The Deals People Make
Professional Negotiator Says Coming
To Terms Is A Day-To-Day Task
Consumers sometimes think of negotiations as intimidating, formal proceedings that only happen in lawyers' offices, or under high pressure in venues like car dealerships. In reality, people are negotiating all the time, says professional negotiator Steven P. Cohen.
Negotiating can be a means of making decisions with other people "in a civilized way," says Cohen, a former Boston lobbyist and commercial real estate manager and currently head of The Negotiation Skills Company, a five-year-old Beverly firm that trains people in negotiations and related management skills.
Cohen, who teaches at the University of New Hampshire and at European business schools - Group Hautes Etudes Commerciales, Ecole Superieure des Sciences Commerciales d'Angers and the Open University - spoke with the Globe recently about the art of negotiating.
Q. In one's personal finance life, where can negotiating skills best be used?
A. What you can negotiate ranges from what restaurant you'll have dinner at, to what movie you're going to see, the purchase of a house [or] negotiating a loan from a financial institution. ...Negotiations with teen-agers have financial implications, too: when they want money, clothes or books. Deciding where to go on vacation is a major financial decision. Negotiation really covers every area of life. Virtually all people negotiate on a regular basis at work.
Q. What kinds of personal characteristics do you need and where do you practice your skills?
A. The capacity to think, to listen, to reflect on what you learn - to do your homework. You do your homework before you get into the formal process of negotiating. You shop around.
You need to look at most negotiations as episodes in ongoing relationships. You can start at the dinner table, or in other private social situations. You think about what you're doing and what you want to accomplish. You need to understand why you want what you want, what your interests are and whether a given negotiator can be responsive to you. What good does it do to ask your father-in-law for a favor if his wife is going to make the actual decision?
Q. The old wisdom about negotiating was that you always had to ask for far more than what you really wanted, and work backward to get to a reasonable goal. Is that still true today?
A. It depends. In some cultures negotiation is highly choreographed. If in an Arab soukh [market] you give a merchant his or her first asking price,you've ruined their day. You're suposed to be outraged by the price they are asking, and they are supposed to be outraged by the first price you're offering.
Try to figure out your zone of possible agreement. We can't always do that off the top of our heads, so asking questions helps us find out. You might ask, "What kind of price range sounds attractive?"
You do want to walk in with flexibility. In fund-raising, the rule is you ask people for a lot of money. It's a situation - then people may think you're saying, "I want to rip you off."
Q. Are there some areas consumers frequently overlook where a better deal may be negotiated?
A. Big-ticket items are usually more open to negotiation; houses, cars, things like that. Hotel rooms and airplane fares are, too. Ask the representative: "Is this really the best price you can offer me?"
Q. What are the most common mistakes people make in negotiating on their own behalf? Do people commonly do a better job of negotiating for someone else?
A. Not being prepared, not understanding why you're looking or something. I can say I want a blue dog, but why the dickens do I want a blue dog? Do I want to make a fashion statement, or do I want a dog that will scare everyone else?
A very major mistake is getting emotional and taking the dealings personally. "An adversary is not necessarily an ememy," as Richard Nixon once said. That's why people negotiate better on someone else's behalf. They can be more cold-bloodedly analytical about somebody else's decision than their own.
Q. What about work? What kind of power does someone have in today's work world to negotiate salaries, benefits or working conditions?
A. Here again, you need an understanding of how badly they need you. You can only learn that by asking questions and doing homework. That gives you a measure of the relative balance of power, and understanding the balance of power gives you a sense of the leeway in negotiations.
Q. What if you're being outplaced, or offered early retirement? What kind of leverage do you have then?
A. Well, that depends. Let's say they have to downsize by 97 employees and 95 have agreed. Your leverage is probably better at number 96 than if you are the first employee to sign up. You have to understand the needs of the people making the offer.
Q. In jobs that may be temporary assignments for someone who has been downsized, what should the person look for in negotiations?
A. Clearly, you have to look as best you can at your short- and long-term interests. If you're downsized out on the street, you may need enough money to pay the rent next month, but in the long-term maybe another job would be better. Perhaps you'll be able to quit the short-term job, but you may not have the choice. You've got to keep your eyes and ears open and know when to keep your mouth shut.
Q. Can you handle negotiations differently when you won't have an ongoing relationship with the person?
A. Negotiation results don't just impact on the other side of the table. They can impact your reputation in the community, your reputation among friends. The question to ask is: How would you feel if the story was published on the Globe editorial page, read out in church or if your mother found out?
In a dispute with a neighbor or motorist, the most important thing to remember is: Only one person can get angry at a time because otherwise it can degenerate into warfare. De-escalate the situation as best you can by listening. Know when it is wise to get away. That doesn't stop the negotiation process. It puts it on hold. You can't legally leave the scene of an accident, but you've got to pick the arena for discussions.
Q. What about negotiations involving a business? Should that be left to one or two people in the company?
A. How many people should participate in negotiations really relates to how many people have demonstrable interests in the consequences. If you're outnumbered, and are being "good copped/bad copped," you need to call attention to that: "I hear this from Charle, but I hear that from Eloise. I don't know what the correct story is. Why don't I retire from the room and give you two a chance to come up with a clearer picture?"
Once, when I was managing commercial real estate, I worked up a lease with a prospective tenant, but it came back twice with revisions from different levels at his corporation.
So I asked how many levels had to approve it. Five was the answer. I said no deal. They were good cop/bad copping me. There has to be a fundamental fairness to proceed. Two against one or three against one is not necessarily unfair, it's really an issue of the stakeholders being represented.
FYI
"Pocket Guide: The Fine Art of Negotiating"(The Negotiation Skills Co., $4).
Call 508-927-6775 or write P.O. Box 172, Prides Crossing, MA 01965.
"Getting to Yes; Negotiating Agreement Without Giving In," by Roger Fisher, William Ury and Bruce Patton (Penguin, $11.95).
"You Can Negotiate Anything," by Herb Cohen (Carol Publishing Group, $10.95).
"Negotiation really covers every area of life," says negotiator Steven P. Cohen.
By Jo-Ann Johnston -- Globe Correspondent
Published in "The Boston Globe", September 2, 1996
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