Negotiation is at the heart of human communication˳ Think about it˳ Most conversations are a sale in the making˳ You are either selling to a yes or accepting a no in everything you do˳ At work this shows up in what you do, how you do and what you get paid˳ All of these facets are negotiable˳ Deepak and Max go far beyond the Win/Win, Win/Lose and Lose/Win mentality and show how to create value˳ The whole goal of the book can be summed up in a quote by Emerson: “Man Hopes; Genius Creates”
Why is this important to me?
I start all of the book summaries with this question because if we cannot answer it then there is no sense in wasting your time watching the video˳ People do anything to avoid pain and gain pleasure˳ When in the middle they attain their COMFORT ZONE! The comfort zone may be the only place where good negotiation is not needed˳ Otherwise you need to know how to negotiate – PERIOD˳ This book will show you how˳
Win/Win is seen as the ultimate end to good negotiations˳ Is it the best outcome? Negotiation genius will show that it is not always the best outcome˳ Amateur negotiators pull at each side of the rubber band hoping it does not break before they can come to an agreement or settlement˳ This is claiming value in a nutshell˳ Johnny wants to pay only $50,000 and Jane wants $100,000˳ Typically, they meet somewhere in the middle at $75,000˳ Claiming value is not nearly as powerful as creating value which we will examine in more depth˳
Deepak and Max break down the book into 3 sections˳ I will cover portions of each section for the sake of time˳ Claiming value is the first part˳ Claiming Value – is when each party tries to gain the most out of negotiations for themselves˳
1˳ BANTA – Best Alternative to Negotiated Agreement! Identify all of your best options˳ Do your homework and prepare
2˳ RV – Reservation Value – This is your walk away point˳ Understanding BANTA allows you to really know what your Reservation Value˳
3˳ ZOPA – is the ZONE of Possible Agreement – This is the spread between sells reservation value or walk away point and the buyer’s reservation value˳
Common negotiation mistakes are as follows: 1˳) You made the first offer when you were not in a strong position˳ 2) You made a first offer that was not sufficiently aggressive˳ 3˳) You talked but did not listen 4˳) You tried to influence the other party but did not try to learn˳ 5˳) You did not challenge your assumptions about the other party˳ 6˳) You miscalculated the ZOPA and did not reevaluate it during the negotiation˳ 7˳) You made greater concessions than the other party˳
Contingency Contracts are designed to draw out lies and deception as well as extremes in any contact˳ They leave certain elements of the deal unresolved until uncertainty is resolved in the future˳
Silence – be comfortable with silence˳ Just remind yourself that if you speak when it is their turn, you will be paying by the word˳
Investigative negotiation is just what it says˳ Probe and ask questions to gather information˳ How can we get information so we can create value, resolve conflicts, and reach efficient agreements?
1˳) Trust is critical in all relationships˳ You can have a weak agreement with good people and have a great outcome˳ You can also have a rock solid agreement with bad people and have a terrible outcome˳ Trust is the glue that holds the deal together after it is done˳ Sharing information can help you gather information˳
2˳) Negotiate issues simultaneously – When you do this then more information is shared and the dialogue is more open˳ Once people are comfortable with you then they will dump more information˳
3˳) Ask good questions and LISTEN – If you take nothing else from this video review then this one piece of advice will serve you well˳ Asking open ended questions in their TERMS like “Why”, “Tell me more”, “Can you be more specific” will allow you to get a full spectrum of what they are concerned about, what is important to them and what areas are NOT important to them˳
The power of questions can be mind blowing˳ Think about if Microsoft wanted to buy your software company˳ You value it at three times revenue which is $15 million dollars˳ If you accept this offer with knowing all you can know then this may be good enough˳ What if because of their distribution that they will be able to generate $100 million per year in revenue with your software˳ Don’t you think they would pay you more? They could pay you triple your price˳ The key here is knowledge˳ Understand why they want to buy and the consequences if they don’t and this will yield exponential results˳
Several principles are critical for you to learn˳ Remember that in any negotiation if you get a No, don’t accept it˳ Your goal is to understand “Why NOT”˳ Once you do you may be able to open it back up and get to a yes˳
I hope you have found this short summary useful˳ The key to any new idea is to work it into your daily routine until it becomes habit˳ Habits form in as little as 21 days˳
One thing you can take away from this book is don’t accept NO˳ Instead ask why!
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