Key Highlights Class #3 - 9/30/06
Role Play Reflection – Sally Soprano (I was the Agent)
In reflecting on the negotiations that I embarked in during the role-play of the Sally Soprano case, I went into it with the background information that Sally Soprano was the desperate one based on the fact that she was. I was surprised during the course of the negotiations with how Mike (Higgins), as the role of Lyric Opera’s business manager, was even-keeled and rational and willing to make compromises.
He seemed willing to make compromises from the very beginning so I pushed for more than I thought I could get. The maximum compensation I got Soprano was $78,500 (28,500 for this lead role and if 80% ticket sales a guaranteed role at $30,000 for the next one). I do not think there was any money left on the table. I accomplished this by trying to talk to the Lyric Opera Business Manager rationally and knew they were in a bind after finding out that their lead was ill and Mike basically told me how much he was going to pay her. He also said that the Opera was very committed to making a deal. My opponent made an excellent point when he said I showed no empathy.
Since I was playing the role of a “Agent”, I thought it was important to be as cut throat as possible. With this mindset, I felt I was more focused on uncovering his BATNA and showing less empathy/trust as I have in other role-play negotiation. Because of past lessons I have learned, my number #1 goal was to figuring out his BATNA and discover the ZOPA. In the end, there was a small ZOPA and I thought it was hard to agree upon a salary because the Lyric Opera was a non-profit company. The best was to create a deal was to increase the stakes and share the risk (both the Lyric Opera and Sally Soprano.
In the course of this role-play, I learned that in order to survive you have to “frame desperation” as something other than desperation. Survival is almost impossible without framing a disadvantage as an advantage. For example, Sally Soprano was a “has been” in the Opera world yet, I framed her as being “experienced” in our negotiations.
Sharing Risk
In looking at different sides, seeking each other’s interests may help come to an agreement. In looking at this case, the Lyric Opera felt they were better off in paying a low base salary and sharing possible profits with her based on ticket sales. This is beneficial for both sides because the Lyric Opera’s interests were to sell tickets and Sally Soprano just wanted to make money. If she was a hit, than they would both make money in this arrangement and have successfully shared the risk.
In debriefing with Mike, he seemed to think I was a little hard on him during the negotiation process and was digging in making it difficult to get anything accomplished. I took that as a compliment since my prior role plays, I felt like I got walked all over.
Friday, October 20, 2006
Key Highlights Class #2 (9/23/06)
Class # 2 Key Highlights 9/23/06
First Role Play Negotiation:
Planning For the Law Books Negotiation
As the buyer if the books for the first one-one role play, I read the case, put together a well-thought plan and did not stick to it. I believe the flow of the conversation and the first few minutes of questions and answers was the decisive factor in abandoning the original plan. We had a nice conversation and we were able to enter into the negotiation openly and honestly thus shifting perceptions to integrative vs. distributive. Since I was the buyer, I felt, immediately, at a disadvantage because the purchasing law firm needed the books more than the selling law firm needed the money. Throughout the negotiations, Obei used an effective technique of being quiet and letting me talk. At times, I got myself into a corner and was not effectively negotiating a good deal.
After debriefing with Obei, it turned out that neither of us stuck to our original Negotiation plan. In addition, I paid too much and Obei had set a much lower walkawya than I thought. The lesson learned was that it was clear that we both wanted to implement mutual gain by throwing other things into the pot such as office space in DC and client sharing. I went into it not thinking the little things mattered. For example, I was not concerned about shipping and handling mattered but Obei threw those in unexpectedly so I accepted it as part of the deal. I guess in this small concession that he made, I did get a good deal.
If I were to do this again, I would have negotiated a better deal (i.e., paid less for the books) by talking less. Although I felt like both sides were able to get some good advantages, I left money on the table. I should have asked additional probing questions and not have been afraid to take a coldhearted look at whether this deal makes sense money-wise for the overall firm.
Experiencing Intimidation
In going through the “Law Books” role-play, I discovered that I was intimidated by low-ball offers. I found it was difficult to recover and get back to negotiating a good deal. The reason I was intimidated is that I created the foundation for trust in the beginning and felt like I did not want to low-ball (gouge) because of the relationship. I think if I had kept my BATNA in mind than I would not have been nervous about responding to the low-ball offer with a high counter-offer. Somehow, I felt forced into doing business with him because of building trust and not doing a deal was not an option.
In summary, in shifting negotiations from distributive to integrative, you need to build trust and be creative but should not let one leave money on the table. Also, setting ambitious targets would help identify eachother’s walkaway as well as aid in discovering the ZOPA. Also important to keep in mind discovering your opponent’s BATNA (and always keep your own BATNA in mind as well).
First Role Play Negotiation:
Planning For the Law Books Negotiation
As the buyer if the books for the first one-one role play, I read the case, put together a well-thought plan and did not stick to it. I believe the flow of the conversation and the first few minutes of questions and answers was the decisive factor in abandoning the original plan. We had a nice conversation and we were able to enter into the negotiation openly and honestly thus shifting perceptions to integrative vs. distributive. Since I was the buyer, I felt, immediately, at a disadvantage because the purchasing law firm needed the books more than the selling law firm needed the money. Throughout the negotiations, Obei used an effective technique of being quiet and letting me talk. At times, I got myself into a corner and was not effectively negotiating a good deal.
After debriefing with Obei, it turned out that neither of us stuck to our original Negotiation plan. In addition, I paid too much and Obei had set a much lower walkawya than I thought. The lesson learned was that it was clear that we both wanted to implement mutual gain by throwing other things into the pot such as office space in DC and client sharing. I went into it not thinking the little things mattered. For example, I was not concerned about shipping and handling mattered but Obei threw those in unexpectedly so I accepted it as part of the deal. I guess in this small concession that he made, I did get a good deal.
If I were to do this again, I would have negotiated a better deal (i.e., paid less for the books) by talking less. Although I felt like both sides were able to get some good advantages, I left money on the table. I should have asked additional probing questions and not have been afraid to take a coldhearted look at whether this deal makes sense money-wise for the overall firm.
Experiencing Intimidation
In going through the “Law Books” role-play, I discovered that I was intimidated by low-ball offers. I found it was difficult to recover and get back to negotiating a good deal. The reason I was intimidated is that I created the foundation for trust in the beginning and felt like I did not want to low-ball (gouge) because of the relationship. I think if I had kept my BATNA in mind than I would not have been nervous about responding to the low-ball offer with a high counter-offer. Somehow, I felt forced into doing business with him because of building trust and not doing a deal was not an option.
In summary, in shifting negotiations from distributive to integrative, you need to build trust and be creative but should not let one leave money on the table. Also, setting ambitious targets would help identify eachother’s walkaway as well as aid in discovering the ZOPA. Also important to keep in mind discovering your opponent’s BATNA (and always keep your own BATNA in mind as well).
Friday, October 13, 2006
Key Highlights Class # 1 (9/9/06)
Class journal....
The first day we started out in Negotiations class talking about a case study involving a non-profit company thinking about selling (Elm Tree) to a big real estate developer in Somerville. My immediate thought was that Elm Tree had no chance of coming away from the deal whole because they were up against savvy negotiators/business people. It was my takeaway from class that in every negotiation we should think about profit and the viewpoint of the other side but at the same time Maximize profit or minimize the other person’s profit
I was struck by our conversation pertaining to Integrative negotiations. The idea here is that we want the other person to feel as though they have won and more important, that you feel as though you have won. Doing well for yourself is always the name of the game in negotiations but it is also important to care about the relationship.
Integrative Negotiations
I hope to use this in most of our upcoming role plays. In reflecting upon my own personal preferences I much prefer integrative relationships but I also feel like I can be taken advantage of. What I like about it is that you can think outside of the box and be creative with what is considered valuable. I like the idea that one is not stuck with a certain pre-determined solution.
Distributive Negotiations
The idea of somebody losing out on a deal just does not sit well with me, Win/Lose: Want to do well for ourselves but we do not care about the other person. Person who makes the most profit. Person tends to be mostly closed. Withhold information. The benefit is that we won’t be taken advantage. Fail to identify creative solutions.
Lessons Learned:
World runs on Relationships. This seems true in many areas not just negotiations – work, social life, family
Key Lessons Learned: Cooperate or compete - working with people and keeping a positive attitude is critical
Pressure and reciprocity...huge concessions vs. small concessions.
Rule of Reciprocity – etiquette norms violated if one person offers a fair price and the other person high-balls.....huge psychological impact
After setting an anchor and going back and forth when the gaps between bids get smaller, it could mean that the other person is closer to their walkaway. If this is the case, tread lightly and take another coldhearted look at situation and decide on your walkaway. Am I better off compared to the alternative?
The first day we started out in Negotiations class talking about a case study involving a non-profit company thinking about selling (Elm Tree) to a big real estate developer in Somerville. My immediate thought was that Elm Tree had no chance of coming away from the deal whole because they were up against savvy negotiators/business people. It was my takeaway from class that in every negotiation we should think about profit and the viewpoint of the other side but at the same time Maximize profit or minimize the other person’s profit
I was struck by our conversation pertaining to Integrative negotiations. The idea here is that we want the other person to feel as though they have won and more important, that you feel as though you have won. Doing well for yourself is always the name of the game in negotiations but it is also important to care about the relationship.
Integrative Negotiations
I hope to use this in most of our upcoming role plays. In reflecting upon my own personal preferences I much prefer integrative relationships but I also feel like I can be taken advantage of. What I like about it is that you can think outside of the box and be creative with what is considered valuable. I like the idea that one is not stuck with a certain pre-determined solution.
Distributive Negotiations
The idea of somebody losing out on a deal just does not sit well with me, Win/Lose: Want to do well for ourselves but we do not care about the other person. Person who makes the most profit. Person tends to be mostly closed. Withhold information. The benefit is that we won’t be taken advantage. Fail to identify creative solutions.
Lessons Learned:
World runs on Relationships. This seems true in many areas not just negotiations – work, social life, family
Key Lessons Learned: Cooperate or compete - working with people and keeping a positive attitude is critical
Pressure and reciprocity...huge concessions vs. small concessions.
Rule of Reciprocity – etiquette norms violated if one person offers a fair price and the other person high-balls.....huge psychological impact
After setting an anchor and going back and forth when the gaps between bids get smaller, it could mean that the other person is closer to their walkaway. If this is the case, tread lightly and take another coldhearted look at situation and decide on your walkaway. Am I better off compared to the alternative?