77 Best Practices in Negotiation

Dr. Gary S. Goodman

• Publisher: G&D Media
• Year: 2020
• ISBN:
  9781722522957
• Topic: Personal Development
• Subtopic: Negotiation

DR. GARY S. GOODMAN is the best-selling author of more than twentyfive books and thousands of articles. He is also creator of the applauded training program, "Best Practices in Negotiation, " offered at U.C. Berkeley and UCLA Extension, as well as at organizations worldwide. As an attorney, Fortune 1000 management consultant, and celebrated speaker and lecturer, Dr. Goodman has personally negotiated more than a thousand contracts for his companies and for his clients.Drawing from the best-published sources and his own ample experiences, Dr. Goodman shares tips and techniques for negotiating everyday transactions as well as mega-deals. You will discover:

• The six-step Anatomy of a Negotiation Transaction, a guide from the inception to the execution of an agreement
• How to avoid common pitfalls and dirty tricks when negotiating
• How not to give away the store
• The 3 "T"s in any negotiation: Text, Tone, and Timing
• When you should grab their first offer
• The secret to detecting 3 types of liars
• How to read your counterpart's pain threshold
• The best way to counter dirty tricks
• No Job Offer? Negotiate Reconsideration!
• How to negotiate Less Job Stress!
• Five traps to avoid in preparing for a negotiation
• Unique and counter-intuitive advice to finding better bargains on cars and housing

There is a lot of room for creativity in negotiating, but few folks pay attention to the possibilities. You need LOTS of tools, techniques, strategies, ploys, feints, and bluffs in order to come out on top. That's why expert negotiator Dr. Gary Goodman has provided you with no fewer than 77 Best Practices!

Chapter 1

What Is a Negotiation?

What is a negotiation? When does it begin and end? How does it differ from other transactions, such as everyday buying and selling? And why does it deserve special study, preparation, practice, and investment?

I define negotiation as a value-for-value exchange, where the values tendered by the parties are variable, subject to the estimation, calculation, and agreement of the parties.

You walk into a department store and find a nice sweater. The price is $89, according to the tag. You bring it to the register, pay for it in cash, and leave with the item.

This is a transaction, but it isn’t a negotiation, according to the definition I have supplied. The store set a price, you paid that price, and the clerk accepted it. The value you gave for the garment, $89, was not bargained for. It wasn’t a variable. It was a fixed, predetermined amount.

Had you noticed an imperfection in the weave, you might have pointed this out to the clerk or to the manager, and that flaw might have provided a justification for a price reduction, had you requested one.

At that moment, when you determined you wanted to pay less for the sweater and undertook to seek a reduction, formulating your communication strategy, negotiation got underway.

Clerks and managers are commonly empowered to take off a certain percentage from damaged goods, often 10–15 percent. Had they done so, we most certainly would regard the encounter as a negotiation.

But what if they declined to drop the price? Would it still be a negotiation? Yes, because they would have taken a position—that the sweater was still worth full price—or they might have puffed, “We’re not that kind of store!”

You would then have the option of capitulating or refusing to buy. From your view, if you didn’t achieve the desired price, it might not have been a successful negotiation, but it was one nevertheless.

You can see from this example that buying and selling do not always, or often, involve negotiating. But when one party wants to sweeten a deal, gain an additional benefit, avoid a detriment, add certain requirements or conditions, or achieve a discount or obtain payment that is above list price, then negotiation kicks in, like a generator when the lights go out.

When exactly does negotiation begin? For those that always pay full price, or accept the values others impose on goods and services as irrevocably fixed, the answer could virtually be, “Never!”

To such folks, nothing seems negotiable. They seek employment, send out résumés, and when they are interviewed and hear the words, “We pay X dollars per year,” they reflexively and agreeably say, “Great!”

They don’t actively try to improve their lot, because many feel undeserving of special treatment and consideration, or they might be concerned that asking for more will appear greedy and they’ll risk losing the job offer.

Others that believe that everything is negotiable and act accordingly. Some proudly declare: “I never pay retail prices!” feeling that when they do, they’re behaving foolishly, like suckers.

The rest of us fall somewhere in the middle, appreciating that a car dealership is a venue where haggling is expected, and if you don’t do at least some of it, you’ll get fleeced. But we may blanch at the suggestion of trying to get a casket for a relative’s funeral at a reduced price, because that would be simply “unseemly.”

These three types of negotiators—the “never bargain,” “always bargain,” and “sometimes bargain” individuals—are already negotiating their expectations. They are setting certain aspiration levels without necessarily being aware of what they’re doing.

Likewise, those that think they can get great deals if they actively seek them out often find they are right, as are the folks that think they can get very little in the way of bargains.

As I explain in Best Practice 36, “The more you ask for, the more you’ll get.” Not only does behavioral research support this finding, but this phenomenon confirmed in actual practice.

Some wrongly believe, “The more modest I am in my requirements, the more likely it is they’ll be fulfilled.” That’s simply naive. I suspect that this contention stems more from low self-esteem than from negotiation doctrine, but it does dramatize the fact that negotiations begin in our minds.

Thus it pays to think through our tacit beliefs about bargaining, its opportunities, obstacles, attractions, and repulsions. We need to adjust the beliefs that are shortchanging us.

And when does a negotiation END?

By this point, you’re probably about to guess, “Later than I thought!” and you’d be right.

I’m tempted to quote the inimitable Yogi Berra, who said “It ain’t over till it’s over,” appending what an anonymous pundit added: “And it’s never over!”

Number 15 of the 77 Best Practices offers this gem from Dun & Bradstreet: “The deal isn’t made until the money is paid.”

If you take this to heart, as I do, then you’ll never leave a transaction with a handshake or even a signed contract, and conclude, “This negotiation is over!”

As you’ll see when I outline the anatomy of a negotiation transaction, the sixth step requires action and execution. Agreements need to be put into effect, and their conditions need to be met before we can say that a negotiation is concluded.

Let me offer a recurring illustration of this precept. I’m a big sports fan, and I follow professional baseball, basketball, and to a lesser extent, football. (In the case of football, I am much more attentive to college teams.)

One thing I have noticed is when a pro athlete has an unexpectedly productive year, it’s common for his or her agent to approach the team’s management and invite them to a “renegotiation session.” Usually the agent will be seeking a contract extension at a higher rate of pay, but its effective date will be accelerated to the present.

In contract law terms, the agent’s client has a preexisting duty to honor the current contract and to play for the amount of money he agreed to beforehand. There is no obligation on the part of team management to accede to the agent’s request for an immediate upgrade in pay.

But in the real world of pro sports, everyone knows that an unhappy player simply won’t play his best, whether it results from an intention to “do the slow walk,” to “dog it,” to not hustle and put out 100 percent, or it is simply an unconscious reaction to feeling unappreciated or mistreated.

Thus the athlete’s original negotiation still isn’t over, even in the middle of its agreed-to contract years, although he is playing and the team is paying. If his agent says, “Stick ‘em up!” that original negotiation is subject to being reopened and modified.

Retaining the other party’s goodwill, trust, and desire to cooperate is an essential component of effective negotiating. Unfortunately, when a more narrow view of when negotiations begin and end is used, these dynamics are not given the attention, study, or importance they deserve.

Why should we study negotiation at all?

Negotiation is a frequent and significant activity of businesspeople and consumers. Like breathing, it is ignored and mostly taken for granted until the air is noticeably fouled or our lungs spasm.

When negotiations break down, suddenly we’re interested in asking, “What went wrong?” But until and unless dysfunction occurs, we rarely bother to study it.

Fortunately, you can find the topic presented in some university extension and continuing-education programs, and through a few commercial providers. I run my course, “Best Practices in Negotiation,” at UCLA and UC Berkeley Extension, and privately by invitation at organizations and trade and professional associations worldwide.

I hope this book will make you a more conscious, capable, and comfortable negotiator. But your education doesn’t have to stop here, with this text. I invite you to contact me about coaching and consulting as well as opportunities to bring my training to your site.

Chapter 2

Anatomy of a Negotiation

You sidle your car to a gas pump, insert your charge card, fill, and you feel or hear a click, indicating that your tank is topped off. Returning the pump hose to its holder, you get in the car and drive away.

This is more or less how a gasoline purchase transaction occurs. If you do these things step-by-step, you’ll fill your tank and keep motoring.

Most gas-ups are uneventful. We don’t have to outsmart or trick the pumps. We get what we pay for, denominated to the penny. And typically, unless we’re fleet customers, we don’t dicker over prices or seek discounts.

Most negotiations are also rather smooth and perfunctory transactions. They have beginnings, middles, and ends. We’ll discuss these features, identifying six steps that are common to most successful negotiations, steps that you’ll want to emulate. But before we do, let me make a few preliminary comments about negotiation and about this book.

Negotiations typically involve two or more parties that are seeking to fulfill some fairly mundane objectives. For example, employers interview prospective employees. The former and the latter need each other, so they’re hoping the result of their get-together will be productive.

While the boss (in theory) wants to pay the lowest of all possible salaries, and her new hire wants to earn the highest, generally market forces and the relative urgency each party brings to fulfilling her needs will inform the salary bargaining range.

No matter how clever one party is in negotiation, the worker, practically speaking, cannot accept a post that won’t pay her bills, and the manager cannot exceed rationality by offering an exorbitant pay package.

Even if such a lopsided outcome occurred, it wouldn’t be sustainable. Sooner or later, and probably sooner, somebody would notice that an error was made.

“What was I thinking?” one person might wake up to realize.

So implicitly an invisible hand will be steering many negotiations, as economists describe the constraints of supply and demand in a free marketplace. There is only so much wiggling room when it comes to setting and getting certain prices and benefits from our bargains.

If bargaining were a baseball game, your team couldn’t expect to hurl no-hitters and beat opponents by a score of 15–0 every time they take the field. You’ll probably score, and the other team will too. And you’ll both make a couple of errors or stupid plays during your time between the lines of the baseball diamond.

Just as there are professional coaches to help you to realize your personal potential, enhance your skills, and provide you with an edge by sharing their wisdom, there are consultants (such as your author) that are here to help you to achieve more than you otherwise would on the basis of your native gifts and range of experiences.

This doesn’t mean with my help you’ll win every negotiation contest, nor does it mean you’ll prevail on every point.

I hope that by reading this book and implementing its wisdom, you’ll: (1) understand what you can achieve in a particular negotiation so you can set appropriate goals; (2) have several new tools and techniques to bring to the bargaining forum; and (3) consistently achieve significantly better results in most of your negotiations.

This book leans heavily toward the pragmatics of negotiating, identifying tactics you can use, while identifying some of the dirty tricks others may use on you. I provide lots of examples, many drawn from the thousands of transactions I have personally engineered and overseen as a sales pro, entrepreneur, corporate consultant, and attorney. Other practices have come from published sources, my clients, and my students.

Drawing inspiration from Aristotle and others, I believe when teaching, example is more effective than precept. You’ll probably remember most of the Best Practices I’ll identify, because they are brought to life through stories, case studies, and events that occurred. By contrast, some negotiation texts, programs, and gurus fail to hit the target: they’re all theory or all practice, when reality requires the proper mixture of both.

Specifically, contributors to the field fall into one of two camps: (1) they are head-in-the-clouds theoreticians that are trying to invent and then overlay a grand intellectual model onto bargaining; or (2) they are out-of-the-trenches types who have war stories to tell, but are not effective at drawing out lessons that are applicable to...