Imagine this: you reach an agreement in a negotiation and the other side says: “I will send you the contract.” You gladly accept as it means less work for you. Unfortunately many times the language in the contract may differ slightly from your understanding of the prior agreement. You suggest several changes and the other side acts startled that you are changing what had already been agreed to and now they claim that since you are making changes, they are allowed to re-open issues as well.
When two parties reach an agreement, many times it is codified within a written contract. Many people feel that the process is completed when the handshake occurs, but some people use the tactic of Controlling the Contract to gain extra advantage after the other side thinks that the deal is done.
To manage Controlling the Contact tactics, try to:
- Write the Drafts of the Contract. If possible, at the end of discussions, tell the other side that you (or your lawyers) will be glad to write it up. That way the other side is reacting to your draft rather than you reacting to their draft.
- Write a Memo Before You Write a Contract. By writing a memo or a letter in plain language, you will get both parties to agree to the main agreements before the lawyers start to confuse the issues with their own “legalese.” This plain language letter or memo can be a reference point back if the contract seems to be off course.
- If Necessary, Manage the Lawyers. Sometimes lawyers can re-interpret understandings and get into discussions with the other side’s lawyers that may or may not reflect the original intent of the agreement. If you sense this is happening, make sure to re-establish your contact with the other side to reiterate your understandings before you let the lawyers continue to battle it out.
- Personalize Communication. Where possible have major changes to the contract communicated via phone or in person. Often one side will provide comments to a contract that they feel are minor, but the other side perceives as re-writing the deal. It can escalate and trust can be lost if both sides continue to communicate by marking up drafts and sending them back and forth. Before you get yourself into a battle of the contracts, pick up a phone with the person who you worked with to cut the original deal.
Recall when you were a young child gathered with your friends. You’re all in deep discussion about what game you’ll play together. Timmy suggests dodge ball, Susie offers a board game, and you too like the board game idea. Thus, your and Suzie’s democracy votes board game, while Timmy angrily refuses. Eventually, Timmy gives you the ultimatum, “if we don’t play dodge ball, I’m going home!” It’s a temperamental withdrawal tactic that people continually use throughout their lives – usually with a little less immaturity.
This is where your counterpart, often dramatically, will exit the discussion hoping you’ll fear a no-deal or no-conclusion and make a concession just to bring them back to the table. By doing so, they gain a concession without giving one. You’ll often see a hasty change in demeanor and location, and hear a “fine then…” or “this is too much…” or “this is ridiculous…” or “we’re getting nowhere…”
Consider the following techniques to manage the Withdrawal Technique:
- Use a Hypothetical. Let’s say someone says something like, “I have told you that I do not think that I can get this proposal agreed to by my Board, so I am going to have to stop these discussions entirely.” While this sounds like a Withdrawal, the fact that the other side provides a condition regarding getting the proposal “agreed to by the board” provides an indication that the withdrawal may not be a withdrawal. To test the other side, you could ask: “Hypothetically speaking, if you were able to get it past the Board, would you be willing to continue the conversation?” If the other side agrees to continue the discussion, then you have prevented the Withdrawal.
- Offer Mutual Concessions. Rather than making a one-sided concession just to get the other side to the table, propose a resolution where each side makes a concession. This approach gives the other side a potential reason to return, but it does not provide them with a unilateral gain just to bring them back to the table.
- Focus on Previous Progress. Rather than conceding to get the other side to the table, try to get the other side to agree that there has been substantial progress made in the past and that momentum may help remind them that although there is frustration at this point, the past progress you have made should justify that the other side not just walk away at this point.
The man who discovered Oprah, Dennis Swanson, former Chicago TV exec, recalls how it all unfolded in 1983:
“Well, you know, she had the best attorney in Baltimore, Ron Shapiro, who handled Brooks Robinson, a lot of the Orioles, who were a championship team at that time. The tricky part of it was, her contract didn’t expire until the end of the year. But then, the people that had the contract had a 60-day option in there, and I said to Shapiro, I said, ‘We’ll wait till January 1, because she’s worth waiting for, but I can’t wait the 60 days beyond that.’ He negotiated out of that. We put her on the air the first of January, and we were in last place when we put her on the air – and we won the February (ratings) less than a month later.”
Click on the attached link to find out more about the role SNI Chairman, Ron Shapiro, played in the early years of Oprah Winfrey’s career.
People may use three types of tactics to make you concede your pricing. They may start with “Give me a ballpark price;” “You have to do better than that;” and “Let’s Split the Difference.” Each of these is difficult to handle, and when combined throughout a discussion of price, they can create a “triple-whammy.”
Let’s take a look at how to manage each of these monetary price concessions.
- Give me a Ballpark Price. There are two ways to manage this tactic. First you should resist the urge to provide a ballpark price. Rather than giving a figure off of the top of your head, tell the other side that you would much prefer to be able to think about the issue more so that you can make a more realistic assessment. If taking this approach is not possible, then make sure to lowball your ballpark to prevent getting locked into a bad deal before the discussion even starts.
- You Have to do Better than that. Defend against this tactic by asking the other side, “How much better do I have to do?” Asking this will force the other side to at least put a stake in the ground before you bid against yourself with no commitment from the other side.
- Split the Difference. If the other side offers to split the difference, try to anchor them to the “split the difference price” and then continue to discuss. Imagine you are offering $1,000 and the other side is asking for $2,000 and they suggest that you “split the difference.” Try the following: “I do not think that I can do $1,500, but I appreciate that you are willing to compromise. Now that I’m at $1,000 and you can agree to $1,500, I think that we are closer to reaching an agreement.” If you can then continue the discussion and then offer to “be fair” and split the difference, you now may be able to end up at $1,250.
Sometimes you may find yourself in a situation with two or more participants on one team, you’ll notice one partner acting very cordial and empathetic, where the other partner is extremely temperamental and demeaning. The “bad cop” threatens you and probably declares that there is “no reason to continue conversations.” Once you begin to fear that you might lose the deal, the “good cop” swoops in to assure you that all is not lost and if you can just be reasonable, perhaps you can both find a resolution. The object is to coerce you into believing that the “good cop” is on your team, and thereby get you to provide additional information or even make concessions that you would not have otherwise made.
This is yet another tactic to manipulate you. Watch out for the good cop/bad cop scenario as it can lead you down a dangerous path in poor negotiation skills.
- Call their Game – Smile convincingly and say, “This feels a lot like good cop/bad cop. I do not want to get caught up in games like this. We have serious issues facing us, and if both of you are needed to make a decision, I suggest you get him back in the room.”
- Ignore the Bad Cop – The Good Cop/Bad Cop tactic only works if you allow the bad cop to get you to lose your focus. Let the bad cop expel his energy so you can move forward and focus on the business at hand.
- Terminate the Session – Turn to the good cop and tell him that it is obvious that the other person is too upset to carry forward. This should get the good cop to attempt to convince you to stay and you should thereby be able to regain control.
While it may be tempting, going “toe-to-toe” with the bad cop is usually not an effective way to manage this technique. Even if you are able to quiet down the bad cop, going into attack mode will likely cause you to lose your focus. The other side will use this loss of focus to get you to reveal information or make concessions that you may not have done if you had been able to maintain a more focused approach.
Have you ever found yourself in a situation where you’re in the process of solidifying a deal and the person you’re dealing with has got you handshake away from completion and then drops the infamous line, “This looks good, and now I’ll just have to ask my boss/client/wife/committee if this is acceptable before it’s final.”?
This is their escape clause – their tactic to get your best deal, and provide themselves with one more opportunity to take another bite of the apple when they come back and say: “My boss loved the idea, and she is on board, provided we can make a small change…”
We call this tactic – or manipulation technique, higher authority. You maybe unaware that the person you’re dealing with is actually using the higher authority tactic to leverage themselves into landing a better deal. Try to familiarize yourself with cases like this to avoid being swindled.
Think of the car salesman who has to “get approval” from his manager before finalizing the deal. He walks into the “back office,” only to return and tell you his boss was prepared to agree to a “slightly” more expensive deal.
We have encountered the higher authority scam many a time. So we’ve come up with a couple ways to save you, and you’re deal, from this unfortunate sabotage.
- Smoke out the tactic early. Openly asking before conversations begin, “What is your decision making process?” Alternatively you can ask, “If we come to agreement, what happens next?” Typically if you try this early in the process, you will smoke out whether there is anyone else who she might later use as her higher authority.
- Ask for a meeting with the higher authority. If you use this strategy, you should make her aware that your boss is going to call her boss directly and while you have advised him not to do so, he has not listened to you. By taking this approach, you are giving her the “heads up,” and hopefully she will appreciate your attempts to keep her informed.
- Match their higher authority to your higher authority. Tell her that you too must go to someone to get your agreement approved. This provides you with the ability to ask for changes from your higher authority if she asks for changes from her higher authority.
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Create a team on your side. It may consist of co-negotiators, experts in various aspects or good cop-bad cop, information sources, and devil’s advocates with whom you can role-play. Practice before you go to the table.
Assess the other side and the members of their team. Who are their decision makers? Don’t get caught by a higher authority. Strategize. Do you want to control the negotiation or let the other side control the flow? Do you want to lead from strength or react to a lead from the other side? How many face-to-face meetings do you want to have? No answer is right or wrong. That depends on your needs, your goals, the tone and style of the other side, timing, and egos.
Plan you concessions. Where will you give in? Where will you stand firm? How will you make a move so that it gives the least and gains the most? Write out/set forth you proposals in advance – test them, state them, and restate them until you are comfortable.
Don’t stop practicing until you are comfortable. Don’t stop practicing until you are comfortable that your strategy works and flexes when faced with a variety of opposing strategies.
You will never achieve a lofty goal unless you aim for it. Where would you like to come out? What would be ideal/ if you don’t reach it, you will surely never get it. At the very same time, know where your bottom line is. How much will you give up to make the deal? If you don’t face this hard question in advance, you may find yourself repeatedly lowering your expectations as the deal progresses. Be willing to walk at a certain point but decide where that point is before you start negotiating and write it down on the Planner.
Case and point: Jerry McGuire. If you’ve ever seen the movie, you know that the character of Jerry McGuire sets very high goals in the opening scene. Watch it Here to see what we mean.
Virtually all negotiators over-estimate their own weaknesses and the other side’s strengths. Try to take an honest inventory of each side’s real strong points and vulnerabilities. An analysis of the other items in the Preparation Planner should be a part of that inventory. Ask yourself if your vulnerabilities appear as weaknesses to the other side or if you are more sensitive to them. The same applies to strengths. Give yourself credit for you pluses. Assess the other side’s strengths analytically, not emotionally.
Examples of other factors include: Their company may be bigger but not as market-responsive as yours. They may have been around longer but are they as in tune with today’s demands? The real strength you have is knowing your own strengths and weaknesses.
Often participants in our programs voice the following frustration: “How can you possibly achieve a Win-Win result when you are in a weak position? When the other side holds all of the cards, isn’t it impossible to be an effective negotiator?” I believe the most effective negotiators are able to use their skills, both when they have the leverage, as well as when they don’t. In order to be more effective when you are in a weak position, I suggest the following:
1. Check Your Assumptions – If you take the time to identify their weaknesses you may very well discover strengths in your own position of which you were previously unaware.
2. Expand Your Alternatives – Is the other side the only person in the world with the product or service that you want? Seldom is there ever a single source supplier for a particular item. It might be more convenient to buy from this person, or maybe the quality is better, but in the end, there are typically many alternatives to choose from, even when your alternatives look limited.
3. Change the Subject – You might talk about benefits you provided to the other side in the past. You might discuss future opportunities that could exist. You even might inquire as to what else the other side is interested in beyond the deal at hand. Seldom does a transaction consist of only one component. Find out what other items can be brought into the negotiation and see if you can establish an upper hand with regard to these issues.
4. Find Those Similarly Situated – If you find yourself in a weak position, there are likely others very similar to you. Seek out these people and see if the sum is greater than the individual parts. Consider class action suits, where an individual claimant is definitely in a weaker position when compared to a large company.