Successful Negotiation

Essential Strategies and Skills

Inspired by George Siedel's Course

Mahdi Jadaliha 11/17/2024

The Power of Negotiation

Steve Jobs

"Steve Jobs' negotiation with Xerox PARC in 1981 changed computing history forever."

Should I Negotiate?

Decision Making

Key Decision Factors

  • Time value vs. potential gain
  • Impact on relationships
  • Alternative opportunities
  • Emotional investment

Position-Based vs. Interest-Based

Position-Based

Position

Interest-Based

Interest

The Orange Story

"Two sisters fighting over an orange discovered they needed different parts - one wanted the fruit, the other the peel."

Orange

Types of Negotiation

Dispute Resolution

  • Focus on past issues
  • Resolve conflicts
  • Maintain relationships

Deal-Making

  • Focus on future
  • Create value
  • Build partnerships
BATNA

Decision Tree Analysis

Decision Tree

Visualizing possible outcomes and their probabilities

Cross-Cultural Negotiations

Global
  • Time orientation
  • Communication style
  • Decision-making process
  • Power distance

Psychological Tools

Psychology

Anchoring Effect

The first number sets the stage

Anchor

Salary Negotiation Example:

Initial: $85,000

Counter: $95,000

Final: $90,000

  • First number heavily influences final outcome
  • Works even with irrelevant numbers
  • Hard to ignore even when aware of it

Loss Aversion

Losses hurt more than equivalent gains feel good

Same Outcome, Different Framing:

"If you don't sign today, you'll lose the 20% discount"

VS

"If you sign today, you'll receive a 20% discount"

Key Ratio: Losses feel 2-2.5× stronger than gains

Overconfidence Bias

Overestimating our abilities and judgment

Common Signs:

  • Minimal preparation
  • Dismissing contrary evidence
  • Excessive optimism
Overconfidence

"90% of drivers believe they are above average"

Framing Effect

Same facts, different presentation, different decisions

Medical Treatment Example:

"200 out of 600 patients will be saved"

VS

"400 out of 600 patients will die"

Power

Key Takeaways

  • Focus on interests, not positions
  • Prepare thoroughly
  • Understand cultural contexts
  • Be aware of psychological factors
  • Know your BATNA

"The most successful negotiators help others achieve their goals while achieving their own."