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Values and Negotiations
by Byron Kalies


What are the values in your business? I guess you'd say you haven't really thought about it. However, everything you say or do show the real values you have to your staff and your customers. Most business people given time would produce a list of values along the lines of the following:

Communication - We have an obligation to communicate. Here, we take the time to talk with one another … and to listen. We believe that information is meant to move and that information moves people.

Respect - We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment.

Integrity - We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.

Excellence - We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.

These are all sensible values to espouse. Where it fails however, is where people don't 'walk the talk' (the above example is from the Enron Annual Report 2000).

How often do you see people saying one thing and acting totally differently? I've seen businesses with values about: the customer being king, respect the customer, trust the customer, etc. Yet these same businesses have signs in their shops; 'you break it - you've bought it', 'only 2 children allowed in at one time', 'each item ordered will require 100% deposit'. All these messages are saying the same thing - "I don't trust you.".

I've worked in Organisations that encourage people to take risks. Yet the first time someone made a mistake they were out the door.

The only way to keep the values real is to live them. When General Electric spent $50 million on an expensive, environmentally friendly light bulb that no one wanted, they handed out cash management awards to the team. In the words of Jack Welch, CEO at the time, it was for "celebrated their great try."

Nowhere is there more opportunity to demonstrate (or abuse) these values than in selling. In most situations you, as a seller, have more knowledge than the buyer. You know the price and could exploit it. Negotiating a fair price is a vital aspect. You know how much the product costs or you should do. Work out really how much it costs including time, overheads, everything. That's your 'fall back' position - the minimum you'll accept. Now look at it and determine how much you would be willing to pay for the product. This, hopefully, will be more than the minimum and will be your 'ideal'. If you could sell it for more than you think it's worth I would guess you're getting into dangerous territory in terms of your values. If you have to negotiate above this rate I would guess you will feel a little guilty, a little like you're ripping people off. So don't do it. You've got to do business with these people again so think about the longer term effects.

So, just as you have your 'ideal' and 'fall back' positions so does the other side. What you need to do before you enter into any negotiation is to gather as much information as you can. You need information about the other side - who are they, what business are they in, what values do they hold, what's important to them at this moment. What do you think their 'fall back' and 'ideal' positions will be. If you've determined your positions you should now be properly prepared and the negotiation can begin.

There is a fair amount of rubbish talked about negotiations. Some of the most ridiculous pieces of information I've been told about negotiating are:

  • 'Keep them waiting. Always turn up a few minutes late'. Well that's guaranteed to get them in a great frame of mind from the start isn't it?

  • 'Have your chair higher than them. It'll give you a position of power'. It will certainly make the other feel intimidated. Is that really what you want? Are you really that insecure you need to resort to these tactics to win?

  • 'Start with a ridiculous offer' ... please. You'll annoy the other and put yourself in a ridiculous position. If you've established your ideal position and if, for some ridiculous reason the other accepts this then you're values are shot to pieces anyway.

The real skill in these negotiations is to listen. Listen for signs, signals. Listen for what is important and what isn't. It's so easy to get into the mind set of 'it's all about the money'. What may be important is when the money is to be transferred. It may be vital to the other that the money is paid up front whereas you'd bargained for a later payment. Negotiate. Maybe paying earlier, but less, is something that would work for you. Maybe delivery is a problem for one of you, or storage, or whatever .... Listen to the tone of voice, watch the body language to give you clues. You need to be thoroughly prepared for this.

There are a number of things that get in the way of listening:

Thinking. This can really be a problem. With thinking I mean anticipating what you will say next. Listen carefully then consider your response.

Disagreeing. Try not to get emotional about the negotiation. If you don't agree acknowledge it and then move on. Stay focused on the result you want. Don't allow yourself to be side-tracked.

Anticipating. Try not to second guess what the other will say. Listen carefully to the words and the tone. If something doesn't feel right - it probably isn't. If the words are saying one thing and the body language another - check it out. Ask for clarification.

Interrupting. This goes along with the previous point. Don't assume you know what the other will say. Pause. Leave gaps. It's surprising how much information can be gained by just pausing and allowing the other to continue talking.

Be as open as you can. This doesn't mean tell everyone your whole strategy, but don't lie. If you're asked a question that you don't want to answer at the moment "I don't want to answer that question at the moment" seems a sensible reply. Again it's to do with your values.

Finally remember that there are a number of outcomes to any negotiation:

You Win - They Lose - You get a real bargain by making a ridiculous deal. This sounds tempting until you remember your values. There's also a practical reason for not adopting this approach - you may well want to deal with these people again. There's the story of Ford driving such a hard deal with their spark plug suppliers that the suppliers were losing money and soon folded. Ford had to find spark plugs in another continent that worked out twice as expensive.

You Lose - They Win - That's just masochistic. If you've worked out your 'fall back' correctly this can't happen.

You Lose - They Lose - Not really a good option for anyone,

Win - Win - Would be good for everyone.

There is another option. It's the 'No Deal' option. You don't have to make a deal. If there's no overlap on the negotiating arena then save some time and move on. People sometimes think they must make a deal. Remember you can walk away. Walk away and reassess is always a good thing to do if you feel something's not working. More often than not it isn't and frequently it's because somewhere, somehow your values are under pressure.


The Author


Byron Kalies is a Liverpool-based writer with 12 years' international experience as a management consultant. Recent publications include Across The Board (U.S.A.), Career Times (Hong Kong), CEO Refresher (Canada) of course, Guardian (U.K.), Sydney Morning Herald (Australia), MIS (U.K.), Management First (U.K.), Lifelong Learning (U.S.A.), Business Day (South Africa), Business Plus (Ireland). Book "25 Management Techniques in 90 Minutes" (Management Books 2000) published April 2005.

Many more articles in Authenticity in The CEO Refresher Archives
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Copyright 2006 by Byron Kalies. All rights reserved.

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