Tag Archives: BATNA

COVID-19: Life’s still negotiable

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In moments like these, when the world’s out of control, little seems negotiable. But I’m here to tell you that negotiation is needed now more than ever. Indeed, if we don’t at least try to negotiate a new path through uncertain and frightening times, we’re sure to make an already bad situation worse.

To see what I mean, consider just a few of the many situations that now require many of us to negotiate:

  1. Cancelling a non-refundable reservation: Yes, it says the travel reservation is non-refundable, no exceptions. But actually, it SAID the reservation was non-refundable before the whole world changed. There’s literally no risk in calling up our favorite travel website, explaining the newfound need for a cancellation, and seeing what they say—though there might be some lost time. Indeed, some airlines have already said yes preemptively. Don’t negotiate, however, and you’re setting yourself up for a sure loss.
  2. Setting the new terms with your kids: Things were going swimmingly with the kids. They’d go to school, you’d go to work, and you’d reconvene in the evening. But now, they’re not going to school, you’re not going to work, and you’re about to interact continuously for a solid two weeks (at least). In situations like these, it’s important to make the first offer as to the new rules: That is, proactively and preemptively inform them what learning activities (for example) they’ll be doing before watching cartoons each day. Don’t do that, and the cartoons will automatically appear immediately.
  3. Upgrading your service: Maybe that modem was working for emails. Maybe that cord-cutting was working for the evening news. But chances are, they’re not working for your new needs now. When negotiating a new deal with your service provider, don’t get desperate! Don’t go to the provider, hat in hand, and ask what you’ll have to pay for an upgrade. Go to them with a viable fallback option in hand—another internet or cable company—and only when you’ve researched it thoroughly and would actually be willing to exercise it. Don’t do that, and you’re sure to pay through the nose.
  4. Whether to attend the meeting in-person: Hopefully everyone’s gotten the memo. Just in case someone hasn’t (or it’s ambiguous whether you can), though, you may have to negotiate virtual attendance at a meeting. In these moments, it may be helpful to remind them that social distancing is ultimately a win-win—in the final analysis and the long-term, your interests aren’t opposed. Couple that with a demonstration of the ways you can still accomplish the meeting’s objectives, and you’ll hopefully convince them. Don’t, and we all experience community spread.
  5. Speaking to someone who won’t work virtually: And then there’s (sort of) the opposite. To illustrate, I entered a parking garage the other day, only to hear the parking attendant coughing violently for what seemed like minutes. Maybe it was only those few minutes. Maybe her water went down the wrong pipe. Maybe her employer wouldn’t let her leave, or she couldn’t afford it. But if it was actually COVID-19 and she chose to stay there, think of all the parking tickets touched! If you have to talk someone into leaving the workplace, it might be helpful, rather than urging or ordering them to leave, to probe their underlying reasons for staying–their interests. Do they need a social connection? Not have the necessary technology? Need the money to make it? All problems that can, at least in theory, be solved by an employer without contributing to community spread.

In sum, notwithstanding all the bad news about COVID-19, we’d all do well to remember that life’s still negotiable. Indeed, challenging times call on all of us to negotiate life ever more vigorously than before.

“What’s the worst that can happen?” A simple question to make life negotiable

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The situation’s more complicated, but I’ll first state it simply:

If I had to pick just one way that people go wrong in negotiations, it’s that they don’t negotiate. Facing a dissatisfactory situation, they just live with it. And if I had to pick just one reason that people live with it, it’s that they don’t ask a simple but immensely powerful question of themselves: “What’s the worst that can happen?” By asking that one simple question routinely, I think you’ll find your life becoming more negotiable.

Now the more complicated version: When we encounter crummy situations, we can’t always negotiate our way out of them. In particular, we’re sometimes stuck with a situation no one else can control—a difficult past, a chronic disease, weeks of icy rain in Maryland. But other times, we’re stuck with a situation another person could resolve: A crummy schedule the boss could resolve with flexible hours, a ridiculous price the dealer could resolve with a discount, a relative’s annoying habit they could resolve by just stopping it (!).

In the former situations, negotiation’s not going to get us far (though this post might help). But in the latter, the question we need to—and often don’t—ask ourselves is this: “What’s the worst that can happen?” For example, will the request of our boss really lead her to fire us, will the ask of the car dealer really cause him to kick us out of the dealer, will the huddle with the relative really drive her to the eggnog, never to utter our name again?

If the answer to such questions is yes, then kudos to us for living with it. The costs of negotiation are just too high.

But here’s the problem: Many of us don’t know the answer since we never ask the question. Instead, we implicitly equate the worst that can happen with the worst outcome in the world. But how accurate is that assumption? Will our boss really fire us for requesting some flexibility? Will the car dealer really forgo our business entirely? Will our family member really slosh away our entire relationship past and present in the eggnog? If we never ask the question, we never know the answer.

In sum, by never asking “What’s the worst that could happen?”, we often vastly overestimate the costs of negotiation, which makes any benefits pale in comparison—which makes us suffer through a wide array of solvable situations. It’s an exceedingly common situation, and thus an exceedingly common mistake. Consider some other common examples:

  • Fees from service providers: What’s the worst that could happen if we ask the bank or the airline or the cable company to waive the fee? They won’t, in which case we’re right back where we began. But they’re not going to send us to a different bank or different airline or different cable company unless they’re exceedingly irrational (no comment). And they might just make a “one-time exception.”
  • Creative ideas in meetings: What’s the worst that could happen if we raise a new and creative and slightly oddball idea in a meeting? Generally, people will ignore it and move on. But unless we’ve developed a thorough reputation for irrelevance or insanity, they won’t immediately put our career on the slow-tack. And they might just consider what we said.
  • Family preferences: What’s the worst that could happen if we suggest a different restaurant or alternative family vacation? They’ll decide against us, and then we’re stuck with the same Applebee’s or Disney getaway we were. But hey—maybe they’ll at least consider our dislike of overcooked burgers or overpriced opportunities to wait in line next time.

These are just a few of the innumerable situations where failing to ask what’s the worst that can happen leaves us with the worst that’s already happened. I’m certainly not saying that you always have the ability to ask, nor that you always should. But I’m certainly saying that when you do have the ability, you should always at least consider the worst-case.

Renovating a room? Three more reasons to get multiple quotes

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I’ve previously advised you, when hiring a contractor, to obtain several quotes. And I’ve so-advised for a specific reason—a reason that most negotiation instructors would fully endorse: because you’ll then have an alternative, providing leverage over the preferred contractor’s price. But I’m here to suggest some less recognized but no less important reasons to engage with multiple parties—reasons that can easily make your contracting more negotiable.

Consider just three:

  1. You learn about the issue: We’re currently pondering a bathroom renovation and have invited several contractors over to offer their ideas. And simply by talking to several independent parties, I’ve learned all kinds of interesting and esoteric things about bathrooms—from the building codes about medicine cabinets to the standard height of a toe kick (in addition to what a toe kick is). Had I talked to just one party, I would’ve amassed few such nuggets of information—nuggets that will inevitably inform the final decision.
  2. You hear lots of ideas: You’d think: one bathroom, one set of possibilities. But then you’d be wrong. Each contractor has offered an entirely different vision for the same space, multiple layouts with markedly different advantages and disadvantages. Had I talked to just one party, I might’ve been showering in some awfully strange places or paying to move some awfully expensive pipes.
  3. You learn about your own preferences: Talk to a neoclassical economist, and they’ll probably tell you that you understand your own preferences. Talk to me, and I can tell you that, if I had any a priori preferences about a bathroom renovation, I had no idea what they were. But in the process of conversing with multiple contractors, I’ve come to develop some rather refined renovation preferences. Slate floor? Only if it’s smoothed. Oval mirror? Looks awfully nice between some rectangular cabinets. Only by talking to multiple parties did I come to understand myself.

So, talking to multiple parties is not just about driving the price down. It’s also about understanding whatever it is you’re negotiating about—as well as yourself. Without that, no discount will make your bathroom negotiable.

Success as a steadily improving BATNA

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How can you know your life is broadly successful? The question is often asked, but rarely from the perspective of negotiation research. So let me share an answer implicit in that research, an understanding of which can make life negotiable: you can measure success, in part, by the trajectory of your BATNA.

Huh? Let me explain.

BATNA, or best alternative to a negotiated agreement, is your next best alternative to any particular negotiation. Put simply, it’s your plan B. In general, successful people tend to see the number and quality of their BATNAs steadily increasing over time. Just a couple quick examples:

  • Multiple job offers: The most successful people tend to have employers fighting for their services rather than the reverse. In other words, they have many alternatives to any particular job. Thus, they have the luxury of choosing the best option.
  • Multiple life choices: The most successful people have many choices about how to live their life. They can choose to continue working, as most of us must But they can also choose to take some time off, sail the world in a small schooner, or simply take a mental relaxation break. In other words, they have many alternatives to their current way of living.
  • Multiple friends and colleagues: The most successful people have many people, both friends and colleagues, beating a path to their door—whether to have a beer or start a project. In other words, they have many alternatives to the relationships they find less than fully enriching.

Across several definitions of success, then, the common denominator is a consistently improving BATNA. So if you’re looking for a way to measure your success, you might consider the trajectory of your BATNA.

Declaring yourself a negotiation superhero—By considering your plan B

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Worried about an upcoming negotiation? Dreading the back-and-forth? The fast ones your counterpart is sure to pull when you’re not looking? Well, don’t fear: here’s a research-based suggestion that can make negotiations negotiable: actively thinking about your BATNA.

I’ve repeatedly discussed the importance of BATNA: your Best Alternative to Negotiated Agreement, or simply your Plan B. As noted by me and countless other negotiation researchers, having and knowing and improving your BATNA lets you walk away from an unproductive negotiation. Less appreciated, I think, is the way that actively thinking about your BATNA before a negotiation can steel you for some upcoming bargaining—at least when your BATNA is decently attractive.

To see what I mean, imagine you’re about to talk to a flooring contractor who is likely to quote you an unattractive price. Imagine further that you have another decent quote in-hand, and you’d like to get your flooring upgraded but really don’t need to. You detest negotiation in general—and especially with pushy salespeople. Accordingly, you’re dreading the upcoming interaction and secretly hoping he calls to cancel.

In this situation, most people are so consumed with worry that they simply forget about their BATNA. Somewhere in the back of their brains, they know that they can always walk away from an overly pushy contractor, but they don’t actively focus on the fact that this guy is just one minor blip in a long list of potential next steps.

But why not?

Why not stop, forget about the pushy contractor, and refocus on the fact that you don’t really need this guy’s flooring, or really any flooring at all? Thinking like that, you’ll realize that it’s the pushy contractor who should be nervous: It’s he who stands to lose a large chunk of change if you don’t like his proposal—he who’d better fear the formidable you and your ability to bolt. Thinking like that, you can confidently place your hands on your hips, puff out your chest, and declare yourself a negotiation superhero.

So the next time you’re fearing an upcoming negotiation, stop thinking about it! And refocus on the fact that you don’t really need it, that you have a plan B.

It’s a powerful strategy but comes with two obvious caveats: First, it obviously falls flat if your BATNA is bad. If your foot is falling through to the basement and all alternative quotes are unbearably expensive, it clearly won’t really help to consider them (though we often vastly overestimate the unattractiveness of our alternatives). Second, it’s not a great idea to keep thinking about your BATNA when the guy actually appears at your doorstep. Instead, as noted elsewhere, you should shift your attention toward your target when negotiating and only return to your BATNA at the end.

So let this be the beginning of the end of your negotiation fears! Our alternatives are often far better than we think, if we really think about them—and we should.

Preparing to negotiate? Use your “BRAIN”!

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Most people know to prepare before a negotiation. If not, then negotiation instructors like me frequently remind them. So the problem is not a lack of awareness about the need to prepare. It’s the lack of a framework describing what to prepare. What exactly should negotiators ponder before arriving at the bargaining table?

Since knowing what to prepare is pretty much a prerequisite for preparing itself, and preparing itself a prerequisite for a negotiable life, let me suggest you use your BRAIN (via the following acronym):

  • BATNA. All good preparation starts with a consideration of alternatives—specifically a negotiator’s next-best alternative if the current negotiation fails (i.e., their Best Alternative to Negotiated Agreement or BATNA). Otherwise, they’ll never know how much power they have or how far to push the envelope.
  • Reservation price. Great negotiators transition directly from their BATNA to their bottom line, walk away point, reservation price. Otherwise, they don’t really have the foggiest idea whether to get to yes or get to no and go with their BATNA.
  • Aspirations. BATNAs and reservation prices are great, but negotiators who spend too much time pondering their alternatives or minimally acceptable agreements (i.e., their reservation prices) tend to get them. To get something better, great negotiators also define their goals, targets, aspirations—actively considering what they really want when their counterpart demurs.
  • Interests. The acronym might as well stop there (and consider the acronym if it did), but the preceding letters alone tend to elicit a very competitive negotiation. Great negotiators know that spending the whole time competing to attain their aspirations, clear their reservation price, or avoid their BATNA results in a competitive scramble over the crumbs of a very small pie. Instead, they know they need to identify and find creative ways of fulfilling both negotiators’ overall objectives (i.e., their interests), and thereby “grow the pie.”
  • Negotiation counterpart. So why not BRAI then? Because that makes very little sense as a word and even less sense as a preparation strategy—the latter because it completely omits the other party. Negotiators who BRAI, and most negotiators do, fail to anticipate their counterpart’s situation and thus find it immensely hard to understand or respect that situation while negotiating. So great negotiators repeat the preceding letters for their counterpart, taking a wild albeit educated guess as to their counterpart’s BATNA, reservation price, aspirations, and interests.

So the next time you sit down to prepare for a negotiation, don’t just use your mind—use your BRAIN! Doing so can’t spell the difference between a smart negotiation outcome and an outcome that everyone deems dumb.

When to part with your Plan B

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I’ve often alluded to the need to develop a BATNA: a next-best option or plan B if the current negotiation fails. Any negotiation instructor worth their salt will give the same advice. But the advice also raises a critical conundrum that often goes unanswered: when to let your BATNA go. When’s the right time to exercise plan A and let your fallback option go their merry way?

Since knowing when to part with your BATNA can dictate both your economic outcomes and your long-term reputation, thereby making life more or less negotiable, let’s consider five questions that can inform a decision about letting your BATNA go. If you’d like, consider these questions in the context of two job offers, one of which you prefer (plan A) to the other (plan B):

  1. Am I certain about plan A? Plan B effectively offers insurance against the collapse of plan A. So if plan A is far from certain—if someone from plan A has mentioned but not confirmed you’ll get a job offer, for example—then it’s probably better to retain plan B.

But…

  1. Is plan B starting to feel that way? No one likes to feel like a fallback. If you’ve been stringing plan B along, stalling sketchily while they eagerly await an answer, chances are they will. Since the associated damage to your reputation may start to outweigh the benefits of a fallback, you should consider parting ways.
  2. Would I ever say yes to plan B? Maybe it’s the reluctance to say no, or the fear of cold decisiveness. Either way, people frequently retain BATNAs that they would never in a million years exercise. If you would never say yes to your best alternative—if it’s a job you couldn’t possibly envision yourself doing, for example—it’s only right to say no, and quickly.
  3. Are you preventing your plan B from exercising theirs? Oftentimes, your BATNA’s offer to you is preventing them from exercising their own BATNA, e.g., an offer to somebody else. If you are standing in the way of their doing so for no clear reason, it’s probably better to part ways.
  4. How small of a world is it? If you and your BATNA will never again cross paths—not even on the interweb—then you might consider retaining them a big longer. Are you dealing with a used car dealer in the middle of nowhere? But in the considerably more common situation where you and your BATNA both inhabit a small world, I’d suggest treading much more carefully. Will your stringing-alonging follow you around till the end of time? Will every future employer in your industry / city / profession know how fallbackish your current BATNA felt? If so, then treat them with extreme caution and respect, if only for this fairly self-focused reason.

In sum, good negotiators know to cultivate a BATNA. Great and responsible negotiators know to never string a BATNA along unnecessarily. Here’s hoping that these five questions help you navigate these ethically fraught waters.

What’s my alternative?

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The road to regrettable yet avoidable workplace mistakes is littered with the absence of three small words: what’s my alternative? A failure to ask this simple question, I submit, can account for a major portion of our worst workplace decisions. To avoid such decisions and make our lives more negotiable, let’s look at a few of the perils associated with failing to consider our alternatives, along with some simple examples of each.

  1. Walking away from a good deal. Perhaps the most pernicious consequence of failing to consider our alternatives is the risk of walking away from a positive situation. Why would anyone do that? Often because of a flurry of emotions. Consider the many regrettable instances when people mouth off to their superiors or become embroiled in workplace conflicts, thinking they can easily find another job if they have to. But can they? Unfortunately, the labor market is rarely so obliging.
  2. Accepting a bad deal. Quite the opposite, failing to consider our alternatives can lead us to stick with an inferior option. Consider the huge proportion of Americans who consider themselves locked in a dead-end job. Many of them certainly are, given a host of economic and social challenges beyond their control. But at least some of them are not: At least some of the people who consider themselves trapped in a dead-end job could in fact pursue a less stressful or less demanding job, or even found a viable business, if only they entertained such alternatives seriously.
  3. Wasting time deliberating. Many people spend a great deal of time pondering what to do when there is realistically only one thing they can do. Should I accept my boss’s offer to lead that important project? If I really have the option to decline, it’s worth the careful thought. But if my career implicitly depends on my acceptance, then it’s better to confront a lack of alternatives than to pointlessly give myself an ulcer.
  4. Becoming complacent. People and firms often rest on their laurels—failing to innovate or experiment with new ways of working or doing—because they overestimate the costs of failed experiments or underestimate the costs of continuing down a well-trodden path. In other words, they fail to carefully consider the alternatives to doing nothing, so nothing is often what they do.
  5. Submitting to whatever someone says. Many individuals and firms have their favorite vendor or preferred service provider. Look to no one else for service X or product Y! While this approach might make everyone feel good, it’s not particularly likely to produce a favorable agreement. Think about it: even if the preferred vendor is benevolent, how motivated will they be to offer an amazing deal if they know that you’ll accept their terms regardless? Not very. So it’s good to have friends, but when you are bidding for business, it’s also good to have alternatives.

In sum, this negotiation professor believes that a major swathe of our most regrettable yet avoidable decisions can in fact be avoided by considering our alternatives carefully. The next time you make that major decision? Consider considering your alternatives first.

Negotiation lessons from the safety patrol

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I recently volunteered to serve as safety patrolman for my neighborhood. In essence, this involved trolling around the neighborhood at night, making sure no one (i.e., no teenager) was breaking community rules (e.g., loitering at the community beach) or even breaking the law (e.g., defacing said beach).

Since my duties tended to bring the community’s interests (and my own) into conflict with the interests of others (i.e., teenagers), these duties introduced several opportunities to negotiate. Accordingly, the experience reminded me of several important negotiation principles, which I thought I’d share in the hope of making life more negotiable.

  1. Interrupting other peoples’ interests is not particularly pleasant. Who wants to act as the killjoy that spoils some lovestruck teenagers’ lovely evening on the pier, shining a flashlight right in the face of affection? Not me, nor many others I know. In general, I remembered that interests consisting of interrupting other people’s interests are not particularly pleasant to pursue. With that said…
  2. It’s easier when you’re representing others. While less than lovely to give some young lovers (or young tokers) the boot, it was made much easier by the underlying motive: I wasn’t being a killjoy of my own accord. I was doing the community’s bidding, essentially representing the will of several hundred people. In general, I remembered that representing other people often strengthens your resolve. What’s more…
  3. Symbols help. The job of patrolman does have some benefits. I got to drive around with a flashing orange light on my car and wear a flashy orange vest apparently stolen from the Village People. Ridiculous to me and anyone who knew me, these symbols were quite intimidating to teenagers, for whom they legitimized my annoying requests. Perhaps for this reason, the experience also reminded me that…
  4. Most people comply. Thankfully, precious few teenagers protested. Sure, there were the aspiring few negotiators who tried to convince me that they were, for example, “just enjoying the lighting show.” But even these enterprising young negotiators agreed to clear the beach, as per community rules, after a further request. Perhaps they realized that…
  5. It’s good to have an obvious and powerful alternative. Any lip from these teenagers and I had the community and county’s approval to reel in the long arm of the law (i.e., call the police). A strong alternative for me, albeit not one I was particularly eager to engage. A weak alternative for the teenagers, who would find themselves with a rap sheet before even completing their FAFSA.

These examples are probably a bit tongue-in-cheek, but the lessons are real. They highlight, once again, that negotiations truly surround us. And they reminded me—and can remind us all—that negotiating power comes from the surrounding situation at least as much as your prowess.

What’s up, doc? Negotiating in healthcare

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Most of us spend more on healthcare than we’d like to—more, in some cases, than our annual car or mortgage payments. That being the case, why do we spend so much time negotiating the terms of our cars and houses, and so little the terms of our healthcare?

Frankly, the negotiation professor in me just doesn’t know. From my perspective, a few simple principles from the research literature on negotiation can make our healthcare much more negotiable. Just a few illustrative examples:

  1. Setting high aspirations. Negotiation research consistently shows that those who set and stick to aggressive goals tend to achieve better outcomes. With respect to our own bodies, though, I suspect many of us are dissuaded from our goal of ideal health when a well-intentioned doctor tell us “there’s nothing wrong,” or “you’re just fine,” even when we know there is and we’re not.
  2. Reiterating our core interests. Negotiation research shows that the most effective negotiators are those who hew to a consistent script—reiterating their core problem or motivation as consistently and repeatedly as possible. This seems particularly important in healthcare, when we often have to answer the very similar questions of a seemingly endless series of people. On a visit to the ER, for example, we might have to state our symptoms to the front desk, triage nurse, attending nurse, doctor, radiologist, and so it goes. The more consistent our message to each person, even in response to slightly different turns-of-phrase, the better our chances of proper treatment.
  3. Cultivating an alternative: The best negotiators always develop an alternative possibility—another car or house they’d be willing to buy, for example. Negotiating the terms of an alternative affords them power in their primary negotiation but also, importantly, helps them learn about whatever they’re negotiating. What price should I really offer for my preferred Corvette? Some of us cultivate an alternative in healthcare by obtaining a second opinion. But I suspect that some of us don’t because we think the doctor will get offended. Assuming we’re at least as motivated to learn about our health as our cars, I’d suggest we should.
  4. Asking questions: The best negotiators ask a lot of questions. Indeed, they probably use their listening ears more than their speaking lips. Well, few contexts are quite as rife for questions as the cryptic explanation of benefits. $392.54 for an octowhatgraphy with Dr. Whosehisname? I don’t know about you, but I’ve found that calling the insurance company and asking about it not only helps me mitigate confusion. It also turns up quite a few clerical errors that end up saving me money.
  5. Just asking: Asking a lot of questions is great, but even more basic is asking in the first place. The best negotiators are those who simply ask for whatever they need or want rather than expecting their counterpart to guess. But I suspect that few of us really ask for what we want in healthcare, mainly because we think we can’t—especially with a high-status doctor across the table. Lower prices, less invasive procedures, fewer unnecessary appointments: it’s all worth an ask if it matters.

In short, few aspects of our own lives are more important than our health. So why not do what we can to negotiate a healthier deal?

Negotiation success through graduation platitudes

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The graduation season is upon us! Setting aside all of the reasons for joy and celebration, that can only mean one thing: so is the season of the platitude-laced graduation speeches. And while few of us enjoy platitudes, many of us would probably acknowledge that they contain nuggets of wisdom. Why else would wise people keep repeating them?

Thus, in the spirit of the season and in hopes of making life more negotiable, I thought it might be useful to investigate whether the most common platitudes contain any nuggets of wisdom about negotiation. So here are five common platitudes and their implications for negotiation—all of which are surprisingly informative and eerily consistent with negotiation research:

  1. Dream big: With this omnipresent platitude, speakers advise graduates to set their sights high, shoot for the stars, aim for their most cherished objectives. And when the going gets tough, should they quit? No! Double down and try again. Well, that’s exactly what negotiation instructors have advised their students to do for decades: set aggressive targets reflective of ideal goals, then continue to doggedly pursue them—creatively if necessary—without ever giving up or giving in.
  2. Don’t look back: Quickly on the heels of the first platitude, many speakers offer the second, suggesting that graduates should not only dream big and persist, but also resist the temptation to regret “what could’ve been.” In an eerily similar vein, negotiation research suggests that people should focus on their target while bargaining, but then evaluate the agreement against their bottom line, the goal being both a great outcome and a negotiator who doesn’t look back in regret.
  3. Do what makes you happy: This common platitude advises graduates to look beyond the socially sanctioned markers of success (e.g., a big paycheck) in order to pursue their true motivations—the factors that will truly dictate their happiness or lack thereof. In very much the same spirit, Getting to Yes and nearly every negotiation course it inspired advises negotiators to “focus on interests rather than positions.” When negotiating, that is, try to satisfy your true, underlying motivations (your interests) by going beyond surface-level positions—many of which inevitably involve money.
  4. Thank the people who got you here: Speakers often ask graduates to pause their aspirations and thank the people who got them this far. Similarly, I have argued that that life is only negotiable when we occasionally stop negotiating long enough to express gratitude for the people around us.
  5. Always wear sunscreen: Perhaps this one hasn’t quite reached “platitude” status, but it sure got popular a few years back. We could dig pretty deep into the underlying meaning, but let’s just go one level deeper than the words: don’t forget to take simple steps that protect you from bad outcomes. There are lots of ways to go wrong in negotiations, but negotiation research has long shown that negotiators without alternatives almost always get burned.

So the platitudes in those graduation speeches actually turn out to capture numerous nuggets of negotiation wisdom. Something to ponder the third or fourth time you hear a speaker telling you to “dream big.”

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?

Four strategies to win any negotiation (especially with the car dealer)

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A few posts ago, I talked about how to out-negotiate the car dealer: by cultivating your alternatives. We’ve also tried to out-negotiate toddlers (with first offers), employers (with reservation prices), and cable companies (with targets).

In all of these areas, life’s negotiable!

Yet, at this point, I need to introduce an important wrinkle: To REALLY win any negotiation, you need more than a single, simple strategy. Although each strategy will give you a great start on each problem introduced so far, life rarely lends itself to simple solutions. Ultimately, what you need is the negotiation Jedi’s ability to wield all four strategies at the same time!

Does that sound daunting? Today, you’ll see that it’s not—that all four strategies actually fit together naturally once you know how. To illustrate the connections without introducing new complexity, today’s post will reopen a problem we’ve already seen—the car dealer—briefly applying each of the four strategies to this particular problem but focusing on the overall process. The upside of brevity and reiteration is that you’ll not only learn how to master ANY negotiation; you’ll develop particular prowess at taming the car-dealing crocodile.

So, for today’s example, imagine that you’re in the market for a lovely Ford Taurus. You’ve found a stunning red model at the local dealer, priced at an attractive $25,000. What to do now? Here’s a four-step process that I would recommend for nearly any negotiation, including this one:

1. Define and try to improve your BATNA (best alternative).

As discussed in the original post on car dealers (which you should feel free to see for more information), one of the easiest and most important ways to avoid succumbing to the crocodile is to find another Taurus at a different dealer that you could buy in place of the red beauty. Better yet, find another Taurus at a different dealer that you could LOVE like the red beauty—ideally one with a similar or lower price. For example, suppose you search high and dry, finding another Taurus that—though blue—is competitively priced at $23,000. If the red Taurus is still tugging just a little bit harder at your heartstrings, the blue Taurus is your BATNA—and it sounds like a pretty good one.

2. Use your BATNA to define your reservation price (bottom line)

As discussed in the post on jobs, knowing and growing your BATNA is not quite enough: you also need to have a clear idea of what to do with your BATNA. Specifically, you need to translate your BATNA into a numerical bottom line (i.e., a reservation price) for your primary negotiation over the red Taurus. If you’d be willing to pay $1000 more for the ecstasy of red than blue, you might say to yourself: “Self, I won’t pay a penny more than $24,000 for the red Taurus.” Sounds like a reservation price for the red Taurus.

3. Define your target (goal)

As discussed in the post on cable companies, determining a bottom line is still not enough: if that’s the only number in your head, you run the risk of accepting a deal that’s kind of / sort of / barely / minimally acceptable, maybe. To avoid that kind of deal, you need to know what you really want! In other words, you need to set a target. But how to do it? In this case, the $23,000 price of the blue Taurus seems like a good place to start. Make that number your goal for the RED Taurus; think about it and focus on it instead of the $24,000 you’re actually willing to pay. Only remember the $24,000 figure at the end—to decide what to do and determine how well you’ve done.

4. Use your target to make a first offer

As discussed in the post on toddlers, your job is still unbelievably not done. Why? Because YOU know your target but your counterpart still has no idea what it might be. Unless your counterpart starts thinking about YOUR target, they’ll probably think about theirs. Luckily, there’s an easy way to bring the crocodile around to your way of thinking: by making the first offer. Before he can even snap his jaws, you should make an offer—and one that clearly communicates your target. If your real target is $23,000, you might offer something slightly more aggressive in hopes of eventually landing at your target: perhaps $22,000.

So you see that the four concepts discussed in the context of four separate problems actually apply to all four problems—and to many other problems you’ll probably face throughout life. Future posts will discuss new problems and strategies, but these four will always remain at the core.

What do you think of the four-step process?

How to out-negotiate the car dealer: Cultivating your alternatives

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My last post discussed one of the toughest negotiations—convincing a toddler to comply. This post considers one of the most feared—dealing with a car dealer. Most people would rather extract their teeth through their eyeballs than talk to a car dealer. How can we hope for a decent deal when the guy across the table is continuously snapping his jaws?

This problem is formidable, but negotiable. The key is to recognize that there is not just one guy or one table—that you (like the dealer) have alternatives.

Anytime you negotiate anything, you have a primary negotiation partner and you have a next-best alternative: whatever you would do if the current negotiation fails. Since the landmark book Getting to Yes, this alternative has been called your BATNA: your best alternative to negotiated agreement. As I usually repeat ad nauseam in a negotiation course, BATNAs are your greatest source of power in a negotiation. If you have a good BATNA, you can walk away from the current crocodile. If you don’t, he might as well snap away. So, speaking now to those of us who don’t “like” negotiating, take heart! Being a powerful negotiator doesn’t mean acting like Donald Trump; it means having a viable plan B.

I know of few negotiations where BATNAs are more important than car purchases. As the buyer of a car, you typically have multiple—often many—dealers to choose from. The single-most important thing you can do to get a good deal is to visit enough dealers (by taxi, if you have to) to fall in love with at least two cars—each at a different dealer. As I often remind my students, falling in love with one person is a beautiful and wonderful thing in everyday life. Yet, falling in love with one house, one car, or one job is almost guaranteed to make you a sucker. Why? Because if you’re head-over-heels over one car, for example, you have no choice but to submit to every snap of that crocodile’s jaws. You have to accept whatever terms they offer.

Conversely, what happens if you find yourself swept away by two cars at different dealers? At a minimum, you learn about the market. Quite often, the cars are quite similar, but one is inexplicably cheaper. I recently found the exact same car at two dealers, 10 miles apart, but $3000 different in price. That’s right, a $3000 discount, no “negotiation” in the traditional sense. In addition to learning about the market, cultivating an alternative immediately affords you confidence. With a $3000 discount in hand, I can assure you that I felt much more comfortable pushing back on the original, higher-priced crocodile. As a result, and most importantly, having a good BATNA immediately gets you a better deal. Without revealing the exact amount of the discount to any other dealers (which is a topic for another post), the $3000 discount gave me the confidence to go to a third dealer and get the same discount on the same car with better features (all-wheel drive for those icy mid-Atlantic hills).

In sum, one of the single-most important strategies in any negotiation, especially a consequential purchase, is to cultivate a good alternative, a strong BATNA. Doing that is not only effective; it’s heartening for the non-born negotiator, as it doesn’t require negotiation tactics as much as time. As little of that as we all have, I would advise any serious negotiator, negotiating any serious issue, to find enough time to find a BATNA.

Have you cultivated your alternatives in a past negotiation? How has it worked?