Discover the Interests behind Positions

Here’s one of my favorite negotiation stories:

Two sisters were in the kitchen fighting over the last orange in the refrigerator. The battle became so intense that their father finally had to intervene. He offered to cut the orange in half as a compromise, but this just provoked more fighting.

Finally, he asked the girls why they each wanted the orange so badly. “I’m hungry,” said the first, “and I want a snack.”

“I’m baking a cake,” said the second, “and I need to grate the orange peel into the batter.”

When the father understood the interests underlying his daughters’ positions, the solution became obvious.

Similarly, knowing your counterpart’s interests in your negotiations are what you need to get past what seem to be immovable positions. And that’s why, in addition to finding precedents and alternatives, finding interests needs to be an important part of your pre-negotiation preparation.

Negotiation has been defined as taking and giving up a series of positions. Positions, however, are often defined by dollars. Interests give you insight into the real reasons behind your counterpart’s positions. Understanding their interests in advance, therefore, can make you more successful in moving them from one position to the next.

Here’s an example. Suppose you’re negotiating with your landlord over a substantial unexpected increase in your office rent. The extra money defines her position and may be difficult for you to accept until you learn that her interests lie in paying for renovations in order to attract prestigious tenants to her building. Knowing this gives you leverage. In lieu of paying the extra rent, perhaps you could call in some of your own contractors to help do the renovations more cheaply for her.

Sometimes you may discover that your counterpart’s interests are the same as your own. Maybe you’re both looking for ways to cut costs or increase efficiency. Maybe you’re both interested in expansion. Maybe you’re both just in need of a successful deal to help your careers. In any case, it’s good to know your common interests in advance. Beginning with what you have in common is a great way to start negotiating.

During your preparations, make sure you discover the interests behind your counterpart’s negotiating positions. In addition to giving you more leverage, you’ll ensure that both you and your counterpart get the deal that you both want.

Be Prepared with Alternatives

Preparing for your negotiations with precedents, or previous negotiation outcomes, can help increase your leverage when you’re seated at the negotiation table. A second important addition to your preparation is creating alternatives.

It’s been said that going into negotiations without alternatives is like going into battle with only one weapon. I’ve seen this happen – not in real life, but in a comic strip: Hagar the Horrible. He and his invading army couldn’t knock the down the castle doors with the battering ram they had brought, so they had no alternative but to turn around and go home.

In any negotiation, there are always alternatives and the more alternatives your counterpart thinks you have, the greater your negotiating leverage. One way to create the perception of having many alternatives is to evoke the competition. Suppose you’re looking for a low-rate mortgage on a shophouse you want to purchase for your business. You meet with one banker who offers you reasonable rates, but before signing on, you make it clear that you’re going to shop around. You step out, maybe visit another bank or two (or not) and return two hours later. By simply stating, “I think you can do better on your interest rate”, you’ve told the banker that you have alternatives and if he or she really wants your business, those rates will come down.

Sometimes, however, you might be in a situation where you’re negotiating with a sole source of some product that you require. “What can I do?” you might ask. “I have no alternative!” Being in this situation can create feelings of powerlessness and dependency.

So let’s suppose, after you look around, you find that there is only one source. Are there no alternatives? Well, could you redesign around this product or come up with a replacement? Possibly. Could you make the product yourself? Since you’re dealing with a sole source, there are doubtlessly other companies in your position. This might be an opportunity for profitable competition. And even if these options seem extreme, you still have alternatives in your attitude towards doing business with this sole source. The way you feel about doing business with them will have a direct effect on how they do business with you.

Dependency reduces your negotiating leverage. Being well prepared with a list of alternatives, however, gives you independence and helps you to negotiate with more confidence.

Prepare for Negotiating with Precedents

Fail to prepare and prepare to fail.

Remember when your moms and dads told you this before your UPSR and PMR? Remember the hours of study time you put in as a result? Chances are your level of success was proportionate to the amount of time you put in.

Diligent preparation for big challenges pays off in the long run and this holds true today, even though you’re not in school anymore. What are some of the challenges you face on your job that require preparation? That do-or-die sales presentation for a potential customer? Your annual review with your supervisor? How about negotiations with your suppliers?

Among the challenges you face on your job, few pay off as well for adequate preparation as negotiation does. So let's discuss how preparation can help you negotiate better and with more confidence.

Let’s begin with precedents. Precedents are outcomes that have happened before in similar negotiating contexts. Knowing how events turned out in the past can benchmark how you want them to turn out in the present. And in Malaysia, where customs, traditions and long-standing practices are honored, invoking precedents as examples or justification can carry weight in your negotiations.

So do some research. Be prepared with your previous numbers and theirs, if you can access them. For example, if your counterparts are asking for discounts that you can’t provide, be prepared to show them that all of your customers always get equally fair prices.

If you find you have no precedents with the counterpart you’re currently negotiating with, market value is often a good substitute. When you’re planning to negotiate for a used car, for example, reading through the classified ads and knowing how much the car you want is worth will help you ensure that you get a good deal.

Precedents aren’t limited to numbers. You can also find precedents for terms. When the Ford Foundation negotiated to begin operations in Sudan, for example, the Sudanese hesitated when the Ford Foundation’s representatives asked for tax and customs exemption. They eased up immediately, however, when they were told that the Foundation’s agreement with Egypt contained similar exemptions.

The power of the past can give you leverage in negotiations, so spend some time studying your history. Just like for your PMR, the more time you put in, the greater the payoff will be.

You vs PowerPoint: Who Speaks for Whom?

If you were born before 1980, you probably remember how much trouble it used to be to prepare a business presentation. It took hours to print your transparencies and real muscle to cart around those bulky overhead projectors. Today, however, with presentation software programs like PowerPoint, you can carry hundreds of digital presentations on a thumb drive, which plugs directly into a projector smaller than a tissue box controlled with a hand-held remote. Easy.

In fact, maybe a little too easy.

PowerPoint presentations are intended to be visual support for you, the presenter. Slides enhance your spoken message, illustrate your trends and comparisons, and create a picture of what you have to say.

When used effectively, PowerPoint helps your audience follow you. It shows them where you are and indicates transitions between ideas. It helps you to introduce new information and builds a sense of anticipation for your audience.

Studies conducted by 3M, the people who make your Post-It notes, have indicated that PowerPoint makes presentations more interesting, more entertaining, more impactful, and more persuasive. How much more? Up to 43% more.

In short, PowerPoint’s job is to make your presentation visual. Many presenters, however, use PowerPoint to do everything.

PowerPoint slides should not speak for you. You are there to speak for them. Wordy, overly-detailed slides are designed to help you remember everything you have to say, but these take the audience’s attention away from you. If you need an outline to help you remember your details, got in on a separate piece of paper and get it off your slides. Design your slides for your audience’s benefit, not for yours.

Also, when you close your presentation, saying ‘thank you’ is your job, not PowerPoint’s. When you reach your last slide, turn PowerPoint off with your remote or by pressing the letter “B” on your keyboard. Face your audience and tell them, ‘thank you.’ Wait for the applause to die down, then politely invite them to ask their questions. If you have a ‘thank you’ slide and a ‘Q&A’ slide, get them out of your presentation. ‘Thank you’ is much more sincere if it comes from you.

Remember, your business presentations are not about PowerPoint, they’re about you. And if your audience likes you, they’ll love your presentation.