Wiley Negotiating For Dummies 2nd Edition Feb 2007 ISBN 0470045221 pdf

  

Negotiating

FOR

  ‰ DUMmIES

ND EDITION

  2

by Michael C. Donaldson

Foreword by David Frohnmayer

  

President, University of Oregon

  

Negotiating

FOR

  ‰ DUMmIES

ND EDITION

  2

by Michael C. Donaldson

Foreword by David Frohnmayer

  

President, University of Oregon

  ® Negotiating For Dummies , 2nd Edition Published by Wiley Publishing, Inc.

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  About the Author

Michael C. Donaldson

  is an ex-Marine. As a 1st Lieutenant, he was selected to be Officer-In-Charge of the first Marine ground combat unit in Vietnam.

  He went on to earn his law degree from the University of California at Berkeley (Boalt Hall) where he was student body president. He raised his three lovely daughters (Michelle, Amy, and Wendy) as a single parent and is now the proud grandfather of two healthy and happy grandsons (Soul and Caden). He is an avid skier, worldwide hiker, and award-wining photographer. He com- peted in the Senior Olympics in Gymnastics, win- ning gold medals for the parallel bars in 1996, 1997, and 1998 and a silver metal for rings in 1998.

  In his successful entertainment law practice, Michael represents writers, directors, and producers. He was co-chairman of the Entertainment Section of the Beverly Hills Bar Association and is listed in

  Who’s Who of American Law. His book Clearance and Copyright is used in 50 film schools across the country.

  Michael travels extensively to universities, annual meetings, and corporate headquarters throughout the United States, Asia, and Europe to lead work- shops on the topic of negotiating. His expertise, developed over a lifetime of experience and learning, makes him a highly sought-after speaker. Michael’s expansive knowledge of negotiating coupled with his energetic and engaging style delivers powerful results to each seminar attendee.

  Michael C. Donaldson 2118 Wilshire Blvd, Suite 500 Santa Monica, California 90403-5784 info@michaelcdonaldson.com

  Speeches, Seminars, and Consulting

  Michael’s expansive knowledge of negotiating coupled with his energetic and engaging style delivers powerful results at seminars and keynote speeches.

  ⻬ 45 minute keynote speech on negotiating. ⻬ 2 ¹

  ⁄ ^{2 hour negotiating workshop ideal for a break-out session at annual meet-} ings. Includes printed hand-out. Material is tailored for each audience. ⻬ Two- and three-day intensive negotiating seminars for corporations.

  These seminars are specially designed for each corporate client after a thorough needs analysis. Ideally, the seminars last from 8:30 in the morn- ing to 9:00 p.m. with programming covering lunch sessions. The third day ends at 4:30 p.m. The participants typically have a dinner together before the evening session and are all housed in the same hotel. ⻬ Seminars: “Working with the Jerk at Work” is a fun and exciting full day or half day course that helps smooth out the noisiest of office battlegrounds.

  Free Negotiating Stuff

  As a Dummies reader, you can visit Michael’s Web site, www.michaelc donaldson.com , and get the following free materials:

  ⻬ Ten ways to become a master negotiator ⻬ Ten common negotiating mistakes ⻬ Ten-step preparation sheet to prepare you and your team for any negotiation ⻬ 20% discount on a 1-hour negotiating DVD

  Use this special code: NEGOTIATINGCHAMP

  Table of Contents

Foreword.....................................................................xix

Introduction..................................................................1

  Who Needs to Read This Book? .....................................................................1 Foolish Assumptions .......................................................................................2 About This Book...............................................................................................2 How This Book Is Organized...........................................................................3

  Part I: Preparing to Negotiate ...............................................................3 Part II: Getting Your Point Across.........................................................4 Part III: Getting Past the Glitches to Close It Up.................................4 Part IV: Conducting Cross-Cultural and Complex Negotiations .......5 Part V: The Part of Tens.........................................................................5 Icons Used in This Book..................................................................................5 Where to Go from Here....................................................................................6

Part I: Preparing to Negotiate ........................................7

Chapter 1: Negotiating for Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 When Am I Negotiating? ................................................................................10 The Six Basic Skills of Negotiating ...............................................................10 Prepare...................................................................................................11 Set goals and limits ..............................................................................13 Listen......................................................................................................13 Be clear ..................................................................................................14 Push the pause button.........................................................................17 Closing the deal ....................................................................................17 Handling All Sorts of Negotiations ...............................................................18 When negotiations get complicated ..................................................18 International negotiations ...................................................................19 Negotiations between men and women ............................................19 Negotiation on the phone and via the Internet ................................20 Chapter 2: Knowing What You Want and Preparing to Get It . . . . . . .21 Creating Your Vision ......................................................................................22 Envisioning your future .......................................................................23

  Dedication

  This book is dedicated with love and respect to: Sally Tompkins Anne Laidlaw Susie Kittleson (1941-2006)

  Author’s Acknowledgments

  I gratefully acknowledge the contribution of so many beloved people whose talent and willingness to help were indispensable: ⻬ My daughters, Michelle (and Ray) Rapko, Amy Donaldson (and Eddie), and Wendy (and John) Friess, who have taught me more than I ever wanted to know about negotiating with children. ⻬ My partner, Tim Kittleson, for his sharp eye and wise counsel. ⻬ Betty White, whose genuine enthusiasm encouraged me from the earli- est stages of the first edition all the way through this sequel edition. ⻬ An army of typists, proofers, and commenters led by Gus Avila, Katheleen Ebora, and Ryann Gooden. ⻬ The dozens and dozens of people who provided quotes, quips, informa- tion, and insights that enrich the book, including such professional writ- ers as Howard Rodman, Melinda Peterson, and Phil Proctor. James Greenwood, your donated time is particularly appreciated. ⻬ My clients, with whom and for whom I hone my skills every single day. ⻬ Mimi Schwied Donaldson, who aggressively supported me to write the book that would eventually become Negotiating For Dummies and to find a publishing home for the book. When I decided to join the For Dummies team , Mimi became coauthor of the first edition by making substantial contributions to what is now Chapter 2 and Chapter 9. She also con- tributed virtually all the material that is gathered into Chapter 17 on negotiating between men and women. ⻬ And, from beginning to end, the wonderful, supportive, and flexible staff at Wiley Publishing, Inc.: Kathy Cox, who commissioned the second edi-

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  Contents at a Glance

Foreword ....................................................................xix

Introduction .................................................................1

  

Part I: Preparing to Negotiate .......................................7

Chapter 1: Negotiating for Life..........................................................................................9 Chapter 2: Knowing What You Want and Preparing to Get It .....................................21 Chapter 3: Mapping the Opposition...............................................................................41 Chapter 4: Knowing the Marketplace ............................................................................53 Chapter 5: Setting Goals ..................................................................................................63 Chapter 6: Setting and Enforcing Limits ........................................................................73 Part II: Getting Your Point Across ................................87 Chapter 7: Listening — Really, Truly Listening ............................................................89 Chapter 8: Asking the Right Questions........................................................................103 Chapter 9: Listening to Body Language.......................................................................119 Chapter 10: Tuning In to Your Inner Voice ..................................................................141 Chapter 11: Being Crystal Clear: Telling It Like It Is...................................................151 Part III: Getting Past the Glitches to Close It Up.........173 Chapter 12: Pushing the Pause Button to Turn Off the Hot Buttons .......................175 Chapter 13: Dealing with Difficult People and Situations..........................................195 Chapter 14: Closing the Deal and Feeling Good About It ..........................................209 Chapter 15: When the Deal Just Won’t Seem to Close ...............................................235 Part IV: Conducting Cross-Cultural

and Complex Negotiations .........................................255

  Chapter 16: International Negotiating .........................................................................257 Chapter 17: Negotiating with the Opposite Sex..........................................................277 Chapter 18: Complex Negotiations...............................................................................293 Chapter 19: Blind Negotiating: Telephone and Internet ............................................313 Part V: The Part of Tens ............................................327

  Negotiating For Dummies, 2nd Edition x

  Preparing Yourself for Negotiation ..............................................................32 A is for Alert ..........................................................................................33 Dressing for success ............................................................................33 Walking through the door ...................................................................35 Leaving enough time ............................................................................36

  Defining Your Space .......................................................................................37 Negotiating on your home turf ...........................................................37 Seating with purpose ...........................................................................38 Planning the environment far in advance .........................................39

  Chapter 3: Mapping the Opposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Identifying the Person Conducting the Negotiation ..................................42 Filling Out the Information Checklist...........................................................44 Determining the Negotiator’s Level of Authority.......................................47 Finding the Negotiator’s Key Client .............................................................49 Aiming to please ...................................................................................49 Making it personal................................................................................49 Focusing on the Negotiator’s Interests........................................................51 Recognizing faults that can trip you up.............................................51 Preparing is essential, even if it’s someone you know ....................52 Chapter 4: Knowing the Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Gathering Information: The One with the Most Knowledge Wins ...........53 Browsing the Internet ..........................................................................54 Visiting the library ...............................................................................54 Shopping the competition...................................................................55 Asking questions ..................................................................................55 Reading insider reports .......................................................................56 Consulting Consumer Reports............................................................56 Playing Detective and Evaluating Info .........................................................57 Solving the mystery of value...............................................................58 Recognizing agendas: The source shades the results .....................59 Staying informed...................................................................................59 Preparing from the General to the Specific ................................................60 Time .......................................................................................................60 Quality....................................................................................................60 Quantity .................................................................................................61 Changes .................................................................................................61 Risk.........................................................................................................62 Strategic relationship...........................................................................62 Chapter 5: Setting Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Setting a Good Goal........................................................................................64

  Table of Contents

  Setting specific rather than general goals.........................................67 Setting challenging yet attainable goals ............................................68 Prioritizing your goals .........................................................................69

  Separating Long-Range Goals from Short-Range Goals .............................69 Setting the Opening Offer..............................................................................70 Breaking the Stone Tablet .............................................................................71

  Chapter 6: Setting and Enforcing Limits . . . . . . . . . . . . . . . . . . . . . . . . .73 What It Means to Set Limits ..........................................................................74 Setting Limits in Three Easy Steps...............................................................75 Know that you have other choices ....................................................75 Know what the other choices are ......................................................76 Know your “or else” .............................................................................77 Enforcing Your Limits ....................................................................................78 Write down your limits ........................................................................78 Establish your resistance point..........................................................78 Tell your team the limits......................................................................79 Never paint yourself into a corner .....................................................80 Practicing Negotiating toward a Limit.........................................................80 How to Tell the Other Party When You’re the One Walking Away...........81 The Consequences of Not Setting Limits ....................................................84 Re-examining Your Limits .............................................................................85 Sometimes, the Best Deal in Town Is No Deal at All ..................................85 Part II: Getting Your Point Across.................................87 Chapter 7: Listening — Really, Truly Listening . . . . . . . . . . . . . . . . . . .89 Two Quick and Easy Starter Tips to Better Listening ...............................90 Six Barriers to Being a Good Listener..........................................................91 The defense mechanism......................................................................91 Weak self-confidence (the butterflies)...............................................93 The energy drag....................................................................................94 Habit.......................................................................................................95 The preconception ...............................................................................96 Not expecting value in others.............................................................97 Becoming a Good Listener ............................................................................97 Clear away the clutter..........................................................................97 Take notes .............................................................................................99 Ask questions......................................................................................100 Count to three.....................................................................................100 Wake yourself up ................................................................................101 Listening Your Way up the Corporate Ladder ..........................................101

  Negotiating For Dummies, 2nd Edition xii

  Asking Good Questions: A Real Power Tool .............................................107 Avoid intimidation..............................................................................109 Ask, don’t tell ......................................................................................110 Avoid leading questions ....................................................................111 Don’t assume anything ......................................................................112 Ask open-ended questions ................................................................113 Ask again..............................................................................................114 Use your asks wisely ..........................................................................115 Accept no substitutes ........................................................................116

  Dealing with Unacceptable Responses......................................................116 Don’t tolerate the dodge ...................................................................116 Don’t accept an assertion for the answer .......................................117 Don’t allow too many pronouns .......................................................117

  Look for Evidence of Listening ...................................................................118

  Chapter 9: Listening to Body Language . . . . . . . . . . . . . . . . . . . . . . . . .119 Everybody’s Bilingual ..................................................................................120 It’s written all over your face ............................................................120 Silent signals from the rest of the body...........................................120 Remember to listen ............................................................................121 What Our Bodies Can Say ...........................................................................122 Matching your body language with your words.............................123 Reading someone else’s body language ..........................................124 Interpreting conflicting messages ....................................................124 Emphasizing with body language.....................................................126 Using Your Knowledge of Body Language in Your Next Negotiation.....127 Knowing where to stand....................................................................128 Making the first contact.....................................................................129 Showing that you’re receptive (and knowing

  if your counterpart isn’t) ...............................................................129 Seeing a change of heart....................................................................132 Ferreting out boredom.......................................................................135 Wearing your confidence on your sleeve ........................................135 Closing the deal ..................................................................................136

  Don’t Believe Everything You See ..............................................................137 Different strokes for different folks ..................................................138 Consider the context .........................................................................138 Prepare for the bluff ...........................................................................138

  Chapter 10: Tuning In to Your Inner Voice . . . . . . . . . . . . . . . . . . . . . . .141 The Origins of Your Inner Voice .................................................................142 The conscious and subconscious mind ..........................................142 Left brain vs. right brain....................................................................144 Processing information for decision making ..................................144

  Foreword

  I have known Michael Donaldson since our days in law school together. We share fundamental values about our human community, and I agree about how honest negotiation can help us realize those values. Now that I’ve reviewed the final text, it is gratifyingly obvious that this is not merely a book about techniques. It is not a book about cheap tricks. As far as I know, it is the only book on negotiating that begins with creating a personal or business mission statement that explores and then incorporates your values and beliefs. I strongly agree that people must always negotiate from an informed, deeply held belief system.

  This is also the only book on negotiating I have seen that has an entire chap- ter on listening to one’s inner voice. You must hear what your heart and your gut tell you before you can best use the other insights of this book. No practi- cal guide can overrule your inner sense of what is right and wrong.

  I am no stranger to high-stakes, complicated negotiations. My own back- ground as the Attorney General of the State of Oregon includes some hefty negotiations. I was one of the three chief negotiators representing all 50 states in a case involving some extraordinarily complicated issues of oil pric- ing. The case resulted in a settlement exceeding 4 billion dollars. At the time, it was the largest settlement in American legal history. That negotiation took place in some 15 different locations over a period of four years and involved dozens of parties.

  From this and other experiences, I know that superficial technique can be no substitute for beginning with an informed, deeply held belief system. The reason I like this book is that it makes clear how every negotiation is premised on alignments of fundamental values. We must understand our- selves and what we wish to accomplish and then develop these values and feeling with those who might seem, on the surface, to be our adversaries. In this book, you will discover how we all may be more effective in resolving the big and little negotiations that our turbulent existence shows us every day.

  Dave Frohnmayer, President, University of Oregon Attorney General, emeritus — State of Oregon (1981–1991)

  David Frohnmayer was President of the National Association of Attorneys General (1987–1988). He received that association’s Wyman award in 1987

  Table of Contents

  Knowing How to Close.................................................................................222 The good closer ..................................................................................223 The only three closing strategies you’ll ever need ........................224 Using linkage to close ........................................................................224

  Barriers to Closing .......................................................................................226 Overcoming fears ...............................................................................226 Overcoming objections......................................................................228

  Closing When It’s All in the Family.............................................................231 When the Deal Is Done ................................................................................232

  Review the process ............................................................................232 Set up systems for checking the system .........................................233 Remember to celebrate! ....................................................................234

  Chapter 15: When the Deal Just Won’t Seem to Close . . . . . . . . . . . .235 Overcoming the Glitches.............................................................................235 Dirty Tricks That Torment ..........................................................................236 A constant change of position ..........................................................236 Good cop, bad cop .............................................................................237 The invisible partner .........................................................................238 The double message ..........................................................................240 Nickel and diming...............................................................................240

  “Let’s split the difference and be done” ..........................................242 The hidden agenda.............................................................................242

  Addressing Red Flags That Come Up When It’s Time to Close ..............244 “If you accept this price, I’ll have a lot more work for you in the future”......................................................................244 “We’re in such a rush, why don’t we start without a contract?”.......................................................................245 “We’re such good friends, let’s get started right away” ................245

  Dealing with a Bad Negotiating Environment...........................................246 Managing Conflict When the Deal Won’t Close ........................................248 The Ultimate Glitch: Someone Walks Away ..............................................249

  If the other party walks away ...........................................................250 If the other party comes crawling back...........................................250 If one of your competitors walks away............................................251 If you’re the one walking away .........................................................252

  Starting All Over Again ................................................................................253

  Part IV: Conducting Cross-Cultural and Complex Negotiations..........................................255 Chapter 16: International Negotiating . . . . . . . . . . . . . . . . . . . . . . . . . .257

  Negotiating For Dummies, 2nd Edition xvi

  Preparing for a Negotiating Session with Someone from Another Culture...............................................................................262 Deciding whom to invite....................................................................263 Hiring an interpreter ..........................................................................263 How quick to the kill? ........................................................................265 If a meal is involved............................................................................266

  Listening Around the World........................................................................267 Listening in Bali ..................................................................................267 Listening in America ..........................................................................268 Listening in Japan...............................................................................268

  Speaking to Foreigners ................................................................................268 Observing Body Language ..........................................................................270 Overcoming Unique Issues in International Negotiations ......................271

  Choice of language .............................................................................272 Currency fluctuations ........................................................................272 Time differences .................................................................................273

  Closing Around the World...........................................................................274 Good ol’ U.S. of A. ...............................................................................274 Middle East..........................................................................................275 Japan ....................................................................................................275

  Chapter 17: Negotiating with the Opposite Sex . . . . . . . . . . . . . . . . . .277 Conversing Between the Sexes...................................................................277 Bridging the gap .................................................................................278 Tips for women...................................................................................278 Tips for men ........................................................................................279 Four Strategies for Women Who Want Men to Hear Them .....................280 Strategy 1: Avoid apologies ...............................................................281 Strategy 2: Be brief .............................................................................282 Strategy 3: Be direct; don’t hint........................................................283 Strategy 4: Avoid emotional displays...............................................284 Four Strategies for Men Who Want Women to Hear Them .....................285 Strategy 1: Don’t be condescending ................................................286 Strategy 2: Share before deciding.....................................................286 Strategy 3: Share something personal .............................................287 Strategy 4: Avoid emotional displays...............................................288 Negotiating with Your Spouse, Your Boss,

  or Your Most Important Customer.........................................................290 How negotiations within long-term relationships are different ...290 Tips for negotiating in long-term relationships..............................291 Special preparations ..........................................................................292

  Chapter 18: Complex Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .293 The Elements of a Complex Negotiation ...................................................294

  Table of Contents

  Dealing with multiple parties at the table .......................................300 Wading through multiple issues .......................................................300

  Putting Your Skills to Work in Complex Negotiations .............................302 Skill #1: Prepare ..................................................................................303 Skill #2: Set goals, set limits ..............................................................303 Skill #3: Listen .....................................................................................304 Skill #4: Be clear..................................................................................304 Skill #5: Push the pause button ........................................................305 Skill #6: Closing ...................................................................................306

  Building Your Team......................................................................................307 Going Back for More: The Renegotiation ..................................................308

  A scheduled renegotiation ................................................................309 An unscheduled renegotiation .........................................................309 A conditionally scheduled renegotiation ........................................310 But I like the contract and I think it’s fair .......................................311

  Chapter 19: Blind Negotiating: Telephone and Internet . . . . . . . . . . .313 Putting in the Call.........................................................................................314 Getting past the gatekeeper ..............................................................314 Leaving a message..............................................................................315 Hitting “O” ...........................................................................................316 Wording your voice mail greeting ....................................................316 Assembling the Participants for a Telephone Chat .................................317 Gathering in front of the telephonic campfire ................................317 Conferencing with your own equipment .........................................317 Hiring outside help.............................................................................318 Making the Most of Your Telephone Negotiation.....................................318 Crisp beginnings .................................................................................319 When the meeting starts ...................................................................319 Speaking with authority.....................................................................320 Questions to ask on the telephone ..................................................321 Shaking hands over the phone .........................................................322 Negotiating via E-Mail ..................................................................................322 Part V: The Part of Tens .............................................327 Chapter 20: Ten Personality Traits of Top Negotiators . . . . . . . . . . . .329 Empathy ........................................................................................................330 Respect ..........................................................................................................330 Personal Integrity.........................................................................................331 Fairness .........................................................................................................331 Patience .........................................................................................................332

  Negotiating For Dummies, 2nd Edition xviii

  Chapter 21: Ten Key Negotiations of Your Life . . . . . . . . . . . . . . . . . . .335 Asking for a Raise.........................................................................................335 Buying a Used Car ........................................................................................337 Buying Engagement and Wedding Rings ...................................................338 Planning a Wedding......................................................................................339 Buying a Home..............................................................................................340 Negotiating a Home Improvement Contract.............................................342 Negotiating a Divorce Settlement...............................................................343 Negotiating about Naptime, Curfew, Dessert,

  and Other Childhood Necessities ..........................................................344 Preparing to negotiate with your kids .............................................345 Setting limits for minors ....................................................................345 Listening to your kids ........................................................................345 Parenting with clarity.........................................................................346 Pushing the parental pause button..................................................346 Closing with kids ................................................................................346

  Choosing Medical Care for an Incapacitated Parent ...............................347 Buying Funeral Services ..............................................................................348

  Index ........................................................................349

  Negotiating For Dummies, 2nd Edition Negotiating For Dummies, 2nd Edition Negotiating For Dummies, 2nd Edition xx

  

Introduction

  elcome to Negotiating For Dummies, 2nd Edition — a new and

  W improved way to get what you want in life.

  You negotiate all day long, not just on the job but in every situation you encounter — with your boss or your employees, with your vendors or your clients, with your spouse or your kids, even with the serviceperson who comes to your house but doesn’t repair the refrigerator after all. All of these relationships call for constant negotiation. A negotiation is any communication in which you are attempting to achieve the approval, acquiescence, or action of someone else. Most people tend to think of negotiation in the business context or in connection with major purchases, such as a home or a car. But you probably spend more of your energy in one-minute life negotiations such as, “Dad, can I borrow the car?” or “Honey, will you please put the seat down?” The lessons in this book apply to both the once-in-a-lifetime, million-dollar deals and the everyday, one-minute life negotiations.

  Who Needs to Read This Book? Everyone.

  Face it, you negotiate all day long, and you can do a much better job of it. No matter how you perceive your skills today, they can be stronger tomorrow. And your progress can start with this book. Many people assume that they know a great deal about negotiating because they have done it so often, but these same people have never given a moment’s thought to the fundamentals of successful negotiating. Worse, many people believe that their lawyers are knowledgeable about negotiating simply because they are lawyers! The sad truth is that most people who negotiate for a living are untrained for that part of their endeavor.

  Those people who want to understand more about the mechanics of negotiat- ing often decide to take a course, buy a book, or read an article. But all too

  Negotiating For Dummies, 2nd Edition The mission of this book is to help you to negotiate from strength.

  Understanding the six basic skills used in every negotiation in which you are involved transforms you into a confident and successful negotiator. After you have mastered the six basic skills of negotiating and achieved this position of strength, every tough situation you encounter becomes easier to analyze and conquer. Students who have attended my seminars tell me that they use my material to get raises, to get promotions, and to close deals. They tell me how they use the course materials to improve the quality of their office life by approaching co-workers using negotiating techniques. One student wrote: “I don’t have to yell anymore.”

  Foolish Assumptions