May 19, 2015 Negotiation Workshop

Professor Medvec
Traps:

Negotiating wrong deal negotiating what is standard or typical rather than

putting right issues on the table
Failing to establish an ambitious goal for the negotiation
Focusing primarily on highly quantified issues
Telling no story or the wrong story in a negotiation
Making single offers rather than employing a multiple offer approach

Generating the right issues:

Do not talk about single issue negotiations Talk about one thing will always
become contentious
Multiple issues allow us to trade off differences

I. Putting the right issues on the table

Objectives what do I want to get short & long term with the other side.
Example of employment contract negotiation. Standard & typical are salary,
bonus. Non-standard include opportunities for you to get promoted, develop:
o Project location, type
o Promotion
o Vacation days
Negotiable issues For every single objective, you should have multiple
negotiable issues
If you have differentiation in your business high quality, design, then
negotiate on those qualities negotiate on warranty on product, negotiate on
customization. Put differentiators into differentiation

II. Failing to establish ambitious goals

Professionals are used to expecting smth so they dont argue for strong
enough employment
Evaluate the weakness of the other sides BATNA thats how you should
evaluate your goal. Your goal is based on the weakness of the other
sides BATNA
Reservation point your bottomline determine largely based by your BATNA
the pt at which you would walk away rather than taking the deal. Your
reservation pt and your goal should be uncorrelated. Goal & Reservation
should be completely independent of each other.
Look for 3 houses that you are indifferent between, maybe at different
pricepoints. Then only then offer. You want to build your BATNA

Nothing about the house should be discussed pre-contract: furnished,

foundation
o Inspection report: Point out all the flaws post-contract and go in with a
weaker seller to get those resolved
Be concerned with overestimating the other sides BATNA rather than
underestimating their BATNA
o

III. Focusing primarily on highly quantified issues

Create a way to score all issues. The goal is to quantify all issues, generally in
terms of dollars
Prioritize issues
Fractionate larger issues into smaller ones If you negotiate too big a bucket,
you will likely clash
o Nanny negotiate vacation days. Nanny cares about how many days.
Medvec cares about which days
o Breaks down into 2 issues: how many days and who gets to pick the
days. Nanny still gets her days and Medvec still gets control
Assign relative weights
Check for indifference between outcomes with the same dollar value
Make sure your scoring system is dynamic not static
Use scoring system to determine reservation price

IV. Telling no story or wrong story in a negotiation

Whats the message I want to convey when I walk out

Look for issues that are not as important to you but important to other side
(story telling issues) you can offer this to them
Trade off issues: Not important to other side, important to you Put this on
the table to bounce against contentious issues so you can get some of your
trade off issues since contentious issues are important to them (important to
other side, important to you)
Important to other side
Not important to you (story telling
issues)
Not important to other side
Not important to you

Important to other side

Important to you (contentious issues)
Not important to other side
Important to you (trade off issues)

V. Use single offer instead of multiple offers

We always want to go FIRST so you can anchor negotiation Going first
will give you big anchoring advantage THOSE WHO SPEAK FIRST WIN
Make the 1st offer to define the fair territory

 Also has advantage with relationship enhancing 2 nd person needs to worry

about how to respond and not being too negative with 1 st offer
The right rationale:
o Offer focus on them, not on me. Not about my cost, my risk, margin I
need to make. Their needs, their priorities, their interests
o Framing the offer correctly: Remember ppl are risk averse in doman of
gains & risk seeing in the domain of losses
o When you want to move the other side off of the status quo, highlight
losses not gains. If you dont do this, you will lose risks,
vulnerabilities, competitive threats
o When I want to maintain status quo, I use gains words
o When you lead change, when youre leading a proactive change and
not crisis: You dont want to talk about gains, you want to highlight
losses Need to create sense of urgency
o People dont change for need to gain, they change to avoid
losses
If the other side is very heavy, you can control the space Put offers on the
wall
If the other people go first, dont talk about that offer further because it
becomes more embedded. Instead offer multiple equivalent simultaneous
counter offers
Plan to concede on story telling issues to make the other side happy, feel like
they are winning. LEAVE YOURSELF ROOM TO CONCEDE
Multiple equivalent simultaneous options Give 3 offers rather than one.
Lets meet, here are the 3 options eliminates the option of not meeting. Im
not talking about were not meeting or not, were talking about
when were going to meet?
Same 3 options look wildly different to the other side but are actually the
same to me
Multiple options will get people to start comparing offers and you can see
what matters to them. Single offer doesnt give you that ability. Understand
what theyre willing to give up to get others
Advantages of Making Multiple Offers Simultaneously:

Anchor the negotiation

Collect information from the other side
Allows you to be aggressive signal cooperation through the fact that you are
offering multiple options
Gather information about the other sides relative priorities
Test what the other side is telling you
Allows you to be more consistent
Make concessions that do not cost you anything
Highlight your own value-add

Vary issues that you want to draw peoples attention to, stay constant for
issues you dont want to draw attention to. Vary issues in the story-telling
quadrants. Vary 5 issues. You want the offer to tell compelling story and you
cant do that if youre varying too many issues. Deliver a big story that
highlights all the varies.

Five Fs

First
Focus on THEM
Frame it correctly
Be Flexible Leave yourself room to concede, Use multiple equivalent
simultaneous offers
No feeble offers Could you take smth off, could you help me out, could you
give me better shelving. Ask for what you want. Be specific. Feeble offers
result in frustration on your side.