During the Civil War, President Lincoln was urged by a friend to give up Forts Sumter and Pickens and all government property in the Southern states. In reply, Lincoln said, “Do you remember the fable of the lion and the woodsman’s daughter?”
“Aesop writes that a lion was very much in love with a woodsman’s daughter. The fair maid referred him to her father. And the lion went to the father and asked for her hand.
“The father replied: ‘Your teeth are too long.’”
The lion went to a dentist and had them extracted. Returning, he asked again for his bride.
“’No,” said the woodsman. “Your claws are too long.”
Going to the doctor, he had the claws removed. Then he returned to claim his bride, and the woodsman, seeing that he was unarmed, beat out his brains.
“May it not be so with me,” concluded Lincoln, “if I give up all that is asked?”
I learned a long time ago that you can’t give anything away in negotiations without receiving something in return. I also know that the most important term in any contract isn’t the contract. It’s dealing with people who are honest.
Before you start any negotiation, look beyond the title and make sure that the person you’re dealing with is in a position of authority to sign off on the agreement.
No matter what industry you’re in, or how far you go in your career, the ability to effectively negotiate can make the difference between success and mediocrity. It doesn’t matter whether it’s a multimillion-dollar contract, a job offer or a house sale. The rules of good negotiating are the same.
- Know what you want. Don’t go to the table without a clear, realistic idea of what you want to achieve. It will help you negotiate with confidence.
- Ask for what you want. Don’t be afraid to make the first offer. You’ll set the tone for the discussion, and studies suggest that the negotiator who goes first usually comes closer to getting what he or she wants. While I often counsel people to let the other person go first, someone has to start the process. I have found that either way, I need to be clear about my expectations or I will be disappointed.
- Understand what your adversary wants. A successful negotiation should satisfy both sides. Instead of trying to crush your competition, find out what he or she hopes to get, and try to work together toward a solution that works for you both.
- Don’t concede unilaterally. Usually one side or the other has to give something up. If you offer something, be sure to get a comparable concession from the other person. Giving away something for nothing will be taken as a weakness to be exploited. The playing field needs to be level. You don’t have to accept being bullied.
- Don’t rush. Time can be your friend if you’re willing to wait for the right deal. If the other side senses a deadline, he or she may be motivated to hold out until the last minute, or try to force you into accepting unreasonable terms. Be patient and let the time pressure work against the other side.
- Be ready to walk away. This can take a certain amount of courage, but it’s necessary to avoid being backed into an agreement you don’t want. If possible, keep an ally in reserve – someone with the power to approve or reject the deal. This can give you an out if you need to turn down a deal, or motivate the other side to make the best offer possible.
- Listen. Sometimes what the other side says is not the same as what they want. They say the price is too high, but their most important demand is quality, which almost always costs a little (or a lot) more. Pay attention for cues that will help you direct your response to a better outcome for all.
Financier J. P. Morgan once wanted to buy a large Minnesota ore mine from John D. Rockefeller. So Rockefeller sent his son, John D. Jr. to talk to Morgan.
Morgan asked, “Well, what’s your price?”
He was unprepared for the response. Junior said, “Mr. Morgan, I think there must be some mistake. I did not come here to sell; I understood you wanted to buy.”
Mackay’s Moral: There is no such thing as a final offer.