What is the primary driver for architecture in many companies?

In high growth industry like Telecom, Airlines, Finance, Insurance, Retail, Manufacturing, Energy, etc. senior management is constantly looking for innovation and facing the daunting task of aligning the IT systems with business goals to ensure competitiveness without much success. Very often, IT managers find themselves in the middle of chaos wherein the enterprise spending more than $100 million per year to develop and maintain information technology systems which are not able to support changing business requirements. In fact, there is growing need to consolidate the multiple line of business (LOB), face the complexity of rationalizing 70 or 100 plus IT systems and task of mapping their relevance to the enterprise profitability.

"The framework has been applied in Global 2000 organizations* such as
Volkswagen
Boeing
Sprint
Swisscom Mobile
Bank of America
Health Canada
Allstate Insurance
Federal Express
Johnson & Johnson
NCR Corp
Glaxo SmithKline
Volkswagen
General Motors
Canadian Imperial bankof Commerce
note-* based on public domain information
Enterprise Architecture (EA) is a comprehensive framework used to manage and align an organization's business processes, Information Technology (IT) software and hardware, people, operations and projects with the organization's overall strategy. A strong Enterprise Architecture process helps to answer basic questions like: What are the organization's business processes and how is IT supporting those processes?
The Zachman Framework has become de facto standard for Enterprise Architecture for aligning the business goals with Information Technology Investments world over. It's not surprising to note that why Fortune 2000 companies are using this framework as a blueprint for ensuring business improvements, cost reductions as high as $500 mn (and more) and increasing the opportunities to collaborate with partners across the multiple market segments and crossing the geographical boundaries.

With its growing consumer market, India is gearing to become a major base for the productdevelopment firms and new technology companies, This conference will provide an opportunity to the architects, program managers, CIOs and CTOs to share knowledge of innovative architecture which represents the next generation of organizational practice.

In India, very small fractions (<1>

SaaS predictions for 2008 and beyond

Now that 2008 has arrived, along with the New Year's resolutions and the ever-present pundit predictions, I thought it was the perfect timing to dive into what Saugatuck Technology just reported as being their Software-as-a-Service (SaaS) predictions, highlighting five key trends for 2008 and beyond:

SaaS platforms and marketplaces will begin to proliferate, becoming a significant channel opportunity for vendors, as well as a key means by which users will gain access to SaaS solution capabilities.

SaaS is becoming an international phenomenon, driven by both local demand as well as large multi-nationals who are adopting SaaS business solutions on a global basis. While US SaaS adoption is clearly going “mainstream”, Europe and Asia are only now beginning to experience the steep adoption ramp that the US has witnessed over the past two years. Whereas average US market growth rates will likely slow into the 35-40 percent range in 2008, European market growth rates should exceed 60-70 percent next year.

SaaS merger & acquisition activity will explode. No doubt a serious feeding frenzy is about to unfold and it could be anticipated that a large number of venture-backed start-ups and emerging SaaS companies would be acquired by either SaaS pure-plays, ISVs hungry to enter the SaaS fray or on-shore & off-shore IT services and BPO providers who are eager to leverage a SaaS model.

Traditional on-premise application ISVs will earnestly begin to fight back. Approximately 15-20 percent of ISVs have already either begun new initiatives or gained access to SaaS assets and development experience through M&A activity. However, over the next 12-24 months, this number is anticipated to rise dramatically, as a tougher economic climate will only exacerbate an already challenged on-premise and traditional perpetual license model.

SaaS development platforms will evolve and 2008 will see explosive growth in the adoption and use of SaaS-based software development platforms and services. Wide availability of open, standardised tools and technologies in subscription-based, on-demand environments will help streamline and reduce the costs of software development and customisation.

Power Negotiations (Part #9)

When You're Negotiating,Money Isn't As Important as You Think

Let me tell you about my pet subject: When you're selling your product or service, money is way down the list of things that are important to the other side.First, we'll talk about something that you may find hard to believe but it's something of which I've become convinced-that people want to spend more, not less, and that the price concerns salespeople more than the people to whom they sell.Then I'll teach you all the things that are more important to people than money.Finally, I'll teach you some techniques to find out how much they'll pay.

People Want To Pay More, Not Less After almost two decades of training salespeople, I have become convinced that price concerns salespeople more than it does the people to whom they sell. I'll go even further than that-I think that customers who may be asking you to cut your price are secretly wishing that they could pay more for your product. Hear me out before you dismiss this as being imbecilic.I was the merchandise manager at the Montgomery Ward store in Bakersfield, California back in 1971. Although Bakersfield was not a large town, the store ranked 13th in volume in a chain of more than 600 stores. Why did it do so well? In my opinion, it was because head office left us alone and allowed us to sell to the needs of the local population.

For example, we did a huge business in home air conditioners because of the outrageously hot summers. In Bakersfield, it's common for it to be 100 degrees at midnight. In those days an average blue-collar home in that city cost around $30,000. The air conditioners that we would install in these homes might cost $10,000 to 12,000. It was very hard for me to get new salespeople started selling in that department because they had a real resistance to selling something that cost more money than they had ever made in a year. They simply didn't believe that anybody would spend $12,000 to put an air conditioner in a $30,000 home. The customers were willing to pay it, as was illustrated by our huge sales volume, but the salespeople weren't willing to support these decisions because they thought it was outrageously expensive.However, if I could get salespeople started to where they began to make big money and they installed air conditioner son their own homes, suddenly they didn't think it was so outrageous any more, and they would dismiss the price objection as if it didn't exist.Beginning stockbrokers have the same problem. It's very hard for them to ask a client to invest $100,000 when they don't know where lunch money is coming from. Once they become affluent, their sales snowball.So I believe that price concerns salespeople more than it concerns any customer. This is demonstrated by the experience of one of my clients who is a designer and supplier of point-of-purchase sales aids and displays. He tells me that if three products are on a shelf in a store-let's say three toasters-and the features of each are described on the carton, the customers will most frequently select the highest price item-unless a salesperson comes along to assist them with the selection. When that happens, the salesperson, who is probably working for minimum wage, is unable to justify spending money on the best and manages to talk the customer down to the low-end or middle-of-the-line toaster.The important element here is the description on the carton.

You must give customers a reason for spending more money, but if you can do that, they want to spend more money, not less. I think that spending money is what Americans do best. We love to spend money. We spend six trillion dollars a year in this country, and if we could walk into a store and find a salesclerk who knew anything about the merchandise, we'd spend seven trillion dollars a year. And that's when we're spending our own hard-earned after-tax dollars. What if you're asking someone who works at a corporation to spend the company's money? There's only one thing better than spending your own money, and that's spending someone else's money. If that weren't enough, remember that corporate expenditures are tax deductible, so Uncle Sam is going to pick up 40 percent of the bill.So, I believe that we've had it all wrong for all these years. When we're trying to sell something to somebody, she doesn't want to spend less money; she wants to spend more.

However, you do have to do two things:
1. You must give her a reason for spending more.
2. You must convince her that she could not have gotten a better deal than the one you're offering her.
That second point is where Power Negotiating comes in because everything I teach is designed to convince the other people that they won the negotiation and that they couldn't have done better.
Let's face it, does what you pay for something really matter? If you're going to buy a new automobile, does it matter if you spend $20,000 or $21,000? Not really, because you'll soon forget what you paid for it, and the slight increase in payments is not going to affect your lifestyle.

What really matters is the feeling that you got the best possible deal.
You don't want to go to work the next morning and have everybody crowded around to admire your new car when somebody says, "How much did you get it for?"You say, "I worked out a terrific deal. I got them down to $21,000.""You paid what?" he replies. "My friend bought one of those, and he paid only $20,000. You should have gone to Main Street Auto Mall." That's what hurts-the feeling that you didn't get the best deal.The objection that every salesperson hears most is the price objection. "We'd love to do business with you, but your price is too high." Let me tell you something about that. It has nothing to do with your price. You could cut your prices 20 percent across the board and you'd still hear that objection. I trained the salespeople at the largest lawn mower factory in the world. You probably own one of their products because they manufacture most of the low-end private label lawn mowers that discount and chain stores sell. Nobody can undercut their production cost on lawn mowers. They have it down to such a science that if you bought one of their mowers at Home Depot and you tipped the kid who carries it to your car a dollar; the kid made more on the lawn mower than the factory did. That's how slim their profit margins are. However, when I asked them to tell me the number one complaint they hear from the buyers at stores, guess what they told me? You got it. "Your prices are too high."You hear that complaint all the time because the people you're selling to study negotiating skills too. They meet in groups at their conventions and sit around in the bars saying things like, "Do you want to have fun with salespeople? Just let them go through their entire presentation. Let them take all the time they want. Then when they finally tell you how much it costs, lean back in your chair, put your feet up on the desk and say, 'I'd love to do business with you, but your prices are too high.' Then try not to laugh as they stammer and stutter and don't know what to say next."Instead of letting this kind of thing work you up into a sweat, adopt the attitude that negotiating is a game.

You learn the rules of the game, you practice, practice, practice until you get good at it, and then you go out there and play the game with all the gusto you can muster.

Negotiating is a game that is fun to play when you know what you're doing and have the confidence to play it with vigor.

The next time you're trying to get somebody to spend money remember that they really want to spend more money with you, not less. All you have to do is give them a reason and convince them that there's no way they could get a better deal.

Things That Are More Important Than Money A reporter at a press conference once asked Astronaut Neil Armstrong to relate his thoughts as Apollo 11 approached the moon. He said, "All I could think of was that I was up there in a spaceship built by the lowest bidder." A cute line, but he was falling prey to a popular misconception that the government must do business with anybody who bids the lowest price. Of course, that's not true, but it's amazing how many people believe it.

I hear it all the time at my Secrets of Power Negotiating seminars: "What can we do when we have to deal with the government? They have to accept the lowest bid."I once found myself sitting next to a Pentagon procurement officer on a flight to the East Coast, and I raised this point with him. "All the time I hear that the government has to buy from the lowest bidder. Is that really true?""Heavens no," he told me. "We'd really be in trouble if that were true. Cost is far from the top of the list of what's important to us. We're far more concerned with a company's experience, the experience of the workers and the management team assigned to the product, and their ability to get the job done on time.

The rules say that we should buy from the lowest bidder who we feel is capable of meeting our specifications. If we know that a particular supplier is the best one for us, we simply write the specifications to favor that supplier."Of course, that is the key to selling to government agencies, whether it is the city, county, state, or federal government. If you want to do business with any level of government, you should become known as the most knowledgeable person in your industry, so that when the agency starts to prepare bid specifications, they welcome your advice on what they should specify. Fortunately, the trend is away from this type of direct bidding and toward the government agency hiring a private sector project manager to supervise the work. By inserting this middle person, they avoid the obligation to let bids and instead let the middle person negotiate the best deal.So even with the federal government, price is far from the most important thing.

When you're dealing with a company that doesn't have legal requirements to put out a request for bids, it's far from the top of the list.

Just for the fun of it, review the following list of things that are probably more important than price to buyers.

• The conviction that they are getting the best deal you're willing to offer.
• The quality of the product or service. This is an interesting one because I frequently hear from salespeople that they sell an item that has become a commodity, and it doesn't matter which source the buyer uses and that the buyer wants only the lowest price. Baloney. If that were true 90 percent of companies supplying such products or services would be out of business. If that were true, the only company that could exist in the market place would be the one offering the lowest price, and that's a nonsensical proposition.
• The terms that you offer. Many large companies make more on the financing of their product than they do the sale of the product. I recently leased a top-of-the-line luxury automobile and became convinced that making the car was only a small part of what this company did. The real money was in financing the lease or the purchase.
• The delivery schedule that you offer. Can you get it to them when they need it and be counted upon to keep on doing that? Do you offer a just-in-time delivery system? Are you willing to let them warehouse the product and bill them as they use it?
• The experience you have in delivering the product or service. Are you familiar with their type of company and the way they do business? Are you comfortable with that kind of relationship?
• The guarantees that you offer and, in general, how well you stand behind what you do. I once paid several hundred dollars to buy a product from a Sharper Image store. After a few months, a part on it broke, and I called their 800 number to see if they would take care of the problem. After listening to me only long enough to understand what the problem was, the operator said, "If you'll give me your address I'll FedEx a replacement part to you."I said, "Don't you need to know when and where I bought it? I'm not sure that I can find my receipt.""I don't need to know any of that," he told me. "I just want to be sure that you're happy with what you bought." When a company stands behind what they do to that extent, am I really going to worry about whether they have the lowest price or not? Of course not.
• Return privileges. Will you take it back if it doesn't sell? Will you inventory their stock and do that automatically for them?o Building a working partnership with you and your company. The old adversarial relationship between vendor and customers is disappearing as astute companies realize the value of developing a mutually beneficial partnership with their suppliers.
• Credit. A line of credit with your company may be more important than price, especially to a start-up company or in an industry where cash flow is cyclical, and you could take up the slack during the lean months.o Your staff. When the contract calls for something to be made (aerospace, construction) or a service to be performed (legal, audit or accounting work, computer services) other factors may be more important than price:
• The quality of the workers that you will assign to the job.The level of management that you will assign to oversee the work.
• The ability and willingness to tailor your product and packaging to their needs.
• The respect that you will give them. Many times a company will move from a large vendor to a smaller one because they want to be a substantial part of the vendor's business to have more leverage.
• Peace of mind. AT&T keeps my telephone business although they are more expensive than Sprint and MCI and have never pretended that they aren't. I stay with them because the service has been trouble free and simple to use for many years, and I have more important things concerning me than switching long distance companies to save a few pennies a call.
• Reliability. Can they trust that the quality of your product and service will stay high?
  Finding Out How Much a Seller Will TakeNow let's look at some techniques to find out the seller's lowest price. When you are buying, the negotiating range of the seller ranges from the wish price (what they're hoping you'll pay) all the way down to the walk-away price (at anything less that this they will not sell at all).

The same is true in reverse with the buyer. How do we uncover the seller's walk-away price? Let's say that your neighbor is asking $15,000 for his pick-up truck.

Here are some techniques you can use to uncover his lowest price.

• Ask. That may seem incredibly naive, but if he's not a good negotiator, he may just tell you what's on his mind. Of course, a Power Negotiator won't fall for that, but many people will. If he's a Power Negotiator, he will automatically turn the tables on you by saying, "I think $15,000 is a very fair price, but if you want to make me an offer somewhere close to that, I'll talk it over with my wife (Higher Authority-see Chapter 7). What is the best price you would offer me?"Of course, the way that you ask for his lowest price makes a big difference.
• Try these approaches:"I'm really interested only in a pick up truck for occasional use, not one as fine as yours. I'm looking at one that the owner's asking only $5,000 for. However, I thought I'd be fair to you and ask you what the least you'd take would be."Or the Reluctant Buyer approach (see Chapter 5): After spending a lot of time looking it over and asking questions you say, "I really appreciate all the time you've taken with me on this, but unfortunately its not what I was looking for. But I wish you the best of luck with it." Then, when you're halfway into your car to leave you say, "Look, I really want to be fair to you because you spent so much time with me, so just to be fair to you, what is the very lowest price you would let it go for?"
• Drop out of contention but tell him you have a friend who might be interested. You might say, "Thanks for showing it to me but it's really not what I'm looking for. However, I do have a friend who's looking for something like this, but he doesn't have much money. What's the very least you'd take?"
• Nibble for a finder's fee. "If my friend did buy it from you, would you give me a $500 finder's fee?"
• Offer something in return to see if it will cause them to lower the price. "Would you take less if I let you borrow it once in a while?"
• Have other people make super-low offers to lower the expectation of the seller. This is unethical of course, but I'll tell you about it so that you will recognize it when it's used against you. If the seller has high hopes of getting $15,000 for his truck, your offer of $10,000 may sound like an insult. However if he's had only two offers so far, one for $7,000 and the other for $8,000, when you come along and offer him $10,000, he may jump at it.
• Make a low offer subject to the approval of a higher authority. "My buddy and I are going in on this so I'll have to run this by him, but would you take $10,000?"

Now let's look at some techniques that a seller could use to find out how much a buyer is willing to pay. Let's say that you sell switches to computer manufacturers.

Here are some techniques you could use:

• Raise their top offer by hypothesizing what your higher authority might be willing to do. Perhaps they buy similar switches now for $1.50 and you're asking $2.00. You might say, "We both agree we have a better quality product. If I could get my boss down to $1.75, would that work for you?" Protected by Higher Authority, it doesn't mean that you have to sell them to him for $1.75. However, if he acknowledges that $1.75 might be workable, you have raised his negotiating range to $1.75 so that you're only 25¢ apart instead of 50¢.
• Determine their quality standards by offering a stripped down version. "We may be able to get down below $1.50 if you don't care about copper contacts. Would that work for you?" In this way you probably get them to acknowledge that price isn't their only concern. They do care about quality.
• Establish the most they can afford by offering a higher quality version. "We can add an exciting new feature to the switch, but it would put the cost in the $2.50 range." If the buyer shows some interest in the feature, you know that they could pay more. If he or she says, "I don't care if it's diamond plated. We can't go over $1.75," you know that fitting the product to a price bracket is a critical issue.
• Remove yourself as a possible vendor. This disarms the buyer and may cause him to reveal some information that he wouldn't if they thought you were still in the game. You say, "Joe, we love doing business with you, but this item is just not for us. Let's get together on something else later." Having disarmed Joe in this way, a little later, you can say, "I'm sorry we couldn't work with on the switches, but just between you and me what do you realistically think you can buy them for?" He may well say, "I realize that $1.50 is a lowball figure, but I think I'll get somebody to come down to around $1.80."

As you can see from all we've talked about here, there's a lot to be said about the subject of price.

Power Negotiators know not to exacerbate the price problem by assuming that price is uppermost in the other person's mind. Also it is ludicrous to say that what you sell is a commodity, and you have to sell for less than your competitor's price for you to get the sale.

Power Negotiations (Part #8)

Power Negotiators Understand the Importance of Gathering Information

Henry Kissinger was once asked if he already knew what the Soviets would propose at an upcoming summit meeting. He said, "Oh, absolutely-no question about it. It would be absolutely disastrous for us to go into a negotiation not knowing in advance what the other side was going to propose." Can you imagine the cost of getting that kind of information? The budget of the C.I.A. is top secret, but experts think it is almost $4 billion a year, even now that the Cold War is over. So, governments think it's important enough to spend that kind of money. Doesn't it make sense that we at least spend a little time to find out more about the other side, before we go into negotiations? Why do countries send spies into other countries? Why do professional football teams study the replays of their opponents' games? Because knowledge is power and the more knowledge one side is able to accumulate about the other, the better chance that side has for victory.If two countries go to war, the country that has the most intelligence about the other has the advantage. That was certainly true in the Persian Gulf War-the C.I.A. spies had photographed every building in Baghdad, and we were able to completely take out their communication systems in the first few bombing runs. If two companies are planning to merge, the company that knows the most will usually end up with the better deal. If two salespeople are vying for an account, the salesperson who knows more about the company and its representatives stands a better chance of being selected for the account.

Despite the obviousness of the important role that information plays in a negotiation, few people spend much time analyzing the other side before starting a negotiation. Even people who wouldn't dream of skiing or scuba diving without taking lessons will jump into a negotiation that could cost them thousands of dollars without spending adequate time gathering the information they should have.

Rule One: Don't be afraid to admit that you don't knowWhy are people reluctant to gather information? Because to find things out, you have to admit that you don't know, and most of us are extraordinarily reluctant to admit that we don't know.So the first rule for gathering information is: Don't be over confident. Admit that you don't know and admit that anything you do know may be wrong.

Rule Two: Don't be afraid to ask the questionI used to be afraid to ask questions for fear that the question would upset the other person. I was one of those people who say, "Would you mind if I asked you?" or "Would it embarrass you to tell me?" I don't do that any more. I ask them, "How much money did you make last year?" If they don't want to tell you, they won't. Even if they don't answer the question, you'll still be gathering information. Just before General Schwarzkopf sent our troops into Kuwait, Sam Donaldson asked him, "General, when are you going to start the land war?" Did he really think that the General was going to say, "Sam, I promised the President that I wouldn't tell any of the 500 reporters that keep asking me that question, but since you asked I'll tell you. At 2.00 AM on Tuesday we're going in"? Of course, Schwarzkopf wasn't going to answer that question, but a good reporter asks anyway. It might put pressure on the other person or annoy him so that he blurts out something he didn't intend to. Just judging the other person's reaction to the question might tell you a great deal.If you want to learn about another person, nothing will work better than the direct question. In my own experience-now that I'm no longer afraid to ask-I've met only a few people who were seriously averse to answering even the most personal questions.
For example, how many people get offended when you ask them, "Why were you in hospital?" Not very many.It's a strange fact of human nature that we're very willing to talk about ourselves, yet we're reticent when it comes to asking others about themselves. We fear the nasty look and the rebuff to a personal question. We refrain from asking because we expect the response, "That's none of your business." Yet how often do we respond that way to others?When you get over your inhibitions about asking people, the number of people willing to help you will surprise you. When I wanted to become a professional speaker, I called up a speaker I admired, Danny Cox, and asked him if I could buy him lunch. Over lunch, he willingly gave me a $5,000 seminar on how to be successful as a speaker. Whenever I see him today, I remind him of how easy it would have been for him to talk me out of the idea. Instead, though, he was very encouraging. It still astounds me how people who have spent a lifetime accumulating knowledge in a particular area are more than willing to share that information with me without any thought of compensation.It seems even more incredible that these experts are very rarely asked to share their expertise. Most people find experts intimidating, so the deep knowledge that they have to offer is never fully used. What a senseless waste of a valuable resource-all because of an irrational fear.

Rule Three: Ask open-ended questionsPower Negotiators understand the importance of asking and of taking the time to do it properly. What's the best way to ask? Rudyard Kipling talked about his six honest serving men. He said, I keep six honest serving-men. (They taught me all I knew); Their names are What and Why and When and How and Where and Who. Of Kipling's six honest serving men, I like Why the least. Why can easily be seen as accusatory. "Why did you do that?" implies criticism. "What did you do next?" doesn't imply any criticism. If you really need to know why, soften it by rephrasing the question using what instead: "You probably had a good reason for doing that. What was it?" Learn to use Kipling's six honest serving men to find out what you need to know.

You'll get even more information if you learn how to ask open-ended questions. Close-ended questions can be answered with a yes or a no or a specific answer. For example, "How old are you?" is a closed-end question. You'll get a number and that's it. "How do you feel about being your age?" is an open-ended question. It invites more than just a specific answer response. "When must the work be finished by?" is a closed-ended question. "Tell me about the time limitations on the job," is an open-ended request for information.

Rule Four: Where you ask the question makes a big differencePower Negotiators also know that the location where you do the asking can make a big difference. If you meet with people at their corporate headquarters, surrounded by their trappings of power and authority and their formality of doing business, it's the least likely place for you to get information.People in their work environment are always surrounded by invisible chains of protocol-what they feel they should be talking about and what they feel they shouldn't. That applies to an executive in her office, it applies to a salesperson on a sales call, and it applies to a plumber fixing a pipe in your basement. When people are in their work environments, they're cautious about sharing information. Get them away from their work environments and information flows much more freely. And it doesn't take much. Sometimes all that it takes is to get that vice-president down the hall to his company lunchroom for a cup of coffee. Often that's all it takes to relax the tensions of the negotiation and get information flowing. And if you meet for lunch at your country club, surrounded by your trappings of power and authority, where he's psychologically obligated to you because you're buying the lunch, then that's even better.

Rule Five: Ask other people-not the person with whom you will negotiateIf you go into a negotiation knowing only what the other side has chosen to tell you, you are very vulnerable. Others will tell you things that the other side won't, and they will also be able to verify what the other side has told you.Start by asking people who've done business with the other side already. I think it will amaze you-even if you thought of them as competition-how much they're willing to share with you. Be prepared to horse trade information. Don't reveal anything that you don't want them to know, but the easiest way to get people to open up is to offer information in return. People who have done business with the other side can be especially helpful in revealing the character of the people with whom you'll be negotiating. Can you trust them? Do they bluff a great deal in negotiations or are they straightforward in their dealings? Will they stand behind their verbal agreements or do you need an attorney to read the fine print in the contracts?Next, ask people further down the corporate ladder than the person with whom you plan to deal. Let's say you're going to be negotiating with someone at the main office of a nationwide retail chain. You might call up one of the branch offices and get an appointment to stop by and see the local manager. Do some preliminary negotiating with that person. He will tell you a lot, even though he can't negotiate the deal, about how the company makes a decision, why one supplier is accepted over another, the specification factors considered, the profit margins expected, the way the company normally pays, and so on. Be sure that you're "reading between the lines" in that kind of conversation. Without you knowing it, the negotiations may have already begun. For example, the Branch Manager may tell you, "They never work with less than a 40 percent markup," when that may not be the case at all. And never tell the Branch Manager anything you wouldn't say to the people at his head office. Take the precaution of assuming anything you say will get back to them.Next, take advantage of peer-group sharing. This refers to the fact that people have a natural tendency to share information with their peers. At a cocktail party, you'll find attorneys talking about their cases to other attorneys, when they wouldn't consider it ethical to share that information with anyone outside their industry. Doctors will talk about their patients to other doctors, but not outside their profession.Power Negotiators know how to use this phenomenon because it applies to all occupations, not just in the professions. Engineers, controllers, foremen, and truck drivers; all have allegiances to their occupations, as well as their employers. Put them together with each other and information will flow that you couldn't get any other way.If you're thinking of buying a used piece of equipment, have your driver or equipment supervisor meet with his counterpart at the seller's company.If you're thinking of buying another company, have your controller take their bookkeeper out to lunch.You can take an engineer from your company with you to visit another company and let your engineer mix with their engineers. You'll find out that unlike top management-the level at which you may be negotiating-engineers have a common bond that spreads throughout their profession, rather than just a vertical loyalty to the company for which they currently work. So all kinds of information will pass between these two. Naturally, you have to watch out that your person doesn't give away information that could be damaging to you. So be sure you pick the right person. Caution her carefully about what you're willing to tell the other side and what you're not willing to tell-the difference between the open agenda and your hidden agenda. Then let her go to it, challenging her to see how much she can find out. Peer-group information gathering is very effective.

Power Negotiators always accept complete responsibility for what happens in the negotiations.
Poor negotiators blame the other side for the way they conducted themselves.

Many years ago, I was conducting a negotiating seminar in the San Fernando Valley, and comedian Slappy White was in the audience. During the break, I told him how much I admired comedians. "It must be fun to be successful like you," I told him, "but coming up through those comedy clubs with all their hostile audiences must be sheer hell.""Roger," he told me, "I've never had a bad audience.""Oh, come on, Slappy," I replied, "When you were starting out, you must have had some awful audiences.""I've never had a bad audience," he repeated. "I've only had audiences that I didn't know enough about."As a professional speaker, I accept that there is no such thing as a bad audience, there are only audiences about whom the speaker doesn't know enough. I've built my reputation on the planning and research that I do before I'll get up in front of an audience.As a negotiator, I accept that there's no such thing as a bad negotiation. There are only negotiations in which we don't know enough about the other side.

Information gathering is the most important thing we can do to assure that the negotiations go smoothly.

Power Negotiations (Part #7)

How to Negotiate
When the Other Person Tells You That They Don't Have the Authority to Decide

One of the most frustrating situations you can run into is trying to negotiate with the person who claims that he or she doesn't have the authority to make a final decision. Unless you realize that this is simply a negotiating tactic that's being used on you, you have the feeling that you'll never get to talk to the real decision-maker. When I was president of the real estate company in California, I used to have salespeople coming in to sell me things all the time: advertising, photocopy machines, computer equipment, and so on. I would always negotiate the very lowest price that I could, and then I would say to them, "This looks fine. I do just have to run it by my board of directors, but I'll get back to you tomorrow with the final okay."The next day I could get back to them and say, "Boy, are they tough to deal with right now. I felt sure I could sell it to them, but they just won't go along with it unless you can shave another couple of hundred dollars off the price." And I would get it. There was no approval needed by the board of directors, and it never occurred to me that this deception was underhanded. I and the people with whom you deal see it as well within the rules by which one plays the game of negotiating.So when the other person says to you that they have to take it to the committee, or the legal department, it's probably not true, but it is a very effective negotiating tactic that they're using on you. Fortunately, Power Negotiators know how to handle this challenge smoothly and effectively.Your first approach should be trying to remove the other person's resort to higher authority before the negotiations even start, by getting him to admit that he could make a decision if the proposal was irresistible. This is exactly the same thing that I taught my real estate agents to say to the buyers before putting them in the car, "Let me be sure I understand, if we find exactly the right property for you today, is there any reason why you wouldn't make a decision today?" It's exactly the same thing that the car dealer will do to you when, before he lets you take it for a test drive, he says, "Let me be sure I understand, if you like this car as much as I know you're going to like it, is there any reason why you wouldn't make a decision today?" Because they know that if they don't remove the resort to higher authority up front, then there's a danger that under the pressure of asking for a decision, the other person will invent a higher authority as a delaying tactic. Such as, "Look, I'd love to give you a decision today, but I can't because my father-in-law has to look at the property (or the car), or Uncle Joe is helping us with the down payment and we need to talk to him first." One of the most frustrating things that you encounter is taking your proposal to the other person and having her say to you, "Well, that's fine. Thanks for bringing me the proposal. I'll talk to our committee (or our attorney or the owners) about it and if it interests us we'll get back to you." Where do you go from there? If you're smart enough to counter the Higher Authority Gambit before you start, you can remove yourself from that dangerous situation. So before you present your proposal to the other person, before you even get it out of your briefcase, you should casually say, "Let me be sure I understand. If this proposal meets all of your needs (That's as broad as any statement can be, isn't it?), is there any reason why you wouldn't give me a decision today?" It's a harmless thing for the other person to agree to because the other person is thinking, "If it meets all of my needs? No problem, there's loads of wriggle room there." However, look at what you've accomplished if you can get them to respond with, "Well, sure if it meets all of my needs, I'll give you an okay right now." Look at what you've accomplished:1. You've eliminated their right to tell you that they want to want to think it over. If they say that, you say, "Well, let me go over it one more time. There must be something I didn't cover clearly enough because you did indicate to me earlier that you were willing to make a decision today." 2. You've eliminated their right to refer it to a higher authority. You've eliminated their right to say, "I want our legal department to see it, or the purchasing committee to take a look at it."

What if you're not able to remove their resort to higher authority? I'm sure that many times you'll say, "If this proposal meets all of your needs is there any reason why you wouldn't give me a decision today?" and the other person will reply, "I'm sorry, but on a project of this size, everything has to get approved by the specifications committee. I'll have to refer it to them for a final decision."

Here are the three steps that Power Negotiators take when they're not able to remove the other side's resort to higher authority:

Step number one-appeal to their ego. With a smile on your face you say, "But they always follow your recommendations, don't they?" With some personality styles that's enough of an appeal to his ego, that he'll say, "Well, I guess you're right. If I like it, then you can count on it." But often they'll still say, "Yes, they usually follow my recommendations but I can't give you a decision until I've taken it to the committee." If you realize that you're dealing with egotistical people, try preempting their resort to higher authority early in your presentation, by saying, "Do you think that if you took this to your supervisor, she'd approve it?" Often an ego-driven person will make the mistake of proudly telling you that he doesn't have to get any body's approval.

The second step is to get their commitment that they'll take it to the committee with a positive recommendation. So you say, "But you will recommend it to them-won't you?" There are only two things that can happen at this point. Either she'll say, yes, she will recommend it to them, or she'll say, no she won't-because . . . Either way you've won. Hopefully, you'll get a response similar to, "Yes, it looks good to me, I'll go to bat for you with them." But if that doesn't happen, and instead they tell you that they won't recommend it because, you're still ahead, because any time you can draw out an objection you should say, "Hallelujah" because objections are buying signals. For example, nobody will object to your price unless buying from you interests them. If buying from you doesn't interest them, they don't care how high you price your product or service.For a while I dated a woman who was really into interior decorating. One day she excitedly dragged me down to the Orange County Design Center to show me a couch covered in kidskin. The leather was as soft and as supple as anything I'd ever felt. As I sat there, she said, "Isn't that a wonderful couch?"I said, "No question about it, this is a wonderful couch."She said, "And it's only $12,000."I said, "Isn't that amazing? How can they do it for only $12,000?"She said, "You don't have a problem with the price?""I don't have a problem with the price at all." Why didn't I have a problem with the price? Right. Because I had absolutely no intention of paying $12,000 for a couch, regardless of what they covered it with. Let me ask you this: If buying the couch interested me, would I have a problem with the price? Oh, you had better believe I'd have a problem with the price!Objections are buying signals. We knew in real estate that if we were showing property, and the people were "Ooooing and aaahing" all over the place, if they loved everything about the property, they weren't going to buy. The serious buyers were the ones who were saying, "Well the kitchen's not as big as we like. Hate that wallpaper. We'd probably end up knocking out that wall." Those were the ones who would buy.If you're in sales, think about it. Have you ever in your life made a big sale where the person loved your price up front? Of course not. All serious buyers complain about the price.Your biggest problem is not an objection, it's indifference. I would rather they said to you, "I wouldn't buy widgets from your company, if you were the last widget vendor in the world, because . . ." than have them say to you, "I've been using the same source on widgets for 10 years, and he does fine. I'm just not interested in taking the time to talk about making a change." Indifference is your problem, not objections. Let me prove this to you. Give me the opposite of the word love. If you said hate, think again. As long as they're throwing plates at you, you have something there you can work with. It's indifference that's the opposite of love. When they're saying to you, like Rhett Butler in Gone With the Wind, "Quite frankly, my dear, I don't give a damn." -that's when you know the movie is about over. Indifference is your problem, not objections. Objections are buying signals.So when you say to them, "You will recommend it to them, won't you?" they can either say, yes they will, or no they won't. Either way you've won. Then you can move to step three:

Step Three: The qualified "subject to" close. The "subject to" close is the same one that your life insurance agent uses on you when he or she says, "Quite frankly, I don't know if we can get this much insurance on someone your age. It would be "subject to" you passing the physical anyway, so why don't we just write up the paper work "subject to" you passing the physical?" The life insurance agent knows that if you can fog a mirror during that physical, he or she can get you that insurance. But it doesn't sound as though you're making as important a decision as you really are. The qualified "subject to" close in this instance would be: "Let's just write up the paper work 'subject to' the right of your specifications committee to reject the proposal within a 24-hour period for any specifications reason." Or, "Let's just write up the paper work 'subject to' the right of your legal department to reject the proposal within a 24-hour period for any legal reason."Notice that you're not saying subject to their acceptance. You're saying subject to their right to decline it for a specific reason. If they were going to refer it to an attorney, it would be a legal reason. If they were going to refer it to their CPA, it would be a tax reason and so on. But try to get it nailed down to a specific reason.

So the three steps to take if you're not able to get the other person to waive his or her resort to higher authority are:
1. Appeal to the other person's ego.
2. Get the other person's commitment that he'll recommend it to the higher authority.
3. Use the qualified subject-to close.

Being able to use and handle the resort to higher authority is critical to you when you're Power Negotiating. Always maintain your own resort to higher authority. Always try to remove the other person's resort to a higher authority.

Key points to remember:

• Attempt to get the other person to admit that he could approve your proposal if it meets all of his needs. If that fails, go through the three counter gambits:
• Appeal to his ego.
• Get his commitment that he'll recommend to his higher authority.
• Go to a qualified subject-to close.
• If they are forcing you to make a decision before you're ready to do so, offer to decide but let them know that the answer will be no, unless they give you time to check with your people.
• If they're using escalating authority on you, revert to your opening position at each level and introduce your own levels of escalating authority.

Power Negotiations (Part #6)

If You Need to Put Negotiating Pressure on the Other Side, Try Good Guy/Bad Guy


Good Guy/Bad Guy is one of the best known negotiating gambits.
Charles Dickens first wrote about it in his book Great Expectations. In the opening scene of the story, the young hero Pip is in the graveyard when out of the sinister mist comes a large, very frightening man. This man is a convict, and he has chains around his legs. He asks Pip to go into the village and bring back food and a file, so he can remove the chains. The convict has a dilemma, however. He wants to scare the child into doing as he's asked, yet he mustn't put so much pressure on Pip that he'll be frozen in place or bolt into town to tell the policeman.The solution to the convict's problem is to use the Good Guy/Bad Guy Gambit. Taking some liberty with the original work, what the convict says in effect, is "You know, Pip, I like you, and I would never do anything to hurt you But I have to tell you that waiting out here in the mist is a friend of mine and he can be violent and I'm the only one who can control him. If I don't get these chains off-if you don't help me get them off-then my friend might come after you. So, you have to help me. Do you understand?" Good Guy/Bad Guy is a very effective way of putting pressure on people, without confrontation.

I'm sure you've seen Good Guy/Bad Guy used in the old police movies. Officers bring a suspect into the police station for questioning, and the first detective to interrogate him is a rough, tough, mean-looking guy. He threatens the suspect with all kinds of things that they're going to do to him. Then he's mysteriously called away to take a phone call, and the second detective, who's brought in to look after the prisoner while the first detective is away, is the warmest, nicest guy in the entire world. He sits down and makes friends with the prisoner. He gives him a cigarette and says, "Listen kid, it's really not as bad as all that. I've taken a liking to you. I know the ropes around here. Why don't you let me see what I can do for you?" It's a real temptation to think that the Good Guy's on your side when, of course, he really isn't. Then the Good Guy would go ahead and close on what salespeople would recognize as a minor point close. "All I think the detectives really need to know," he tells the prisoner, "is where did you buy the gun?" What he really wants to know is, "Where did you hide the body?" Starting out with a minor point like that and then working up from there, works very well, doesn't it? The car salesperson says to you, "If you did invest in this car would you get the blue or the gray?" "Would you want the vinyl upholstery or the leather?" Little decisions lead to big ones. The real estate salesperson who says, "If you did invest in this home, how would you arrange the furniture in the living room?" Or, "Which of these bedrooms would be the nursery for your new baby?" Little decisions grow to big decisions.

People use Good Guy/Bad Guy on you much more than you might believe. Look out for it anytime you find yourself dealing with two people. Chances are you'll see it being used on you, in one form or another. For example, you may sell corporate health insurance plans for an HMO and have made an appointment to meet with the Vice-President of Human Resources at a company that manufactures lawn mowers. When the secretary leads you in to meet with the vice president, you find to your surprise that the president of the company wants to sit in and listen in on your presentation.That's negotiating two on one, which is not good, but you go ahead and everything appears to be going along fine. You feel that you have a good chance of closing the sale, until the president suddenly starts getting irritated. Eventually he says to his vice president, "Look, I don't think these people are interested in making a serious proposal to us. I'm sorry, but I've got things to do." Then he storms out of the room. This really shakes you up if you're not used to negotiating. Then the vice-president says, "Wow. Sometimes he gets that way, but I really like the plan that you presented, and I think we can still work this out. If you could be a little more flexible on your price, then I think we can still put it together. Tell you what-why don't you let me see what I can do for you with him?" If you don't realize what they're doing to you, you'll hear yourself say something like, "What do you think the president would agree to?" Then it won't be long before you'll have the vice-president negotiating for you-and he or she is not even on your side.

If you think I'm exaggerating on this one, consider this: Haven't you, at one time or another, said to a car salesperson, "What do you think you could get your sales manager to agree to?" As if the salesperson is on your side, not on theirs? Haven't we all at one time been buying real estate and have found the property we want to buy, so we say to the agent that has been helping us find the property, "What do you think the sellers would take?" Let me ask you something. Who is your agent working for? Who is paying her? It's not you, is it? She is working for the seller and yet she has effectively played Good Guy/Bad Guy with us. So, look out for it, because you run into it a lot.

Power Negotiators use several Counter-Gambits to Good Guy/Bad Guy:o The first Counter-Gambit is simply to identify the Gambit. Although there are many other ways to handle the problem, this one is so effective that it's probably the only one you need to know. Good Guy/Bad Guy is so well known that it embarrasses people when they get caught using it. When you notice the other person using it you should smile and say, "Oh, come on-you aren't going to play Good Guy/Bad Guy with me are you? Come on, sit down, let's work this thing out." Usually their embarrassment will cause them to retreat from the position. o You could respond by creating a bad guy of your own. Tell them that you'd love to do what they want, but you have people back in the head office who are obsessed with sticking to the program. You can always make a fictitious bad guy appear more unyielding than a bad guy who is present at the negotiation.o You could go over their heads to their supervisor. For example, if you're dealing with a buyer and head buyer at a distributorship, you might call the owner of the distributorship and say, "Your people were playing Good Guy/Bad Guy with me. You don't approve of that kind of thing, do you?" (Always be cautious about going over someone's head. The strategy can easily backfire because of the bad feelings it can cause.)o Sometimes just letting the bad guy talk resolves the problem, especially if he's being obnoxious. Eventually his own people will get tired of hearing it and tell him to knock it off.o You can counter Good Guy/Bad Guy by saying to the Good Guy, "Look, I understand what you two are doing to me. From now on anything that he says, I'm going to attribute to you also." Now you have two bad guys to deal with, so it diffuses the Gambit. Sometimes just identifying them both in your own mind as bad guys will handle it, without you having to come out and accuse them.o If the other side shows up with an attorney or controller who is clearly there to play bad guy, jump right in and forestall their role. Say to them, "I'm sure you're here to play bad guy, but let's not take that approach. I'm as eager to find a solution to this situation as you are, so why don't we all take a win-win approach. Fair enough?" This really takes the wind out of their sails.

This Gambit is very, very effective even when everybody knows what's going on. It was how Presidents Carter and Reagan got the hostages out of Iran, wasn't it? You remember that? Carter had lost the election. He was very eager to do something about the Iranian hostage situation before he left the White House and Reagan could take credit for their release. So, he started playing Good Guy/Bad Guy with the Ayatollah. He said to him, "If I were you, I'd settle this thing with me. Don't take a chance on this new team coming into office in January. My goodness, have you taken a look at these guys? The President's a former cowboy actor. The Vice President is the former head of the C.I.A. The Secretary of State is Alexander Haig. These guys are crazier than Englishmen. There's no telling what they might do." Reagan, playing along with it, said, "Hey, if I were you, I'd settle with Carter. He's a nice guy. You're definitely not going to like what I'll have to say about it, when I get into the White House." And sure enough, we saw the hostages being released on the morning of Reagan's inauguration. Of course, the Iranians were aware of Good Guy/Bad Guy, but they didn't want to take a chance that Reagan would follow through with his threats. It demonstrated that these Gambits work even when the other side knows what you're doing. In 1994, Jimmy Carter was again called upon to play the Good Guy when he and Colen Powell went to Haiti to see if they could get General Cedras to give up power without a fight. Powell was there to impress the might of the armed forces upon Cedras. Carter was there to cozy up the dictator, even suggesting he come to Plains, Georgia, and teach a class in Sunday School when the crisis was over.

KEY POINTS TO REMEMBER:

• People use Good Guy/Bad Guy on you much more than you might believe. Look out for it whenever you're negotiating with two or more people.
• It is a very effective way of putting pressure on the other person without creating confrontation.
• Counter it by identifying it. It's such a well-known tactic that when you catch them using it, they get embarrassed and back off.
• Don't be concerned that the other side knows what you're doing.

Even if they do it can still be a powerful tactic. In fact, when you're Power Negotiating with someone who understands all of these Gambits, it becomes more fun. It's like playing chess with a person of equal skill rather than someone whom you can easily outsmart.

Power Negotiations (Part #5)

What To Watch For When the Talking is Over and It's Time to Get the Deal in Writing


Most people think of negotiating as the verbal give and take that takes people from their different wants and needs to a point of agreement. That, of course, is the heart of negotiating but just as important is the transition to the written contract that formalizes the verbal agreement.

Here are the things that Power Negotiators look for as they move toward the written contract:
Don't Let the Other Side Write the ContractIn a typical negotiation, you verbally negotiate the details, then put it into writing later for both parties to review and approve. I've yet to run across a situation where we covered every detail in the verbal negotiation. There are always points that we overlooked when we were verbally negotiating that we must detail in writing. Then we have to get the other side to approve or negotiate the points when we sit down to sign the written agreement-that's when the side that writes the contract has a tremendous advantage over the side that doesn't. Chances are that the person writing the agreement will think of at least half-dozen things that did not come up during the verbal negotiations. That person can then write the clarification of that point to his or her advantage, leaving the other side to negotiate a change in the agreement when asked to sign it.Don't let the other side write the contract because it puts you at a disadvantage.This applies to brief counter proposals just as much as it does to agreements that are hundreds of pages long. For example, a real estate agent may be presenting an offer to the sellers of an apartment building. The seller agrees to the general terms of the offer, but wants the price to be $5,000 higher. At that point either the listing agent who represents the seller or the selling agent who represents the buyer could pull a counter-proposal form out of his or her briefcase and write out a brief counter-offer for the seller to sign. Then the selling agent will present to the buyer for approval. It doesn't have to be complicated: "Offer accepted except that price is to be $598,000," will suffice.If the listing agent writes the counter-offer, however, he or she might think of some things that would benefit her seller. She might write, "Offer accepted except that price to be $598,000. Additional $5,000 to be deposited in escrow upon acceptance. Counter-offer to be accepted upon presentation and within 24 hours."If the selling agent were to write the counter-offer, he might write, "Offer accepted except that price is to be $598,000. Additional $5,000 to be added to the note that the seller is carrying back."These additions are probably not big enough to be challenged by either a seller or a buyer who is eager to complete the transaction; however, they substantially benefit the side who wrote the brief counter-offer. If the person who writes a one-paragraph counter-offer can affect it so much, think how much that person could affect a multi-page contract.Remember that this may not just be a matter of taking advantage of the other side. Both sides may genuinely think that they had reached agreement on a point whereas their interpretations may be substantially different when they write it out.

A classic example of this is the Camp David accord, signed by President Carter, President Anwar Sadat of Egypt, and Prime Minister Menachem Begin of Israel. After 13 frustrating days of negotiating at Camp David where they all felt until the last moment that their efforts were futile, they reached what they thought was a breakthrough to agreement. Excitedly they flew helicopters to Washington and with massive publicity signed the accord. In the East Room, the normally unemotional Menachem Begin turned to his wife and said, "Mama, we'll go down in the history books tonight." That may be so, but the truth is that many years later, hardly any of the elements of the agreement had gone into effect. Their enthusiasm led each of them to think that they had reached agreement when they really hadn't.If you are to be the one writing the contract, it's a good idea to keep notes throughout the negotiation and put a check mark in the margin against any point that will be part of the final agreement.

This does two things:
1. It reminds you to include all the points that you wanted.
2. When you write the contract, you may be reluctant to include a point in the agreement unless you can specifically recall the other side agreeing to it.

Your notes will give you the confidence to include it even if you don't remember it clearly.If you have been team negotiating, be sure to have all the other members of your team review the contract before you present it to the other side. You may have overlooked a point that you should have included or you may have misinterpreted a point. It's common for the lead negotiator to let her enthusiasm overwhelm her to a point that she feels that the other side agreed to something when it was less than clear to more independent observers.I'm not a big believer in having attorneys conduct a negotiation for you because so few of them are good negotiators. They tend to be confrontational negotiators because they're used to threatening the other side into submission, and they are seldom open to creative solutions because their first obligation is to keep you out of trouble, not make you money. Remember that in law school, they are not taught how to make deals, only how to break deals. In our litigious society there isn't much point in making an agreement that won't hold up in court, however, so it's a good idea to have the agreement approved by your attorney before you have it signed. In a complicated agreement what you prepare and have the other side sign may be no more than a letter of intent. Have the attorneys work on it later to make it a legal document. It's better that you devote your energy to reaching agreement.If you have prepared an agreement that you think the other side may be reluctant to sign, you may be smart to include the expression "Subject to your attorney's approval," to encourage them to sign it.Once the verbal negotiations are over, get a memorandum of agreement signed as quickly as possible. The longer you give them before they see it in writing, the greater the chances that they'll forget what they agreed to and question what you've prepared.Also, make sure they understand the agreement. Don't be tempted to have them sign something when you know they're not clear on the implications. If they don't understand and something goes wrong, they will always blame you. They will never accept responsibility. I find it helpful to write out the agreement I want before I go into the negotiations. I don't show it to the other side, but I find it helpful to compare it to the agreement that we eventually reach, so that I can see how well I did. Sometimes it's easy to get excited because the other side is making concessions that you didn't expect to get. Then your enthusiasm carries you forward and you agree to what you feel is a fantastic deal. It may be a good deal, but unless you have clearly established your criteria up front, it may not be the deal that you hoped to get.Power Negotiators know that you should always try to be the one that writes the contract. When the verbal negotiations are over, it's time for someone to put everything in writing, and the person who gets to put it in writing has definite power in the negotiations. There are bound to be little details that you didn't think of when you were verbally negotiating that need to be specified in the written contract. If you're the one who gets to write the contract, you can write those to your favor. Then it's up to the other person to negotiate them out when it comes to signing the contract. So, try to be the one who writes the contract. I'll say to the other people, "Look, we need to put this down in writing. But let's not go to a lot of expense on this. I have an attorney on retainer, it won't cost either one of us anything for me to have my attorney do it." Even if I had to pay the attorney to do it, I still think I'd be better off to be the one who is writing the contract.

Read the Contract Every TimeIn this age of computer-generated contracts, it's a sad fact that you have to reread a contract every time it comes across your desk.In the old days, when contracts were typewritten, both sides would go through it and write in any changes, and then each negotiator would initial the change. You could glance through the contract and quickly review any change that you had made or to which you had agreed. Nowadays with computer generated contracts we're more likely to go back to the computer, make the change, and print out a new contract. Here's the danger. You may have refused to sign a clause in a contract. The other side agrees to change it and says they'll send you a corrected contract for your signature. When it comes across your desk, you're busy, so you quickly review it to see that they made the change you wanted and then turn to the back page and sign it. Unfortunately, because you didn't take the time to reread the entire contract, you didn't realize that they had also changed something else. Perhaps it was something blatant such as changing "F.O.B. factory" to "F.O.B. job site." Or it may be such a minor change in wording that you don't discover it until years later when something goes wrong, and you need the contract to enforce some action. By then, you may not even remember what you agreed to, and you can only assume that because you signed it you must have agreed to it.Yes, I agree with you-you have a wonderful case for a lawsuit that the other side defrauded you-but why expose yourself to that kind of trouble? In this age of computer-generated contracts, you should read the contract all the way through, every time it comes across your desk for signature.

People Believe What They See In WritingThe printed word has great power over people. Most people believe what they see in writing, even if they won't believe it when they just hear about it. The Candid Camera people did a stunt to prove that a number of years ago -- you may remember seeing it on television. They posted a sign on a road next to a golf course in Delaware that said, "Delaware Closed." Allen Fount stood by the sign in a rented trooper's uniform. He wasn't allowed to speak to the people as they came up, only point up at the sign. What happened amazed me. People were coming to a screeching halt and saying things like, "How long is it going to be closed for? My wife and kids are inside." People believe what they see in writing. That's why I'm such a big believer in presentation binders. When you sit down with someone, you open the presentation binder, and it says, "My company is the greatest widget manufacturer in the world." Then you turn another page and it says, "Our workers are the greatest craftsmen in the business." You turn another page and start showing them reference letters from all your previous jobs.They find it believable even when they know you just came from the print shop with it. This is how hotels are able to get people to check out of the rooms on time. Holiday Inns used to have a terrible time getting people to check out of their rooms at 12 noon, until they learned the art of the printed word and posted those little signs on the back of the door.

Now 97 percent of the guests check out of their rooms on time, without any question at all, because the written word is so believable. Recognize this when you're negotiating with people. In our litigious society, it's essential to eventually get your agreement into writing. As regrettable as it may seen, it doesn't make much sense to verbally negotiate an agreement unless the other side is willing to attest to it in writing somewhere down the line.

Power negotiators know that it's important to wean the other side onto seeing in writing what they are agreeing to verbally.So every chance you get put things in writing.

Take the time during the verbal negotiations to say, "Let me be sure that I understand what you're proposing." Then stop to write down your understanding of the point that you were discussing. Show it to the other side, but you don't have to have them sign it at this point. All you're doing is getting them used to seeing it in writing. This subliminally confirms what, up to that point, has only bee a verbal understanding. If you don this at intervals during the discussion, you'll have much less trouble getting them to sign the final written contract.It's important to realize that, at every point of the negotiation, the other side is more persuaded by what they see in writing.

For example, if you have salespeople selling for you and you have to put a price change into effect, be sure that they have it in writing. Because there's a world of difference between them sitting with a potential customer and saying, "We're having a price increase at the start of next month, so you should make a commitment now," and them saying, "Look at this letter I just got from my boss. It indicates that we're having a price increase on July 1st."

Always show it to people in writing whenever you can. If you're negotiating by telephone, back up what you're saying by also faxing them the information.

If you sell big-ticket items and don't have a method of creating computer-generated proposals, I'd suggest that you stop everything and go get a computer system right now. It'll pay for itself on the first job. Many years ago I was in Australia on a lecture tour and a fire broke out on the second floor of my home in California. When I returned I had three contractors bid on repairing the damage. Two of them scrawled out bids by hand. They both bid around $24,000. The third contractor prepared a very comprehensive bid by computer. Every little detail was spelled out in detail. But his bid was $49,000-more than twice as much. I accepted the higher bid because the Power of the Printed Word was so great that I just didn't trust the hand-written bids.

What's the bottom line? Because people don't question what they see in writing, you should always present written backup evidence to support your proposal. If the negotiation includes expectations that the other side will meet certain requirements, it also helps to confirm those requirements in writing.

The transition from a verbal negotiation to a written contract can be a delicate one, but Power Negotiators known how to set it up so that it doesn't become a traumatic experience.