A Successful Negotiation and its Lessons

Global Software, a large developer/marketer of specialized software, bought out the stock and thereby the main product of SuperTech Software. That main product was not fully developed, but promised great returns for Global, because the timing was right to take advantage of new government regs requiring such software. Global budgeted an extra ten per cent beyond the buy-out price to purchase training for its software people to learn enough about the product to finish developing it to something marketable.

Then they approached Cindy, the project manager and a principal developer at the former SuperTech, seeking the training they needed. They offered the budgeted 10%, but had a list of training tasks, although with missing parts. Cindy was confident that, personally and with colleagues she would organize, she could deliver the training. But not for the ten percent. What could she do?

Cindy’s business coach spent an hour or two with her persuading Cindy she could conduct an effective negotiation. She also got a few pointers from a professional negotiator. Then she approached Global’s project manager, Charles. She set a date to visit with him, and prepared a spreadsheet showing all the tasks that would be needed, reasonable prices for each task, and the total, which was about three times the budgeted 10%.

On the appointed day, and in several later phone calls, Cindy went over the details of the spreadsheet with Charles, explaining the amount of time required for each task, why the prices were in line with industry standards. She also explained how Global would waste its large investment if it went cheap on the tech transfer training, perhaps never completing the project, or completing it after the window of sales opportunity closed. He countered by explaining how they had set up a fixed budget and could not change it.

Finally, with persistence she convinced Charles, Global’s project manager. He in turn went to his boss and his boss’s boss to seek additional investment in training, using the materials Cindy provided. After hemming and hawing, the higher managers agreed, and Global issued a contract to Cindy, one that would assure her and her colleagues months of remunerative and interesting work.

This story—the names have been changed—illustrates several points about successful negotiating. The first is how important preparation is. The detailed spreadsheet greatly helped Cindy make her points. Doing it in advance enabled her to take the time to do it right.

The second is the use of outside, objective data. Here, that data were the prices for the various tasks, compared to typical pricing for similar training tasks.

Point three is that Cindy separated out any personal emotions she had initially about Global apparently trying to cheat her by offering a lowball contract, and using Charles as a battering ram.

The fourth point is Cindy stuck to her guns without being personally obnoxious or angry, but instead remaining informative. Eventually this negotiation worked out successfully.

That SOB Has To Give Up His Ace Before I’ll Talk With Him.

The recent Iraq Study Group report and the various reactions to it shine a light on a frequent problem in all kinds of negotiation and dispute resolution.

The Study Group recommended that the US and Israel, with slightly different interests, both begin talks with Iran and Syria. The idea for the US is to find a way to extricate itself from Iraq. From what I can tell, Pres. Bush refuses to speak with Iran until and unless Iran in advance gives up its apparent vision of having nuclear weapons.

I am not going to tell the world’s leaders how to solve the Iraq and Israel/Palestine problems. I don’t have all the facts. Still, as I have said, this position shines light on a stance people sometimes take in negotiating. Simply stated, “I will not sit down with that SOB unless he first [gives up his strongest negotiating card, his ace].” Well, you know he is not going to, and things will remain at impasse, likely with continual provocation back and forth.

What’s going on? Some folks think that a negotiating position that strong will pressure the other person to give up his ace and back down. Not likely.

For some folks it isn’t a tactic. They really are that stubborn, and don’t care whether the other person gives up his ace, as long as they don’t have to change their stated position that demands that the other person does give up his ace. That is, it is pure stubbornness, a/k/a “principal.” Things will remain at an impasse with escalating hostility a long time. Just the same as if it were just a negotiating tactic.

How does that impasse get broken down and a deal get done? Maybe it can’t be. Maybe both sides have to be so bloodied they can no longer stand, and the people who eventually take over for them are more reasonable.

There is another way. The person with the unmeetable demand can permit someone to negotiate for him (or her) without apparent authority. This ‘back channel’ can open a door. True, at the start there will be little if any trust on either side. So, why negotiate with someone you don’t trust?

The short answer is if you don’t you will never resolve the issues, and may spend years in hostile disagreement, with each side taking various types of hits. Or break a deal that might be good for both sides.

The longer answer is trust can be built up with a series of small concessions, sometimes as little as the shape of the bargaining table. (Don’t laugh. The negotiations that ended the Viet Nam War took several years and in the beginning focused on that subject.)

The gradual process can help each side understand the other and learn what makes the other tick, partly based on carrying through with promises and on operating in apparent good faith. Note that good faith is not the same as caving in. It means honesty and a degree of candor.

Why negotiate with your enemy? Because, again, if you don’t you will remain at war. That may be as small as continuing exchanges of neighborhood nastiness like throwing garbage over the fence at 2 a.m. or making unnecessary noise. Of course, it can be as large as confrontations of thousands or millions of heavily armed troops. Or something in between. It always means no-one wins. In other words, the alternative to talking with your enemy stinks.

Negotiation 101: Consider sitting down to talk with your sworn enemy or someone you don’t trust a danged bit, because if you don’t the alternative stinks.