SECRETS OF POWER NEGOTIATING FROM PAGE 31

Chapter 40 - Take it or Leave it: In the last chapter, I told you that projecting that you´re prepared to walk away is the most powerful pressure point of them all. If you use it, however, be sure that you´re gentle when you tell them that you´re prepared to walk away. Remember that the objective is to get what you want by projecting that you´re prepared to walk away. The objective is not to walk away -any idiot can do that./ If you´re too blunt in the way you project this, you may antagonize them, so be careful. Don´t use that obnoxious expression "take it or leave it." Even people of good will who feel that they´re willing to meet your demands may recoil if you use that. Instead, use more subtle expressions such as, "Sorry, but that has to be my walk-away price." Or, "We never deviate from our published price-list." / What not to do in a Negotiation: The "take it or leave it" approach to union negotiations even has a name -Boulwarism. Lemuel Boulware was head of labor relations for General Electric during the fifties and sixties. His negotiating method was to make an offer that he thought was fair to the company, the union, and the stockholders and never deviate from it. This take or leave it attitude obviously creates bad feelings because it doesn´t give the union negotiators a chance to have a win for their memebers. I´m sure it didn´t escape Boulware´s attention that if the union took the first offer, the members would begin to wonder why they needed a union. In 1964, the National Labor Relations Board found GE guilty of not barganing in good faith. Even worse, Boulware´s intransigence caused 13 unions to join in a walkout against the company in 1969./ A great way to be firm without being offensive is the Higher Authority Gambit. Who could take offense when you say, "I´d love to do better, but the people back at the head office won´t let me? / I knew a man once who owned a small hotel in Manhattan. One of the problems he faced was friends who wanted to stay and not have him charge them. He solved the problem by establishing a mother-in-law rate. They would call up to see if he had a room free, and he would say, "I´ll tell you what I´ll do. I´ll give you my mother-in-law rate. This is what she pays when she stays here. Nobody stays for less." In that way, he was firmly telling them "No freebies," but he was doing it in a very diplomatic way./ Responding to "Take It or Leave It": When somebody uses the blunt take it or leave it approach on you (and it may be more subtly expressed, such as, "That´s our price, we don´t negotiate"), you have three options: 1. Call his bluff: Tell him your higher authority insists on concessions and if that remains their position, there´s no way that you can put this together. Perhaps you walk out and hope they´ll call you back. Before you consider this drastic response, consider whether the other negotiator has much to lose from your walking away. If it´s a sales clerk in a retail store who is not on comission, he probably has little, if anything to lose and will let you walk. I never had any luck negotiating price with communists, for example, because profit was not a motivating factor for them./ Once I knew that I was dealing with a communist, I gave up trying to get a concession from him. He had no incentive in his system that would make him want to please me./ So befor you walk out, consider how much the other person has to lose by letting you do that. If they have nothing to lose, you probably won´t get anywhere by walking out./ 2. Go over the person´s head: That doesn´t always meand demanding to see his boss or calling his boss to complain. A gentler way is to ask, "Who is autorized to make an exception to the rule?" A little stronger would be to say, "Would you mind checking with your supervisor and seeing if you can get her to make an exception to the rule? I´m sure that if anybody could get her to do it, it would be you." Even stronger would be, "Would you mind if we talked to your supervisor about this?"/ 3.Find a face-saving way for the other person to modify his or her intransigent position: This is the most desirable way to handle "take it or leave it," of course. It is especially effective if the ohter negotiator has something to gain by finding a way around the impasse, which would be true if you´re dealing with the owner of a business or someone on comission. "I can understand why you feel so strongly," you say, "but surely if I were willing to pay you a bonus, you´d be willing to make an exception to the rule, wouldn´t you, Joe?" Or you might try, "Joe, let me ask you something. What would it take for you to change your position on that, just a little bit and just this one time?// Chapter 41 - The Fait Accompli: Fait accompli is a French expression meaning, "it is done." If you have ever sent someone a check for less than they´re asking and marked the back of the check "Payment in full is acknowledged," you have used the Fait accompli Gambit. It´s when one negotiator simply assumes the other will accept the assumed settlement rather than go to the trouble o reopening the negotiations. It works on the principle that it´s a lot easier to beg forgiveness than it is to get permission./ Fait Accompli became so common in the auto repair industry that we passed laws against it. It was common for service stations to fix your car without getting your approval of the estimate, figuring that there wasn´t much you could do about it once they had fixed the car, and they could hold it until you paid for it. / A friend of mine owns a billboard company. He was negotiating with a farmer who had let trees grow on his property until they obscured one of Mike´s billboards, reducing its commercial value to zero. Mike tried to negotiate a good faith payment in return for the farmer letting him trim back the trees, but the farmer demanded an outrageous amount of money because he thought Mike had no options. Mike decided to use the Fait Accompli Gambit on him. One morning he had four of his workers sneak onto the farmer´s property and fire up their chain saws in unison. Befor the farmer could reach for his shotgun, the trees were down and his workers were back over the fence and driving off. Later in the day Mike went by to apologize for the misunderstanding and was able to reach a much more reasonable settlement with the farmer./ The Fait Accompli Can Be Dangerous: The Fait Accompli Gambit does not engender warm feelings from one side to another. When Batman movie producers Peter Guber and Jon Peters were offered key positions at Sony Studios in 1989, they were already under contract to Warner Brothers. They decided to sign anyway and present the fait accomply to Steve Ross, their boss at Warner. Ross went ballistic at the way Guber and Peters had handled this and decided to fight them on it. It ended up costing Guber and Peters more than $500 million to buy out their contract. It was a bad choice of negotiating tactic because Ross probably would have released them without penalty if they had not antagonized him so much. What does this teach you? Don´t use a Fait Accompli unless you don´t care how the other side reacts because it won´t endear you to them./ Sometimes Fait Accompli is done so outrageously that you have to smile at the nerve of the person who does it to you. When I was young, I lent an expensive camera to an older man who had been an important mentor to me. He promptly pawned it and sent me the pawn ticket. Attached was a note that said, "Sorry about this, but I had to have the money. This is a very important lesson for you to learn in life - don´t trust anybody. / More recently a speaker´s agent booked me to do a speech and collected the speaking fee from the company, but didn´t send me my share, which was more than $6,500. He told my business manager that he had spent the money to pay his creditor who were turning nasty. When pressed for a reason for stealing from me like this, he said, "I just figured that Roger was rich and didn´t need the money nearly as much as I did." His audacity stunned and amused us so much that we let him make payments to us./ More subtle forms of Fait Accompli are effective ways of putting pressure on the other side. If you have been overcharged, sending them a check for the correct amount with a "paid in full" endorsement on the back may be simpler than arguing the point. If you are signing a contract and disagree with any of the points make the changes and send the corrected contrac back to them. They may well accept the changes rather than take the trouble to reopen the negotiations./ Chapter 42 - The Hot Potato: The next pressure point is the Hot Potato. That´s when somebody wants to give you his or her problem and make it your problem. It´s like tossing you a hot potato at a barbecue. What Hot Potatoes are you tossed? Do you ever hear "We just don´t have it in the budget"? Whose problem is it that they didn´t budget properly for your fine product or service? It´s their problem, right? Not yours. But they´d like to toss it to you and make it yours./ How about, "I can´t authorize that." Whose problem is it that he hasn´t developed the trust of the people to whom he reports? It´s his, right? Not yours. But he´d like to toss it to you and make it yours. If you´re a contractor, customers have probably called you to say, "I need you to move my job up. If you´re not here first thing in the morning, this entire project comes to a screeching halt." Whose scheduling problem is that? Theirs, right? Not yours. But what they´d like to do is toss you their problem and make it yours./ What you should do is what the international negotiators would tell you to do when the other side tries to give you its problems. I´ve found out from my study of international negotiations that exactly the same principles apply -the same rules that applied for the negotiators in Geneva during the arms control talks also apply to you when the other side is putting pressure on you. The same things apply, and same responses are appropriate./ Here´s how the international negotiators would tell you to respond to the Hot Potato: First, test it for validity. This is what international negotiators do when the other side tries to give them their problem. You have to find out right away whether it really is a deal killer that they´ve tossed you. Or is it simply something they threw onto the negotiating table to judge your response. You must get on it right away. Later is too late. If you work on their problem, they soon believe that now it´s your problem and it´s too late to test it for validity./ In real estate we used to get tossed the Hot Potato all the time, such as from the buyer who would come into one of our offices and say, "We have only $10,000 to put down." Even in blue-collar areas, that would be a very low down payment. Our real estate agent could possibly work with it, but it would be tough./ I would teach the agents to test it for validity right away -to tell the buyers, "Maybe we can work with $10,000. But let me ask you this: If I find exactly the right property for you, in exactly the right neighborhood, the price and terms are fantastic, your family is going to love it, your kids are going to love having their friends over to play but it takes $15,000 to get in- is there any point in showing it to you or should I just show it to my other buyers?"/ Once in a great while they would respond, "Don´t you speak English? Watch my lips: $10,000 is it and not a penny more. I don´t care how good a buy it is." But nine times out of 10 they would say, "Well, we didn´t want to touch our Certificate of Deposit, but if it´s really good buy we might. Or maybe Uncle Joe would help us with the down payment." Immediately the agent found out that the problem the buyers tossed him was not the deal killer that it had appeared to be./ If you sell home furnishings one of your customers might say "We´ve got $20 a square yard for carpeting and that´s it." If you catch that Hot Potato, instead of tossing it back you will probably start thinking of cutting prices right away -if you assume that what they told you was final. But instead you test for validity up front, saying, "If I could show you a carpet that would give you double the wear and still be looking good five years from now, but cost only 10 percent more, you´d want to take a look at it, wouldn´t you? / Nine times out of 10 they´ll say, "Sure, we´ll take a look at it," and immediately you know the price is not the deal buster that it appeared to be. Another was to counter the Hot Potato of "We don´t have it in the budget" is to say, "Well, who has the authority to exceed the budget?" Sometimes you´ll kick yourself at what happens next. They´ll say, "That would take a vice president´s authorization." You say, "You want to do it, don´t you? Why don´t you call the vice president and see if you can get an okay to exceed the budget?" He´ll pick up the telephone, call the vice president, and argue for an okay. Sometimes, it´s that simple. Test for validity right away./ I was at the Anchorage Hilton, and on my departure day, I needed a late checkout. There were two young women standing right next to each other behind the registration desk, and I said to one of them, "Would you give me a 6 p.m. checkout in my room, please." She said, "Mr. Dawson, we could do that for you, but we´d have to charge you for an extra half-day." I said, "Who would have the authority to waive that charge?" She pointed to the woman standing next to her and said, "She would." So I leaned over and said to the other woman, "And how would you feel about that?" She said, "Oh sure. That would be fine. Go ahead." Another way to handle the "we don´t have it in the budget Hot Potato" is to ask them when their budget year ends./ How This Gambit Made me $5,200: I trained the 80 salespeople at one of the top HMOs in California. A few weeks before the meeting, the training director called me and suggested we have dinner so that she could fill me in on how the company operates. Because I figured that she was going to pay for dinner, I picked the top French restaurant in Orange County, and we had a great dinner. As dessert was served I said, "You know what you should do? You should invest in a set of my cassette tapes for each of your salespeople so that they have the advantage of a continuous learning process." As I said that, I was mentally computing that 80 salespeople at $65 per set of tapes would be another $5,200 income on top of the speaking fee to which they´d already agreed. She thought about it and said, "Roger, that probably would be a good idea, but we just don´t have it in the budget."/ I need to make a confession here. I´m very ashamed of what I thought next, but I want to share it with you because it may help you if you´ve ever had the same thought. I thought, "I wonder if I cut the price whether she would say yes." Isn´t that a shameful thought? She hadn´t said a thing about the tapes costing too much. She hadn´t told me that she might be tempted if I lowered my price. She had simply told me that she might be tempted if I lowered my price. She had simply told me that she didn´t have it in the budget./ Fortunately, I caught myself and, instead, tested for validity. I asked, "When does your budget year end?" This was August and I thought that she would tell me December 31. To my surprise, she said, "At the end of September."/ "So you would have i in the budget on October 1?"; "Yes, I suppose that we would."; "Then, no problem. I´ll ship you the tapes and bill you on October 1, fair enough?; "That would be fine," she told me. In less than 30 seconds, I had made a $5,200 sale because I knew that when she tossed me what was essentially her problem, I should test for validity./ Look out for people giving you their problems. You have enough of your own, don´t you? It´s like the businessman who was pacing the floor at night. He couldn´t sleep, and his wife was getting frantic. "Darling, what´s bothering you, why don´t you come to bed?" He said, "Well, we have this huge loan payment due tomorrow, and the bank manager is a good friend of ours. I just hate to face him and say that we´re not going to have the money to pay him." So his wife picked up the telephone, called their friend the bank manager, and said, "That loan payment we have coming due tomorrow, we don´t have the money to pay it." The husband exploded. He said, "What did you do that for? That´s what I was afraid of." And she said, "Well, dear, now it´s his problem, and you can come to bed." Don´t let other people give you their problems./ Chapter 43 - Ultimatums: Ultimatums are a very high-profile statements that tend to strike fear into inexperienced negotiators. Terrorists are holding a plane full of hostages and tell negotiators that unless their demands are met, they will start shooting hostages at noon on the following day. Jimmy Carter used to say that the worst nightmare of his presidency was that the Iranians who had taken the hostages in the embassy in Tehran would start shooting them one at a time until he met their demands. An ultimatum is a powerful pressure point, but it has one major flaw as a gambit: If you say that you are going to shoot the first hostage at noon tomorrow, what had you better be prepared to do at noon tomorrow? Right. Shoot the first hostage. Because if 12:01 p.m. rolls around and you haven´t done that, you have just lost all of you power in the negotiation./ How Passing a Deadline Sank the PLO: Of all the terrorist actions during the Reagan years, the one that failed most miserably was the hijacking of the Italian cruise ship Achille Lauro by four heavily armed Palestinians. The hijackers announced that they would start shooting the passengers unless Israel released 50 Palestinian prisoners. (This later turned out to be a hastily concocted demand. The real purpose of the mission was to attack an Israeli port. Only when their weapons were discovered did they resort to hostage taking.) Although the hijackers quickly killed a 69-year-old passenger in a wheelchair who had challenged them, they never followed through on their threat to kill the other passengers. When they found that Israel would not release the prisoners, the hijackers settled instead for what they thought would be safe passage from Egypt to Tunis aboard a Yugoslav airliner. They were captured when Ronald Reagan ordered the USAF to intercept the airliner on which they were escaping. They forced the airliner to land at a naval air base in Italy, where the hijackers were arrested and brought to trial./ The same weakness applies to an ultimatum in a business negotiation. If you tell a supplier that unless he can deliver by noon tomorrow you will go with her competitor, what had you better be prepared to do at noon tomorrow -go with his competitor? Because if the deadline passes and you haven´t done that, you have just lost all of your power in the negotiation. Your should only use ultimatums as a pressure point if you are willing to follow through. Don´t bluff, because all the other side has to do is to wait through your deadline to find out that you were only bluffing and your threat had no teeth in it./ When you understand the weakness in using ultimatums as a pressure point, you can easily figure out that the strongest Counter Gambit is to call their bluff and let the deadline pass. There are other less blatant responses, however. If someone gives you an ultimatum you have four ways to respond, and I list the here in increasing level of intensity: 1. Test the ultimatum as soon as you can. They tell you that the shipment must be there by noon tomorrow. Test the ultimatum by asking if having a partial shipment there by noon would solve their problem. Could you air-freight enough for them to keep their assembly line going and surface ship the balance? 2. Refuse to accept the ultimatum. Tell them that you have no idea if you can make that deadline or not, but that they can be assured that you´re doing everything humanly possible to get it done. 3. Play for time. Time is the coin of the realm when one side is threatening the other with an ultimatum. The longer they go on without carrying out the threat, the less likely they are to follow through with the threat. So terrorist negotiators alwas play for time. This happnes in hostage negotiations where the perpetrators are demanding a getaway helicopter or car. The police negotiator plays for time by saying that he needs to get the governor´s approval or that the getaway car is on its way, but it´s stuck in traffic. As the time passes, the scales tip upward dramatically in favor of the negotiators. 4. Bluff your way through and let the ultimatum pass. If it works, it´s the best alternative because it not only solves this immediate crisis, but it also lets them know that you´re not going to let them push you around in the future. Bluffing takes courage, however, and you shouldn´t do it capriciously. Get all the information you can about the situation. The essential thing to find out is whether anything has changes. Since you signed the contract with them, has a new supplier appeared who could supply them on time and for less money? If you have a contract or an option to buy, have they had a better offer from someone else? If nothing else has changed, you may be safe in taking the chance. What you´re trying to uncover, of course, is if they want to continue the relationship with you or if the ultimatum is their method of getting you out of the picture./ Section Four: Negotiating with Non-Americans: At my Secrets of Power Negotiating seminars, I am usually asked about negotiating with non-Americans. It seems just about everyone has had a frustrating experience dealing either with a non-American, or a person of foreign origin./ I know how different America is from any other country on Earth. America is deceptively different to non-Americans because many of them have had a great deal of exposure to American culture from watching our movies and T.V. shows. Movies and T.V. don´t reveal what is in the American heart and mind, however, and that´s what determines our approach to business./ Conversely, we tend to look at non-Americans and think we understand them. True, they may dress in Western business suits and speak our language, but that doesn´t mean that their traditional values and mind-sets have changes. They may prefer American music and American movies but their beliefs in their way of life and the values that thay place on their traditions are as strong as ever./ I believe that underneath all of our apparent similarities there lie enormous differences in our approaches to business./ Chapter 44 - How Americans Negotiate: The American Art of the Deal: Donald Trump wrote a best-selling book, The Art of the Deal, that detailed many of his early real estate negotiations. The title and the premise of the book illuminate the overriding concern of most American negotiators -the cutting of the deal. We do live in a very deal-conscious environment./ I suppose that sociologists would tell you that we concentrate more on cutting the deal than other nations because we are such a mobile and diverse society that we have little sense of roots. Instead of trusting the people and the way things are done, as is common around the world, we place all of our trust in creating an unbreakable deal./ "Will it hold up in court?" we demand, as though anyone who doesn´t consider the possibility of having to defend the deal in court is naive./ Sociologists would also point out that this is a recent change in the fabric of our society. During the first half of the 20th century, we still looked to community pressures to enforce our obligations. To renege on a deal was unthinkable because of the dishonor that it would bring us in our community. We also had our religious community to police any thoughts of reneging on a commitment. It would be unthinkable to let down our priest, minister, or rabbi. Also, before T.V. comandeered our leisure time, we belonged to many community organizations. We did not stray far because the members of our Lions, Kiwanis, or Optimist club -or the members of our PTA, Masonic or Elks lodge- might ostracize us. Sadly, that way of life is lost to us. Now what is left to us is the deal and an all-too-common resort to the courts to enforce the deal at all costs. The deal is finite, the deal is static, and the deal has been made and cannot be changed./ Most non-Americans completely reject our dependence on the deal. Should they choose to sign a contract at all, it is simply an expression of an understanding that existed on a particular date. It is a formal expression of a relationship that now exists between the parties. As with any other relationship, it must mold itself to changing conditions./ Most Americans are astounded to learn that you can sign a contract in Korea and have it mean nothing six months later. "But we signed a contract," the Americans howl. "Yes," their Korean counterpart patiently explains, "we signed a contract based on the conditions that existed six months ago when we signed it. Those conditions no longer exist, so the contract we signed is meaningless." "Foul," cries the American. "You are trying to cheat me." Not at all. What seems to us to be disreputable action is not to them, and we should not attempt to paint it as such. It is merely their way of doing things./ Americans are often delighted to find that they had so little trouble getting their Arabian trading partners to sign a contract. They they are horrified to find out that in the Arab world signing the contract announces the start of the negotiations, not the end. A signed contract means less in their culture than a letter of intent does in ours. I am not putting this down, and you should not either. What we should do is recognize that different nationalities and cultures have different ways of doing things and it behooves us to learn, understand, and appreciate those ways. It will come as no surprise to you to learn that Americans resort to legal action more quickly and frequently than any other people on Earth. This would be laughable to a businessman in India where the civil legal system is close to nonexistent. It would take five years to have a civil case heard, and most realistic people suggest that you forget it because it´s questionable that the system will even be functioning five years from now. Even the chief justice of India has said in public that the system is about to collapse. Si Indians must rely on their faith in the person with whom they are doing business. I remember trying to explain to an Indian the American custom of the bride and groom signing a pre-nuptial agreement before they marry. He was increduolous. Why on earth would you marry someone that you did not trust, he wanted to know. What I couldn´t make him understand was that wanting to put an agreement in legally acceptable written form does not denote distrust to an American./ In America, legal action is so common that companies continue to do business with a company that is suing them. We see it as a normal way to resolve a dispute and no reason for rancor. In most foreign countries, there is such a loss of face involved in being sued by another company that they will refuse to deal in any way with a company that is suing them./ The word context describes de degree of importance attached to the relationship between the parties, as opposed to the details of the contract. When the relationship is paramount, we call it a high context negotiation. When the deal is the thing, we call it a low context negotiation. Different nationalities place greater or lesser importance on context -the environment in which the proposal is made. These cultures are listed from high context to low context: The Orient, Middle East, Russia, Spain, Italy, France, England, United States, Scandinavia, Germany, Switzerland. / Communication is also low context in the United States. By that, I mean that words and expressions mean the same regardless of where they are said. "No" means "No" whether it is whispered on a date or yelled at you by your boss. We take that for granted in this country. I´ve even seen T-shirts worn by women that say, "What part of "No" don´t you understand?" That is not so in high context countries where, in order to understand what was said, your would have to understand who said it to whom, where the comment was made, and in what context it was made. / To give you an example of this from my experience, let´s suppose that Dwight, an American has been to see a play, and you ask him how he enjoyed it. Dwight might say, "It was quite good." The meaning of that is very clear to an American. It means that Dwight thought the play was ver good. Now let´s suppose that it was Rodney, an Englishman who went to see the play. When he says, "It was quite good," that could mean a whole range of things. It could mean it was awful but "I´m a polite enough fellow to not say that to the author in public." If the person who gave him the tickets asked him how he enjoyed the play, "quite good" could mean that the play was average but he appreciated being given the tickets. If Rodney´s son wrote the play, "quite good" could mean, "Outstanding but I´m not about to give you a swelled head." / When Scottish golfer Colin Montgomerie played in the US Open in San Francisco, a reporter fron The Los Angeles Times asked him how he had managed the impressive feat of playing an entire round without being in a single sand trap. Montgomerie replied, "Well, I am quite good." The reporter took this to be an arrogant response, and wrote it up in a blistering attack on Montgomerie´s personality. That was unfair, because what the golfer intended to convey was a wry, self-deprecating response. If he´d have known that American English is a low-context language, he would have said, "Well, I am fairly good." It´s a thought that an American would have conveyed by saying, "It´s because I played this course once before." So, the frist thing we should learn about negotiatin with non-Americans is that the deal is not the major issue to them. They put far more trust in the relationship between the parties. Is there good blood between the parties? If there is only bad blood, no amount of legal maneuvering will make the relationship worthwhile. While you are trying to hammer out the fine points of the deal, they are spending time assessing the fine points of your character./ Getting Down to Business with Non-Americans: Now let´s concentrate on the other major mistake that we Americans make in dealing with non-Americans -we want to get dow to business too quickly./ Nobody gets down to business faster than Americans do. Typically, we exchange a few pleasantries to ease any tension and the get right down to hammering out the details of the deal. We socialize afterwards. Non-Americans may take days, weeks, or even months before they feel comfortable moving from the getting-to-know-you stage to the point where they feel good about doing business./ When the Shah of Iran fell from power, the real estate company of which I was president in Southern California did a huge amount of business with Iranians (they prefer to be called Persians) who were fleeing the new regime, often with millions in cash to invest. Often I would watch our people make the mistake of trying to talk business too quickly, which caused the Iranians to distrust them. Quickly we learned that they wanted to sit and drink tea for several hours as they sized us up./ If you fly to Japan to conduct business, you may have to socialize for many days before they feel that it´s appropriate to talk business. Be careful, however, that they´re not just trying to push you up against a time deadline. At my seminars many people have told me that thei joy at being treated so well soon turned to chagrin as they realized how difficult it would be to get down to business at all. They have told me horror stories of not being able to negotiate until they were in the limousine on the way back to the airport. It´s a two-hour ride out to Narita Airport, but that is negotiating under excessive time pressure. Terrified at the thought of going home empty handed they went straight to their bottom line./ When negotiating with non-Americans, we Americans would do much better if we would slow down. We tend to speak first, then listen to the response, and observe the behavior of the other negotiatos. Non-Americans tell us that we should reverse that order. We should observe first then listen and finally speak. In fact, reacting slowly to the proposal of the other side is a mark of respect. Your silence does not indicate acceptance of their proposal, merely that you are giving it the consideration it deserves./ So, we see that Americans fall into two major traps when dealing with non-Americans. We over-emphasize the deal and don´t attach enough importance to the relationship of the parties, and we get down to business too quickly. the two are closely related, of course. Building a relationship with the other side to the point where you feel comfortable with them takes time. Enlargin on that relationship to the point where you trust the other person, and don´t have to rely on the contract being airtight, takes a great deal of time./ Chapter 45 - How to Do Business With Americans: A Guide for Non-Americans: Americans Are Very Succinct: This is the first thin that I had to learn when I came to this country. Americans can say in a few words what other nationals, particularly the English, take all day to say. An Englishman might walk out of his front door in the morning and say, "What a wonderful day! I feel positively overwhelmed by the beauty of the morning!" An American would say, "Great day!" and it means exactly the same thing./ I noticed this in the press briefings during the Gulf War. The British information officer would announce to the press, "I´m very pleased to report that we are on our battle plan and if I may be so bold, slightly ahead of plan. Furthermore I don´t hesitate to say I believe we will stay ahead of plan." The American information officer would get up and with a sly grin on his face say, "We´re kicking butt!" It means exactly the same thing! You as a non-American might see this succinctness as being very blunt, but Americans don´t mean any offense by it./ Americans Anser Questions with One Word: When an american asks you how you like your hotel, they don´t want to know your reaction to your hotel. They just want reassurance that you´re content. You can answer their inquiry with one word, and the word is "Great!" The same goes for any other question that starts with "How did you like..." or "How was the..." or "Did you like..." Are you ready to practice? Here we go: Q: "How did you like America?" A: "Great!"; Q: "How do you like Americans?" A: "Great!"; Q: "How are you enjoying your stay?" A: "Great!" Q: "What do you think of the American habit of answering every question with one word?" A: "Great!" / Americans are Very Patriotic: There is only one way to answer a question such as "How do you like America?" That is with an enthusiastic outpouring of support. "What a great country," you should say, "I just love it here." Americans do not want to hear that you were stuck in unbelievable traffic on the way from the airport. Or that you´re shocked by the violent level of crime./ Your opinions about Americans working too hard or being materialistica are much better left unpacked in your luggage at your hotel. It´s not that Americans are unrealistic about the problems. It´s just that they are very paternalistic about their country. Think of America as their child, and a favorite one at that. You wouldn´t dream of criticizing your friend´s child, would you? / I´m a memeber of the Traveler´s Century Club in Los Angeles. To qualify for membership you must have traveled so much they often ask me, "If you could live anywhere in the world, where would it be?" I would never answer that question with a direct response. I would precede my answer with a compliment to America by saying, "If I couldn´t live in the United States, I would live on the north shore of Lake Leman in Vevey or Montreaus, in the French speaking part of Siwtzerland." / You may hear Americans criticize their country and sometimes very vocally. That´s an American prerogative. Free speech and the right of assembly are guaranteed in writing by the constitution. Don´t take that criticism to mean that the complainer wants to change the way of government./ You may be amazed at the way presidents and members of Congress are quickly criticized for what may appear to you to be minor indiscretions. It is not so much puritanical outrage, although it´s true that Americans are much narrower minded in this regard. British actress Emma Thompson, who portrayed a thinly disguised Hillary Clinton in the movie Primary Colors, was asked for her opinion on accusations that Presiden Clinton had had sex with an intern. "I don´t quite understand it," she said with exaggerated naiveté, "I could understand what the fuss was about if there was a horse involved or something like that." Realize that American outrage over governmented scandals is vented with full confidence that the government will not fall over exposing salacious behavior./ The American Class System: One of the things that I first loved about America when I came here was the lack of a class system. My father drove a taxicab in London, and would be forever branded as working class. That would severely limit my ability to advance myself in society. America has little of this nonsense./ You may run into some "old money" people who inherited great wealth and have little concept of what it´s like to work to advance themselves, but they are rare. Most Americans are where they are because they put forth the effort./ The difference between England and America is simple. In England, if a worker is digging a ditch and looks up to see a Rolls Royce pass by, he thinks, "I wonder who he´s stealing from?" In America the ditch digger looks up and thinks. "One day I´m going to have one of those Rolls Royces."/ In your country, the profile of wealth is probably a pyramid shape. The base of the pyramid is the poor people. Above that you have a smaller middle class and the apex of the pyramid is the minority of rich people. The profile of wealth in America is more like a kite. A few very poor people, rising to a large middle and upper middle class tapering off to a few very rich people. If you´re here for business almost all of your contact will be with the middle and upper middle class./ Because of the lack of a class system in America, titles are important. Titles indicate rank and how well we´re doing. Titles also indicate earnings in America, which is not so in other countries, where a general manager might supervise many other managers who earn more than he does. Titles are an important barganing issue in employment negotiations. Many top people in organization have quit because they weren´t given the title they felt they deserved./ Titles are very important to Americans. It´s our attempt at a class system. so, class in America, if you can call it that, is based strictly on money. If you are financially successful, you will be admired and your family background or the school that you attended will not impress anyone. In fact Americans love to brag about their humble beginnings. Why else would I tell you that my father drove a taxicab?/ Religion in America: I found it very hard to believe that America is one of the most religious countries in the world. Perhaps because the constitution guarantees the spearation of church and state, you just don´t hear much about it. Perhaps it´s because there are so many different religions. Perhaps because the most religios states are the rural ones that few newcomers visit. The truth is that Americans are very devout church-goers. Fifty-three percent go to church regularly and 80 percent of those who don´t will tell you that they pray regularly. Ninety percent of people polled say that they believe in God. Compare that to England where only 15 percent of the people attend church./ This is important to you if you´re to do business in America. Although the subject of religion will hardly ever come up in business, you are probably dealing with an American who feels strongly about his or her faith in God. Be careful you do not offend particularly in the Bible belt states that sweep down through the center of America from Iowa to Texas and east to South Carolina, which is probably the most religious state of them all. Movie actor Charlton Heston filmed a commercial for Budweiser beer, and had to cancel a planned speech when he was no longer welcome in South Carolina./ The Frontier Mentality: Understand how close every American is to being an immigrant, and it will go a long way to helping you understand Americans. A remarkably high percentage of Americans are actually immigrants. It´s over 20 percent in California, the most diverse state. Nationwide, it is almost 10 percent. I don´t mean immigrants from another state. I mean that they weren´t born in the United States. Most Americans´ parents or grandparents immigrated to this country./ It makes Americans value their freedom above all things. Americans hate being told what to do, particularly by their government. That attitude leads to several hard-to-understand facets of American life. It leads to a rmarkable lack of city planning. Most Europeans, for example, are happy to comply with the design standards of their village, so that the entire community has a conforming look. Not Americans, because it would take away a freedom from government control that they cherish. Let me give you another example./ One of the most controversial issues in America is the right to bear arms. You´ll see bumper stickers that say, "When guns are banned, only criminals will have them." Nobody wants to stop people from unting but many people question why citizens need the right to own automatic weapons whose sole purpose is to kill people. That will be hard for you to understand too, until you understand how strongly Americans feel the need to be free of government control./ Time is Money to an American: Americans tell a joke about the attorneywho died and went to heaven. (That´s not the punch line!) St. Peter, who in Christian mythology is the person who admits people to heaven, said to him, "Boy, are we thrilled to have you here. We´ve never had a 125-year-old attorney before." The attorney protested, "I´m not 125,. I´m 39." St. Peter said, "There must be some confuision -according to the hours that you´ve billed..." / The joke is funny to Americans because it references the high pressure world in which business executives live. Time is a commodity to Americans. As a non-American, you´ll find the pace of business life here startling. A deal can be a good deal but it´s an even better deal if the person who put it together can brag about how quickly he put it together. When an American appears to be rushing you into a deal, he is not trying to trick you. He is just doing things his way./ You will find life in America to be very high-pressure. There is a great sense of urgency, to seize the opportunity and make the most of it while you can. Some of this comes from Americans being so young. We are a very young society. Part of it comes from the strong sense of individualism. Katherine Hepburn said, "As one goes through life, one learns that if you don´t paddle your own canoe, you don´t move." / Another part of it comes from the American experience. We have never lived through a war. We have never had our very existence challenged. That´s the kind of life experience that makes people reevaluate their priorities and determine that there may be more important things in life than making money. So to a German, it may make perfect sense to spend three weeks at a spa to rejuvenate their mind and body. To an American, a trip to the spa is more likely to mean a massage between business meetings./ It´s a very mobile society. The average American moves 11 times in his or her lifetime./ The Opinonated American: A line in a Paul McCartney song talked about there being too many people reaching for a piece of cake. I think of that line whenever I hear of a new protest group that has sprung up. There are too many people in America trying to push their point of view on others. There is not a cause, however obscure, that has not organized into a protest group. You will find Americans are frank, outspoken and opinionated./ Don´t take this personally. An American businessman may say to you, "That´s hogwash, Hans, and you know it!" Don´t take this as a personal attack. It´s just that Americans are used to being very open and direct in their communications./ The Friendly American: Americans are eager to have you lie them and share their admiration for what they and their country have accomplished. There is a superficial level of friendliness that confuses Non-Americans. Part of this comes from the mobility of the society. Very few Americans stay put for long. It´s unusual to meet someone who was born in the same state as the one in which they now reside. It´s hard to build long-term friendships. Don´t be confused by Americans who appear to suddenly have becoe your bosom buddy. When I first move to America I found that people whom I had met only superficially at a party or picnic would say to me, "We´ll have to have you over to the house." Or "Let´s get together soon." I thought this meant that I should pull out my appointment calendar and set a date. It doesn´t mean that at all./ Business Cards: Every American businessperson carries a business card, and business card exchanges are common upon first meeting somebody. In yoru culture, it may be considered polite to carefully study and admire the card. You don´t have to do that here. It´s okay to stick it in your pocket with just a cursory glance./ Tipping in America: Load up with one-dollar bills because it´s going to cost you a bundle in America. Plan to add 15 percent to restaurant bills, bar bills, and taxi fares. Skycaps who check your bags at airports and bellhops who carry your bags to your room expect $1 per beg. Hotel doormen expect a dollar when you arrive for holding the cab door open for you, and again when they call a cab for you when you leave./ Don´t be looking through your coins trying to figure out an appropriate tip. Tips fold in America, they don´t clink. Just round up to the next dollar. If you come from a country that doesn´t believe in tipping, all of this will seem outrageous to you, but it´s the way it works here. Don´t withhold or reduce tips even for bad service, particularly when you´re with businesspeople. It will just make you look cheap./ The Diverse Population of America: America is one of the most populated countries on Earth and one of the most diverse. You will certainly encounter people from all ethnic backgrounds. If you come from a homogenous country, this will confuse you. My friend Jack visited me from England and as he looked around the restaurant, he said, "I can´t believe how many Non-Americans there are in this country." I told him, "Those are not Non-Americans, Jack. They are Americans. You´re the only non-American here." / California, is the most diverse state. Twenty percent of California´s residents were not even born in the United States. If you live in the City of Los Angeles and are a Caucasian, you are the minority. Approximately 20 percent is of Mexican descent, and 10 percent is African Americans. As newspaper columnist Calvin Trillin remarked, "I believe in open immigration. It improves the diversity of the restaurants. I´d let anybody in except the English." / Don´t assume that you can tell a person´s status from the way he or she looks. You may have an appointment with the president of a company that does $100 million a year in sales. That president may be Asian in appearance, or black, or of Mexican descent. You just can´t tell. And you certainly can´t assume that the president will be a man./ The Self-reliant American: Individual accomplishment is glorified in America. From an early age, children are encouraged to be competitive, discover their strengths, and pursue their own dreams. To Americans accomplishment is king, even when that takes the individual away to opportunities that are far away fom his or her family or community./ This may seem very strange to you if you´re from Japan, where to stand out from the team seems arrogant, or from Australia where it would seem like hubris and the "tall poppy" always gets cut down./ American business executives are well-paid by world standards but that is jusified by boards of directors and stockholders, because a single executive brought in to run a company can dramatically affect the fortunes of the company. This competitiveness extends all the way through the organization. Although in recent years companies have tried to install quality circles and team problems solving, it goes against the grain. Even down on the assembly line, workers want to out-work and out-produce their fellow employees. The country is successful in large parte because America is a very competitive society./ You will encounter this competitiveness in your business dealings. Americans want to win. They do not want to compromise. They will compromise if that is in their company´s best interest, but it is not in their heart This is epitomized in the saying of a legendary American football coach, Vince Lombardi. You may see this slogan proudly displayed on plaques on the walls of executive suites. It says, "Winning isn´t everything, but making the effort to win is ." / America is also a ruthless society. The rewards are great for the individual who succeeds but those who fail find little support. There is no such thing as termination pay in America. An office worker who loses her job will be told at 4:30 p.m. on a Friday afternoon and is expected to be out of the building by five. The company owes that employee nothing other than any earned vacation days that have not been taken, and that is a matter of company policy, not government fiat. The employee will have been required to pay into a state unemployment fund and will be able to appeal to the state agency for survival benefits for just 13 weeks./ A Final Word About Americans: "The song, "America the Beautiful" by Katharine Lee Bates is not the national anthem. The American national anthem is a battle hymn. Some pacifists wanted to make "America the Beautiful" the national anthem until they were told that even for Americans, it´s just a little too narcissistic. Americans are very proud of their country. They believe fervently that it´s the best country in the world. I´ll prove./ Chapter 46 - Negotiating Characteristics of Americans: Let´s first look at the characteristics of the typical American who negotiates with non-Americans, and then in the following chapter we´ll look at the characteristics of foreign negotiators: We Americans tend to be very direct in our communications. We use expressions such as "What´s your bottom line?" or "How much profit would you make at that figure?" Or we try to shift the emphasis of the negotiations by saying, "Let´s lay our cards on the table," or "Let´s wrap this one up tonight." We, "Tell it like it is," "Shoot from the hip," and try to "Hit the nail on the head." We seldom, "Beat around the bush." Althoug I recommend this kind of directness when negotiating with other Americans because it puts pressure on the other side, realize that to non-Americans it may seem to abrupt and such bluntness may offend them./ We resist making outrageous initial demands. This goes back to our hope that we can "cut the deal" and "get out of Dodge." Because we want to blitz the negotiations and wrap them up quickly, we tend to think in much shorter time frames than non-Americans. We are thinking we can cloncllude the negotiations in hours, while they´re thinking it will take many days. Although a non-American may be comfortable making an outrageous initial because he knows that the price and terms will change enormously as the days go by,we see that as slowing the negotiations down or drawing us into endless haggling./ We are more likely to negotiate alone. It´s not unusual to find a lone American negotiator showing up at an international negotiation, fully empowered to do business. (He may be able to put together a team of three if it includes his interpreter and driver.) Then when he is led into the negotiating room, he finds that he is faced with a team of 10 or 12 from the other side. This is not good for the American, because he will feel psychologically overwhelmed, unless the negotiating teams are roughly the same size. However the effect of this on the foreign team concerns me more./ Non-Americans may interpret a lone negotiator as "They´re not serious about making a deal at this meeting because if they´ve only sent one negotiator, this must be only a preliminary expedition." Or non-Americans get the impression that the American is merely gathering information to take back to his team of negotiators./ Unless the American understands this and takes pains to explain that he is the entire negotiating team and that he is empowered to negotiate the deal, he may not be taken seriously. This puts him at a serious disadvantage because he has then removed his resort to Higher Authority (see Chapter 7). If forced to emphasize his authority to negotiate, he should point that he only has authority to negotiate up to a certain price point. Beyond that point, he will need to get authorization. If pressed to reveal that price point, he should explain that he is not empowered to reveal it./ Americans are uncomfortable with emotional displays. The English are the most uncomfortable of course, but Americans also see displaying emotions in public as weakness. If an American wife starts to cry, her husband instantly assumes that he has done something devastatingly cruel to her. In the mediterranean countries, the husband simply wonders what ploy his wife had concocted. This fear of an emotional reaction causes Americans to be tentative in their negotiations with non-Americans, and if the other side does explode with anger at one of our proposals, we tend to overreact. Instead, we should merely see it as a negotiating ploy that might be perfectly acceptable in their culture./ We tend to expect short-term profits. Besides wanting to conclude the negotiations before we have built a relationship with the other side, we also expect quick results from the deal that we cut. We look at quarterly dividends while foreign investors are looking at 10-year plans. The CEOs of many of the companies who have hired me to train their people, particularly those in the volatile high-tech inedustries, seem to spend a large part of their day worring about Wall Street´s reaction to every move they make. To many non-Americansthis emphasis on short-term profit and today´s stock price vomes across, unfairly I think, as a "fastbuck" mentality. Where they are looking to build a long-term relationship with us, we appear to concentrate only on profits, and this can be offensive to them./ We are less likely to speak a foreign language. There´s no question that English is becoming the business language of the world./ Whenever one European company merges with another country from a different European country they will probably adopt English as their corporate language because it is the foreing language that they will both have learned. Conferences in Europe ar typically conducted in English now because it is the common denominator language. Most European business people can speak two foreign languages and one of them is always English. Most Oriental business people can at least understand English even if they cannot speak it well. Sadly, hardly any Americans can speak German or Japanese. If we do know a foreign language, it is probably Spanish or French./ To realize how arrogant this may appear to non-Americans, you have only to think of how frustrated you became when you first dined in a Parisian restaurant. When the waiter didn´t appear to speak any English, you probably thought as I did: "This is a tourist restaurant. They must get English-speaking people in here all the time. Why is he being so difficult by refusing to speak English?"/ Unfortunately, this attitude is all too prevalent with American business people. Any expectation that "If they want to do business with us they should learn our language" can come across as irritatingly arrogant to a non-American. We should always appear surprised and delighted that they speak even a few words of our language. We should always make an effort to speak a few words of their language, even is it´s only to say Good morning and Thank you./ Being willing to do business in their language is particularly important if this is your first business foray into their country. They will want to know that you´re making a commitment to doing business in their country and be reassured that you´re not just trying to take advantage of the easy profits. It may be worth the expense of having your pinting materials transalted into their language just to make the point that you´re there to stay./ We are uncomfortable with silence. Americans hate silence. Fifteen seconds of silence to us seems like an eternity -do you remember the last time the sound went out on your television? You were probably thumping the top of the set within fifteen seconds. Particularly to Asians, who are comfortable with periods of meditation, this impatience appears to be a weakness and a weakness they can take advantage of. When dealing with non-Americans, dont be intimidated by periods of silence. See it as a challenge to not be the next one to talk. After an extended period of silence, the next person to talk loses. The next person to open his or her mouth will make a concession./ One of my students, a mortgage banke, told me of negotiating in Shanghai, China. "there were 20 of us around a conference table," he told me. "Tens of millions of dollars in mortgages were at stake. Suddenly the other side went completely quiet. Fortunately, I had learned aout this tactic and was prepared for it. I glanced at my watch. Thirty-three minutes went by without a word being spoken. Finally, one of their lawyers spoke up and made a concession that enabled us to put the transaction together." / We hate to admit that we don´t know. As I discussed in Chapter 38 on the importance of gathering information, Americans hate to admit that they don´t know. This is something that non-Americans know and can use to their advantage. You don´t have to answer every question. You are perfectly entitled to say, "That´s privileged information at this stage." Or simple tell them that you don´t know or are not permitted to release the information they seek. Not every question deserves an answer./ Please permit me to do a little flag waiving here. People around the world still admire and respect Americans and particularly American businesspeople. They trust us and see us as a straight-forward in our business dealings. This I believe. In this chapter, I have not been pointing out the shortcomings of Americans dealing with non-Americans. I have been teaching you only how foreign negotiators misperceive Americans. Fair enough? / Chapter 47 - Negotiating Characteristics of Non-Americans: There´s an old joke that the restaurants in heaven have a German manager, a French maitre d´, English waiters, and an Italian cook. On the other hand, the restaurants in hell have an Italian manager, a German maitre d´, French waiters, and an English cook. Comedian George Carlin says, "If there´s a heaven, there are German mechanics, Swiss hotels, French chefs, Italian lovers, and British police. If there´s a hell, there are Italian mechanics, French hotels, British chefs, Swiss lovers, and German police." These are stereotypes, sure, but it would also be wrong to ignore national business characterisitics in the name of avoiding any stereotyping./ Let´s look at the negotiating characteristics of non-Americans. I would be guilty of massive stereotyping if I implied that all people from these countries or of these national backgrounds had these tendencies. However, it´s realistic enough to assume that a large percentage of people from these countries behave this way. So, it´s well worth being aware of the propensities and observing the non-Americans with whom you´re negotiating to see if they do fit the mold./ English People: Be sensitive to national origin. Great Britain includes England, Wales, and Scotland. The United Kingdom also includes Norhtern ireland. Of the four countries that compose the U.K., 82% are English,so unluss they have a brogue, you can assume they are English. English people prefer to be called English, not British. Part of this sensitivity comes from massive immigration problems. A refrain you will frequently hear is, "I don´t wish to be called British. If you are British, you might be from just about anywhere. I am English." / Make appointments well in advance, because the English live by their calendars. Be punctual but never early. Ten minutes late is better than one minute early for social engagements. The English are excessively polite. London is a crowded place. In such a crowded country, it is important to have boundaries on one´s behavior. Understanding this is the key to understanding the English./ This is why you will see such outrageous styles of dress and hair styles on young people in England. It appears to an outsider that a youth with spiky orange hair wearing a leather outfit with chrome studs can exist in harmony with a bowler-hatted banker who carries an umbrella year-round and has a handkerchief stuffed up his sleeve. This is deceptive. They don´t approve of each other´s behavior - they are just too polite to protest./ You will find it rare for an English person to ask you a personal question. Although it´s acceptable in America to open a conversation with, "What do you do?" or "Where do you live?" that would be a hopeless invacsion of privaxcy to an English person. Because they are excessively polite, they would answer the question if you asked them, but would never reciprocate by asking you what you do./ England is still a very class-conscious society, although that is changing rapidly. Indicative of the change is that Margaret Thatcher, John Major and Tony Blair were the first three prime ministers who did not come from the upper classes. You will still run into a great deal of class consciousness especially with older people. If they are evasive about where do you live, for example, don´t press them because thy may feel self-conscious aobut living in a working class suburb./ The English do not feel at all comfortable talking to strangers in the same way that Americans do. The proper way to inicitate a conversation with a stranger in England is to mention the weather with an onnocuous comment such as , "Nice day today," or "Might get some rain." If the resñonse is an untilligible one syllable that sounds like "Hurrumph" they are not being impolite, they simply don´t feel comfortable talking to you at that timee. If they want to pursue a conversation, they will respond with an equally inocuous response such as "My roses need some rain," or "Wouldn´t be surprised to see rain at this time of year. Wouln´t be surprised at all." You may then start a conversation, but remember don not ask them any personal questions./ It´s okay to politely decline the offer orf tea or coffee, whereas in pany parts o the world it´s an insult. Be aware that the English view Americans with suspicion. We are seen as too slick for English tastes. They are somewat wary of getting involved with Americans for fear of being bamboozled by a fast talker./ The English business executive does not move at the frantic pace of the American. "Here in England we have a different approach to success than do you chaps in the States. Here we consider that success in business entitles us to work less hard. You chaps think that success requires you to work even harder."/ French People: I have never had the trouble with French people that most Americans seem to have. I think that much of that comes from Americans being exposed to only Parisians. Paris is to the French what New York is to Americans. Parisians come across as less courteous than we would prefer. France is very centralized. The government, the banking and industrial powers and fashion industry all emanate from Paris./ Parisians appreciate elegance, so dress more formally than you would at home. Add some extra touches such as a pocet handkerchie or a silk scarf. Remember the French pride themselves on their language skills. this love of language means that even those who speak a few words of English may be reluctant to do so because they don´t want to speak it poorly. It´s not because they have the attitude, "If you want to speak to me, you must learn my language." It´s true that there is a strong movement to prevent English words from becoming a part of the French language, but that´s another matter./ The French take pride in being eloquent and love to argue and converse. Nothing is more enjoyable than an abstract argument over their morning croissant and coffee. The point over which they are arguing is less important than the logic they use to win their argument. The French are logical thinkers, and sell with logic and reason rather than an appeal to emotion. In negotiations when the French say yes, they mean maybe. When they say no, it means, "Let´s negotiate."/ As with the English, the French value principle over result. Making a fast buck is not reason enough to violate their traditional way of doing business. Be puntctual because to be late is an insult to the French. Shake hands briefly when you meet them. Kissing cheeks is for only close friends. Call all adult women Madame, even if they´re single. / Above all, don´t ruin a meal by trying to talk business. A French lunch can last two hours and can be an exquisite experience. Unless your host starts talking business, avoid it. You´ll be doing yourself far more good by showing them how much you appreciate their cuisine. Be prepared to pick up a huge bill for the meal./ You should know you are in trouble when they carve the duck tableside./ Germans: Germany (and the German-speaking part of Switzerland) is a low context country; they put their emphasis on the deal rather than the relationship of the parties or the environment in which they signed the contract. Germans are one of the few nationalities to expect more detailed contracts than Americans. They really are masters of the deal that, once they have hammered it out, they will never change. Shake hands firmly when you arrive and leave. Do be punctual because it´s very important to them.´Don´t put your hands in your pockets when you´re talking business, as it seems to casual to them. Don´t tell jokes in the workplace. Germans consider it totally inappropriate./ It takes Germans a long time to get relaxed with you. In business, they are much more formal than Americans. They have a formal and informal distinction in their language. To use the informal (Du) style with a superior, rather than the formal (Sie) style, would be a major mistake. Don´t call people by their frist name unless invited to do so./ Germans place great emphasis on titles. Use yours if you have one and respect theirs. Address people as Herr, Frau, or Fräulein followed by their professional designation, for example, Herr Dokter Schmitt, or Frau Professor Schmitt. German workers who have worked together for decades will still call each other by title and last name./ Germans drive very fast. Posted speed limits are universally ignored. Remember that the fast lane is for overtaking only, however fast you´re going. Asiasn: Asians are very relationship based. They far prefer to trust the person with whom they negotiate than they do the contract they signed. In Thailand and other Asian countries, you may be greeted with a slight bow and both hands pointed toward you with palms togeter. You should respond with the same greeting but hold your hands level with or slightly higher than theirs. The height of the hands indicates the respect that the person has for the person they are meeting. Someone meeting a servant may hold his or her hands well below their wist. Someone meeting a hole person, or a great leader, might touch his hands to his forehead. Don´t get carried away but indicate respect by holding your hands a little higher than theirs./ Asians often consider promises made during the negotiation as being made to the individuals who negotiated, not to the organization. Americans call the signing of an agreement "the closing." Asians consider it an opening of the relationship. With Asians, it is very important to convey that you consider the signing of the contract a beginning no an ending. Do not expect eye contact, because they think it´s impolite. It´s not a sign of shiftiness./ Koreans: Koreans also look at the agreement as a starting point, not the final solution. They don´t understand how an agreement can be expected to anticipate every possible eventuality, so they see a contract as an expression of an understanding on the day that the contract was signed. If conditions change, they don´t feel bound by the contract they signed. Your response to this should not be to place less emphasis on the contract, but to draft a contract that is flexible enough to move with changing conditions. If you can predict a shift in conditions, rather than resisting it, you should accpet that it could happen and provide penalties and rewards for the way each side responds to the changing conditions./ Koreans don´t believe in fault. They consider that if they fail to stick with agreement, it is an act of God. Unfortunately, they may have planned to take advantage of you with this./ The Chinese: The Chinese have a saying: "He ging, he li, he fa." It means first examine the relationship between the parties, then look at what is right, and only then worry about what the law says. Many Chinese now shake hands when they meet Americans, but first wait to see if they offer their hands. The traditional greeting is a slight bow from the shoulders that is almost an exaggerated nod and is much less pronounced than the Japanese bow, which is from the waist./ Appear to be low key in your approach because loud behavior easily offends the Chinese. The Chinese do business based on building a relationship with you, but they are not above using this as a pressure point and accusing you of breaking a friendship if you hesitate to go ahead with the project. / A stron tendency in Chinese culture is to put the group´s needs ahead of personal needs. Remember that for thousands of years Chinese focus was on the family unit and beyond that the needs of the village. Confucianism also emphasizes the importance of the family, the extended family, and the community./ So Chinese negotiators work in teams and arrive at group decisions. The communists eliminated religions from the culture, but Confucianism and Taoism are philosophies, not organized religions. Confucianism puts emphasis on the organization of family, village, and social life. Taoism stresses the importance of being in balance and harmony with nature./ A part of this emphasis on the group dynamics is the Chinese concept of Guanxi. This refers to the time honored concept of reciprocal concessions. It is subtle in its application but it is the underpinning of Chinese society. When one person does a favor for the other, he expects something in return. He doesn´t specify what he expects or when he expects it, but the obligation incurred has now become part of the fabric of their relationship. You will encounter Guanxi relationships everywhere you go: in your dealings with business people and government officials, and in every other aspect of Chinese life./ Another strong part of Chinese culture is respect for a person´s position. Try to understand the rank of the people with whom you deal. It surprised me to find that there is no simple word in the Chinese language for brother or sister. The words that they use for that specify whether it is an older or younger sibling. Infants are raised with that kind of concern for position and it stays with them throughout their lives. In the workplace, age rather than ability usually make promotions. Everyone is expected to defer to his or her elders./ You know, of course, that the Chinese attach great importance to saving face. In business meetings, do not expect them to speak ou in support or opposition to you suggestions. They will be concerned that they may lose face or cause you or others to lose face./ Every Chinese person is an entrepreneur at heart and loves to bargain and haggle. Expect them to start high and be willing to make concessions. You should do the same and not be offended by what appears to you to be grinding you down on price. Have fun and enjoy the bargaining./ The Japanese: In Japan, they are reluctant to say no. Yes to them means only that they heard you. So, don´t ask questions that they can answer with a yes or no; ask opend ended questions. "When can you do that?" is better than, "Can you do that?" / It is impolite for a Japanese person to say No to an elder. However Westernized they may have become they still have trouble with this.When the Japanese say, "It will be difficult," they mean no./ So, Japan is a very high context country. In a culture that values tact and courtesy over honesty, words do not always mean what they appear to mean. There is a big difference between what they say (tatemae) and what they think (honne). "We" comes before "I" in Japan. The group is more important than the individual, which is the opposite of American culture, which glorifies and rewards independence. To punish a child in America you ground them -keep them in. To punish a child in Japan, you send them out of the house./ As with other Asian cultures that have been influenced by Confucius, the emphasis here is on the hierarchy. Observe how Japanese people bow to each other. The person in the lowest hierarchy will bow first and will bow lowest./ The concept of Was is strong in the culture. We would translate that as meaning harmony. They want to find a harmonious solution to every problem. To this end, they believe that every situation has unique factors that enable them to bend a solution to maintain harmony. Until Western culture reached Japan in the 19th century, they didn´t understand the concept of objectivity. From their point of view, everything is subjective./ The Japanese prefer to work in groups. Don´t try to identify the lead negotiator, the one who will make or break the negotiation. There probably isn´t one. Don´t expect much feedback on your proposal, for several reasons: ~ There is a hierarchy in Japanese companies. Individuals do not want to embarrass themselves by speaking out. ~ The Japanese businessperson wants to save face and allow you to save face. ~ They are adverse to risk and therefore unwilling to state their opinion for fear that it will be rejected by the group./ The Chinese have a concept of Guanxi meaning reciprocity. If I do a favor for you, you now owe me a favor. The Japanese call this Kashi, which literally translates as loan. In restaurants, you will see associates pouring sake or beer for their friends. It is accepted as creating a subtle form of obligation that will be reciprocated. At that level, it´s charming. It becomes more complicated when you realize that your Japanese business associates are doing favors for you in full expectation that you will return the favor./ The opening position that the Japanese take depends on how well they know you. If they don´t know you or your industry well they will start high, not to take advantage of you, but because they learn about you by judging your reaciton. It´s called the "banana no tataki uri" approach to negotiating, a term that refers to the way that banana vendors would ask an outrrageously high price from people they didn´t know and then lower it quickly if the buyer protested. It sounds unethical to us, but it does make sense. You don´t know the negotiating style of the stranger. He may be accustomed to hard bargaining. If you start high, you will quickly learn about them and take a different approach the next time you do busniess with them./ Key points on how the Japanese make decisions: They make decisions in large groups, so we have trouble figuring out who is making the decision. The truth is that no one person is making the decision. They consider defining the problem to be far more important than searching for the right answer. The group is there to absorb information and feels that once they fully understand the situation, the choice will be obvious. So each memeber of the group will give their input, starting with the lowest ranking person and moving up to the top./ Japanese executives see their job as requiring them to come up with creative ideas, not to be held accountable for the results. Where as we prefer to have one person make the final decision so that they can be held accountable, the Japanese let the entire group collectively make the decision. When everyone has given all of their input the choice may be obvious to the group. If is still not obvious they may retreat., knowing that they need to absorb more information. This makes Americans frustrated because they feel nothing is happening. The good part of all this is that once they do decide to go ahead, everybody is on board and fully committed to the course of action./ Russians and Ukrainians: The Russians are not entreprenurial at heart. Understand that the communist system removed all incentives from their way of life. Banning religion meant that there was no moral incentive to do good in their soceity. Banning profitable private enterprise meant that there was no financial incentive to do good. Remember that for 70 years they lived under a system where everybody worked for the government -there was no other employer. Money was almost meaningless to them because even if they had any, there wasn´t anything to buy with it./ Although some Russians have taken to capitalism like a duck to water, for many it is a diffcult transition, so don´t expect them to be motivated by profit the way that we would be./ Russians are not afraid to make tough initial demands. They expect you to express respect for them. That might be considered patronizing to an American. Not so with Russians. Learn about the person with whom you will be negotiating and let them know how impressed you are. They have a very bureaucratic mind-set, so they are not afraid to say they don´t have the authority. This will give you the most furstration. Russians have learned to protect themselves from blame by getting a dozen other people to sign on to every decision. This is a throwback to the old Soviet days, when mistakes could have very serious repercussions./ Another mindset you´ll encounter is that Russians think that, unless they are authorized to do something, it is forbidden. We Americans think just the opposite. We think that if something is not forbidden, it is okay to proceed. They can say no endlessly to test your resolve./ Russians are not afraid to vocalize their concerns, even if it causes you to squirm. Try to appreciate this openness and not let it bother you. As with any angry person, try to move him off of the position that he has taken to get him refocused on your mutual interests. (See Chapter 36 for more on conflict resolution.) They are self-centered. The Russians are not interested in win-win./ Russia is a higher context country than you would think. You may get the impression that they are hard and cold in their business dealings because they are very direct. However, underlying that tough negotiating style is a need to feel good about the person with whom they are dealing. This is done at a deeper level than the superficial friendliness of American business relationships. Don´t think that because you downed a case of vodka with them and engaged in bear hugs all around, that you have bult a trusting relationship./ If Russians say that something would be inconvenient, they mean that it would be impossible./ Middle Easterners: Be sensitive to ethnic differences when you´re negotiating in the Middle East. Above all, don´t refer to them as Arabs unless they come from the Arabian peninsula, which includes Saudi Arabia, Iraq, Jordan, and the Gulf States. Egyptians do not appreciate being called Arabs, and Iranians are horrified because they are proud to be Persians./ Do expect to spend a great deal of time, perhaps many days, getting to know the person before he feels comfortable negotiating with you. When people from the Middle East sign a contract, they see it as the start of negotiations, not the end. They sign the contract first and then negotiate. Most Americans who do business there understand this and call them "contract collectors." It´s important to understand this and not see it as devious; it´s simply the way they do things. A contract to them means less than a letter of intent does to us./ In their world, the ground floor is where shopkeepers ply their trade and shopkeepers are a lower class than business people. Don´t insult your Middle East trading partners by asking them to do business in a ground floor office. The higher floor you are on the more they see you as having prestige./ Don´t be offended if they show up late for an appointment, or perhaps don´t even show up at all. Appointments are not the firm commitments that they are in this country, and time in general is not prized the way that we value it. You will often be overwhelmed with hospitality and gifts by the non-Americans with whom you´ll be negotiating. This is an overt attempt to win your favor, and you must deal with it . Rather than giving offense by refusing their favors, the best plan is to reciprocate, which eliminates the personal obligation that may have been created. And you have twice the fun./ Section Five- Understanding the Players: In the previous sections, I´ve concentrated on howto play the negotiating game. Now I want to focus on the importance of understanding the other negotiator and realizing that it is a major key to Power Negotiating. People are different. They throw who they are into the negotiation. It affects the kind of strategy that they develop, it influences which of the Gambits they will use and how thay will use them, adn it determines their entire style of negotiatin./ Remember you´re always dealing with an individual, not an organization, even if you are negotiating with a union boss who heads up a 10,000-membar union. I don´t blame you for assuming the needs of his members dictate his actions, but I believe that his personal needs guide his actions. A secretary of state may have explicit instructions from the president on how he should conduct international negotiotions ,but his personal needs may still dominate his actions. Understand the person and you can often dominate the negotiations./ We´ll look at you and see if you have what it takes to be a Power Negotiator as I cover the Personal Characteristics, Attitudes, and Beliefs of Power Negotiators. People seem to think that some peopla are born with the characteristics that make them successful negotiators. "Oh, he´s a born negotiator," you´ll hear people say. You know that´s not true. I challenge you to open any newspaper in the land and show me a birth announcement that says, "A negotiator was born at St. Bartholomew´s Hospital today." No, people are not born negotiators. Negotiating is a learnable skill. In this section I´ll teach how to feel comfortable with any style of negotiator, so you can easily read varios negotiators and their approach to getting what they want. Then I´ll show you how to adapt your style of negotiating to theirs./ Chapter 48 - The Personal Characteristics of a Power Negotiator: To be a Power Negotiator you need to have or develop these personal characteristics. The courage to probe for more information, the patience to outlast the other negotiator, the courage to ask for more than you expect to get, and the integrity to press for win-win solutions, the willingness to be a good listener. In this chapter we will take a look at each of these in more detail./ The Courage to Probe for More Information - Poor negotiators are always reluctant to question anything the other says, so they negotiate knowing only what the other side has chosen to tell them. Power Negotiators are constantly challenging what they know about the ohter side and, what is more important, the assumptions that they have made based on that knowledge. You should adopt many of the approaches of investigative reporters as you gather information./ Ask the tough questions, the ones that you feel sure they won´t answer. Even if they don´t answer you will learn by judging their reaction to being asked . Aske the same question of several people to see if you get the same responses. Ask the same question several times during and extended negotiation to see if you get consistent answers. As you know, I devoted Chapter 38 to the importance of gathering information before and during the negotiation./ The Patience to Outlast the Other Negotiator: Patience is a virtue to a good negotiator. I remembered going around the country on a press tour to promote an earlier book on negotiating. A couple o times I showed up at teevision statiosn and the interviwewer said to me, "You don´t look like a negotiator." I knew what they meant and it didn´t offend me. They meant, "We thought you´d look tougher, we thought yo´d look meaner." Perhaps from seeing movies about union negotiators many people think of negotiators as tough, ruthless people who will pull any ruthless stunt to trick the other side into losing. Nothing could be further from the truth. Good negotiators are very patient people who won´t let time pressure bully them int omaking a deal that is not in everyone´s best interests. / Remember what I told you in Chapter 37 on about the Vietnam peace talks? Averell Harriman rented a suite at the Ritz Hotel in Paris on a week-to-week basis. The Vietnamese negotiator Xuan Thuy rented a villa in the countryside for two and half ywars. With your government, your people and the world press breathing down your neck for results, it takes courage to show that much patience, but it´s very effective./ The Courage to Ask for More: Henry Kissinger says, "Effectiveness at the conference table depends upon overstating one´s demands." Apart from projecting the wilingness to walk away if you can´t get what you want, I don´t think that there is anything more important than understanding this principla and having the courage to apply it./ We all lack courage sometimes simply because we fear ridicule. Remember when I taught you about the Bracketing Gambit in Chapter 1? I told that you should make a super-low offer, which brackets your objective, when buying something. Then again I told you that when you´re selling something, make your initial proposal so high that it brackets your real objective./ You should always advance your maximum plausible position. Sometimes that´s hard to do. We simply don´t have the courage to make those way-out proposals because we´re afraid the other side will laugh at us. The fear of ridicule stops us from accomplishing many things with our lives To be a Power Negotiator, you must get over that fear. You must be able to comfortably advance your maximum plausible position and not apologize for it. I´ll teach you more about fear in Chapter 53 on Cercive Power./ The Integrity to Press for a Win-win Solution - Straight up is the way to negotiate. Often the opportunity to take quick advantage of a weakened opponent will tempt you. Often you´ll be in a situation in which you know something that if the other knew, they wouldn´t be so eager to settle. Having the integrity to push for a win-win solution even when you have the other side on the ropes is a rare and precious commodity. I don´t mean by this that you make costly concessions to the other side because you´re so charitable. I do mean that you continue to look for ways to make concessions to the other side that do not take away from your position./ The Willingness to Be a Good Listener: Only a good listener can be a win-win negotiator. Only a good listener can detect the other side´s real needs in a negotiation. Here are some tips for being a good listener in preparing for and conducting negotiation: Increase you concentration by thinking of listening as an interactive process. Lean forward. Tilt your head a little to show you´re paying attention Ask questions. Give feedback. Mirror what he or she said. Avoid boredom by playing mind games. Concentrate on what he or she is saying , not the style of delivery. You can do this by picking the longest word in a sentence or rephrasing what has just been said. Because you can listen for times faster than the speaker can speak, you need to do something or your mind will wander./ Increase your comprehension of what´s being said by taking noes right from the start of the conversation. Take a large pad of paper with you. Head it up with the date and the topic and start to keep brief notes on what´s being said. Paper is cheaper than the time it takes to get back and get the details. This communicates to the other person that you care about what he´s saying. An additional bonus is that when people see you´re writing down, they tend to be a lot more accurate in what they´re telling you. Next, defer making judgment of the other person until he´s through. If you immediately analyze someone as phone, manipulative, or self serving, you tend to shut him out and quit listening to him. So just hold off and wait until he´s through before you evaluate./ Improve your ability to evaluate what´s said by asking the other person to present his conclusion first. Then if you don´t agree with her completely, ask him to support his conclusions. Keep an opoen mind until he has. Be aware of your personal biases and be conscious of how they´re coloring your reactions. If you know that you don´t like attorneys, you can evaluate the information much more clearly when you´re aware that this is causing you to distrust the person who is talking to you./ Perhaps you´re a person who can´t stand people trying to hype you. You automatically resist what they have to say whether it´s right or whether it´s wrong, so be aware of that. It improves your ability to evaluate what they´re saying. Learn to take notes with a divided note pad, one with a line down the middle. On the left you list the facts as they were presented, on the right you note your evaluation of what was said./ Chapter 49 - The Attitudes of a Power Negotiator. The Willingness to Live with Ambiguity: Power Negotiators relish the idea of going into a negotiation not knowing whether they´ll come out heroes, or if they´ll come out carrying their heads in their hands. This willingnesss to live with ambiguity requires a particular attitude. People who like people are much more comfortable with ambiguity. People who prefer things are not as comfortable. For this reason engineers, accountants, and architecs -members of those professions that depend on accuracy- have a tough time with negotiating. They don´t like to push and shove of it. They would rather have everything laid ou in black and white./ Let me give you a little quiz to test your willingness to live with ambiguity: If you´re going to a party, do you first like to know whom you´re likely to meet there? If your spouse is taking you to have dinner with friends at a restaurant, do you like to know exactly which restaurant you are going to? Do you like to plan your vacations to the smallest detail? If you said yes to all three of these, you have a majir problem with ambiguity. To become a negotiator I suggest that you force yourself to tolerate situations in which you don´t know exactly what the outcome will be./ A Competitive Spirit: Good Negotiators have an intense desire to win when they´re negotiating. Seeing negotiating as a geme is a big part of what makes you good at it. It´s fun to walk into the arena and pit your skills against the skills of the other person./ It always amazes me that salespeople can be so competitive in sports and so cowardly when it comes to handling buyers. A saesperson may enjoy playing racuqetball so he sets up an early morning game with a buyer before he´s scheduled to make a presentation to him. On the racquetball court, he´ll do everything he can -within the rules of the game- to beat the buyer. Then they shower off and go to the office to negotiate the sale and the moment the buyer mentions price, the salesperson rolls over and feels that he´s at the buyer´s mercy./ The more you think of negotiating as a game, the more competitive you´ll become. The more competitive you become, te more courageous you become, and the better you´ll do./ No Strong Need to Be Liked:


Power negotiators are not restrained by the need to be liked./ Pyramid of human needs, which showed our needs as 1) survival, 2) security (the need to assure our continued survival), 3) social (the need to be liked by others), 4) self esteem (the need to be respected by others) and 5) self-actualization (the need to feel fulfilled)./ Power Negotiators are beyond stage three most of the time -they have surpassed the need to be liked. Negotiation, almost by definition is the management of conlict or at least opposing viewpoints. People who have an exaggerated need to be liked will not be good negotiators because they fear conflict too much. Does this mean that good negotiagtors are ruthless people who win because they don´t care if the other person is losing? No, not at all. It does mean that the most important thing to them is to hammer away at the problem until a solution is found that everyone can live with./ Chapter 50 - The Beliefs of a Power Negotiator: Negotiating is Always a Two-way Affair: Power Negotiating is always a two-way affari. The pressure is always on the other person to compromise in the negotiations just as much as it is on you. For example, when you´re walking into a bank and applying for a business loan, you may get very intimidated. You tend to look at that big bank, and you start thinking, "Why on Earth would a big bank like this want to lend little old me money?" You lose sight of the pressure that´s on the other side. This bank spends millions of dollars a year in advertising to entice you to come in for a loan. There is tremendous pressure on the bank to get those deposits out in the form of loans. Many people at that bank have jobs that are dependent on their making loans./ So, a good negotiator learns to mentally compensate for the fact that we always tink we have the weaker side in the negotiations. As she strides up to that loan officer´s desk she thinks to herself, "I bet that loan officer just got a royal chewing out from his boss who told him, ´If you can´t find somebody to lend money to today, we don´t even need you around here anymore."/ Remember when you´ve had a key employee come to you to ask for a raise in pay? What are you sitting there thinking? You´re thinking,: "I hope I don´t lose him over this. He has done so well for me, all these years. He´s so skilled in what he´s doing. I have no idea where I´d find a replacement for him." They´re probably sitting there, thinking, "I hope this doesn´t affect my career plan with the company. They´ve really been good to me over the years. Maybe I shouldn´t push so hard. She´s been so nice to me." You´re both sitting there thinking that you have the weaker hand in the negotiation. Power negotiators learn to mentally compensate for that./ Why does this happen? Because each side knows about the pressure that is on him or her, but doesn´t know about the pressure that is on the other side. For that reason, each side typically thinks that it has the weaker hand./ Don´t buy into it when a potential customer says to you, "I´ve got half a dozen other guys that will do it for less money and do it just as well." Don´t buy into that. Something brought the other side to the negotiating table. The customer has pressure, just as much as you have it on you. The minute you believe that and learn to mentally compensate for it, you become a more powerful negotiator./ Negotiating is Played by a Set of Rules: The second belief that makes you a good negotiator is that negotiating is a game that is played by a set of rules, just like the game of chess. Perhaps when you read some of the Gambits in Section One your thought, "Roger, you´ve never met some of the guys I have to deal with my business. The make Attila the Hun look like Ann Landers. They´re never going to fall for that kind of thing." / That´s fair enough, but I want to buy a little blue sky from me until you´ve had a chance to try them out. Repeatedly, students of mine have told me: "I never thought that it would work, but it did. It´s amazing." The first time you Flinch, Nibble, or use the Vise on the other person and walk out of the negotiations with $1,000 in your pocket that you didn´t expect to get, you´ll be a believer too./ The Vise in Action: I remember training the employees of a large savings and loan in Southern California. At a local hotel, they arranged an afternoon seminar followed by a cocktail party and dinner. During the cocktail party, I was sstanding talking to the president of the savings and loan when the maitre d´ from the hotel came up with two bottles of wine in his arms. He asked the president if he would like wine seved with the dinner. When asked, he told the president that the wine cost $22.50 per bottle. The president was about to say okay when I said, "You´ll have to do better than that." The maitre d´ looked irritated, and the president looked shocked. The maitre d´ said, "I tell you what. If you´ll serve it for everybody, I´ll give it to yu for $15 a bottle." The president´s face lit up and he was about to give his okay when I said, "We were thinking more like $10 a bottle." Which caused the maitre d´ to say, "I´m not going to negotiate the price of wine with you - $13.50 is absolutely the best I can do." Remember that the president had been in the seminar that afternoon and had heard me talk about the Vise Gambit, but until he saw it in action, I don´t think he thought that it would work./ So buy some blue sky from me until you get a chance to get out there and try out these Gambits. The most important belief to have is that negotiating is a game that is played by a set of rules. If you learn the rules well, you can play the game well./ No is Simply an Opening Negotiating Position: To Power Negotiators the word NO is never a refusal -it is simply an openng negotiating position. Remember that the next time you take a proposal in to somebody -perhaps your boss or a potential customer- and he explodes with rage and says, "Not you again, with another of your crazy ideas. How many times do I have to tell you that we´re never going to do it? Get out of my office and quit waisting my time." When that happens remember that a Power Negotiator doesn´t take it as a refusal (I know - it´s close), she takes it only to be an opening negotiating position. She thinks to herself, "Isn´t that an interesting opening negotiating position. I wonder why he decided to start with that approach." / Your children know this, don´t they? You can tell your child, "I am sick of hearing abouth this! Go to your room! I don´t want to see you until the morning! And if you ever bring this up again I will ground you for a month!" Do they hear a refusal? No! They´re up in their room thinking, "Wasn´t that an interesting opening negotiating position?" / Section Six: Developing Power Over the Other Side: Power. Control. Influence. That´s really at the heart of any interpersonal situation, sn´t it? In negotiating, the person with the most influence or power will gain the most concessions. If you allow other people to manipulate and intimidate you, it is your fault if you´re not getting what you want out of life. If, on the other hand, you learn what influences people and how to use and counter specific methods, you can take control of any situation./ Developing personal power over the other side is an issue that is so critical to Power Negotiating that I´m going to devote all of this section to it./ In any negotiation, one person always feels he´s either the intimidator or the person being intimidated. You always feel that you either have control of the other person or the other person has control over you. In this section, I´m going to explain where that feeling comes from and how to deal with it./ At a seminar in Iowa a man approached me and said, "Roger, my wife took your Power Negotiating course, and I´ve never seen such a personality change in all my life. She has her own small business, and it wasn´t doing that well. But once she studied up on personal power and your Negotiating Gambits, it´s amazing to see the difference in her. She turned into a tiger and she really turned that business around./ I have always been fascinated by what causes one person to be influenced by another and for the last decade, I have been absorbed with studying personal power. Now I´ve been able to pinpoint the essential things that give you power over other people. In every situation in which one person exercises control over another, one or more of these factors have been called into play. Whether it is a drill sergeant harassing a private in boot cap or a parent trying to maintain control over an errant child, one or more of these basic power factors is being used./ Powwer has earned a nasty reputation, hasn´t it? In a letter to Bishop Creighton, Lord Acton said that, "Power tends to corrupt and absolute power corrupts absolutely." Charles Colton said, "Power will intoxicate the best hears, as wine, the strongest heads. No man is wise enough, nor good enough to be trusted with ulimited power." However, I don´t believe that power is inherently evil. It really isn´t power that corrupts is it? It´s the abuse of power. You wouldn´t say that water is bad because occasionally we have floods and people are killed. You wouldn´t say that air is bad because we occasionally have hurricanes and things are damaged. So it´s not power, it´s the abuse of power that corrupts. The power itself is independent of its use. As George Bernard Shaw said, "Power does not corrupt man; fools, however, if they get into a position of power, corrupt power." Power can be a very constructive force. When I talk about power I am not referring to the wanton ruthlessness of a dictator, whether he is in politics or industry; I simply mean the ability to influence other people./ What I´m going to cover in this section are the things that people can do when they´re negotiating with you to cause you to blink first at the negotiating table. Of course, these things are also what can give you power over the other side. Where does that ability come from? It comes from one or more of these eight elements./ Chapter 51 - Legitimate Power: Legitimate Power goes to anyone who has a title. I think you´ll agree that you are always a little more intimidated by someone who has the title of vice president or doctar than you would be by someone who has no title. We gain Legitimate Power instantly, because it goes to us the moment that the title is conferred upon us./ For example, the moment the chief justice swears in the president of the united States, the president receives the full power of the presidency, independent of any personal power that may have existed moments before. What a president does with the power from that point on makes all the difference. To strike a balance between appearing presidential and appearing close to the people -just a regular guy- is delicate balance. When President Carter carried his own luggage into the White House, he started giving away his Legitimate Power. He gave away even more Legitimate Power when he turned the heat down in the White House to save energy./ Perhaps the symbolism of being willing to share the burden of the energy crisis was important enough to lower the temperature. However, none of us expected the first lady to have to type her own letters with gloves on to keep her hands warm, as her husband forced her to do. President Reagan´s use of limousines, state banquets, and helicopter rides to Camp David restored Legitimate Power to the presidency./ We knew that George Bush´s career in politics was finished when he taunted Bill Clinton and Al Gore with the titles of Bozo and Ozone Man. Barbara Bush was not the only person to be horrified at this very un-presidential approach. Just the sight of Bill Clinton jogging into McDonalds for an Egg McMuffin perhaps endeared him to millions of junk food fans, but it didn´t help him in his negotiations with Congress and foreign leaders. And having an affair with an itnern was so un-presidential that it devastated his ability to influence./ Titles influence people, so if you have a title, don´t be afraid to use it. Don´t be bashful about putting your title on your business cards and on your nameplate. If the title on your business card says vice president, you already have a head start over someone whose card says salesperson. When I ran the real estate company, I would let the agents who were farming a territory put area manager on their buisness cards. (Farming means that they had staked out an are of 500 homes, and they were knocking on doors and mailing nesletters to those homeowners to establish themselves as an expert in that community.) They told me that having the title area manager on their cards made a dramatic difference to the way people accepted them./ So if you don´t have an impressive title on your business card, this may be something your company should review. The standard designations for territories are that an are manager reports to a district manager who reports to a regional manager, so regional vice president appears to be the more impressive title. Occasionally, I run into a company that designates title the other way and the area manager is in charge of the Western united States. I don´t suggest that they change, but because it´s traditionally done the other way, area manager tends to be a less impressive title than regional manager./ Legitimate Power also tells you that you should have them come to you if possible, rather than negotiating in their territory where their trappings of power surround them. If you´re taking them somewhere, it should always be in you car because that gives you more control. If you´re taking them to lunch, it should be to your choice of restaurant, not to their favorite place where they would feel in control./ Here are five small things that Power Negotiators can do to build their Title Power: 1. Use your title if you ahve one. If you don´t have a title, see if you can get one. 2. Use your initials. For example, describe yourself as J.R. Doe, rather than John Doe. People who don´t know you must then call you Mr Doe rather than calling you by you first name. 3. If possible, always negotiate in your office, in you surroundings, rather than in theirs. That way you´re in you power base surrounded by the trappings of your title. 4. Always use your automobile when you´re negotiating with people; don´t let them drive. Real estate people always do that, don´t they? When they´re in your car, you have control over them. 5. Have a secretary place and screen your calls. I personally don´t like secretaries who place calls for people, but it does convey legitimate power./ Other Forms of Legitimate Power: There are other forms of Legitimate Power. Positioning in the marketplace is a form of Legitimate Power. If you can claim that your company is the biggest -or smallest, if you claim that it´s the oldest -or the newest; you have Legitimate Power. You can claim to be the most global company or you can claim to specialize. You can tell people that you´re brand new so you´re trying harder or that you´ve been in the business for 40 years. It really doesn´t matter how you position yourself -any kind of positioning gives you Legitimate Power./ Respect for the law is a form of Legitimate Power. Some people obey the law only because of fear of punshment, but most of us also respect the law and follow it because of that respect. There is almost no chance of us getting into trouble if we drive without a driver´s license in our possession, but most of the time we take pains to see that we have it in our pocket. It´s very hard to enforce seat belt laws, but I started wearing mine when California passed a seat-belt law, simply because I take pride in showing respect fo the law. Do you zoom through red lights in the middle of the night if there´s nobody around? Probably not, because we see the benefit of everyone obeying traffic laws without question./ Tradition is a form of Legitimate Power (Until the turn of the century, tradition and law were thought to be the only main influences on people´s behavior.) If you can establish in the other person´s mind that you have been doing something for a long time, you can convince him or her that it´s valid without giving any other reason for doing it./ An established procedure is another form of Legitimate Power. "We have always done it this way," has power. That´s why price tags have Legitimate Power. Because they say, "Here´s the way this works. We put a price tag on the merchandise. You pich what you want and bring it to the cash register. We charge you what is on the price tag." Simply because of this established procedure, few people question price tags in this country./ Conversely, the procedure on a car lot has been established differenlty. "You look at the price sticker and then you make us an offer," is the established procedure. Power Negotiators know to use "standard contracts" when getting the other person to do what we want them to do. "This is our standard contract. This is the one that everybody signs," is simply conveying the power of procedure that is a form of Legitimate Power. So the first element of personal power is Legitimate Power, which goes to anybody who has a title, or has positioned themselves in the marketplace, or who has projected that an established way of doing things exists./ Legitimate Power As an Intimidation Factor: On the other hand, when you negotiate with other people, don´t be intimidated by a title. We all tend to be more intimidated by someone who´s a vice president of a bank or the president of a corporation than we would by someone who didn´t have a title. For example, let´s say that you´re looking for a particular make and model of car./


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If they´re buying, they want the lowest price and you want the highest price. /
Negotiating takes a different position. It teaches you how to win at the negotiating table, but leave the other person feeling that he or she won



TIMES NEW ROMAN 8 - NORMAL