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What You'll Learn In Today's Episode

  • Beware of Positional Bargaining when choosing a system of negotiation: It rewards deceptiveness, stubbornness, and deceit rather than meaningful conversations or new solutions. It often solves the wrong problems, too.
  • Positional Bargaining leads to both sides surrendering something. This is why it’s sometimes called a lose-lose. Everyone misses out on possible opportunities.
  • Menu-picking is Options-focused. You learn the other side’s concerns and then offer a list of proposals. The biggest downside is probably the absence of engaging the other side.
  • Principled Negotiation is often your best choice. This offers a way to be both assertive and collaborative. You establish rapport, trust, and respect. From there, you can employ good Communication to direct the process.

Watch This Episode On NEGOTIATEx TV

Executive Summary:

Welcome to the NEGOTIATEx Podcast! In our last episode, Nolan and Aram discussed the 7 Elements of Negotiation: Relationship, Communication, Interests, Options, Legitimacy, Alternatives, and Commitment. Learn these. They are useful in every system of negotiation.

However, some choices will bring more value to clients than others. In fact, pick your best. That’s what this episode is about.

Positional Bargaining

You’re probably familiar with Positional Bargaining. Essentially, one party starts artificially high and the other party starts artificially low. As a result, each of the two sides trades concessions back and forth.

At some point, one of the parties will remind everyone of their alternatives. For example, they may mention leaving the table entirely. Note that these threats are sometimes a buildup toward both parties splitting the difference. Other times, they are real. In other words, one side exits the negotiations altogether.

Positional Bargaining leads to both sides surrendering something. As a result, it is sometimes called a lose-lose. Note that both parties are focused on their positions or demands. This means everyone is missing out on opportunities.

Seek a more creative problem-solving system of negotiation. This could satisfy both sides’ needs, fears, concerns, and motivations.

Instead, Positional Bargaining rewards deceptiveness, stubbornness, and deceit. Avoid it if you are out to generate meaningful conversations or new solutions. In fact, it can seriously damage relationships. It often solves the wrong problems, as well.

Other Games you Might Play

Did you know that there are over 725,000 ways to negotiate? Don’t try to learn every combination. Each of the 7-Elements can be applied in at least 4-5 different ways. Additionally, you can sequence the Elements differently.

Lock-in is a negotiation game of Commitment and level of Authority. If you try to rebook a flight, you may see the airline use this form of negotiation.

The ages-old game of Chicken is another common negotiating approach. Predictably, it’s about determining who blinks first. Threats are used in a give-me-what-I-want-or-else style.

Menu-picking, meanwhile, focuses on Options. First, learn the other side’s concerns. Second, offer a list of proposals. This approach’s biggest downside is probably its inherent lack of engaging the other side.

Appeasement, Extortion, and Favors-and-Ledgers are what Aram calls “relationship games.” Each of these systems has its own pros and cons, too.

Circling Back To Value

Aram recommends the Circle of Value method. This is sometimes called “Principled Negotiation.” It is a joint problem-solving system. It offers a way to be both assertive and collaborative: You can manage the substance of the deal as well as the relationships involved.

Build the Relationship you want: Establish rapport, trust, and respect. Then employ good Communication to direct the negotiation process.

From there, both sides enter the Circle of Value. Share your Interests and uncover theirs. With this shared understanding, collaborate and brainstorm Options together.

Next, assess the Options using applicable standards of Legitimacy. Options are all the things you could do to satisfy both party’s Interests. The standards of Legitimacy include industry benchmarks, negotiation precedents, and other objective criteria. Consider them in order to be understood as fair and reasonable.

Nolan and Aram delve deeper into the successful negotiator’s best system of negotiation in this edition of the NEGOTIATEx Podcast. Please subscribe to us on Apple Podcasts or wherever you listen from. Drop by negotiatex.com and leave feedback, too. Our downloadable prep tool is a free resource that we’ve put there to help you.

Your time’s important to us. Thanks for listening!

Transcript

This is the NegotiateX podcast show number 4. So Nolan, let me ask you, what was your very first negotiation in life?

To borrow my dad's truck, to take it out.

No earlier than that before that.

To stay out later with my friends.

Even earlier in life my friend.

Like baby, like that young?

Yeah there you go, now you getting there.

Food, you know, crying because I'm hungry.

That's it that's it and how did you let your parents know you wanted to be fed?

I’d cry.

Yeah and if that didn't work, then what would you do?

I'd cry louder. I’d pitch a fit.

Yeah I bet you would pitch a fit, you know what, some people never learn to negotiate differently than that.

You're listening to NegotiateX Radio, helping you elevate your influence through purposeful negotiations, if you're here looking to learn about how to become a better negotiator in both business and life then you're in the right place, stay tuned and be sure to join the others who have benefited from the kill NegotiateX.com, your home for negotiations training and consulting online.

Welcome to another episode of the NegotiateX podcast I am your co host and co founder and with me today is Aaron something. Aaron, how are you doing today Sir?

I'm great, hello everybody.

I'm a little exhausted so I apologize if I come through like that I've got 3 foster puppies that are 8 weeks old and they are running my life.

Wow.

I know, I think, I think I have a better understanding of what it must be like to have 6 kids running around.

Well these at least the kids I can talk to and then try to reason with them or as I like to say, negotiate with. I don't know what you do with 3 puppies my friend.

Yeah I think the biggest thing I do is trying to keep them busy with their own toys so they don't chew up everything and it's a mess. All right so our goal for today is to kind of build on what we talked about the last show and that was the 7 elements of negotiation, just as a little reminder, those were: relationship, communication, interest, options, legitimacy, alternatives and commitment.

That's right Nolan as we mentioned last time we use these elements to prepare and I’ll just remind everybody, you can download for free, prep sheet at negotiatex.com backslash prep, but we also use these elements when making choices in negotiation, how we conduct the negotiation, how we measure a successful outcome and also is re review our negotiations.

Yeah I'm excited for today's episode because we're going to focus on some of those process choices you're referring to and how we use those elements during a negotiation, so Aaron, why is this important?

Well maybe our listeners might remember, a recall couple episodes ago when we spent some time talking about the power of mind sets and how our assumptions and our mindset drives the actions we take and how those actions ultimately lead to the results we get, when different methods of negotiation are used, we're going to call these things systems of negotiation or negotiation systems for today, the result can be very, you know, vastly different outcomes, so by understanding those systems, how we negotiate, we can actually get better or more effective outcomes and results.

Yeah and better results leads to more value which is one of the core tenets in NegotiateX -- that through the podcast and negotiation principles we teach, that you are able to deliver true value to your organization, business and life.

Yeah absolutely Nolan.

All right so let's do it let's jump into it, what's a common negotiation system, I think last time we talked about how many people fixate on alternatives and commitments and so on?

Yeah very common form of negotiation the people will be very familiar with is what's called positional bargaining -- it only involves the 2 elements of commitments and alternatives, it's going to sound familiar -- one party starts artificially high maybe really high the other party starts low, they go back and forth, you know, might sound like well for you ‘I can do this’ ‘I guess I can come down this far’ they go back and forth, at some point they might remind the other party gently or subtly or maybe not so subtly that they have alternatives -- things that I can go do without you, this often sounds like a threat, they may actually walk out of the room, whether it's real or fake and then they either come back perhaps and split the difference somewhere in between or they actually don't reach an agreement and walk away.

Yes I think, you know, some people would call this a win-win, where both sides are giving up something to get to a, you know, a negotiated outcome, what do you think about that?

Well I call that a lose-lose and unfortunately a lot of people who, when they start with this process they think a win-win is about us both giving up something but again that's because they're kind of focused on positions and you know, what I want versus interest as we talked about in the last episode and if I focus on interest, my underlying needs, fears, concerns, and motivations -- maybe I can find a creative way for both of us to get our goals and objectives met rather than simply compromising between 2 positions.

Positional bargaining is kind of what you're talking about there is there when can you use it, it can't be bad all the time, is it?

Yeah you know, in fact as we talk about these systems in negotiation, I don't like to say bad or wrong, I just like to call, you know, more effective in certain circumstances. So positional bargaining, yeah, you know, it doesn't require a ton of preparation, it can be pretty, you know, simple or useful and you know simple low stakes, transactional sort in the arrangements, it's incredibly familiar so it doesn't take any explanation for the other party, you know, because pretty much, you know, anyone anywhere has played this game, you know, haggling at some point in their life, in fact I like to joke this is the first negotiation. So Nolan, let me ask you, what was your very first negotiation in life?

To borrow my dad's truck, to take it out.

No earlier than that before that.

To stay out later with my friends.

Even earlier in life my friend.

Like baby, like that young?

Yeah there you go, now you getting there.

Food, you know, crying because I'm hungry.

That's it that's it and how did you let your parents know you wanted to be fed?

I’d cry.

Yeah and if that didn't work, then what would you do?

I'd cry louder. I’d pitch a fit.

Yeah I bet you would pitch a fit, you know what, some people never learn to negotiate differently than that. They make demands and when their demands don’t get met, they use threats, they speak louder and they send warnings that they need to get their positions met or they’ll walk away.

So positional bargaining or in the language of the 7 elements that we introduced during episode 3, the use of alternatives and commitments to get what we want, it has some significant limitations right, it tends to reward the deceptiveness, this stubbornness, deceit, it often, you know, doesn't necessarily lead to real meaningful conversations, it can actually damage relationships, it clearly doesn't generate new, out of the box solutions and even when you get a solution, the solutions are often arbitrary and one of my biggest concerns is that it doesn't necessarily satisfy our interest so there's this possibility that by positionally bargaining we're solving for the wrong problem and I don't like doing that when I negotiate.

Yes so in a negotiation how many different ways can someone negotiate?

Well there's actually over 725000 different ways to negotiate.

Oh man, you can't be making up numbers like that on the air like this, going to turn people off and they’re not even going to listen to us, that can't be true.

Well okay so here's how I get that number. When you look at the different possible solutions and the different ways you can use 7 different things and you can use each of the 7 elements in 4 to 5, some cases 6 different ways, you can sequence them differently, so some systems of negotiation use all 7 elements, some use only 1 or 2 elements and again you can how you order them is going to be a different system of negotiation. Actually all the combinations and permutations of those numbers, you come out with a number just over 725000.

Well so I've seen the books that say you know top 100 ways to negotiate, if there's 725000 different ways to negotiate, is it better for me to try and memorize those top 100, like kind of, what's the best way to approach this?

So Nolan, you're never going to memorize 725000 different ways to negotiate and what I would tell you is those books with the top 100 ways to negotiate, while those may be common forms of negotiation they're also a little misleading because the moment you meet person X who negotiates using system of negotiation 101, you’re stuck and so you don't know what to do, so the good news is you don't have to memorize any forms of negotiation really, you just need to know what elements you’re using, to be able to recognize what elements the other party is using and then be able to make choices about you know how do I want to negotiate to achieve my goals and aims.

Yes if I were to write a book of the 725000 different ways to negotiate, would you read it?

It would be a pretty, well it depends, it would be either really long book or as we’ll try to explain, it would be a fairly simple -- simple book but since you wrote it Nolan, yes I would read your book.

All right I appreciate it. All right so are there other common negotiation systems and can you give us some examples?

Yeah I would say every element of negotiation has some systems of negotiation that are fairly similar for it or are common to it, so lock-in, the game of lock-in, this tends to be a commitments game, it's really tied to the level of authority, I lock-in into a commitment ‘gee I wish I could help you but I can't’ -- this is the -- this is the form of negotiation we often see being used by airlines right when they when you're trying to rebook a flight – they’re like ‘ah my hands are tied’. Sometimes you see legitimacy there too so it's not just about authority and commitment – ‘I can't do this’, ‘I can't do this because here's the standards you see [incomprehensible mumbling] right it's our company policy or whatever else’. The game of chicken, right, uses threats which is really, well you know, if you don't do what I want, I'm willing to make you hurt really badly, supplier, sure that's going to hurt us too but we'll see who survives right because I'm bigger. So the game of chicken is a focus on threats. Menu picking, I like this one, I've seen this one in action, this is a focus on options, this is where I understand your concerns are, I go back and come up with a list of proposals for you that I think are going to be your interest really well and I come back and say ‘pick one’. It's a very common options game. Unfortunately it doesn't it engage the other team in problem solving, personal problem solving, that's one of the downfalls to it. Appeasement, extortion, favors and ledgers -- these are all relationship games and every form of negotiation has some pros and certainly some cons.

So what is favors in ledgers or what’d you say, favorites in ledgers?

Favors and ledgers right, so it's you know, you say, hey Aaron, if you can do this for me, you do this one podcast for me, I will owe you 100, you know, ???? of value, whatever they are, I will owe you. And so I say great Nolan, I will do it and then I say, Nolan, you know what, I want to utilize those, the value, the credit I have with you, I want you to fly up and watch my kids and you're like, that's a heck of a lot more than what was the right, you know, exchange, what I did for you or what you did for me and so the problem with a game like favors and ledgers, where, you know, we're kind of keeping track of what we do for each other -- is that without good communication and you know and managing the perceptions around -- what's the value of the favor -- things can get really out of whack quickly and actually damages the relationship, so we end up making one sided commitments a lot of times while playing that game.

All right so now I know our listeners are wondering is there a better way to negotiate, I know that our colleagues over at vantage partners have the circle of value, so how does that come into play?

Yes so the circle of value is a joint problem solving approach, some folks would refer to it as principled negotiation, I like thinking about it as joint problem solving or the circle of value name and it really begins by first trying to build a relationship that you want using good communication and process to direct to the negotiation, then you enter in what's called the circle of value, that's not the circle of life for all my, you know, Lion King fans and it's not the circle of trust if you are a meet the parents fan – it’s called the circle of value because once you get inside the circle, this is where you uncover interests, collaborate to create options and then jointly assess those options using standards of legitimacy, this is where the role of the negotiator isn't just simply to split up the pie, it’s actually to increase the amount of value, to increase the pie and I would remind every -- this is a ???? process, we inside the circle, this is a ???? process, as I discover more interests I can develop more options, as I assess my options I'm going to come back and realize there's interests that aren’t being met -- so finally at some point we step out of the circle once a suitable agreement can be reached and the 2 parties will move to commitment and they will say – ‘great what are we going to do to implement this’ and if after this ???? process involving brainstorming, uncovering interest, measuring by fair objective criteria -- we can't reach an objective, then we go with our alternatives.

Yeah it sounds like a pretty lengthy process and probably not one that many people are familiar with.

Yeah well, I think that's true and I think in terms of familiarity, I think the wise negotiator takes the time to educate their counterpart on the negotiation process they're trying to follow and then in terms of timing, you know, the truth is that the time it takes to do these things that we're talking about, really isn't any longer than, say someone who is constantly re-negotiating because they're using positional bargaining coming up with an ineffective or poor solution -- or not just poor positional bargaining, really any of the other forms of negotiation we talked about.

So, real world, kind of what's an example of this?

Yeah so there's a story I like to tell and I'll try to tell it quickly, I was operating in Afghanistan, we were trying to get provincial governors to take action at, you know, around security and counter corruption measures at borders and airport checkpoints and so we had one provincial governor in particular wanted to work with it and the trouble was we couldn't get him to even come to the table and meet with us we had, you know, zero relationship. So what I did was I just spent a lot of time thinking about the problem from his perspective and I try to put myself into his shoes and then I wrote a note to the contact we had for him and I said, you know, if you’d allow me I'd like to, based on my understanding of your problem in the situation, I’d like to bring a media team to discuss with you some of the effective stuff that's going on in your province. To which I actually got a response and not from one of his staffers but actually from him. And so I got a meeting and during that meeting, face to face, I was actually able to start developing a relationship I actually shared a note with him, we conversed and I was able to talk to him a little bit about, just the fact that I cared how he saw things and that I was taking the time to do that, he can trust me. So a number of things: working on relationship, working on communications, sharing that I was thinking about his concerns, getting creative with what we might do around joint inspections, low level prosecution of stuff, of criminal behavior and you know continued meetings and follow up, media coverage, or the fact of things, some had great precedent, some did not but we will do an evaluation, we came up with a solid solution, something we will implement and we went from having someone we could never get in contact with to someone who met with us routinely. The punch line, like the rest of the story, as Paul Harvey used to say, was after I left Afghanistan I've been I've been back home in the US, on Christmas Eve after I'd returned, I actually got a Christmas card from this provincial governor. I like to tell folks, if I can practice this the circle of value approach and totally change the nature of the relationship and help two people, two parties interact with each other and I get a Christmas card from an Afghan governor, this stuff works and you can put this into practice with your very toughest supplier or vendor or client or whoever it might be.

Yeah I think that's an awesome, awesome story there for the circle of value approach I mean that's pretty powerful that you're able to get a Christmas card, I don't think I've ever gotten a Christmas card by any counterpart or anyone I've worked with downrange, so.

I'll send you one this next year okay.

Yeah I appreciate it, that kind of wraps up the show here.

I want to jump into some takeaways if that's good for you, Aaron.

Yeah absolutely.

All right so this podcast is all about action, in kind of delivering value to your business, organization and life, so what are some key takeaways from this show, that our audience is going to use to become better negotiators?

Yeah I'd like our listeners to recognize they have choices in negotiation, that there's many ways to negotiate and how you choose to negotiate will have a profound impact on the results you achieve so the circle of value approach that we've talked about can help you achieve both outstanding substantive solutions as well as great relationship outcomes, building the relationship that we want going forward, it empowers you as a negotiator to be both progressive and collaborative and those are things that people often feel a tension between, you don't have to choose between the 2 of them, you can build a relationship and you can do well, you can be aggressive and you can be collaborative. Consider getting some more information from us and practicing something different in your next negotiation.

Yeah it's a great take-away there in my only takeaway for our audience is to head over to Apple Podcasts or wherever you listen to this podcast and give us a 5 star rating, we are growing quickly, we have a lot more people that have been downloading the podcast and listening to it. So really helps us out to have other people find this podcast in ultimately to become a better negotiator. So that is it from us today on the NegotiateX Podcast, if you have any ideas or something that you want us to cover in future episodes you can shoot us an email team@negotiatex.com. For any of the resources from today's episode you can go to NegotiateX.com/services for show 4 and I think that's it.

We will see you in the next episode!

Thank you for listening to NegotiateX Radio, helping you elevate your influence through purposeful negotiations, if you're here looking to learn about how to become a better negotiator in both business and life, then you're in the right place, be sure to join the others who have benefited from NegotiateX.com, your home for negotiations training and consulting online.

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