Costly Mistakes: The 7 biggest errors in negotiations

By Matthias Schranner

Matthias Schranner worked a number of years for the police as their leading negotiator in hostage takings and other crimes. Here he describes his successfully proven negotiating techniques. Using numerous practical examples, he illustrates various procedures which can be applied to negotiations about salary, sales, and contracts with individual customers, business partners, and groups of customers. This is a book for employees, colleagues and executives who want to negotiate competently and successfully in every situation. Matthias Schranner knows, more than anyone else, about negotiating under extreme conditions.

• Language: English
• Publisher: Schranner
• Release date: Nov 15, 2018
• ISBN: 9783982034140

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Introduction

I am not Schranner. I am invisible, I am in the shadow, you cannot recognize me. I analyze negotiations in the background and, building on these analyses, I develop strategies and tactics. In addition, I look for mistakes during the course of negotiations, when my clients ask me to do so. Such mistakes mostly are caused by wrong assessments, by errors.

One of the biggest errors is believing that both sides can win, that a win-win agreement is possible.

This assumption is wrong. Because there must always be a winner. In sports, in business, and in politics. A negotiation is no different, there is one party carrying the victory, and another party that must accept defeat.

In this book, I want to share with you the knowledge and experience I gained from accompanying difficult negotiations. I would like to assist you on your way to becoming the winning type in negotiations.

My clients call me when they are in a seemingly unsolvable negotiation situation and see no way out. Although they are usually experienced and professional negotiators there are always situations in which they do not know what else they could do. They call me because they depend on the advice of an outside expert. They do not want anybody to know that I support them, because my name and our institute are synonyms for a firm negotiation. And in the era of win-win, this attitude is not very much in fashion. Nowadays, many people believe that they must strive for a long-term and successful partnership for both sides.

Outwardly, for instance at a press conference, my clients, too, communicate that they aim for an equal partnership. In the background, however, we invent strategies to achieve success – with the opposing party whenever this is possible, and if not, then without them.

Firm does not mean unfair or tricky. Your negotiations should always be fair and collegial. If your negotiation partner is also interested in a collegial agreement, I am happy for you. But if they want to win against you, you should not let them.

You can benefit from my experiences in the background and learn from my clients’ mistakes.

In addition, I want to give you tips on how you can master the most difficult situations even better. At the end of each chapter you will find a summary with all the negotiation tips. The book follows the negotiation process in chronological order:

In chapter 1 we deal with your opinion on difficult negotiations. Chapter 2 links the preparation of negotiation contents with the strategic preparation. In chapter 3 we assign strategic roles to the negotiators involved. In chapter 4 we enter the negotiation and focus on the first three minutes. In chapter 5 we test the distribution of powers in the negotiation. Chapter 6 presents the most important tactics and focuses on the course of the negotiation. In chapter 7, I show you what matters in doomed negotiations.

You can also request additional information and a checklist for preparing a negotiation by sending an e-mail to:

[e-mail]

Please be aware that in my entire work as a consultant, as a background strategist I am bound by absolute confidentiality. I will therefore not use any company names or any individual’s name and keep the examples abstract. Please allow me to address you directly as the negotiator. For reasons of readability, I use the male form in most examples. Naturally, this does not mean that only men make such mistakes.

I thank you cordially for your interest in this book and wish you good fun in reading it.

Matthias Schranner

Error No. 1

The principal goal of every negotiation is a win-win agreement

At the very beginning I want to show you why there cannot be any win-win situations in difficult negotiations, although social romantics may think otherwise.

Win-win, just like strategic partnership, is one of the most misused terms in high-stake negotiations. Win-win is pursued like the Holy Grail, but the parties’ diverging interests will make it impossible to find it.

What is win-win, and why is it so popular?

Most of my clients say that for them finding an agreement where both parties win is the most important goal by far. It is so important because they aim for a long-term partnership and still want to be able to look the other side in the eye when they meet again.

A graphic representation of this concept would look like this:

But what is a win-win agreement, actually?

Its principles were studied at Harvard University in the 1970s. Scientists tested negotiation methods and tried to find a version that would make both sides happy. They developed the method of fact-based negotiations – a.k.a. win-win or Harvard Approach. However, they assumed that there are no fundamentally contrary interests between the negotiating parties, which is the only situation where all players leave the negotiation as winners.

I would like to point out that negotiating is not that difficult when both parties have similar interests!

Diverging interests, however, are the rule in high-stake negotiations. The win-win concept can be applied indirectly at most, in that you create a win-win situation for yourself.

Try to imagine that I am negotiating with you about where we should meet for our consulting session. New York and Boston are good locations for me. You would prefer Washington, but you could imagine coming to New York as well. I would structure the negotiation so that New York is in the running as a concession to you, but I also bring Boston into the game so that at the end of the negotiation I have the option of two equivalent locations. I generously offer you two options that are equally suitable for me. It does not matter whether we meet in Boston or in New York, both of them are a win situation for me. I therefore turn our meeting into a win-win negotiation, into a Boston-New York negotiation with two equal options for me.

Negotiations become interesting when there are diverging interests, and both sides know it and the negotiation becomes a question of power. The power is on your side in the negotiation if you know how to solve conflicts strategically and consistently. And not by believing in a win-win agreement and hoping that the opposing party will be reasonable. They won’t!

A conflict is always based on diverging interests and on the assumption that the own interests are the right ones – which leads you to believe that the opposing party has the wrong interests.

This sounds pretty obvious, but it is at the root of all problems in difficult negotiations. Judging the own interests to be the right ones and therefore concluding that the other party’s interests are wrong creates a conflict that is all but unsolvable.

Leave the judgment of right and wrong behind

You should be able to trade during a negotiation. If you cannot trade, then you cannot negotiate and achieve a result. If you want to be able to trade at any time, you should leave the judgment of right and wrong behind.

Let us take a brief look at the teachings of Socrates. He distinguished between truth and certainty.

Socrates pointed out to his fellow Athenians that they were certain about many things but that they actually knew almost nothing about the truth of those things. They were not able to recognize the true things. Based on Socrates’ teachings, today we distinguish two series of concepts – semantic features and psychological states.

In my opinion, you cannot find a semantic-feature solution in a win-win negotiation. It is not possible that both parties really win (truth, knowledge, reality). However, it is possible for both of them to believe that they can win or that they did win (certainty, opinion, reality).

Example:

Let us assume that you want to sell your car. You think about the maximum price you want to realize, and about the minimum you are willing to live with. You place an ad in the paper or on the internet stating your maximum price. Let us assume you want $10,000 for your car and put that in the advertisement.

Naturally, you do not say what your minimum acceptable price is, the price you would accept grudgingly and with a tummy ache. Let us say, that price is $9,000.

It is a Saturday morning, the telephone rings. A potential buyer calls, you meet him, he takes his time to look at the car, takes it for a test drive and decides to buy the car. You tell him that you want $10,000 for the car, and the buyer agrees at once. He signs the sales contract and gives you the money.

Honestly, how do you feel? Are you happy because you got the maximum price you wanted? No. You are unhappy because you feel that you could have gotten more.

This was too easy. You do not know how much more the buyer might have been willing to pay. This uncertainty disturbs you, you are mad that you asked for a price that was too low and that you accepted so quickly.

So, where is the truth for you now? You cannot say with certainty whether you made a truly good deal. And you are also uncertain as to whether you could have asked for more money.

How is the buyer doing when he drives home with the new car? At first, he is probably happy and satisfied. Things start to become difficult for him once he reenters his social environment. When people ask him how much he paid for this car, when people might laugh at him because he paid so much money for that car. The buyer, too, cannot know the truth on the deal he just made. At best, he has certainty. And that is fragile.

Every negotiation is determined by a range of imponderables. There are many elements that we cannot control, that we cannot analyze or prepare down to the smallest detail. In difficult situations especially, we are moved by emotions and tend to lose more and more of the rational control.

Therefore, we can never find the truth in a negotiation.

And this is why we should stop looking for it. We should rather dedicate our attention to certainty – that of the negotiation partner. It is of great importance to find out why our negotiation partner has the certainty that entitles him to his point of view.

We therefore must question his certainty and analyze his opinion and his view on reality.

• Negotiation tip: Do not look for the truth, but find out what certainty your negotiation partner has, and why.

Example:

A trade union demands a 5% pay raise for all employees. The employer side, citing the bad economy, warns to overextend salaries and wages during such times. This could lead to the company’s ruin and that is why they offer zero pay raise.

Based on my experience I can assure you that both parties think that they are right. And this being right is then communicated as the truth.

Those who believe that they are right insist on their point of view and communicate it very clearly to the outside world. Both parties – trade union and employer in our example – communicate in the press and before the employees their own view of the situation and corroborate it with arguments. Arguments, however, belong in the realm of certainty, not that of truth.

What is presented during difficult negotiations is nothing but standpoints, and those are then linked to threats and sanctions. If we don’t get a 5% raise, we will go on strike! the trade union says. If we must raise salaries, we’ll move the production abroad, management counters.

How could we find a so-called win-win agreement here? Please, do not even try and offer me a compromise!

In a compromise, both parties approach one another and meet in the middle. But the question is, what middle? Departing from a pay raise from 0 to 5%, the mathematical compromise would be at 2.5%. Both parties would have won, both parties relented, and reached their goal fairly, at the half-way point. But that is not the case.

What

Reviews for Costly Mistakes

[dancap69 · Rating: 4 out of 5 stars]

Some good advice. Aggressive negotiation, German-style. I love another sentence of Schranner: "as a buyer, your job is to instill fear (on the salesman)"