The next idea I want to think about continues our conversation about preparation, and this next idea is where we should negotiate. The idea is as a preparation move, we want to think about where we're going to meat. Sometimes it could be in somebody else's offices, where maybe there we might learn information about their interests or about their operation, or sometimes it could be a neutral space somewhere in between let's or want to travel, or maybe officer under renovation, we don't want them to see the chaos that we have at home. Or it could be and here's the broader idea, somewhere where you're going to be comfortable. In the last module, I mentioned the idea of patience, we want to think about being patient in some space. I mentioned one of my former executive students, I had another student who described to me a negotiation that she had. She said she flew into Russia for negotiation, she was escorted by a bunch of very large men and they went into the basement of a large cement building, the first thing she realize is she lost cell service and then it was an unheated room, and all she could think about was getting out. Here's the idea. As soon as we're focused on leaving, then we become impatient and we're willing to make concessions to get out. The idea is to think about where we negotiate in part as it's related to patience. The second idea is that where we should negotiate, as it's related to confidence. The confidence we have in a negotiation matters a great deal, it's related to patients, but it's a little bit different. How confident are we as we're negotiating? Now, part of it has to do with the space that we're in and we should recognize that sometimes people will purposefully change the space that we're in. Are we in a chair that's lower down? Are we in the chair where sun is coming into our eyes? Are we in a space that makes us uncomfortable in some way? We should recognize that sometimes maybe on purpose, where people, the person we're negotiating with might've done something to make us less comfortable and as a result, we are going to be less patient, less confident. We know, for example, from sports, there's a home field advantage. For example, if you look at baseball, the United States since 1901, the home record is well over 50 percent, it's about 54 percent and conversely, about 46 percent on the road. There's a home field advantage. Now, part of it stems from maybe get more favorable calls by the referees, your fans are there and you're more familiar with that setting. There's an interesting negotiation study that was done where they had people personalize a space, and they had people either negotiate a neutral space or in a space that wasn't theirs or was theirs. They found that confidence was the key mediator and negotiators performed predictably better when they negotiated in their home turf, their personalized space. The idea is that where we negotiate and the plan of where we negotiate can matter a great deal. Those are some ideas about where we negotiate because where we negotiate is going to influence the confidence and the patience that we have as we negotiate. The next idea for preparation is to think about with whom we're negotiating and here's the idea. We want to negotiate with someone that has won the ability to make concessions and two, the interest in addressing our concerns. Typically this will be the manager rather than perhaps a store clerk who's just paid by the hour. Or if you're negotiating your salary, it could be the manager whose job and life you're going to make better as opposed to somebody in HR who may be just processing many candidates and care less about you. The idea is, we've got to find the right person, somebody who cares about addressing our interest, and who has the power to do something and finding the right person is a key step in the preparation for negotiation. It might happen as you negotiate through the bargaining process too, when you realize the person you're talking to doesn't have the authority to do that. We know in mediation practices, mediators insist that the senior partners show up because they want to make sure that the people that have the power to enact a deal are there and present. That's the key idea and in my negotiation classes, I have students go out and negotiate for things. They've negotiated for some difficult things as part of the exercise. They've negotiated in grocery stores or in gas stations, those places are extremely hard to negotiate in. But one of the key things that you've got to do if you try a negotiation in a context like that is escalated to find the manager, find somebody who has the power to make a concession. That's the idea about with whom you negotiate. The next idea is to think about the relationship context. I mentioned before the importance of relationships. Here, the idea is we've got to develop our relationships. I talked about going from this transactional to serve communal. Somewhere along that direction, the best negotiators I know, they take at least a few seconds, if not minutes or longer to develop some relationship. Even a seemingly transactional relationship, they'll engage in what's called non-task communication. Non-task communication is communication that's off-topic. I'm talking about sports, or the weather, or something happening in the community, or about your weekend or latest trip. I'm talking about something that's not focal to the negotiation at hand, but it helps to build rapport, to develop a relationship. Part of that is we're just queuing the idea that, "Hey, I care about you." We're having a conversation that's more typical of what friends would do than what just purely transactional partners would do. To think about the relationship context, but also to build relationships. The next idea for preparation is we've got identify key issues; what are the key issues for you? Do you know what you really care about, what matters most, and perhaps that's most apparent to you? But the next idea is to figure out, what are the key issues for our counterpart? Here's the challenge. We've got to take perspective. This is another theme that I'm going to pull through this course is taking the other person's perspective. The challenges that were typically very egocentric. If I'd ask you, what's the most interesting thing in the whole universe? The single most interesting thing is me and anything that relates to me. If it's not me, it is inherently less interesting. What that means is that it's work for us to take somebody else's perspective, but great negotiators do well because they're taking their counterpart's perspective, understanding what their key issues are, what their concerns and challenges are, what information they need so that they can figure out ways to expand the pie and reach a better deal. I'll give you an example. There was a call for proposals to haul trash, a trash pickup in Oceanside, California. They put out this request to haul trash. Here's what's interesting is that Sarber trash hauling won the bid, they won the bid with the highest price. Here's what's interesting. People will often say, "Oh, what I care about is price. I need the best price, I need the lowest price, I care about price. "But what they really care about is value. Here's what Sarber trash hauling did. They went to the city and said, "Hey, you do need to haul trash, but you also have a beach erosion problem. Here's what we're going to do. We're going to haul trash out to Arizona, we're going to get sand. We're going to clean our trucks, haul the sand back and solve a second problem that you didn't even ask about, but we know that's pressing for you. We're going to fill up these trucks with sand to address beach erosion. It is a little more expensive, but the value is so much better. The idea is we're going to think about somebody else's perspective, take their perspective and find ways to expand the price we can both do better. Now, I mentioned this idea about addressing issues, thinking about your counterpart. In general, we want to be collaborative and work with others, but we also want to recognize their opportunities to create concessions. Ed Rendell, he was the former mayor of Philadelphia and then the Governor of Pennsylvania. He was working with David Cohen, his right-hand person. When he came in as Mayor of Philadelphia, the city finances were in disarray. There were real challenges. They needed to negotiate and renegotiate contracts with all of the different unions. One of the first things David Cohen did is he put out a request for proposals to privatize trash collection. He put out this request for proposal. David Cohen explained to me. He said, "Oh, we never really wanted to privatize trash collection, we didn't want to lose union jobs. We're happy to continue with that contract, but I knew this was going to be a hot button issue." David Cohen put out this request to privatize trash collection. When he met with the unions, this was their top issue. In every meeting they brought out this issue, "Hey, we don't want you to privatize trash collection. We don't want to lose these union jobs. Don't privatize trash collection." David Cohen kept this issue the whole way through. He said the whole time, "Yeah, I was planning not to do it, but I knew this would be a concession that I could give." What David Cohen did is he created an opportunity for a concession. In a lot of crisis negotiations, the crisis negotiators, they'll occlude the air conditioning, they'll cut power and water to the site after they've surrounded it. That creates an opportunity for a concession. They could turn the water back so people can flush toilets. The negotiator can say, look, I gave you something, but knows they've created the opportunity for concession from the beginning. We can think about these opportunities that is other ways to create concessions. Now in both of these cases, we also want to, both the Ed Riddell case and this crisis case. It can be tough on the relationships. We want to make sure we're not being too hard on the person as we're creating concessions. But the more general ideas to think about ways to identify issues for the other side and to think about opportunities to create value. That's this broad idea. We think about issues for ourselves and for our counterpart. Three more quick ideas. One is identify key questions you should be asking. As you've prepared, you've done your homework, you've gathered information as you can. You've looked up if you're buying a house, you looked up comparable prices and the condition and square footage of those houses. If it's salaries, you looked up comparable salary information. You've done a lot of homework, but there's still information you don't have that could be idiosyncratic to the person you're negotiating with and what are the key questions you should be asking? You also want to think about the key questions they're going to ask you. You want to prepare your responses. You don't want to be taken off guard. When somebody asks you a question like, how much did you making your last position or why did you leave this position after such a short tenure? You want to have a response so you don't end up saying things that either end up being deceptive because you're trying to cover something or end up revealing information you might not have wanted to reveal. Identifying key questions, preparing responses. The next idea is to develop your alternatives. The most power you have in a negotiation comes from the alternatives that you have. When you're negotiating with one employer, having another job offer could give you a lot of leverage or you're negotiating to buy a car. Having another offer for a car could give you a lot of leverage. You want to think about developing alternatives because that's a key source of power in negotiations. The final idea I want to talk about as we prepare involves setting goals. Here's the idea. You don't want to walk in and say, look, I'm just going to noodle around. We'll see where things end up. Rather we want to plan for where we're going to go. What is the goal of this conversation? Some great negotiators will say, look, this is going to be a long running negotiation. We're not going to solve anything today. My goal today maybe just to convince the other side we're going to court there's no settlements or to convince them that I'm prepared for a very long protracted negotiation. That could be the goal, but we want to have a specific goal for the conversation. What is it that we want to have as the outcome of this conversation, this stage of the negotiation? What is the goal? Once we have that goal, it's going to line up our actions and behaviors to achieve that goal. What does success look like? There's a very substantial goal setting literature. We know this in sports psychology. People visualizing the field goal and it lines up the action so they can kick the ball the right way. There's a large literature in business, whether it's welding, delivering mail, people sewing, all kinds of goals in sales. When people have a specific goal, it's very motivating and it guides specific behaviors to hit that goal. Now, one challenge in negotiations, we don't know exactly what the other side can give us but still we should have some aspiration, some specific goal in mind. That's going to guide us and push us. For those of us that are more conciliatory, setting a specific goal, and then committing to that goal by telling other people will gird us to be tougher in a negotiation than if we say, look, I'm just going to go in there and see how things go. That's the idea that is, you can think about this I'm going to run my goal is to run five miles today are my goals to do 50 sit-ups. That specific goal is going to push us in ways that I'm just going to do my best will not. We know when there's a lot of data, that specific challenging goals should be at the 85th to 90th percentile performance. If you're managing a sales team and that's what people typically sell, you want to set goals that are high but realistic. It should be optimistic, but justifiable. That's the way we should set our goals for negotiation. As we're preparing, we want to think about what is that specific goal. They want to do things like tell other people or write them down to help us visualize and commit to those goals. All right, those are the key ideas for preparation. When we come back, we'll talk about the bargaining process.
