When it comes to negotiations, many people shy away from the entire process because of the perception that you have to be sneaky and dishonest in order to get what you really want. Of course, that is not my position at all, nor is it the position of most of the other experts in the field of what is known as Win Win negotiations. The goal of a Win Win outcome is for both sides to come away feeling good about the final result, and if you feel you have been cheated and lied to, obviously that is not a Win Win result.
I firmly believe that a successful, Win Win negotiation requires a high level of integrity and honesty. However, is it possible to be too honest? This is kind of a tricky question. Maybe a better way to ask it is, “Is it possible to reveal too much information, too soon?” I would say the answer to that question is definitely, “Yes!” Without in any way meaning to imply that it is good to lie or practice deception, I firmly believe that if you are “too honest” too soon, you will hurt your chances to achieve an outcome that serves your best interests.
A good negotiator should have a high level of integrity, but he should also proceed with a great amount of wisdom. Negotiating is a process that involves several valuable steps. In the Preparation stage you should carefully think through your needs, goals, limits, and concession options. You should also collect as much information as you can about the other side’s position in these areas. In the Discussion process, both sides carefully lay out the pertinent information about these issues as the need arises. It is here that the question of too much openness comes into play. If you are committed to a Win Win outcome, then you will want to treat the other side fairly. However, you must also take precautions to make sure you are treated fairly, too.
During the Discussion phase, both sides are still collecting information to help them determine exactly what a truly fair outcome might be. After all, it is only human nature to want to get the most while giving up the least. The best Win Win outcome would be one that tries to balance both sides of this equation so that each side is giving something valuable to the other side in order to achieve their goals. However, you never want to give up more than you have to. The Discussion stage, and on into the next stage – the Bargaining stage – will help you define where that balance is going to be.
Some people are uncomfortable with this process of probing and sharing back and forth, possibly because they fear they are going to somehow be taken advantage of because they lack the skill or experience to handle it. At any rate, rather than patiently allow the process to unfold, they would rather “put all the cards on the table” at the very beginning. In an attempt to be open and honest (therefore, actually bypassing the true negotiation process!), they will reveal all their goals, their resources – even their bottom line – all at once. By giving the other side all this free information, you have provided them with a tremendous advantage. They now have a very good idea of how urgent you are feeling to close this deal, and how much you would be willing to give up to make it happen. They no longer have to consider their options and try to find a balanced solution.
For instance, suppose you say at the very beginning, “Look, I just want to lay all my cards on the table so I will be completely honest with you. I desperately need this piece of property in order to add a new wing and parking area for my growing business. If we can’t expand, we will have to start turning away business and it will cost us thousands of dollars a week. So, my research tells me the fair market value of your acreage is approximately $150,000. But, like I said, I really urgently need this parcel, so, if I have to, I will cash in my IRA and sell my Harley so I can scrape together as much as $200,000 in order to get this deal done.”
Okay, all that stuff may be true, but does the other side need to know that now? Or ever? What if they came to the negotiation thinking, “Wow, I can’t believe somebody wants to buy this property, especially now. I have three kids in college and I was about ready to sell it anyway. I would love to get $150,000 – the appraised value. But I would be glad to let it go for $130,000 if I had to, just to get some resources to cover the expense that are coming due for college in the next 3 months. That won’t leave very much left over but I could maybe remodel the downstairs of our house.”
So, care to guess how much it would cost you if you laid all your cards out on the table too soon? How about somewhere between $20,000 to $70,000?!! All the other side has to say is, “Well, I really hate to give up this parcel. It has been in my family for generations. But, I can see that you really need it, so if you really are willing to offer $200,000 – which is very generous of you – I guess we have a deal.”
Would you have both been happy at $150,000? Absolutely. Would you be miserable to find out later you overspent by $50,000? Absolutely. Is it worth it to let the process play out gradually, and carefully trade truthful information as the need arises in order to find a fair, Win Win solution? Absolutely!
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March Negotiation Quick Tip of the Month – Cracking the Krunch
Sometimes, in the middle of a negotiation, the other side may say to you something like, “You’ve got to do better than that. We can’t live with that price.” This negotiation tactic, sometimes referred to as “The Krunch,” is intended to force you into granting more concessions such as discounting the price or providing other incentives. At this point, always rely on the First Principle of negotiation – Never give a concession without getting one in return. So, the other side wants a lower price? Fine, what are they willing to give in return? Respond with something like, “This is the standard pricing we offer all of our preferred customers, and it is better than you will find anywhere for the features and benefits we offer. However, if you would be willing to increase your monthly order by 20%, I think I could find a way to reduce the unit cost by at least 10%.” This proposal will certainly keep the negotiation process going until you find the right solution.
