Saturday, March 17, 2012

Getting to Yes! Negotiating Like a Pro...

The book of the week was Getting to Yes by Roger Fisher and William Ury. This is a book all about negotiating, one of the most important skills any person can learn in a lifetime. You might think that negotiating is only for lawyers and business people, but everyone negotiates- every single day.

People negotiate about simple things on a daily basis. You negotiate who pays for lunch, what movie to get at Blockbuster, what route to take on a family trip and the list goes on. Then there are some more obvious functions of negotiations: asking for a raise, bargaining with a shopkeeper in Central America (one of my favorite things to do), and trying to get the best deal on your new house. After reading this book, I look forward to all of these events to test my new found ability. 

When people think about negotiating, many have a lot of misconceptions of the "right" way to do it. Often negotiating is shown on television using the positional bargaining technique. Using this method people take sides. "This is what I want and I am sticking to it" and when you have two or more people arguing like this they become more and more entrenched into their own idea. Often, sides start to attack the other person's ideas and, in a round-about-way, start to attack that person. Big picture, positional bargaining leads to negotiation-by-strong-arm, if any solution is found at all, and really has negative affects on the relationships negotiating. 

The authors have a more useful approach to negotiating... Principled Negotiation. In essence, this is separating the people from the problem and focusing objectively on this issue. This does not mean that you do not focus on the people as a part of the issue, but just eliminate the "my side, your side" back and forth. In every negotiation there are people and those people have emotions and wants. You can and should take that into consideration when using principled negotiation. Ultimately it should all come down to fairness. You don't need to strong-arm someone into getting want you want. Just think about the situation as a whole and make agreements based off all the information. If someone wants to sell their house, they will have set a price on it. As the buyer, use all the information to negotiate a fair price for yourself and them. Use probing questions to get them to help you make a fair decision. Ask them how they came to their conclusion on the price... if they say that the house next door sold for that much... you might bring to their attention that the house two doors down sold for $20k less... or that the house they are basing their price off had 1 more bedroom and 1 more bathroom. In that case, how much is an extra bedroom worth?... They might say $8k... and a bathroom?... $4k... That other house also had a shed in the backyard when it sold, how much would that have been worth?.. $1500.. So on a so forth... using this type of negotiation you can objectively analyze the situation. Be sure all along the way to inform the negotiated party that you just want it all to be fair. Most people are on board when it comes to being fair. 

It is important you put yourself in the other party's shoes. See the situation the way they do. In the previous example they party wanted to sell their house. Find out why they want to sell their house, are they moving far away? How soon do they need the house sold? How long did they live there? In addition to helping you see the negotiation from their point of view it can give you incite into what agreement inventions to make to negotiate more efficiently. If you know they need to move within 2 weeks, you can invent a solution that involves closing sooner in exchange for a slightly higher price.... or if the party is on the fence about your asking price, closing within 2 weeks is something that can put them over the fence.... creating a win-win situation.

Additionally, you will most likely come across aggressive negotiators that will give you high or low-ball offers, they may have someone else there playing good cop, bad cop or in the worst case, uses threats to try and get their way. When you find yourself in these situations, lay them out immediately and let the other party know that "I am most interested in the fairness of the deal and I know that your offer is just trying to high-ball me. Let's get past that, please give me a reasonable offer and we will work from there."  You may find yourself in situations where a party manipulates the environment in order to make you uncomfortable: increasing the heat, being in a loud environment, being in a place where they know everyone and you know no one. If you find yourself in this situation let them know that you don't feel comfortable discussing the issues in that environment and you would like to reschedule to meet at X. Dirty negotiation techniques are used and the best thing you can do is let the other party know that you realize what is happening and bring them back to the issue of fairness.

Next time you find yourself in the Caribbean negotiating the price of a hammock to take back to the States, use principled negotiation. Look at the situation from the shopkeepers perspective. Don't strong-arm him and play the whole game where you walk away 5 times in order to get the best deal. This will end up hurting the shopkeepers ego because he "gave in" to your demands and you probably won't get as good of deal and you might think. Instead, brainstorm some agreements of strength for both sides. He asks you for $80, since you know he is just highballing you call him out on it. Break it down to the root of the problem. Ask him if he is willing to take $30... and when he says no (they always do) dig deep into possible agreements like buying a hammock and a picture for $40. These negotiations are the hardest to have with a rational principle negotiation, but I can't think of any better practice! Give it a shot! I promise you'll have fun with it.

I think this book is a must read for any business person or lawyer, but, as I said earlier, is incredibly helpful for everybody else too. It's a short read and it's really pretty fun. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Saturday, March 10, 2012

Outliers...


The book of the week is Outliers by Malcolm Gladwell. I think Gladwell is a genius. I reviewed The Tipping Point about this time last year and loved it. There is an incredible amount of great content to his books. The last one I need to read is Blink.. and I have no doubt that I will add it to the bookshelf before long.

As much as I loved his book, I cannot give you a lot of information from it. Each chapter has a number of pages and there is very very little repetition of information. What I can tell you is this:

Gladwell contends that Outliers, especially when making reference to success are not really outliers at all. But these people are a product of their culture and other chance encounters that made them who they are. He explains the successes of Bill Gates, Steve Jobs, Bill Joy, All-Star Hockey Players, Mozart, Joe Flomm, and Christopher Langan. These people are remarkable, no doubt, but a large reason they are who they are now is because of the time they were born, or the jobs their parents/grandparents had, or the freak chance they received to be able to write thousands of hours of programing code at the age of 13, while some college professors did not even get that opportunity.

Let me give you a very cliff-notes taste of what I am referring...For instance: 40% of All-Star Canadian Hockey Players are born between January and March. The researcher that discovered this phenomenon found that it was because of the cut-off for junior league teams. The kids that were born in January had more physical development than any kids born in that year (meaning they were just bigger kids). And the larger the kid the better in hockey. So what happened was the larger kids were the ones chosen for better teams which means that they got extra practice and extra attention. The more hours you spend practicing something the better you become... it has been concluded that it takes about 10,000 hours of practice to become a master at something. If you were a kid born in December, you were already at a disadvantage. That being said, it's not a surprise to see that a majority of the All-Star Canadian Hockey Team had early birthdays. The information in this book is interesting and eye-opening.

I am a big fan of this book and this author! I recommend this book for everyone, no matter who you are, because it helps you see where some extraordinary success stems from... As always, if you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.