IT'S NEGOTIABLE: THE THREE CRITICAL ELEMENTS: TIME, INFORMATION, AND POWER

The three most critical elements in negotiation are time (the period over which the negotiation process takes place), information (the more you have, the better), and power (which comes in many forms).

Most people think of negotiation as an event that has a definite beginning and ending. Furthermore, most people consider the negotiation to start and end with the actual interactive process between the two parties. Nothing could be further from the truth.

An acquaintance sought advice on what strategy to use to ask for araise during her annual review with her boss. All the options she had considered dealt with the actual review session. What she had not considered was all the preplanning and information gathering needed to create a powerful negotiation. She had not taken into account such things as documenting her accomplishments over the previous year; finding out what her boss's needs and goals are and how she can help him achieve his goals; finding out what types of raises her boss has given in the past and in what amounts; and having a clear vision of what goals she wants to achieve in the negotiation. In this example, the negotiation began the day our seminar participant starting working for the company and will continue to her next employment opportunity. Most negotiations, like life, are a continuous process.

Time plays a critical role in negotiations. Most often, negotiations will conclude in the final 20 percent of the time allowed. This aspect of negotiation follows an interesting rule that seems to apply to life in general. It's called the 80/20 rule, or Pareto's law (after Vilfredo Pareto, the Italian economist and sociologist who defined it). It states: "Twenty percent of what you do procedures 80 percent of the results; conversely, 80 percent of what you do produce only 20 percent of the results."

In negotiation, this means that 80 percent of your results are generally agreed upon in the first 20 percent of your time. We consistently see this phenomenon in the seminars we present. As the participants negotiate with each other, the seminar leader periodically tells them how much time they have left. Normally, the majority of the negotiations are concluded in the final two minutes.

Time and deadlines can favor either side, depending on the circumstances. Here are a few suggestions that will help you bring time to your side of the negotiations.

1. Have patience. Because most concessions and settlements will occur

in the last 20 percent of the available time, remain levelheaded

and wait for the right moment to act. As a general rule, patience

pays.

2. If there are benefits to resolving the negotiation quickly, sell

your counterpart on the value added to him or her. There will be

times when one or both parties will benefit if negotiations are

resolved quickly.

3. Realize deadlines can be moved, changed, or eliminated. As your

deadline comes near, do not panic. Change your deadline. Have you

ever wondered how many of the people running to the post office at

the last minute on April 15 have refunds coming to them? Even

without a refund, people still have the opportunity to file an

extension, giving them another four months to end in their forms.

4. In most negotiations, you are better off if you know your counter-

part's deadline and he or she does not know yours. As you near the

point that you perceive as the other's deadline, his or her stress

level will increase and he or she will most likely make con-

cessions.

5. Remember that generally you will not achieve the best outcome

quickly. Although there are exceptions to this rule, generally you

are better off changing your deadline and moving on in the nego-

tiation, slowly and with perseverance.

Most often, the side with the most information will receive the better outcome in a negotiation Why, then, do people fail to get adequate

information prior to a negotiation? Because, as we mentioned earlier, they tend to perceive the negotiation as the actual interaction between two parties. People seldom think about the information they need until this fact hits them in the actual negotiation.

A negotiation is not an event, it is a process. It starts long before the face-to-face encounter. One reason you have to start preparing much earlier is that during the actual negotiation, it is likely that your counterpart will conceal his or her true interests, needs, and motivations. Your chances of getting this information during the actual negotiations is relatively remote.

The earlier you start, the easier it is to obtain information. People are more willing to give out information prior to starting any formal interaction. Before buying my wife's car, I went to several dealerships asking questions about the models we were interested in, the financing plans available, and how willing they were to deal.

Where do you get information? From anyone who has knowledge that will help you in your negotiation. You can find useful material by researching facts and statistics, talking to someone who has negotiated with your counterpart in the past, talking to your counterpart, or speaking with friends, relatives, and others who have been in similar negotiations.

Advanced Preparation in Negotiation

In negotiations, advanced preparation is critical. The more information you have, the better off you will be. Also, it will be in your best interest to have a clear set of goals going into negotiation. You should set your goals based on the information you collect. The following questionnaire will help you collect the information you will need.

Points of View Questionnaire

Your Side Counterpart's Side

Topic: Topic:

Available Facts: Available Facts:

Negotiable Issues: Negotiable Issues

Needs of Negotiators: Needs of Negotiators:

Position on Issues: Known Position on Issues:

Strategy and Tactics: Strategy and Tactics:

The word power has had a bad connotation for many years. It has received this reputation because most people associate the word with one side dominating or overpowering the other. I define power as the ability to influence people or situations. With this definition, power is neither good nor bad. It is the abuse of power that is bad.

There are ten types of power that can influence the outcome of a negotiation. I emphasize the word can, because if one has power but doesn't use it, the power adds no value to the negotiation.

1. Position. Some measure of power is conferred based on one's formal

position in an organization. A marketing manager can influence the

decisions that affect the marketing department. However, the mar-

keting manager has little authority or power in influencing the

decisions that affect the finance department.

2. Legitimacy. Certain positions of authority confer legitimate power.

The pope of the Catholic Church holds this type of power. Catholics

look to the Pope for guidance in areas such as marriage, divorce,

or abortion.

3. Knowledge or expertise. People who have knowledge or expertise can

wield tremendous power. Of course, knowledge in itself is not

powerful. It is the use and application of knowledge and expertise

that confers power. Thus, you would be an incredibly bright person

and still be powerless.

4. Character. The more trustworthy individuals are, the more power

they will have in negotiations. The big issue here is whether

they do what they say they are going to do.

5. Rewards. Those who are able to bestow rewards or perceived rewards

hold power. Supervisors, with their ability to give raises, hold

power over employees.

6. Punishment. Those who have the ability to create a negative outcome

for their counterpart have the power of punishment. Managers hold

this type of power with their ability to reprimand and fire em-

ployees. State troopers and highway patrol officers also have this

power with their ability to give out speeding tickets.

7. Sex. Dealing with someone of the opposite sex can confer power. I

have videotaped many negotiation case studies in which the turning

point was when a woman casually touched a man's hand or arm to make

her point.

8. Behavior style. You are most likely one or a combination of the

following behavior styles:

(a) analytical, process oriented, methodical;

(b) driven, task oriented, goal directed, bottom-line focused;

(c) supportive, relationship oriented, focused on feelings;

(d) some blend of the other three. Which behavioral style is the

most appropriate depends on the situation. Someone going

through a divorce who wants to maintain a good relationship

with his or her spouse and children would want to use the

supportive style. The real power behind knowledge of behavior

styles lies in your ability to adapt your style to the situa-

tion.

9. No Power. In some instances, giving up all power can be very

powerful. If a kidnapper threatens a hostage with death enough

times, the hostage may just challenge the kidnapper to go ahead

and kill him. At the point that the hostage no longer fears death,

the kidnapper loses his power.

10. Crazy. This may sound funny, but bizarre or irrational behavior

can confer a tremendous amount of power. Every organization has

someone who blows up or behaves in an irrational way when con-

fronted with problems. Those who have been exposed to this type of

behavior tend to avoid such individuals. Some people in organiza-

tions are not given many tasks to accomplish because others are

afraid to ask them.

Most people have more power than they think. I believe there is a link between one's self-esteem and the amount of power one believes one has. It has been demonstrated that people with high self-esteem feel they have more viable options in negotiations. People with low self-esteem do not perceive themselves as having viable alternatives. These are the same for people who feel they lack the power to act. Powerless people become apathetic, which means they do not stand a fair chance when they enter a negotiation.

When entering into a negotiation, there are some rules to remember about power.

1. Seldom does one side have all the power. Even when you go to banks

asking for a business loan, you, the entrepreneur or customer,

still have power: the power to decide which bank you will apply

to; the power to decide what interest rate you will pay; and the

power to decide whether you will put up your home as collateral.

2. Power may be real or apparent. When I was a proctor in the soci-

ology department at San Diego State University, I knew that cheat-

ing was a problem, but I had never made a focused effort to stop

the offenders. I figured I would use multiple tests on the final

to prevent cheating. Unfortunately, when the term was ending I

didn't have time to scramble the finals, so I had to resort to

Plan B. As I was passing out the tests, I announced that I would

uphold the university's "policy" on cheating. As I completed hand-

ing out the test, one bold student asked what the policy was. My

response was simple: "If you need to ask, then you don't want to

know." This was the first time I had ever seen all sixty students

staring at their own paper. Does the university have a policy on

cheating? I don't know. But in this situation, whether the power

was real or apparent didn't matter. The students perceived that I

had the power.

3. Power exists only to the point at which it is accepted. When re-

turning from a trip to Europe, I noted at the airport that all

the ticketing agents for the economy class had at least a twenty-

minute line to check baggage. Yet the business and first-class

agents had not one person in line. Not wanting to wait in line, I

boldly took my baggage and tickets up to the business class agent

and got my seat assignment. (I would have gone up to the first-

class counter, but I didn't want to push my luck.)

4. Power relationships can change over time. This is one of the

hardest lessons I have ever learned. In my youth, I had the same

girlfriend from the seventh to the eleventh grades. At the time, I

was proud to say I had the power in this relationship. I chose

which activities we would become involved in, what friends we

would have, and where we would go on our dates. Giving her flowers

was not in my repertoire. After all, I didn't need them. And then

something happened that sent me into a tailspin. Marilyn, my girl-

friend, was asked out by the student body president. As if that

weren't enough, Brutus was also the starting quarterback for the

football team. Overnight, I was sending cards and roses and

begging for a date. I was my first real-life lesson that win/lose

negotiations eventually end in lose/lose.

In relationships, the side with the least commitment generally holds the most power. If one party is highly committed to the relationship

and the other is not, the former will generally have less power in the relationship.

5. Test your power. You will never know how much power you have until

you test reality. The chances are, you have more power than you

think. Once again, power is neither good nor bad. The abuse of

power is what is bad.