Having been newly promoted to product manager, Terry was pleased when her boss told her that Joe, one of the company’s top negotiators, would show her the ropes. With her first important negotiation looming, Terry met with Joe and asked for his advice on dealing with the client.
“Just be careful not to lose the account,” he said. “And don’t be a pushover.”
“Right,” Terry said. Common sense, she thought. “Maybe you could help me figure out our bottom line.”
“Well, we obviously don’t want to lose money on the deal.”
“So, you’re saying it’s acceptable to just break even?”
“Listen,” Joe sighed. “I’m sure you can work the numbers yourself. We wouldn’t have hired you otherwise, right?”
Is this his idea of sage negotiation advice? Terry wondered as she left Joe’s office.
Rather than building up her confidence, Joe had undermined it. Instead of giving useful advice, he had offered platitudes.
Many professionals have a knack for creating value, claiming value, and building great deals. Yet few are capable of helping others enhance their negotiation performance. Some offer weak advice that they themselves wouldn’t follow. Many are oblivious to the qualities that make them effective negotiators, and thus are unable to share these traits.
As I mentioned earlier in this chapter, not everyone is cut out to be a negotiation coach. Yet an effective coach can be an invaluable asset, and such individuals most likely exist within your organization. In the remainder of this chapter, I’ll provide a more detailed look at negotiation coaching and highlight the most important qualities to look for in a coach. After you have learned to distinguish good coaching from bad, you’ll be ready to identify the best negotiation coach for you. Finding a good negotiation coach can be critical to winning at win-win negotiation. We all need help with reality testing. We all need someone who will be both sympathetic and critical. If we are setting out to get the other side to rethink its priorities and ask for a revised mandate from its back table, as I described in chapter 4, rehearsing possible ways of saying the relevant things is important.
What Is a Negotiation Coach?
ANYONE IN AN ORGANIZATION who can help teach others how to negotiate more effectively can become a negotiation coach. Coaching is best conducted one-on-one rather than in groups. Because few organizations formally promise ongoing negotiation training to their employees, most negotiation coaching is done off the books. And because the best negotiation advice will come from someone fully aware of the precise demands and constraints you’re facing, look for a coach within your own organization who really understands what you are up against.
Rather than simply telling you what to do in a particular situation, effective coaches focus on improving your skills and helping you learn from your own experience. They are well versed in an explicit theory of negotiation that allows them to explain and predict what will and won’t work in a consistent way. Effective negotiation coaches help you set goals, assist you in figuring out what techniques to try and what adjustments to make. They give you a chance to rehearse and they enable you to understand what happened after the fact. Specifically, good coaches give advice consistent with their own practice, stress the importance of preparation, help you rehearse new or awkward techniques, and debrief your final results.
A Good Coach Is Consistent
AS PART OF THE FIRM’S quarterly speaker series, Jane, a vice president, gives a presentation to the project managers on the topic of negotiation. She makes three main points: First, don’t let the other side call the shots regarding the location, the agenda, and the parties present. Second, make a high opening bid in order to keep your bottom line hidden. Finally, don’t squeeze the other side so hard that they lose their dignity. After the talk, one of the managers asks Jane for some help in sketching out an approach to an upcoming negotiation. Jane listens, then gives some suggestions that are quite different from what she said during the presentation. She largely contradicts the principles outlined in her talk because she knows that hard bargaining of that kind is likely to backfire. Why did she make those points in the first place? Because she thought other top managers might judge her to be weak if she suggested a mutual-gains approach to negotiation?
It’s not uncommon for negotiation coaches to offer advice that’s inconsistent with their own bargaining behavior. It is also not surprising that inconsistencies like Jane’s can leave trainees confused about which practices to follow. This happens when coaches lack a clear theory of negotiation to back up their advice. When asked to make recommendations, they simply parrot tips they’ve heard from others or read in airline magazines. Only coaches whose practice is informed by a theory in which they fervently believe (and which has been vetted empirically) are capable of giving consistent negotiation advice.
Ideally, senior managers should be taught to identify potential discrepancies between their theories and their practice. But it’s a rare company that allocates sufficient resources to address the disconnect between what negotiators say and what they do.
One simple way for organizations to improve consistency is to limit their pool of negotiation coaches. Not all senior managers should be expected to be able to give expert negotiation advice to their direct reports. Instead, organizations should identify and train a few senior managers who have real coaching talent and let it be known that they’re available to give advice companywide. These individuals would learn to be explicit about the theory of negotiation they depend on to diagnose others’ strengths and weaknesses (as well as their own).
Keep in mind that employees may be reluctant to ask for negotiation advice from their direct supervisors for fear of revealing weaknesses that could be held against them during performance reviews or salary discussions. For this reason, many trainees may actually prefer to get help from coaches in other parts of the organization.
A Good Coach Focuses on Preparation
DURING HIS LAST FEW NEGOTIATIONS, Brian has not done nearly as well as Tim, his boss, had hoped. All three contracts came in well below the margin the division expected. Tim, who signed off on each deal, is worried about taking heat from the new director of global purchasing, who has pressed every unit to reduce costs. As Brian’s next negotiation approaches, Tim decides to show up unexpectedly and play “bad cop” to Brian’s “good cop.” Subtly, he’ll show Brian how it’s done—and help them both bring in a great deal.
As you might have guessed, Tim is making a number of mistakes as Brian’s coach. Surprising Brian at an important negotiation is likely to rattle the already shaky negotiator. And the good cop/bad cop routine is not a sound strategy for creating value or winning at win-win negotiation. Most crucially, Tim has failed to help Brian prepare for the upcoming round of talks.
To see how the relationship between negotiation coach and trainee should work, let’s consider another situation within the same company. Carmella, a unit manager, is concerned about how a new purchasing director’s mandate will affect her upcoming talks with Naomi, the CEO of a consulting company central to Carmella’s supply chain. Carmella has done business with Naomi for almost a decade and considers her a friend. Naomi has always delivered on time and on budget, and Carmella hasn’t rebid the contract in six years. Now, the new purchasing director wants all contracts rebid.
Concerned about her dilemma Carmella approaches her company’s CFO, someone who has given her helpful feedback over the years. Carmella explains the conflict between wanting to meet the purchasing chief’s demands and not wanting to tell Naomi that her contract will be rebid and might not be renewed. The CFO listens at length and poses questions that help Carmella to think more clearly about her priorities. He asks Carmella to identify the other company’s interests and to consider how Naomi’s company might reduce costs. He also asks Carmella what she would expect from Naomi if the situation were reversed.
The discussion helps Carmella figure out how to approach Naomi and how to direct her own staff. It a
lso gives Carmella half a dozen ideas about things she can say or do that will make it necessary for Naomi to reconsider the existing contract with her back table (within a framework of options that Carmella has produced).
What made the CFO a good negotiation coach in this situation? He listened closely to the details and encouraged Carmella to prepare for talks as thoroughly as possible. He also enhanced Carmella’s likelihood of winning at win-win negotiation by encouraging her to get Naomi to go back to her back table with new options that are good for Carmella and her company, as well as for Naomi and her company.
A Good Coach Rehearses and Debriefs
DANNY ALWAYS GETS RESULTS. His division at one of the country’s largest investment firms has topped the charts for five years running, far surpassing the profitability of the firm’s other regional units. But a reorganization looms. A shift to a matrix model (along the same lines as Wall Street Associates faced in chapter 2) will require Danny to report to a product manager in addition to his usual regional account manager. How can he please both managers, win a large bonus, and still get great results? Danny knows it’s time to see his mentor—the guy at the top who has always given him strong advice.
Over lunch with Ralph, Danny explains the problem. “How am I supposed to negotiate expectations with my new boss and stay on good terms with the old one?” he asks.
“Offhand, I’m not sure,” Ralph says. “Let’s talk it through.”
They start by role-playing the conversation Danny might have with the new product manager. Next, they rehearse Danny’s talk with his long-term manager. Ralph, who has been at the front lines of the “reorg wars” for nearly two decades, does a great job of playing both parts. He also encourages Danny to take the risk of being a bit more outspoken in voicing his concerns about the restructuring.
Danny leaves the lunch with renewed confidence. Initial discussions with both of his bosses go well, and he schedules a celebratory drink with Ralph.
After toasting Danny’s apparent success, Ralph urges him to question whether he made any mistakes in one or both of the meetings. Together, they cover what Danny might have done differently, as well as tactics he might try in future negotiations. By carefully balancing criticism with support and grounding his advice in tried-and-true theories, Ralph helped Danny strengthen his negotiation skills as well as his position within the firm.
A “Good Coach” Checklist
WHAT QUALITIES SHOULD YOU FOCUS ON when evaluating a potential negotiation coach? Effective coaches:
•Help you set your own goals rather than telling you what your goals should be.
•Encourage you to try new tactics and take risks.
•Offer support while leading you to confront what went wrong and why.
•Ask questions that enable you to figure out what you can learn from your experience.
•Model advice in their own practice.
•Honestly and humbly share their own negotiation experiences, positive and negative.
It is difficult to get a negotiating partner, whether internal or external, to rethink their mandate or return to their back table seeking clarification of their organization’s options or interests. But getting them to do so is usually necessary if one is to win at win-win negotiation. You’ve got to be able to create more value (by getting the other side to consider options or packages that are good for them and great for you). If they have no room to maneuver—because they have been instructed to read the same script over and over again, no matter what new information comes to light or what counterproposals have been offered—it is very hard to create value. Unless you can create more value, claiming a significant share of the value available is exceedingly difficult. We all need a coach we can turn to in such situations, someone who understands what’s going on, someone sympathetic to our interests, someone who will give us the criticism and support we need to test possible strategies for getting our counterparts to ask for different advice from their back table.
THE BEST COACHES ARE CONSISTENT AND KNOWLEDGEABLE, AND THEY FOCUS ON:
•Preparation
•Rehearsing what you are going to say to the other side
•Helping you learn from your experience
CODA
Finding the Sweet Spot in Your Next Negotiation
WINNING AT WIN-WIN NEGOTIATION means being able to handle the claiming problem. You now have six strategies that should make that easier, even when you are dealing with difficult negotiators or negotiating situations. In every instance, you’ve got to get the opening right so that you can move as quickly as possible into the trading zone. Then you need to invest heavily in value creation, avoid compromise, and convince yourself to aim for your sweet spot—that point on the win-lose continuum where you are as far above your minimally acceptable outcome as you can get and the other side is sufficiently above theirs to claim victory when they report to their back table.
Get the Opening Right and Find Your Way into the Trading Zone as Quickly as Possible
MOST NEGOTIATORS START OUT thinking they know what they want. That is, they know their aspirations. They also believe they have a pretty good idea of what the other side wants. Many do not, however, spend enough time assessing or trying to improve their walk-away. They don’t spend nearly enough time trying to estimate their negotiating counterparts’ walk-away or the ways they might raise doubts about how favorable the other side’s walk-away really is. Too many negotiators spend too much time repeating their initial demands and pushing their own objectives—often exaggerating what they “must have”—and fail to probe carefully what the other side wants (their aspirations) and needs. This makes it difficult to find the trading zone.
At some point, almost every negotiator must reassess his initial strategy by asking himself, “Will I get something better than my minimum walk-away if I keep pushing my initial demands? If I don’t find a way to help the other side meet what I now understand to be their most important concerns, will I be able to get them to agree to anything?” Many negotiators get locked into an unreasonable opening or preemptive demands. They fail to make adjustments. The most successful negotiators, on the other hand, revise their objectives and strategy based on what they learn by asking good questions. Most importantly, they have confidence in their ability to improvise.
Often, negotiator rigidity is caused by the misplaced concern, “If I drop my opening demands, the other side will think I am weak.” Yet, it’s not rational to stick to demands that you know the other side cannot possibly accept. Some negotiators convince themselves the other side is bluffing when they say they can’t accept an opening offer. So they just keep hammering away. Or they are locked into unworkable promises they made to their back table before they started; they are not empowered to make adjustments. Getting into the trading zone requires flexibility, the ability to ask good questions, and a mandate from one’s back table that encourages improvisation.
Many people are not conscious enough of timing. They intentionally open with an overly ambitious demand, intending to make gradual concessions until they reach a final point that is still above their minimally acceptable outcome. This is the gist of hard bargaining. Unfortunately, such concession trading can backfire. Sometimes the other side will just walk away, insulted, when they hear an opening demand that is hopelessly out of bounds. They won’t wait for another round of concessions; they will just assume that there is no chance of finding the trading zone and break off negotiations. So one side’s intent to go slowly may conflict with the other side’s quick estimate that agreement is not possible.
If everyone were completely open about their priorities or interests at the outset, and felt comfortable talking honestly about the tradeoffs they were willing to consider (and why), they could move quickly into the trading zone. They might, however, discover that there is no deal space. In my view, that wouldn’t be a bad thing. It would avoid useless conversation. In fact, experienced negotiators don’t waste time bluffing or trying to psych each o
ther out. They move into the trading zone as quickly as they can, or move on to the next negotiation.
In every situation the deal space, if there is one, is bounded by walk-aways or BATNAs—on both (or all) sides. For example, if I have an offer from your competitor in my pocket when we start negotiating, that’s my BATNA. If you don’t match it or offer me more, I will walk away. Other times, it’s not so easy to estimate my walk-away. If I’m a salesperson and I have a potential buyer for my product, but they insist on a discount, I may have no way to know whether someone else will come along quickly enough to buy my product (without demanding a discount) so I can meet my monthly sales quota. In that case, it is unclear whether I should walk away or not. In either situation, the deal space is the distance between our BATNAs or our realistic walk-aways. If that space is large, each of us will want to be at the edge of the continuum where our costs are lowest and the benefits to us are highest.
When we are in the deal space, we are in the trading zone. While it has real boundaries, the trading zone is also a state of mind. We’re in it because we are optimistic about reaching agreement. When we ask constructive questions—and don’t just present arguments on our own behalf—and we explore each other’s interests, we probably have found our way into the trading zone. But when we keep repeating opening demands and arguing on behalf of what we want, we are probably not there.
Here’s how this looks analytically:
To discover the actual boundaries of the trading zone, try to use what-if questions. “If I offer you X, would you give me Y?” Linked offers of this kind, especially a series of such questions, help to reveal the boundaries of the deal space.
Invest Heavily in Value Creation
Good for You, Great for Me Page 17