Removing the need for negotiation

“You pay $150 dolla!!”
“No, I’m not paying anything!”
“Your fault, you pay $150 dolla!”
“No, it was your fault. I’m not paying anything!”

I move over to the curb as my friend and an enraged taxi driver continue their dialogue in the middle of the street. Cars on either side are incessantly using their car horns to signal their frustration with the gridlock. Some try to slowly squeeze past in the small gap that is not taken up by the taxis. Meanwhile the line of cars is rapidly growing in length.

“You open door, you pay me $150 dolla!”
“Forget it. You’re the one who overtook us!

As my friend had exited our taxi, another taxi had overtaken us, resulting in a small collision. While our taxi was scratch free (well, no additional scratches from the collision), the side mirror assembly of the other car was now in pieces on the ground.

“You pay me $150 dolla!”
“Hey, there is no way that mirror costs $150 dollars!”

This move was a mistake. By engaging in the conversation about cost, my friend could be perceived as accepting responsibility for the accident and now the question is reduced to “how much will he pay”. The taxi driver quickly picked up on this.

“Ok, you pay me $120 dolla!”

How are they negotiating now? Yes, old-style bargaining over money. This battle of attrition continued for about 10 minutes. So please picture 10 minutes of standing in the middle of the road, emotions running high, and with cars passing within centimetres, in the dusty, hot and humid air of South East Asia.

Eventually my friend turns silent, disengages from the dialogue, walks up to the damaged taxi, leans forward, and picks up the pieces of the side mirror. While he slowly inspects the mirror, the taxi driver continues their negotiation:

“70 dolla. You pay me 70 dolla!”

And then we all hear a *CLICK*. Was that… Could it be… Yes, as I look over I see that my friend have successfully put the side-mirror back together.

“But it is not working. You pay me $70 dolla!”
“How do you know it’s not working? Try it!”

The taxi driver reluctantly tries the electric mirror control. And voila, it’s all working and no visible scratches!

What begun as a clumsy bargaining process was resolved using masterful negotiation. My friend had snapped out of the traditional “I’m right and you’re wrong” or “I want XYZ from you” mentality, and instead removed the need to have a negotiation altogether.

In our book we named this technique preventative options – options (or solutions) that allow us to prevent the need to have particularly difficult negotiations. While our example here was quite trivial, this technique becomes a very powerful option for values-based negotiations where parties will never change their mind or accept being “wrong” (e.g. on abortion, religion, global warming, gun control, etc).

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5 problems with your opening offer

Occasionally participants ask me about opening offers. Regardless of what the offer is about, we typically make a few mistakes in how we think about opening offers:

  1. Three of the problems are right there in the heading. Let’s start with the first one – opening offer. The language used signals that this is your first offer, but that you expect to give more. Of course you can’t admit this to the other party, because then they will hold out for your next, more favourable (from their perspective) offer.
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    So what do you do? You want to maximise your chances of them accepting this first offer so you keep the charade going for a bit. You look the counterparty straight in the eye, and tell him or her that this is the best you can do. In other words, you start the negotiation with a lie!
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    And if you lie once, then everything you say is questionable. Bye-bye trust.
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  2. Many people will give an offer that involves price or other numbers. Sure, at some point we may need to discuss numbers. But once numbers are on the table negotiations predictably degenerate into a bargaining game with little to no value creation potential. Yes, the game can be turned around. But that will require a more skilful negotiator, and that skilled negotiator is unlikely to have started with a number in the first place.
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    So what do we discuss if we don’t discuss numbers? We discuss how to arrive at those numbers. This conversation has greater scope for finding agreement, creating value, and for persuading parties.
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  3. One common reason for opening with a number is to take advantage of anchoring. When we don’t have a reference point as to what is a fair or correct number (e.g. the price for a new or unique product), we are disproportionally influenced by (anchored to) the first number we hear. So negotiators have an incentive to open with aggressive opening offers. While we don’t necessarily accept the anchor we hear as fair, it does work like a strong gravity field and influences our expectations of where the negotiation will end up.
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    But… While anchoring is very effective for claiming value from completely unskilled negotiators, it is such a common tactic that even average negotiators are familiar with it. And they will resent you for trying to manipulate them.
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  4. By the way, why are we calling it an opening offer? Why are we offering anything? Discussing offers signal a fundamental misunderstanding of negotiation. It’s not about give and take. We’re in the business of finding ways to get all parties what they want. Assuming that parties have to give, concede or offer things leads parties into a zero-sum bargaining process where little or no value is created.
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    Why not use “option”, “suggestion” or “idea” instead of “offer”. Indeed, why not!
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  5. And why open with an offer. How can you possibly expect to come up with the perfect offer straight out of the box? The offer (or option, suggestion, idea or solution) is supposed to satisfy parties needs, thus we first have to discover what those needs are! And to do so effectively typically relies on first having negotiated a process and pattern of communication that parties agree to follow. And the success of achieving that is in turn strongly influenced by relational aspects such as rapport and trust among parties.
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    In other words, there are many, many things negotiators do before putting an offer (or option, suggestion…) on the table.