This book collects the 2022 negotiation blogs and illustrations from Scotwork North America's weekly blog offering real-world negotiation insights.
2022
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Scotwork’s Tales From the Table, Vol. 5: 2022
Adaptation and Inspiration
A Year of Adaptation and Inspiration by Brian Buck
At the outset of 2022, we found ourselves yearning for a sense of stability — something resembling a long-promised “return to normal.” Naturally, life had other plans, and we learned that our constant state of flux would be with us for a while longer. Just when we thought we had the pandemic managed, we were confronted by new realities that we’d have to deal with, from political turmoil to economic uncertainty. That’s in addition to trying to figure out new work environments, how to travel again, and the rising price of everything. While the year was anything but a return to normal, we seemed to do better with our state of flux compared to the previous couple of years. The difference? We’d developed our adaptive coping skills. That’s the silver lining to a constant state of flux — we adapt and aspire to be better, and along the way, we inspire others to do the same. At Scotwork, we witnessed all of this while working with our amazing clients. Our extraordinary team served as expert consultants as we helped our clients negotiate complex, constantly fluctuating situations. We helped navigate today’s turmoil while mitigating future precedent, as we know that tomorrow’s turmoil is waiting right around the corner. We coached our clients to adapt as they aspired to incorporate new methods, business models, and work
environments. It was like changing tires on a car as it’s flying down the fast lane. But they adapted and have created stronger organizations as a result. Needless to say, we were also inspired by what we experienced. While some people tried to exploit the turmoil, far more were willing to work together to find mutually beneficial solutions. This further underscored that we’re better together than we are divided, and I have no doubt about the resiliency of those we serve. As 2022 comes to a close, we’re taking a moment to look back — to reflect, to learn, to once again be inspired. With that in mind, I want to say thank you to all of our clients who trusted us to help them negotiate the many twists and turns of the year in order to reach better outcomes. And thank you to the talented team I have the privilege to work with every day — you are truly inspiring. Here’s to a safe, healthy, and prosperous 2023. May the state of flux be calmer, your resolve be stronger, and your results be better than expected. Cheers,
Scotwork
John McMillan Founder
Stephen White Chairman
Scotwork North America
Brian Buck CEO
Susan Boisvert Finance Manager Michael Roche Vice President Sales
Trevor Murphy Marketing Director Mike Saporito Operations Manager
NEGOTIATION CONSULTANTS
Jill Campen Kirbi Isaac Gerald Langlois Frank Marchesani Julie Shen
Simon Carkeek Randy Kutz John Leehman Gaëtan Pellerin Richard Waldrop
Millie Davis Ananda Laberge David Mahr Sandy Sbarra
EDITORIAL TEAM
Steven Chean Editor, Copywriter
Ben Risbeck Illustrator
Special thanks to the Editorial Team for their efforts in creating this book. Every member of Scotwork North America contributes to the content and quality of this book and is greatly appreciated.
Brian Buck CEO, Scotwork North America
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2022 Blog Posts: Negotiation Topic Finder
Aggressive negotiators • It’s Not the Phalange p. 28
Bias • Break the Bias p. 60
Confidence • Confidence Matters p. 40 • Pointers Heard From Dad p. 94
Analysis • Analysis Paralysis and
Bluffing • No Basis, No Deal p. 36
Contract renewal • Hope Springs Eternal Deals p. 88
What to Do About It p. 44
Changing precedent • Mask Mandates at Mardi Gras p. 14 • Break the Bias p. 60 • Hope Springs Eternal Deals p. 88 • Don’t Be Afraid to Trade p. 86
• Get Your Pie! p. 82
Control • You Can’t Negotiate With Stupid! p. 50
Anchoring • Need More Dough? p. 42
Credibility • No Basis, No Deal p. 36
Assumptions • Stay Attuned in
Circular arguments • Is It Taboo to Talk Politics? p. 24
Data • Analysis Paralysis and
Your Relationships p. 16
Avoiding deadlock • Negotiation Obstacles p. 12 • Stuck in a Persuasion Loop? p. 32 • Are You Hurt or Injured? p. 52
Coaching • Is It Time for You to Have a Negotiation Coach? p. 38 • Confidence Matters p. 40 • Optimizing Your
What to Do About It p. 44
Difficult people • Negotiation Obstacles p. 12
• You Can’t Negotiate With Stupid! p. 50 • Why Are You Still Negotiating? p. 62 • Negotiation Is Not a Bad Word! p. 72
Avoiding negotiation • Negotiation Obstacles p. 12
Dealmaking Ecosystem™ p. 84
We organized this book into the themes we saw in 2022: Flux, Adaptation, Aspiration, and Inspiration. However, you can skip to a negotiation topic that appeals to you. We hope you will use this as a handy guide throughout the year.
Discounts • We Don’t Discount —
Irritation • Are You Hurt or Injured? p. 52
Framing • Need More Dough? p. 42
and Neither Should You p. 34
Limits • Hot Property p. 22 • Why Are You Still Negotiating? p. 62 Logic issues • Negotiation Obstacles p. 12 • You Can’t Negotiate With Stupid! p. 50
Grievances • Stop Global Whining p. 58
Emotion • Is It Taboo to Talk Politics? p. 24 • It’s Not the Phalange! p. 28 • Are You Hurt or Injured? p. 52 • Don’t Apologize p. 68 • Negotiation Is Not a Bad Word! p. 72 • Who’s Going to Win the Championship? p. 74
Handling complaints • Stay Attuned in Your Relationships p. 16
Handling objections • Stay Attuned in
Managing expectations • No Basis, No Deal p. 36
Your Relationships p. 16
Fear • Don’t Apologize p. 68 • Lesson From a King p. 80
Managing negotiators • Is It Time for You to Have a Negotiation Coach? p. 38 • Confidence Matters p. 40 • You Might Have a Problem p. 46 • Leaders: Questions for Success p. 64 • Leaders: Optimize Team Performance p. 66 • Optimizing Your Dealmaking Ecosystem™ p. 84
Help • Is It Time for You to Have a Negotiation Coach? p. 38 • You Might Have a Problem p. 46 • Mom’s Best Advice p. 90
Flexible strategy • Hot Property p. 22 • Stuck in a Persuasion Loop? p. 32 • A New Day at Work p. 70 • Get Your Pie! p. 82
Internal negotations • Negotiation Is Not a Bad Word! p. 72
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2022 Blog Posts: Negotiation Topic Finder (continued)
Managing precedent • We Don’t Discount —
Overcoming obstacles • Negotiation Obstacles p. 12 • Are You Hurt or Injured? p. 52 • Lesson From a King p. 80 • Hope Springs Eternal Deals p. 88 • There’s a Grinch UC p. 76 • Mom’s Best Advice p. 90 • You Might Have a Problem p. 46 Parenting • Mom’s Best Advice p. 90 • The Ultimate Sacrifice p. 92 • Pointers Heard From Dad p. 94 Persuasion • Stuck in a Persuasion Loop? p. 32 • Need More Dough? p. 42 Power • Know Your Neighbor p. 18 • Break the Bias p. 60 • Why Are You Still Negotiating? p. 62 • A New Day at Work p. 70
Preparation • Hot Property p. 22 • Keep Calm and Carry On p. 48 • Leaders: Questions for Success p. 64 • Mom’s Best Advice p. 90 • Don’t Be Afraid to Trade p. 86 • Pointers Heard From Dad p. 94
and Neither Should You p. 34
• Don’t Apologize p. 68
Negotiation systems • Leaders: Optimize Team Performance p. 66 • Optimizing Your
Price increases • Leaders: Is It Time to Raise Prices? p. 20
Dealmaking Ecosystem™ p. 84
Opinions • Is It Taboo to Talk Politics? p. 24 • Who’s Going to Win the Championship? p. 74 Opportunities to negotiate • Negotiating With the PTA p. 26 • Don’t Be Afraid to Trade p. 86
Price negotiation • We Don’t Discount —
and Neither Should You p. 34
• Leaders: Is It Time to Raise Prices? p. 20
Proposals • Negotiating With the PTA p. 26 • Analysis Paralysis and What to Do About It p. 44
Rapport • The Lost Art of Schmoozing p. 54 • Mom’s Best Advice p. 90 • Pointers Heard From Dad p. 94 Scotwork Dealmaking Ecosystem™ • Optimizing Your Dealmaking Ecosystem™ p. 84
Tone • Mask Mandates at Mardi Gras p. 14
• Who’s Going to
Win the Championship? p. 74
• Lesson From a King p. 80
Training • Confidence Matters p. 40 • Optimizing Your
Unexpected • Know Your Neighbor p. 18
Dealmaking Ecosystem™ p. 84
Veterans • The Ultimate Sacrifice p. 92
Trust • The Lost Art of Schmoozing p. 54
Status quo • Mask Mandates at Mardi Gras p. 14
Win-Win • Get Your Pie! p. 82 • Don’t Be Afraid to Trade p. 86 Work environments • A New Day at Work p. 70 • There’s a Grinch UC p. 76 • Don’t Be Afraid to Trade p. 86
Truth • Mom’s Best Advice p. 90 • Pointers Heard From Dad p. 94
Supporting your team • Is It Time for You to Have a Negotiation Coach? p. 38 • Confidence Matters p. 40 • You Might Have a Problem p. 46 • Leaders: Questions for Success p. 64 • Leaders: Optimize Team Performance p. 66 • Optimizing Your Dealmaking Ecosystem™ p. 84
Uncertainty • Keep Calm and Carry On p. 48 • Leaders: Questions for Success p. 64 • Leaders: Optimize Team Performance p. 66 • A New Day at Work p. 70
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FLUX
As much as we yearned for stability, 2022 turned out to be yet another year of flux. The pandemic continued to force numerous changes in the way we work and conduct business. In the end, this state of flux had us reevaluating how we do what we do.
Negotiation Obstacles by Brian Buck
• Let go of your ego. I like to think of myself as a people person, and it can bug me when I can’t make a connection with someone. Instead of letting that derail the deal, I’ll sometimes hand over the negotiation to someone else who can better connect. After all, is it more important to connect or get the deal?
One of my favorite sayings is, “Don’t let your obstacles become your excuses.” Obstacles arise in every negotiation, and they’re frequently the reason for why an outcome did or didn’t occur. How much of a role an obstacle plays in an outcome, however, relates to how well you deal with it. The most common negotiation obstacles that I see can be broken down into three categories: personality obstacles, logical obstacles, and issue obstacles. A personality obstacle relates to the behavior of the individual you’re negotiating with. A logical obstacle is one in which you’re struggling to understand their reasoning, or they’re struggling to understand yours. An issue obstacle is one where you can’t seem to come together on an issue. In many cases, you might be dealing with more than one obstacle type, but let’s discuss some techniques for potentially overcoming each type in order to get to better deals. Personality Obstacles We’re not going to get along with everyone. I’ve met some people who seem to be able to do that, but even they run into folks they can’t make a connection with. Personality conflicts can derail a negotiation. If you find yourself in this situation, you might consider taking one of the following steps: • Let the deal be your connector. The reality is, you’re both there for a reason — presumably you both want a deal. If there’s nothing else you’ve been able to build rapport around, let the deal be the connector for your temporary partnership. When things get awkward, bring it back to the deal to remind each other why you’re there. • Bring a team with you. There’s strength in numbers. Having just one extra individual on your side can help you shift the focus away from your personality obstacle. Select someone who’s not like you — someone whose personality complements yours. For instance, I’m typically the outgoing, talkative type, which means I should bring in someone who’s a little more reserved in order to create balance.
Don’t let your obstacles become your excuses!
Logical Obstacles These can be frustrating. Running into a logical obstacle can make you feel like you’re talking with someone who thinks the sky is green and grass is blue. Logical obstacles can also be huge time-wasters, as you attempt to get the other side to see the world your way. The next time you hit this roadblock, you might want to try one of these techniques: • Stop arguing, start investigating. There’s no sense in continuing to debate about who’s right and who’s wrong. Instead, start asking lots of questions to understand how they got to their viewpoint. This will help you find handles you can use to move the conversation forward. • Make a bet on who’s right. If your logical issue has to do with two potential outcomes ( e.g. , they think X will happen while you think Y will happen), then place a bet on both. If your logic is right, then you’ll both do it your way; if your logic is wrong, then you’ll both do it their way. • Agree to disagree. If a logical obstacle isn’t central to the negotiation, then agree to disagree and move on. If need be, you
can revisit it later. However, if it’s central to the negotiation, then first try one of the two options above. Issue Obstacle Issue obstacles tend to be the most consequential to a negotiation, but getting past them is usually easier than getting past the others. If you do get stuck, consider trying one of these methods: • Find out why. If someone rejects your position on an issue, find out why. People frequently defend a position before they even understand why someone objects to it. Ask questions first, then try to find resolution. You might be surprised by how easy it is to address the issue once you know what it is. • How could you say yes? You don’t have to say yes to their demand, but before you reject it outright, think to yourself, “What would I need to say yes?” This will help unlock your creativity, allowing you to find ways to resolve the obstacle and move forward.
their ask, and it will help you understand the implications of your commitment (or lack thereof).
• Explore the space. Issue obstacles can arise when we don’t quite understand what it means to accept or reject a proposal. Before committing, ask the other side, “Suppose I could do that — what would that do for you?” This will force them to articulate the value of
These are just a few of the ways to get past some of your obstacles at the negotiating table. The reality is, an obstacle is just a temporary roadblock that can be overcome with calmness, creativity, and perseverance. Don’t let your obstacles become your excuses!
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Mask Mandates at Mardi Gras by Brian Buck
It’s Mardi Gras time! For more than 300 years, we’ve been celebrating Mardi Gras — beginning in Fort Louis de la Louisiane (now Mobile, AL) and settling, a few years later, in the Mardi Gras capital of the US, New Orleans. Up till a couple of years ago, saying there was a mask mandate at Mardi Gras wouldn’t have been a big deal, because there’s always been a mask mandate at Mardi Gras. In fact, it’s one of the oldest mask mandates in our nation’s history. In the early 1800s, New Orleans passed a law stating that all float riders had to wear masks, thus cementing Mardi Gras’ mask-wearing traditions. Ever since, anyone who’s been to Mardi Gras, or thinks of Mardi Gras, thinks of Mardi Gras masks, because every subsequent generation has kept the tradition alive. But who knew that nearly 200 years later, “mask wearing” would mean something completely different? The tradition has been challenged. Recently, I was working with a client who’s preparing for a negotiation with a vendor regarding a contract that’s been in place for some time. In fact, it’s been in place so long, it predated her and her two predecessors’ tenures. The same can be said on the vendor’s side. Literally, no one who negotiated the original contract was still around, yet both sides have worked diligently to keep the tradition of the terms alive — till now. Over the past few years, the traditional terms of the agreement have been challenged. Most of them were set at a time when customer demand was more predictable, supply chains not as strained, and market conditions more stable. Suffice it to say, the terms no longer met our client’s needs. Our client’s challenge was how to change precedent — particularly where there was no cause for dissatisfaction other than the current environment not being supported by the terms of the agreement. If the relationship were eroding or the vendor had failed to deliver, it would’ve been much easier to change precedent due to a self-evident reason for the change. In this case, our client and the vendor had a great relationship. The vendor had performed all required services in a more than satisfactory manner, but our client knew that the current approach
was inefficient and needed to be changed before it had an impact on the relationship and service delivery. The way to change precedent, in a manner that’s acceptable to both parties, is by finding the motivation to change. If you’re in the driver’s seat, you could certainly just demand change. The downside to that approach is that the other party will always seek a way to fight the change and maintain the status quo. Then, when the power shifts (and it always does), the other side will find a way to go back to how it was, or even seek retribution. You see this play out after every general election, when control over the White House and/or Congress changes hands: The laws and executive orders that had been forced upon the party now in control get overturned. However, if there’s mutual motivation to change, then the precedent (the tradition) will be changed forever. Here are three techniques I use to find that mutual motivation: 1. Make a connection. When the problem is one-sided, the other party is less likely to act. However, if the problem is perceived to impact both parties, then both parties have a connection to the problem and will be more motivated to act.
2. Reframe the situation. Don’t assume the other party sees what you see. They’ll likely keep looking at the situation through the same lens till you can reframe it in a manner that gets them to look at it differently. If they don’t see it differently, chances are they won’t want to change. 3. Find the drivers. Some are driven by money, others by acceptance, others still by ego. All of these can be powerful drivers to change. Understand what drives the other side and try to incorporate that into the need to change. Traditions become traditions as a result of repetition. Whether it’s Sunday family dinners, Wednesday night drinks with colleagues, early morning walks with a friend, or wearing masks at Mardi Gras, they exist because we do them over and over again. When it comes to the tradition of a contract, take a look at the precedent that’s been set and make sure that it’s relevant, meaningful, and useful. If it’s not, it’s time to create a new tradition.
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Stay Attuned in Your Relationships by Simon Carkeek
I’m a romantic at heart, and as Valentine’s Day approaches and Cupid draws back his bow, I’ve been reflecting on what makes successful relationships endure. I’ve been married nearly 20 years, and I realized what makes our relationship work: My wife, Sophie, and I try to see circumstances from each other’s perspective as well as our own. We’re attuned to each other’s needs. Attunement is as essential for successful negotiations as it is for romance. In Daniel Pink’s excellent To Sell Is Human, he highlights an experiment in which a gas station’s asking price was higher than what the potential buyer could offer, but some variables, if they came to light, could allow a deal to happen. The experiment divided participants into three groups. Experimenters told the first group to imagine how the other side was feeling and the second group to imagine what the other side was thinking. They gave the third group only basic instructions. The group that considered the other side’s feelings made more deals than the instructions-only group. The best-performing group was the one that attempted to understand the other side’s perspective (what they were thinking). In fact, three-quarters of that group arrived at a deal that satisfied both parties.
Taking the time to consider the other side’s feelings and perceptions is particularly important when you’re in an ongoing relationship with your negotiating partner. Pink’s experiment got me thinking about a major deal I nearly lost when I wasn’t attuned to a standing client’s perspective. The deal was for an event partnership going into its second year. The first year had been successful for the client, but the venue’s high cost resulted in my company’s margins being lower than expected. The client needed to agree to a 20% increase for the event’s second year (yikes!). I knew the client might be at their spending limit, since negotiating the original fee had been challenging. Meeting with the client confirmed that there was no clear way the deal would move forward. Like the gas station experiment, the deal’s cost was greater than what the client would pay. Fortunately, the client did what I should’ve done and worked to see things from my perspective. They asked if there was any way for the event to move forward at the original rate. The only circumstance that would allow us to do that would be finding a less expensive venue, and my team had exhausted all known options. The client had a private room at a good location and asked if we’d consider using that space. Asking questions resulted in finding an option that closed the deal! The next time you must resolve a deal issue, try these 3 techniques to understand the other side’s perspective. You may see the value of what you have in their terms — and uncover more value than you expected. • Be curious and ask good questions. • Show genuine interest in the other party. • A sk open-ended questions to understand their motives, needs, and constraints.
Fortunately, the client did what I should have done.
Then listen — really listen — to their response. I was fortunate my client did this when I had not. Test your assumptions. List the elements of the deal you think you know but haven’t confirmed. These could include the cost, the timing, or the client’s estimation of the value of the deal. In my example, I assumed my client’s priority was that the event had to take place at a specific kind of venue. Their actual priorities were brand alignment with our publication and a high-level audience of decision-makers. Know what’s valuable to them. This is possibly the trickiest technique mentioned here, but it may also be the most valuable. Consider what you have to offer in terms of how the other party values it .
Understanding value in terms of how the other side perceives it helps keep a relationship fresh and aligned. Your friends at Scotwork wish you good relationships in your deals and your life away from work. Happy Valentine’s Day to you — but especially to my wife, Sophie.
For instance, alignment with my publication’s brand was not a hard cost to my team, so I undervalued it from the client’s perspective.
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Know Your Neighbor by Brian Buck
This past Sunday, my neighbor hosted an open house for their newly listed home. The housing market is so hot right now that our cul-de-sac was packed with cars as people swarmed to take a look. As I watched all the interest, I recalled when my wife and I sold our first home in a hot market, nearly 15 years ago. It didn’t go as planned, and we almost lost the sale to a neighbor who reneged on his offer. In a hot seller’s market, sellers are accustomed to getting multiple offers, including some that are well over asking price. That was no different when we decided to sell our home. We were ecstatic as the offers came pouring in, and we went with one from a young couple who were starting a family. Not long after accepting the offer, we were visited by one of the buyer’s mothers. Without her adult son
I could’ve put a price on her demand, but it got so absurd, it seemed anything less than just giving in was not going to be acceptable. As we made our way through the process, it became clear that the buyers weren’t going to be able to get the financing they needed to
present, she asked us to throw the washer and dryer into the sale. It was an odd request, and we declined — mostly because our deal was with her son and his wife, not with her. But she kept coming back! Even though we asked the buyers to have her stop, at least once a week there’d be a knock on the door.
purchase our home. In the meantime, we’d received a backup offer that was $50K more than the original buyers’ offer. Between us moving the loan contingencies, them not getting financing, and those regular knocks on the door, we decided to cancel the sale and accept the backup offer. The backup offer was really appealing: not only was it for more money, but it was also all-cash. It was made by one of our neighbors, who happened to own a few houses on our street where his family and extended family lived. In fact, had we received his offer initially, we would’ve accepted it, but he didn’t place it till after we accepted the first one. Regardless, my wife and I were relieved to be out from under the washer-and-dryer drama and into a more lucrative deal. That is, till the day after we accepted. That’s when we got a call from our real estate agent, who told us that our neighbor was going to renege on his offer and, instead, offer us $50K less than our asking price. Since we had lost the first offer, he felt he was in a position of strength. Needless to say, we were angry, disappointed, and scared. Mostly because we had placed an offer on another house contingent on the sale of this one, and we were close to missing that contingency. Being that it was our first home sale, we had no idea what to do. Even our agent was at a loss. After all, this was our neighbor, with whom we exchanged pleasantries almost every day. Now, everything was awkward. We knew we couldn’t accept $50K less, and we also knew we’d lose the other house by starting over. But our limit was our limit. The morning we were going to cancel the sale, our neighbor stopped me, asking if I knew who he was. “Of course,” I said. “You’re the one trying to buy my house for far less than you originally promised.” He started interrogating me about why I was selling the house, asking questions regarding potential structural damage, plumbing issues, and foundation concerns. The house was structurally perfect. Then he got into why we lost the first buyers — what had they discovered? I explained that they weren’t able to get financing. Then he started asking me why my family would want to leave his neighborhood.
I explained that we were moving closer to our families, something I was sure he could appreciate. I had no idea why I was getting the third degree, but it started to become clear that he thought he had a lot more power than he actually did. It felt like he was hoping something was wrong with the house that made the original buyers back out. He made a completely incorrect assumption and then acted on it without discovering what was really going on. At the end of our conversation, he simply said, “You’re a good boy. You’re a good family man. I will honor my first offer. The deal will be closed by the end of the week.” To our surprise and relief, it was done as he promised. We were able to buy the house we wanted, where we still live today. Looking back with a negotiator’s eye, there were a number of lessons I took from that transaction: • Be prepared for the knock on the door. “No” was not the answer for the first buyer, who wanted our washer and dryer. Had we demanded something in return, I suspect the door-knocking would’ve stopped. • Make sure you know before you act. Our neighbor almost lost the sale because he acted before he understood the situation. Had he asked questions, he would’ve gathered enough information to act accordingly. Who knows: Maybe he could’ve paid a little less — just not a lot less. • Power is not forever. We thought we were in the driver’s seat when we had two offers. Then, when we had only one, things changed — almost to the point where we walked away. So, use your power while you have it because circumstances will change.
Good lessons for a hot housing market and beyond. I wish my current neighbors all the best, and I look forward to welcoming new neighbors to our block.
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Leaders: Is It Time to Raise Prices? by Brian Buck
Then there are businesses whose products and services aren’t as hampered by labor shortages or supply chain outages. For example, the travel industry. While airlines and hotels were especially hard-hit during the pandemic, they’re starting to come back in areas where COVID’s impacts are subsiding. In these markets, their businesses are in high demand, and some are using this moment as an opportunity to make up for lost revenue over the past few years. These aren’t the only reasons for raising prices, but all of us will be dealing with price increases — either by giving them or receiving them. Here are some thoughts on how to deal with either situation. Giving a Price Increase Every business’ timing and reasoning for its price increase will vary, but here are some tips for putting you and your team in the best position possible when rolling one out: Don’t overexplain. When delivering bad news like a price increase, we tend to overexplain the situation, hoping that the lengthy explanation will ease the pain. Unfortunately, the longer the explanation, the higher the likelihood of you adding in weaker arguments that could dilute the stronger arguments. Develop the best argument and ensure that your team sticks to it. Be ready to answer tough questions. Having answers ready for tough questions like “why?” or “can you make an exception for me?” will help your team immensely, giving them confidence and creating alignment. Without those answers, you run the risk of your team making difficult situations even more difficult. Consider grace periods and other timing elements. Time is a powerful tool. If circumstances allow, you can use it to make the transition to higher prices easier to deal with. Consider giving grace periods or one-time exceptions in return for long-term acceptance of the new rates.
There’s no denying what’s happening in the marketplace: much of China is still in lockdown, which is disrupting supply chains everywhere; sanctions against Russia are limiting oil supply in the world market; the Fed is raising rates; and the stock market is shedding value daily as both the Dow Jones and NASDAQ near 52-week lows. All of which is contributing to an inflation rate of 8.5%. It begs the question: Is it time to raise prices? For some businesses, there may be no other choice. In particular, businesses that rely heavily on human capital have been forced into a position of paying higher wages to retain talent. When labor is the majority of your cost model, trimming overhead is your biggest lever to pull in order to maintain margins. However, most unessential-personnel trimming happened during the pandemic, and there may be no more to cut, so the only option, at this point, is to raise prices in order to maintain operational sustainability. Other businesses dealing with supply chain shortages may have to raise prices because volume selling won’t help their bottom line, since there’s limited volume to be had. Instead, they have to make the most out of every sale — and that might mean raising prices to temper demand and maximize every sale opportunity.
All of us will be dealing with price increases.
Receiving a Price Increase If you’re on the other end of a price increase, here are some tips to help you mitigate it as much as possible: Be a detective, not defensive. Playing the “how could you do this to me?” card will get you only so far. Instead of getting defensive, be curious. Ask questions that will help you understand the reason, the timing, the circumstances under which it would not apply, etc. You’re looking for the weaker arguments and justifications that can help you refute their strongest arguments. Do your homework. If someone is citing a 25% increase due to inflation, is that reasonable considering where inflation rates are? If you haven’t done your homework, then all you can do is rely on the information presented by the other side. Knowing your marketplace and market conditions will put you in a stronger position to refute outlandish claims.
What do you want in return? Any change to an existing agreement opens the door to change anything you don’t like about that agreement — and a price increase is no exception. You can use that increase to help you get other things that you want, which may offset some or all of the price increase. So, before you blindly or begrudgingly accept an increase, use it to trade for something of value to you.
Whether you’re contemplating a price increase or anticipating receiving one, be prepared. But also, keep in mind that many of the drivers of today’s price increases are temporary, and the pendulum will swing the other way at some point. When it does, you still want to be in a strong position.
21
Hot Property by Simon Carkeek
The 2021 housing market was the most lucrative, and competitive, in US history. My town is a prime example, with properties selling through blind bids and regularly going for 25% to 30% over asking price. Few purchases in life are more emotional than the place you will be calling home. As such, emotion is driving much of this behavior, which is risky considering the financial commitment involved. A recent survey found that millennials were, indeed, willing to make rash decisions to afford a home, including buying sight unseen and offering over asking price. Nearly half of millennial buyers expected to exceed their budget in order to secure their dream home. Conversely, 1 in 4 who already own a home regret that their mortgage is too expensive. These dilemmas remind me of when I moved to the US with my young family in 2010. Naturally, we needed somewhere to live, and while we were somewhat flexible, we did have a couple of non-negotiables: 1. The town: We’d done extensive research and concluded that Montclair, New Jersey, was the place for us. It had a great school system, but more importantly, it just felt right. 2. A house, not an apartment: We’d come from a house in the UK and had two small children. We needed a house with a yard. When we began looking for places to rent, though, we quickly hit a wall. Most of the rentals were apartments, and the available houses were far too big and way outside of our budget. After several months spent futilely searching, we grew disheartened — even questioning our decision to move to the US. Still, we put our emotions to one side and decided to change strategy. There were a few places for sale that we thought we might be able to afford. That’s when we considered buying. We quickly found a place we liked, and our offer was accepted. So far, so good! Now we just needed to secure financing. That’s when we hit another wall. Remember, this was 2010, not long after the financial crisis. We’d just arrived in the US, so we had no credit history.
Despite a decent deposit, no bank would give us a loan. Again, despair crept in. If we couldn’t get a loan, we couldn’t buy. We were ready to give up. In fact, my wife said as much to one of her friends, who advised us to go back to our broker and ask what it would take to get a mortgage. The broker said that, for a cheaper property and a 40% deposit, he could get us the remaining financing. So, we pivoted again, this time refinancing our property in the UK, where we did have good credit, releasing enough cash for the higher deposit. Soon after, we found another property within the range set by our broker and secured the deal. The experience reminded me of several important lessons about negotiation: Identify your must-haves. In my case, it was a house with a yard in Montclair. Knowing this helped me to remain focused, including where I could be more flexible. For example, the house we bought had no garage (for my bikes!). I really wanted one, but it wasn’t a must-have. Don’t give up. Change strategy. We had planned to rent. It would have been less risky, and I would have preferred not to refinance my house in the UK. But deciding to buy instead was necessary to get what we wanted and well worth it in hindsight. Know your limits (and stick to them). In my case, the limit was set for me, but it helped to focus our search on only those properties that we knew we could afford. For the home buyers in the survey who went over budget and then regretted it, having a red line they weren’t prepared to cross may have helped them keep emotion at bay and make a more rational decision in the moment.
And of course, beware your emotions. When we get emotional, we can’t think straight. We either make rash decisions (going over budget) or just give up (like I nearly did). Fortunately, my wife’s calm and lucid friend encouraged us to curb our emotions and explore other ways to achieve our objective, and we are still living happily in the same home twelve years later.
23
Is It Taboo to Talk Politics? by Brian Buck
One of the most difficult things to do is discuss Congressional or government negotiations without bringing politics into the equation. As a negotiator, I view politics as merely one variable among many in the context of a negotiation. My personal style is to avoid bringing politics to the table — particularly in today’s charged cultural climate. Opinions shape political views, and those opinions are difficult to change, let alone to negotiate. So, what do you do when politics enters the equation? A recent study found that 1 in 3 Americans are almost completely isolated from their opposing political party. Through self-selection or happenstance, we tend to live among people who have the same political views as we do. The more isolated we become, the more difficult it is to relate to others who don’t share our point of view, which is probably why most people find talking about politics difficult, contentious, and something to avoid at all costs.
to reframe the issue, minus the burden of politics. For instance, let’s assume there’s a discussion about what the administration should do, or shouldn’t do, to ease inflation, with the parties discussing the implications of those actions. A skilled negotiator will reframe the issue away from politics and toward a non-partisan discussion about what happens if inflation goes up or down. In other words, they move away from opinions about why inflation goes up or down, and they reframe the problem in terms of what will need to be done if it goes up or down. If a political conversation becomes heated, the skilled negotiator will defuse the situation by calling for a break. Following a summary of the discussion points and progress made, they’ll allow everyone time to cool off. Usually, a pre-break summary is factual, including all of the major topics discussed. However, if there’s been a heated political conversation, consider not summarizing the political debate — just the issue. Using the above example, you wouldn’t summarize that one side believes the administration is doing well with inflation while the other doesn’t. Instead, you’d summarize that you’re discussing the implications of inflation going up or down. Again, take politics out of the conversation and allow everyone to focus on the issues at hand, instead of the opinions. Lastly, if you find yourself trapped in a circular political argument, make a proposal. A proposal will beat an argument every day of the week, and this situation is no exception. Your side and theirs may not be able to settle a disagreement over which political party is better, but you can certainly make some decisions regarding what to do if one of you is proved right. So, stop arguing and make a proposal that gets you back to making decisions about the issues at hand. By the way, the above applies to all those other things that we aren’t supposed to talk about, like religion and baseball. Happy negotiating! By the way, the above applies to all those other things that we aren’t supposed to talk about, like religion and baseball. Happy negotiating!
So, what do you do when politics shows up at the negotiating table?
First, it’s important to understand that our political views are our opinions about how a government or society should be run. I’ll reiterate: they’re opinions. Opinions are formed by experiences and beliefs. As such, they’re difficult to argue with, let alone to negotiate. But they can influence our negotiations. When a political view (think: opinion) hits the table, a skilled negotiator will listen and grow curious. They have an insatiable appetite for knowledge. They want to understand how the other side thinks, how they view the world, and what they value. Therefore, when an opinion is presented, their instinct is to seek understanding, not to persuade or dissuade. The more they understand about the other side, the better their position to negotiate in a manner that the other side understands. In most political conversations, there’s an issue being discussed. Once they’ve listened to the other side, a skilled negotiator will seek
25
Negotiating With the PTA by Trevor Murphy
Summer is over, and the kids are back to school! Signs of the new school year are all around: Back-to-school sales at retail stores have ended, school buses are in traffic as people drive to work . . . and interactions in a new school community can provide opportunities for unanticipated negotiations. I went back to school, as well, since the new PTA members for my kids’ grade school met for the first time a few weeks ago. It’s a good group of people giving their time and energy to help the school. It’s my first year working with the organization, so I spoke when answers seemed obvious. “Should we raise money for field trips?” was easy to support. I was less sure, however, when the question was, “ How should we raise money for field trips?” The other parents quickly identified me as inexperienced in the ways of the PTA, and they stopped specifically
I decided to contribute by paying attention and learning how the organization works. The experienced team members moved deftly through a big agenda, but their progress suddenly slowed. “We can’t use our social media accounts. The person in charge of them from last year hasn’t given us the credentials,” a PTA officer said.
requesting my opinion. I’m still unsure about some of the questions we considered, like “Should we have a talent show?” Ours is a school for children aged between five and 11 without special training in the performing arts, so the answer doesn’t seem like an obvious “yes” to me, although it does to some parents.
“What?” another person asked. “Does he know we need them?” As the committee discussed the facts, it came out that the person previously in charge of social media knew he was supposed to turn over the credentials but hadn’t. The only clue the person with the credentials shared was that he wanted “to collaborate” on the PTA social posts even though his child had graduated. Team members proposed different ways to address the issue. People were frustrated at what appeared to be an unreasonable request and tempers started to rise.
“You’re suggesting we negotiate with this person instead of trying these other approaches. Is that right?” she asked.
“Yes,” I said.
“Do you think it will work?”
“We won’t know until we try,” I answered. “I can tell you that I’ve experienced remarkable results from negotiation, even when an easy resolution wasn’t apparent.” The PTA President considered this for a moment, then spoke again. “OK,” she said. “We’ll try it. You’ll be in charge of the negotiation, and you have to get results in time for us to announce the first fundraiser, or we’ll have to try something else. I’ll get you the phone number you need to get this started. Next order of business . . .” When my first PTA meeting ended, I felt like I had bitten off a lot, and I hoped it wasn’t more than I could chew.
“We go to the social media platforms. Maybe Instagram helps us out.”
“Do we create all-new social accounts if that doesn’t work?”
“Go over this person’s head. Who’s his employer? Let’s talk to his boss and see if that makes him give us the credentials.”
I realized that I might have something to contribute. “Hey, team,” I started. “Since this person says he wants to ‘collaborate,’ I think we can negotiate with him.” The group was quiet for a moment. I needed to make my case clear and concise if I wanted to be taken seriously in future meetings. I took a breath and presented my thoughts. “He’s got something we want, which is the credentials. We apparently have something he wants, since he’s interested in collaboration. That’s enough to create the basis for a negotiation. He’s also signaling what would be worthwhile for him to start talks.” The PTA officers considered this for a moment. The core team was familiar with how to work together; they communicated effectively just by making a few hand gestures to one another and raising their eyebrows in response. I wondered if it would ever be possible to be an insider with this group. The President spoke to me.
Here are my takeaways, since I went back to school for my first PTA meeting:
• The opportunities to use negotiation to make things happen are everywhere if you can notice them. • Proposing a solution at a school meeting is often the same as volunteering to handle the whole problem. • I’m still unsure if we should have a talent show, but it looks like it’s happening, so I’m throwing my support behind it. The PTA got their social media credentials back. The first fundraiser, a dine-out at a local restaurant, was announced on Instagram and garnered a respectable number of likes. We’re hoping for a big night.
27
It’s Not the Phalange! by Brian Buck
campers. As we boarded, you could see the events’ cumulative impact on our faces. There was added aggression when securing storage space, not a lot of patience for others as they got settled, and a noticeably curt tone of voice directed at flight attendants.
“There’s something wrong with the left phalange!” If you’ve watched Friends , then you know the scene that led to panic and the deplaning of Rachel’s Paris-bound flight. I couldn’t get that scene out of my head as we tried to make our connection in Frankfurt to get home. Only this time, Phoebe’s phalange warning came in the form of a high-strung airline representative who sent 364 passengers into a frenzy. Our connecting flight arrived in Frankfurt right on time. Our flights that day were running smoothly, with no issues, and we had plenty of time to get to our gate and board the next plane for the final leg of our journey. But as we approached the gate, our sense of calm began
Everyone needed to chill.
Quite frankly, I see this a lot at the negotiating table too. We tend to reciprocate the other party’s emotions and behaviors. If one party is aggressive, then the other side tends to get aggressive. If one side doesn’t share information, then the other side tends to not share information.
to crumble. A swarm of passengers attempted to queue in order to board the plane. At the center of it all stood an airline representative who was shouting at everyone. He was attempting to get those whose passports had been checked to line
One of the easiest ways to control a negotiation’s tone is to control your emotions.
And so on.
Regardless of the leverage or power you wield at the table, one of the easiest ways to control a negotiation’s tone is to control your own emotions and actions. If the airline representative
had been calm, then the people around him would’ve been calm — which would’ve helped conciliate concerns or complaints. You can do the same in your own negotiations simply by changing your tone or behavior. If the other party is being aggressive toward you, or they’re not forthcoming with you, take a moment to evaluate how you’ve behaved. Is it possible that the other side is reciprocating what they’re getting from you? If that’s the case, then changing the negotiation’s direction begins with you. As for the flight, after we all settled into our seats, we calmed down. Still, it wasn’t the way we wanted to begin an 11-hour flight home. Next time, we’ll make sure the left phalange is a-OK!
up on one side of the gate, while everyone else lined up on the other side. Only, he didn’t explain that clearly, and passengers had no idea if their passports had been checked or not. “You need a stamp!” he kept yelling. More confusing still, the “stamp” wasn’t actually a stamp — it was a signature by some other security agent. Add to that, the monitors at the gate announced that it was time to board. In other words, it was a scene of mass confusion and utter chaos. It seemed that our agitated representative’s colleagues were just as confused: Their computer systems had shut down, and the agitated representative had turned on them, barking orders while trying to keep the passengers at bay. The more agitated he became, the more agitated the passengers and his colleagues became. Trickling through the electronic turnstile, we were a mob of unhappy
29
ADAPTATION
Over the past couple of years, as we dealt with our seemingly constant state of flux, we developed advanced adaptive coping skills that helped us find better solutions to our problems. As we’ve learned, those who adapt to possibilities will do far better than those who dig in their heels and fight against the change that’s happening all around them.
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