1. Are You Asking the Right Questions? Alice, the Director of Programming for a professional training institute, is entering into a negotiation with Gary, a marketing consultant, about his promoting an advanced information technology (IT) course she recently developed. For the institution's basic IT course, Gary's firm absorbs all the advertising and marketing costs, pays a set fee to the institute, and retains the revenue generated. She and Gary want to settle on a revenue- sharing plan for the new course. When the two meet, Gary points out that he would be the one taking on all the risks of marketing the advanced course—risks greater than those associated with the basic course. Therefore, he argues, he deserves a greater share of the revenue generated by the advanced course. Alice, who needs Gary's experience to market the new course, makes a counterproposal, offering Gary 3% more than the revenue he earns from the basic course. Gary reinforces his position by explaining how much he would have to earn to cover his costs. Alice contends that this advanced program will be a real moneymaker for both of them. “Don't you agree that our arrangement for the basic course yielded profits for both of us?” she asks. “Yes, but can’t you see that I'm taking on all the risks in this arrangement?” Gary responds. They go back and forth in this manner, Gary arguing about his costs and risks, Alice insisting her programs fared well in the past and will market successfully in the future. The few questions they ask focus on issues, counter offers, and settlement options. After two hours and little progress, Gary asks Alice, “Do you want to continue doing business with my firm or don’t you?” ‘The questions that Gary and Alice ask foster an “attack and defend” pattern that turns into a verbal tug of war. When bargaining becomes a debate between pro and con positions, the conversation blocks discovery of common goals and joint gains. Negotiators who fall into this communication rut make poor concessions, pass up opportunities that would further everyone's interests, and walk away from such encounters dissatisfied. In a typical negotiation, people ask a wide array of questions that move beyond the basics of who, what, when, where, and why. Yet, when researchers code in- teractions, they find that negotiators typically spend more time arguing for their positions, defending their stance on issues, and providing information than they do in asking questions. When pressed, negotiators admit that asking questions leaves them feeling vulnerable and open to exploitation. Effective use of questions, however, allows negotiators to redirect interactions and gai important insights about the bargaining situation. In this article, | suggest a variety of strategies to help you fine tune your questions in negotiation and apply these tools to reach an agreement that satisfies everyone. Page 1 of 12Use open-ended questions with an explanation: Questions differ in type and form. The sidebar “Leading and Loaded Questions” describes how negotiators use questions to advocate a particular position or attempt to corner the other side. Closed questions can be answered with a simple yes or no, while open-ended questions invite the other side to think through the inquiry. Open-ended questions aid in gathering information, searching for alternatives, and defining priorities and preferences. They produce greater joint gains when parties provide a rationale or explanation for the question. Suppose that Gary points out to Alice that his marketing strategies and costs depend on their target audience. “The basic course targets a large group of entry-level employees in the IT arena,” he says, “while the advanced course focuses on a smaller audience.” He then asks Alice, “What type of clientele would the advanced course draw?” When you provide an explanation before making an inquiry, your question will seem less intrusive or confrontational than it might otherwise. Research shows that providing an explanation for an inquiry is particularly advantageous for negotiators who hold higher positions of power than the other parties Use questions to move from debate to dialogue: When negotiators engage in a debate, their verbal tug of war closes off possibilities. You can improve the pattern of your negotiations through dialogue, a form of conversation that results in broader thinking, new insights, and greater understanding. Questions play a key role in changing the conversational form of a negotiation from debate to dialogue. The timing of questions has a critical effect on bargaining outcomes. Research shows that questions can serve as interruptions that redirect the negotiation toward cooperative dialogue. For example, Gary might interrupt the pro and con debate over fee structure to ask Alice, “What profit margin do you need for the advanced course to be successful?” This question shifts the conversation away from positions to a discussion of needs, Broad-based questions that help identify the primary or underlying differences between negotiators are particularly helpful in turning a debate into a dialogue. For example, Alice might say to Gary, “You're clearly concerned about taking on additional risks. What does the term risk mean to you in terms of the advanced course, and how does this risk differ from that associated with the basic course?” Here, Alice is asking a window question that calls on Gary to illuminate his understanding of the situation. Use circular questions to explore the negotiation context: Circular questioning promotes dialogue by expanding the scope of the discussion beyond the immediate situation. In exploring the larger context, circular questions illuminate the bases for positions. Alice might ask Gary the following set of circular questions: * “How do you conduct a marketing campaign?” “What is similar and different about marketing a basic and an advanced course?” © “What is the timing and relationship between conducting a campaign and enrolling trainees in a course?” Page 2 0f 12By asking Gary about his work, Alice broadens the discussion from the fee structure for a particular course to the general context of marketing. In this way, she can learn about the concept of risk as it is embedded in the marketing process. Gary could engage in circular questioning by asking Alice: “What is the nature of an advanced course?” ‘* “What aspects of the basic course are necessary for students to know before they enroll in the advanced course?” ‘© “What is the relationship between the fee structure and the type of course?” Circular questions allow negotiators to learn about each other’s circumstances, to build trust, and to expose underlying issues in their relationship. This sort of questioning is less threatening to both sides than direct queries about bargaining positions. LEADING AND LOADED QUESTIONS Early in their negotiation, both Alice and Gary resorted to using leading questions—questions that function not as inquiries but as statements of position or even as “veiled advocacy.” “Don’t you think our arrangements for the basic course have worked well and yielded profits for both of us?” Alice asked Gary, who later asserted, “Can't you see that I’m taking all the risks in this proposal?” Because they prompt the other side to become defensive and less willing to disclose information, leading questions result in lower overall joint gains. Also triggering emotional responses are loaded questions, such as: “aside from the excessive options on the table, what other suggestions do you have for a payment plan?” or “Are you saying these unfair terms are the only ones you will accept?” Freighted words such as excessive and unfair serve to corner or even trick the other party. Because such questions perpetuate a defensive stance, you should strive to eliminate them from your repertoire. Say Alice finds out that for Gary to recover his costs, he would need to recruit at least 105 students for each advanced course. For the basic course, he uses a formula of enrolling one attendee for every 1,000 mailers or for every five Web postings and magazine ads. But Alice realizes that this approach won't work for the advanced course. in marketing it, Gary would need to appeal directly to a much smaller pool—individuals who had taken the basic class. If few people signed up, he’d lose money. This new understanding of Gary's risk marks a turning point for Alice in the negot Gary's questions, in turn, will help him grasp Alice's conception of fee structure. Page 3 of 12Use questions to uncover underlying concerns: By acknowledging the risks that Gary faced in the past, Alice opens the door for them to explore underlying issues that might help generate settlement options. For example, Gary explains that being asked to bear a higher level of risk without the possibility of greater profit makes him feel exploited. Once Gary has raised this concern, Alice can shift the negotiation away from competition to mutual recognition. She could ask him, “What type of arrangement would reward you for this risk and allow your company to make a profit?” Alice could also point out how much she values Gary's work. An enhanced sense of connectedness and appreciation can move the discussion to a new plane where negotiators can explore opportunities for mutual agreement. Use questions to enhance creativity of settlements: As Alice discusses the course design, she mentions that students must take the basic course first and enroll in the advanced course later. “Why is a different timing for the classes essential?” Gary asks. The discussion sparked by this question leads to the idea of offering the two courses as a two-day package, which would allow Gary to promote the basic and advanced courses together. This plan reduces Gary's risk and retains Alice’s fee structure. This win-win agreement grows out of an understanding of each party's circumstances and interpretations of the situation Research on communication and creativity shows that originality in problem solving arises from the joint development of new insights—insights that come from learning about each other's experiences. Question-based dialogue is much more likely than debate to yield such mutually beneficial outcomes. The use of effective questions breaks the pattern of arguing for and against positions and engenders benefits beyond acquiring information. Questions lead to new understandings about the bargaining situation, which, in turn, can shift a stalled negotiation into a conversation that generates creative options for a settlement. + eeENDEHH Page 4 of 122. Choose Language When Making Offers, Concessions February 4, 2005 The Business Journal "Oh, | don't know. My first offer? Boy, | hate this. | suppose | could offer you somewhere around $125 to $150 per hour to do some marketing consulting for me. Of course, | know you're busy and I'm in a rush myself, so I'd really like you to seriously consider it." Is it possible to make a worse first offer? Probably not. This one: Signals uncertainty and lack of preparation by saying "Oh, | don't know." Is vague and ambiguous by offering "somewhere around $125 to $150 per hour." Communicates too much flexibility by noting it's a “first offer." Fails to justify its faimess by pointing to standards such as market value or precedent. Weakens leverage by stating the person is in a "rush" and "hates" the process. It even uses a range, which often leads to miscommunication. After all, the consultant probably focused on the $150 rate, while the potential client probably focused on the $125 rate. So how should we make offers? As I've written in past columns, it's important in your offers and concessions to: * Be specific and detailed. * Explain the offer's rationale and tie it to standards such as market value or precedent before introducing numbers. ‘+ Sometimes point out the consequences if it's not accepted. © Often put it in writing. © Avoid ranges. © Promote an air of finality and increasing rigidity. In many ways, this last point is the most difficult. How, after all, can we promote an air of finality and increasing rigidity in our offers and concessions, especially in the heat of a negotiation? Start by understanding that your counterparts -- before you even open your mouth ~ often already have certain expectations about how you will start and end the process. One major expectation is that your "first offer" includes a substantial amount of value you will concede during the negotiation. Overall, many expect that parties will start with a lot of flexibility and end with relative inflexibility. Page § of 12In most negotiations, this not only is an expectation but something you should incorporate into your offer-concession strategy. In general, start by using words and phrases that signal significant flexibility, then signal middle flexibility (you have some room but are approaching the rigid point), and finally, when you've reached the end, use words signaling inflexibility. What specific phrases should you use, and which should you avoid? 1, At the start, signal significant flexibility with these phrases: "My asking price is ..." and "Ym looking to get ..." Be serious, straightforward and confident, especially at the start. And avoid any explicit mention of the phrase "first offer." That phrase undermines the validity of your offer. Generally, avoid initially using words like "non-negotiable" or “best offer," unless you really mean it and will not make any further moves in the negotiation. Your credibility will take a hit if you use words like these and then move. J only recommend using these words, if at all, at the very end. There, as noted below, you then are signaling total inflexibility. 2. Inthe middle, signal some flexibility with these phrases: "I'm willing to accept ... because ." and "This is fair and reasonable because... ‘Again, be straightforward and factual. But don't overtly signal flexibility or inflexibility. Instead, send a strong, reasoned rationale and implicitly state: "I'm not going to move unless you give me a good reason to move." 3. At the end, signal inflexibility with these phrases: "I've given this a great deal of thought, and it's the best | can do. Anymore and it's not worth it for me to do the deal." This is it. No more. Be firm but not stubborn. And be more explicit here about your leverage - what you may do if you can't reach a deal with this counterpart. If you have a good alternative to a deal with this counterpart, consider sharing it Also, avoid the phrase "take it or leave it." These words often create unnecessary resistance and put your counterpart on the defensive. This usually is counterproductive. Finally, please don't wing it in the offer-concession stage. Consider the exact language and phrases you want to use and then use them, It's extremely difficult to take back off-the-cuff remarks that may inadvertently come out. It's often expensive to take them back, too. REND EHH Page 6 of 123. How to Listen For More Information? By: Jens Thang Listening is the best skill you can learn to do better in negotiations. It is the best way to learn more about the other party. It’s not surprising that there are many people with poor listening skills. Everyone wants others to listen to them. This validates their self-worth. Learning more about the other party you are negotiating with will drastically improve the results of your negotiations. How to listen? 1. Question ‘There's a huge difference between hearing and listening. For the latter, you have TO BE THERE. You must take a more proactive stance to listening. Throw questions. After you have asked a question, listen. Don’t say another word. Give the other party more chances to speak. The more they talk, the more they will reveal information. In turn, the better your results. “What are the reasons for requesting for this?” “What is the best way to go about doing to this?” “When do you think we should sign the deal?” “How is it possible for us to come to an agreement?” “What is holding you back?” Listen to what the other party has to say and ask questions which will reveal more information. 2. Paraphrase Paraphrasing is to check your understanding. It means that you express what you understand from the conversation using your own words. When you paraphrased, you let the other party know that you are listening. If you show that you have taken in whatever she has said, you will be more successful in gaining her trust. This also increase ‘the chances of her listening to what you have to say. “Just to make sure | get you right on this...” “if i'm not wrong, you are trying to say that...” “Correct me if i’m wrong...” Page 7 of 123. Acknowledge To acknowledge means to express your understanding of the other party’s emotion. Negotiation can be an emotional affair. When someone negotiates, she is constantly looking out for validation. In her mind, she might be thinking, “Is my opening okay?" “Do they think that my concern is trivial?” “Do they think that I'm hard to deal with?” “Do they think that I’m demanding?” To move on in a negotiation, we have to validate the other party's emotions. “Sounds like you are very concerned with the delivery...” “It occurred to me that you are unhappy with the terms...” “can understand why you are not happy with this condition...” “can see the reason you should be upset.” “1am hearing what you say, you are disappointed because...” Remember: 3 steps to listen for more information: Question, Paraphrase, Acknowledge SEND IO Page 8 of 124. Influencing For Results By: Radu lonescu Negotiation can be considered a tool that helps parties to reach an agreement based on their interests, but ultimately, what we do when we negotiate is to try to influence others to accept our way. Sometimes we succeed, sometimes we don’t. Negotiation literature is full of tactics and strategies that describe ways of accomplishing this goal. There are two types of influences: Positive and Negative. If we want to change our car we might consider selling the old one. We prospect the market and find that a normal price for the old one could be $ 9.000. If we advertise it at a price of $ 10.000, this is a positive way of influencing others. If we decide to advertise at $ 13.500, this can be considered a negative way of influencing behavior. Negotiation is measured by two criteria: Results and effects on relationships. A successful negotiation occurs when we meet our objectives in terms of results and keep the relationship, at least, within cooperative limits. There are long debates about ethics and morals in negotiation. What we should do and what we are not allowed to do. Many authors try to find criteria for orientation. At the end of the day, the difference between using positive or negative influence is the status of the relationship. Whatever the result (of course at least we must reach our objectives), if we end up with a good relationship it means that we used positive influence. When we behave as other people expect us to behave or when they accept the appropriateness of our actions or motives, we are using positive influencing techniques. We know we are using influence in a positive manner when we prepare well for a negotiation. If we have a lot of offers, if through our actions we gain trust, if we make the right alliances, if we create an environment that others enjoy, if we demonstrate competence, if we have communication skills and through many other methods, we are using positive influences. On the other hand, if we lie even when other expects us to lie, if we deceive, if we try to dominate, if we do not listen, if our main preoccupation is arguing, if we disregard other's party needs, we obtain a negative reaction. Using negative influencing tactics can bring us the desired results, but we have to be aware of the consequences. A bad relationship is certain and our name and reputation goes with it, One can argue that being a good negotiator and using only positive influencing techniques can still result in a negative reaction because of skill differences between the parties. The others may envy the skillful one or assume that facing such a good negotiator, they will surely loose. Civilized society is based on equal opportunities, not on equal possibilities. A real good negotiator can almost always demonstrate to others that they have achieved the best result for a certain deal. Page 9 of 12Often, the difference between the two types of influencing is vague. Different negotiations have different boundaries between positive and negative influences and it is not easy to detect them. Even when we try to keep within positive influencing techniques, we always have the tendency to push toward the limits, hoping that we will notice signals from the other side of the table that will show us when we had pushed too far. Skillful negotiators have the ability to move the boundary inside what is normally considered as negative actions and still keep a good relationship. When we try to evaluate a situation we are using our own system of values. In a negotiation, however, we are dealing with people that always have another system of values. So, in their eyes, it is not important what is our consideration about fairness, ethic and moral. It is their judgment that matters. And if we want to be effective in our influence, we must evaluate our actions as closely as we can to their views also. All of us develop a behavioral strategy inside our normal environment. By observation and self-training we identify the limits between the two types of influences. At the office, inside our market, in our group of friends and at home, we have the ability, more or less, to know how to cope with situations that we face. Problems occur with changes. When we change jobs, when we meet another culture, when the market is changing, we may lose our perception about the limits between the two types of influences. This is when we have difficulties in negotiation. We don’t know any more, for example, what will be the effect of advertising our car for $ 10.000 in India? Is the market value still $ 9.000? And if so, in order to obtain $ 9.000, is $ 10.000 the correct opening? If a buyer comes and offers $ 4.000, is he a serious buyer? Hundreds of questions have to be answered to find again our way to effectiveness in negotiations. The way we behave in a negotiation is based on our feelings. Confidence, trust, courage are one category and on the opposite side, anger, fear, greed, uncertainty are another kind of feelings that show us why we do what we do. if we are greedy we will try to exploit others. If we are afraid, we will try to protect ourselves, if we are furious we want to attack and if we are uncertain we will avoid. All these lead to negative influence. Our actions are mirrors of our feelings and negative feelings lead to bad relations. The other kinds of feelings, the Positive ones, are the source of positive influence. When we are confident, when we have courage and when we want to build trust, we will be able to concentrate on new ways and new opportunities that can bring a strong win-win situation for all parties. The secret to effective negotiations, therefore, is in understanding others as well as ourselves so that we can use positive influences in our negotiations. Positive techniques are essential to achieving winning results and relationships that make agreements valuable for all the parties in an agreement. eHEND ERE Page 10 of 12,5. Interpreting Body Language Studying what you and your counterpart in the negotiation process are not saying is critical to achieving a win/win outcome. The following chart is a dictionary that will help you translate your counterpart s body language, and use your own to say what you really mean to say. Dominance, Power * Feet on desk Piercing eye contact Hands behind head or on hips Palm-down handshake Steepling of the fingers Standing while other is seated Submission, Nervousness «© Fidgeting © Minimum eye contact © Hands to face, hair, ete. © Palm-up handshake © Throat clearing Disagreement, Anger, Skepticism Squinting eyes Frowning Turning away Crossing arms or legs Boredom, Lack of Interest Avoiding eye contact Playing with objects on desk Staring blankly © Drumming on table * Picking at clothes © Looking at watch, door, etc. Uncertainty, Indecision © Cleaning glasses © Looking puzzled Page 11 of 12Putting fingers to mouth Biting lip Pacing back and forth Tilting head Suspicion, Dishonesty Touching nose while speaking Covering mouth Avoiding eye contact Moving away Crossing arms or legs Evaluation Nodding Squinting Putting index finger to lips Tilting head slightly Stroking chin Confidence, Cooperation, Honesty Leaning forward Opening arms and palms Maintaining great eye contact Keeping feet flat on floor Smiling Moving with counterpart s rhythm +eeEND OH Page 12 of 12