Tip Sheet 6 – Negotiating Tactics

© 2010 Richard Pryor & Associates

Intended Audience – This FAQ is for the assistance of people involved in the procurement or the supply of ICT products and services.

Introduction

The topic of negotiation tactics could fill a book. This tip sheet provides an overview of some commonly used negotiation tactics. Typically these tactics are used at various stages in a negotiation and they may be used in combination.

It is desirable that the leader of the negotiation team have a clear plan of how these tactics are to be used and that he or she also has the ability to modify or adopt new tactics as the negotiations progress.

Where the relationship between the parties is strained or ongoing negotiations are in jeopardy, tactics should be selected and applied with extreme caution. The inappropriate or transparent use of tactics can be enough to destroy a potential relationship.

The tactics used by the other party should also be monitored and counter-measures applied as appropriate.

Should I try to control the negotiation process?

A party can gain considerable advantage by taking control of the negotiation process. A key way to take control of the process is to take control of the agenda and minutes of meetings. The content of the agenda can then be used to control all subsequent steps in the negotiation process.

If the agenda is used to control the sequence of discussion of issues, this gives that party an opportunity to engage in salami slicing (see previous tip sheet).

During the planning of the negotiation process, it should become evident whether advantages might be gained if issues are approached in a particular order. The overall negotiation strategy should include identification of methods to capitalise on any advantages which may flow from discussing issues in a particular sequence.

Should I take control of the negotiating environment?

Control of the negotiating environment can provide significant advantages.

There are a large number of environmental factors which can be applied to the conduct of negotiations. Care should be taken in deciding whether or not to adopt environmental tactics as it can be very obvious that these tactics have been employed. Use of these tactics can be seen as disrespectful and can have a significant and negative effect on the progress of negotiations.

Examples of environmental factors include the following:

• Location – Generally it will be an advantage to conduct negotiations on home turf with the comfort that comes from familiar surroundings. Conducting negotiations at your own premises will maximise the opportunities to exploit other environmental factors. There can be disadvantages in negotiating from your own location. In particular, there is greater potential for interruptions or for key team members to be distracted by other pressing matters. It may be more difficult to rely on a lack of authority to agree a particular concession if you are negotiating in your head office with the CEO in a nearby office.
• Meeting facilities – Control over the negotiation location gives control over the primary meeting room and over break-out rooms. This allows the primary meeting room to be set up before the arrival of the other negotiation team so that environmental advantages are maximized. For example, the visitors could be required to sit on the side of a table which faces into glaring windows or which provides a distracting view. Table shapes and seating positions should also be considered. Generally formal seating arrangements are preferable to round table or informal arrangements. It can be very intimidating for the team members of the other party to be forced to sit apart, or in close proximity to opposition team members or in a position where they have insufficient desk space and elbow room. Ideally temperatures should be kept a bit too cool to prevent sleepiness. However, the visitor’s break-out room might be kept at a warmer temperature to impact the effectiveness of work during break-outs.
• Fatigue – If the visiting negotiation team have travelled from interstate, they may not be well-rested when they arrive at the meeting and they will suffer from fatigue and loss of concentration during protracted negotiations. Sessions and topics can be planned to capitalise on this. The host team can conduct the negotiations in such a way that the host team are able to rest during break-out sessions whilst the visiting team is required to work on an issue during the break-out period (e.g. the host team members may be able to rest and eat a meal while the visiting team is working on an issue such as re-pricing for an alternative service). During extended negotiations, this can have a compounding effect and weaken the effectiveness of the visiting team members.
• Time – Team member who travel from interstate may have flight commitments which set a firm closing time for a negotiation session or which create the unattractive prospect of having to arrange overnight accommodation if the negotiations are not finalised. This can allow the host negotiation team to deal with issues so that the time pressure is working against the visiting team towards the end of the day. By selectively parking more difficult issues, the host team may be able to orchestrate a position where the horse trading at the end of the day produces an optimal outcome for the host negotiating team.
• Food & drink – Failure to provide food and drink at appropriate points in the process can be considered bad manners. However, hunger (particularly when combined with fatigue) can reduce the effectiveness of members of a negotiation team. Conversely, an excessively large or rich meal can also result in drowsiness, poor concentration and reduced negotiation effectiveness.

How do I deal with environmental tactics?

Firstly, you need to be aware of the use of environmental tactics. The use of some environmental tactics will be obvious (e.g. forcing you to stare into the glare from a window) but at times the tactics will be very well concealed.

In one transaction, the other party had two teams working on the negotiations. Only one team was involved in face to face meetings while the other team undertook the work which the meeting team would normally have to undertake during adjournments and break-outs. This allowed the dual team to stay ahead on all issues and for the meeting team to take an extended rest while the opposing single team worked through breaks to stay on top of issues.

Stay alert for clues that concealed environmental tactics are being applied.

Once an environmental tactic is identified, it should be nullified as quickly as possible. Glare should be addressed by closing the blinds or changing seating positions. Rest and food breaks should be required when necessary.

Should I revert to informal communications at any stage?

If formal negotiations seem to be stalled or if there is one opposition team member who seems to be obstructing progress beyond a particular deadlock, an informal one-on-one discussion with the appropriate member of the other negotiating team may allow progress to be made.

An informal communication between the parties respective “good guys” can be an effective way to overcome a deadlock following positioning by the parties respective “bad guys”.

This is an ideal tactic to adopt if there has been considerable positioning at the negotiating table and if it would now be difficult for either party to make concessions without losing face.

During the one-on-one discussion, the parties can explore ways to overcome a deadlock and if a suitable compromise can be agreed, the two representatives can then decide how best to give effect to the resolution.

Usually the resolution can simply be communicated back to the rest of the team but in some circumstances it may be necessary to go through the motions of negotiating the resolution.

Should I use surprise?

If the other party to negotiations seems to have excessive control of the process or seems too comfortable in the process, then surprise can be used to put the other party off balance. This can then create uncertainty and a loss of confidence and may lead to a greater willingness to make concessions.

Surprise should only be used when there are clear indications that it might move the other party in the required direction. Storming out of a meeting will significantly weaken a party’s position if they then return to the negotiating table meekly after the other party ignores the tactic.

Specific surprise tactics can include anything unexpected but the following are more common examples:

• Loss of patience or loss of temper – If a representative suddenly raises their voice, slams a hand on the table or otherwise demonstrates impatience or anger, this can unsettle the other side and can send an unstated message about the undesirability of the other party’s position.

  The danger of this approach is that if the loss of temper is an act, the person purporting to lose their temper needs to be a convincing actor. If the loss of temper is real, then this may create additional issues because a loss of control can result in the inappropriate communication of information which was not to be disclosed (at least at the particular point of the negotiations).

• Change in flavor or approach – If a party changes its general approach to the negotiations, this may not be immediately apparent but it can be very unsettling for the other party. For example, a party may change its approach from a conciliatory attitude where compromise is sought to an inflexible position where no room for compromise is demonstrated.
• Walkout or break-off of negotiations – A sudden walk-out is very dramatic, particularly if it occurs unexpectedly and without explanation. Similarly a sudden suspension of negotiations can be extremely unsettling for the other party.

Should I use a “take it or leave it” approach?

The “take it or leave it” approach has advantages and disadvantages.

The primary advantage of this approach is that it can short-cut debate and force a relatively simple decision on an issue.

If the party receiving a “take it or leave it” ultimatum makes the necessary concessions, then the approach can be used again with respect to other critical issues. The concession may significantly weaken the position of the conceding party with respect to the negotiation of other contentious issues.

If the “take it or leave it” issue is truly a deal breaker, then the early identification that adequate concessions will not be made can save a lot of wasted effort.

The major danger of this tactic arises if the other party elects to “leave it” because this may preclude further negotiations with that party or, at best, the party imposing this ultimatum will be in a much weaker negotiating position.

Should I use a “good guy” and “bad guy” approach?

Nearly every team has members who naturally fall into the good guy and bad guy categories.

Business and technical staff are often the good guys whereas finance and legal representatives are often the bad guys.

Generally I think it better that people perform their role in the negotiating team but act themselves rather than adopt any artificial persona.

In the course of performing these roles, “good guy” and “bad guy” opportunities will often arise. As noted above, an entrenched position established by the bad guys can often be resolved by informal discussion between the good guys.

© 2010 Richard Pryor & Associates – The content of this FAQ is subject to copyright and may not be translated, adapted, reproduced, broadcast or transmitted in whole or part without the express written permission of the author.

Important disclaimer – This FAQ provides general comment. It does not constitute advice on any matter. No reader should act on the basis of any content without obtaining and considering professional advice upon their own circumstances. Richard Pryor & Associates and its officers and agents hereby disclaim any liability to any person with respect to the consequences of anything done or omitted to be done in reliance upon any of the content.

For further advice on ICT procurement and supply negotiations, contact Richard Pryor – richard@pryor.com.au