorit,too,ifitweretherightthingforyoutodo—butitisn’t.Iknowthatyouwon’tbecompletelyhappyunlessyougetthemodelwiththetwo-terabyteharddrive.I’msorry,butIwon’tsellyouanythingless.”

They love you for that.Of course, it’ll raise a few eyebrows, but if you’vedoneyourhomeworkandyou’reright,you’llhavepowerwiththatcustomer.Ifyoubackdown,howaretheygoingtorespectyou?

Supposeyourdoctortoldyouthatyouneededquadruplebypassheartsurgery,andyousaid,“IthinkIcangetbywithatriplebypass.”Ifhesaid,“Okay,let’stryatriplebypassandseehowitworks,”howwouldyoufeelabouthimthen?Wouldyouletthatpersoncomenearyouwithascalpel?Idon’tthinkso.

WhenyouprojectReverentPower,theothernegotiatorsnoticeit;theyadmireandrespecttheconsistentsetofvalues,anditgivesyouagreatdealofinfluenceover them. When you’re negotiating, and you indicate a willingness to cutcorners,orinsomewaypullsomestringsthatyoushouldn’tbepulling,youmaygetashort-termgaininyourabilitytomakethatsale.However,yougetalong-termlossinyourabilitytoinfluencethatbuyeroveralongperiod.

Be careful that you’re not setting up standards and then breaking your ownstandards. Don’t tell that buyer that you would never cut prices and then goaheadanddoit.That’sworsethannotsettingupthestandardsinthefirstplace.

ReverentPoweris themostpowerful influencingfactorofall.Beingable toproject successfully that youhave a consistent set of standards and that you’llneverdeviatefromthemhasanawesomeaffectonpeople.Here’swhyit’smorepowerfulthantheobviousinfluencingfactorsofrewardandcoercion.Althoughthose twomay have an immediate and dramatic effect on people, you cannotsustainthem.Theyeventuallytendtobackfireonyou.

Theparentwho’salwayspersuadinghischildbyofferingherrewardsquicklyfindsoutthechildlearnstoexpectthoserewardsandwillrebelifshedoesn’tgetthem.You can pay a corporate executive $20million a year, and in the earlystages,itwillbeatremendousmotivatingfactorforhim.Hewilldoanythingtoassurethecontinuationofthatreward.However,yearbyyear,thevalueofthatrewardstartstodiminish.

YoucanmotivateapersonwithCoercivePowerbythreateningtofirehim,forexample. However, it always backfires if you keep it up too long.When youkeeponthreatening,he’lleitherfindawaytogetoutfromunderthepressure,orhe’lllearntolivewithit.Yet,ReverentPowerjustgrowsandgrows.Thelongeryouprojectthatyouhaveaconsistentsetofstandardsfromwhichyou’llneverdeviate,themorepeoplelearntotrustyou.Fromthattrustgrowsatremendousabilitytoinfluencepeopleinanegotiation.

ReverentPowerasanIntimidatingFactor

When people use Reverent Power on you, it can be daunting because weadmirethatcharacteristic.Whentheysaytoyou,“Yes,butwedon’tdobusinessthatway.Ourfounder,Godresthissoul,saidwhenhefirststartedthisbusiness28yearsago,‘Let’sestablishafairlistpriceforourproductsandneverdeviatefrom that.’”Whenwe heard such high-flownwords, we hate to go against itbecauseweadmirepeoplewhohaveprinciplesanddon’tliketoopposethem.

When someone is usingReverent Power on you in thatway, you have twoalternatives:

1.Establishthat,althoughthey’retellingyouthattheyhavenevermadeanexceptiontotherule,therehaveindeedbeenexceptions.Thepowerofprecedentisaremarkablething.Ifyoucanestablishthattherehasbeen

anexceptionsomewheredowntheline,itnegatesReverentPowerentirely.IfyouareinaHolidayInninFloridaaskingforaspecialconcession,andifyoucanestablishthattheHolidayInninSeattleoncemadethatconcessionforyou,itgivesyougreatpowerindealingwiththatdeskclerkinFlorida.

2.Establishthat,althoughitmayhavebeenagoodruleinthepast,it’snolongerthesmartthingtodo.IknowofoneFortune50companythatforyearsgotawaywithsaying“Ourfounderestablishedapolicywhenhefirststartedthiscompanythatwewouldneverdeviatefromlistprices.Weshouldhaveafairpriceandeveryoneshouldpaythesame.”Thecompanywasabletomaintainthatfordecades,butfinallytheircompetitionstarteddiscountingandtheyhadtofollowthem.Justbecauseithasbeentheirpolicyforyears,itdoesn’tmeanthatitshouldbetheirpolicytoday.

KeyPointstoRemember

1.Wewanttobeledbypeoplewithaconsistentsetofvalues.2.Havethecouragetodecidewhatisbestforyourcustomersandneverdeviatefromthat.

3.ReverentPowerisstrongerthanRewardPowerorCoercivePower.Thosepowersmaydecreasewithtime,butReverentPowercontinuestoincrease.

4.ReverentPowercanbeintimidatingwhenitisusedonyoubecauseweadmirepeoplewhodothingsconsistently.

5.Doenoughinformationgatheringthatyoucanchallengestatementssuchas“We’venevermadeanexceptiontothatrule.”

6.Ifyoucan’tfindexceptions,convincethemthatit’stimetobemoreflexibleandmakeexceptionstotherule.

Chapter57

CharismaticPower

The fifthelementofpersonalpower isCharismaticPower. It’sprobably thehardest one to analyze and explain. What is charisma? We’ve all heard ofcharismaticreligions,ofcourse.Inthatsense,charismameansagiftfromGodofaspecialtalent,suchastheabilitytoheal,ortoprophesize.Inpopularusage,charismameansthis:aspecialqualitythatgivesapersontheabilitytocapturetheimaginationofanotherperson,inspiringsupportanddevotion.

German sociologistMaxWeber was the first person to bring the term intomodern-dayusageandpresent it as a learnablepersuasion skill.Hecalled it aformofauthority.Untilthestartofthe20thcentury,wethoughtofauthorityaseither law or tradition. MaxWeber introduced charisma as the third form ofauthority.That, simplywith their personalities, people could influence anotherperson.

MaxWeberalsointroducedthetheorythatcharismaticleadersareelectedintroubledtimes.ThatiscertainlytrueofAdolfHitlerinGermanyandJuanPeroninArgentina.Look at recentAmericanpolitics andyou’ll see that phenomenaalso.FranklinRooseveltwasfirstelectedinthemiddleoftheGreatDepression.BarackObamawaselectedduringtheworstrecessionsincethegreatone.

Obamaisacharismaticpresidentbecauseofhiscongenialnatureandhisself-confidence.Hisforcefulwayofprojectinghisvisionforthecountryinspireshisfollowers.

Dean Simonton, a psychologist at the University of California-Davis,determinedtheelementsthatapresidentialcandidatemustprojectifheistobeperceived as charismatic. He must have a flair for the dramatic, consciouslyrefine his own public image, use rhetoric effectively, exhibit artistry inmanipulation, conveyaclear-cut,highlyvisiblepersonality,have theability tomaintainpopularity,enjoytheceremonialaspectsofthepresidentialoffice,andbeadynamoofenergyanddetermination.

Ifyou’llapplythosecharacteristicstothepresidentyouthinkisorwasmost

charismatic,you’llseethatcharismaisnotamysteriouscharacteristic thatyoumustbebornwith,butmoreaskillthatyoucandevelop.InmybookSecretsofPower Persuasion, I spend two entire chapters explaining how to developpersonalcharisma.Fornow,let’sjustrecognizeitspoweranditslimitations.

MeettheMaster:WilliamJeffersonClinton

I’msureyou’vehadtheexperienceofmeetingacelebritywhohasan overwhelmingly charismatic personality. When I met PresidentClinton,IwasuncomfortablebecauseI’mat theoppositeendof thepoliticalspectrum,andI’msurehecouldsensethat.Ididn’twanttosayanythingthatwouldconstituteanendorsement,soIsaid,“Goodluck,Mr.President.Don’tletthemgetyoudown.”Guesswhathedid.Helookedmeintheeyeandsaid,“Roger,ifyou’llstaywithme,I’llbe there.” I said, “I’ll be there,Mr. President.”Within 15 seconds,he’dgotten a commitment of support fromme strictly basedon thepowerofhispersonality.

InTucson,IfoundmyselftalkingtosomeonewhohadjustmetBillClinton at political event. She toldme, “Therewere about 40 of uswhohadbeenchosen tomeethim,andweweregathered inahotelmeetingroom.Hecameinandspentabout20minutesshakinghandsas he went around the room. When he left, everyone of us wasconvincedthathehadcomeintotheroomespeciallytomeetthem.”

That’scharismaticpower!

Charisma is veryhard to explain.Weknow itwhenwe see, it butwehavetroubleexplainingit.Whenyouarehavingtroubleunderstandingsomething,ithelpstothinkoftheopposite.Whatcharacteristicswouldyouascribetotheleastcharismaticpersononearth?Withwhomwouldyouleastliketospendtherestofyourlifeonadesertisland?Ithinkitwouldbeapersonwhoistotallyself-centered,someonewhoonlythinksofhimorherself.

TakeJohnPaulGetty,forexample.Whenhewastherichestmanintheworld,manypeoplewanted toownwhatheowned,butnobodywanted tobewhohewas. Aristotle Onassis had the greatest difficulty in doing business with himuntil, as he explained in his autobiography, he accepted that anything Gettywoulddowouldbetotallyselfserving.

If the opposite of charisma is being self-centered, it becomes clear thatcharisma is theability toproject thatyoucareabouteveryonewithwhomyoucomeincontact.Youdon’thavetobeaMotherTheresa,caringabouteverypoorperson on the planet, or a Martin Luther King, Jr., caring about everyonesufferingracialprejudice,butyoudoneedtocareabouteveryoneyoumeet.

DaleCarnegie,inhisiconicbook,HowtoWinFriendsandInfluencePeople,gaveus this important advice:Treat everyoneyoumeet as themost importantpersonyouwillmeetthatday.That’swellsaid,isn’tit?Notthemostimportantpersonyou’llevermeetoreventhemostimportantpersonyou’llmeetthatweek—that would be over the top. Treat everyone you meet as if he is the mostimportantpersonyou’llmeetthatday.Youcan’tgetawaywithtreatingthevicepresidentwithrespect,buttreatingthesecretaryasaservant.

Salespeople tend to overemphasize Charismatic Power. Many an old-timesalesperson has toldme, “The only reasonmy people do businesswithme isbecause they likeme.”Well, not nowadays. Don’t fall into theWillie Lomantrap.Even60yearsago,whenArthurMillerwroteDeathofaSalesmanandhadWillieLomansaying,“Themostimportantthingistobeliked,”hewasmakingfunofit.Sure,thatbuyerismorelikelytogiveyouanorderifheorshelikesyou, but don’t think it gives you much control. Buyers are much toosophisticatedforthattoday.It’salongwayfromcontrolofthenegotiations.

CharismaticPowerasanIntimidatingFactor

SomepeopleareveryastuteaboutusingCharismaticPoweronyou.Withoutrealizing it,youcan findyourselfmakingconcessions to themsimplybecauseyoulikethemsomuch.Wheneveryoufindyourselfdrawntotheotherperson,you should stop yourself and think, “Would I be making this concession if Icouldn’tstandthisperson?”

KeyPointstoRemember

1.Charismaisspecialqualitythatgivesapersontheabilitytocapturetheimaginationofanotherperson,inspiringsupportanddevotion.

2.Itisjustaspowerfulandthetwotraditionalwaysofinfluencingpeople:thelaw(wehaveallagreedthatwewillobeytheselaws)andtradition(thisisthewaywe’vealwaysdoneit).

3.Charismaticleadershavegreaterpowerduringtroubledtimes.4.Charismagrowsasyoulearntoprojectconcernforotherpeople.

5.Treateveryoneyoumeetasthemostimportantpersonyouwillmeetthatday.

6.Don’tgiveconcessionstopeoplebecauseyoulikethem.Stopyourselfandthink,“WouldIbemakingthisconcessionifIcouldn’tstandthisperson?”

Chapter58

ExpertisePower

ThesixthelementofpersonalpowerisExpertisePower.Whenyouprojecttopeople that you have more expertise than they do in a particular area, youdeveloppowerover them.Thinkof thepeople towhomyoudefer becauseofExpertise Power: your doctor, your auto-mechanic, and your plumber. I evendefer to themaidwhocleansmyhomewhenshe tellsmethat Ineed tobuyaparticulartypeofcleanerforaspecialsurface.

I thinkthatExpertisePowerisbecomingincreasinglymoreimportantas theworldinwhichwelivebecomesmorecomplex.I thinkthat thetroublestartedbackin1965whenSonymarketedthefirstVCRmachine.Until then, lifewasdifficult, butmanageable.Wecould turnon theoven, and switchon the radioandthetelevisionset.Themomentweconcededthatwecouldn’tfigureouthowtoprogramourVCRs,weconcededthatfromthatpointon,thereweregoingtobe a great many things for which we’d have to call in an expert. Perhaps itstartedbeforethat.Irememberstandinginfrontofanewcarthatmyfatherhadboughtback in themid-1950s.“Where’s theholefor thehandcrank?”Iaskedhim.

“Doesn’thaveone,”hetoldme.

“Thatdoesn’tmakeanysense.Howwillyouget it startedwhen thebatterywon’tstartit?”IwasusedtoacarthatI’dhavetohandcrankfor15minutesonacoldmorningwhenmymotherwantedtogointotownforsupplies.

“I’m not sure about that, either,” my father told me. “They say that if thebatterywon’tstartit,you’vegotaseriousproblemthatyoushouldgetfixed.”

“Thatstilldoesn’tmakesense,”Irepeated.However,Igotusedtothat,andIresignedmyselftoVCRs.ThefirsttimeIsawahomecomputer,IthoughtthatI’dneverfigureouthowtouseit.IstillhavetroublewithmyiPhone.IfIcan’tfigureouthowitworks,Igetmy13-year-oldgranddaughter,Astrid,toexplainittome.Reluctantly,Iconcedethatthere’sgoingtobealotmorecompromisingbefore I get to my horizon.With technology leapfrogging over itself year by

year,monthbymonth,and,soon,weekbyweek,theexpertisgoingtobeking.Every one of us should realize that if we don’t keep on frantically becomingmoreofanexpertinourfield,theavalancheofnewtechnologywillrunoverus.

Today, expertise is not something that you study and acquire, becausewhatyou knew last year is not enough to sustain you this year. Youmust be on aconstant, never-ending quest for most expertise. All you have to do to loseExpertise Power these days is to refuse to believe that you must continuallyworkonupgradingyourskills.

Thethreebigfactorsinhavingtheabilitytoaffecttheactionsofothersare:1.RewardPowerorWealth.2.CoercivePowerorViolence.Thatmakesussquirm,doesn’tit?Butifyouhavethebiggerarmy,youhavepower.IfthedrugcartelsinMexicohavemoreandbetterfirearmsthanthepolice,theyhavepower.IdescribeditasCoercivePower,whichisamoredelicatetermthanviolence,butitreferstothesamething.

3.ExpertisePowerorKnowledge.Ifyouknowmore,youhavetheabilitytoinfluenceothers.Beforetheprintingpress,theabilitytoreadandwritewasconsideredexpertisepower.Nowit’sfarmorecomplex.It’swhatIcallExpertisePower.

Here’sakeypoint:ExpertisePowertrumpsbothRewardPowerandCoercivePower.TheleastversatileisCoercivePower.Youcanonlyuseitinrarecases.RewardPowerispowerfulbecauseitlosesitsvalue.ExpertisePowerjustgrowsandgrows.

Thinkof this in thecontextofacorporationhiringanentry-levelemployee.Atfirst,threatstofirethatpersonwillmotivatehimtoworkharder.Puthimintomanagement,andthat$100,000paypackageyougivehimwillmotivatehim—untilhisexpertisegrowstothepointwhereacompetitorwillpayhim$500,000toruntheircompany.

ExpertisePowerasanIntimidatingFactor

Don’t letpeople intimidateyouwithExpertisePower.Rememberwhenyou

firststartedinyourbusiness,andyoustudiedthetechnicalsideofwhatyoudo,but you weren’t confident about it yet? Then you ran into someone whoappeared to knowmore than you did. Remember how intimidating that was?Don’tletthemdoittoyou.Whentheyquestionyourexpertise,don’tbeafraidtosay, “That’s not my area of expertise, but our experts are the finest in thebusiness.Youcanhavecompleteconfidenceinthem.”

Attorneys and doctors really play this one up, don’t they? They develop awholenewlanguagethatyoucan’tunderstandtoproject toyouthat theyhaveexpertisethatyoudon’thave.

There’snotareasonintheworldwhydoctorscouldn’twriteprescriptionsinEnglish,butiftheydid,itwouldtakeawayalittleofthatmystique—alittleofthatExpertisePower.Attorneysare the sameway.Theydevelopawholenewlanguagethatwecan’tunderstandsothattheyprojectExpertisePower.

KeyPointstoRemember

1.Wedefertopeoplewhohavemoreexpertisethanwedo.2.Wemustbeonanever-endingdailyquestformoreExpertisePower.Ifwedon’t,technologyandourchangingworldwillswampus.

3.Thethreebigfactorsinhavingtheabilitytoaffecttheactionsofothersare:violence(CoercivePower),wealth(RewardPower),andknowledge(ExpertisePower).

4.ExpertisePowertrumpswealthandknowledge.5.Don’tletpeopleintimidateyouwiththeirExpertisePower.

Chapter59

SituationPower

TheseventhelementofpersonalpowerisSituationPower.We’reallfamiliarwith this one. This is the person down at the post office, someone who isnormallypowerlessinanyotherareaofhislife,butinthisparticularsituation,hecanacceptorrejectyourpackage.Hehaspoweroveryou,andhelovestouseit.

It’sprevalentinlargeorganizationsorgovernmentagencieswherethepeopledon’thavemuchlatitudeinthewaytheyperformtheirjobs.Whentheydogetsomelatitude,andwhentheyhavesomepoweroveryou,they’reeagertouseit.

Don’tTheyLovetoUseSituationPower!

IrememberspeakingtoahugesalesrallyinHalifax,NovaScotia.ThenightbeforeIgotthere,thisgrouphadputonthepartytoendallparties.Thesepeopleallgotbombedoutoftheirminds.Oneofthemgotundressedtogotobedat3a.m.andthendecidedhe’dliketohavesomeiceinhisroom.Hewasstandingthereinhisdazedstate,tryingtofigureoutwhetheritwasworthwhilegettingsomeclothesontogogettheice.Finallyhethought,“It’s3inthemorning.Theicemachineis justaroundthecornerfrommydoor.Who’sgoingtoseeme?I’llslipoutthewayIam,”forgetting,ofcourse,thatthedoorwouldlockbehindhimtheminutehegotintothehallway.

Soon,he’soutsidehisdoorwithhisbucketoficeandnothingelse,mentallydebatinghisoptions.Hefinallydecidedhedidn’thavemanyoptions,sohesethisbucketoficedownandheadeddown,acrossthelobbyoftheHalifaxSheraton,anduptotheyoungwomanbehindthedesk.Heaskedforanotherkeytohisroom.Shelookedstraightathimandsaid,“Sir,beforeIcangiveyouanotherkey,Ineedtoseesomeidentification.”That’sSituationPoweranddon’ttheylovetouseit?

Thekeyissueinnegotiatingisthatsometimesyougettoapointwherepeoplehave so much Situation Power over you that you’re going to lose this one,regardlessofhowgoodanegotiatoryouare.Ifyou’regoingtohavetomaketheconcession anyway, regardless of what you do, you might as well make theconcessionasgracefullyasyoupossiblycan.Itdoesn’tmakeanysensetogetsoupsetabout it thatyou lose thegoodwillof theotherperson—andstillhave tomaketheconcession.

Howmany times havewe been into a department store to get a refund onsomethingandtheclerksaystous,“Allright,we’lldoitthisonetime.Butit’snotournormalpolicy”?Whatsensedoesthatmake?Ifyou’regoingtohavetomake the concession anyway, youmight aswellmake it as gracefully as youpossiblycan,sothatyoumaintainthegoodwilloftheotherperson.

Manyyearsago,whenIwasarealestatebroker,ourcompanybuiltfournewhomesatonelocation.InCalifornia,wetypicallybuildwithpouredslabs.Justaswe finishedpouring the slabs, thecitybuilding inspectorpulledup,walkedover,andcasuallyasked,“Whatareyoudoing?”

Thatseemedself-evidenttous,buthewasn’tknownforhissenseofhumor,sowesimplyreplied,“We’repouringtheslabs.”

“NotuntilI’vesignedoffontheplumbingyou’renot,”hesaid,andwecouldswear that he was enjoying every minute of this. What followed must havelookedlikeaKeystoneCopsroutine.Everybodywasrunningaround,tryingtofind thesigned-offbuildingpermitcard.Withgrowinghorror,werealized thathe was right. Somebody had goofed, and the inspector had enough SituationPowerthatweweregoingtohavetogetacrewouttherewithshovels,diggingouttheconcretebeforeitset,sothat thebuildinginspectorcouldglanceat theplumbing and sign it off. The point is this: Don’t let it upset you. PowerNegotiators recognize Situation Power for what it is and move into an areawheretheydohavesomecontrol.

KeyPointstoRemember

1.Sometimespeoplewhoarenotpowerfulhavepoweroveryoubecauseofthesituation.

2.Itisprevalentingovernmentagenciesandhugecorporationswherethepeoplehavelittlelatitudeinthewaytheydothings.Theyareexpectedtodoitbythebook.Whenasituationgivesthempoweroveryou,theylovetouseit.

3.RecognizeSituationPowerforwhatitisanddon’tletitupsetyou.

Chapter60

InformationPower

The final element of personal power is Information Power. Sharinginformationformsabond.Any time thatyoushare informationwithsomeone,yougetcloser to thatperson.This iswhy, in theolddays,beforemembersofCongresspassedlawstorestrainthemselves,theywerebigonthelecturecircuit.Anassociationthatmightbepenalizedgreatlybycongressionallegislationcouldhirearepresentativeorsenatortobethespeakeratitsannualconvention.

The association could afford to pay that person a large honorarium. Therewouldn’thavetobeanyquidproquoinvolved—justthefactthatthelawmakerhadmingled with the membership would cause him or her to bond with thisindustry.Pharmaceuticalsalespeople,whohaveaterribletimegettingphysicianstomeetwiththem,knowthattheyshouldalwaysshowupwithsomenewpieceofinformation,perhapstheresultsofanewstudy,becausesharinginformationwiththephysicianbondsthemtothephysician.

Informationasapersonalpowerhaslostmuchofitsabilitytoinfluenceinthiscyberage.Theoldadagethat“informationispower”haswornalittlethin.Nowthatinformationissofreelyavailablewithafewsearchengineclicks,itismuchhardertowithhold.

InformationPowerasanIntimationFactor

Withholding information tends to intimidate. Large companies are skillfulabout doing this. They’ll develop information at the executive level that theywon’tsharewiththeworkers.It’snotbecauseit’sthatsecretive.It’snotbecauseitwoulddoanyharm.It’sbecausetheselargecorporationsknowthatalevelofsecrecyattheexecutivelevelgivesthemcontrolovertheworkers.

Here’saninterestingquotefromtheNavytrainingmanual:

Informational power depends on your giving or withholding ofinformation or having knowledge that others do not have. Useinformationalpowerwhengivingorderstosubordinates.Giveordersinsuch amanner that your subordinates presume the order originated atyour level.When forced to complywith orders you do not agreewith,don’t introducetheorderbysaying,“Thedivisionofficersaid.”Phraseandpresenttheorderinamannerthatleavesnodoubtyouinitiatedit.

When you’re negotiating, don’t tell the other side that youwere told to dosomething.Makeityoursuggestion,andletthemponderwhyyoudecidedthatway.

Thehumanracehasatremendousnaturaldesiretoknowwhat’sgoingon.Wecan’tstandamystery.Youcanputacowinafield,anditwillstayinthatfieldallitslifeandneverwonderwhat’sontheothersideofthathill.NASAplanstospendbillionsofdollars tofly toMarsbecausewehavesuchastrongneed toknowifthereismicroscopiclifeonMars.

Withheld information can be very intimidating. Let’s imagine that you’vemadeanextensivepresentationtoabuyingcommitteeandthememberssaytoyou,“Weneedtotalkaboutthisforamoment.Wouldyoumindwaitingoutsidein the lobby?We’ll callyouwhenwe’re ready foryou.” Is it anywonderyoufeeluncomfortablesittingoutsideinthelobby?Wehateitwhenpeoplewithholdinformationfromus.

Themoment we realize theymay just be doing this to us as a negotiatingGambit, they can no longer intimidate uswith it.Realize that theymay be intheretalkingaboutfootballscoresforallweknow,sothatwhenwewalkbackintothenegotiations,ourlevelofself-confidencehasgonedown,andtheirlevelofpowerhasgoneup.Oncewerealizethat it’s justaploy, theycannolongerintimidateuswiththisGambit.

KeyPointstoRemember

1.Sharinginformationformsabondwiththeothernegotiator.2.Withholdinginformationintimidates.

3.Inthiscyberage,theoldadagethatinformationispowermaystillbetrue,butaccesstoinformationissouniversalthatwithholdinginformationishardtodoandithaslostitspower.

4.Don’ttelltheothersidethatyouweretoldtodosomething.Makeityoursuggestionandletthemponderwhyyoudecidedthatway.

5.Don’tbeintimidatedwhentheothersideasksfortimetodiscussthenegotiations.Itmayjustbeaploydesignedtointimidateyou.

6.Whenyouunderstandthedynamicsofthenegotiatingploy,youwillnotbeintimidatedbyit.

Chapter61

CombinationsofPower

Nowyouknowtheeightelementsthatgiveyoupowerovertheotherperson.Torecap,theyarethefollowing:

1.LegitimatePower(thepowerofyourtitleoryourpositioninthemarketplace).

2.RewardPower(theabilitytorewardtheotherperson).3.CoercivePower(nearlyalwaysperception,notreality).4.ReverentPower(theabilitytoprojectaconsistentsetofvalues).5.CharismaticPower(thepowerofthepersonality).6.ExpertisePower(anabilitythattheotherpersondoesnothave).7.SituationPower(powerthatstemsfromcircumstances).8.InformationPower(knowledgethattheotherpersonlacks).

Take the time to rate yourself in each of those elements—not as you seeyourself,ormaybenotevenasyoureallyare,butasyouthinkotherpeopleseeyou. How do peoplewithwhom you negotiate perceive you in each of theseeightareas?Giveyourselfascorefromoneto10ineacharea,withonebeingveryweakand10beingverystrong.Thepotentialmaximumscoreis80.Ifyourscorecomesout in the60s, that’saverygoodnumberforaPowerNegotiator.YouhavePower,butyoustillhaveempathyfortheotherside.Ifyourscoreishigher than 70, I’d be concerned that you’re too intimidating when you’redealing with people. Less than 60, and you have some weak spots. Examinethoseelementsforwhichyougaveyourselfalowrating,andseewhatyoucandotogetyourselfclosetoa10.

Asyoureviewthislist,rememberthattheseeightpowerelementsarealsothewaysthattheothersidecanintimidateyouintothinkingthatyoudon’thaveanypower.Thenexttimeyou’renegotiatingandyoufeelthatyou’velostcontrol—that they’re beginning to intimidate you—identify which of those elements isgettingtoyou.Identifyingitwillhelpyouhandleit.

Nowlet’slookatspecialcombinationsoftheseeightpowers.FirstbeginwithReverent Power, Charismatic Power, and Expertise Power. Power Negotiators

know that a combination of those three are critical if you are to control thenegotiations.Do you know somebodywho seems to have amuch easier timepersuadingpeopletogoalongwithhissuggestions?Perhapsyou’vesatinonanegotiationwithyourbossandhemade it looksoeasy.Hesatdownwith theotherpersonandchattedwithherfor15or20minutes.Hedidn’tappeartobetalking about anything of consequence, but at the end of that time, the otherpersonsaid,“Whatdowehavetodohere?Doweneedtogowiththetopoftheline,orcanwegetbywiththestandard?Youtellus.You’retheexpert.”

Here’showhegotthatmuchpowerovertheotherside:HedidagoodjobofprojectingReverentPower,CharismaticPower, andExpertisePower.ReverentPower: “Iwon’tdoanything that isnot inyourbest interest, regardlessof thegain tome.”Thatbuilds trust,doesn’t it?CharismaticPower:Hehasa likablepersonality. And Expertise Power: Your manager projected to the other side,withoutitbecomingoverbearing,thatheknewmoreaboutitthanshedid.Whenyouput those three together, you’re very close to controlling the negotiations.You’re very close to the point atwhich the other sidewill defer the decision.“Well,” she’ll say, “What do you think we should do?” She has surrenderedcontrolofthenegotiationtoyourside.

Another combination of the eight components of personal power is ofparticularimportancetoPowerNegotiators.Theeffectsofthesecriticalelementstogetherareoverwhelming.Whenthesefourcometogetherinoneperson,whathappens is incredible.The four are:LegitimatePower (thepowerof the title),RewardPower(theabilitytorewardpeople),ReverentPower(theconsistentsetofvalues: I’mnotgoing todeviate from this regardlessofwhathappens),andCharismaticPower(thepersonality:thepizzazzwithwhichtoputitacross).

When these four come together in one person, the effect is phenomenal,whether it is used for good or evil. This iswhat gaveAdolfHitler control ofGermanyin the1930s.Hekeptstressing the title—Fuhrer!Fuhrer!Fuhrer!Hekept stressingRewardPower.Hekept saying to theGermanpeople: Ifwedothis, if we invade Czechoslovakia and Poland, this is what we’ll get. Thedictatorial Reverent Power—we’ll never deviate from this. Hitler also hadhypnotic Charismatic Power. He could hold tens of thousands of peoplemesmerizedwithhisoratory.

YouCan’tGetAnyMoreConsistentThanThis

It is fascinating to me that Adolf Hitler, who completed hisautobiography,MeinKampf(MyStruggle),in1926,wroteiniteverydetail of what would follow, including the expansion of GermanythroughCzechoslovakiaandPolandintotheUkraine.Althoughmorethan fivemillion copies had been circulated inGermany before thestartofWorldWarII,itwasnevertranslatedintoanyotherlanguage.HitlertightlycontrolledcirculationofhisbooktowithinthebordersofGermany,butitishardformetobelievethatsomecopieswerenotsmuggledoutof thecountryand translated.Perhaps thepeoplewhotranslateditsimplycouldnotbelievetheenormityofwhatheplannedto do. Perhaps we needed Hitler too much as a bulwark againstcommunism.Perhapstheydismisseditastheravingsofamadman.Buthadwehavetakenitseriously,wewouldhaveknowneverydetailofhisplans.Becauseheneverdeviatedfromhisoriginalintent.

This was also the way that David Koresh got control over the BranchDavidiansinWaco,Texas,andhadsomuchcontroloverthemthattheywantedhimtotellthemnotonlywheretolive,whattothink,andwhattosay,butalsowhentodie.DavidKoreshtoldhispeoplethathewasGod.That’saprettygoodtitle—youcan’tdomuchbetter than that!Hekept stressingRewardPower: Ifyoustaywithme,you’regoingtoheaven.Ifyougowiththem,you’regoingtojail.ReverentPower:Wedon’t carewhat the rest of theworld thinks.This iswhatwebelieve.CharismaticPower:Hehadthehypnoticpersonalitythatisthetrademarkofallcultleaders.

On the good side of the coin is when you get a John F. Kennedy. Everypresidenthas thepowerof the title.Everypresident is able to reward,butnoteverypresident is able toproject theconsistent setofvalues.Thiswas JimmyCarter’s undoing and was Bill Clinton’s albatross, because they appeared tovacillate.ItwasRichardNixon’sundoingattheend.

Not every president is able to project Charismatic Power. This was GeraldFord’s problem. He had the other three elements in abundance, but he didn’thavethepersonalitywithwhichtoputitacross.Throughouthiscareer,RichardNixon,althoughhewasbrilliant,wasdoggedbythefact thatfewpeople likedhim.IthinkthatitwasGeorgeBushSr.’sdownfallalso,particularlybecausehefollowedRonaldReagan,whowassocharismatic.

John F. Kennedy and Ronald Reagan both had these four powers in greatabundance, which made them the most popular presidents in modern history.Look at Barack Obama’s remarkable rise to power and howwell he rated inthesefourcharacteristics.Youcanhavethatkindofpowerifyouconcentrateondevelopingthosefourelementsofpersonalpower.Whenyoudo,Ipromiseyouthatyou’llseearemarkabletransformationinyourabilitytoinfluencepeople.

KeyPointstoRemember

1.Rateyourselfonascaleofoneto10asotherpeopleseeyouintheseareas.Ifyourtotalscoreisinthe60s,that’sgoodforanegotiator.

2.Combinationsofthesepowersareverypotent.3.CombiningReverentPower,CharismaticPower,andExpertisePowerisespeciallypotent.

4.Ifyouarea10forLegitimatePower,RewardPower,ReverentPower,andCharismaticPower,youwillhaveanenormousabilitytoinfluencepeople.

Chapter62

OtherFormsofPower

Anotherformofpersonalpoweristhepowerofcrazy.Idon’tthinkthatyou’llwanttouseitveryoften,butyoushouldknowaboutit.It’sthepowerofcrazy:Ifyoucanconvince theotherside thatyou’recrazy,youcanhavepoweroverthem.

Just after communistVietnamopened its borders to non-Americans again, IspentaweekinHoChiMinCity(formerlynamedSaigon)andHanoi.InHanoi,I hired a guide to showme around.Shehad lived through thewar, and Iwaseager to get her impressions.When I askedherwho she thoughtwas thebestAmerican president, I was aware that she was a government employee (aseveryone is under communism) and would only say what she had beenauthorizedtosay.

Shethoughtaboutitforawhileandthensaid,“Inotknowwhobestpresidentis,butIknowtheworst.RichardNixon,hewastheworstpresident.Hewantedtodropnuclearbombonus.Heiscrazy.Heis theworstpresidentofall.”I’mconfident that even Richard Nixon did not intend to drop a nuclear bomb onHanoi.HeandHenryKissingercookedupastrategy.TheyfeltthatiftheycouldconvincetheNorthVietnamesegovernmentthattheywerecrazy,thattheycouldforce them to the negotiating table, which is what they did remarkablyeffectively.

In business, the power of crazy translates into the person who is soinconsistent in thewayhe reacts thatyouneverknowhowhe’sgoing to treatyou.Onedayyoucanwalkintohisoffice,andhe’llthrowhisarmsaroundyou.The next time you walk into his office, he might throw you out. If you canconvincesomeonethatyou’recrazy,youcanhavepoweroverhim.

ThePowerofRiskSharing

Another formofpersonalpower is thepowerof risk sharing.Youcanhavepowerovertheothersideifyouconveytothemthatothersaresharingtheirrisk.This is thepowerofasyndicated investment:Themorepeopleyoucanget toinvest,theeasieritistogetotherstosignup.

IfIaskedyoutobetme$5,000tomy$20,000ontheflipofacoin,yououghtto be eager to take the bet. I’m offering you four-to-one odds on two-to-onechance.(Professionalgamblerswilltellyouthatitdoesn’tmatterwhatyoubeton, as long as the odds are better than they should be.) However, the risk oflosing$5,000ontheflipofacoinmaybetoogreatforyou,andyouwouldturnmedown.Considerthis:Ifyoucouldget100peoplewhowereallwillingtorisk$50,wouldyou thengo ahead?Chances are youwould, because although thepotentialgainisthesame,youperceivethatothersaresharingtherisk.

Thesameprincipleappliesininvestmentsyndication.IfIaskedyoutoinvest$100,000inarealestatesyndication,youwouldbereluctanttoriskthatmuch.Even if I asked you to invest $5,000, you might consider the risk too great.However,ifItoldyouthatIhave19otherinvestorsreadytoputup$5,000andyou would be the 20th, you would be far more likely to go along with myproposal. Also, if I suggested that you invest $100,000 in 20 differentsyndications, you would be far more likely to do that than invest the entire$100,000inonesyndicationbecauseyoufeelthatyouareloweringyourrisk.

Whatcanwelearnfromthis?Anytimethatyoucandemonstratethattheriskyouareaskingtheothersidetotakeisbeingshared,youdevelopthepowertoinfluencethem.

ThePowerofConfusion

There is power in confusion.Thismay not sound right to you because youhave always understood that a confusedmindwill say no. That is true—it isimportanttobesurethatthepersonwithwhomyou’redealingunderstandswhatheor she isgetting into.However, it is also true that a confusedmindcanbemoreeasilyled.

If you’re negotiating with someone and tell her, “There are two possible

optionsforyou,andtheyareverysimpletounderstand.Letmeexplainthemtoyou,andyou’llbeable tomakeachoice.”With thatapproach,youhave littleability to influence her because she can readily perceive the benefits of eachoptionandmakeherownchoice.

However,ifyousaidtoher,“Therearemanywaystogohereandthiscanbeveryconfusing.Thereare25differentoptionsopentoyouand,unlessyouarevery familiarwith themall,youwillhavea tough timeknowingwhichone isbest for you. Fortunately, I’m very familiar with the options, and I havesuccessfullyguidedmanypeoplewhoareinexactlythesamepositionasyou...,”shewouldbemorepliable.ThemoreconfusedIcangether, thebetter thechanceIhavethatshewillaskmeforguidance,providedIcangethertodoonething,andthatistrustme.Aconfusedmindcanbemoreeasilyled,butonlyifthepersontobeledtruststheleader.

Asyoucansee,thereisgreatpowerinconfusion.Thebestdefensethatyouhaveisjusttokeepyourwitsaboutyouanddon’tlettheotherpersonconfusethe issue so that you surrender to their ideas. When he starts sailing off ontangents say, “I don’t see howall of these details are germane tomy choices.Insteadofconfusingthesituation,let’sjuststicktothekeyissues.Fairenough?”

ThePowerofCommunicatingOptions

You can gain influence in negotiations if you advertise that youhavemanyoptionsanddon’tneedtomakeadealhereandnow.Ifyoupointoutthatthereiscompetition for your product or services, chances are that the buyerwill raisetheiroffer—especiallyifyoutellthemthatyoudon’tneedtosell,andcertainlynot for less than you are asking. For example, you could say to prospectivebuyer,“IwishthatIcouldgiveyoumoretimetomakeadecision,butIneedtoknowrightnow,becauseIhavetwootherbidsalready,andit’snotfairformetokeeptheotherbuyerswaiting.”

If you are buying, any seller finds it sobering to learn that you havemanyotherchoicesandatlowerprices.Ifyouarerespondingtoaclassifiedadforaboat or a car, for example, youmight say, “I have two others to look at thisevening,at7o’clockandateight.They’renotaskingasmuchasyouare,butI’d

liketoconsideryoursanyway.CouldIcomebyandseeyoursatsix?”

In any negotiation, the sidewith themost options has themost power.Themoreyoucanservicetheperceptionthatyouhaveoptions,themorepoweryouwillhaveasanegotiator.

KeyPointstoRemember

1.Ifyoucanconvincetheothersidethatyou’recrazy,youcanhavepoweroverthem.

2.Inbusiness,thisisthebosswhoseresponsesareunpredictable.3.Youcanpersuadepeopleifyoucanillustratethatothersaresharingtherisk.

4.Aconfusedmindsaysno,butaconfusedmindismoreeasilyled.

5.Themostimportantpowerinnegotiatingisthepowerofcommunicatingthatyouhaveoptions.

Chapter63

NegotiatingDrives

Notoftendoessomeoneotherthanaprofessionalnegotiatorthinkaboutwhatisdrivingtheothernegotiator,becausewealltendtoassumethatwhatdrivestheother person is the same thing that drives us. Sociologists call this “socio-centrism.” This means we think that the other person wants what we wouldwant,ifwewerethey.

Power Negotiators know that what we would want, if we were them, mayhavenothingtodowithwhattheywant.PowerNegotiatorsknowthatthebetterwe can understand what is driving the other side—what they really want toaccomplish—thebetterwecanfulfilltheirneedswithouttakingawayfromourposition. Poor negotiators get into trouble because they fear that theywill bevulnerable to the other side’s tricks if they let the other side know toomuchabout them. Instead ofwanting to find outwhat is driving the other side andrevealingtheirdrivestotheotherside,thepoornegotiatorletshisfearsstophimfrombeingthatopen.

PeterPestillo,executivevicepresidentofcorporaterelationsforFordMotorCo. and a leading labor negotiator, points out that you must evaluate thenegotiation and determine what is most important to you. “What kind of anegotiationisit?”hesays.“Ifit’sonlyaone-timeevent,youcanconcentrateontheresult.Butifthere’sanongoingrelationshipinvolved,victoryismakingbothsidesfeelsatisfied.Takeonlywhatyouneedanddon’ttrytomakeanybodylookbad.”In thischapter,we’ll lookat thedifferent things thatdrive theothersidewhenthey’renegotiatingwithyou.Recognizingandunderstandingthesedrivesisthesecrettowin-winnegotiating.

TheCompetitiveDrive

TheCompetitiveDriveiswhatneophytenegotiatorsknowbestandit’swhytheyseenegotiatingaschallenging. Ifyouassumetheotherside isout tobeatyou, by any means, you will fear meeting someone who may be a betternegotiator thanyou,or someonewho ismore ruthless.Thisdriveexistsat cardealerships.Thecardealerattractscustomersbyoffering“the lowestprices intown”butpaysitssalespeoplebasedontheamountofprofittheycanbuildintothesale.Thecustomerwantsthelowestprice,evenifthedealerlosesmoney,orthesalesperson loseshiscommission.Thesalespersonwants todrive thepriceupbecauseit’stheonlywayhecanmakeanymoney.

NegotiatorsusingtheCompetitiveDrivebelieveyoushouldfindoutallyoucan about the other side, but let the other side know nothing about you.Knowledge ispower,butcompetitivedrivenegotiatorsbelieve thatbecauseofthis,themoreyoufindoutandthelessyoureveal,thebetteroffyou’llbe.Whengatheringinformationhedistrustsanythingtheotherside’snegotiatorsmighttellhimbecauseitmaybeatrick.Hegathersinformationcovertlybyapproachingtheotherside’semployeesorassociates.

Thisapproachiscountertothewin-winphilosophythatsaysthewaytomakebothsideshappyistoexpandthenegotiationtolookforthingsbeyondthemainissueswhereconcessionscanbemadewithoutdetractingfromeachside’sbasicneeds. Competitive negotiating is not helpful to a win-win approach becauseneithersidetruststheothersideenoughtoshareinformation.

Because he assumes that the other side is doing the same to him, heworksassiduouslytopreventtheleakingofinformationfromhisside.What’scausingthisapproachistheassumptionthattherehastobeawinnerandtherehastobealoser.What’smissingisthepossibilitythatbothsidescouldwinbecausetheyare not out for exactly the same thing, and, by knowingmore about the otherside,eachsidecanconcedeissuesthatareimportanttotheotherside,butmaynotbesignificanttotheirside.

TheSolutionalDrive

TheSolutionalDriveisthebestnegotiatingsituationtobein.Thisiswhentheothersideiseagertofindasolutionandiswillingtodiscussthebestwaytodo

that. Itmeansnobody threatens theotherside,andbothwillnegotiate ingoodfaith to findawin-winsolution.SolutionalDrivenegotiatorsarewideopen tocreativesolutionsbecause they feel theremustbeabetter solutionsomewherethathasn’toccurred to them.It takesanopenmind tobecreative.Lookat thevariablesbuyersandsellerscouldproposeinassimpleatransactionasbuyingahouse.Thecostoffinancingtothebuyercouldbeadjustedbylettingthebuyerassume an underlying loan. The seller could carry back all the financing andremainliablefortheunderlyingloan(calledwrappingtheunderlying).

Thebuyercouldaccommodatethesellerbygivingtheselleradditionaltimetofindanotherhome.Thesellercouldleasebackthehousefromthebuyerforanextended term. The price could include all or some of the furnishings. Thesellerscouldretainalifeestateinthehousethatwouldenablethemtostayinthehouseuntiltheydied.Thisisagreatideaforelderlypeoplewhoneedcash,butdon’twanttomove.Thebroker’sfeecouldbeeliminated,orthebrokercouldbeaskedtotakehisfeeasanote,ratherthanincash.Thebuyercouldmovein,butdelaytheclosingtohelpthesellerwiththeirincometaxes.

ThegreatthingaboutnegotiatingwithsomeonewhoisintheSolutionalDriveis he has cast nothing in stone. He is not restricted by company policy ortradition, feeling that everything is negotiable because everything wasnegotiated.Shortofbreakingthelawortheirpersonalprinciples,hewilllistento any suggestion you care to propose because he does not see you as incompetitionwithhim.

Itsounds like theperfectsolution,doesn’t it?Bothsidescooperating tofindtheperfectandfairsolution.However,thereisonecaveat.TheothersidecouldbefeigningwhentheyappeartobeintheSolutionalDrive.Onceyouhaveputyourcardsonthetableandtoldthemexactlywhatyouarepreparedtodo,theymayreverttoCompetitiveDrivenegotiating.Ifitseemstoogoodtobetrue,bewary.

ThePersonalDrive

Youmayencountersituationswherethemaindriveoftheothernegotiatorisnot towinforwinning’ssake,or to find theperfectsolution.Theirmaindrive

maybefortheirpersonalprofitoraggrandizement.Acasethatquicklycomestomind is that of an attorney who is working on a fee basis rather than acontingency basis. It would be in that attorney’s best interest not to find asolutiontooquickly.Whenyourunintothis,youshouldseewhatyoucoulddoto satisfy that personal need formore fees. Itmay be in your best interest tothreaten to take your solution over the attorney’s head to his client.Hewon’tappreciate that, of course, but if he feels that his client would accept thecompromise if you went over his head, you may force him to accept yoursolution.

Another example may be a young corporate negotiator who wants to lookgoodtohiscompany.Thelastthinghewantstodoisgobackempty-handed,soyour best strategy may be to establish that he has a deadline and stall thenegotiations.Youmightbeabletoreachaterrificsettlementinthelimousineonthe way to the airport if he’d rather agree to anything than go home empty-handed.

Afurtherexamplewouldbeaunionnegotiatorwhowantstolookgoodtohismembers. In that case, it may be in both your best interests to make anoutrageous initial demand. Then he can go back to his members and say, “Iwasn’t able to get you everything youwanted, but just listen to their openingnegotiatingposition.Iwasabletogetthemallthewaydownfromthatforyou.”If you made a more modest opening negotiating position it might have beendifficultforhimtosellittohismembersbecausetheydidn’tfeelthattheirunionfoughthardenoughforthem.

TheOrganizationalDrive

Youmayfindyourselfinasituationwheretheothernegotiatorseemstohavea fine Solutional Drive. She really wants to find the best solution, but theproblemisthatithastobeasolutionthatshecanselltoherorganization.ThishappensagreatdealinCongress,wherethesenatororrepresentativeiseagerforasensiblecompromise,butknowsthathewouldgetpilloriedbythevotersinhisstateordistrict.Inclosevotes,you’llseethisallthetime.

Onbothsidesofthehouse,thepoliticianswhohavethesupportoftheirvoters

will commit quickly. Those who will be in trouble back home may want tosupport their party, but are reluctant to toe the line. In this case, the partyleadershipcountsnoses to seehowmanyvotes theyneed towinbyonevote.Thentheylettheirmemberswhowouldbemosthurtbyvotingforthebillvoteno.Theoneswhowouldbeleasthurtareled,likelambstoslaughteritalwaysseemstome,andmadetovoteforthebill.

It’shardformetobelievethatanyintelligentsenatorwouldopposeabanofassault weapons on our streets, but many of themwere forced by their moreradicalvoterstoopposeaguncontrolbill.

Whenyou’renegotiatingwithsomeonewhomustpleaseanorganization,hemay be reluctant to spell out his problem for you because it would seem toomuchlikecollusion.YouneedtobeproactiveandbeintheOrganizationalDriveby thinking, “Who could be giving him heartburn over this one?” Is it hisstockholders,thislegaldepartment,orperhapsgovernmentregulators,whomhewouldhavetocircumventtoimplementthebestsolution?Ifyouunderstandhisproblem,youmaybeabletodothingstomakethesolutionmorepalatabletohisorganization.Forexample,youmighttakeamoreradicalpositioninpublicthanyou do at the negotiating table. In this way, your compromise gives theappearanceofmakingmajorconcessions.

Acompanyhiredmeoncetohelpthemwhentheirassemblyworker’sunionwentonstrike.Theunionnegotiators felt that thesolution theyhadnegotiatedwas reasonable, but they couldn’t sell it to their members, who were out forblood.We developed a solution inwhich the local newspaper interviewed thepresidentofthecompany.Duringtheinterview,heexpressedsincereregretsthathewascaughtinadifficultsituation.

Theunioncouldn’tselltheplantoitsmembersandthepresidentcouldn’tsellanythingbetter tohisboardofdirectors and stockholders. It appeared that thestrike would soon force him to move production from that factory to theirassembly plant in Mexico. The next day, the worker’s spouses opened thenewspapertoheadlinesthatread“PlanttoClose—JobsGoingSouth.”

By the afternoon of that day, the spouses had put enough pressure on theworkers that they clamored to accept the deal that they had previously turneddown. If you’re dealing with someone who has to sell the plan to his or herorganization,youshouldalwaysbelookingforwaystomakeiteasiertodothat.

TheAttitudinalDrive

Theattitudinalnegotiatorbelievesthatifbothsidestrustandlikeeachother,theycanresolvetheirdifferences.TheAttitudinalDrivenegotiatorwouldneverresolve a problem by telephone, e-mail, text message, or fax, or through anintermediary.Theywanttobefacingtheotherpersonsotheycangetafeelforwhothatpersonis,believingthat,and“Ifweknoweachotherwellenough,wecanfindasolution.”

JimmyCarterisanattitudinalnegotiator.HeinitiatedcontactwiththeNorthKoreans when they were refusing to back down on their nuclear weaponsprogram.HemetwithHaitianGeneralCedrasuntilthebrinkofwarandpleadedwithPresidentClintonforafewmoreminutestoreasonwiththegeneral.Whenhefinallyreachedasettlement,heinvitedthedictatortocometohischurchinPlains,Georgia, to teachaSunday-schoolclass.Theproblemwiththatkindofnegotiatingisthatitcaneasilyleadtoappeasementoftheotherside.

TheAttitudinalDrivenegotiatorissoeagertofindgoodintheothersidethattheycanbeeasilydeceived.Agoodexampleof thiswaswhenPrimeMinisterNeville Chamberlain of England made a last-minute effort to avoid war withAdolfHitler.He returned toEngland, proclaiming that he had avertedwar bygivingawayonlypartofCzechoslovakia.AdolfHitlerhadalreadyfiguredoutthathewasachump,anditdidn’ttaketherestoftheworldlongtoagreewithHitler’sassessment.

It helps that both negotiators know and like each other because it’s hard tocreate a win-win solution unless they trust each other. However, PowerNegotiatorsknow thatyoumustcreatea solution that is in thebest interestofbothsides.Then,itismutuallybeneficialforbothtosupporttheagreementandseethatitisimplemented.

KeyPointstoRemember

1.Don’tbeguiltyofsocio-centrism.Whatwewouldwant,ifwewerethey,mayhavenothingtodowithwhattheywant.

2.Themoreyouunderstandwhatisdrivingtheothersidethemorelikelyyouaretoproduceawin-winsolution.

3.CompetitiveDrivenegotiatorswon’tshareinformationthatmightbehelpfultotheothersideanddon’ttrustinformationgiventothembytheotherside.

4.SolutionalDriveiswhenbothsidestrusteachothertoworkforamutuallyacceptablesolution.

5.BewareofCompetitiveDrivenegotiatorsmasqueradingasSolutionalDrivenegotiators.

6.SometimestheneedsofthePersonalDrivenegotiatormaybemoreimportantthanfindingthebestsolution.

7.OrganizationalDrivenegotiatorsmaybehappywiththesolutionbutcan’tsellittotheirpeopleandthinkofwaysthatcouldhelpthemconvincetheirorganization.

8.AttitudinalDrivenegotiatorsputtoomuchconfidenceingainingthefriendshipoftheother.Instead,workforasolutionthatbenefitsbothsides.Thenitdoesn’tmatterifyoulikeeachother.

Chapter64

Win-WinNegotiating

Finally,let’stalkaboutwin-winnegotiating.Insteadoftryingtodominatetheotherpersonandtrickhimintodoingthingshewouldn’tnormallydo,Ibelieveyoushouldworkwiththeotherpersontofigureoutyourproblemsanddevelopasolutionwithwhichyoucanbothwin.Yourreactiontothatmaybe,“Roger,youobviously don’t know much about my industry. The people with whom Inegotiate don’t take any prisoners. There’s no such thing as win-win in myindustry. When I’m selling, I’m obviously trying to get the highest price Ipossiblycan,andthebuyerisobviouslytryingtogetthelowestpossibleprice.WhenI’mbuying,thereverseistrue.HowonEarthcanwebothwin?”

Let’s lookat themost important issuehere.Whatdowemeanwhenwesaywin-win?Does it reallymean that both sideswin?Or does itmean that bothsidesloseequallysothatit’sfair?Whatifeachsidethinksthattheywonandtheother side lost—would that be win-win? Before you dismiss that possibility,thinkaboutitmore.Whatifyou’resellingsomethingandleavethenegotiationthinking,“Iwon.Iwouldhavedroppedthepriceevenmoreiftheotherpersonhadbeenabetternegotiator”?

However, theotherpersonis thinkingthatshewonandthatshewouldhavepaidmore ifyouhadbeenabetternegotiator.Bothofyou think thatyouwonandtheotherperson lost. Is thatwin-win?Yes, Ibelieve it is,as longas it’sapermanent feeling. As long as neither of you wake up tomorrow morningthinking, “Sonof agun,now Iknowwhathedid tome.Wait until I seehimagain.”

That’swhyIstressdoingthethingsthatservicetheperceptionthattheothersidehaswon,suchasthefollowing:

Notjumpingatthefirstoffer.Askingformorethanyouexpecttoget.Flinchingattheotherside’sproposal.Avoidingconfrontation.

PlayingReluctantBuyerorReluctantSeller.UsingtheViseGambit.UsingHigherAuthorityandGoodGuy/BadGuy.Neverofferingtosplitthedifference.Settingasideimpasseissues.Alwaysaskingforatrade-off.Taperingdownyourconcessions.Positioningtheothersideforeasyacceptance.

Rule1ofWin-WinNegotiating

Thefirstthingtolearnis:Don’tnarrowthenegotiationdowntooneissue.If,forexample,youresolvealltheotherissues,andtheonlythinglefttonegotiateisprice,somebodydoeshave towinand lose.As longasyoukeepmore thanoneissueonthetable,youcanalwaysworktrade-offssothattheotherpersondoesn’t mind conceding on price because you are able to offer something inreturn.

Sometimesbuyers try to treatyourproduct as a commodityby saying, “Webuythisstuffby the ton.As longas itmeetsourspecificationswedon’tmindwhomadeitorwhereitcomesfrom.”Theyaretryingtotreatthisasaone-issuenegotiation to persuade you that the only way you can make a meaningfulconcession is to lower your price. When that’s the case, you should doeverythingpossible toputother issues,suchasdelivery, terms,packaging,andguarantees,ontothetablesothatyoucanusetheseitemsfortrade-offsandgetawayfromtheperceptionthatthisisaone-issuenegotiation.

Ataseminar,arealestatesalespersoncameuptome.Hewasexcitedbecausehe’d almost completed negotiating a contract for a large commercial building.“We’vebeenworkingonitnowforoverayear,”hesaid.“Andwe’vealmostgotit resolved. In fact, we’ve resolved everything except price, and we’re only$72,000apart.”IflinchedbecauseIknewthat,nowthathe’dnarroweditdowntooneissue,thentherehadtobeawinnerandtherehadtobealoser.Howeverclose they may be, they were probably heading for trouble. In a one-issuenegotiation,youshouldaddotherelementssothatyoucantradethemofflater

andappeartobemakingconcessions.

ASpyforaSpy

During the cold war, FBI agents arrested Gennady Zakharov, aphysicistwhowas amember of theSoviet delegation to theUnitedNations.TheFBIhadcaughthimred-handed(pardonthepun)ashepaid cash for classified documents on a New York City subwayplatform. A week later, the KGB arrested Nicholas Daniloff, theMoscowcorrespondentforU.S.NewsandWorldReport.NinemonthsearliertheyhadsetupDaniloffforjustsuchanopportunitybyhavingaKGBagentdressedasapriestaskhimtodeliveralettertotheU.S.embassy.

Now the Soviets were demanding the release of Zakharov inexchangeforthereleaseofDaniloff,whomtheyhadbrandedasaspy.Outraged by the blatancy of their move, Reagan refused, and theincident began to threaten the upcoming arms control summit.Everybody knew that the fate of Zakharov and Daniloff wasinsignificantcompared to thepotential forworldpeace,butbynow,bothsideshaddugintotheirpositionsandwereblindtotheirmutualinterests.Itwasaone-issuenegotiation:WouldwetradeZakharovforDaniloff or wouldn’t we? President Reagan was adamant that hewouldn’tbeapatsyfortheKGB.

To the rescue came Armand Hammer, the chairperson ofOccidentalPetroleum,whohadbeendoingbusiness inRussia sincethe revolution.He knew that theway to break the deadlockwas tointroduce another issue into the negotiations so that the Russianscouldofferamorepalatable trade-off.Hesuggested to theRussiansthattheyalsoagreetoreleasedissidentYuriOrlovandhiswife,IrinaValitova.ThisbrokethedeadlockbecauseReagan,whohaddugintohispositionofnot tradingaRussianspyforanAmericanjournalist,could find the new trade acceptable because it didn’t violate hispreviouslystatedposition.

Ifyoufindyourselfdeadlockedwithaone-issuenegotiation,youshould tryadding other issues into themix.This is called expanding the pie, rather thanslicingthepie.Fortunately,usuallymanymoreelementsthanjusttheonemainissue are important in negotiations. The art ofwin-win negotiating is to piecetogetherthoseelements,likeputtingtogetherajigsawpuzzle,sobothpeoplecanwin.

Ruleoneis:Donotnarrowdownthenegotiationstojustoneissue.Althoughwemay resolve impassesby findingacommonground thatwehaveonsmallissues,tokeepthenegotiationmovingasItaughtyouinChapter10,youshouldnevernarrowitdowntooneissue.

Rule2ofWin-WinNegotiating

Peoplearenotoutforthesamething.Weallhaveanoverridingtendencytoassume that other peoplewantwhatwewant, andbecause of this,webelievethatwhat’simportanttouswillbeimportanttothem.Butthat’snottrue.

Thebiggesttrapintowhichneophytenegotiatorsfallisassumingthatpriceisthe dominant issue in a negotiation.Many other elements other than price areimportant to the other person. You must convince her of the quality of yourproductorservice.Sheneedstoknowthatyouwilldeliverontime.Shewantstoknowthatyouwillgiveadequatemanagementsupervisiontotheiraccount.Howflexible are you on payment terms? Does your company have the financialstrengthtobeapartneroftheirs?Doyouhavethesupportofawell-trainedandmotivatedworkforce?

These all come into play, alongwith half a dozen other factors.When youhave satisfied theotherperson that youcanmeet all those requirements, then,andonlythen,doespricebecomeadecidingfactor.Thesecondkeytowin-winnegotiatingisthis:Don’tassumethattheywantwhatyouwant.Ifyoudo,youfurthermake the assumption that anything you do in the negotiations to helpthemgetwhattheywanthelpsthemandhurtsyou.

Win-winnegotiating cancomeaboutonlywhenyouunderstand that peopledon’twant thesame things in thenegotiation.PowerNegotiatingbecomesnotjustamatterofgettingwhatyouwant,butalsobeingconcernedabouttheotherpersongettingwhatheorshewants.Oneofthemostpowerfulthoughtsyoucanhavewhenyou’renegotiatingwithsomeoneisnot“whatcanIgetfromthem?”but “what can I give them thatwon’t take away frommy position?”Becausewhenyougivepeoplewhat theywant, theywillgiveyouwhatyouwant inanegotiation.

Rule3ofWin-WinNegotiating

Don’tbetoogreedy.Don’ttrytogetthelastdollaroffthetable.Youmayfeelthat you triumphed, but does that help you if the other person felt that youvanquishedhim?That lastdollar lefton the table isaveryexpensivedollar topickup.AmanwhoattendedmyseminarinTucsontoldmethathewasabletobuy the company that he owned because the other potential buyer made thatmistake.Theotherpersonhadnegotiatedhardandpushedthesellertothebrinkoffrustration.Asafinalnibble,thebuyersaid,“Youaregoingtoputnewtiresonthatpickuptruckbeforeyoutransferthetitle,aren’tyou?”Thatstrawbrokethe proverbial camel’s back. The owner reacted angrily, refused to sell hiscompanytohim,andinsteadsoldittothemanatmyseminar.Don’ttrytogetitall. Leave something on the table so that the other person feels that shewon,also.

Rule4ofWin-WinNegotiating

Putsomethingbackonthetablewhenthenegotiationisover.Idon’tmeanbytelling them that you’ll give them a discount over and above what theynegotiated. Imean do somethingmore than you promised to do.Give them alittleextraservice.Careaboutthemalittlemorethanyouhaveto.Thenyou’llfind that the littleextra forwhich theydidn’thave tonegotiatemeansmore to

themthaneverythingforwhichtheydidhavetonegotiate.

Now let me recap what I’ve taught you about win-win negotiating: Peoplehavedifferentpersonalitystyles,andbecauseofthis,theynegotiatedifferently.Youmustunderstandyourpersonalitystyle,and,ifit’sdifferentfromtheotherperson,youmust adaptyour styleofnegotiating to theirs.Thedifferent stylesmean that in a negotiation, different people havedifferent goals, relationships,styles,faults,anddifferentmethodsofgettingwhattheywant.

Winning is aperception, andbyconstantly servicing theperception that theotherpersoniswinning,youcanconvincehimthathehaswonwithouthavingtomakeanyconcessionstohim.Don’tnarrowthenegotiationdowntojustoneissue.Don’tassumethathelpingtheotherpersongetwhathewantstakesawayfromyour position.You’re not out for the same thing. Poor negotiators try toforce the other person to get off the positions that they’ve taken. Powernegotiatorsknowthat,evenwhenpositionsare180degreesaparttheinterestsofbothsidescanbeidentical,sotheyworktogetpeopleofftheirpositionsandtoconcentrateontheirinterests.Don’tbegreedy.Don’ttrytogetthelastdollaroffthetable.Putsomethingbackonthetable.Domorethantheybargainedfor.

RememberthePowerNegotiators’Creed:

Themost important thought you can havewhen you are negotiating isnot“whatcanIget themtogiveme?”It is“whatcanIgivethemthatwouldnot take away frommyposition, butmaybeof value to them?”Whenyougivepeoplewhattheywant,theywillgiveyouwhatyouwant.

KeyPointstoRemember

1.Win-windoesn’tmeanthatbothsidesconcededequally,orthatbothsidesgainedequally.

2.It’swin-winaslongaseachsidefeelsthattheywon,evenifeachsidefeelsthattheotherlost.

3.PowerNegotiatingmeansthatfromthewaythatyounegotiate,youcangetwhatyouwantandstillhavetheothersidefeelingthattheywon.

4.Ifyounarrowthenegotiationdowntojustoneissue,there

mustbeawinnerandaloser.Keepenoughissuesopenthatbothsidescanfeelthattheywon.

5.Ifyou’redealingwithaone-issuenegotiation,introduceotherissues.Thisiscalledexpandingthepie,ratherthanslicingthepie.

6.Don’tassumethattheywantwhatyouwant.Ifyoudo,youfurthermaketheassumptionthatanythingyoudointhenegotiationstohelpthemgetwhattheywanthelpsthemandhurtsyou.

7.Don’ttrytogetthelastdollaroffthetable.8.Doalittlemorethanyoubargainedfor.9.RememberthePowerNegotiators’Creed:

The most important thought you can have when you arenegotiating is not “what can I get them to give me?” It is“what can I give them that would not take away from mypositionbutmaybeofvaluetothem?”Whenyougivepeoplewhattheywant,theywillgiveyouwhatyouwant.

Conclusion

FinalThoughts

Throughoutthisbookonnegotiating,I’vealwaystriedtoemphasizethewin-win philosophy—that the answer to negotiations is not to dominate the otherperson,but to achieveawin for them, too.Always remember thatpeoplewillgiveyouwhatyouwant,notwhenyoudominatethem—andnotwhenyouoverpowerthem—butthey’llgiveyouwhatyouwantwhenyou’reabletogivethemwhattheywant.I’vetriedtostressmyconvictionthatinanynegotiation,theobjectisnotto

beatyouropponent,but rather tocreatively reachanagreement inwhicheachnegotiator can feel that he’s awinner. Imaintain that in every negotiation, nomatterwhattheobjectofthenegotiationis,bothsidescanwin.Morethanthat,I’vebeensayingthatbothsidesshouldwin.

NegotiatingBenchmarks

I’vetalkedaboutsomeofthestandardsofgoodnegotiation,thosebenchmarksbywhichthevalueofanegotiationmaybejudged.Thesestandardsshouldn’tbeanylesslenientthanthoseusedbythesilvercraftsmeninoldEngland,astheyhammeredtheirmarkintotheirwares.Thesestandardscanhelpyoudeterminenotonlywhetheryouwonorlost,buthowyouplayedthegameaswell.

Everyonemustfeellikeawinner.Thefirststandardthatyoushouldconsideriswhethereveryoneinvolvedinthenegotiationemergedfeelinglikeawinner.You’veprobablynotcompletedagoodnegotiationiftheotherpartywalksawayfromthetablethinkingheorsheisn’tagreatnegotiator,mutteringsomethinglike,“Ican’tbelieveit.Hetalkedmeoutofeverything.”Rather,agoodnegotiationhasbeencompletedwhenbothpartiescanwalkawayfromthedealfeelingasthoughtheyhadaccomplishedsomethingimportant.Bothcareabouttheother’sobjectives.Thesecondbenchmarkisthe

feelingthatbothsidescareabouttheobjectivesoftheother.Ifyoufeltthattheotherpartywaslisteningtoyouand,ifnotbeinggratuitous,thenatleasttheyweretakingyourneedsintoconsideration.Iftheothersidehadthesamefeelingaboutyou,then,asanegotiator,youprobablysucceededincreatinganatmosphereofcommunication,inwhichawin-winsettlementcouldbereached.Itwasfairtobothsides.Thethirdbenchmarktowatchforisthebelief(whichbothsidesshouldhold)thattheothersidewasfairinthewayinwhichitconductedthenegotiations.Forinstance,afootballteamdoesn’tmindlosingthegamenearlysomuchiftheyknowthattheothersidewasplayingbytherules.Nobodymindsatoughfight,aslongasit’safairfight.Apoliticalcandidatedoesn’tmindhislosssomuchifhebelievesthat

hisopponenthaswagedafairandreasonablecampaign.It’swhenthere’sfoulplay,aruleisbeingbroken,orsomethingsneakyisgoingon.That’swhenthenegotiatorswillholdfeelingsofbetrayal.Theattitudesofbothnegotiating teams, as they conclude the negotiations, should be, “Well,theyweretough,andtheyfoughthard.Buttheydidlistentomypointofview. I believe that theywere fair in the way that they conducted thenegotiations.”Theprocesswasenjoyable.Benchmarknumberfouristhateachnegotiatorshouldfeelasifheorshewouldenjoydealingwiththeotherpartyorpartiesatsometimeinthefuture.Wecouldassumethatthisishowtwochessplayerswouldfeel,leavingamatch,ifthegamewasconductedfairlyandwell.Eachwouldwanttoplaytheotheragain,nottoout-dotheotherorgetrevenge,butsimplybecausetheprocessofplayingoneanotherwasenjoyableandchallenging.Bothsidesareeagertofollowtheagreement.Thefifthstandardofjudgmentisthebeliefheldbyeachpartythattheotherpartyisdeterminedtokeepthecommitmentsmadeinthecontract.Eachsideshouldhaveagoodreasontobelievethattheotherwillupholdtheconditionsoftheagreement.

Ifeithersidefeelsthat,giventheopportunity,theothersidewouldbackdownfrom its promises, then that negotiation was not a win-win negotiation.Therefore,mydefinitionofawin-winnegotiatorisapersonwhocangetwhathewantsoutofnegotiationandstillbringhimselforherselfuptothestandardsestablishedbythesefivebenchmarks.Andalosingnegotiator issomeonewho

hasnotfulfilledtherequirementsofthosebenchmarks,nomatterhowmanyofhisorherownobjectivesheorshegainedinthenegotiation.

NeedsNegotiating

It’simportanttounderstandthateverypersonactsonlyinhisorherownself-interest, and must therefore be motivated from that standpoint. Internationalnegotiators call this “needs negotiating.” Underpinning this philosophy is theconceptthatpeoplewillonlyactinordertomeettheirownneeds.Indoingso,they need not necessarilymeet the needs of someone else in order to reach aworkableagreement.Thewinningnegotiatorrespectstheneedsandvaluesofhisorheropponent,andactivelyworkstosatisfythoseneeds,aswellashisorherown.Spendsometimewiththeideasthatwe’vediscussed.Ifyou’llworktoapply

themineverydaysituations,you’llacquireasurprisingamountofcontrolinanysituationinwhichyou’redealingwithotherpeople.Usethesetechniquestohelpyoureachthelevelofsuccess thatyoudesireforyourself.Andremember thateverything thatyouneedorwant iscurrentlyownedorcontrolledbysomeoneelse.Now you have the skills that you’ll need to deal with these people more

effectively.It’suptoyoutousetheminanethicalmannertoreachanagreementthatisadvantageoustoeveryoneconcerned—awin-winsolution.

Nowyou are ready to graduate as a PowerNegotiator. The skills you havelearnedwillgiveyouthepowertocommandanybusinesssituationsothatyoucansmoothlygetthebestdealforyouandyourcompany.Farmoreimportantly,theseskillswillgiveyouthepowertomanageconflictinyourlife.Startingnow,there should never be a timewhen you lose control of a situation because ofangerorfrustration.Startingnow,youwillbeincontrolofyourlife.Startingnow,youmayappear

upset or angry, but you’re doing this as a specific negotiating technique—youwillneverbeoutofcontrol.Evenwhenit’sonlyasimplematter,suchasgetting

yoursontocleanuphisroomorgettingyourdaughtertogotobedontime,youwillbeincontrol.Fromnowon,youwillunderstandthatanytimeyouseeconflictitisbecause

oneormoreoftheparticipantsdoesnotunderstandPowerNegotiating.Whetherit’s a husband andwife in an argument, a boss firing an employee, a workergoing on strike, a crime being committed, or an ugly international incident,PowerNegotiatorsknowthatithappenedbecausetheparticipantsdidnotknowhowtogetwhattheywantedwithoutresortingtoconflict.Ilookforwardtothedaywhenallconflictsareavoidedbecausepeopleknowhowtogetwhat theywantwithgoodnegotiatingskills. I inviteyou toshare thisvisionwithmebypledgingnowtoremoveconflictfromyourlifeandthelivesofthosearoundyoubyalwayspracticinggoodnegotiatingskills.Thentheexamplethatyousetwillhelpleadusintoabrightnewfuturewhereviolence,crime,andwarsbecomeananachronism.

AbouttheAuthor

Roger Dawson was born in England, migrated to California in 1962, andbecameaUnitedStatescitizen10yearslater.FormerlythepresidentofoneofCalifornia’s largest real estate companies, he became a full-time author andprofessionalspeakerin1982.HisNightingale-Conantcassetteprogram,SecretsofPowerNegotiating,isthe

largest-selling business cassette audio program ever published. Several of hisbookshavebeenmainselectionsofmajorbookclubs.HeisthefounderofThePowerNegotiatingInstitute,aCalifornia-basedorganization.Companies and associations throughout North America call on him for his

expertiseinnegotiation,persuasion,anddecision-making.HewasinductedintotheSpeakerHallofFamein1991.Hisseminarcompany

conductsseminarsonPowerNegotiating,PowerPersuasion,ConfidentDecisionMaking,andHighAchievementthroughoutthecountryandaroundtheworld.

ThePowerNegotiatingInstitute1045EastRoadLaHabraHeights,California90631USA

Tel:800-YDAWSON[932-9766](fromtheUnitedStatesorCanadaonly)Internationaltelephonenumber1-562-694-5306.

FormoreinformationseehisWebsite:www.RogerDawson.com.

You are welcome to e-mail comments, questions, complaints, andsuggestionstoRoger@RogerDawson.com.

AlsobyRogerDawson

Books

YouCanGetAnythingYouWant

SecretsofPowerNegotiating

SecretsofPowerPersuasion

TheConfidentDecisionMaker

The13SecretsofPowerPerformance

SecretsofPowerNegotiatingforSalespeople

SecretsofPowerPersuasionforSalespeople

SecretsofPowerProblemSolving(comingSpring2011)

(withMikeSummey)

TheWeekendMillionairesGuidetoRealEstateInvesting

WeekendMillionaireMindset

WeekendMillionaireFAQ

WeekendMillionaireSecretstoNegotiatingRealEstate

AudioPrograms

SecretsofPowerNegotiating

SecretsofPowerPersuasion

SecretsofPowerPerformance

ConfidentDecisionMaking

ThePersonalityofAchievers

PowerNegotiatingforSalespeople

VideoTrainingPrograms

GuidetoEverydayNegotiating

GuidetoBusinessNegotiating

GuidetoAdvancedNegotiatingPower

PowerNegotiatingforSalespeople(a12-partseries)

SpeechesandSeminars

Ifyouhirespeakersforyourcompany,orinfluencetheselectionofspeakersatyourassociation,youshouldlearnmoreaboutRogerDawson’sspeechesandseminars.Hewillcustomizehispresentationtoyourcompanyorindustrysothatyou get a unique presentation tailored to your needs.You can also arrange toaudioorvideotapethepresentationforuseasacontinuoustrainingresource.

RogerDawson’sPresentationsInclude:

SecretsofPowerNegotiating

SecretsofPowerPersuasion

ConfidentDecisionMaking

The13SecretsofPowerPerformance

To get more information and receive a complimentary press kit, please call,write,e-mail,orfax:

ThePowerNegotiatingInstitute

1045EastRoad

LaHabraHeights,CA90631USA

Phone: 800-YDAWSON(932-9766)

Fax: 562—697—1397

E-mail: Dawsonprod@aol.com

Website: www.RogerDawson.com

AudioCDandVideoPrograms

FollowingisalistingofRogerDawson’saudioandvideoprogramsthatyoucanorderfromthefollowing:

ThePowerNegotiatingInstitute

1045EastRoad

LaHabraHeights,CA90631USA

Phone: 800-YDAWSON(932-9766)

Fax: 562-697-1397

E-mail: Dawsonprod@aol.com

Website: www.RogerDawson.com

AudioCDPrograms

SecretsofPowerNegotiating

$69.95

Six hours of great training on 6 audio CDs. This is one of the largest-sellingbusiness audio programs ever published,with sales ofmore than $38million.You’lllearn20negotiatinggambitsthataresure-firewinners.Goingbeyondthemere mechanics of the power negotiating process, Roger Dawson helps youlearn what influences people, and how to recognize and adjust to differentnegotiatingstyles,soyoucangetwhatyouwant,regardlessofthesituation.

Also,you’lllearn:

▶Anewwayofpressuringpeoplewithoutconfrontation.▶Theoneunconsciousdecisionyoumustnevermakeinanegotiation.▶Thefivestandardsbywhicheverynegotiationshouldbejudged.▶Whysayingyestoosoonisalwaysamistake.▶Howtogathertheinformationyouneedwithouttheothersideknowing.▶Thethreestagesterroristnegotiatorsusetodefusecrisissituations,andmuch,muchmore.

PowerNegotiatingforSalespeople

$69.95

Sixhoursofgreattrainingon6audioCDs.ThisprogramthatsupplementsandenhancesRogerDawson’sfamousgenericnegotiatingprogramSecretsofPowerNegotiating, teaches salespeople how to negotiate with buyers and get higherpriceswithouthavingtogiveawayextras,suchasfreightandextendedpaymentterms. It’s themost in-depth program ever created for selling at higher pricesthan your competition and still maintaining long-term relationships with yourcustomers.It’sguaranteedtodramaticallyimproveyourprofitmargins,orwe’llgiveyourmoneyback.

SpecialOffer. Invest in bothSecrets ofPowerNegotiating andPowerNegotiatingforSalespeopleandsave$30.

Bothforonly$110.

SecretsofPowerPersuasion

$69.95

Six hours of great training on 6 audio CDs. In this program, Roger Dawsonshowsyou thestrategiesand tactics thatwillenableyou topersuadepeople invirtuallyanysituation.Notbyusingthreatsorphonypromises,butbecausetheyperceivethatit’sintheirbestinteresttodowhatyousay.

You’lllearn:

▶Whycredibilityandaboveall,consistencyarethecornerstonesof

gettingwhatyouwant.▶You’lllearnverbalpersuasiontechniquesthatdefuseresistanceanddemonstratethevalidityofyourthinking.

▶Todevelopanoverwhelmingauraofpersonalcharismathatwillnaturallycausepeopletolikeyou,respectyou,andgladlyagreewithyou.

▶It’sjustamatterofmasteringthespecific,practicalbehavioraltechniquesthatRogerDawsonpresentsinahighlyentertainingmanner.

SecretsofPowerPerformance

$69.95

Sixhoursofgreattrainingon6audioCDs.Withthisprogram,you’lllearnhowtogetthebestfromyourselfandthosearoundyou!RogerDawsonbelievesthatweareallcapableofdoingmorethanwethinkwe’recapableof.Isn’tthattruefor you?Aren’t you doing farmore now than you thought you could do fiveyearsago?Withthelife-changingsecretsrevealedinthisbestsellingprogram,you’llbeabletotransformyourworldinthenextfiveyears!

ConfidentDecisionMaking

$69.95

Sixhoursofgreattrainingon6audioCDs.Decisionsarethebuildingblocksofyourlife.Thedecisionsyou’vemadehavegivenyoueverythingyounowhave.Thedecisionsyou’llmakefromthispointonwillberesponsibleforeverythingthathappenstoyoufortherestofyourlife.Wouldn’titbewonderfultoknowthat,fromthispointon,you’llalwaysbemakingtherightchoice?Allyouhavetodoislistentothislandmarkprogram.

You’lllearn:

▶Howtoquicklyandaccuratelycategorizeyourdecision.▶Howtoexpandyouroptionswitha10-stepcreativethinkingprocess.▶Howtofindtherightanswerwithreactiontablesanddecisiontrees.▶Howtoharnessthepowerofsynergismwiththeprincipleofhuddling.

▶Howtoknowexactlywhatandhowyourboss,customer,oremployeewilldecide,anddozensmorepowerfultechniques.

VideoTrainingPrograms

GuidetoBusinessNegotiating OnehourDVDvideo$55

GuidetoEverydayNegotiating OnehourDVDvideo$55

GuidetoAdvancedNegotiatingPower OnehourDVDvideo$55

Ifyou’reinanywayresponsiblefortrainingorsupervisingotherpeople,thesevideos will liven up your staff meetings and turn your people into masternegotiators. Your sales and profits will soar as you build new win-winrelationshipswithyourcustomers.Thenusetheseprogramstodevelopatraininglibraryforyouremployees’review,andfortrainingnewhires.

PowerNegotiatingforSalespeople

12-PARTVIDEOSERIES$499

Think how your sales and your profitmarginswould soar, if you could haveRogerDawsonspeakatyoursalesmeetingsonceamonth!Nowyoucan,withthis new series of twelve 30-minute videotapes designed just for this purpose.Dawson goes one-on-one with your salespeople to show them how to out-negotiateyourbuyers.Playoneamonthatyoursalesmeetingsandwatchyourpeoplebecomemasterfulnegotiators!

SpecialPrices forCareerPress readers.Mention this bookwhen youplaceyourorderandreceivea20-percentdiscount.Allmajorcreditcardsaccepted.

AllrightsreservedunderInternationalandPan-AmericanCopyrightConventions.Bypaymentoftherequiredfees,youhavebeengrantedthenon-exclusive,non-transferablerighttoaccessandreadthetextofthisebookonscreen.Nopartofthistextmaybereproduced,transmitted,downloaded,decompiled,reverseengineered,orstoredinorintroducedintoanyinformationstorageandretrievalsystem,inanyformorbyanymeans,whetherelectronicormechanical,nowknownorhereinafterinvented,withouttheexpresswrittenpermissionofthepublisher.

copyright©2011byRogerDawsonEditedbyJodiBrandonTypesetbyEileenMunson

CoverdesignbyJeffPiasky

SecretsofPowerNegotiating®,PowerNegotiating®,andPowerNegotiator®areregisteredtrademarksofThePowerNegotiatingInstituteandRogerDawsonProductions.

TheCareerPress,Inc.

220WestParkway,Unit12

PomptonPlains,NJ07417

www.careerpress.com

www.newpagebooks.com

978-1-4532-5411-0

This2012editiondistributedbyOpenRoadIntegratedMedia

180VarickStreet

NewYork,NY10014

www.openroadmedia.com

EBOOKSBYROGERDAWSONFROMCAREERPRESS

ANDOPENROADMEDIA

Availablewhereverebooksaresold

FINDOUTMOREAT

CAREERPRESS.COM&WWW.OPENROADMEDIA.COM

FOLLOWUS:

@CareerPressInc

@openroadmediaandFacebook.com/OpenRoadMedia

Videos,ArchivalDocuments,andNewReleases

SignupfortheOpenRoadMedianewsletterandgetnewsdeliveredstraighttoyourinbox.

FOLLOWUS:

@openroadmediaand

Facebook.com/OpenRoadMedia

SIGNUPNOWat

www.openroadmedia.com/newsletters