A Last Minute Demand

The CEO of a construction company was negotiating a deal in which his firm would be contracted to build midsize office buildings for a buyer. After months of negotiations had finally concluded–but just before the contract was signed–the buyer approached the builder with an entirely new and potentially costly demand. The buyer wanted to include a clause in the contract that would require the builder to pay large penalties if the project’s completion was delayed by more than one month. The builder was irritated by this sudden demand; it seemed as though the buyer was trying to squeeze a last-minute concession from him. The builder weighed his options: he could accept the buyer’s demand and seal the deal; he could reject the buyer’s demand and hope this would not destroy the deal; or he could try to negotiate to reduce the proposed penalties. After considering these options, the builder decided on an entirely different approach. He negotiated with the buyer to increase the amount of penalties he (the builder) would have to pay if the project was delayed–and the revised deal made both parties better off. How? We will revisit this example in Chapter 3.

A Campaign Catastrophe

It was 1912, and former president Theodore Roosevelt was campaigning for a third term. The campaign was tough; every day seemed to present new challenges. But here was a challenge that no one had anticipated. Three million copies of Roosevelt’s photograph had already been printed for circulation with a campaign speech when Roosevelt’s campaign manager discovered a catastrophic blunder: the photographer had not been asked permission for the use of Roosevelt’s photograph. To make matters worse, it was soon discovered that copyright law allowed the photographer to demand as much as $1 per copy to use the photograph. Losing $3 million in 1912 would be equivalent to losing over $60 million today. No campaign could afford that. The alternative was almost equally unattractive; reprinting three million brochures would be tremendously costly and could cause serious delays. The campaign manager would have to try to negotiate a lower price with the photographer, but how? The photographer seemed to hold all the cards. The campaign manager, however, had something better: an effective strategy that he used to negotiate an almost unbelievable deal. We will reveal the deal–and the strategy–in Chapter 1. As we hope to persuade you, people are rarely born “negotiation geniuses.” Rather, what appears to be genius actually reflects careful preparation, an understanding of the conceptual framework of negotiation, insight into how one can avoid the errors and biases that plague even experienced negotiators, and the ability to structure and execute negotiations strategically and systematically. This book will provide you with this framework–and with an entire toolkit of negotiation strategies and tactics that you can put to work immediately. As you begin to apply the framework and strategies in the many negotiations you encounter–in business, in politics, or in everyday life–you will begin to build your own reputation as a negotiation genius.

Our Approach

Just twenty-five years ago, courses on negotiation were rarely taught in management schools or in executive education programs. Now they are one of the most sought-after courses in business schools throughout the world. Negotiation courses are also tremendously popular in law schools and schools of public policy and government. Why? Because in our increasingly complex, diverse, and dynamic world, negotiation is being seen as the most practical and effective mechanism we have for allocating resources, balancing competing interests, and resolving conflicts of all kinds. Current and future managers, lawyers, politicians, policy makers, and consumers all want and need to know how to get better outcomes in their negotiations and disputes. Negotiation is, perhaps now more than ever, an essential skill for success in all areas of life. Why, then, do so many people continue to negotiate ineffectively? In our work as educators and consultants, one of the biggest problems we’ve encountered is the pervasive belief that people are either good or bad at negotiation, and little can be done to change that. We could not disagree more. In addition, too many people–including many seasoned dealmakers–think of negotiation as being all art and no science; as a result, they rely on gut instinct or intuition as they negotiate. But gut instinct is not a strategy. Nor is “shooting from the hip” or “winging it.”

We offer a more systematic and effective approach. This approach leverages the latest research in negotiation and dispute resolution, the experience of thousands of our clients and executive students, and our own experience as negotiators, consultants, and educators. It has been challenged and refined in our MBA and executive education courses at the Harvard Business School and in our work with over fifty major corporations in more than twenty-five countries. The resulting framework will help you minimize your reliance on intuition, increase your understanding and use of proven strategies, and achieve superior negotiated outcomes consistently. We also aim to dispel the notion that negotiating effectively is as simple as achieving “win-win agreements.” If you’re like many of the executives we’ve worked with, you’ve had the experience of wanting to bargain in good faith for a mutually rewarding outcome, only to find that the other party is playing hardball, behaving unethically, or negotiating entirely in their own self-interest.

Or you may have found yourself negotiating from a position of weakness, dealing with someone who was not sophisticated enough to negotiate effectively, or sitting across from someone who did not have the authority to negotiate the kind of deal you wanted. How does the “win-win” principle help you in these situations? In complex negotiations, which might include multiple parties, great uncertainty, threats of litigation, heightened emotions, and seeming irrationality, it may not even be clear what “win-win” really means. Because such complexities are commonplace, you must deal with them systematically. This book will provide you with the tools you need to do exactly that. In other words, while preserving the virtues of a win-win mind-set, we will help you understand how to strategize effectively when “win-win” won’t save you. Following is a brief outline of what you will find in this book.

Tools:

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