The importance of preparation is a key tenant in negotiations. Granted, it may be hard – if not impossible – to anticipate the ludicrous debates in which you might find yourself entangled on any given day (after all, do any of us really wake up expecting to have an intellectual debate as to the merits of picking your nose or why your two-year-old shouldn’t bite the puppy’s tail?), but if you find yourself engaging in the same debates day after day, or week after week, it may be time to step back and apply some fundamental negotiating principles.

Let’s start with BATNA, or the best alternative to a negotiated agreement. Whether your ultimate goal is to secure a “win” or to simply arrive at a compromise, you will be able to negotiate far more effectively if you have identified your BATNA.

Puppy is a master negotiator. She has a magical ability to sense weakness, and uses the opportunity to eat her opponents alive. I’ve quickly learned that if I don’t know my BATNA, she will often come out on top. Let me give you an example. When Puppy was three, we enrolled her in preschool two mornings a week. She’s always been into clothing and fashion, and often changes her clothes several times a day. I generally try to keep my mouth shut and let her express her individuality. Even when she wears her yellow and white polka-dot shirt under a fuchsia floral dress complimented by brown tights with teddy bears on them. But I draw the line at pajamas. Don’t get me wrong – I love pajamas. In fact, unless I’m leaving the house, I rarely change out of my pajamas. But I do feel compelled, as a parent, to teach my child to dress appropriately when appearing in public.

So when she showed up at the breakfast table one morning and announced she was going to school in her pajamas, I drew the line. I told her she could wear anything she wanted, but not pajamas. I won’t get into the details of the exchange that ensued, but suffice it to say that she was determined to make a point – and so was I.

So what were my options? I could have given in and allowed her to go to school in her pajamas. On a theoretical basis, I didn’t really have any problem with this option (her pajamas were in good taste and they did look awfully comfortable), but on a practical basis this was one precedence I didn’t want to set. The situation went downhill quickly, and I had to make a decision. Assuming we weren’t going to reach a successful agreement, what was my best-case scenario? Obviously if she wasn’t willing to go to school in anything other than pajamas and I wasn’t willing to let her leave the house in pajamas, staying home was our best alternative.

Was this something I could live with? I had a full day planned. Kitten and I had music class, and I had a long list of errands to accomplish afterward. Puppy staying home would mean no music class, and possibly no errands. Yep. I could live with that. I had identified my BATNA.  

Want to know how our negotiation ended? Check back next week, when I’ll be posting a discussion on  identifying win-win scenarios!

In negotiations, whether we realize it or not, our cooperation increases the size of the pie for everyone (creates value) and our defection defines our slice of it (claims value).

We often develop imaginative ways to create value through the promise of mutual gains and introduce these ‘carrots’ into our negotiation strategy at the appropriate point as to maximize their impact and benefit.  As it relates to cooperation and the use of carrots, most of us consider ourselves fairly effective with this approach. 

What happens when the other party isn’t cooperating, however?  Are we as effective at bringing them back to the bargaining table?   Are we as capable of putting the deal back on the tracks?

Quite simply, what happens when they say no when we really want them to say yes?  How do we move them to our way of thinking?  That is the art of negotiation.  The art of letting *them* have *your* way.

Former Secretary of State James Baker once famously said (and I’m paraphrasing here), Diplomacy is the art of saying nice doggie long enough until you can find a big rock with which to smash it in the head.  If there is no rock, negotiation is pointless…  How many of us negotiate without a rock?  I can’t tell you the number of times I’ve had a client say we’re just going to tell our supplier we want to buy their stuff, but we need a better price.  I nod politely and ask, “or what”?  Puzzled, they ask, what do you mean “or what”?  I explain, and what if they say no?  What if they say this is the best possible discount they are able to offer you?  What will you do then? 

You see, the “or what” is the rub.  Gee Mr. Supplier, we’d like you to give us a better discount.  If you’re not prepared to answer the “or what”, you are just Oliver Twist asking for more.  Seemingly, we are much less prepared to correct behaviors that are counter-productive to our goals and objectives.  The use of ‘sticks’ in a negotiation is every bit as important as carrots, and in many cases, much more so.  When one party cooperates and the other party defects, the defecting party claims value.  When both parties defect, not only is no value created, no value is claimed either.  It stands to reason then, that you can prevent the defecting party from claiming value by defecting.  Sometimes the best way, perhaps the only way to bring a defecting party back to the bargaining table is to defect yourself.

Easier said than done?  Defection in a negotiation is often viewed with a negative connotation, and is also often confused with the end objective.  Some view it as confrontational or even as threatening.  Regardless of how it’s viewed, a defection strategy is often justified.  Defecting from a negotiation can be extremely effective in situations where a supplier is reaching or over playing their hand.

In one case, NET(net) was working with a client who had two viable solutions for a business need, and the preferred supplier overplayed their preference status to the tune of a 40% premium price over the competition.  The client told the preferred supplier that the current price made it impossible for them to be selected, but the supplier refused to lower their price, believing that the client was bluffing.  Instead of haggling, the client sent a polite thanks but no thanks letter, and went into unilateral negotiations with the alternative supplier with the full intent to get a deal done.  The preferred supplier returned the next business day with a market leading price and improved terms and conditions.  This led us to coin the negotiation axiom, “sometimes the fastest way to a yes is to say no”.  This client didn’t bluff.  They had every intention to do the deal with the alternative supplier and the preferred supplier knew it.  It’s not gaming or brinkmanship; it’s defection.  To be effective, it has to be credible, it has to be timed right, and it has to be sequenced appropriately.  When it’s done right, it works.

While we are mostly inclined to be cooperative and we all work hard to find ways to increase the value and mutual gains for all parties involved in a negotiation, the use of sticks on a quid-pro-quo basis is an extremely effective way to control the bargaining table.  Defections from negotiations are sometimes the best and perhaps the only way to break the cycle of supplier lock-in and the incumbency effect of entitlement rights.  See future blog posts on these and other topics.

Cross-posted from my other blog.

At my new job, everyone has to put together performance plans to plan and track their performance. The majority of the plan revolves around planning the projects you are working on, but there is also a part for planning your own professional development. There are a number of suggested “leadership competencies” on which you can work and they even provided suggested resources (e.g., online modules, courses, books) to help you develop in your chosen areas. In the area of “communication skills” – something I like to think is one of my strengths – one of the books on the list caught my eye: Getting to Yes: Negotiating Agreement Without Giving In. Because, although I’m fairly strong on communication generally, I suck at negotiation. I hate it. The thought of it stresses me out. My image of negotiation is two opposing sides that hate each other, each trying to screw the other over to get as much as they possibly can for themselves. Yuck. My strengthes in communication, I feel, have to do with things like active listening, respect, fairness, objectivity and caring for other people. I don’t want to screw other people over, but I also don’t want to let them screw me over. You can see where my distaste for all things negotiation-y comes from.

But since the point of professional development is, well, development, I added reading this book to my list of things I will accomplish this fiscal year in pursuit of more skillz.

Much to my surprise, I really liked the book! It wasn’t about trying to screw over the other guy at all!

What I learned, in a nutshell, from this book was:

• separate the people from the problem – remember that the person/people you are negotiating with are people and you have to take their feelings/motives/interests into account. And if you separate the people from the substance of what you are negotiating over, you will be able to deal with both the people and the problem in a more effective way
• focus on people’s interests, not on rigidly defending a position – Getting to the heart of what each side wants (i.e., focusing on interests) allows you to come up with creative solutions that can address both sides’ interests because it opens up possibilities that you would not even consider if you were strictly saying “I want this” and “you want that.”
• have objective standards, because they are much harder to argue against than arbitrary positions. Trying to negotiate a pay raise or a house price? Find standards of what other people get paid for comparable work (or paid for a comparable house) and what would make another job (or house) comparable and that will make it easier to defend your offer and reason with the other side.
• know your BATNA (best alternative to a negotiated agreement) – think about what the alternative will be if you can come to an agreement with this party. Will you be able to easily sell your house to someone else? Get another job? Knowing what your alternative is will help you decide if you want to keep negotiating or not.

And, if you can believe this, before I even finished reading¹ the book, I had used its principles to negotiate a contract! By focusing on interests instead of positions for a contract I was in the process of negotiating, I was able to come up with a creative solution that satisfied both my interests and the client’s interests, despite us being quite far apart in our intial proposals (and if we had merely tried to negotiate from those positions, we either never would have come to an agreement or one of us would have had to make major concessions to the other and been quite unhappy about it). Also, I knew what my BATNA was (as I have a full-time job, I didn’t need to have the contract, so my BATNA was to decline the contract unless I was happy with the offer), which helped me to know what I was willing to accept.

Also, by total random coincidence, just the other day, while searching for some mind mapping software, I came across this mind map that summarizes the book:

Anyway, I totally think this book is worth the read. It’s called Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher, William Ury and Bruce Patton.

¹Well, listening to it, since it’s on CD.

It may seem too good to be true, but you may be able to negotiate a lower rent with your property manager. Many apartment hunters don’t bother trying because they assume that the advertised rent is simply what must be paid. Many tenants who fall in love with an apartment/rental home or find a suitable option after an exhausting search are understandably hesitant to haggle with a landlord for fear they’ll lose the opportunity.

Negotiating is Fun and Gets Results!

Although it probably never hurts to try talking a landlord into lowering the rent, there are certain situations in which you’re most likely to be successful. Keep these in mind as you hunt for apartments:

You’re interested in a vacant apartment. It’s one thing if you’re looking to sign a lease for an apartment right after its current tenants leave. But if an apartment has been vacant for a while, it means the landlord should be hungrier to find a replacement. Keep in mind that for every month the apartment stays vacant, the landlord loses a month’s rent. So, the longer the vacancy, the greater your chances of convincing a landlord to cut you a break in the rent.

You’re looking for an apartment in a renter’s market. When you hear it said or you read about how we’re in a “renter’s market,” this means that apartment hunters like you generally have the upper hand. This is because there are too many vacancies in your area, too little demand, or perhaps some of both.

Landlords must be competitive to earn your business. Indeed, smart landlords think of ways to get that extra edge on the competition in a renter’s market. For instance, a landlord may offer a new amenity or offer concessions such as waiving a customary parking fee, paying the broker’s fee or giving new tenants a free month’s rent. If you’re interested in an apartment and the landlord isn’t offering any concessions, you’ll have a good chance of succeeding in negotiating a lower rent in a renter’s market.

Negotiating Tips and Strategies

A few things we’ve heard from different renters:

1) Know how the rental unit in question compares to others. Is it already priced higher or lower than similar properties? Find something about it that makes it “less desirable” than a comparable property.

Do Your Research Before Negotiating!

2) Prepare for the conversation.  Decide on the best and most realistic rent you want. If the place is advertised at $1300, decide if you want to aim for $1100.  Also, decide your BATNA – your Best Alternative To No Agreement.  If the landlord doesn’t budge, are you really willing to pay $1300? Or is your absolute highest actually $1200? Make sure the price you offer to pay is lower than your BATNA, so there is room to concede and, well, negotiate.

3) Don’t come across as too eager. Remember that a property manager really wants a responsible, clean and employed tenant.  So don’t take the advice of some bloggers who recommend you say you hope your landlord could reduce your rent so that you can better afford the apartment. This statement makes property managers wonder if you will have trouble down the road. Instead, say for example that you are looking at a couple other options and one of them has all the same amenities and is in a great location for $1100, and another one at $1200 includes all utilities (and be honest, real examples are better than make believe ones!).

“I went into an apartment manager’s office on a Saturday morning to ask for $100 off the monthly rent, a specific corner 2nd floor unit, with free wifi. I had also set up an appointment that afternoon at another apartment which offered competitive deals, and told the first agent that I’d much prefer to live at their place, and was ready to make out a check for deposit plus first month’s rent, but that I would feel bad canceling the afternoon appointment and needed to make a decision that day. This made the agent take me seriously.

She called the owner and spoke on my behalf – it probably helped that the week before I had come prepared and given them a copy of my employment info verifying income, was dressed nicely (but not too nice!) and asked to see a lot of different units and take home some information – they knew I was interested, but I stayed noncommittal. Anyway, it all worked out.  I stuck to my guns even when she offered $50 off, because I had already decided that that $100 off was what I wanted – I would have been okay paying for wifi but she just threw that in as well as $100 off. A good negotiation saved me about $1500 this year!!!”

5) Remember, the art of negotiation is just that – negotiation. This means you should be prepared to compromise, and it is important to state the deal that would be best for you first – always make the first offer when you are negotiating down, rather than asking if they can cut you a deal.  And include in your offer a few things that you would actually be okay without. For example, if what you really want is $100 off the rent, you could also ask for free parking. During the negotiation, you can offer to pay for parking so long as you get the rent reduction, and the landlord might feel like they have “won” something – the best negotiation is when both parties walk away feeling like they have gained something.

Do you have any negotiation stories? Share them with us by leaving a reply below!

Le président sortant algérien  Abdelaziz Bouteflika, brigue un troisième mandat de cinq ans,  a souligné  à Batna  dans le nord-est qu’il est porteur des mêmes  idées de réconciliation et du même programme du développement  économique et social du pays, basés sur la réconciliation  nationale.  ”Je suis porteur des mêmes idées et je ne suis pas venu à Batna pour présenter mon programme que vous connaissez depuis une  dizaine d’années”, a souligné M. Bouteflika, lors d’un  rassemblement à Batna. Au premier jour de la campagne électorale pour l’élection  présidentielle du 9 avril 2009 , M. Bouteflika a fait savoir  son programme s’inscrit dans la “continuité” de ce qu’il a déjà  entrepris. Elu à la présidence algérienne en avril 1999 puis réélu en  avril 2004, le président Bouteflika avait lancé notamment un  processus de réconciliation nationale dans le but de sortir ce  pays de la “décennie noire” des années 1990 marquées par des  attaques terroristes. La politique de réconciliation, engagée en 2000, a permis à des milliers d’islamistes d’abandonner le maquis et la lutte armée. La situation sécuritaire s’est nettement améliorée ces dernières  années en Algérie malgré des attentats de la branche d’Al-Qaïda au Maghreb. M. Bouteflika s’est déclaré “fidèle” à ses engagements  consistant en le rétablissement de la paix et le retour de la  confiance aux citoyens, en redonnant au pays sa place dans le  concert international. Rappelant que durant les années du terrorisme et de violence,  l’Algérie avait été isolé par des pays européens, même des pays  ”frères”, M. Bouteflika a noté que le peuple algérien a “recouvre” sa “fierté”. Il a précisé qu’il est impossible d’initier une politique  d’édification et de construction du pays sans la sérénité et la  paix, appelant les citoyens à rester “fidèles” à la Charte pour la paix et la réconciliation nationale, approuvée à l’unanimité par  voix référendaire par le peuple algérien en septembre 2005. ”Après des années de violence et de terrorisme, le peuple  algérien s’est rendu à l’évidence qu’il fallait aller vers la  réconciliation”, a souligné M. Bouteflika, demandant ainsi à ceux  qui ont été touchés par cette tragédie de pardonner. Fustigeant les “extrémistes”, M. Bouteflika a affirmé que  ”l’Algérie appartient à tous les Algériens et pas seulement aux  laïcs ou aux islamistes”. Depuis son arrivée au pouvoir, M. Bouteflika a initié des plans pour relancer l’économie algérienne, affectée par les violences,  et promouvoir la construction d’infrastructures. A cet égard, il a réaffirmé qu’il a tenu ses promesses en  matière de développement économique et social du pays.L’Algérie s’est débarrassée du “fardeau” de la dette extérieure, alors que certains économistes avaient suggéré de se consacrer  plutôt au développement même en étant endetté, a-t-il expliqué. ”J’ai promis la création de trois millions d’emplois et 1,5  million de logements en cinq ans, ce qui a été réalisé en  dépassant même nos prévisions”, a indiqué M. Bouteflika, ajoutant  qu’il a été fait appel à des entrepreneurs pour travailler 24  heures sur 24.  Avec ses réalisations en matière de réconciliation nationale et de redressement économique, M. Bouteflika, un artisan de la  réconciliation nationale âgé de 71 ans, est presque sûr d’être  réélu président algérien, d’autant plus qu’il bénéficie d’un  soutien ferme des trois partis politiques (FLN, RND et MSP), et de l’aide d’une machine électorale efficace, estiment des analystes.  Les cinq autres candidats à la présidentielle algérienne, à savoir Mme Louisa Hanoune, Moussa Touati, Ali Fawzi Rebaïne,  Mohamed Djahid Younsi et Mohamed Saïd Belaïd, ont tous inauguré  leur campagne électorale dans plusieurs villes du pays

yas: je ne voulais pas juste ajouter dans les liens le blog de Knu et sa mère car je porte trop de considération au travail qu’elles accomplissent en cuisine pour ne pas profiter de l’occasion pour en dire publiquement le plus grand bien! Et ce à juste titre car j’ai eu l’occasion, que dis-je l’honneur, de goûter ce qu’elles préparent! …Haga, je le dis dès maintenant si vous trouvez cet article trop pompeux et bien je m’en fiche! lol! Il sera pompeux car il doit l’être!

En effet, depuis 5 années, je passe au moins 2  semaines par an à Batna en compagnie de Knu et de sa famille.  Et je dois avouer que je suis gâtée! Déjà par le simple fait d’être en leur compagnie! Wallah merci les amis! Et bien sûr, puisque c’est le propos de cet article, mes papilles gustatives sont à la fête!! Et je peux vous assurer que c’est la fête tous les jours ! lol

Alors, je pourrais passer des heures à vous parlez de ce que j’ai bien pu manger chez Knu en utilisant des “délicieux”, “savoureux”,  “exquis”  ou plus basiquement “c’est trop trop bon”! lol! Sans oublier bien sûr l’expression chère à tata “à tomber par terre”! Mais je ne vais pas vous infliger mon blabla! Je vous dirai simplement: aller visiter le blog “Cuisine à 4 Mains” (cliquez!) qui est un excellent ambassadeur de l’art culinaire!

Et sachez que toutes les recettes ont été testées et approuvées par les soins de mon cousin (le papa de Knu)! lol! Plus sérieusement, les recettes y sont très bien expliquées et trop bien illustrées (il faut dire que Knu s’applique énormément pour les photos).

Un petit mot pour finir, même si comme moi vous ne savez pas faire un oeuf au plat (oui je sais!! c’est le b a ba! mais je ne le sais pas le faire et même que j’en suis fière lol!) et que par conséquent la cuisine n’est pas votre truc, aller quand même visister ce blog juste histoire de voir ce que 4 mains peuvent accomplir et croyez moi avant que ça soit de la cuisine au sens galénique du terme (mélange, dispersion, émulsion….etc.) c’est de l’art!… Pour preuve la robe de cette poupée! C’est pas magnifique?

Non non! Vos yeux ne vous jouent pas des tours! Ceci est bien une robe-gâteau!

P. S 1: l’image ci-dessus a été réalisée sans trucages! lol

P. S 2: je me demande si mes anciens profs de galénique apprécieront la comparaison que j’ai faite mais c’est qu’ils n’arrêtaient pas de nous dire que la galénique c’est de la cuisine!! non? lol!

I hope Professor Noonan agrees that this is a very insightful read on the game theory analysis of Tata’s acquisition of Corus. I’ve copied the text below with few comments/remarks (in []) from myself to explain the “game” aspect of the deal:

The game plan

Starting with an expectation of a good potential fit, let us see how Tata and Corus have together won out. Visualise a two-dimensional (X-Y) space with Tata’s objective function along the horizontal axis (X) and Corus’s along a vertical axis (Y). The essential requirement for this analysis is that there is an objective function, i.e. a line that measures increasing overall benefit, which can be defined separately for each party along one of these axes. We may surmise that Tata’s primary concern was to pay no more than reasonable compensation for Corus in order to result in a profitable combination, shown as a percentage cut from a notional asking price on the horizontal axis. Corus’s objective function could be the retention of maximum sustainable benefits with employment participation (assuming that the management and union are in sync). This is shown as a percentage on the vertical axis. Mapping Tata’s and Corus’s responses in terms of the percentage cut in price and percentage benefits retained, we get one set of points for Tata and another set for Corus. A line through the first set represents Tata’s response function or strategy, and a line through the other set represents Corus’s response function. For a given cut in price, Tata favours fewer benefits than Corus expects, and for a given benefit level, Corus wants less of a price cut than Tata.

[vduvvur: And hence when the deal was being made, there would've been a negotiation going on between the parties about the mix of price vs. employee benefits. It is similar to the Riverside DEC case we did in SDA where DEC could help Riverside with certain financial incentives to adapt a new technology, and Riverside could choose certain particular forms of help and mix them to ensure they receive max benefits]

The Hamada diagram

The Hamada diagram enables a graphic depiction of game theory, and this analysis is an adaptation.* Tata’s ideal solution, referred to as its “bliss point”, is on its strategy line corresponding to a high price cut. This is where it has its highest economic welfare. Corus’s bliss point [vduvvur: the bliss point could be seen as the BATNA, where each party maximize their payoffs], likewise, is on its strategy line where retained benefits are high. Each party’s economic welfare decreases as it moves away from its bliss point; each party’s indifference curves are therefore concentric around its bliss point. [vduvvur: this indifference curve can be seen as the Pareto frontier, along which lies the maximum value created from the transaction]

# For Tata Steel, as the cost of acquisition reduces moving right along the horizontal axis, Tata can concede more benefits to Corus’s employees.
# For Corus, the management and employees seek a sustainable long-term solution that yields benefits with participation. Despite their premium product line, image, and access to markets for these products, their high-cost structure militates against easy solutions. This realisation impelled Chairman James Leng of Corus to initiate discussions with potential alliance candidates.
# Tata’s and Corus’s responses intersect (coincide) at N, the non-cooperative or Nash equilibrium (Figure 2).

This is the norm for non-zero-sum games when players adopt conflicting, mistrustful strategies, so competitive responses force the solution to a point where neither can benefit by acting unilaterally. Coordinated solutions, however, can make both better-off, i.e. deliver a bigger price cut together with more benefits. This is because efficiency occurs where the respective indifference curves are tangential to each other, whereas they intersect at the point of Nash equilibrium. These tangential points are on the “contract curve” joining the two bliss points. A coordinated solution on this line is efficient, and at the midpoint C, is Pareto optimal (most efficient).

Negotiation  is something that everyone do on a daily basis, even if without noticing it, it is, like the song from Frank Sinatra, “under your skin”. We negotiate with our bosses, our wife and family, our colleagues, our partners and customers. It is such important because mainly the human kind society is a trade one, which makes that the basic rule will be trade ones, and this last case Negotiation.

There is a lot of information around how to negotiate, stategies to increase  the outcome of the negotiation, to intimidade the other side, to drop of the negotiation table, to exchanges, etc…  A lot things that are very important as tools and technics to get you ready to face a negotiation.

The more you negotiate the better you are, so the most ouctome you will be able to get out any situation, and the more easy you will se behind the stragegy your negotiation counter part is following.  

There are then several approaches about the outcomes of the meeting, and that says, that the best solution would be to go to a win win situation, or to have very clear your BATNA (Best Alternative to a Non-Negotiated Agreement) that is directly translated in knowing where is the exit door , if no agreement is reached.

At this point it is where everything starts to be come a little bit more difficult, as they we are playing against another intelligent mind with principle and values and a feeling of honour very different. It is when usually people show their inner-conscience, and becomes what they are really are (with exceptions of people being able to represent roles) and where based on the values and ethics of the negotiatiors deals can be or not be closed.

Ethic is something that has been lately been introduced into management in the last years, especially what is called christian ethic applied to business, where basically you try to apply the same principles of the christianity and you apply direct to them on a business and its people.

Ethics, christian or not, although I always try to use the christian ethics are very important in negotiation as it opens a  all wide range of new ways to face tought and rough negotiators, specially in the case where the negotiation power is shifter toward their side. By keeping an opened mind to truth, honesty, comprehension, respect and pardon (among themselves) is very disarming, as usually negotiatiors are only looking innward without thinking in the other player interests/needs. Once you shift the mind from “me” toward “you”, the results are really impressive. And I am not talking about direct outcomes reflected by winning all negotiations, as the secret of a good negotiator is to transform a short term defeat into a long term victory.

Even in the case no agreement is reached, you will have won the respect of the other negotiatior and in such a small world, you never know who and when you will be negotiating again.

Images from http://www.negotiationlawblog.com

Some links:

http://en.wikipedia.org/wiki/Negotiation

http://www.negotiationtip.com/

Some videos training

And finally to have some fun with

1. Thirty minutes is not a lot of time.

2. Your BATNA will do you no good if you don’t actually get around to discussing the issues.

3. If your opponents’ strategy is to avoid any permanent resolution, neither of you are going to accomplish anything.