This week we’re raising our haggling game with help from negotiation expert Dr. Victoria Medvec. Vicki is the Adeline Barry Davee Professor of Management and Organisations at the Kellogg School of Management at Northwestern University and the CEO of Medvec and Associates, a consulting firm focused on high-stakes negotiations and strategic decisions. She regularly advises CEOs and other top-level executives on negotiations at companies like McDonalds, J.P. Morgan Chase, Hewlett Packard, and Microsoft.
In this weeks’ episode, you’ll hear Vicki advise us on how to negotiate absolutely any type of deal (personal, professional, or otherwise) using strategies like figuring out your BATNA (Best Alternative to Negotiated Agreement), approaching negotiations as multi-issue matters versus single-issue matters, and how to know when to walk away.
Highlights from this week’s episode
From the Victoria Medvec interview:
On why it’s important to lead the negotiation:
[Y]ou do want to make the first offer. You want to get ready and prepared. Understanding the weakness of the other side’s alternatives so that you set the right goal, that you will get a tremendous advantage from leading in a negotiation rather than following. When I lead, I set the table with the issues that we’re discussing. When I lead and frame the discussion, I’m actually in the relationship-enhancing position because I make an offer and build a rationale and you have to react, respond to critique, get as opposed to me critiquing your offer.
On how to approach more personal negotiations (such as figuring out with your partner where to spend the holidays):
[I]n really close personal relationships, a lot of times we actually do the worst job negotiating. We get outcomes that leave a lot of money on the table. And the reason that happens is because we don’t like conflict in those close relationships. So we often will take the first acceptable solution rather than seeking out the most optimal solution. So I would say two things: number one, think about multiple issues. So don’t have a discussion about where we’re going to spend Thanksgiving, have a conversation about the calendar for the coming year. Where is Thanksgiving? Where is the Fourth of July? Where is Christmas or the New Year? Think about the calendar for the year rather than the single holiday with the right issues on the table. And then the second thing that I would say is create some options, different ways that we might do it and explore those options with your spouse or significant other. So don’t go in with this single offer, but go in with a set of alternatives and talk through it.
On knowing the “Five F’s” of negotiations:
Number one, we want to go in and we want to go First. We want to Focus on them…We want to Frame our offer correctly. So if we are thinking that we want to get the other side to do something, to do something different, move off the status quo, we might want to frame more loss language and what we want to maintain the status quo and maintain what people are currently doing, we might want to highlight more gain language. Loss language is language like risk threat, competitive pressure, vulnerability, exposure. Whereas gain language are words like value, value propositions, savings, increase, enhance, improve benefits, advantages…and then we want to make sure that the fourth that is be Flexible. We want to do two things: maybe we give them multiple offers and we always leave ourselves room to concede because when we can see people are happier with the agreement that we ended on. And the fifth step is very important: no Feeble offers. Too often people go in and they people ask. It’s like I’m in a department store and I see a shirt that has a bag and I say, “Could you take something off?” That’s a feeble offer. Make it clear specific ask. Go to that person at the at the counter and say, “Oh, do you see the bag? That’s really unfortunate…You’re going to have to just return it and then you won’t be able to make any commission on that. You know what? I would take it off your hands. Give me a 30 per cent discount, OK?” That’s a clear, specific number.
To hear more of Vicki’s super savvy negotiation techniques, we recommend listening to the full episode.