Negotiating is one of the oldest human skills, and if you look through history, you can learn some important lessons for the negotiating you do today.
Build the relationship before testing it in negotiations
When the Americans were fighting their War of Independence with England in 1777, they were desperately short of food, ammunition and shelter. Hoping to tap into the long-standing animosity between England and France, the American founding father Benjamin Franklin travelled to see the French Foreign Minister, the Comte de Vergennes.
The negotiations lasted from January to October that year. At their first meeting, Vergennes was surprised at the modesty of Franklin’s requests. He asked for some trading concessions, which really gave the United States nothing more than they already had.
Over the following months, Franklin’s requests increased until they included weapons, ammunition, blankets, clothing and even warships.
The reality was that in January the Americans’ situation looked perilous, so Franklin knew he had little leverage with the French. By October, the tide of the war had turned. The Americans were now seen as likely victors over the British — putting Franklin in a much more powerful position and allowing him to increase his demands and apply the necessary pressure.
The negotiating table is not the place to improve relationships; this is where relationships are tested, so be sure you have a strong enough relationship with the other party at the start.
Benjamin Franklin’s position improved dramatically through the negotiation and he was able to maximise on this because he had concentrated in the early part on building the relationship.
Step back to see the bigger picture
Sometimes you need to remind each other of the purpose that unites you rather than the particulars that divide you.
The 50th anniversary of the Cuban missile crisis was on Oct 28 last year. Never had the world come so close to destruction in nuclear war. In 1962 at the height of the Cold War, US and Soviet ships faced off against each other in the Caribbean.
Soviet nuclear missiles were being installed in Cuba just 180km from the US mainland and the Americans were threatening all-out retaliation on Cuba and the USSR unless they were removed.
The rhetoric became more heated while President John F Kennedy amassed the largest force since World War II in readiness for attack. Enough nuclear firepower to destroy the planet several times over was armed and aimed and “hawks” on both sides were urging their leaders to push the button first.
At the height of the tension, Soviet Premier Nikita Khrushchev sent a letter to President Kennedy in which he said, “We must not succumb to light-headedness or petty passions…These are transitory things, but should war break out it would not be within our power to contain or stop it…thereby dooming this world to the catastrophe of thermonuclear war.”
President Kennedy responded and disaster was averted.
When we are negotiating, it is easy to become so caught up in the competitiveness of the situation — the haggling over every little point — that we lose sight of the purpose that unites us — the desire to do a deal.
If that happens, you need to step back, focus on how far you have come and remind the other party of your common purpose.
The other party sets the value
During the Cuban missile crisis negotiations, one of the demands by the Soviets was that the US remove missiles installed in Turkey.
The Soviets did not know that the US intended to decommission these anyway as they were based on obsolete technology and were expensive to maintain.
The US realised that this bargaining point was much more important to the Soviets than it was to them, so they were able to extract many more concessions than they would have otherwise asked for.
Remember that success in bargaining is dependent on your ability to identify those points that are of higher value to the other party than they are to you. The real value of any point is the value the other party puts on it — not how you value it.
Get full value for every concession
Never give any concession easily — otherwise the other side won’t value it. Imagine you are considering buying a car advertised at $100,000. You plan on a starting offer of $90,000 hoping to settle for under $95,000. You make your opening offer of $90,000 and the seller accepts your offer immediately.
Now, do you think, “Wow, what a great negotiator I am”? Or are you more likely to think: “I should have started lower. He seemed too eager. Is there something wrong with the car?”
Professor Gavin Kennedy says the worst thing you can do to a negotiator is to accept his first offer. It’s bad for both sides!
So, while it is important to keep your eye on the big picture and not fall into the trap of negative competitiveness, you should always get full value for every concession — and never give something for nothing.