hello okay today we are going to talk about negotiation tips let me just share my screen here get this going okay so 30 negotiation tips but let me say that this is a lecture about influence and persuasion it's labeled negotiation tips but when you're involved in mediation or negotiation it's voluntary the other side whether or not they will make an agreement is voluntary purely voluntary on their part so you've got to be influential and persuasive so that's what these tips speak to it's also of course involved in arbitration because while some arbitration is binding many people go to an arbitration that is not binding in other words it's more of an advisory opinion so in the end even if you get that outside opinion from the arbitrator in the end you're still going to have to use that opinion in order to influence the other side persuade the other side so hopefully all of these tips are applicable to all fields of adr mediation negotiation and arbitration so these are 30 tips be careful about making first offers i've probably told this edison story in some of these other videotapes because this is such an important story about making first offers so thomas edison the famous inventor he invented something in the early 1920s that was going to be extremely helpful to people working on wall street so he went to a wall street firm and he was negotiating with the head of the wall street firm edison wanted to get five thousand dollars for his invention which was a huge amount of money in the early 1920s he walked in and the ceo i'll give you forty thousand dollars for it edison said well i guess that sounds fair deal okay so put that aside you just got forty thousand dollars for the invention what if edison had walked into the room and said mr ceo this is my great invention i'm hoping to get five thousand dollars for it and the ceo would say you know what i think that sounds fair i will give you five thousand dollars so the outcomes of these two negotiations are entirely dependent upon who made the first offer right so making a first offer can be very very dangerous if you're not aware of the other party's bottom line or where they're willing to go be very careful about making that first offer i would feel comfortable making a first offer only if i had a tremendous amount of objective criteria right outside independent third-party sort sort of data and information that can lend credibility to the offer that i'm making if i have no idea what the other side's willing to do i'm going to be very hesitant to make that first offer and also if i walked in and i were edison and the ceo said edison i love your invention i'll give you forty thousand dollars i would say huh that's an interesting place to start where did you get your forty thousand dollars then i would try to negotiate up from there even though in my mind i'm saying wow i only wanted five thousand and he's already offering me forty thousand this is going to be an interesting negotiation so be very careful about making those first offers when they make an offer be prepared to flinch and ask where did you get that number so if um if i walk in and the ceo says edison i'll give you forty thousand dollars and i flinch like i'm disappointed wow forty thousand dollars where did you get that number he might say to himself wow i need to pay edison a lot more right and be willing to go higher so if you the other parties first offer essentially anchors that negotiation at forty thousand dollars if i if i need to erase that anchor what i call erasing the anchor i'm gonna have to do something pretty dramatic like flinching or letting them know that's not gonna work if i say forty thousand dollars that's that's not going to work that's erasing it when they make an offer do be prepared to flinch and ask them where did you get that number make them justify the number that they're throwing out don't necessarily accept their first offer people want to dance in a negotiation so usually the first number that they throw out is not going to be their bottom line although i did do some it says there except for a state court judge i did some training for a group of state court judges and when i explained this idea about first offers one of the judges who was a senior judge of his state court system said i don't play that game i don't like the game of the dance of a negotiation back and forth back and forth until you finally meet in the middle of some extreme offers encounter offers he said i tell people what i want i justify it and they either give it to me or they or they don't he said i run all the courthouses in my state if i need 10 court houses i don't go to the legislature and tell them i need 15 hoping to get 10. i tell them i need 10 not 9 not 11. and let me explain why i need ten and then i stop there so uh everybody has a different uh viewpoint on this i think that most people do want to dance many people will one will start low the other will start high they'll do a dance and come out somewhere in the middle and they expect that that dance will take place use objective criteria i always talk about objective criteria if you're buying a used car you go to the blue book value of the car the reason you do that is because you want objective criteria outside independent third-party sources of information that you can bring into the negotiation to lend credibility to what's being thrown around if you're buying a home you go to the comp values right the comps the values of comparable homes in the immediate area that's the objective criteria if i'm selling my house i want top dollar you're buying a house you want to pay as little as possible let's see what these outside parties are are paying or receiving for the houses that are comparable to mine in the immediate area that will tell us more than anything else about what i should be paid for my house the three w's of negotiation why what if and where did you get that number these three tools can go a long way right if you ask in a negotiation just constantly ask them why you're just trying to get more information you don't have to say why why why like a two-year-old but you can ask in different ways could you talk more about that could you tell me more about that just get them to open up and explain their position why they think it's justified what it is they really want what their real needs are their underlying interests ask them why in a different many different ways and you'll continue to get more and more information which is the lifeblood of any mediation or negotiation or arbitration what if is a trial balloon what if we do this uh it's sometimes called a trial balloon and again it's trying to ask the other side to give you information you have to make it clear that you're not making an offer by saying what if because if i say what if we do xyz and the other party says riley i love it it's a deal then i've locked myself into i just made an offer and they've accepted it so i may have sort of locked myself into a deal if you're going to do trial balloons and ask people to give you information by asking what if we do this you have to make it clear to them you're just brainstorming you're not making an offer you're just talking about the issues then you explore it through these what-if questions and where did you get that number oftentimes when people do throw out a number or an offer make them justify why they think it's reasonable why they think it's fair so when they throw that out say where did you get that why is that reasonable and fair make them justify it and hopefully they will have good reasoning and good objective criteria to convince you that it's reasonable and fair the three ease of ego emotion and escalation ego plus emotion leads to escalation and in any negotiation you're dealing with human beings so oftentimes people's egos are involved very quickly emotion becomes involved and this can very easily lead to an out-of-control situation escalation impasse deadlock be mindful of that um and i i you know i think that one of the it's you know one of the i don't i don't know if i'd necessarily call it a secret but really one of the best things you can do when you're negotiating is to have behavior such that you just keep the conversation going so if you can keep the other side from becoming defensive and you can keep yourself from becoming defensive then the conversation will continue going once the other side sort of becomes defensive and puts up sort of a a force field the negotiation will take an entirely different turn it'll go on a completely different trajectory one that might be very negative and you might not come to a conclusion conclusion or any sort of a deal so it's constantly trying to behave in a reasonable way without getting angry without rolling your eyes and so forth so that you can just continue to talk and you can say along the way if it's not the deal that you need this doesn't quite work it's not we're not quite where we need to be in order for me to agree but if you keep having that kind of tone and body language the the conversation will continue onward and you can eventually get to an agreement if you let ego and emotion take over it can quickly get out of spin out of control and lead to impasse or deadlock and no agreement explore those underlying interests not positions you've probably heard this several times in my different lectures the famous orange story right the two siblings who are arguing over the last orange in the refrigerator their position is i want the orange i want the orange finally one parent comes in says you both want the orange i'm going to cut it in half give you each half into the orange then we come to find out that one of the siblings is cooking so all she wanted was the peel of the orange the other sibling is hungry all she wanted was the fruit of the orange so roger fisher in the book getting to yes the famous book getting it to yes tells us if you'd only unexplored underlying interests to find out what they really want then the outcome could have been one sister gets the entire appeal the other sibling gets the entire fruit of the orange so if you explore those underlying interests sometimes each party can get more of what they truly want negotiating in person um murabian or murabian who's retired from ucla did experiments in the 1980s to try to assemble what all is involved in communication right so some of you who studied communication theory have probably read that in the overall pie making up communication it's made up of words and voice and body language and murabian even sort of argues that it's just seven percent of the communicate overall communicated message comes from words uh 38 comes from your voice and tone and so forth and fully 55 of the message comes from your body language and uh i many experiments have been done to see if this is the case i think depending on what the topic is some of it might be more some of the message a greater proportion of the message might be uh words than seven percent but at any rate i do think that it is made up of those three components words and voice and body language so you want to try to have a mode of communication where you can get all three of those and unfortunately we're in a day we're in a time when a lot of people communicate by text or by email or other ways where they only see the words and there's a very limited amount of information that is conveyed through just the words you can go you can get on the telephone and get the words and the voice so that's a little bit better it's best of all if you can see all three the words and the voice and the body language you can get that through skype or zoom but you're still not going to get as much information as you would get in person so try to be in person if you can't be in person then be on the telephone the the worst situation is being trying to negotiate through email or text and the literature suggests that those kinds of negotiations that involve strictly words are much more likely to very quickly come to an impasse or a deadlock ask for more than you expect to get shoot for the moon it's got to be a credible number um but oftentimes if you do shoot for the moon you'll do much better than you think you otherwise would do concessions try to make them very small try to make them rare i wouldn't necessarily offer the first concession some people think that it's good that it builds rapport and trust and so forth if you can go ahead and make that first concept concession i don't know if i'd uh advocate for that this idea of if then so if somebody wants when you when you walk into a negotiation situation prepare yourself with a bunch of concessions in other words a list of small things that you can concede on and large things that you can concede on also a list of small things that you want from the other side and a list of large things that you want from the other side then when the topic of concession comes up if they say can you give me this and it's a small thing you can say well if i give you that then will you give me such and such and you have a whole list of things if they ask for a small thing you have a whole list of small things that you want in return if they ask for a large concession you have a whole list of large concessions that you want in return don't give up anything unless you give up unless you get something in return and be patient 80 of concessions are made in the last 20 of the negotiation according to the literature ask a lot of open-ended questions uh and i did a whole lecture on on open-ended questions you're asking basically you know things that they can't answer with a yes or no or with one word right if you're saying why they then have to give you a longer explanation that gives up a lot of information which is the life blood of the negotiation of the mediation so constantly ask open questions such as why and tell me more use the power of silence many people don't like silence they fill that void with just talking in which case they're just giving out information experiment with having pauses and delays while you're having a conversation with people you will be amazed at how quickly they will jump in and start talking because people are uncomfortable with silence experiment with this it's it's it's it's a very powerful tool in negotiation hear the other side out before you tell your story not only can you uh get a lot more information that way and and probably make a better sort of offer by hearing what they want but this last idea of people will not listen to you until they feel they have been fully heard and understood without judgment that idea there's tremendous research that supports that simply put it's very practical to listen to them first and to let them know that you've fully heard them fully understand them and you're not judging them only then will they listen to you and really uh consider what you are saying listen twice as much as you talk the person that controls the negotiation is the person listening and not giving information be that person i know that that's not the person who wins in negotiation in the movies or in books but those are the people who win mediations and negotiations in real life when i say win a lot of people don't like the word win but i mean a negotiation remediation where you get what you want if they get angry or emotional don't reciprocate it might be just strategic on their part but again uh peop because of ego and emotion people oftentimes if the other side is being angry or emotional that then will make your side become angry and emotional and it will quickly escalate so realize that that might be pure strategy on their part and don't react to it taking a lot of breaks even a quick restroom break a quick walk a quick phone call when you get back into the room the emotion the emotion will be at a much lower temperature figure out what information to acquire and what to protect that's the negotiator's dilemma the negotiator's dilemma is what information should i reveal to the other side and when should i reveal it what should i reveal and when should i reveal it you have to be very strategic do you want them to know certain things and there are going to be certain questions that they ask of you that are obvious questions that they're going to ask you you have to anticipate that those questions will come down the pike and you have to figure out in advance how you will answer them if you don't when the question comes to you you will look like a deer caught in the headlights of a car and sometimes that alone gives them the answer that they're looking for be prepared for those questions then i say but you don't know what you don't know so ask why a lot again asking just the simple idea of why is this tell me more that oftentimes opens up avenues of exploration that you didn't even know existed and that's because you don't know what you don't know you don't know what's important unless you start having those very open-ended conversations detective columbo i think was one of the world's greatest negotiators if you don't know who that is just uh go to youtube and look at a couple of of clips of detective columba colombo right he was the detective who seemed to be bumbling and didn't know what he was doing and in that way he was not threatening to the other side and they would end up opening up and giving him all sorts of information so herb cohen wrote a wonderful book called you can negotiate anything many years ago and he at one point said the two most helpful words in a negotiation are ha and wha meaning like if you are this person who doesn't have all the answers and who's just trying to explore and get information that will be very powerful in the negotiation the other side will end up giving you information that will enable both parties to make a better deal make trades to create value and the question that you constantly want to ask in order to do that is what cost me uh very little that the other side values greatly right if i can give you something that cost me very little that you value greatly we've just literally enlarged the pie now you you want to be very careful about that information because if they know if they know that it costs you very little right they're going to want it and then give you very little in return because right you expect very little so again you don't want to be taken advantage of by letting the other side know that it costs you very little but you're trying to find out the information is this very valuable to the other side if it is and you know yourself that it's going to cost you very little to provide that to the other side it's a very helpful situation in a negotiation that's extremely helpful in information and knowledge that you can use to your advantage to get a better deal to create value and so that's the question you constantly want to be asking what cost me very little that the other side values greatly it's not always about the money it might be about apology or respect or setting a certain precedent there's a story that i read in a negotiation book i don't know if it's true it might be sort of one of these apocryphal stories but i just think it's a wonderful story to learn as a learning tool it was a woman who was said to live in a home where they were building a large um some sort of large complex in the immediate area and they she was the holdout she was the last home in the area they needed her home in order to finish their very large complex it was a mall or something like that and she wouldn't budge they would knock on her door and offer her twice the value the twice the uh the the value of the home that it was worth three times the value of the home that it was worth finally you had a real negotiator knock on the door and said look you know why won't you sell your home and she finally admitted that the situation was she had several pets that she had buried in the backyard she was an elderly woman she was very emotionally attached to these pets and by golly she was not going to move her pets who were buried in the backyard and the person said look there's a wonderful pet cemetery in our town and i'm happy to move your pets to this pet cemetery and get them some amazing burials and then we'll buy your house and that's you know that's in in the end that resolved her problem it wasn't an issue of money that ended up doing doing that ended up costing the developer a lot less than two or three times the value of her home but they finally figured out what it was that she really wanted and it wasn't necessarily something that could be solved with money alone be very careful of the tone right your voice your body your words hear the music behind their words they're giving you so much information besides just their words be very careful about using humor a lot of people try to use humor in negotiation and mediation they think it'll kind of soften up the other side if you can be sort of jolly funny person you have to be very careful with it because oftentimes these are professional situations where the other side can even be offended if you try to be funny so all i'm saying is be very careful i have seen people try to be funny and fall flat uh the situation falls flat because it's just kind of uncalled for so be very careful about humor slow down the pace of the negotiation don't be quick to agree or disagree it's very easy to make mistakes the winner's curse is right if i'm buying a bike i go up to somebody and i say you're selling your bike i'll tell you what i'll give you fifty dollars for that bike because i i think it looks like it's probably worth more than fifty dollars and the person says you'll give me 50 deal right i've just won the negotiation but as i'm walking away i'm probably saying wow they were so easy to give me the 50 the bike for 50 what's wrong with this bike it's clearly not worth fifty dollars that is the winner's curse be very careful slow down the pace of the negotiation uh and don't be quick to agree or disagree try to avoid raising their defenses i talked about this earlier i think it's central and key to a negotiation if you can speak in a way and interact in a way and have a dialogue that doesn't raise the defenses of the other side if you can just keep that conversation going you're much more likely to come to an agreement if you do things that irritate the other side and those things are you know get angry get mad roll your eyes be discourteous all sorts of things that might bring ego and emotion into the negotiation it will quickly bring the negotiation to a standstill there'll be a deadlock there'll be an impasse it'll go along a trajectory that's very negative try to have behavior such that you're not raising the defenses of the other side and don't allow your own defenses to be raised once those defenses are raised on either side the negotiation is probably heading headed toward a dead end consider writing a first draft draft of the contract remember that in law if if the contract eventually has to go to a court the judge is going to rule construe the con contract against the drafter of the contract so i would advise people if you're coming to an agreement write the contract together at least if it goes to court it won't be construed against you alone you can say we drafted this together uh i highly recommend that and i highly recommend running that contract by hired counsel to make sure that a lawyer might be prepared to to find difficulties with it that others might not find set aside difficult issues until the end when you're negotiating i don't know some people will say tackle those tough difficult issues first get them out of the way i advocate doing smaller things that are much easier to come to an agreement on because then you can build rapport and trust and get people invested uh in in the process they've dedicated time and they'll be more likely to hang in there when you get to those more difficult issues down the road mood is very important the idea of motion emotional contagion there have been very interesting studies on if people are in a very bad mood that will quickly spread to other people who are in the room if they're in a good upbeat positive mood that too will spread just like electricity through wires to the other people in the room it's called emotional contagion it's very real and it can make an impact on a negotiation if you're negotiating in a restaurant or golfing or at a sporting event or a baseball game that will create a certain mood it'll be a very different negotiation than if you're in a closed off room in a business office uh if you have uh food there do you want some you know some soda pop and some cookies there that'll be make for a very different negotiation i remember hearing a story about some people who were negotiating over a 10-day period every day there were hot chocolate chip cookies on the table every day to help facilitate the discussions well on the last day of the negotiation there were no hot cookies no warm cookies people walked in and they were furious they couldn't they almost couldn't work because the cookies weren't there this is very it seems like small stuff but it's not it's very real as for the alcohol i don't know you can use your own judgment some people think that it's inappropriate to have alcohol if there's a mediation or a negotiation going on obviously it can play a role in making things no more convivial or whatever try not to negotiate tired hungry or angry warren christopher the former secretary of state was famous for saying that he felt that he was at a great disadvantage in negotiations because he could go into into a room and tell the other side look we're not going to leave here until we have a deal and he was somebody who he said didn't you know he could go for a long time without eating or sleeping and so he felt it was tremendously advantageous to him to wear the literally physically wear the other side down make them hungry and tired and they'd come to an agreement it's something to be mindful of don't offer to split the difference if i'm at 10 and you're at 20. if you're at 20 and you say you offer to split the difference and you say how about if we say 15 i can flinch and go 15 i can't go up to 15 but i might be able to go to 11. right so the new bargaining range then is between 11 and 15 and will come come somewhere in in that part in somewhere in the midst of that now and that's because you offered to split the difference if i offered to split the difference you might do the same thing i'm at 10 you're 20 and i say well i can't go to 20 but i could go to 15. and you'll flinch and say i can't go to 15 but i could go to 19 right so the new negotiation range the bargaining range is between 15 and 19. so i recommend don't be the person to offer to split the difference because the other party might just try to split that again okay test their bottom line you say you can only spend a thousand dollars but can you pay 1200 if the computer has more memory constantly test that bottom line don't just assume that they if even if they say it's their bottom line that it really is their bottom line and in generating options is it possible to offer the other side several different options all of which you like very well it's nice for the other side to be able to have choice and they're saying wow i have all these choices well if you presented them and you're agreeable agreeable to all of them you don't mind whatever choice they make so think about having several different options that are agreeable to you that you can throw out to the other side so that you're giving them a choice and we'll end on this build a relationship michael wheeler who's at harvard business school wrote a book on negotiation and there was a wonderful story in there of a man who wanted to purchase a home on an island off of i think it was off of massachusetts there was a small little island uh off the coast and there was a home there and he sort of eyed this home that he loved uh looking at as he drove by and he wrote a postcard uh to the residence every year just saying i drive by i drive by you're home and see it off the coast here uh almost every day it looks great and so every year this person wrote a card to the to the woman who lived in this home well uh in the end she needed to sell her home and so this man who was interested in the home found out about it and made an offer and it was far under he could only afford something that was far under the market rate so her attorney wrote him and said there's no way that my client's going to sell you this home it's far under the market rate well then he got a letter a couple days later and said i actually i you know i told my client about this this is the woman who owned the home and she figured out that it was this man who had written her a card every year for 10 years talking about how much she loved the home and this elderly woman said i don't really care about the price this guy loves my home he's been eyeing it for 10 years and we're going to sell it to him so even a sort of superficial non-substantive relationship like that ultimately had a tremendous impact on this woman's willingness to make this deal so think about that uh when you can even make more substantive real uh relationships with people that will then eventually help you in making a better deal so that's all for today i will see you soon