An article by Marc Beaujean, Jonathan Davidson, and Stacey Madge or McKinsey, highlights just how important customer facing staff are in making an emotional connection between a client and a supplier’s ‘brand’ and how that connection, that spark, can drive profitability.

The article emphasises just how important it is for customer facing staff, at all levels, to be trained to have high levels of Emotional Intelligence in order to make it easy for people to connect with clients;  especially when the client has a major problem. In the view of the authors, high emotions (caused by a big problem) plus a great response are what really drive customer loyalty. in one study a bank in North America found that a 50% gap between the best and worst branches, as measured by ‘share of wallet’ and customer retention stats, was accounted for by the ability to solve customer problems effectively. Interestingly the research showed that this ‘solving problems effectively’ sometimes meant prioritising  the customer’s need over the banks sales targets. However that customer focus translated, over time, into a larger share of the customer’s banking business.

You can take a look at the full article HERE

And if this topic interests you, you might like to consider how our one-day Essential Customer Care programme could help you and your people build customer loyalty through improved soft skills and better emotional intelligence…

http://www.boulden.net/course-essential-customer-care.php

 

All the best,

George

“There is nothing either good or bad, but thinking makes it so.” – William Shakespeare, Hamlet

Welcome to the working week

Everyone has ‘stuff’ they need to get done and ‘problems’ that they need to solve. There are small things and minor problems, (like doing the ironing, or getting the kids off to school); bigger things (like completing a major work project, or taking care of an elderly relative.) Then there are things that are fun; things that are not so much fun; things we initiate and things that are thrust upon us by others or by circumstances. At one level these demands on us to get things done can be motivational. For example, athletes tend to break records in front of a large crowd and great satisfaction can be gained from striving to complete a worthwhile task. However, if the pressure to make things happen increases beyond a certain point, and we’ve more on our plate that we feel we can handle, then a stress reaction can occur. In this situation a person can start to feel anxious (rather then energised), sometimes to the point of feeling completely overwhelmed.

Surviving on the savannah

So how does positive pressure to get things done, or handle life’s problems and challenges turn into negative stress? The answer is found in evolutionary biology and the fight/flight survival mechanism. Approached by a lion in the African savannah our ancestors would not survive long if they sat down and debated what action to take, so the brain triggers an instantaneous reaction to either (a) attack the lion or (b) run away.

This ‘fight/flight’ process involves hormones such as adrenaline, noradrenaline and cortisol being released to facilitate immediate physical action. The hormones generate a series of physical changes aimed at helping to react to a threat e.g. a heightened awareness, a reduction in sensitivity to pain, a quickening heart rate, etc.

The response is triggered both by real threats (e.g. an actual lion) and the possibility of a threat (e.g. a noise in the bushes that might, or might not, be a lion). The way the system was intended to work is that the response ‘switches on’ and ‘switches off’ very quickly in answer to the physical events that unfold. So we run away from the lion, and once safe again we calm down, or, the noise in the bushes turns out to just be the wind blowing through the branches, and we relax.

Failing to flip the ‘off switch’

Problems arise when the physical threat is replaced by the ‘psychological threat’ such as: worry about tight deadlines; criticism from your boss; an argument with your partner; money troubles; or the long term, low level tension created by the daily grind of commuting etc. If the fight/flight mechanism is triggered for these ‘psychological threats’ the adrenaline, noradrenaline and cortisol causes the body to go into overdrive, but the hormones are not naturally dissipated by action, so the blood pressure stays raised or the mind remains agitated. When this happens fighting or running often translates into unhelpful effects like irritable bowel, dry mouth, stomach ache, eczema, insomnia, angry outburst etc.

The joy of euphoric stress

The type, number and intensity of ‘events’ that it takes to create a ‘stressful’ situation where the fight/flight response goes into over-drive varies enormously from individual to individual e.g. some people would be horrified at the thought of giving a presentation to three hundred people at a conference, while others would be excited by the prospect.

The Canadian psychologist, Hans Seyle, famously identified four ‘zones’ of arousal or stress:

  • Calm – a relaxed, peaceful state of mind
  • Euphoric stress (Eustress) – the natural high that comes from striving to meet a challenge
  • Distress – the sense of ‘worry’, ‘tension’ and (maybe) anxiety that comes from feeling out of control
  • Extreme distress – a sense of panic, helplessness and fear that comes from seeing no way out of a difficulty or problem situation, this can result in a range of symptoms such as fatigue, palpitations, irritability, headaches etc.

The issue for Seyle was to (i) know yourself and what you personally can – and can’t – take in your stride, and (ii) have strategies for recovering quickly from ‘distress’ and ‘extreme distress’ when you get too far outside your comfort zone.

Four strategies for managing stress

Research indicates that there are four, interconnected, strategies for learning to defuse the fight/flight response and so manage stress effectively:

  1. Manage your state of mind; it may be easier said than done, but the idea is to let your problems ‘bounce off you’, like water off a duck’s back (i.e. eliminate ‘worry’ or ‘annoyance’ or ‘panic’ in the face of work overload, or disappointments, or ‘bad’ situations.) Be proactive; be optimistic.
  2. Manage your personal energy levels; stay physically strong and well rested, be active and ‘burn off’ stress inducing hormones through exercise (get a good night’s sleep, exercise, consciously take ‘time out’ for fun activities, have a balanced diet, don’t drink or smoke too much etc.)
  3. Manage your relationships; no one can thrive without some help from other people (a problem shared is a problem halved, actively stay ‘connected’ to family and friends.)
  4. Manage your task list; the chances are that it’s impossible to do everything you might like to do, or that your boss might like you to do! (So prioritise your efforts, say ‘no’ (respectfully) to unreasonable requests, and negotiate workloads/responsibilities.)

Let’s look at the first of these strategies (Manage your state of mind) in more detail.

Manage your state of mind: The ABC of stress management

Albert Ellis argued that experiencing psychological stress involves a three-step, ABC process… Adverse Events; Beliefs; Consequences:

Adverse Event: Something bad happens (e.g. you are stuck in a traffic jam, you hear a sudden loud noise, you are late for a meeting, you argue with a colleague.)

Beliefs: You think about the event to assess if it presents a threat (this happens very quickly and usually at a subconscious level.)

Consequences: You experience feelings and sensations that will vary in type and intensity, depending on how you think about the event (i.e. is the fight/flight response (a) triggered and (b) if triggered, how quickly is it switched ‘off’.)

His observation is that we cannot (usually) control events, but we can (at least to some extent) control our thinking, and therefore we can manage our emotions and thereby take charge of the fight/flight response. So for Ellis you can think about a situation using either ‘junk logic’ (negative, pessimistic, disempowering thoughts), or ‘rational thinking’ (logical, positive, optimistic – but realistic thoughts.) Unsurprisingly, he recommends using rational thinking.

Remember, ‘worse things happen at sea’

So imagine an Adverse Event (say) someone comes back home after a long day at work to find they’ve been burgled. Not a nice experience. At this point they could use, what Ellis would call ‘junk logic’, and think; “this is the most awful thing ever, I can never feel safe in my home again, this is just terrible, I’ve lost some precious belongings and that’s a dreadful, heart wrenching loss and I am helpless to do anything about it.” And as result they’d probably feel anxious and distraught.

But are those thoughts, in this example, helpful or even really true? Can the home really not be made safe – ever again? What would adding a stronger door, or more robust locks or a remote camera do for security? It’s horrible to have had your home broken into but that doesn’t mean steps can’t be taken to stop it happening again. And when all is said and done, no one was hurt or injured. Furthermore, while the loss of personal items (especially those with sentimental value) is no laughing matter, is it really the end of the world? No doubt some things can be replaced with insurance money and for the others you still have your memories, and no one can take those away.

Manage your personal energy levels: Exercise and diaphragmatic breathing

Harvard Medical School, (exercising to relax, 2011) notes that exercise reduces levels of the body’s stress hormones, such as adrenaline and cortisol. It also stimulates the production of endorphins, chemicals in the brain that are the body’s natural painkillers and mood elevators. Endorphins are responsible for the “runner’s high” and for the feelings of relaxation and optimism that accompany many hard workouts. So regular exercise helps to manage stress. They also note that while rapid, shallow breathing is a common response to stress: slow, deep, regular breathing is a sign of relaxation. And it’s possible to control your respirations so they mimic relaxation i.e. deliberately engaging in deep, slow breathing helps to dissipate stress.

Manage your relationships: Hug the monkey

Rick Hanson (the well regarded neuroscientist) notes that in terms of evolutionary biology the brain development occurred in three stages:

  1. Stage one was the development of structures in the brainstem that were highly focused on avoiding danger (i.e. the fight/flight response). This is still the most basic and most sensitive/powerful level of the brain’s functions.
  2. Stage two, was the development of structures in the sub cortex to help seek out pleasure and ‘rewards’.
  3. Stage three was focusing on the need for belonging and love (located in the neo cortex.)

These three aspects of brain function: avoiding harm, approaching rewards and attaching to others need to be integrated and balanced in order to achieve a positive, happy life. Hanson humorously refers to this as the need to: pet the lizard; feed the mouse and hug the monkey.

As for ‘attaching to others’ he notes that in ancient times, membership in a band was critical to survival: exile was a death sentence in the Serengeti. And that today feeling understood, valued, and cherished, directly affects a person’s happiness and effectiveness. So an important part of stress management (or more accurately ‘stress avoidance’) is to seek ‘connections’ to others. Or as Hanson would say, to “hug the monkey, (an admittedly goofy phrase) inside yourself and thus absorb in one form or another that most fundamental human sustenance: love.” So prioritise spending time with people who wish you well and have your best interests at heart. Make sure that your work commitments don’t stop you from seeing friends, spending time with family and catching up with colleagues.

Manage your task list: don’t bite off more than you can chew

It’s a very rare person who can do everything they want to do during the course of a day. Most of us have to negotiate with (i) ourselves, about competing demands on our time and (ii) with the people who will have priorities that differ from ours. This involves saying “no” to being overloaded, but also agreeing how to flex and adapt your schedule in the face of reasonable requests and demands from your family, boss and peers.

Many people don’t fully appreciate that saying, “yes” to one thing effectively means saying “no” to something else. And that ‘something else’ we are saying ‘no’ to may well be a priority work task for us, or may eat away at time we want to dedicate to our home or personal lives. So if we are too accommodating then it may well be that the things we are saying ‘no’ to by default are the very things that we need to do to take better care of ourselves and/or hit our personal work targets.

Of course the irony is that if we agree to do more than we can handle, we probably don’t do it very well, and we may also end up exhausted (or angry) for having to do something that intrudes into our personal time. This is why finding out exactly why people are asking for things, and then negotiating a way forward that makes sense to you and to them is so important to managing stress. So mastering the delicate art of saying no, is a key life skill.

Stress and leadership: my brother’s keeper

If you are a leader, or a people manager, then, in many countries, you will have a legal responsibility to proactively ensure the welfare of people reporting to you, and that includes monitoring their stress levels. In the UK, for example, the Health and Safety at Work Act 1974 and Management of Health and Safety at Work Regulations 1999, make employers responsible for ensuring the health, safety and welfare at work of their employees. Legally, Board Members must ensure that a Health & Safety policy is in place and monitor factors that might suggest there is a problem with stress-related illness in the business, e.g. high rates of absenteeism.

Managers should be on the lookout for common signs of stress in employees, including (but not limited to)…

  • Taking more time off than usual
  • Not taking normal breaks (e.g. lunch), working long hours
  • Increased irritability, poor concentration, reduced productivity (e.g. making mistakes)
  • Becoming withdrawn, ‘moody’ or over-reacting to what others say
  • Showing physical signs of fatigue e.g. yawning, rubbing eyes, sweating, or sallow complexion

So what’s next???

  • Reflect on which of Seyles “stress zones” you are in and what that might tell you about how you might try to adjust your behaviour to spend more time in zones one and two.
  • Consider just how optimistic you are. Do you need to adjust your thoughts to be more of a “glass half full” type of person? This doesn’t mean pretending that things are Ok when they aren’t, but it does mean looking at what’s good about a situation and taking the initiative to improve things where possible.
  • Try reading, The Relaxation & Stress Reduction Workbook
    by Martha Davis, Elizabeth Robbins Eshelman, Matthew McKay and Patrick Fanning
  • Learn more about Breathing Excercises, a three minute video – Diaphragmatic Breathing Technique

If you think that you or your work team could benefit from our help then take a look at our half-day master class on stress management.

Or maybe our ‘one to one’ executive coaching services.

Or give us a call on 0844 394 8877 (UK) or  +44 1788 475 877 (international) or email us at coaching@boulden.net and we’ll be happy to discuss how we can work with you.

And to end with a quote from the well known US physician Dr. Chris Feudtner,

“90% of life is about remaining calm.”

“Behaviour is the mirror in which everyone shows their image”
GOETHE
airliner cockpit

A habit is a routine of behaviour that is repeated regularly and tends to occur subconsciously. The reason habits matter is that once established, they are more or less automatic, which makes for great economy of action, i.e. it becomes very easy to act in a particular way. So, habits make us highly efficient – we can act without having to engage in conscious thought or to undertake time-consuming self-analysis. With the right set of habits we can succeed at any number of things more or less on autopilot!

If you don’t have a ‘habit’, each time there is a beneficial (but potentially challenging) thing to do, you have to make a conscious act of will to do it. This involves expending emotional energy on the decision process, rather than allowing the habit to take the strain. For example, “I take the stairs rather than the escalator – because that is what I do – that is my habit – that is who I am – I do not allow myself the choice to do otherwise – ever.” (Note that the rationale for taking the action is no longer there – it is not needed. All that is needed is obedience to the habit.)

There is, of course, a ‘dark’ side to all this. The unconscious, spontaneous aspect of habits can potentially make it easy to do things that benefit us (getting things done, exercising, meditating) but it is just as easy to repeatedly and unthinkingly do things that harm us (smoking, procrastinating, lethargy). The neurological process that creates habits does not distinguish between good and bad; it takes an act of conscious will to promote beneficial ones and extinguish the harmful ones. Sadly, as most of us know, old habits are very hard to break, and new habits are very hard to form because the behavioural patterns we repeat are imprinted in our neural pathways, so mastering our habits takes perseverance.

Habit loops

Charles Duhigg in the The Power of Habit notes that habits have a three-part structure:

  1. A Cue: A ‘signal’ that triggers the start of the behaviour (e.g. putting your running shoes by your front door; you see the shoes and think ‘run’!)
  2. A Routine: Engaging in the behaviour (going for the run)
  3. A Reward: The pay-off from engaging in the behaviour (the rush of endorphins that comes from doing exercise, enjoying the sense of achievement that comes from completing a task).

The best way to remove a bad habit is to replace it with a good one. So, the first step is to notice what ‘cues’ a negative behaviour (e.g. feeling bored), which initiates a ‘bad’ routine (e.g. eating a chocolate bar) and then change cues and/or routines to improve the situation. E.g. for the cue of ‘feeling bored’ we might adopt a new, more positive routine e.g. surf the Internet, phone a friend (rather than eat chocolate). Of course, it takes a conscious effort to establish the new habit; making improvements takes will power! In fact, Lally et al. (Journal of Social Psychology 2010) found the average time to establish a ‘habit’ was 66 days, with a range of 18–254 days.

Keystone habits

In terms of developing new habits one big idea is the notion of a ‘Keystone Habit’; these are ‘super habits’ that influence behaviours in a wide range of situations (i.e. it’s a habit that affects your entire life.) Keystone habits can be identified by asking the question: “What’s the one thing, which if I did it consistently, would have the most benefit in my life?” E.g. exercise more, eat better, stop smoking, improve my sleep hygiene, show more affection to my partner, embrace opportunities, do public speaking etc. And then frame that ‘topic’ as a specific goal that can become an automatic routine e.g. “I’ll walk 10,000 steps every day.”

One example that the research highlights as a keystone habit is exercise, because typically someone who keeps fit also eats reasonably healthily and sleeps soundly. Another is meditation. Research from the UCLA Laboratory of Neuro Imaging suggests that people who meditate show more gray matter in certain regions of the brain, show stronger connections between brain regions and show less age-related brain atrophy (i.e. meditation can make your brain bigger and faster). So, one ‘keystone habit’ for people who commute on public transport could be to take a few minutes on each journey to close their eyes and meditate. Or for people who drive to work it might make sense to leave a little early, park and spend a few minutes in the car meditating before going into the office.

Bright lines and rituals

In legal contracts there is the concept of having ‘bright lines’, or clear, unambiguous boundaries; so it is obvious and unarguable whether or not something has, or hasn’t, been done. For example ‘stay hydrated’ or ‘get more sleep’ are fuzzy lines, while ‘drink a litre of water a day’ or ‘go to bed at 11pm every evening’, are clear, bright lines. In setting new habits it really helps to adopt bright lines. And, as far as habits as concerned, the brightest line is if you agree to do something (even for just a few minutes) each and every day, as opposed to, say, twice a week.

Rituals (highly specific behaviours, done at precise times of the day) are one type of ‘bright line’. They are a highly effective way of avoiding work overload as they can be used to ‘programme’ in breaks, pauses, and ‘re-set’ moments into the day. For example, a ritual might be that you go to bed at the same time every night so that you consistently get enough sleep, or exercise as soon as you wake up to be sure you get exercise, even when you don’t feel like it. One ritual that’s commonly taught as part of a time management programme (it’s certainly part of our training) is at the end of each work day to write down the most important task to accomplish the following day; something you’ll do as soon as you get back into work in the morning i.e. before doing anything else. Or you could take advice from Thanh Pham, the productivity blogger, and develop a ritual around “clearing to neutral”, by which he means clearing up at the end of any activity before starting the next task, e.g. put away equipment, or files, or wash up the pans, so that everything is ready to ‘go’ the next time you start that task.

Micro actions (too small to fail)

The smaller the daily goals or challenges you set for yourself when conditioning a new habit, the easier it is to keep going past the 66 day mark, when it’s likely to have become automatic and unconscious. So Stephen Guise in his book Mini Habits suggests that you make your goals ‘stupid small’, so small that it’s almost impossible not to do it. Of course the idea is that if you start with just one tiny step, that gives you the impetus to do much more than that. An example in the book, for the keystone habit of exercise, is that rather than specify that you’ll do 30 minutes of exercise each day, just commit to doing one ‘press-up’, or one ‘sit-up’, or one minute of stretching. Yes, just one. Once you’ve done that one you can then, if you like, do ‘bonus exercises’. He argues the key is to develop momentum for making a change and that means making things ‘too small to fail’. So, don’t say you’ll do ten sales or marketing phone calls each day; just commit to doing one. Don’t say you’ll start reading for pleasure ten minutes each evening; just commit to one minute. Don’t say you’ll become tidier and better organised; just clear out one shelf, or one desk drawer. Don’t say you’ll manage your team better; just give one piece of feedback (positive or constructive) each workday.

Habits that drive competitive advantage

One way of using ‘habits’ is to drive corporate culture. This is best done by choosing one simple, but core (keystone) behaviour and ask all employees to make it part of their normal routine. So, Lisa Earle McLeod in her 2012 book Selling with Noble Purpose, argues that driving sales revenue involves having a focus on what your product or service can do for customers (a Noble Sales Purpose). For McLeod this involves thinking about three issues:

  1. How your product helps customers
  2. How you’re different from your competitors
  3. Your emotional commitment to helping customers
    (why you care about what you do).

And once that focus is in place she suggests identifying a specific behaviour that supports that ‘purpose’, and this ‘habit’ should be something that:

  • Takes less than a minute
  • Everyone in the company can do
  • There are no excuses for not doing it

For example, Boston University have a policy that no member of staff should ever walk past people on their campus who are looking at a map, or appear to be visibly lost. They should stop, introduce themselves, and ask if they can help. This single policy sends a message to everyone, both inside and outside the organisation, that the culture of the University is to be helpful, and that the institution places a high priority on interpersonal interactions. This simple ‘habit’ encourages employees of every level to personally connect with students and their parents (customers), and empathise with them.

A focus on Safety in the workplace can be a ‘keystone habit’ that can drive profits and productivity. When Paul O’Neil became CEO of Alcoa in 1987 investors were surprised at the emphasis he placed on safety and ensuring ‘proper procedures’. O’Neill changed the company’s operation structure so that any time an employee got hurt, the senior members of the department had to deliver a plan to O’Neill showing how the injury would never happen again. Executives who didn’t embrace this keystone habit were fired or not promoted.

The knock-on effects of forcing people to pay attention to details, and making improvements that this focus on a safety culture engendered, saw costs fall, and quality improve. In fact by the time O’Neill retired in 2000, Alcoa’s profits had quintupled.

The seven habits

One of the best-known books on effective habits in business, and in life, must surely be Stephen Covey’s (1932-2012) multimillion selling;
The 7 Habits of Highly Effective People (1989). It could be argued that most of the ‘success behaviours’ that Covey lists are not habits in the technical sense of the term as they are broad concepts, and insufficiently ‘routine/automatic’. But they can certainly form the basis for a series of more specific habits and rituals that will drive good performance and create a sense of fulfilment.

The seven habits are:

  1. Be Proactive – Take responsibility for how your life is; make choices and take action to make things how you want them
  2. Keep the End in Mind – Define meaningful goals; be clear about what you want (Covey calls this the habit of personal leadership – having a focus for your actions)
  3. First Things First – Organise your time and energy around executing your key priorities
  4. Think Win-Win – Look for mutual benefit in all interactions; cooperation with other people tends to get better results than trying to ‘beat’ them
  5. Seek First to Understand and Then to be Understood – Listen closely to what people are saying and when you’ve fully understood their view have your say (diagnose before you prescribe)
  6. Synergise – Cooperate by respecting differences and build on strengths; use teamwork to do much more than you could accomplish alone
  7. Sharpen the Saw – Continuously look to strengthen your body, heart, mind, and soul

So what’s next?

Record the habits you already have, and how they work for (or against) you. As habits (once formed) are automatic it’s useful to take the time to consciously examine what you’re doing and assess the pro’s and con’s of your set routines.

Ask yourself: “What’s the one thing, which if I did it consistently, would have the most benefit in my life?” And create a ‘bright line’ goal based on your answer.

Read… Smart Change: Five tools to create new and sustainable habits in yourself and others, Art Markham (TarcherPerigee, January 2014)

Watch… this three minute clip of Charles Duhigg giving an overview on ‘the power of habits’…
See video clip

Consider sending your managers on our half-day workshop on Practical Time Management as a great way of helping them adopt habits for improved personal effectiveness…
View Practical Time Management

If you’re a senior executive maybe a ‘one-to-one’ executive coaching session would be a useful option for helping you develop some good habits, rid yourself of some bad ones, and maybe identify a ‘keystone habit’ for the organisation as a whole?
View ‘one-to-one’ executive coaching

And remember…

“Sow a thought, reap an action; sow an action, reap
a habit; sow a habit, reap a character;
sow a character, reap a destiny.”
STEPHEN R. COVEY,
The 7 Habits of Highly Effective People

“One hand washes the other” – Seneca the younger

high impact negotiations
Negotiation, as defined in the dictionary, is, a discussion aimed at reaching an agreement. And much of success in business comes from being able to negotiate deals that leave both parties feeling satisfied. This involves treating the negotiation primarily as a ‘problem solving’ activity, as opposed to a competition to be won or lost. This is the ‘classic’ win/win scenario from the games theory models of the 1940’s. Win/Win deals mean that people are more likely to keep their promises because they feel that they gain from the arrangements that have been made. Win/Win deals also make repeat business more likely, because both sides start to trust each other and are ready to compromise to make sure that they both continue to gain from the relationship. In fact a study by Professor Gerald R. Williams (Harvard Law School dispute colloquium 1983) found that 97% of negotiators in his study who adopted a cooperative problem solving approach were rated as being effective, as opposed to 67% for people who adopted an adversarial stance.

But of course there are many competitive situations where one party would like to take advantage of the other and create a Win/Lose deal. Effective Negotiators understand this and so have the capability to work collaboratively (their preferred way of operating) while also being able to ‘defend themselves’ against hostile or predatory behaviour. With that in minds we’ll cover in this article:

  • Four negotiation principles
  • Four expert behaviours
  • Dealing with deceitful negotiators
  • The power of conditional language when doing a deal

Four negotiation principles

There is a lot of research that highlights what makes for good negotiation strategy, and amongst that research we can highlight four ‘big’ ideas: Building Trust; The Anchoring Concept; Interests not Positions; The Settlement Range (BATNA’s and ZOPA’s).

Building trust

Psychological research shows that ‘behaviour breeds behaviour’ i.e. we respond to other people’s actions with similar actions e.g. if someone treats us with respect, we tend to respond in kind, but If they seem (say) ‘guarded’ and cautious, we are likely to behave that way ourselves.  So good negotiators (wherever possible) take time to get to know the other party before they begin to negotiate in order to build a cooperative atmosphere e.g. by meeting for an informal coffee or lunch; but even a few minutes of small talk before starting the meeting can help. For example, Northwestern University School of Law Professor Janice Nadler found that negotiators who spent five minutes chatting on the phone—before negotiating —felt more cooperative toward their counterparts, shared more information, made fewer threats, than did pairs of negotiators who jumped straight into discussing the deal.

Of course it would be naive to assume that a ‘trusting relationship’ will exist just because you’ve engaged in some small talk, so skilled negotiators also do their homework on the other party’s past business dealings, corporate culture, and interests.National culture also comes into play when building trust. For example some cultures need a protracted period of confidence building, often based around meeting for dinner or drinks, e.g. to build a relationship with a Japanese company up to two years of contact during which friendship, ‘respect’, politeness, and ‘sincerity’ is established may be required; whereas other cultures prefer to get to business straight away and like a measure of plain speaking e.g. Holland.

Another key trust building technique is to highlight the concessions you’re making to the other side. A common negotiation error is to make concessions without explaining the ‘cost’ of that concession, and as a consequence the concessions go unappreciated and unreciprocated. So showing that you are prepared to do something that would be difficult/embarrassing/consequential is important, even (or maybe especially) in those instances where there is no financial number that can be placed on it.

The Anchoring concept

‘Anchoring’ describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.   Once an ‘anchor’ has been set, e.g. a price has been quoted, then it is quite difficult to move too far away from that initial start point. So it’s usually best to put your offer on the table first (i.e. set the anchor) and to make sure that you have a ‘bold’ initial start point. It also pays to be aware of this ‘psychological bias’ and to consciously and actively act to defuse any ‘unhelpful’ anchor points set by the other side.

Interest not positions

In negotiation theory an ‘Position’ is ‘what’ someone wants (it’s the thing they are asking for) and an ‘Interest’ is ‘why’ he or she wants that thing. The significance of this is concept is that there is usually only one way of satisfying a position – and that’s to give in to it – but there are typically many ways of satisfying an interest. This matters because the more options we can generate the more likely we are to find a way of doing things that work for both parties.  For example someone might ask a car dealer for a Porsche 944 (a position that gives one way of meeting their requirements) but if their interest is in owning a sports car then more options become available (e.g. Jaguar, BMW, Ferrari, Aston Martin etc.) And maybe the car dealer doesn’t have a Porsche in stock but can offer a good deal on a Jaguar. So effective negotiators ask, “Why is that important to you?”

Settlement range

Expert negotiators know what their goals are.  They also know what they are willing to give to the other side to get their goals.  As part of this they have clear view of what offer they will open with, what they are prepared to concede on and what they will absolutely refuse to do. This assessment is based on a solid grasp of the strengths and weaknesses of their position and of their view of the other side’s situation. This is known as building a ‘settlement range’. (Of course if the two settlement ranges – yours and theirs – don’t overlap then a deal is going to be hard to reach!)   At Harvard Business School they describe this overlapping range as the ZOPA – Zone Of Possible Agreement.

Also Ury, Patton and Fischer in their classic text on negotiation (Getting to Yes) highlight the importance of the BATNA when defining the settlement ranges. The BATNA is the ‘Best Alternative To a Negotiated Agreement’ i.e. what would you do if you walk away from the deal? The better your ‘no deal’ option, then the more ‘bullish’ you can afford to be during negotiation. But remember the other side also has their own ‘no deal’ fallback position and it might be even better then yours! It’s worth highlighting that the ‘best alternative’ is a robust and properly researched option – not something that ‘might be possible’, or something that you ‘hope’ to do if the deal falls apart.  The BATNA concept is topical in light of the British Prime Minister’s stated position on Brexit i.e.  ‘that no deal is better than a bad deal’. Her critics on this point (of whom I’m one) say that this is actually not a true BATNA, because the analysis of what is likely to happen in the event of not reaching agreement with the EU hasn’t been fully examined and explored.

Four expert behaviours

In 1978 Neil Rackham and John Carlisle published a seminal study into the behaviors of expert negotiators in the Journal of European Industrial Training. They defined good negotiators as people who: routinely came to an agreement; made deals that were implemented successfully; and left people happy to negotiate with them again. The study provided a wealth of research based data into what constitutes effective negotiators behaviors, including the information that great negotiators:

  1. Focus on the common ground – they don’t ignore difficulties but they start by emphasizing what the areas of agreement are. They also remind people of what’s in each other’s mutual interest and what has already been agreed as the negotiation unfolds. They do this three times as much as average negotiators.
  2. Ask Questions – they explore the other person’s point of view and seek to understand their requirements and what room they have for manoeuvre. They do this twice as much as average negotiators.
  3. Behaviour label (explain what you’re going to do before you do it) – they make what they want to happen clear in order to (i) create a sense of fairness and order and (ii) to slow the conversation down slightly, which creates time to think. For example they might label their behaviour by saying; “I’d like to ask you a question” or, “I have a proposal for you”, or “I’ll explain what we need to get from this deal, and then make a suggestion for how we think you can support us, does that make sense?” They do this four times as much as average negotiators.
  4. Summarise – they take the time to slow down the pace of the negotiation and give themselves (and the other party) time to think. Summarising also helps to clarify what’s been agreed and what is still at issue. They do this twice as much as average negotiators.

Dealing with the deceitful negotiator

Not all negotiators take a Win/Win approach. Some are very competitive and some tell lies, sometimes directly, but more often by omission (i.e. by not offering relevant facts). So effective negotiators are adept at asking detailed questions, spotting evasion, noticing vague responses and reading body language. A study by Schweitzer and Croson found that 61% of negotiators gave an honest answer when asked directly and specifically about information that weakened their position (compared to 0% of those not asked directly).But be warned, 39% of the negotiators simply lied. When people are telling lies they often avoid answering the question they’ve been asked.  A study by Rogers & Norton (Journal Experimental Psychology, 2011) found listeners usually don’t notice these evasive answers, so it’s a tactic that works well for the deceitful negotiator. One counter measure is to have a list of questions on a pad; leaving space next to them to write down the answers you’ve been given. It’s then possible to take a few moments after each response to consider whether you’ve actually been given the information you wanted.

The power of conditional language

Conditional language is the bedrock of effective negotiation i.e. any proposed action is reliant on something else (i.e. if X then Y). E.g.  “if you reduce the price by 5% then I will sign the contract.” Or “if you want a lower price, then I need you to buy a bigger quantity.” This is important because it builds ‘give and take’ or symmetry into the conversation. So no concession of any substance is given for free; there is always a ‘quid pro quo’ hardwired into the structure of the language being used. And if the other side doesn’t reduce the price by 5% then the offer of signing the contract is void.

Conditional language can also be applied to the challenge of addressing differences of opinion about what the future might hold e.g. the seller of a business anticipates rapid, on-going sales growth and so wants a high price for their company, but the buyer is more pessimistic about future revenue streams etc. This can usually be addressed by including a contingency in the deal (i.e. using the if X then Y format) e.g. “the price for the company is €100,000,000 but if sales reach X over the next three years then an additional €10,000,000 will be paid.”

Conditionality can also be used to deal the issue of ‘events’ causing agreements to become unworkable or unprofitable over time.  Often these events will be unforeseen e.g. a change in legislation, an unexpectedly large shift in exchange rates, a new technology appears etc. So savvy negotiators make sure they have a ‘break clause’ in their deals, so that existing terms can be revisited as and when economic conditions change i.e. if we feel there is a change in circumstances then we have the right to reassess the terms after a two-year period.

What’s next?

Reflect on how you handle your negotiations at present. Do you plan thoroughly?  Do you think about your settlement range and BATNA? Are you focused on making sure that the other side also get something from doing the deal? (I.e. you adopt a problem solving mind-set.) What improvements could you make to how you negotiate?

Read (or re-read) …the classic negotiation text… Getting to Yes by Ury, FryPatton (Houghton Mifflin Harcourt)

Watch… this two minute clip of the prize wining psychologist  Daniel Kahneman giving an overview of the power of anchoring.

Consider sending your deal makers on our two-day, Advanced  Negotiation Skills Course (which looks in detail at planning strategies, influencing skills and breaking deadlocks).

We also have a half-day workshop on High Impact Negotiations, which is a great way of ensuring people have a grasp of the key elements of making good deals…

If you’re a senior executive maybe a ‘one-to-one’ executive coaching session would be a useful option for helping you improve your negotiation skills.

And remember…

“You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.” – J. Paul Getty.