How Contract Negotiations Work

Video Transcript

Hello. My name is Barry Payne on behalf of Expert Village. In this section we're going to look at how negotiators get trust from the other party. You see, the more they can trust you the more likely they are to have the courage to move in the direction you want them to move. Now there's a sense of when we step into a negotiation that we step into the unknown. There's a little bit above the water and there's a lot underneath like an iceberg. Let's have a look at the iceberg. There, a little bit showing above the water, but underneath we know there are their aims, goals, fears, attitudes and feelings. And all of those things are going to affect the way they behave and affect the way the negotiation goes. Now let me ask you. Suppose I say to you "Hey, I'm really happy to be here today. Look the sun's shining. It's been a wonderful time and it makes me feel good". Alternatively I can say to you "The sun is shining today-fact". Suppose I say to you "You know I really thought it would be difficult to solve that point in the negotiation. But you know what? I actually feel well and pleased that we seemed to have gotten a settlement that was okay for both of us". What kind of a person do you see me as being? That's fairly open. Trustworthy, maybe? Skilled people do a lot of this. Now look at the numbers. Can you believe that when we found this finding we just couldn't believe it. 10% of everything they say is process commentary. Talking about the process of negotiation or their internal thoughts and feelings. Now don't get me wrong here. Giving facts and opinions skilled people do very little of. They do far less than the average negotiator. But giving their internal thoughts and feelings they do a lot. Indeed, back to the question of deadlocks, one of the best ways of removing a deadlock is to use this - "I'm concerned about this issue. We've been round it four times now. We don't seem to making much progress and I'm not quite sure where we go from here". Now what that does it gets the other party to take on board the problem. You don't do it with logic. You do it in a completely different way by entering through the gut rather than the head if you like. It's very powerful. Carl Rogers, a famous American behavioral scientist said that giving internal feelings in counseling is very valuable in that it helps the person being counseled to trust the counselor. It's the same principle here. It's as if these people are people first and negotiators second. They seem very relaxed. Let me give you a classic example. A negotiation was between Rolls Royce and Boeing and it got towards the end. There are two major negotiations in the airline business. One is with the airline to get your engine specified for the particular plane you're buying. The other one happens much earlier than that when the plane maker or the aero engine maker get together to ensure that the characteristics of the engine are going to fit in the airplane. Otherwise, you won't lift it off the ground, for example. So this would be virtually solved within some months of discussion. We were in Seattle, in the states, and the chairman had come across to finalize this, but there were some problems left. The issue is huge financial difficulties if the aero engine doesn't do what it's supposed to do and in fact the technology sometimes isn't completely in place. They do very long term technical projects. What we got within a very short space. We had two rooms of our specialists of the main meeting room - finance people, technical people and so on. And the Rolls Royce chairman suddenly said "Look, let's take a break. And I looked out the window. There was a park outside. There was a fountain playing. And I saw Bob and Francis walking around this, talking to each other. Well, they came back and within about 15 minutes we got an agreement. Everyone was elated. We all decided to go out to dinner that night. And I said to Francis - I took him aside, I said "Can I just ask you, what were you talking about when you were walking around the fountain outside today"? And he looked at me and said "We weren't talking about this negotiation". I thought he'd actually done the deal somehow, one to one, outside. "No, no". He said "We've met before. He said "We had a major negotiation a couple of years ago". He said "You know what? I'll never forget that negotiation". He said "I was under terrific pressure. I needed that contract". He said "And you know what? He told me he was in exactly the same position". And he pulls the moment. He said "You know he's a tough guy but that Bob's not a bad man". Now that was a very unusual example of process commentary. Those two men, with huge responsibility, had talked to each other at a feelings level about something that had occurred before and it gave them just enough trust to be able to do what they had to do that day.

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