The Art of Negotiating
ByAs a middle kid with five brothers and sisters I often said, “That’s not fair!” I quickly learned “fair” rarely exists. It’s all about negotiation.
Here’s one that caught my eye this year. The Washington Nationals paid rookie baseball player Stephen Strasburg a whopping $15.1 million dollars to sign with them. Was it fair that they had to pay that kind of money to a rookie? It doesn’t matter; it’s about what the market will bear. What value can Strasburg bring to the Washington Nationals? They believe based on his stats he was worth every penny.
Strasburg’s signing caught my attention as a business person because of the classic negotiating that went on. His agent knew his stuff. Midnight was the “drop dead” time in which Strasburg would go back into the draft. If the Washington Nationals didn’t get him to sign before then they would lose him to next year’s draft. The agent kept pressure on them to agree to their terms. Strasburg signed with 1 minute & 17 seconds left before midnight-so the deal literally came down to the last minute. Time was on his side and he knew it. It is in those moments of negotiation where the magic happens. When else can a few moments of time be worth so much money?
Here are some basic negotiation tips for you to consider:
• Know what you want before you ask
• Embrace the other person’s agenda
• Respect what they want
• If you think you are an MVP, act & look like one
• Time is either on your side or against you
• Image & perception is reality-always negotiate from a position of strength
(Selling a horse? Act like the Marlboro man. Buying a horse? Act like a poor farmer)
• Negotiating is not a search and destroy mission
• Disarm the opposition (do your homework/research)
• Don’t turn negotiation into conflict
• Push back, don’t attack
• Move from your values to your story
• Frame the debate so they can see your reality: set expectations-
What is going to be the reality?
• Getting your reality to prevail is where the big money is made
• Never spilt the difference-you lose credibility & it’s amateurish
• Practice dealing with fear, “I’m sorry we can’t work things out”
• Put fudge factor in the first offer
• If you are losing get creative
• It’s not about what is fair it’s about market value
2 Comments
December 2nd, 2009 at 9:40 am
Hey Joyce -
Great blog!
You know, a lot about negotiating is about people liking you and feeling “good” about everyone getting much of what they want. In this case, the Nationals paid not for talent, but for the publicity and potential ticket sales/merchandise sales that come with signing a highly touted rookie. The kid knows that and so do the Nationals….and so if all works out he will pitch well, people will attend more games, and everyone makes money!!
Jim
December 2nd, 2009 at 9:54 am
Thanks Jim. I agree with you. The overall market value of a deal is the nut of a negotiation. I’ve found in my coaching practice most folks sell themselves short basing their market value on their self-esteem rather than the actual value they bring to the market. I gently remind them to get out of their own way and remind them it’s business and not a statement of personal worth.
Another point to make is it pays to put a strong team together whatever business you are in. If you have a strong lawyer, CPA and others advocating on your behalf you will be in a much stronger position. Be willing to pay for the expert help you’ll make more in the long run. Strasburg’s agent’s fee was no doubt linked to the overall deal. He played to his strengths-negotiating. It’s fair to say it was right in his “wheelhouse”. lol!