Mastering the Art of Compromise
A compromise is a negotiated settlement in which each party achieves partial success. A negotiator does not plan to arrive at a compromise - but, generally speaking, a compromise is often accepted when negotiations reach an impasse. A compromise might arise in a competitive negotiation (if both sides would rather accept a compromise than break off negotiations) or collaborative negotiations (both will accept a compromise to preserve the relationship).
When to Compromise
The authors provide another bulleted list of situations where a compromise might be appropriate:
- In an otherwise collaborative effort, there are some goals that are mutually exclusive
- A weaker party may jump at the opportunity to compromise because it fears that it will not be able to achieve its goals fully.
- Either party wants to bring the deal to a quick close without investing the time in negotiating for concessions
- Two parties wish to collaborate, but there is not sufficient time to build the relationship and go through the painstaking process of collaboration
- In collaborative negotiations, when resources are limited and cannot be expanded or effectively shared.
- In competitive negotiation, a party might accept a compromise on one factor in order to gain a concession toward a more important factor.
Also, compromise can often be the last step in a competitive negotiation. Rather than stating terms and waiting for an opponent to respond, one party will propose that the two compromise (split the difference between the last bids).
Sometimes, compromise is not possible: there are generally constraints to negotiation (a negotiation with a budget set by others), and a negotiator should not accept a compromise if it pushes him outside his acceptable range.
Compromising: Cost vs. Benefits
The primary benefits of compromise are its low negotiation cost (you may not need to concede anything to get a compromise) and relatively low risk (once you've agreed on a compromise, the other party cannot renegotiate the terms without seeming dishonest). The primary cost is the opportunity to negotiate for more than you got by means of a compromise.
The main difference between agreeing on a compromise and seeking a concession is that you do not have to offer anything in order to obtain a concession - you merely meet halfway.
Also, a "proper" compromise is generally done to preserve relationships in situations where both parties cannot be fully satisfied. The tactic of appearing to want to compromise is often sued by deceitful competitors - they make an outrageously exaggerated bid and offer to compromise.
The "After You" Tactic
By offering a compromise, one party may be signaling its willingness to concede a specific amount - which can be used against them by the other party (in this case, it is not unethical because you voluntarily disclosed the amount and offered a compromise that the opponent has not yet accepted).
To shift power, one tactic is to propose a compromise, but ask the other side what they think is a fair amount. The other party may take you up on it, and disclose their idea of a fair settlement - which you can accept, or reject and use the information they provided in your continuing negotiations.
Tactics of Master Compromisers
Another bulleted list, and a rather long one:
- Be clear on your goals and objectives so that you can determine whether a compromise is acceptable
- Especially be aware of the priorities, so that you don't compromise on an important issue to reach an agreement on less important aspects
- Knowing you walk-away and alternatives, so that you can measure the proposed compromise against them
- Know who is empowered to make a decision, and be sure that a compromise is approved by them before you even consider it
- Demonstrate an interest in negotiating to ensure that the other party realizes that you will neither walk away not cave in if a compromise cannot be achieved.
- Do not be the first to make a concession or suggest a compromise, as that demonstrates your willingness to accept less
- Offer compromises when you are in a position of strength rather than asking for them in a position of weakness
- Do not wait until the deadline to offer a compromise, as it takes time to negotiate a compromise, and you'll almost certainly have queered the deal
- As with concessions, take small and consistent steps - moving too fast, or at irregular intervals, signals weakness and confusion
- When you make a concession, expect a reciprocal one - the difference between a concession and a compromise is that you expect something in return for a concession.
- A concession cannot be used to get a party to accept an offer outside the range it was willing to accept in the first place
- Pushing too hard for a compromise signals weakness - do not be too eager to compromise, or seem to disappointed if your opponent will not
- Seek a win-win compromise when possible - focus on what the compromise allows both parties to gain rather than what they must give up
- Finally, be polite - even in competitive situations, others will be more eager to deal someone who is well mannered and respectful.
EN: A lot of this seems like it's repeated from previous sections, or tossed in at random. I don't think the authors really worked it out here.
The Dangers of Compromise
The authors list a number of "traps" one must be careful to avoid when negotiating a compromise:
The compliance trap arises when individuals make a commitment that they would prefer not to make in order to appease the other party. Generally, this can be best avoided by taking the time to consider the compromise rather than automatically agreeing to them. Some negotiators (particularly salesmen) will attempt to blindside a person in an attempt to get their compliance with something rather than offering a compromise or asking a concession.
The likability trap is a variation on the compliance trap: the opposing party will assign (or be) a person whom the other party likes or finds attractive in order to get them to agree to a bad deal in order to please the other party. The counter to this tactic is to put personal feelings completely aside and focus on your objectives.
The authority trap is another tactic along the same lines: the negotiator for the other side is a person who has an impressive title (doctor, reverend, vice president, etc.) to which a person who has been taught to respect authority is likely to want to placate. Again, recognize that this is emotional rather than rational and focus on objectives to counter this trap.
The reciprocity trap occurs when another party agrees to a compromise, by expects you to agree to a compromise they propose in return, generally without considering its merit. In this situation, it is not a compromise, but an exchange of concessions, and should be considered as such. It may even be the case where an opponent grants you an unsolicited concession and then expects you to accept a compromise in return.
The authors also note that personal gifts may be offered - in advance of negotiation, during the course, or even afterward - and this can be tricky. In some cultures, this is traditional and expected. In the West, it is generally frowned upon (considered to be bribery) and often it is specifically proscribed by corporate ethics policies.
Even so, it's still common for salesmen to offer a gift, even "trinkets and trash" to make someone feel obliged to listen to their pitch, or a vendor may "treat" his customers to perks in order to make them feel obliged to stay. The authors advise you to refuse as gracefully as possible, even when it's overtly state that there are "no strings attached," there always are.
The commitment trap is used to get a person to make a commitment, then switch or alter what is being offered in return. You agree to a price for an item, then the other party claims to be out of that item, but will offer a "similar" substitute for the same price. The "bait and switch" tactic in retail marketing is a good example of this trap. The best defense is to be specific, and insist on renegotiation when the opponent tries to switch on you.
The exclusivity trap is a method of convincing someone that an item is worth more because it is scarce or even unique. To counter this tactic, consider whether that exact item is necessary to accomplish your goals, or if there are substitutes.
Compromising with Superiors
Compromising with superiors is often necessary because it is not wise to say "no" to a boss, and they are not always willing to work collaboratively with their inferiors.
Generally speaking, these negotiations address the specifications, time, and resources involved in accomplishing a specific task or goal, and the subordinate is in a position where the goal cannot be achieved given one or more of those three.
In the best of cases, you can work collaboratively in order to get what you need. If that is not possible, you must compromise. An effective tactic is to consider the project and determine which components are most fixed, then negotiate a settlement that requests compromises in terms of the other two: if time is limited, get more resources; if budget is limited, get them to back off on the specifications; etc.
Rhetorically, the authors suggest an if-then approach: "If I am to do this, then I'll need that in return." They also suggest ayes-and approach: "Yes, I can do X and I need Y to accomplish that."
If the compromises you need cannot be reached, the next step is to ask for help, which is largely unique to this situation: you can admit that you're having difficulty envisioning how to achieve the outcome given the specifications and/or time and resources allotted, and ask for help. A superior should be willing to work with you, and they should be able to see the problem you're facing and the need to compromise.
Haggling
Haggling is the use of compromise in a competitive situation. Specifically, it is negotiating a compromise on price alone - the buyer and seller are not negotiating anything else, and generally are not offering concessions.
Haggling is less common in the US and Europe than it is in other cultures, though it still occurs when an item has a high price and a high markup (automobiles, houses, jewelry) - but with the influx of people of other cultures, haggling over lesser goods is increasing, and may be beneficial.
The authors suggest the following:
- You can always ask for a price break, but it is generally refused
- Do not haggle unless you reasonably expect to buy the item
- Being polite is of importance in haggling
- A good opportunity to haggle is when a price has already been marked down (especially if it's a close-out item)
- It is also possible to haggle when there is no posted or market price for an item
- Merchants are more willing to haggle with a regular customer than an unknown person
- Small merchants, where the owner mans the register, are more willing to haggle than larger stores, where the person you face is a clerk, with no power over pricing, then a manager who reports to higher managers
- Merchants are more likely to haggle if payment will be made in cash
EN: The authors approach haggling from a consumer perspective - they don't relate it to the business environment, or explore the perspective of the vendor in these cases.
LOOSE NOTES
When someone cites expert opinion, chances are that they have chosen an "expert" who supports their position. A common instance of this is in providing appraisals of value. A wise negotiator should find his own experts rather than accepting on blind faith what the opponent's expert has to say.
Another trick is to get the other party to accept an offer before telling then what is required of them in return. A good example is cell phone marketing, where you get a great deal on a phone - but then you learn that you must also buy a two-year contract. The defense is to back out of the deal on the grounds that you were unaware of the conditions. You can resume negotiations afresh or, if you feel this was an attempt to be underhanded, walk away.
Negotiating with superiors is difficult because the competitive tactics are generally off the table for you - but not for them - and you are necessarily in a disadvantaged position. Depending on leadership style, it may not be possible to collaborate, and you may be limited to appeasing, avoiding, or compromising.