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Let's Play Hardball. . . or Let's Not. . .Yet. . .

Posted by admin VIP     0 Comment(s)    Add a Comment  comment-icon.png
03/01/2012 06:52 PM

Sorry for the "bait-and-switch."  I was excited to start my series of blogs and weekly email list talking about something that I think gets most people going, Hardball Tactics.  We love them when we are forced to use them, but loathe the negotiator that uses them as a default.  Alas, as I started the campaign I realized that while readers may be familiar with basic negotiation skills they may not identify the language I use.  So to ensure the best results from my tips, I am reminded that starting at the very beginning is "a very good place to start." Thus, I am going to do a few weeks of basic negotiation tips and language before getting to the "super exciting stuff."  Milk before Meat, but I do prefer meat, so hang on there hungry lion.

Let's start with an overview of a "basic" negotiation.  Many refer to this negotiation as a "Dance".  You have two parties/sides that possibly have something the other wants.  Generally one-side starts with an offer.  If the second side agrees here there is no negotiation of course, so the other side makes his/her offer.  If the first side accepts the second's offer it is still a negotiation, just not a "normal" one.   A "normal" negotiation will have the parties go back and forth a few times until they reach an agreement; they "dance".  So using a childhood scenario, it basically looks like this:

Joe: Betty, I'll give you $1 for your candy bar.

Betty: How about $5?

Joe: I'll do $2.

Betty: No way, at least give me $4

Joe: That is a lot, I don't know now. . . how about $2.50?

Betty:  Not enough.  $3.50?

Joe: $3, final offer.

Betty: Done! Enjoy.

Simplistic, they "meet in the middle".  Great negotiating and compromising you two!  Of course we like to try and outsmart others so we think about ways to "win."  There has even been scientific research by grown-ups to study negotiations in order for parties to "win."  Some basics, that we likely all intuitively understand and just waited for someone to confirm and label them, for this "Dance" are as follows:  

1. The parties start from positions (their "side") and move those positions until they agree ("concessions");

2. the size of the concession is related to time - each concession tends to be about half the size of the concession that precedes it and it takes about twice as long for it to be made;

3. There are about 2 or 3 concessions made by each party; and

4. As such, the dance ends in a "successful" negotiation ending about the midpoint between the first two reasonable offers.

Joe's "Position" was the candy bar is worth $1, Betty's was that it was worth $5. (Today Joe is about right through market valuation, though kids have a different concept of value, I am sure my three year old would think Betty got a good value)  

Joe and Betty's first concessions were each $1, Joe from $1 to $2; Betty from $5 to $4.

The second concession for both was $0.50, half.

The third concession was another $0.50 to the final end point, which was the mid-point, of $3.  

So the basics here: Parties start from their positions, they make 2 or 3 concessions with each concession being about half the size of the previous concession and taking about twice as long to be offered, and the agreement point is about the mid-point.  I know, I know, I hear you, "But if both sides know this, then one side can just make a different offer and get a better price."  This week is about getting on the boat, next week we will pull-up anchor and head for the sea.

Until Next Time,

Gary

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