Conducting Effective Negotiations by Joel Peterson at Stanford (Full Transcript)

Audience: Set the right expectations.

Joel Peterson: Okay, expectations, your expectations, you’ve set them the right way going in. They’ve been met, therefore you’ve achieved your objectives. That’s a successful negotiation. Yeah.

Okay, so some of it is how you define the terrain. How you and the other party perceive it, and then are you able to execute in that perceived terrain. Bonny?

Audience: Win-win. It’s easy to define what winning is on your perspective, because you’re happy. But I see when on the other side, is that the person, the residual effect after they walked out of the room, and as time goes on that they’re not upset, and they don’t try to undermine and negotiate whatever the result was. So they were happy too.

Joel Peterson: Okay, so you are thinking more broadly than a lot of business people think about negotiation. I mean, these are what I would call enlightened comments about negotiations. Here’s what most business people are negotiating. This is the essence of most business agreements. These five things. So, they’re focused on getting the best price, getting the most attractive terms. Making sure that whatever time frames for execution or deliverables, whatever are acceptable. Making sure the warranties are in place. And then if things go wrong, they’ve got remedies. They may be legal remedies. They may be economic remedies. They’re probably a combination of both. So, most business negotiation, which is in this stylized category, in the middle, is so focused on me getting what I want in these five areas. And people don’t think more broadly than that.

If people who do a lot of negotiating around these things talk about these techniques. Does anybody not run into these before as sort of things that are taught in negotiation classes? Are any of these new to any of you, surprising?

Audience: The bathroom.

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Joel Peterson: The bathroom one is a commonly used technique. Feed the person a lot of water, and a lot of food and then just keep talking, keep the pressure on. So, using the bath — bathroom breaks is a powerful — if you’re using techniques, and what do I mean by plane? They’ve got a plane to catch. Their schedule, exactly. They’ve got to catch a plane, and so you just carry on the negotiation. You speak slowly. You make things drag out. You disagree at the last minute. Just as they’re running for their plane, and say oh, you do the Colombo thing, you know oh, one more thing. You know, have any of you been subject to any of these? What does it feel like?

Audience: Well what you have to assess whether it’s always incompetence, or is it actual bad faith? And that can be difficult. And it’s annoying to have — to even have that.

Joel Peterson: Either case, what do you, how do you feel? If you’re dealing with an incompetent party, or a bad actor?

Audience: Wasting your time.

Joel Peterson: It makes you angry. Very few people, don’t recognize these. If you’re on the other side of the table, it’s not like oh, my gosh, what is happening? I don’t know, I don’t understand, this is sure working on me! You know, most of the time you perceive immediately these techniques, and you resent them. You’re angry about them.

So, in term of techniques that people teach, I think these are anti-successful agreement techniques. You may get a deal done. But you’re unlikely to get a deal that is lasting, enduring, flexible, where you build relationships, where you create solutions. But these are used all the time mostly by investment bankers. I’m just kidding. Sorry, sorry, I know. Roy, could you turn that tape off up there?

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Audience: I have one other technique which I run into quite a lot dealing with competitors. Which is the, during a set of conflicts, long, long negotiations, maybe over the course of months. You discover that in the course of this supposedly good faith negotiation the competitor, for example, has been actually promoting something completely different talking to somebody else. And the explanation you get when you protest is, I’m very sorry we had no idea that was going on.

Joel Peterson: The impersonation of -.

Audience: Deny, deny, deny, right?

Joel Peterson: Yeah or just innocent, you know I had no idea or oh, my god. Which puts you on your heels, puts you at a disadvantage, maybe there are others, anybody in here experienced other obvious techniques that are being used to gain power. Yeah, John.

Audience: We were locked in a room once. I think it was kind of amateurish back in the early days in eastern Europe, that we just climbed out the window.

Joel Peterson: I bet there are a lot of interesting stories. That was another one, so, yeah.

Audience: Language, there’s a — in terms of an experience having negotiations in China where I was sitting across the table from a gentleman who spoke or at least didn’t claim to have spoken any English. And so I had a translator, fortunately. And so that was one kind of — it’s an interesting barrier. Because I was pretty sure that he understood English. And for a variety of reasons, and smoke was also another one. He was an avid smoker. And I can’t stand smoke, and, and I tried my hardest to make sure that he didn’t know that. Because that’s really affected, kind of the way it helps to have everyone to spend in this four by eight room. It was very interesting.

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