If the recent economic collapse has taught us anything, it is that the pursuit of immediate gain with no attention to the long-term consequences is a recipe for financial disaster. The gains accumulated were primarily on paper, but the losses have been painfully real. The problem was that far too few people were looking beyond the deal to see whether it would result in a positive outcome. Mortgage brokers got paid bonuses for signing off on loans, regardless of whether those loans could ever be repaid. What did it matter if the borrower, who had been passed off onto some other institution, defaulted down the road? The answer became agonizingly clear when banks and mortgage companies began to sink under unpaid debts, when borrowers who didn't lose their homes saw their house values plummet, and when the brokers who had generated those billions of dollars of paper profits found themselves on the street.
The folly was in thinking that the deal itself is the goal, that a promise is the same as an outcome, and that once you get a signature on a piece of paper, your relationship with the other party is over and the money will begin flowing in of its own accord. Sounds silly in retrospect, doesn't it? Yet that is the way most books still portray the objective and process of negotiation. Your target, they say, is a deal.
Unfortunately, that narrow focus misses the real point. As anyone knows who has done business in Asia or the Middle East, sold a mortgage to someone who had no realistic way to pay it, or, frankly, has been married, getting to "yes" is not the same as getting results. The other parties may say yes to be polite or to make you go away when they feel cornered by forceful tactics. They may agree to promises they have no intention of keeping, because they feel no connection and therefore no moral obligation to you. The challenge for business, government, and society is not in getting people to make promises but in getting them to carry out those promises fully, willingly, and consistently. That can only be accomplished through changing your negotiation target from making a deal to building an honest and mutually committed relationship with the people who will be carrying out that agreement.
In the same way that the vows made in a wedding ceremony don't guarantee a happy marriage, contractual terms won't ensure smooth and successful business. The marriage license only "closes the deal" to the extent that it opens the door to a potentially fruitful union. The success of the marriage—or the business partnership—depends on the parties' willingness to make it work because they feel committed to the relationship and satisfied that they are benefiting from it.
Have you ever agreed to something, but the negotiation process left you so annoyed or demeaned that you were just waiting for a way to back out of the deal or even the score? Imagine that your boss calls you into his or her office to tell you that the company needs you elsewhere, so you either accept a transfer or you lose your job. You may agree to the transfer as a stopgap measure, but are you secretly looking for another employer? Even if you find nothing else and so are forced to accept the transfer, are you as committed an employee as you once were?
Let's take a less clearly personal case. A customer's procurement manager drives your professional service firm's contract down to a rock-bottom price by continually reminding you of their company's negotiation power and threatening to drop you for a cheaper competitor. You may reluctantly sign on to the deal, but wouldn't you secretly want to get even by socking them with variation orders for every little extra they request, things you would willingly throw in for other, more likeable clients?
And those are just the deals that got to yes. I would lay odds that you can remember walking away from a potentially profitable transaction simply because you didn't like the attitude of the negotiator on the other side. The terms were acceptable, but the way you were being treated was not. You felt so accosted or demeaned or ignored that you didn't want to have anything more to do with that person or that company. At bottom, you felt the deal just wasn't worth the emotional cost.
You can't expect people to carry out agreements faithfully when one moment you call them valued partners and the next you treat them as mere tools, or obstructions, in your quest for short-term profitability or convenience.
A new negotiation paradigm—away from negotiating a deal and toward negotiating a relationship—is needed for the twenty- first century, because the business landscape has fundamentally changed. Businesses can no longer stay on top by negotiating short-term victories. Nor can any organization hope to navigate the increasingly complex economy by pursuing an endless cycle of zero-sum transactions. The key to winning unbeatable, long-term results is to negotiate solid, long-term relationships.
Thousands of companies and individuals have profited handsomely from the concept of "relationship selling." Yet I was struck painfully by the words of Jim Cathcart, one of the founding fathers of that movement, who distilled his sales philosophy as the rejection of a negotiation mentality. "Business should be practiced as an act of friendship, rather than merely as a process of negotiation. It is about connecting with people profitably, not merely persuading them to buy," Cathcart writes.[1] Where does that leave negotiation? As the opposite of friendship and good business practice? Sadly, the notion of negotiation as hostile, self-interested, and manipulative has been reinforced by negotiation "experts" who advise you to "start from 'no'" or who promise to teach you "how to beat the opposition every time." It is precisely this thinking that has led to so many unprofitable or unworkable deals and that makes negotiation stressful and distasteful to the great majority of people.
It doesn't have to be that way. All we need to do in order to move from transactional, deal-centered negotiation to relationship-centered negotiation is turn the relationship sales philosophy slightly around: Negotiation should be practiced as a process of profitably connecting with people, rather than merely as an act of persuasion. Only then will we be on our way to achieving truly winning results.
"That's great in theory," I imagine many of you thinking as you read this, "but what if I'm not a gifted speaker? What if I don't think quickly under pressure or I become emotional when confronted?"
Here's the good news. Relationship negotiation doesn't require you to be eloquent, cunning, tough, quick-witted, or fast-talking. There are no prizes for speed or sleight of hand when laying a strong and rewarding foundation for the future. Instead, the basis of your negotiating power is advance preparation, openness, empathy, patience, and a sincere effort to reach a mutually successful agreement. These are competencies to which even the humblest among us has equal access—but only a select few use to their greatest advantage. This book will provide you with the tools to develop and get the most out of those competencies.
Preparation also helps keep undesired emotions (whether your own or the other party's) in check. Emotional reactions are very like nerve reactions: they're set off by shock. Just as we can't tickle ourselves, because our brains know what's coming, we're far less likely to become upset if we anticipate that others may react negatively at some point in the negotiation—whether it's because they generally have volcanic personalities or they're likely to feel upset by some specific aspect of the discussion. And we're far less likely to set off that negative reaction if we have considered in advance, for example, that Ben generally gets flustered when he's under time pressure or that Sarah, who has put a good deal of effort into formulating her proposal, will probably feel hurt and angry when we reject it. By anticipating problems, we can change our approach in an effort to avoid or at least mitigate them: when we negotiate with Ben, we first ensure that we have set aside sufficient, uninterrupted time; when we reject Sarah's proposal, we give her a full explanation why as well as positive suggestions she can take away. This book will show you how to understand the other side and, through understanding, to anticipate reactions. The payoff of preparation and empathy is not just that they enable you to allay negative reactions and deflect confrontations before they occur; you will also find a marked reduction in your fear of negotiation.
Over the years, I have trained thousands of negotiators from all walks of life—men, women, old, young, businesspeople, social activists, public servants, Asians, Americans, Europeans, Middle Easterners; the list goes on. Almost all started out admitting that they disliked, even feared, negotiation. Yet those same people reported a stunning change after becoming skilled at the GRASP relationship negotiating method (see Part Three). Negotiation, they told me, had gone from being a painful, even humiliating, experience to a rewarding one, not just improving their effectiveness on the job but enhancing the relationships in their private lives as well. I assure you, those people were no more naturally gifted than yourself. What enabled them to be so successful was that they had learned to approach negotiation in a new way, just as you can by following the steps in this book.
Beyond Dealmaking has two objectives divided among three parts. Part One, "Why Relationships Matter," sets out to demonstrate the importance of negotiating open, mutually beneficial, and trusting relationships—and the terrible risks we run by ignoring them. Why do so many deals jump from handshake to heartburn? Why is it that "yes" so often fails to lead to positive action? Real-life examples drawn from every possible type of negotiation will show the impact of fairness, honesty, empathy, flexibility, and problem-solving on the success or failure of negotiation outcomes. From those stories and lessons you will see that
Negotiation isn't a battle or a game—it's simply finding a way to work profitably together.
People do business with people they connect with.
Cooperation is based more on a sense of fairness than on contracts.
Building a positive relationship starts with the first date, not after the wedding.
Healthy relationships have to work both ways.
The second aim of the book is to provide a practical guide for achieving outstanding and sustainable negotiation results, whether across continents, within your own organization, or among family members. This objective is covered in Parts Two and Three.
Part Two, "The Mind of the Negotiator," focuses on the basic approach to negotiating value-enhancing relationships. It stresses the importance of planning, connecting, understanding, problem-solving, reciprocity, and holding firm against one-sided demands.
Part Three, "Five Steps to Success," presents the step-by-step GRASP negotiation model, a method for negotiating profit-maximizing and durable partnerships that has been used successfully by thousands of businesspeople, public officials, NGOs, and private men and women around the world. (If you want to get straight to the GRASP method, you can skip over Parts One and Two; however, I strongly recommend that you read Chapters Two, "Even Monkeys Demand Fairness," and Five, "Don't Feed the Bears!" before you start negotiating.)
The GRASP model breaks down negotiation into five steps:
G: Understanding the Goals of all parties, beyond the immediate deal
R: Developing Routes to those goals that will maximize the benefit of all parties
A: Promoting fairness, trust, and common understanding through valid Arguments
S: Benchmarking your current relationships against possible Substitutes
P: Increasing your Persuasion through open and empathetic communication
The name "GRASP" is more than a memory device; it symbolizes the primary focus of this book. To grasp means both to hold on to something firmly and to understand. The GRASP method creates firm commitments because they are built on understanding, not on gamesmanship. By learning this simple but powerful method and using the GRASP Negotiation Planner at the end of this book (see Appendix A) as an aid in planning your next negotiation, you will discover that negotiation can be a positive, creative, and, most important, genuinely rewarding experience. I welcome you onto this journey.