Monthly Archives: October 2015

I’m outta here! Five questions to ask before walking away from a negotiation

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In September, I tackled the thorny problem of where to spend the holidays. Briefly, I suggested that fighting with your spouse about which family to visit (a distributive strategy) is less productive than figuring out a way to satisfy both of you (an integrative strategy).

Well, suppose you gave my suggestion a try—you offered to spend Christmas with your spouse’s family in San Francisco if she’d spend Easter in Chicago with yours—but she wasn’t too interested. If only she’d read these incredibly useful posts! Regardless, you’re now thinking of defaulting to what I originally called a “50/50 person split”: you spend Christmas in Chicago, while she heads to San Francisco. In effect, you’re considering walking away from this particular bargaining table. And the tenor surrounding your dinner table is starting to reflect it.

The impending holiday impasse is unpleasant, but still negotiable! In this post, I’ll discuss five simple questions to ask yourself before giving up on this or any negotiation. Though they won’t necessarily prevent you from giving up, they’ll at least help to ensure that impasse is the best option. So here go the questions:

  1. Have I asked why? In other words, have you explored the reasons behind her preferences? Why did she flat-out decline your offer to split the holidays? If you asked, she might tell you that her brother will visit San Francisco for Easter but not Christmas, which opens up the possibility of making her happy by reversing the order of the cities in your offer.
  2. Have I said why? In other words, have you communicated the reasons behind your preferences? Perhaps your mother is having an operation around Easter, and you really need to be in Chicago to help her. If you said so, perhaps your spouse would realize that your collective Easter plans are much more important to you than her, especially since her brother’s visiting both of you later this year.
  3. Am I angry? In other words, is emotion propelling you toward an impasse? Few decisions are best made angry, and negotiation decisions are no exception. If you’re angry, I’d suggest ratification as a means of justifying a short break.
  4. Do we have to decide now? Even better than a short break is an extended break in which both parties ponder their options. No, you can’t wait too long in the face of rising airfares, nor is procrastination generally a great strategy. But in the face of an impending impasse, it’s usually worth the wait in order to collect your thoughts.
  5. Is the alternative really better? In other words, is the 50/50 person split (your BATNA) really preferable to the worst deal you could reach with your spouse? Suppose she’s still insisting on both of you spending both holidays in San Francisco. While that makes you angry, is it worse than spending Christmas (and probably Easter too) apart? Perhaps so, and then an impasse is justified. But the point is to ask the question, as we often impasse out of anger even though the alternative is actually worse (previously called hubris).

So the bottom line is this: Before walking away from this or any other negotiation table, make sure you’ve asked and said why, taken the time to diffuse your anger and weigh your options, and verified that the alternative is preferable. If you’ve skipped any of those steps, it’s worth spending a little more time at table, if only to make the holidays that much merrier.

How do you decide whether to walk away from a negotiation?

Household harmony: Carving up the chores without conflict

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How often have you stopped and thought: “Gee, I wish I was doing more housework”? Whether it’s washing the dishes, vacuuming the carpet, or cleaning the cat box, few of us want more housework. As a result, those of us who live with others are likely to eventually experience chore-based conflict.

Dividing up the chores can be contentious! But it’s negotiable.

To negotiate this particular morass, it helps to understand negative bargaining zones and how to deal with them. This post will introduce that topic and propose one strategic response; future posts will offer many more.

So imagine a simple example: you’re fighting with a dissatisfied spouse about washing the dishes. You wash the dishes on Saturday and Sunday, which seems appropriate since your high-stress (and high-paying) job occupies your time Monday through Friday. Your spouse does the dishes the rest of the week, which might seem unfair except that he (to alternate genders in my posts) works a low-stress, part-time job that leaves lots of time for scrubbing.

“Thomasina,” he says, “you’re not pulling your weight around the sink.” “Thomas,” you say, “you’re making 1/100th of my salary.” And thus it’s come to a head.

In a pinch, you’re also willing to wash dishes on Friday (for a total of three days per week). But you’d really rather sip a margarita that night, and you think the idea of Thursday dishes is outrageous. Unfortunately, Thomas doesn’t see it that way: “Every time you come home late, you eat nachos and sip margaritas! Do you know how many dishes that creates, and how hard I have to scrub that nacho cheese? It’s only right for you to do dishes at least Thursday through Sunday!”

This is a negative bargaining zone: the least that one party would accept (four days of dishes) is more than the most that the other party is willing to offer (your three days). And, if you and Thomas just try to persuade each other on the dishes, this is the start of a conflict.

But do you really have to do that? Aren’t there other chores in need of doing? In particular, isn’t Thomas always vacuuming up the cat hair on Saturday, complaining all the while about missing college football? And wait, doesn’t your schedule free up considerably on the weekend? What if you offered to take over the Saturday vacuuming while maintaining your current level of dishwashing?

Well, it’s no telling what Thomas will say (especially if he’s still brooding over the salary comment). But chances are, he’ll at least stop insisting on Thursday dishes. And he may even get so excited about college football that he forgets about Friday dishes.

What’s happened here? You initially faced a negative bargaining zone: four days of dishes demanded versus three days offered. But by introducing another issue (vacuuming), you’re now making an offer that exceeds his minimum demands (defined more broadly). You’ve turned the bargaining zone positive and, in the process, made housework negotiable.

So here’s the bottom line: Many of our conflicts only become conflicts because we fixate on one issue. By introducing another issue, we give ourselves at least a fighting chance of not fighting.

Have you ever split up the housework several chores at a time?

 

 

I need more money! Five topics to ponder before requesting a raise

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“By failing to prepare, you are preparing to fail.”

–Ben Franklin

 

Despite that supposedly low inflation rate, everyone’s cost of living seems to constantly go up. With rising costs come the need for a rising income. Increasing your income, in turn, often requires you to request a raise.

Asking the boss for more money is tough! But Ben Franklin’s advice makes even the toughest challenges negotiable.

Although Ben’s quote did not appear in one of his negotiation blogs, it might as well have appeared there: preparation is probably the single-biggest predictor of negotiation success and failure, especially in important and complicated negotiations like raise requests. The real question, then, is what to prepare—what things to think about in the heart-pounding moments before the request?

Well, imagine yourself palpitating at your desk, two hours before the raise meeting. Before this or any other important negotiation, always consider the following five issues:

    • Your interests. Why do you want a salary increase? “Because I need more money!” you’re thinking, as well as, “What a stupid question!” Truth-be-told, it’s often far from a stupid question. To see why, force yourself to ask yourself “why” again. Why do you need more money? Are you planning to buy something big? Struggling to pay your bills? Saving up for school? All of these are common reasons to request a raise, but each has very different implications for the types of solutions that might satisfy you. If you’re planning to buy a house next year, an end-of-year bonus might help, but if you can’t pay your electric bill right now, an end-of-year bonus won’t do you much good. If you’re saving for school, your company’s educational reimbursement policy is probably more relevant than your paycheck.
    • Their interests. What’s likely to motivate your boss? When she initially demurs, why? Is this year’s budget already gone? Would paying you more create inequity? Is she just demurring to demur? Again, knowing why means knowing what solutions might work. If she doesn’t have any money right now, maybe she will at the beginning of next fiscal year. If it’s inequity she fears, maybe offering to assume more responsibility would make a raise more palatable. If she’s demurring to demur, maybe you should just justify your request.
    • Your reservation price. What’s the worst outcome you would accept? This of course depends on your best alternative to your current job. If you don’t have one or haven’t thought about what it might be, then you’d have to accept almost anything (or nothing) in the way of a raise. But if you have an attractive, high-paying job offer burning a hole in your personal inbox, you should set an aggressive minimum for your current company and accept nothing less.
    • Their reservation price. What’s the most they’re likely to give? This of course depends on their best alternative to you. If they could step out the front door and sneeze on somebody with your skillset, then they’re sure to act like Scrooge. But if finding another “you” would take months or years of aggressive recruiting, then they’re likely to say yes to anything reasonable you request. Most importantly, if the most they’re willing to give is less than the least you’re willing to accept, you’d better start looking for another job and/or come up with a creative way to satisfy your interests that doesn’t involve a salary increase.
    • Your target. What’s the best salary you could realistically expect? That number should be much closer to their reservation price than yours. And since their reservation price is a number that they would be willing to give, they will not be offended when you focus on it and use it to make a first offer during the negotiation, which is generally what I’d advise you to do.

 

The bottom line: in this and any important negotiation, listen to Ben Franklin. What do you think about while preparing for an important negotiation?

 

PS If you like what you’re reading and would like to learn more, I’m teaching an open-enrollment course on Strategic Negotiations in November. I hope to see you there! http://carey.jhu.edu/academics/executive-education.

Get rid of that fee! Three strategies for negotiating without power

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“Fee.” The very word strikes fear, especially when we see it popping up on our own credit card, bank, or cell phone bill.

Is there any hope of eliminating a fee once it appears? It’s negotiable more often than it seems. But since the party imposing a fee holds all of the cards, making it negotiable requires knowing how to negotiate from the low-power position.

So imagine that you just received your cell phone bill. It’s true: you burned through a lot of megabytes watching Donald Trump clips, and you did exchange a bunch of text messages about the hurricane that never showed up. So a little bit of overage wouldn’t surprise you. But $167?!? Now that’s just ridiculous, and you’re calling AT&T to say so.

But wait—before you do, it’s worth understanding the situation. In particular, it’s worth understanding that you have no real alternatives. If they don’t budge, your best option is to pay the fee, pop a blood pressure pill, and fork over an early termination fee (should you decide to switch). Since that’s worse than just paying the fee, your alternatives are few and far between. AT&T’s alternatives, in contrast, seem solid. They collect either: 1) your overage fee, or 2) your overage fee plus your early termination fee. Bummer, you’re stuck in the low-power position.

But reflecting on the situation does not mean surrendering to the situation! Don’t put away your phone or stop dialing their digits. Do consider the following three pointers for dealing with the power deficit, in this and in any other negotiation when you have no options:

  • Don’t sweat it. Lacking any viable alternative, the natural inclination is to panic and wonder what could be worse. In fact, research highlights one situation that is worse: having a viable alternative that’s bad. Why’s that worse? Because people with bad alternatives focus attention on those alternatives, accepting any suboptimal offer that seems marginally better. In contrast, a complete lack of alternatives can be liberating, leading people to feel like they have “nothing to lose.” So this is the point: don’t go into the AT&T call thinking that things are just awful; go in thinking that things can only get better.
  • Make sure to make the first offer. It might seem silly to make the first offer when you’re the one begging for a fee reversal, but my own research with several colleagues shows that it’s even more important to make the first offer when you lack power. Why? Because the other side forgets about your low power when they hear your first offer. They get anchored on your offer just like they would’ve if you had lots of power, and you end up doing just as well as you would’ve if you had fantastic alternatives. So in your upcoming call with AT&T, resist the temptation to let the representative move first; replace it with a polite request that they reverse the fee.
  • Seek other forms of leverage. It’s true—you don’t have any alternatives, so that source of leverage is gone. But alternatives are only one source of leverage; another is your contribution to the relationship. AT&T may have millions or billions of customers, but they make their dollars one at a time. Most organizations are surprisingly willing to forgive a one-time oops if it guarantees future revenue. So when you make your first offer, remind AT&T that it’s your first oops, that you’ve been loyal for many years past, and that you’ll be loyal for many years in the future if they do you the one-time courtesy.

Is there any guarantee that this will work? No. Anyone who’s dealt with any corporation knows that they’re not necessarily the most rational economic agents. But by going in confident, by making the first offer, and by steeping it in the benefits to them, you’ll at least have a fighting chance at fee reversal.

Have you ever gotten a fee reversed by just asking?