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    How Women Business Leaders Can Avoid These 6 Negotiating Mistakes

    I really do not enjoy confrontations, so for me, negotiating has to be a planned strategic activity. Even though I am the owner of a strategic marketing firm and a woman business leader, I have always gone into a negotiation knowing my high and my low, setting my limits and knowing my breaking point. After reading Barbara Buell’s article on the Stanford School of Business website I realize that although I may be on the right track in the planning department, my flexibility and thinking may be a little inflexible – again, finding balance!

    I have condensed Barbara’s article, listing the highlights from Stanford Business School Professor Margaret Neale’s research on common negotiating pitfalls:

     

    1. Poor planning
      Successful negotiators make detailed plans. They know their priorities — and alternatives, should they fail to reach an agreement. You must know your bottom line, your walkaway point. After preparing your own agenda, outline the same for your opponents: What are their preferences, alternatives and bottom line?
    2. Thinking the pie is fixed
      You may make this common mistake when both parties want the same thing. In the context of an overall negotiation involving salary, bonus, and vacation, the boss wants to transfer a junior manager to San Francisco. The manager is eager for the San Francisco assignment. But frequently, the employee will look at the situation and believe that since the boss gave him a desired promotion the employee must compromise on the transfer location. Neale repeatedly has performed this exercise in her classes and finds that 20 to 35 percent of the students miss an opportunity to get what both parties want.
    3. Failing to pay attention to your opponent
      Negotiators need to analyze the biases their opponents bring to the table. How will they evaluate your offers?
      One way to get inside your opponent’s head and influence his or her attitude is to shape the issues for him, a technique called “framing.” If you get your opponent to accept your view of the situation, then you can influence the amount of risk he is willing to take.
    4. Ignoring differences in cross-cultural negotiations
      You need to remember that differences do exist, that they are not necessarily negative, and that these differences can create huge potential benefits — as well as big problems if ignored.
      Neale uses a case study that centers on the construction of a large American theme park in Europe. The American developers brought the European officials to a theme park in the United States. The Europeans were dismayed and shocked with what they observed. It was a disaster. Had the Americans had a sensitive negotiator on the ground in Europe, they could have offered a presentation of an amusement park tailored to local tastes, skipping the junkets to the U.S. park.
    5. Paying too much attention to anchors
      Anchors are part of a bargaining dynamic known as “anchoring and adjustment.” This involves clearly setting the parameters for negotiation. For example, a couple was selling their house for $500,000. The first offer came in at $375,000, which was too low to consider as a real offer to the sellers. The buyers came back at $425,000 and the seller then countered at $495,000. The buyers then came up to $430,000, but the sellers still didn’t accept the offer.
      Using the $425,000 offer as the anchor, the sellers argued that they had come down $5,000 from $500,000 — and the buyer had come up $5,000 from $425,000. Both had moved the same amount in negotiations. One more round of bidding had the house sold for a price well above the buyer’s initial bid.
    6. Caving in too quickly
      If you list a used car for $5,000, you might really be thinking of accepting $4,500. But when your first buyer has it checked by a mechanic and then immediately writes you a check for $5,000 without trying to bargain, you’ll think you sold it for too little. The lesson is: No matter what the price, even if it’s fair, always offer less — if only to make your opponent feel good about the deal.

    The original article, “Negotiation Strategy: Six Common Pitfalls To Avoid,” appeared on the Stanford Graduate School of Business website and was compiled from research conducted by Stanford Professor Margaret Neale. Negotiating is a learned process, and studying how to do it well is essential for every businesswoman. Read my blog, “7 Steps for Women Business Leaders to Negotiate Masterfully,” for more negotiating tips.

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