Have you ever been in a negotiation where your counterpart manipulated the time, location or setting of the negotiation to attempt to make you feel less powerful?

What should you do, for example, if your counterpart makes you wait for an hour after the scheduled negotiation start time, asks you to sit in a chair lower than his or sets up the conference room so the sun is shining in your eyes?

Negotiate the context!  If he keeps you waiting, leave and schedule a new meeting at your office.  If your chair is lower or uncomfortable, switch to a different chair.  If the sun is in your eyes, move or lower the shade.  And let your counterpart know his strategy isn’t working.

Do you have a context manipulation story to share?  If so, we’d love to hear it.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

An interesting negotiation is taking place regarding the City of Glendale’s attempt to keep the Phoenix Coyotes hockey team in Arizona.  The City had been negotiating a deal to help potential owner Matthew Hulsizer purchase the team from the National Hockey League (which acquired the team last year in a bankruptcy proceeding).  The City offered to sell $100 million worth of bonds and give Hulsizer the proceeds to help him purchase the team.  In return, the City would receive rent from the Coyotes for their use of the City-owned hockey arena and other fees.

The deal appeared done until the local non-profit Goldwater Institute threatened to sue, arguing it would cost the city more than the benefits received in violation of the Arizona Constitution.  This completely changed the negotiation dynamic by shifting the parties’ leverage.

Because the deal could be tied up for years in litigation if Hulsizer doesn’t agree to the Institute’s demands, his leverage weakened.  The NHL’s leverage also weakened because it is losing money as the current owner and would like to sell the team as soon as possible and avoid litigation.  While the City also would prefer to avoid litigation, it could attempt to use the Institute’s intervention to negotiate a more favorable deal, possibly using a good-cop/bad-cop approach.  As a result, its leverage has likely strengthened.

The Institute’s leverage also appears strong because in response to its demands, Hulsizer said he would pay the City $25 million to reimburse it for losses it already incurred and to guarantee $75 million of the bonds.  The Goldwater Institute rejected his offer and asked him to either drop his request for $100 million from the city or guarantee full repayment of the bonds.  We await the next move.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

In light of Bill O’ Reilly’ s contentious appearance on ABC’ s "The View," which culminated with Whoopi Goldberg and Joy Behar walking off the set, here are three negotiating tips to consider when strong emotions erupt in the negotiation context.

1. Don’ t immediately react – Responding in kind to an emotional outburst can quickly cause things to spiral out of control. So remain silent and let your counterpart vent. Thomas Jefferson wisely said, “ When angry, count 10 before you speak; if very angry, a hundred.”

2. Don’ t argue – Listen respectfully and acknowledge the legitimacy of your counterpart’s points and feelings, even when you don’ t agree with them. And ask open-ended questions like “ why,” “ how,” “ what,” and “ tell me about” to help them open up.

3. Depersonalize the situation – Rely on independent standards or procedures that both sides will accept as leading to a fair result. An expert’s opinion, similar to market value and precedent, will focus the attention away from you and instead on objective criteria.

While implementing these tips won’ t make for compelling television, they will help you close the deal.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research. He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’ s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

In a recent LeClairRyan webinar about successful mediating, attorney Robyn Gnudi Kalocsay pointed out that failing to get the agreed-upon terms in writing can be a critical mistake at the end of the negotiation process.  She said, “You can leave the mediation thinking that you have an agreement, and spend the next three months trying to get the agreement re-agreed to by both sides.”

Here are three suggestions for avoiding this problem.

1.  Confirm all oral commitments in writing as soon as they have been made, perhaps by email or fax.

2.  Get a ready-to-be-signed written agreement over to your counterpart ASAP and include a reasonable deadline for his or her signature and some incentive for them to sign it by the deadline.

3.  Don’t adversely affect your leverage, such as setting aside a trial or arbitration date, until you have a signed, sealed and delivered deal.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

In sophisticated negotiations, the parties will typically find the standards that favor their side and use their most favorable standards to independently justify the “fairness” of their positions.  The parties will then negotiate over which standard represents the most fair and applicable justification.

Such is the case in the current NBA collective bargaining negotiation.  Billy Hunter, the NBA players’ union director, commenting on the owners' claim to have lost $370 million last year said, "There might not be any losses at all. It depends on what accounting procedure is used."  He then said, "If you decide you don't count interest and depreciation, you already lop off 250 of the 370 million dollars." The union’s preferred standard here is “real losses,” which don’t include interest and depreciation.

In response, NBA deputy commissioner Adam Silver said, "Part of the problem with the existing system is it's based largely on revenue, not net revenue.  Although our actual revenue numbers were better than what we projected, it came at a large cost." The NBA’s preferred standard here is net revenue.

Hunter further stated the players have little confidence in the owners’ projections and will offer their own interpretations of the league's finances at the next bargaining meeting.

What lesson can we learn from this? Research the applicable standards before your negotiation.  Then come prepared to use the most favorable ones and discredit the most unfavorable ones.  Finally, negotiate over the most appropriate objective criteria.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

As detailed in The New York Times, Honest Tea is a specialty juice and tea company with 2009 revenues of $47 million. Coca-Cola owns 40% of the company with an option to buy the remainder next year. One of Honest Tea’s products marketed for consumption by children features “no high-fructose corn syrup” on its label.  Coca-Cola asked Honest Tea to change or remove the label. Coke doesn’t want the ingredient disparaged because it uses it in other products.

Who has the leverage advantage? You might assume Coca-Cola because it is much larger and may soon own Honest Tea outright. However, size alone does not guarantee a leverage advantage. In fact, size is much less important than a) both sides’ need levels and b) both sides’ best alternatives (or Plan Bs to doing the deal with each other).

Here, Honest Tea’s need level is low because they legally retained control over its products’ contents in its agreement with Coke and could harm its customers’ trust if it removed or watered-down the label. At the same time, Honest Tea wants to protect its relationship with Coke which provides much wider distribution and may soon become its sole owner.  Maintaining the status quo (no agreement) is a much better alternative for Honest Tea than losing Coca-Cola’s distribution.   

From Coke’s perspective, despite its size advantage, its need level is higher because its products containing high-fructose corn syrup are much more important to the company’s bottom-line.  At the same time, it is facing decreasing demand for soft drinks and is seeking ways to increase its presence in the growing natural and health drink markets.  If a resolution can’t be reached, Coca-Cola could maintain the status quo or look for alternative health drink companies to invest in but neither may be as desirable to Coke as reaching an acceptable compromise with Honest Tea.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

The New York Times recently reported that the headquarters for the airline resulting from the proposed merger of United and Continental will be in Chicago.  This decision comes close on the heals of Chicago’s successful wooing away of  both United’s corporate offices and operations center from a suburb near O’Hare Airport with the promise of over $40 million in incentives.

Chicago beat out Houston, long-time home to Continental.  While Houston’s mayor told reporters, “(t)he competition’s now just started,” it’s clear Houston arrived late to the table.

What negotiation lesson can we learn?  Get your deal done when your leverage is strong.  Here, Chicago appeared to close the deal before Houston had even entered the game.  Chicago’s successful negotiations to attract United’s corporate offices and operations center gave it the momentum and access it needed to move very quickly here.  While disappointed, Houston residents can take solace in the fact Houston will be the merged airline’s biggest hub.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

In this Exclusive Lawline CLE preview Entrepreneur, Sergio A. Fernández de Córdova, and attorney Joel Wagman, discuss the complex relationship between and entrepreneur and an attorney. When it comes to deal making what are the priorities and who is in charge of the risk at hand?

The CNN.com headline “Both sides claim victory in BA [British Airways] strike” caught my eye yesterday.  It illustrates the importance of both sides being able to “save face” in a negotiation.

One closing strategy I suggest to accomplish this is to avoid narrowing the negotiation down to a single remaining issue.  Instead, keep at least two issues alive so you can trade them off for each other in the end.  If you give in on one of the issues and your counterpart on the other, this will allow your counterpart, at the least, to save face and not walk away feeling like he lost on the final issue. This has an important psychological impact on your counterpart and this, in the end, will make the deal better for both parties.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

Tips for Using Independent Standards
In its Small Business Questions & Answers section, CNNMoney.com suggests one way to fairly set employee salaries is to rely on third-party salary surveys.

Why?  Because relying on independent standards, like a third-party salary survey, (1) gives you credibility, (2) minimizes emotional roadblocks by depersonalizing the issue and (3) provides a good-faith basis for your position.

As the article points out, you should evaluate the salary survey (or other market value determinant) to verify its relevance.  Consider whether it is a representative sample based on its numeric size, geographic area and/or time frame.

And be prepared to counter unfavorable criteria proffered by your counterpart.  In addition to those mentioned above, consider these tactics:  (1) distinguish your item from the market by focusing on its uniqueness; (2) highlight market changes that call into question the validity of your counterpart’s market analysis; and/or (3) focus on other favorable independent standards such as tradition and precedent.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

In a recent New York Times article about the just-starting labor negotiation between the NBA owners and players, David Falk, the NBA's first superagent, said "This is not the time to fight. This is a time to sit down as partners and create a system that is realistic in today's economic climate."

Falk's quote raises an important negotiation question - when should you use Competitive Negotiation Strategies vs. Problem-Solving Strategies?

Generally, Competitive Strategies work best when no future relationship is at stake, when the negotiation involves only one or a few issues, when more for your side necessarily means less for your counterpart (zero-sum) and when your counterpart uses Competitive Strategies against you.

Competitive Strategies include not sharing strategic information, aggressively developing and emphasizing your alternatives, employing your own standards, implementing an aggressive offer-concession strategy and actively controlling the agenda.

Problem-Solving Strategies work best when you have or will have a long-term personal or professional relationship with your counterpart, when the negotiation is complex (it involves many issues), when creative options are present and when your counterpart uses Problem-Solving Strategies with you.

Problem-Solving Strategies include sharing strategic information more liberally, deemphasizing your alternatives and focusing instead on independent standards, implementing a more accommodating offer-concession strategy and openly discussing the agenda.

Here, the owners and players obviously are in a long-term professional relationship, there are numerous issues on the table and creative options, such as yet untapped foreign revenue sources, are present. As David Falk pointed out (and assuming both sides are willing to reciprocate), using Problem-Solving Strategies probably makes the most sense.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

Consider this quote from a recent New York Times article about Derek Jeter playing in the last year of his 10-year, $189 million contract: "Per team policy, the Yankees do not negotiate contract extensions during the season."

Jeter, one of the best shortstops of all time, seems perfectly content to abide by the Yankees' policy and wait until the end of the season to discuss a new deal.

Why? The Yankees' policy gains negotiation power from three key objective criteria:

1. Precedent power - the Yankees' have followed this policy in past player negotiations;
2. Tradition power - the longer a practice is followed the stronger it becomes; and
3. Policy power - policies are used in the negotiation context to promote uniformity and consistency.

Good negotiators use objective criteria in negotiations to support their claim that something is "fair and reasonable." Here, the cumulative effect of multiple powerful objective criteria makes it very difficult for a player to argue otherwise.  Other teams which don't have a similar policy or have made prior exceptions would have a much harder time turning down a request from a top player like Jeter to negotiate a contract extension during the season.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

 

In her recent FT.com column, Memory doesn’t matter when you have the net, Lucy Kellaway humorously recounts recent memory lapses and multi-tasking failures.  She considers several solutions, one of which is to make lists.

When preparing for a significant negotiation, we suggest you make three lists regarding your information needs. 

First, list the information you want to get before you meet with your counterpart.  Second, list the information you want to get during your negotiation.  Finally, list the information you want to initially share and withhold.

Making lists will help you strategically and comprehensively think through the information gathering process.  It will also help you avoid forgetting something important in the heat of the battle or when juggling several tasks.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

In her recent FT.com column, Memory doesn’t matter when you have the net, Lucy Kellaway humorously recounts recent memory lapses and multi-tasking failures.  She considers several solutions, one of which is to make lists.

When preparing for a significant negotiation, we suggest you make three lists regarding your information needs. 

First, list the information you want to get before you meet with your counterpart.  Second, list the information you want to get during your negotiation.  Finally, list the information you want to initially share and withhold.

Making lists will help you strategically and comprehensively think through the information gathering process.  It will also help you avoid forgetting something important in the heat of the battle or when juggling several tasks.
 

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

 

In light of Toyota’s unprecedented decision to recall and stop selling eight car models, this New York Times excerpt caught my attention:  “In its drive to become No. 1 in worldwide sales, Toyota may have left its reputation vulnerable.”  The Tokyo Shimbun went so far as to say, “[t]he discrediting of Toyota could even destroy the world’s trust in Japanese manufacturing, which relies on its reputation for high quality.”  Time will tell what the full consequences will be.

In negotiating and in life, trust is hard to build, easy to destroy and difficult to restore.  Toyota’s plight is a useful reminder that we should always value and protect our reputation.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

In December, GE CEO Jeffrey Immelt disclosed NBC would lose an estimated $200 million on the Winter Olympics.  In a New York Times article yesterday, Dick Ebersol, chairman of NBC Universal Sports, said he would have preferred that Immelt wait to reveal the losses until the end of January “so it didn’t cause any disruption of sales.”

“When you say something like that,” Ebersol said, “advertisers think they’ll get a bargain, and we’ve told them there aren’t any.”  In effect, Immelt decreased NBC’s leverage with its advertisers by disclosing that NBC is a bit desperate for revenue due to its expected loss, and that it had fewer competing advertisers for its spots.

What is the lesson here?  All of the key internal stakeholders in a negotiation need to be on the same strategic page.  Problems arise when the left hand doesn't know what the right hand is doing.  To help prevent this, organizations should – for all their significant negotiations – create strategic negotiation plans and implement negotiation best practices. This includes identifying what strategic information should or should not be disclosed and ensuring all of the key stakeholders are aware of those strategic choices. Importantly, our ExpertNegotiator Planning and Management Software is designed to help you do this by allowing you to create online negotiation plans accessible by each stakeholder in your negotiation – thus ensuring you avoid problems like the one created by Immelt.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

 

A friend recently purchased a used car "as is" for around $5,000 from a dealer. About 45 days later the transmission tanked. Unfortunately, the problem appeared after the state "lemon law" warranty expired.  My friend obtained several estimates for the repair, the cheapest of which was $1,400. Not wanting to pay so much, she returned to the dealer to see if they would help.

What negotiation approach should she take?

She could try a competitive approach and threaten to file complaints with the appropriate state regulatory agency and the Better Business Bureau and stop making her payments (the dealer had financed almost the entire purchase price).

Alternatively, she could take a more problem-solving approach and appeal to the dealer's sense of fairness and potential sympathy for her plight (she is a single mother and her car broke down shortly before Christmas).

Based on her positive experience buying the car (the dealer hadn't use overly competitive, high-pressure tactics), she decided to take the latter approach. It worked, and the dealer ultimately agreed to repair the car for only $300 even though they had no contractual obligation to do so.

The bottom-line: picking the right negotiation approach will help you get the best results.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

In a Forbes.com article last week, Jerry Kennelly, a 30-year Silicon Valley veteran, described a negotiation he was involved in while at Inktomi, one of the first internet search engines, as follows:  “There were two of us, and when we went into the room we faced 14 people.”

Using the power in numbers ploy is a common negotiation tactic.  For example, if you show up for what you think will be a one-on-one meeting and your counterpart brings along his technical expert and a secretary, you will be at a disadvantage because you lack your own expert and will end up with a less detailed written record of the commitments made during the session.

How can you avoid being strategically outnumbered?

Find out who will attend before the meeting.  Don’t hesitate to negotiate this aspect of the agenda.  If you still wind up outnumbered, ask your counterpart’s decision-maker to go to a nearby room to see if you can reach a deal.  Ask, “You don’t need your entire team with you, right?”
 

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

The PGA Tour’s current television deal with CBS and NBC expires in 2012 and negotiations for a new contract are expected to begin soon.  For obvious reasons, both sides are closely following Tiger Woods’ recent travails. 

So what negotiation lessons come to mind? 

First, leverage is fluid so strike while the iron is hot.  Here, the networks’ leverage improved dramatically with Woods’ announcement that he’s taking a sabbatical from golf.  His absence will almost certainly result in lower TV ratings while he is out, which lowers the value of the broadcast rights, including for the future (for who knows if and when Woods will return and the impact his problems will have on his and the PGA Tour’s popularity).  As a result, the PGA Tour most likely will try to delay signing any new deal until after Woods’ return has been confirmed and some of its impact evaluated. Likewise, the networks may push for a deal sooner not later.

And second, watch the negotiations to see how the networks will rely on objective criteria to support their position.  Specifically, television ratings decreased by half while Woods’ was sidelined by knee surgery in 2008 – and they will very closely monitor their current ratings while Woods is out now. And if the ratings, as expected, drop precipitously, then watch the networks use those to try to get a better deal.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

If you’re in purchasing or procurement, how can you reduce your costs, increase your margins, and still ensure the quality of service required from your vendors?
 
When your vendor contracts come up for renewal, bid out the contract and come up with several alternate plans to renewing the current deal. While you may ultimately stick with your current vendor, this classic leverage move—especially effective in a down economy—ensures you will tap into hungry and possibly desperate vendors increasingly worried about revenue and finding and keeping good customers. The better your plan B, the stronger your leverage; and the stronger your leverage, the higher the likelihood you can negotiate better deals.

And if you’re on the sales or vendor side, reassess your leverage and, as much as possible, incentivize your customers so they don’t bid out your contracts. At the same time, seek out new customers. Challenging times often present great opportunities if you can undercut your competitors’ prices.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

In her Tuesday New York Times article, "So How’s It Going?," Jennifer Walzer states that she needed “to come up with a better way to track what happens in the office when I’m not there – and even when I am.”  She then recognizes that “if I want to provide my employees with clearly defined expectations and then hold them accountable, I have to have a way to measure their performance.”

We hear these same two concerns over and over again from negotiation managers.  So how can you best address these issues in the negotiation management context?

First, create negotiation best practices for your team. Negotiation is one of the last significant areas in business that remains largely unmanaged. Frankly, the vast majority of negotiators just don't consistently and systematically use proven, research-based strategies.  Fortunately, research over the last 30 or so years has tested various negotiation strategies, and it's now become fairly clear which techniques work and which don't.

Second, require your team to implement those best practices.  More specifically, require them to:
   
1. Complete a best practices-based strategic negotiation plan prior to their significant negotiations (and which should include setting specific, written goals and a number of other proven research-based strategic and tactical elements);

2. Update their plans during their negotiations and send you reports of their key moves;

3. Track and retain all of their strategic plans, including their results and lessons learned, and other crucial intelligence that's been gathered; and

4. Incentivize their changed behavior.

Finally, make this relatively easy for your team to accomplish (if you don’t, it will be very hard to get your team to actually do it). You can start having plans developed with word processing and/or spreadsheet programs at a basic individual level. But at an enterprise level, you will need more, one solution of which is my ExpertNegotiator Planning & Management software.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

 In her Monday New York Times article, “Trying to Sell Your Business?  Think Like a Buyer,” Barbara Taylor asks, “Why is it so difficult for business owners to put themselves in the shoes of a potential buyer?”
 
One of the main reasons is the vast majority of people negotiate instinctively, not strategically.  In other words, they don’t systematically and comprehensively prepare for their significant negotiations based on the experts’ proven research. Instead, they prepare and negotiate in an off-the-cuff manner.  So not only are they not adequately considering their counterparts’ situation, they’re not even fully exploring their own. 
 
Negotiation research over the past 30 years has proven emphatically that negotiating strategically will improve your results.  Our Five Golden Rules of Negotiation methodology includes all of the key research-based components present in significant negotiations, included understanding your counterpart’s perspective.  What about your counterparts do you need to know?  As a starting point, answer these questions:
 
1.  What are your counterparts’ goals and interests?

2.  What is their preferred negotiation style and what negotiation strategies have they used in the past?

3.  What is their need level (how badly do they need the deal) and what is their best alternative to doing a deal with you (their Plan B)?

4.  What objective criteria (like market value or precedent) will they rely on to justify their position?
 
Investigating and answering these questions will help you get the best deal possible.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 on Latz@ExpertNegotiator.com.
 

The on-going negotiation between the NBA and their locked-out referees provides a very useful negotiation lesson to anyone who has a boss, board or a constituency.

First, to summarize the negotiation’s current status, a deal had been tentatively struck last month between the parties but was then rejected by the refs’ executive board at the last minute. It was then subject to a vote by the referees, who voted it down. 

This two-step approval requirement on the side of the referees illustrates an important negotiation tactic – and one that gave them a structural advantage in the negotiations.

What is it? The Higher or Limited Authority move.

It occurs when one side constantly defers to a “higher authority” to make any substantive move and says they just “don’t have the authority.”  How should you respond?  Explore the extent of your counterpart’s authority early in the negotiation.  Then, to the extent you can, match it.  Generally, it’s disadvantageous to have more authority than your counterpart because you can concede – and often do - while your counterpart can’t.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Poor planning is the first mistake identified in an article about negotiation pitfalls on the Stanford Graduate School of Business website.  I have long emphasized that our biggest challenge as negotiators – and managers of negotiators – is to change our planning and negotiation behavior from off-the-cuff, instinctive negotiating to strategic negotiating based on the experts’ proven research.

The negotiation research is clear – there is a right way and a wrong way to plan for negotiations and to negotiate in most circumstances. And by strategically preparing on the substantive issues involved AND the process of negotiation – based on what you know works and what doesn't - and then letting this guide your moves, you will substantially increase your likelihood of success.  This, in essence, is strategically negotiating.

On the other hand, if you only plan and negotiate instinctively or intuitively and, in effect, wing it, you are leaving your likelihood of success much more to chance.  It's not that you cannot achieve the best possible result. It's possible, just much less likely.

My ExpertNegotiator Planning and Management Software is a unique web-based tool designed specifically to help individuals negotiate more strategically and to help managers create and implement negotiation best practices.  It is an easy-to-use system that will help you become a more strategic – and thus more effective – negotiator and/or manager.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

CIT Group, a US commercial lender, is negotiating with its bondholders to exchange a portion of its debt for equity.  To increase its leverage, it is simultaneously preparing to apply for Chapter 11 bankruptcy ¬protection – and default on $800 million in debt due next month.

As I describe in my most recent monthly column, leverage is a combination of two factors:

First, how much you and your counterpart need a deal.  The more desperate you are, the weaker your leverage; the more desperate your counterpart, the stronger your leverage. 

Second, the relative value of your and your counterpart's Plan Bs (your alternatives if you don't do the deal).  The better your Plan B, the stronger your leverage and the better your counterpart's Plan B, the weaker your leverage.

By preparing for bankruptcy, CIT Group is taking a concrete step to limit the attractiveness of their counterpart’s Plan B.  Bondholders reportedly would get about 90 cents on the dollar if they agree to the deal but likely only 70 cents on the dollar in bankruptcy.  CIT Group is also taking steps to discourage individual bondholders from holding out in the hopes of getting a better deal than those who sign on to the plan early.  The holdouts believe the passage of time improves their leverage because the approaching deadline increases CIT Group’s need level.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Many variables impact the offer-concession stage of a negotiation.  What issues to address first and when and how much to move should be considered during your strategic planning process.  Here are my Top Ten rules of thumb for orchestrating the best game plan once the negotiation begins:

1.  Expect, plan and insist on reciprocity of movement.  Be prepared to give to get but don’t give     more unless you’re getting more.

2.  Say “I’m sorry.  You will have to do better than that” in response to the other side’s initial offer (as many times as they will let you).

3.  Start with the most critical issues on which both sides will likely agree.

4.  Consider the value of momentum – the longer the negotiation lasts, the more committed both sides will feel.

5.  Initial moves of less than 5 percent rarely generate meaningful moves from the other side.

6.  Rarely make a larger concession than your counterpart.

7.  Buyers should insist on reciprocal percentage moves; sellers should insist on reciprocal dollar moves.

8.  The earlier and more often you raise an issue, the more important it will be perceived.

9.  Consider limiting your authority on the most critical issues.

10.  Remain flexible so you can take advantage of new strategically important information and unanticipated opportunities.

For a more comprehensive discussion of each, sign up for a free trial of my ExpertNegotiator Planning & Management Software to access the online version of my book, Gain the Edge! Negotiating to Get What You Want (St. Martin's Press 2004).

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

The Phoenix Coyotes professional hockey franchise is facing a bankruptcy court auction this week.  One likely bidder is Jim Balsillie, co-CEO of Research In Motion (which makes the Blackberry).  He wants to relocate the team to Ontario, a move opposed by the NHL.  While Balsillie will likely be the high bidder, the NHL is arguing his bid should be rejected by the judge in part because of a dispute over the relocation fee Balsillie would have to pay the league. The amount of such a fee is unclear.

So, Balsillie hired a consultant who determined a reasonable relocation fee would be in the $11.2 to $12.9 million range, which includes payments to nearby teams for damage to their franchises.  The NHL hired two consultants who determined the fee would be in the $101 million to $195 million range, not including payments to nearby clubs.

Using “fair” objective criteria to justify your position can be very effective.  Here, both parties are employing experts to attempt to convince the judge of the “fairness” and “reasonableness” of their respective positions.  Experts derive their power from both their actual expertise and knowledge and their perceived knowledge.

What should you do if your counterpart has an expert or an expert opinion?  Find an expert to provide you with an opinion that supports your side and attempt to undermine the credibility of the other side’s expert.  A battle of the experts will then ensue, potentially giving both sides more credibility and a greater ability to justify their position.

How can you undermine your counterpart’s expert?  Closely examine their credentials, qualifications, independence and objectivity and find out their compensation arrangement.  A large fee may undercut their perceived independence and objectivity.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Walt Disney announced on Monday its acquisition of Marvel Entertainment in a $4 billion deal.  Both sides stand to benefit.  Marvel gains access to Walt Disney’s powerful marketing and distribution system, including Disney’s theme parks and cable television channels, and significantly improves its ability to finance its movies.

Disney gains the rights to Spider-Man, the Incredible Hulk and about 5,000 other comic book characters which tend to be more popular with boys.  This will supplement Disney’s existing intellectual property, led by Hannah Montana and its many princesses, which are more focused on girls.

Both boards approved the transaction.  The negotiation began in June when both CEOs reportedly had a very cordial meeting in Marvel’s New York office.  Disney’s CFO described the acquisition as being driven by “the opportunity for synergies over time.”

This deal appears to exhibit the hallmarks of Problem-Solving Negotiation Strategies.  Problem-Solving Strategies involve mutually sharing critical information openly and liberally, downplaying leverage (while still recognizing its impact), relying on independent standards like market value and precedent, using less aggressive offer-concession moves and tactics and implementing mutually agreeable agenda and agenda-control tactics. 

When does this approach work best?  When the parties involved anticipate a strong future professional relationship, when the deal is complex and involves multiple issues and interests, when there are many creative options available and when both parties take this problem-solving approach to the negotiation - all of which appear to be the case here.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

To conclude my trilogy of blog posts about negotiation styles, here are my Top Seven Characteristics of Conflict Avoiders:
 
1.  Strong need to avoid conflict, especially open conflict
2.  Belief that almost all conflict is unproductive
3.  Extremely uncomfortable with emotional conflict
4.  High skill level at avoiding answering questions
5.  High skill level at avoiding addressing undesirable issues
6.  Rarely will overtly control the agenda
7.  Can appear aloof and uninterested as they rarely engage in negotiations involving conflict
 
If you recognize your counterpart is a conflict avoider, how should you proceed?  First, be patient because it will take more time and effort to fully explore conflict-related issues.  Second, stay focused on your goal because it’s easy to get off track when your counterpart is skillful at avoiding issues.  Finally, aggressively probe their interests.  Find out what your counterpart wants and needs, keeping in mind they may try to hide these if they believe discussing them will lead to conflict.


Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

As a follow-up to last week’s blog about preferred negotiation styles in which I identified three broad categories of styles (competitors, accommodators and conflict avoiders) and shared a list of competitor characteristics, here are my Top Ten Characteristics of Accommodators:
 
1.  Highly value good relationships
2.  Love to be liked and are often quite likeable
3.  Attitude reflects concern, compassion and understanding
4.  Fairly accurately show nonjudgmental understanding of others’ concerns
5.  Very effective listening skills
6.  Tend to be viewed as trustworthy, due in part to their superior listening skills
7.  Dislike open conflict, especially when it might harm the relationship
8.  Extended conflicts make them uncomfortable, and they will try to smooth them over
9.  Typical relationships lack open conflict
10.  Adept at creating stress-free atmospheres
 
Accommodators also can allow relationship concerns to overshadow substantive issues.  A very high profile accommodator is former President Bill Clinton.
 
Are you more of an accommodator than a competitor?  If so, keep this in mind when you negotiate and recognize that sometimes you will be better served by taking a different approach.  For example, adjust your negotiation preparation and approach if your counterpart is an aggressive competitor.


Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

One important aspect of negotiating is to understand your and your counterpart’s preferred negotiation styles.  I have found it helpful to categorize negotiator styles into three broad categories:  a) competitors, b) accommodators and c) conflict avoiders.  Of course, these categories describe general tendencies which can change depending on the context and the self-awareness of the individual.  Which is your preferred style?  To get you to think about it, here are my Top Ten Characteristics of Competitors:

1.  High comfort level with conflict and competition
2.  Enjoy debating substantive issues
3.  Not great listeners, due at times to significant egos
4.  Direct, sometimes adversarial tone, words and body language
5.  Relatively impatient and aggressive in their offers and concessions
6.  Enjoy openly controlling and framing issues
7.  Strong desire to win and not lose
8.  Enthusiastic attitude toward negotiations
9.  Style can appear stubborn, arrogant and/or untrustworthy
10.  Often at ease with risk and pressurized environments

Competitors are also comfortable using relatively risky leverage tactics like walkouts, threats, ultimatums, bluffing and other ways to focus the parties on leverage and other power elements in a negotiation.  Examples of negotiators with a competitive reputation include Donald Trump and White House Chief of Staff Rahm Emanuel.

Does this describe you?  If so, consider when this approach works best and when you may be better served by resisting your natural tendencies and taking a different approach.  Also, if your counterpart is a competitor, adjust your negotiation preparation accordingly.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Former President Bill Clinton met yesterday with North Korean leader Kim Jung-il seeking the release of two imprisoned American journalists.  Fortunately, he was successful and the journalists have now been reunited with their families in the United States.  In light of Kim Jung-il’s sordid reputation, here are my Top Ten Tactics for Negotiating with the Unethical and Untrustworthy:

1.  Ensure significant negative consequences for any breach by your counterpart, increasing the likelihood they will actually follow through on their commitments

2.  Independently confirm all statements that may provide your counterpart with leverage, especially if they say they have a better alternative (or Plan B) to doing a deal with you

3.  Discount the relevance of statements that cannot be confirmed

4.  Consider recording the negotiation – it’s tough to dispute a recording of statements actually made

5.  Aggressively explore your potential alternatives (or Plan Bs)

6.  Be wary of vague and ambiguous statements

7.  Build mechanisms into the agreement that independently ensure each party fulfills its commitments

8.  Understand that such negotiations take more time and effort than others, and recognize this as a cost of dealing with this person or entity

9.  Pay attention to the details and don’t leave ambiguous issues unresolved

10. Consider bringing in an independent third party to help

In addition, define what constitutes a breach of any agreement, provide for a fair and efficient way to resolve disputes that may arise from a potential breach and finally, don’t lower yourself to their level.  Your reputation is far too important to risk!

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.
 

CNN reported today that Democratic leadership in the House reached a deal with several “Blue Dog” Democrats to allow the Energy and Commerce Committee to resume its debate of the health care bill with a vote expected by the end of the week.  The deal also reportedly puts off a vote by the full House until after the August recess.

President Obama and House and Senate Democratic leadership originally wanted both the House and Senate to approve the bill before the recess.  Why?

Short deadlines tend to increase pressure and urgency and provide incentives to parties to accelerate the negotiation process.  As a result, they are often used by those hurt by the passage of time and who don’t care much about a future relationship with their counterparts.  Here, President Obama sought to capitalize on his early popularity, which has started to wane as the economic slowdown continues.  Delay – especially over the August recess - will also allow opponents of the bill more time to publicly organize and resist passage.  Bipartisanship also wasn’t a huge priority for President Obama.

Now that a vote on the bill most likely won’t occur until September at the earliest with President Obama’s new deadline for a bill on his desk by the end of the year, let’s consider the benefits of this new longer deadline.  Longer deadlines decrease pressure and urgency.  As a result, they are often used by those helped by the passage of time and/or those who want a future relationship with their counterparts.  Longer deadlines also help those creatively working together to resolve mutual problems.

Here, the longer deadline allows Senate Democrats and Republicans time to potentially negotiate a bipartisan compromise.  This longer deadline thus increases the likelihood of garnering support from moderate Senate Republicans.  

Finally, with both sides of the aisle creatively working together, it might also result in a more thoughtful and ultimately effective piece of legislation.



Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.