Cultivating Negotiation Success

Linden McEntireGwen Long

Ben Del VentoThomas Mueller

Tala YasseriHuang (Jeff) Ye

David Lomosi

Negotiation Table- Expand the Pie, Not Your Piece

Introduction• You will have a front row seat at the “Negotiation Table”

• The illustration will be centered around “pay raise” but is applicable to many situations

• Illustrated learning centered around “5 common mistakes made in negotiations”

• Delivered through role-play and theory

• Executed through discussion at the end

#1 Expand the Pie, Not Your Piece• Build trust and share information

- Tell a story providing facts and accomplishments- Obtain information beyond salary

• Ask Questions- Ask lots of questions, asking and listening are keys to collecting new

information- Always ask for a higher salary- Ask about company's growth forecast- Ask how your contribution has benefited the company in terms of revenue

• Make multiple offers

- Propose higher performance bonus - Propose a shorter time frame for a performance review

Negotiation Table - Know Your Assets

#2 Know Your Assets• The virtually priceless will prevent you from

executing a deal - Priceless or “Pseudo sacred”? - Mellon Financial and Bank of NY • How much is it really worth? - What if it weren’t mine? - Have expert to do appraisal - Research the industry norms

#2 Know Your Assets• It is critical to understand your asset value

beforehand - Know your bottom line

- Know your negotiating power

• Don’t always ask, try to offer - Increase your personal asset - Increase your negotiating power - Increase the pie and mutual benefits to both parties

Negotiation Table-Use Power Responsibly

#3 Use Power Responsibly• Is a Power Trip really worth it?

– A Power negotiator is only concerned with their Best offer which only benefits them

– Overlooking other’s perspectives– Devaluing the opponents concerns

• Consider the other side’s point of view– Lack of research on other side’s view might result in

misunderstanding of their values and principles

– Understanding what’s important for the other side gives insight on what you can leverage in the deal

#3 Use Power Responsibly• They agree to the deal but can’t live up to the demands

– Be realistic– Don’t strong arm the other party into an agreement that they

can’t fulfill– Reduce pressuring the other party into a deal that’s impossible

for them to realize

• The Power negotiator could go to court– Holds himself to a higher standard and doesn’t take advantage

of people– Creating a Fair Deal leaves both parties walking away happy– Playing by the rules – Being aware of both parties’ legal rights

Negotiation Table- Know What You Want

#4 Know What You Want• Creating an Impact Bias: The tendency of overestimating how

great our successes or how horrible our failures will be– Seeking comfort in the easiest possible way

• Making mistakes when we speculate what will bring pleasure or spare us pain– Knowing why we put out energy into something and its realistic value

to ourselves and our organization

• Overestimating the intensity of our emotional response– Overestimating reactions to failure

• Assessing the positive impact by good fortune and the upset of bad news– The error lies in estimating the duration of the mood after the

outcome

#4 Understanding How to Seek What #4 #4 #4 #4 Know What You Want

• Reaching a level of “Happiness” after the deal is done– Seeking something that will bring us additional happiness

• Prospect of success and fear of failure– Can be powerful motivators– Does not imply that negotiation is pointless

• Keen understanding of what transforms into greater possibility– Rational focus upon fears and desires– Gray area options

• Impact Bias– May foster greater long-term contentment– Can prevent us from binding ourselves too tightly to a deal

Negotiation Table- Commit Wisely

#5 Commit Wisely • Giving priority to your own interest

– Binding one side to an agreement more than the counterpart

– The assumption that the other party is trying to take advantage

– Best Alternative to a Negotiated Agreement (BATNA)• Not accepting a lop-sided deal

– Possibility of leading for disaster– Lack of safeguards against problems that may arise

along the way

#5 Commit Wisely • Managing the escalation of the commitment

– Ensuring that both sides are similarly committed to a deal– Identifying shared interest that are not competitive– Negotiating damages upfront– Measuring the level of difficulty to back out of the deal on

both sides

• Leveling the playing field– Measuring risk exposure to the other side so that both

sides can be protected– Researching before hand to even the odds

Summary• You have had a front row seat at the “Negotiation Table” and

seen what not to do

• The illustrations were centered around “pay raise” but are applicable to many situations

• Focused on “5 common mistakes made in negotiations”

• Best practices were shared for each example

• Time for practical application

Questions?

DiscussionWould anyone like to share a specific example of negotiation that they have been through and now, in retrospect, would you have done anything differently since watching this presentation?

Keys to discussion:1. How would you have “expanded the pie”?2. How did you know your assets in the example?3. Did you use your power responsibly?4. Did you know what you wanted before going into the

situation?5. How did you choose your commitment in the example

you are sharing?

References• Baldwin, Carless and Taliaferro, Ryan."Mellon Financial and Bank of New

York." Harvard Business Review 15 December 2008• http://career-advice.boston.monster.com/salary-benefits/negotiation-tips

/Salary-Negotiation-Know-How/article.aspx• Bazerman, M. ,“The Mythical Fixed Pie”, Negotiation, November 2003• Bohnet, I., “Why Your Selling Price May be Too High”, Negotiation,

October 2007• Bordone, R., “Why Your Next Negotiation Power Trip Could Backfire”,

Negotiation, December 2007• Wheeler, M., “Are You Sure that’s What You Want?”, Negotiation, July

2008• Susskind, L., “Are You Overly Committed to the Deal?” Negotiation, April

2008