NEGOTIATION STRATEGIES

May 2013
Raphael Lapin

ADVICE, STRATEGY, COACHING & TRAINING TO GOVERNMENTS, CORPORATIONS AND INDIVIDUALS WORLD-WIDE

 

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Dear Clients and Friends

 

MANAGING UNREASONABLE EXPECTATIONS IN NEGOTIATIONS

 

In  this May '13 edition of  NEGOTIATION STRATEGIES is a one-minute case study in which we provide a technique to neutralize unreasonable demands and expectations while maintaining integrity. We also distill the column into a brief lessons learned at the end for your convenience.

 

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Learn more About Lapin Negotiation Strategies  and ways in which we can make an impactful and substantive difference to your organization.

 

With very best wishes! 

 

Sincerely,

Raphael Lapin

Managing Unreasonable  Expectations in Negotiations

The First Offer Dilemma

 

"Who should make the first offer?

"Are we put at any disadvantage if we do or if we don't make the first offer?"

"How shall we respond if they make a first unreasonable offer?"

These are questions we are constantly asked when advising clients in negotiations.

 

The conventional theory upon which these questions are based, is that by putting out a first offer, you have the advantage of anchoring expectations around that offer, and the further the other side deviates from that "anchor" the more unreasonable they appear. They are therefore limited in their range of deviation by that anchor, or so the theory goes.

 

In our experience however, this seldom works. Usually the other side becomes defensive and emotional. They skillfully perform the artful "flinch", followed by a brazen, equally extreme and unrealistic  counter-offer.

 

So our answer to the "First Offer Dilemma" is: "It really doesn't matter as long as you possess and apply a potent negotiation process, refined technique and practiced skill!"

Unreasonable Initial Positions

 

Typically in a negotiation, your counterpart will initially present an unrealistic and unreasonable position. In addition to using it as an anchoring technique, they also do this to allow some space for bargaining and concessions without breaking their bottom line.

 

Consider the following examples: A large company was threatening to sue an individual for trademark infringement. The defendant was selling counterfeit items of which the trademark holding company became aware. Their attorneys sent a cease-and-desist letter in which they made a point of listing similar multi-million dollar cases which they won. They were tacitly threatening and  implying that they will bear down with all the legal remedies at their disposal to sue for millions to include all statutory and punitive damages that the law will allow. They "anchored" their position and projected an unrealistic expectation that this case was worth millions like the others they had cited. An inexperienced negotiator might be quite shaken by this position, but once one identifies and recognizes it for the tactic that it is, there is really no cause for alarm at all, as we shall soon demonstrate.

 

Another example is the negotiation over the Israeli monetary compensation to Turkish families who lost members in the Mavi Marmara incident. (The Mavi Marmara was the Turkish vessel that violated the Israeli maritime blockade of Gaza in May 2010 which Israeli commandos boarded and in which nine Turkish activists lost their lives during the ensuing skirmish). The Turkish demanded one million US dollars per family for a total of nine million dollars. Here too, they set high and perhaps unrealistic expectations.

 

How, as effective negotiators, do we counter, neutralize and manage these unrealistic expectations in a way that allows for reasoned discussion, fair and realistic outcomes, and which preserves our integrity?

Neutralizing an Unreasonable Position

 

Usually those initial unreasonable positions are quite arbitrary without any concrete support of principle or reason. The first step in neutralizing them is not to be alarmed by them at all, in fact pretend you did not even hear them. If you apply the technique I am about to introduce to you, those initial unreasonable positions will have no bearing on the final outcome whatsoever.

 

The second step and a very crucial one is to counter their position by introducing reason and principle. In our trademark infringement example above, even though our client was tacitly being threatened by a lawsuit for millions, which we ignored, we instead countered with  principle and reason that would establish a realistic and reasonable  compensation. We said that it would seem to make sense for our client to pay back any monies which he obtained illegally through this infringement. By introducing principal and reason, it allowed for the discussion to become more reasonable too. The plaintiff's counsel acknowledged that this would be a legitimate approach but wanted to see all the bills of sales and other relevant documentation. This brought down the initial claim for millions down to a mere $6000.

 

In our second example above with regards to the compensation negotiations between Turkey and Israel over the Mavi Marmara incident, Israel countered Turkey's arbitrary $1 million per family with principle and reason. They suggested that it would make sense to use what Turkey compensates her own families for members that were killed in action which is approximately $70,000 per family. Now unless Turkey can present an equally compelling alternative principle and reason to support her position of $1 mil per family, Israel does not need to back down and still maintains her integrity.

 

Introducing reason and principle into the negotiation may not conclusively persuade the other side, nevertheless it will go a long way in narrowing the gap between extreme positions, and establish a very real context for rational, reasoned and principled dialogue.

Lessons LESSONS LEARNED 
  • Do not be concerned when hearing an unreasonable position and do not respond directly to it
  • Do not counter an unreasonable position with an equally unreasonable position
  • Be prepared to introduce principle and reason to support your position
  • Do not impose your principle and reason, but rather offer and suggest it
  • Invite the other side to suggest principle and reason too
  • Negotiate the relevance, appropriateness and applicability of the proposed principles and reasons.

About1About Lapin Negotiation Strategies 

 

Lapin Negotiation Strategies offers training, consulting, advising and executive coaching in negotiation, business diplomacy and dispute resolution services.

 

Our proprietary and aggressively results oriented services are designed to help your leadership, teams and individuals master the essential negotiation, relationship-building and conflict management skills that increase revenues, decrease the high cost of conflict and build strong working relationships.

Our skilled specialists will:
  • Help your organization build a highly effective negotiation competency and culture which translates into increased revenue and strong business relationships.
  • Develop high impact, customized learning systems to develop advanced skills and powerful techniques in negotiation, dispute resolution and relationship management.
  • Provide advice, strategy, guidance and representation in live negotiation challenges
  • Facilitate, mediate and advise in dispute resolution
  • Create a culture of collaboration by guiding and training teams and divisions to engage in dialogue, to negotiate and to partner
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Raphael Lapin
Principal 

Raphael Lapin, a Harvard trained negotiation and communication specialist. He is adjunct professor of law at Whittier School of Law in Southern California and visiting professor at Southwestern Law School in Los Angeles. Raphael trains and advises Fortune 500 companies and governments around the world and is the author of "Working with Difficult People" (DK Penguin Essential Managers Series)
Working with Difficult People
 Learn more about Raphael Lapin's book, "Working with Difficult People" by clicking on the image above