Clips from Negotiate to Win

• The wise negotiator frequently chooses not to negotiate.
• "It's my bottom line" is the biggest lie in negotiations.
• Only when the other side doesn't move any more can you be sure they're truly at their bottom line.
• Never say you're at your bottom line unless you are.
• Nobody likes having their first offer accepted.
• Schmoozing is the last refuge of the weak negotiator.
• It's better to bring things up now, when you've got some leverage, than later when you don't.
• Never shave a concession. Either make the whole concession that you've supposed to make, or don't make any concession at all.
• The krunch is the simplest and most frequently used tool in negotiating.
• A krunch is the only way to respond to an unreasonable offer.
• Every concession has a price, but krunches cost nothing.
• Only the final handshake seals the deal. Until then, all issues remain open.
• Never stick with an issue that's not working. Skip it and move on to something else.
• The nibble is negotiating's equivalent of a layup.
• Always persuade first. Negotiate only when persuasion fails.
• Face is humankind's third rail. Touch it and die.
• Win-win negotiating is mandatory because the other side survives the talks.
• Don't make a concession without seeking something in exchange.
• Try to avoid saying "no" to the other side. "Yes, if..." is better.
• If you ask for more (without reason) you'll get more.
• Your opening offer should be assertive but never ridiculous.
• Nibbling is part of doing a complete job as a negotiator.
• Sometimes people find satisfactions in strange places.
• Creativity is the most fickle and capricious tool in negotiating.
• The value of the concession to the other side is what matters.
• Setting your Envelopes is your most important homework task.
• Separate the people from the problem. Be hard on the problem but soft on the people.
• We make more concessions to friends.
• The quicker the deal, the greater the risk.
• The more authority you have, the more concessions you'll have.
• Always negotiate with the highest authority person you can get access to.
• Bosses give away the ranch.
• It's where you open, not when, that matters.
• Teams are inherently dangerous, and the bigger the team, the greater the risk.
• Being outnumbered means you're in a target-rich environment.

Five Easy Pieces

Negotiation

Advice from Hugh McColl:

1) Price is there but its about the positions of directors and board members
2) What can we afford? What does it take to get there?

Tactis:

1) Don't let get Investment Bankers get in between the party
2) Wonder of it all approach: try to figure out what is in for everyone
3) Deal with everything about what they care (price, pride, people, etc.)
4) Don't include an offer
5) Sit next to people not across people (except for lunch and dinner)
6) Use less hostile language
7) Use artifacts (like a baseball hat) to make a negotiation special and to "pitch"

Give and Take

1) Gave up chairmanship title to other and give him the same salary! (= keeps pride)
2) Don't give up CEO
3) Give up all other titles (=costs nothing) but keep the CEO - this removes a barrier
4) Kee Surviving, Control and Profitability
5) If they want higher price then they have to give up something, e.g. have to find more earinings in the target
6) One always has to give up board seats. Have criterias in place for replacement.
7) Grow board members like accordeon but then shrink over time again.
8) Board always grew with more and more mergers

Installments in negotiations (Source HBR)

There are other reasons to make concessions in installments. First, most negotiators expect that they will trade offers back and forth several times, with each side making multiple concessions before the deal is done. If you give away everything in your first offer, the other party may think that you're holding back even though you've been as generous as you can be. The manufacturer who offered a 3 percent wage increase to the employees' union up front faced exactly this problem.

Installments may also lead you to discover that you don't have to make as large a concession as you thought. When you give away a little at a time, you might get everything you want in return before using up your entire concession-making capacity. Whatever is left over is yours to keep—or to use to induce further reciprocity. In the real estate example, you might discover that the initial $30,000 increase in your offer was all that you needed to sign the deal!

Finally, making multiple, small concessions tells the other party that you are flexible and willing to listen to his needs. Each time you make a concession, you have the opportunity to label it and extract goodwill in return.

All of the above strategies are aimed at guaranteeing that the concessions you make are not ignored or exploited. It is important to note, however, that when someone refuses to reciprocate, the refusal often hurts her as much as the party who made the concession. Nonreciprocity sours the relationship, making it difficult for negotiators to trust each other or risk further concessions. Thus, effective negotiators ensure not only that their own concessions are reciprocated but also that they acknowledge and reciprocate the concessions of others.

Negotiation tip

Which of these scenarios would make you happier?

Scenario A:

While walking down the street, you find a $20 bill.

Scenario B:

While walking down the street, you find a $10 bill. The next day, on a different street, you find another $10 bill.

The total amount of money found is the same in each scenario—yet the vast majority of people report that Scenario B would make them happier. More generally, extensive research (beginning with the work of the late Stanford University professor Amos Tversky and the Princeton University professor and Nobel laureate Daniel Kahneman in the 1970s) demonstrates that while most of us prefer to get bad news all at once, we prefer to get good news in installments.

Rofr sometimes not good for holder

The issue in both contracts, says Roth, who specializes in game theory, experimental economics, and market design, was that the right was structured as what he terms a Before and After Right of First Refusal (BA-ROFR). The right holder is offered an initial deal by the asset owner—the landlord offers to sell the flat to the renter for $100,000, probably a relatively high price. If the tenant rejects the deal, the landlord is free to offer the property to a third party. But the tenant is still in the game. If the owner and a third party agree on a price below the $100,000 originally offered to the tenant, the tenant has the option to acquire the property for that lower price.

Seems like a sweet opportunity for the tenant. But the timing of the deal works in favor of the landlord, who can now present an ultimatum to the third party saying that if the third party offers a price below $100,000 the renter has a right to match the offer. The BA-ROFR not only strengthens the bargaining position of the owner with the third party, but it also allows the initial offer to the tenant to be set high.

Source: HBR

Playing for money

From Dr. David Newbourgh:

An older guy was disturbed by playing kids in the yards every day who were playing football for fun. He went out and said: "I give you 5 cents each day if you come - but you must play." The kids came and played. After some time the kids came and said, they will only come if they get 10 cents a day. The guy gave them the money and after some time the kids came back and asked for 25 cents to play each day. The old guy gave the kids the money. After a while the kids came again and said they they can only come every day if they got 1 USD. The guy stopped giving them the money and the kids never came back to play again.

Lesson learned: at the beginning the kids played just for fun and for no money. They got used to the money and changed playing for different reasons. That went on until they only played for the money. At the end they stopped playing altogether. Apply to work situations.