Sports agent, attorney and chair of Shapiro Negotiations Institute LLC Ron Shapiro has negotiated half a billion dollars in contracts for clients such as Cal Ripken Jr., Dante Bichette and Jim Palmer. His secret to swinging successful deals? It's not playing hardball but simply being nice, as he and co-author Mark Jankowski reveal in The Power of Nice: How to Negotiate So Everyone Wins--Especially You! (John Wiley & Sons, $24.95, 800-225-5945). Here, Shapiro shares a three-step technique to get win-win results from any deal.
Business Start-Ups: How do you negotiate win-win deals?
Ron Shapiro: Most people view negotiation as sitting down at the table and haggling. In reality, negotiation is a process, not an event. That's why the three-P approach helps.
BSU: Can you explain the system?
Shapiro: Before you sit down at the negotiating table, practice the first P: prepare. Research the people you'll be negotiating with. Research any precedents that apply, such as the value of this particular product, investment or whatever. Plot out alternatives if this negotiation doesn't work the way you want it to. Analyze the strengths and weaknesses of the parties. Analyze relative deadlines. Plan a strategy--put some notes in writing.
Even if you have only a short time, do as much planning as possible. Preparation increases the confidence of even novice negotiators. It's also the only aspect of a negotiation over which you have complete control. In negotiation, preparation is power.
When you get to the table, practice the second P: probe. If I'm a start-up entrepreneur meeting with a potential investor, I'll ask why they're interested in my company, what investments they've made in other start-ups, what they know about my industry. Get past "We'll pay X dollars for Y percent of the company." Understand their interests. Are they in this for a short-term return? Because they love [what] my company's involved in? Because they have a niece who wants to work for me?
Listening is key. God gave us two ears and one mouth, so we should listen twice as much as we talk. Instead, most of us talk five times as much as we listen.
BSU: What if the other side won't give information?
Shapiro: I practice a principle called W.H.A.T. Ask why: "Why do you feel that way?" They might say "I don't want to talk about anything but price." Then I go to H, hypothesize, and say "Hypothetically speaking, if we could take care of your price concerns, what would your other concerns be?" A is for answer. Try answering a question with a question to [find out more]. T is for tell me more. That's the old "Columbo" role: playing dumb. "Can you help me understand?" Soft questioning draws people out.
BSU: What about the final stage: propose?
Shapiro: Try to get the other side to make the first offer. Appeal to their expertise: "This is my first venture; I've never been involved with investors before. You're experienced investors; you have a better sense of what's out there. What do you think?"
If you have to make the first offer, aim reasonably high. If you aim high and they balk, you can bring them back. But don't give them your bottom-line number, or you'll soon be negotiating below your bottom line.
Don't immediately accept their first offer--even if it's at your goal range or above. If you get excited at the first offer, you make them question what they've done, and you lose the chance to analyze what their offer means.
To get what you want, be prepared to give the other side what they want--or at least some of what they want. Negotiation is all about building relationships.
Shapiro Negotiations Institute LLC, (800)?65-4SNI, firstname.lastname@example.org