Tag Archive | "Negotiation"

Effective Threats

Marty Latz will be presenting again this year at the ICLEF Conference Facility!
December 1 – Gain the Edge! Negotiating to Get What you Want, 6 CLE / 6 CME / 1 E

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Notes on Negotiation: Effective Threats
By Marty Latz, Latz Negotiation Institute

“I’m gonna make him an offer he can’t refuse,” Don Vito Corleone (Marlon Brando) says in The Godfather. Perhaps the greatest movie threat ever, Corleone had dominant negotiation leverage – his counterpart faced certain death if he refused Corleone’s “offer.”

By contrast, the media recently reported that President Donald Trump instructed Interior Secretary Ryan Zinke to speak with Sen. Lisa Murkowski (R-Alaska) on health care and “remind” her of the Interior Department’s control of many issues affecting Alaska.

Trump’s threat didn’t change her vote against the Republican plan.

Of course, I’m not suggesting Trump behave like the Godfather. But there are effective and ineffective threats.

If and when and how should you use threats?

First, understand the fundamental nature of threats. Northwestern Professor Adam Galinsky and Brigham Young Professor Katie Liljenquist define a threat as “a proposition that issues demands and warns of the costs of noncompliance” in “Putting on the Pressure: How to Make Threats in Negotiations” in Harvard’s Negotiation newsletter.

Threats constitute an often-unspoken element in almost all negotiations. They’re actually a super aggressive effort to exercise leverage. Leverage, as my regular readers know, relates in part to the strength of your alternative to a deal with your counterpart (your Plan B if your deal is Plan A) relative to their alternative to a deal with you (their Plan B).

Your ability to negatively impact their perception of their Plan B through a threat – the costs of noncompliance with your offer – strengthens your leverage. The worse you can make their Plan B seem with a threat, the more likely they will accept your Plan A by comparison.

Threats are also not inherently evil. As Galinsky and Liljenquist note, “[r]esearchers have found that people actually evaluate their counterparts more favorably when they combine promises with threats rather than extend promises alone. Whereas promises encourage exploitation, the threat of punishment motivates cooperation.”

Understanding this, follow these four research-based guidelines in deciding how to use threats.

1.    Strategically Plan Your Threats

“Put your bike away now, or no electronics for a week,” you might threaten after you find your 10-year-old’s bike in the driveway for the umpteenth time.

Every parent has lost their temper at some point. Does it help? Usually not.

Threats based on anger, volatile emotion, and momentary pressures are almost always counterproductive. Galinsky and Liljenquist note that “multiple studies have linked anger to reduced information processing, risky behaviors, and clouded judgment.”

Strategically planning your threats in advance, not reacting instinctively, addresses these concerns. Such planning also reduces the possibility of counterthreats and retaliation, which could escalate and spiral out of control.

The goal of a threat is to satisfy your interests. Use it to motivate cooperation, not to punish.

2.    Threaten Only in Limited Circumstances

Northwestern Professor Jeanne Brett and her colleagues, according to Galinsky and Liljenquist, have identified three circumstances in which threats can be necessary and effective:

  • Getting your counterparts to the table when facing a seemingly intractable deadlock (like threatening aggression or sanctions to get a recalcitrant country to engage in peace talks);
  • Breaking an impasse by signaling strength and fortitude (bullies sometimes only respond if you demand respect by flexing your muscles); and
  • As a mechanism to ensure compliance and implementation of an agreement.

The reason to only threaten in limited circumstances? Even well-crafted threats may carry significant negative consequences, as noted by Galinsky and Liljenquist, including:

  • Provoking resistance and anger, thus decreasing your counterparts’ likelihood of granting your wishes;
  • Undermining an agreement’s legitimacy if your counterpart believes it resulted from coercion; and
  • Inciting a desire for vengeance (“[p]sychologists,” Galinsky and Liljenquist write, “have found that revenge has biological foundations, persisting until it is satisfied, like hunger. The more severe a threat’s consequences, the more extreme the retaliation is likely to be.”)

Don’t make threats a regular part of your repertoire. Selectively use them.

3.    Credible Threats Work – Empty Threats are Counterproductive

Don’t start a war you’re not prepared to fight and finish. Former President Barack Obama famously threatened Syria with severe consequences if it crossed a “red line” by using chemical weapons.

What did he do after the world saw unmistakable evidence it had crossed his red line? Said he didn’t have authority from Congress to even engage militarily and negotiated a deal to stop it from happening again.

Did this prevent Syria from doing it again? No. Did Obama and the United States lose significant credibility relating to its future promises and threats with Syria and the rest of the world? Yes.

Reputations matter, especially relating to the credibility of threats.

4.    Frame Your Threats to Satisfy Your Counterparts’ Interests

Effective threats should also be framed so they can be realistically satisfied and not engender ill will. They should thus:

  • be specific and detailed;
  • address your counterpart’s interests;
  • be delivered respectfully in a measured, serious tone;
  • include meaningful consequences;
  • link to a timeline; and
  • possibly include an escape route if circumstances change.

Also use them sparingly in situations involving a future relationship between the parties. Threats can backfire long-term.

Then-President Ronald Reagan in 1981 threatened 12,000 striking air traffic controllers with the loss of their jobs if they did not report back to work “within 48 hours” of his statement. 11,359 did not comply. He fired them.

According to Galinsky and Liljenquist, “[m]any observers view Reagan’s controversial threat and follow-through as a pivotal moment in his presidency and the foundation for future political victories.”

Latz’s Lesson:  I’ve made you an offer here you can easily refuse. Don’t. As Clint Eastwood/Dirty Harry would say – “make my day.”

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Marty Latz will be presenting again this year at the ICLEF Conference Facility!
December 1 – Gain the Edge! Negotiating to Get What you Want, 6 CLE / 6 CME / 1 E

______________________________________________________________________

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Marty Latz New 2

Dealing with the Devil

Notes on Negotiation
By Marty Latz, Latz Negotiation Institute

British Prime Minister Winston Churchill in 1940 refused to negotiate with Hitler.  President George W. Bush in 2001 refused to negotiate with the Taliban.

Nelson Mandela, by contrast, reached out in 1985 to negotiate with South Africa’s white government, one that enforced a racist regime and had imprisoned him for over two decades. And President Barack Obama negotiated with Iran, which supports terrorist groups.

“Should you bargain with the devil?” is the question in the provocative book Bargaining with the Devil: When to Negotiate and When to Fight, by Harvard Program on Negotiation Chair Robert Mnookin.

Mnookin’s book transcends war and peace, offering lessons that can be applied to everyday situations. After all, who hasn’t felt betrayed by a business partner, friend, or family member, and felt like hitting back in lieu of talking?

Mnookin advises the following in determining whether to engage, with my own analysis here too.

1.     Systematically evaluate the costs and benefits
Our knee-jerk instinctive reaction toward negotiating with a devil may be “Absolutely not. He’s a devil.” This may overlook, however, your interests that may be satisfied with a less reactive, more strategic evaluation.

Mnookin suggests an initial framework to help make this decision, largely derived from the classic Getting To Yes: Negotiating Agreement Without Giving In by my law school professor Roger Fisher and William Ury.

He suggests the following, which I relate to my Five Golden Rules of Negotiation for the benefit of longtime readers.

  • Identify the parties involved and their fundamental interests (a crucial element of Golden Rule One: Information is Power-So Get It!);
  • Consider each side’s alternatives to negotiation (the major component of Golden Rule Two: Maximize Your Leverage. I call alternatives Plan Bs – Plan A being a negotiated agreement and Plan Bs the result if you don’t negotiate);
  • Evaluate the costs involved if you negotiate (costs constitute an independent standard underlying “fair” agreements – Golden Rule Three: Employ “Fair” Objective Criteria);
  • Brainstorm whether any options/agreements exist that would better satisfy the parties’ interests than their Plan Bs (evaluating options relative to your Plan B involve Golden Rule One (interests and options) relative to Golden Rule Two (Plan Bs)); and
  • Assess whether and how any deal can be implemented (can you trust the devil to fulfill its commitments and/or enforce them independently through courts or other mechanisms (whether a deal will stick and trust factors fit within Golden Rule One).

I would add one piece of advice to Mnookin’s. This strategic evaluation and preparation make sense for all potentially significant negotiations – not just those with “devils.”

2.    Get advice from third parties about your Plan Bs and these factors
I’m a big fan of strategic brainstorming and asking trusted advisors, friends and experts for advice before negotiating. Mnookin recommends this in determining whether to even engage. I agree.

Doing this helps us make more reasoned evaluations and avoid emotional traps that can cloud our judgment in stressful situations. Differing perspectives and ways of thinking can also lead to better analyses and conclusions.

There’s no downside to requesting advice here and a potentially big upside.

3.    When in doubt – presume to negotiate
If you’ve done your strategic analysis – your advisors disagree – and you’re still unsure what to do – Mnookin suggests you negotiate.

“Wait,” you respond. “Shouldn’t there be a presumption against negotiating?” “After all,” Mnookin writes, “this is the Devil we’re talking about!”

No. Why? Because “negative traps,” according to Mnookin, can distort your thinking and analysis. Traps include tribalism, demonization, dehumanization, moralism, zero-sum thinking, the psychological impulse to fight or flee, and the call to battle.

A guideline that makes you articulate the reasons NOT to negotiate has great value.

4.    Be especially pragmatic if you’re representing others
Finally, personal moral intuitions and morality should play a role. It may simply be morally repugnant for you to engage with a “devil.” And going against your morals has real costs. Despite the pragmatic factors urging you to engage, Mnookin notes, deciding not to negotiate “based on moral intuitions may be virtuous, courageous, and even wise.”

However, he recommends this only if you “alone bear the risk of carrying on the fight.”

Your personal morality should not override the above factors when your decision directly impacts others who may have different moral judgments and who rely on you to decide.

Business executives representing shareholders, union representatives on behalf of workers, and political leaders representing constituents should not decide based on their personal morals, writes Mnookin.

Latz’s Lesson:  Whether to negotiate with the devil presents a devilish dilemma. Solve this by strategic preparation, relying on outside advice, presuming to negotiate, and incorporating morality and agency issues into the equation

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Negotiation/Mediation Blog0 Comments

A Matter of Style

Marty Latz will be presenting twice this year at the ICLEF Conference Facility!
June 7 – How to Say “NO” & Preserve the Relationship, 6 CLE / 6 CME / 1 E
December 1 – Gain the Edge! Negotiating to Get What you Want, 6 CLE / 6 CME / 1 E

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Notes on Negotiation
By Marty Latz, Latz Negotiation Institute

‘Stan’ was a jerk. Totally self-absorbed with a massive ego, he was super aggressive and always breaking the rules. Reputation-wise, most people couldn’t stand him. Brilliant at software, though, he had developed a superb product.

The deal – based on an objective analysis of your financial and other interests – appeared to be excellent. But Stan would have a significant role going forward. So how you interacted and negotiated would be extremely significant.

Should you buy control of Stan’s company?

The biggest red flag, of course, is Stan’s personality style.  What does that mean?

Here are five qualities to evaluate in assessing your counterpart’s negotiation style. Developed by Marquette Law School Prof. Andrea Kupfer Schneider in “Teaching a New Negotiation Skills Paradigm” (Washington Univ. Journal of Law and Policy, 2012), I have also added my own thoughts here.

Keep in mind the following, too:

  • Each quality exists on a spectrum. And we all exhibit elements of each, some more than others.
  • These reflect tendencies, not immutable characteristics. Each can be improved upon with self-awareness, training and practice.
  • These are styles – not strategies. They relate less to what you do and more with how you do it. Of course, these overlap.
  • Individuals modify how they implement these styles between negotiations and even within negotiations.

1.    Assertiveness
Assertiveness relates to an individual’s aggressiveness in their negotiation interactions. How forcefully and competitively do they engage? Conversely, how much do they shy away from the conflict that inevitably exists sometimes?

Effective negotiators exhibit strong assertiveness traits – but know when, where and how to modify and modulate them.  Too much assertiveness can result in an overly adversarial environment that can be counterproductive. Too little assertiveness can leave unrealized value on the table.
I once worked with a super assertive lawyer. An excellent litigator, his negotiation style and skills were underdeveloped – everything was a fight. Finding any common ground was extremely difficult.

2.    Empathy
Schneider writes “being empathetic in a negotiation [requires] a complex mix of skills – a willingness to hear the other side, open-mindedness or curiosity, good questioning and excellent listening, among others.” Emotionally intelligent individuals score high on empathy.
Developing this skill means becoming a more active and deep listener and questioner. Highly empathetic negotiators also fundamentally believe their counterparts can help them get what they want. Empathy is especially crucial in negotiations involving future relationships between the parties.

3.    Flexibility
Flexibility sounds good. But too much flexibility can be a liability, reflecting a willingness to change too often without justification.  Too little flexibility – stubbornness – can also be problematic.
Schneider notes that “[talented] negotiators work to find a variety of ways to get the job done both in their strategic choices as well as more flexible outcomes. Being flexible in negotiation allows a stylistic move from simple compromising to more sophisticated integrative solutions. It also helps to prevent stalemate.”

Being open to creative options you may not initially consider is another element of flexibility. Brainstorming, sometimes with your counterpart, often brings out this quality in negotiators.

4.    Social Intuition
Schneider’s research finds that these social skills translate to negotiation effectiveness: personable, rational, perceptive, self-controlled, sociable, helpful, and smooth. Other research cited by Schneider suggests that how we interact and present to others and the importance of being nice are traits associated with successful individuals.

Appropriate tone and positive moods also translate to making negotiators more creative and effective. The opposite, too. Don’t underestimate the power of sociability and rapport and relationship-building in negotiations.

5.    Ethicality
Your reputation for trustworthiness and a willingness to follow ethical principles correlate to your negotiation effectiveness, according to Schneider and others.

Of course, trustworthiness in negotiations does not mean you simply lay all your cards on the table. Some misdirection is expected and warranted in many negotiations.

If my client is desperate to sell his business, I would not share this with a buyer.

Remember, though, your reputation derives not from your belief in your trustworthiness and ethics – but how your counterpart describes you after the negotiation.

So what about Stan? Here’s my style rating of him: high assertiveness, super low empathy, medium flexibility, low social intuition, problematic ethicality. Too many red flags. Walk away.

Latz’s Lesson:  Research and evaluate your counterparts’ personality style. A good or bad style fit can make or break your deal.

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Marty Latz will be presenting twice this year at the ICLEF Conference Facility!
June 7 – How to Say “NO” & Preserve the Relationship, 6 CLE / 6 CME / 1 E
December 1 – Gain the Edge! Negotiating to Get What you Want, 6 CLE / 6 CME / 1 E

______________________________________________________________________

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Blog, Negotiation/Mediation Blog0 Comments

How to Say “No” & Preserve the Relationship – June 7

How to Say “No” & Preserve the Relationship – June 7

In this program led by negotiation expert Martin Latz, participants will shift their mindsets and behavior from instinctive to strategic based on experts’ proven research. Next time you face a situation, you will systematically think about which strategies to use and have a framework within which to approach it. How you say “no” will then be based not only on your own experience, but collective experiences of the best negotiators in the world and on the most up-to-date research.

TOPICS:
• Introduction – The “Family Negotiation Story”

• Participants’ Challenges in Saying “No”

• Discuss Latz’s Five Golden Rules in How to Say “No” & Preserve the Relationship,
including:

   – Information and Interests are Key – Don’t jump to “No”
   – How to Explore Mutual Interests
   – Ways to Open Up and Share More to Strengthen Relationships

• Prepare a Strategic Plan to Say “No”
   – Individually select an example
   – Prepare a Strategic Plan based on taught elements to say “No”

* Discuss Latz’s Five Golden Rules in How to Say “No” & Preserve the Relationship,
   including:
   – Understanding the Meaning of “No”
   – When to Say “No” and When to Say “Yes”

• Continue to Prepare a Strategic Plan to Say “No”
   – Prepare a Strategic Plan based on taught elements to say “No”

• Negotiation Ethics – Part I, including discussion of Stalking Horse Scenario and its:
   – Morality – is it right or wrong?
   – Ethics or Legality – does it cross the legal or ethical line?
   – Effectiveness – does it work?

• Discuss Latz’s Five Golden Rules in How to Say “No” & Preserve the Relationship,
   including:

   – Powerful Standards that Lessen the Negative Impact of “No”

• Prepare a Strategic Plan to Say “No”
   – Individually prepare a Strategic Plan based on taught elements to say “No”

• Negotiate One-on-One Exercise

• Debrief Exercise, focusing on:
   – Elements that worked well, not well and how to improve in the future

• Discuss Latz’s Five Golden Rules in How to Say “No” & Preserve the Relationship,
including:

   – Ways to Frame a “No” with a Yesable Offer
   – Language to Psychologically Make Them Feel Good When Hearing “No”
   – When to Involve Others in the “No” Conversation
   – How to Control the Setting to Improve the Relationship
   – Impasse-Breaking Strategies if You Say “No” You Reach Impasse

• Prepare a Strategic Plan to Say “No”
   – Prepare a Strategic Plan based on taught elements to say “No”

• Negotiate One-on-One Exercise

• Debrief Exercise, focusing on:
   – Elements that worked well, not well and how to improve in the future

• Negotiation Ethics – Part II, including discussion of
   The “False Promise” Scenario & its:

   – Morality – is it right or wrong?
   – Ethics or Legality – does it cross the legal or ethical line?
   – Effectiveness – does it work?
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NATIONAL SPEAKER:
Martin E. Latz, Esq.
Latz Negotiation Institute, AZ
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HOW TO SAY “NO” & PRESERVE THE RELATIONSHIP
A NATIONAL SPEAKER SEMINAR
6 CLE / 6 CME / 1 E – Wednesday, June 7; 9:00 A.M. – 4:30 P.M.

LIVE IN-PERSON ONLY SEMINAR
– ICLEF Conference Facility, Indianapolis

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