I have mentioned often in these newsletters that a good negotiator never goes into a negotiation without knowing his Wish, Aspiration and Bottom Line. These terms refer to three different outcomes the negotiation could achieve, with Wish being the “in your dreams” result, the Bottom Line being the “walk away from anything less” result and the Aspiration being a fair result that you would be pleased to receive.
However, don’t stop there. It is also important that you make every effort to figure the Aspiration of the other side. This is usually fairly easy to do in the early stages of the conversation, if you know how to ask good questions and listen carefully. As you float a few trial balloons – or maybe the other side will float some of their own – these things tend to reveal themselves if you are paying attention and thinking ahead. This information will serve to guide you during the next steps of the negotiation.
Be alert at all times; the other negotiator may be testing and challenging your aspiration level, too. If it turns out that you can't reach an agreement in the negotiation, reconsider. Are you really ready to bail out? Is the other party ready to bail out? Are there any small concessions or trade-offs you can make to gain acceptance? And here we will throw in one of the great principles of Win-Win negotiations. Always look for something you can do or trade that is of low cost to you but valuable to the other party! Or conversely, see if there is anything the other party can give you that is of low cost to him or her but valuable to you. This is one of the ways that great Win-Win deals are closed.
So, let’s look at one of those negotiating scenarios that has to be familiar to practically everyone. Here is the situation:
Tom must sell his house because he is moving out of town. He would be deliriously happy if could sell it for $150,000, but he knows that is nothing more than ? than what? A Big Wish. Realistically he knows he would be more successful asking $130,000, so $130,000 becomes what? That’s right -- his aspiration level. He also knows he will lose money if he sells it for less than $90,000 so $90,000 is ? you guessed it, his bottom line.
Now, enter Tina, who needs to buy a house. After researching the market, she's decided that she could probably purchase a suitable home for $100,000, so that becomes what? Give yourself a gold star if you said aspiration level. She knows she cannot afford to pay more than $125,000, so now you know that $125,000 is her ? her bottom line. And, of course, she'd love to find a $100,000 house selling for $75,000, but that is strictly in the realm of Wishing.
Now, here is an interesting thought experiment. By comparing the overlap of the negotiators' Wish, Aspiration, and Bottom Line levels, you can anticipate how the negotiation will go. This overlap is called a contract zone or settlement range. It is the range within the negotiation that will most likely produce a settlement. The range between Tom’s bottom line and aspiration is $90,000 to $130,000. The range between Tina’s bottom line and her aspiration is $100,000 to $125,000. So now you can be sure that the contract zone in this example is probably $110,000 to $120,000.
Now, we already know that Tom can’t take less than $90,000, but of course he would prefer to get much more. Let’s suppose Tom is able to discern that Tina’s aspiration is in the $100,000 range, which is above his bottom line but he certainly doesn’t want to settle there. What can he do to knock Tina off of her aspiration? Easy; interject into the conversation that he was really hoping to get at least $130,000. Immediately, Tina will realize that her aspiration must be readjusted if she really wants to buy Tom’s house. With her aspiration now adjusted more to the reality of the market, the bargaining can begin that will lead them to that contract zone.
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October Negotiation Quick Tip of the Month – Gimme a Break!
Negotiations can be very stressful events. Sometimes they start out that way, because of a crisis or a competitive issue between the parties. At other times, the parties get stuck on an issue and dig into positions that can take on an emotional or even an irrational character. Nerves become frayed and tempers start to fly; suddenly the whole negotiation is in danger of collapse. Do every one a favor; call for a break and take a time out so that every one can cool off. There are very good physiological reasons for doing this. When we are placed under stressful conditions, our bodies slip into something called the fight or flight response. This response gets us ready for a physical fight; our muscles tense, our heart rate increases, we start pumping out hormones to sharpen our reflexes and power our muscles. Unfortunately, this response also short circuits our ability to think clearly and make rational decisions, which is a bad thing for a negotiation! Calling for a break allows time for our bodies to shut off the fight or flight response. When both parties return to the table, maybe their ability to be reasonable will return as well.
