Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

President Barack Obama said on Feb. 9, “I suppose what I could have done is started off with no tax cuts (in the stimulus bill), knowing that I was going to want some, and then let (the Republicans) take credit for all of them. And maybe that’s the lesson I learned.”

President Obama’s lesson – that he probably should have started with sufficient room to move on tax cuts so the Republicans could feel they had psychologically achieved some success – is a critical offer-concession tactic.

So how can we ensure we don’t make that same mistake in our business negotiations?

• Get into your counterpart’s head.

To build into your first offer sufficient room to move, get into your counterpart’s head and evaluate his or her goals and responses throughout the offer-concession stage.

In this instance, Obama failed to fully appreciate the goals of the top Republican congressional leaders: to stake out their own contrary position and achieve some type of “win” after getting defeated in the election.

Of course, Obama might say he needed to walk the walk and not just talk the talk of bipartisanship. And he did include Republicans in his Cabinet and invite top Republicans to the White House to discuss the bill.

But these actions and a new spirit of bipartisanship are not inconsistent with recognizing that your counterparts need to achieve significant concessions in order to sign on to your legislation.

Businesswise in a tough economy, almost everyone is expecting significant concessions off your first offer. So in calculating it, almost always build in room to move. At the least, it will give your counterpart ammunition when his or her boss asks if he or she got a good deal.

• Game it out.

Play out several offer-concession scenarios in a brainstorming session with your colleagues before you make your first move. Keep in mind that parties often tend to move in patterns based on what has happened in the past. The starting point for these scenarios should be your goal – when and how far do you need to move so you end up there?

Gaming this out will concretely illustrate the impact of giving your counterparts a psychological “win.”

• Throw an anchor.

Finally, consider the anchoring effect – the extent that your starting point will impact your counterpart’s expectation of what is reasonable. Research has found that negotiators have fairly changeable expectations early on in negotiations.

Thus, your first move tends to have a disproportionate impact on your counterpart’s expectations of what he considers fair and reasonable.

As psychologist Robert Cialdini notes in his classic marketing best-seller Influence: Science and Practice, “the truly gifted negotiator is one whose initial position is exaggerated enough to allow for a series of reciprocal concessions that will yield a desirable final offer from the opponent, yet is not so outlandish as to be seen as illegitimate from the start.”

Your starting point should thus be your highest realistic expectation, based on legitimate independent standards and justifications.

President Obama misread the partisan mood of his Republican congressional counterparts. But his more recent combative style suggests he learned from his mistake.

We should also learn from his mistake.

Published March 5, 2009 The Arizona Republic

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