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This microbook is a summary/original review based on the book: The Art of Negotiation: How to Improvise Agreement in a Chaotic World
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No matter what you do in life, your work may contain elements of negotiation. Of course that its clear sellers need to negotiate the best price, but that does not mean that trading is not important in all other trades. To be promoted, you need to negotiate, and if you want to buy a new car, you also need to negotiate. In this book, Michael Wheeler brings all the fundamental concepts so that you understand how to succeed in negotiating. In a nutshell, we could all benefit from learning some negotiating skills. This microbook will show you what these skills are and how you can put them into practice.
Imagine that you are in an important salary negotiation, knowing full well what you want: you know that it is worth $ 20 thousand a month, so naturally, you ask for this amount. But what do you do when the boss says no? Of course, you will lose confidence and control of the negotiation and consequently will abandon the negotiating table with less than you expected. You knew what you wanted, but you had not prepared a map that considered other possible paths to get the most out of your trading. Your map should begin with an identification of your ultimate goal, for example, your goal, with some intermediate steps to be followed, or minimally acceptable results. That way, if the other side of the negotiation does not accept your goal, then you have another goal to pursue. Even middle stages are important because your trading partner has their own goals that can sometimes be contradictory to yours. Let's look at that hypothetical situation of wage bargaining: if your maximum goal of $ 20,000 is rejected, then you can jump to the intermediate goals, which may be, for example, reduce your workload or receive a percentage of the salary in company stock. Maps are also quite useful for you to feel like you know where you are going, providing the confidence you need to be successful. It was this basic principle that saved a military unit from certain death after being lost in the Swiss Alps. The unit was at risk of death when one of the soldiers found a map in his pocket, which was followed by the team to unharmed escape. The interesting thing here is that the map was not from the Alps but from the Pyrenees! The fact that they thought they knew where they were going gave them the confidence to get out alive.
Just as you would not make a recipe without first getting the ingredients prepared, you should also prepare well before a negotiation. Before approaching your negotiating partner, ask yourself: what is the best time to negotiate this particular issue? You should always try to schedule trades at the most advantageous times. You should not, for example, try to sell your ski equipment during the spring. It would be wiser to wait until the fall when people are more interested in skiing, and consequently, in their offer. Then ask, "How likely is it that we will come to an agreement? How much would I benefit from this agreement? "You should seriously reconsider putting too much effort into a negotiation that you believe will not be successful. It would be better to spend these resources on something with greater chances of success. Even with a lot of preparation, things will not always go the way you planned. For this reason, it is important to be flexible, creative and willing to follow a plan B. In the author's negotiation workshops, he usually uses the example of a small business owner who wants to expand his business by buying another small business in the city. Unfortunately, the biggest offer he could make was still far less than the minimum price the other owner expected. So, rather than buying from another company, the small business owner offered to sell his own company to his trading partner and ended up doing a very profitable trading. As this example shows, when your plan has no chance of being successful, sometimes you have the opportunity to consider options you had not considered before.
Professional traders are also nervous. Sometimes they are uncertain of their chances of success. At the same time, as professionals, they can control their emotional reactions, which is crucial in negotiations. At the same time that you can not control the circumstances in which you are living, you can control your emotional responses. Good negotiators should be able to have multiple virtues at once: stay calm and alert, patient and proactive, practical and creative. They may seem contradictory, but in reality, these characteristics help each other. A surgeon, for example, needs to stay calm while performing a procedure, but also alert to the possibility of complications. Like the surgeon, the good negotiator needs to be mentally strong at all times. A good way to ensure that you are in the right emotional space is to identify the circumstances that trigger negative emotions and consequently avoid all of them. For example, if you are the type of person who gets nervous in traffic, you should plan extra time on the mornings you need to negotiate. To not get on autopilot, focus on more than just what the other part of the negotiation talks about. Pay attention not only to what he says but how he speaks and what his body language is saying.
Successful negotiators know they must be ready for the unexpected. You need to learn how to think fast - or improvise - and the best way to do that is to learn how to think like an actor. Improvisation is an acting technique that goes beyond normal text learning and, instead, focuses on spontaneous interactions. The golden rule of improvisation is "never say no". If an actor begins by saying "Hi John, how was America?" No one would respond with "Actually my name is James, and I just got back from Communist China." You have to work with what you have! The same goes for a negotiation. Try not to say "no," unless it's something totally distant from your goals. Always try to negotiate with the offer. Actors are relaxed under pressure and do not think frantically about what to do next. Do not try to find the perfect answer on the negotiation table. This can cause panic and hesitation. Instead, negotiate like an actor improvising and trust that with your preparation and mental presence, you will always be able to come up with a good response. You can also learn a lot from jazz musicians. While orchestra musicians read notes in sheet music, jazz musicians can improvise a concert without any music sheets, just listening and adapting through rhythm and melodies. Likewise, adapting to circumstances, listening carefully and influencing others are key elements for success in negotiations. It is essential that you understand what the other party wants and expects from the trade. Just by paying attention to subtle hints such as tone of voice or non-verbal anxiety signals, you will know how to approach or when to avoid certain topics during the conversation.
Just like in chess, success in negotiations requires experience and predictability. Observe this psychological experiment, for example, in which chess pieces are arranged in random order on the board and then delivered to the participants. They could only peer at the board before being asked to rearrange the chess pieces. The results revealed that all the knowledge and experience of professional chess players were not enough to help them recreate the board. In fact, their performance was similar to that of the other participants. It turns out that when the experiment was repeated with the organization of a real game of chess, the professional players were much better at the time of recreation. They have remembered similar games in the past and so were able to use these experiences to re-create the board. The same applies to a negotiation: your ability to interpret offers on the other side or tactical moves depend on your knowledge and experience. As your experience grows with every negotiation in which you participate, you can supplement your skills with activities like reading books about trading, attending workshops, and observing other people negotiating whenever you can. Going back to chess: even the best players cannot anticipate every possible move. After 80 plays they would have more options available than the stars in our galaxy. Following possible lines of play is impossible. So, instead, chess masters anticipate the playing lines that have a better chance of winning the game. In a negotiation, this means considering the options that have the greatest possible benefits and the greatest chances of an agreement, based on what has worked in the past. However, your decision may always be wrong. Your opponent can unravel his tactical moves, which may make it necessary for you to change your strategy from one time to another. That's why it's so important to know how to improvise!
First impressions in a negotiation will define the trading atmosphere and the perception of your opponent. So it's important that you: Watch your language! Use words and phrases that emphasize common interests. For example, instead of saying "I need to do X", say something like "Let's solve this problem together!" Be careful with your posture. Even if you do not find this, your posture can have a great effect on your mood. If you have a confident and positive posture, such as straight spine and no crossed-arms, you will feel more confident and positive, and others will get this impression of you. Once you have made a good first impression, your position will be to accept or reject the offer. Just say "no" directly when the offer is totally unworkable. If the offer is good but below ideal, then it may be worth continuing the conversation. If the unsatisfactory offer is the first, then there is a greater chance of improvement. Just remember that pressing too much on the other side can result in a disagreement. If you are in a situation where you need to reject the offer but do not want to lose the deal altogether, you can try the yes-no-yes approach. Imagine, for example, that your boss asks you to work on a new project over the weekend. To say "yes" to your personal time, you need to say "no" to your boss. However, if you are open to yes, you can say "yes" to the boss's need, for example, offering to create a system where occasional work on the weekend is rewarded with free afternoons during the week. Both win, and we come to a conciliatory solution. Using the yes-no-yes technique, you can find a common denominator. Creativity solves complex problems.
Many times you will get stuck in a negotiation. So what to do? Giving up or being creative? Thinking outside the box is more than just a cliché - it's essential. Sometimes it's the difference between success and months of work thrown away. The writer committed to the biography of Franklin D. Roosevelt delivered a 1400-page manuscript to the publisher who asked him to reduce the length of the work significantly. He did not want to waste all that work, and the contract was canceled. Luckily, later he found another publisher who liked his manuscript just the way it was and only suggested that he split it into two volumes. Both were a resounding success and are available until today, but this was only possible due to the thought of the second publisher who went beyond the traditional "one person, one bio" and divided the material into two books. Creativity also involves bringing into the discussion the vision of someone from the outside. In fact, surveys have shown that people are better at solving problems for others than for themselves. This psychological distance between us and others can help to see things from a different perspective. Just think how easy it is for you to advise your friends when they have problems, even if you experience difficulties when you are in the same situation. Out of the picture, your perspective may present better ideas on the subject. It is also important to think beyond the financial terms. When we think in monetary terms, a trading can easily turn out to be a zero-sum game, where the more one side profits, the worse it gets to the other side. However, there is always a way to ensure benefits for everyone! One way is by offering security. For example, you can get a better price at your gym if you accept a longer contract. You earn in economics, and they earn from knowing that you will remain a member for a longer time.
All your hard work leading to negotiation loses meaning if you do not know how to close an agreement, persuading the other side of the negotiation to say yes to you in the future. It is important that you always be honest and polite. This will not only help close the deal but will also increase the propensity of the trading partner to agree with you in the future. Would you like to close a deal with someone with whom you have the feeling that you are trying to cheat you? Be honest and transparent. Studies on loss aversion have shown that people have a much better chance of agreeing with you if you focus more on what they can lose than on what they can gain. Imagine, for example, that you want to convince your boss that your company should invest in a new project.
You can greatly increase your chances of success by pointing not only to the potential benefits such as winning new customers but also the negative consequences of non-investment such as losing revenue to more innovative competitors. Also, keep simplicity. People have less chance of reaching a decision when they are offered many options. In one famous study, for example, different jelly flavors were offered to customers in a supermarket. Of those who received only a few options, 30% decided to buy a glass. But of those who were offered a variety of 24 types, only 3% decided to buy. Do not let your trading partner be confused by too many alternatives. Stick to the options that you believe have a greater chance of success.
Imagine that you want to buy a product and a naive seller offers the product for an incredibly cheap value, ten times less than the actual market value today. What do you do? Do you accept the offer immediately, make a counteroffer for less, or tell him that the product is worth much more? Let's say you buy at the asking price without hesitation. A few years later, you discover that the product is a rare issue and worth even more than you expected. 10 times more. A new buyer is interested in the product, not knowing its real value. Do you tell him about the real value or sell at the price that you thought the product was originally worth, making a profit of 10x? These issues may be difficult to answer, but they show us insights about the negotiation process. As a buyer, be sure always to ask specific questions about the terms of what you are buying and the circumstances surrounding the sale. Many people tell the truth when asked directly, though they do not open without a question. As a seller, always consider what information you can provide to potential buyers. Always keep things in perspective: Would you like other people to treat you in the same way? And do not forget, the way people feel about negotiating will be the way they will remember you forever. If the seller of the above example was your child, would you not like buyers to pay a fair price? And if you were a second buyer, would not you like to be informed that the item is a rare issue? Finally, the way you decide to deal with the ethics of a negotiation is up to you, so think how you would feel if the situation were reversed.
Negotiating is a skill that can be developed and you need to study. Just as two people are not equal, negotiations also always differ. Each comes with its own particularities, which means that getting ready is important, but the ability to think fast and improvise is essential. Create a map of what you expect before you start and good deals!
12min tip: Speaking of bargaining, how about reading our FBI Persuasion microbook? We're sure you'll love it!
Michael Wheeler is an MBA professor at Harvard Business School. He teaches negotiation and several executive courses. Since 1993, Michael A. Wheeler teaches negotiation at Harvard Business School in his MBA program, executive courses and more recently in his HBX digital learning platform. His work focuses on negotiation pedagogy, improvisation in complex dynamic processes, ethics and moral decision-making, and various alternative dispute resolution (ADR) processes. For twenty years, he was the Editor-in-Chief of the Negotiat... (Read more)
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