The Persuasive Negotiator

Tools and Techniques for Effective Negotiating

Florence Kennedy Rolland

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000206128
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Negotiation permeates every aspect of our lives, from our home to our work. Whether you consider yourself a novice or expert, there is always room to improve your negotiation performance. With easily replicable tools throughout, this book offers everything you need to know for an MBA in negotiation, but without the expense and time-consuming study. It will help you improve both your confidence and ability, and equip you with all the skills and tools needed for successful negotiation.

Negotiation is more than buying and selling, more than winning and more than streetwise manipulation; it's creating a successful deal that will lead to a fruitful relationship with the other party. In this book, the author demonstrates how we can all become more effective negotiators in business, and our everyday lives, by combining theory with real-life examples and offering practical tips. At the end of each chapter, your knowledge will be tested and the learning reaffirmed to enable you to walk into any negotiation confidently.

This book is essential reading to all students taking part in an MBA program, as well as anyone with an interest in negotiation. Whether you need help negotiating a new kitchen installation, a better salary or a multi-million-pound business deal, this book will give you the competitive edge to get there.

1What is negotiation?

Introduction

When it comes to decision-making there are many alternatives. It’s not simply the case that one method suits all, and in many cases negotiation is not the best fit. The first step you must take is to understand whether or not negotiation is even a valid choice in your decision-making.

George, VP (Sales) at Xander Enterprises, was looking forward to his annual leave starting tomorrow afternoon. He had planned a three-week holiday in Italy with his wife and two children in a rented villa. It was a long overdue break after a frantic year working on a potential joint venture to build a business park with Phoenix Projects, a client company, on the edge of town. His CEO, Dan O’Reilly, came in to his office at lunchtime on Thursday and tasked George with checking over all the files before an important meeting with Phoenix on Tuesday next week.

The contract documents were a total mess, with missing finance information and requiring many changes to specifications and drawings that needed to be analysed and prepared for discussion on Tuesday. This was not a 24-hour job. George would have to delay the start of his holiday until Monday evening at the latest. George would have to make a grovelling apology to his wife and kids, and assure them he would join them as soon as he could get away.

George was very angry to be put in this position in the first place. The account was not one of his, but of the Contracts Manager, Sam, who was on sick leave and would not be back in time to help with the preparation or the meeting next week. This left George as the only suitable option to help out at such late notice. Though he noted it would be a feather in his cap to fix the problem and it would do his promotion prospects no harm at all, he was all too aware of the price he would have to pay domestically, as this was not the first time work had caused him to miss out on family events.

Now, imagine yourself in George’s position on Thursday afternoon when the boss calls on you to work over the first weekend of your annual leave. How do you feel about that? As annoyed as George? Well, we don’t know what George said or did when he heard Dan’s instructions; we only know that he worked through the weekend. If you had been faced with a similar instruction from your boss, how might you have reacted? What could you do to make yourself happier in this type of situation, both at work and domestically?

Exercise 1A

What could you have done in this situation? Write down your answers on a separate sheet of paper, numbering them 1 to 10.

My suggestions follow, in no particular order of priority. George could:

Tell Dan that his holiday was contractually sacrosanct and refuse the assignment.

Question: What would this have done to his career prospects?

Suggest to Dan that somebody else should undertake the assignment and use good arguments to support his suggestion (perhaps appealing to Dan’s sense of fair play?).

Question: What happens if he fails to persuade Dan to change his mind?

Suggest that Dan assign somebody else along with George, with whom George would work until Friday evening, and thereafter the other person would complete the task over the weekend by himself. (Perhaps he could offer to work through Thursday night?)

Question: What happens if there is nobody else qualified to undertake the work after George leaves?

Tell Dan that he did not want to break his holiday in this way, but that he was prepared to toss a coin with him to decide whether he should continue with his holiday plans or start work on the problem.

Question: What happens if Dan has an aversion to a gamble and anyway sees no reason why he should put himself at a 50 per cent risk of doing without George’s services?

Offer to do the work, provided that Dan paid his airfare to Bordeaux on Monday and extended his holiday by a week in compensation.

Question: What happens if there is no pressure on Dan to negotiate with George?

Ask to see the company President to adjudicate whether Dan’s assignment was a reasonable request just before his holiday.

Question: What influence can George bring to bear on the company President before he makes his decision?

Threaten to resign and sue the company for constructive dismissal.

Question: How credible is the threat and would Dan give in to it? How expensive is litigation and would he win?

Tell Dan he will consider it and let him know when he returns from holiday.

Question: What happens when a decision cannot be postponed?

Instruct one of his own subordinates to undertake the assignment.

Question: What happens if the junior refuses the instruction?

Undertake the assignment.

Question: What does giving in cost him in a ruined holiday?

This chapter is about some of the options people can consider when their interests are in conflict with another’s and how we might approach discussing these options.

Alternative methods of making decisions

People make decisions all the time and they use a variety of methods, mostly without thinking about the differences between the methods, to reach and implement their decisions. We can illustrate the variety of methods available to people by considering the suggestions you came up with for George in the introduction. Almost certainly you included some, if not all, of the ten in my list (and perhaps a few others?). Each of my ten suggestions is based on a different method of reaching a decision, and we can name each type of decision method as follows:

Say ‘No’

To reject outright a proposal usually means having to live with the consequences, unless the proposer backs off. If a man puts a gun to your head and says: ‘Sign the contract or I will blow your brains out’, you would surely have to have a serious objection to the terms of the contract if you persisted in refusing and he was serious about his threat. Saying ‘no’ and meaning it is appropriate when you cannot endure the offer but you can endure the consequences.

Persuasion

All selling skills are based on persuasion. If you have ever attended a sales training course you will recognise the role of persuasion in the advice to sellers to ‘sell the sizzle, not the steak’. This approach can persuade someone to say ‘yes’ because their imagination is more likely to be fired by the image of a sizzle than the unadorned image of a steak. The advice to sell benefits, not features, is another example of the talented use of persuasion skills. Persuasion is usually the first method we choose when we want something. When persuasion works it is a fine method, but when it does not work it often leads to tension and conflict:

I tried to be reasonable and explained why Dan should choose somebody else, but he was not interested in my views, only in his own, which shows I was right to call him an idiot of a boss, and he proved this by sacking me.

Problem-solve

This is not as universally applicable a method as its proponents claim (in fact, no single decision method is a panacea for all conflict situations). Problem-solving methods require a high degree of trust between the decision-makers, who also have to agree that they share the problem. If either of these conditions is absent, problem-solving breaks down when individuals ‘hold back’ just in case their candour is ambushed by your denial that you share their problem.

Chance

This is not as silly as it sounds. Some large decisions are made by the toss of a coin. For example, in a choice between two otherwise identical projects for which there are funds for only one, tossing a coin might save a lot of acrimonious argument or indecisive dithering. If you are indifferent between two events (going to the football match or watching television), you have a 50 per cent chance of enjoying either event if you decide between them by tossing a coin. Kerry Packer, the Australian businessman, chose between his lower price and David Frost’s higher price for the Australian television rights to Frost’s interview with ex-President Nixon by tossing a coin. The interesting feature of Packer’s decision is that he allowed Frost to call ‘heads or tails’ over the telephone line separating Frost in California from Packer in New South Wales, and he announced that Frost had won the toss! Whether Packer actually tossed a coin or not is an interesting speculation; if he did toss the coin and Frost’s call won, this makes Packer a very honest man; if he tossed and Frost’s call lost, or if he did not toss a coin at all, this makes Packer a very generous man.

Negotiate

This is a widely used option where conditions for it exist. These conditions normally include the mutual dependence of each decision-maker on the other. If the boss needs your consent for you to do something he wants and to which you cannot unilaterally say ‘no’, nor can he make you do it, it may be possible to negotiate something that meets both your own and your boss’s concerns. This usually involves you getting something, tangible or intangible, in return for your consent. But if you have nothing to trade – he does not need anything you have, including your consent, nor does he have anything in his gift that would persuade you to consent – then negotiation is unlikely to be appropriate.

Arbitrate

When decision-makers cannot find a basis for agreeing, and provided they can at least agree on who is to be the arbitrator and that his decisions will be accepted, they can choose arbitration. The building and construction industry uses formal arbitration procedures to settle the many disputes that arise over increases in costs and variations in specifications after the contract price has been agreed. It is also used in commercial disputes between countries. Though widely used, arbitration is also abused, particularly when the parties reject the arbiter’s award, or when one of them demands arbitration merely as a device to improve the other party’s last offer by letting the arbiter split the difference. This abuse has been overcome by the Pendulum Arbitration system, which requires the arbiter to choose one or other of the party’s claims, rather than award some compromise between them. The problem for George is how to appeal over Dan’s head without compromising his own relationship with the company. Dan’s boss might take a dim view of managers who do not work ‘above and beyond’ the call of duty and he might take just as dim a view of Dan for failing to manage his own people; the former inhibits George from going over his boss’s head and the latter inhibits Dan from letting him. George also has the risk that the arbiter’s decision would ...