Basic Principles Make You a Smarter Negotiator by Roger Dawson

The way that you conduct yourself in a negotiation can dramatically the outcome. I've been teaching negotiating to business leaders throughout North America since 1982 and I've distilled this down to five essential rinci les. These rinci les are always at wor! for you and will hel you smoothly get what you want" Get the Other Side to Commit First #ower Negotiators !now that you're usually better off if you can get the other side to commit to a osition first. $everal reasons are obvious" o Their first offer may be much better than you e% ected. o It gives you information about them before you have to tell them anything. o It enables you to brac!et their ro osal. If they state a rice first& you can brac!et them& so if you end u s litting the difference& you'll get what you want. If they can get you to commit first& they can then brac!et your ro osal. Then if you end u s litting the difference& they get what they wanted. The less you !now about the other side or the ro osition that you're negotiating& the more im ortant the rinci le of not going first becomes. If the 'eatles' manager 'rian ( stein had understood this rinci le he could have made the )ab )our millions more on their first movie. *nited Artists wanted to cash in on the o ularity of the singing grou but was reluctant to go out on a limb because *nited Artists didn't !now how long the 'eatles would stay o ular. They could have been a fleeting success that fi++led out long before their movie hit the screens. $o they lanned it as an ine% ensively made e% loitation movie and budgeted only ,-..&... to ma!e it. This was clearly not enough to ay the 'eatles a high salary. $o *nited Artists lanned to offer the 'eatles as much as 2/ ercent of the rofits. The 'eatles were such a worldwide sensation in 190- that the roducer was very reluctant to as! them to name their rice first& but he had the courage to stay with the rule. 1e offered ( stein ,2/&... u front and as!ed him what ercentage of the rofits he thought would be fair. 'rian ( stein didn't !now the movie business and should have been smart enough to lay 2eluctant 'uyer and use 3ood 3uy4'ad 3uy. 1e should have said& 5I don't thin! they'd be interested in ta!ing the time to ma!e a movie& but if you'll give me your very best offer& I'll ta!e it to them and see what I can do for you with them.5 Instead& his ego wouldn't let him lay dumb& so he assertively stated that they would have to get 6./ ercent of the rofits or they wouldn't do it. This slight tactical error cost the grou millions when the director 2ichard 7ester& to every one's sur rise& created a brilliantly humorous ortrait of a day in the grou 's life that became a worldwide success. If both sides have learned that they shouldn't go first& you can't sit there forever with both sides refusing to ut a number on the table& but as a rule you should always find out what the other side wants to do first. Act Dumb, Not Smart To #ower Negotiators& smart is dumb and dumb is smart. 8hen you are negotiating& you're better off acting as if you !now less than everybody else does& not more. The

dumber you act& the better off you are unless your a arent I.9. sin!s to a oint where you lac! any credibility. There is a good reason for this. 8ith a few rare e%ce tions& human beings tend to hel eo le that they see as less intelligent or informed& rather than ta!ing advantage of them. :f course there are a few ruthless eo le out there who will try to ta!e advantage of wea! eo le& but most eo le want to com ete with eo le they see as brighter and hel eo le they see as less bright. $o& the reason for acting dumb is that it diffuses the com etitive s irit of the other side. 1ow can you fight with someone who is as!ing you to hel them negotiate with you; 1ow can you carry on any ty e of com etitive banter with a erson who says& 5I don't !now& what do you thin!;5 <ost eo le& when faced with this situation& feel sorry for the other erson and go out of their way to hel him or her. =o you remember the T> show Columbo; #eter )al! layed a detective who wal!ed around in an old raincoat and a mental fog& chewing on an old cigar butt. 1e constantly wore an e% ression that suggested he had ?ust mis laced something and couldn't remember what it was& let alone where he had left it. In fact& his success was directly attributable to how smart he was@by acting dumb. 1is demeanor was so disarming that the murderers came close to wanting him to solve his cases because he a eared to be so hel less. The negotiators who let their egos ta!e control of them and come across as a shar & so histicated negotiator commit to several things that wor! against them in a negotiation. These include being the following" o A fast decision@ma!er who doesn't need time to thin! things over. o $omeone who would not have to chec! with anyone else before going ahead. o $omeone who doesn't have to consult with e% erts before committing. o $omeone who would never stoo to leading for a concession. o $omeone who would never be overridden by a su ervisor. o $omeone who doesn't have to !ee e%tensive notes about the rogress of the negotiation and refer to them freAuently. The #ower Negotiator who understands the im ortance of acting dumb retains these o tions" o 2eAuesting time to thin! it over so that he or she can thoroughly thin! through the dangers of acce ting or the o ortunities that ma!ing additional demands might bring. o =eferring a decision while he or she chec!s with a committee or board of directors. o As!ing for time to let legal or technical e% erts review the ro osal. o #leading for additional concessions. o *sing 3ood 3uy4'ad 3uy to ut ressure on the other side without confrontation. o Ta!ing time to thin! under the guise of reviewing notes about the negotiation. I act dumb by as!ing for the definitions of words. If the other side says to me& 52oger& there are some ambiguities in this contract&5 I res ond with& 5Ambiguities . .

.ambiguities . . . hmmm& you !now I've heard that word before& but I'm not Auite sure what it means. 8ould you mind e% laining it to me;5 :r I might say& 5=o you mind going over those figures one more time; I !now you've done it a cou le of times already& but for some reason& I'm not getting it. =o you mind;5 This ma!es them thin!" 8hat a !lut+ I've got on my hands this time. In this way& I lay to rest the com etitive s irit that could have made a com romise very difficult for me to accom lish. Now the other side sto s fighting me and starts trying to hel me. 'e careful that you're not acting dumb in your area of e% ertise. If you're a heart surgeon& don't say& 5I'm not sure if you need a tri le by@ ass or if a double by@ ass will do.5 If you're an architect& don't say& 5I don't !now if this building will stand u or not.5 8in@win negotiating de ends on the willingness of each side to be truly em athetic to the other side's osition. That's not going to ha en if both sides continue to com ete with each other. #ower Negotiators !now that acting dumb diffuses that com etitive s irit and o ens the door to win@win solutions. Think in Real Money Terms but Talk Funny Money There are all !inds of ways of describing the rice of something. If you went to the 'oeing Aircraft Bom any and as!ed them what it costs to fly a 6C6 coast to coast& they wouldn't tell you 5)ifty@two thousand dollars.5 They would tell you eleven cents er assenger mile. $ales@ eo le call that brea!ing it down to the ridiculous. 1aven't we all had a real estate sales erson say to us at one time or another& 5=o you reali+e you're tal!ing -/D a day here; Eou're not going to let -/D a day stand between you and your dream home are you;5 It robably didn't occur to you that -/D a day over the -.@year life of a real estate mortgage is more than ,6&.... #ower Negotiators thin! in real money terms. 8hen that su lier tells you about a /D increase on an item& it may not seem im ortant enough to s end much time on. *ntil you start thin!ing of how many of those items you buy during a year. Then you find that there's enough money sitting on the table to ma!e it well worth your while to do some #ower Negotiating. I once dated a woman who had very e% ensive taste. :ne day she too! me to a linen store in New ort 'each because she wanted us to buy a new set of sheets. They were beautiful sheets& but when I found out that they were ,1&C..& I was astonished and told the sales cler! that it was the !ind of o ulence that caused the easants to storm the alace gates. $he calmly loo!ed at me and said& 5$ir& I don't thin! you understand. A fine set of sheets li!e this will last you at least / years& so you're really tal!ing about only ,28. a year.5 Then she whi ed out a oc!et calculator and frantically started unching in numbers. 5That's only ,/.-8 a wee!. That's not much for what is robably the finest set of sheets in the world.5 I said& 5That's ridiculous.5 8ithout crac!ing a smile& she said& 5I'm not through. 8ith a fine set of sheets li!e this& you obviously would never slee alone& so we're really tal!ing only -8 cents er day& er erson.5 Now that's really brea!ing it down to the ridiculous. 1ere are some other e%am les of funny money" o Interest rates e% ressed as a ercentage rather than a dollar amount.

o The amount of the monthly ayments being em hasi+ed rather than the true cost of the item. o Bost er bric!& tile& or sAuare foot rather than the total cost of materials. o An hourly increase in ay er erson rather than the annual cost of the increase to the com any. o Insurance remiums as a monthly amount rather than an annual cost. o The rice of land e% ressed as the monthly ayment. 'usinesses !now that if you're not having to ull real money out of your urse or oc!et& you're inclined to s end more. It's why casinos the world over have you convert your real money to gaming chi s. It's why restaurants are ha y to let you use a credit card although they have to ay a ercentage to the credit card com any. 8hen I wor!ed for a de artment store chain& we were constantly ushing our cler!s to sign u customers for one of our credit cards because we !new that credit card customers will s end more and they will also buy better Auality merchandise than a cash customer. :ur motivation wasn't entirely financial in ushing credit cards. 8e also !new that because credit card customers would buy better Auality merchandise& it would satisfy them more& and they would be more leased with their urchases. $o& when you're negotiating brea! the investment down to the ridiculous because it does sound li!e less money& but learn to thin! in real money terms. =on't let eo le use the )unny <oney 3ambit on you. Concentrate on the Issues #ower Negotiators !now that they should always concentrate on the issues and not be distracted by the actions of the other negotiators. 1ave you ever watched tennis on television and seen a highly emotional star li!e Fohn <c(nroe ?um ing u and down at the other end of the court. Eou wonder to yourself& 51ow on (arth can anybody lay tennis against somebody li!e that; It's such a game of concentration& it doesn't seem fair.5 The answer is that good tennis layers understand that only one thing affects the outcome of the game of tennis. That's the movement of the ball across the net. 8hat the other layer is doing doesn't affect the outcome of the game at all& as long as you !now what the ball is doing. $o in that way& tennis layers learn to concentrate on the ball& not on the other erson. 8hen you're negotiating& the ball is the movement of the goal concessions across the negotiating table. It's the only thing that affects the outcome of the gameG but it's so easy to be thrown off by what the other eo le are doing& isn't it; I remember once wanting to buy a large real estate ro?ect in $ignal 1ill& Balifornia that com rised eighteen four@unit buildings. I !new that I had to get the rice far below the ,1.8 million that the sellers were as!ing for the ro erty& which was owned free and clear by a large grou of real estate investors. A real estate agent had brought it to my attention& so I felt obligated to let him resent the first offer& reserving the right to go bac! and negotiate directly with the sellers if he wasn't able to get my ,1.2 million offer acce ted. The last thing in the world the agent wanted to do was resent an offer at ,1.2 million@ ,0..&... below the as!ing rice@but finally I convinced him to try it and off he went to

resent the offer. 'y doing that& he made a tactical error. 1e shouldn't have gone to themG he should have had them come to him. Eou always have more control when you're negotiating in your ower base than if you go to their ower base. 1e came bac! a few hours later& and I as!ed him& 51ow did it go;5 5It was awful& ?ust awful. I'm so embarrassed.5 1e told me. 5I got into this large conference room& and all of the rinci als had come in for the reading of the offer. They brought with them their attorney& their B#A& and their real estate bro!er. I was lanning to do the silent close on them.5 H8hich is to read the offer and then be Auiet. The ne%t erson who tal!s loses in the negotiations.I 5The roblem was& there wasn't any silence. I got down to the ,1.2 million and they said& '8ait a minute. Eou're coming in ,0..&... low; 8e're insulted.5 Then they all got u and stormed out of the room. I said& 5Nothing else ha ened;5 1e said& 58ell& a cou le of the rinci als sto ed in the doorway on their way out& and they said" '8e're not gonna come down to a enny less than ,1./ million.' It was ?ust awful. #lease don't ever as! me to resent an offer that low again.5 I said& 58ait a minute. Eou mean to tell me that& in five minutes& you got them to come down ,-..&...& and you feel bad about the way the negotiations went;5 $ee how easy it is to be thrown off by what the other eo le are doing& rather than concentrating on the issues in a negotiation. It's inconceivable that a full@time rofessional negotiator& say an international negotiator& would wal! out of negotiations because he doesn't thin! the other eo le are fair. 1e may wal! out& but it's a s ecific negotiating tactic& not because he's u set. Ban you imagine a to arms negotiator showing u in the 8hite 1ouse& and the #resident saying& 58hat are you doing here; I thought you were in 3eneva negotiating with the 2ussians.5 58ell& yes& I was& <r. #resident& but those guys are so unfair. Eou can't trust them and they never !ee their commitments. I got so u set& I ?ust wal!ed out.5 #ower Negotiators don't do that. They concentrate on the issues& not on the ersonalities. Eou should always be thin!ing& 58here are we now& com ared to where we were an hour ago or yesterday or last wee!;5 $ecretary of $tate 8arren Bhristo her said& 5It's o!ay to get u set when you're negotiating& as long as you're in control& and you're doing it as a s ecific negotiating tactic.5 It's when you're u set and out of control that you always lose. That's why sales eo le will have this ha en to them. They lose an account. They ta!e it into their sales manager& and they say& 58ell& we lost this one. =on't waste any time trying to save it. I did everything I could. If anybody could have saved it& I would have saved it.5 $o& the sales manager says& 58ell& ?ust as a ublic relations gesture& let me give the other side a call anyway.5 The sales manager can hold it together& not necessarily because he's any brighter or shar er than the sales erson& but because he hasn't become emotionally involved with the eo le the way the sales erson has. =on't do that. 7earn to concentrate on the issues.

Al ays Con!ratulate The Other Side 8hen you're through negotiating& you should always congratulate the other side. 1owever oorly you thin! the other erson may have done in the negotiations& congratulate them. $ay& 58ow@did you do a fantastic ?ob negotiating that. I reali+e that I didn't get as good a deal as I could have done& but fran!ly& it was worth it because I learned so much about negotiating. Eou were brilliant.5 Eou want the other erson to feel that he or she won in the negotiations. :ne of my clients is a large maga+ine ublishing com any that has me teach #ower Negotiating to its sales force. 8hen I was telling the sales eo le how they should never gloat in a negotiation& the founder of the com any ?um ed to his feet and said& 5I want to tell you a story about that.5 >ery agitated& he went on to tell the grou & 5<y first maga+ine was about sailing& and I sold it to a huge New Eor! maga+ine ublisher. I flew u there to sign the final contract& and the moment I signed it and than!ed them& they said to me& 'If you'd have been a better negotiator& we would have aid you a lot more.' That was 2/ years ago and it still burns me u when I thin! about it today. I told them that if they had been better negotiators& I would have ta!en less.5 7et me as! you something. If that maga+ine ublisher wanted to buy another one of his maga+ines& would he start by raising the rice on them; :f course he would. 1owever harmless it may seem& be sensitive to how you're reacting to the deal. Never gloat and always congratulate. 8hen I ublished my first boo! on negotiating a news a er reviewed it and too! e%ce tion to my saying that you should always congratulate& saying that it was mani ulative to congratulate the other side when you didn't really thin! that they had won. I disagree. I loo! u on it as the ultimate in courtesy for the conAueror to congratulate the vanAuished. 8hen the 'ritish army and navy went down the Atlantic to reca ture the )al!land Islands from the Argentineans& it was Auite a rout. 8ithin a few days& the Argentine navy lost most of its shi s and the victory for the (nglish was absolute. The evening after the Argentinean admiral surrendered& the (nglish admiral invited him on board to dine with his officers and congratulated him on a s lendid cam aign. #ower Negotiators always want the other arties thin!ing that they won in the negotiations. It starts by as!ing for more than you e% ect to get. It continues through all of the other 3ambits that are designed to service the erce tion that they're winning. It ends with congratulating the other side. If you let these five rinci les guide your conduct when you're negotiating& they will serve you well and hel you become a #ower Negotiator. This article is e"cer#ted in #art $rom Ro!er Da son%s ne book&Secrets of Power Negotiating, published by Career Press and on sale in bookstores everywhere for $24. .