Russell Korobkin - The Five Tool Negotiator: The Complete Guide to Bargaining Success

THE FIVE TOOL
NEGOTIATOR

The Complete Guide
to Bargaining Success

RUSSELL KOROBKIN

LIVERIGHT PUBLISHING CORPORATION

A DIVISION OF W. W. NORTON & COMPANY

INDEPENDENT PUBLISHERS SINCE 1923

B aseball scouts prowl the globe for what are known as five-tool players: athletes with superior ability to hit for average, hit for power, field, throw, and run the bases. Five-tool baseball players are outstanding in all facets of the game. Willie Mays, Roberto Clemente, Hank Aaron, Frank Robinson, and the young Mickey Mantle (before knee problems slowed him) are generally considered the best five-tool players of all time. Each of these legends led his team to World Series championships.

Negotiation, like baseball, is a game in which success is achieved by using five, and only five, tools. Fortunately for most of us, none of them requires the ability to hit a big-league curveball. These tools are the keys to winning at the bargaining table in any league; that is, they are the same whether your goal in negotiating is an eight-figure corporate merger with a CEO, a seven-figure lawsuit settlement with a lawyer, a six-figure sales agreement with a purchasing agent, a five-figure Lexus with an automobile dealer, a four-figure raise with your boss, or even a workable bedtime with your child. By understanding how these tools work, anyone who negotiates in a business, professional, consumer, or family capacity can develop the depth of knowledge and the tactical flexibility to outperform the competition.

Tool #1, Bargaining Zone Analysis , enables you to identify the range of agreements that will benefit both parties.

Tool #2, Persuasion , convinces your counterpart, more than she otherwise would have recognized, that reaching an agreement will benefit her.

Tool #3, Deal Design , structures the terms of the potential agreement in ways that make it more valuable.

Tool #4, Power , forces your counterpart to reach an agreement on terms relatively more desirable to you.

Tool #5, Fairness Norms , provides a framework for sealing a bargain on terms that both parties can feel good about.

A baseball player need not be an expert at wielding all five of the tools of his game to excel. Even among elite professional athletes, very few are considered legitimate five-tool players. Superior hitting ability can make up for some weaknesses in fielding, and a great fielder with a strong arm and speed might enjoy a long career, even if he doesnt hit home runs. But only the five-tool player is truly complete.

The same can be said for negotiators. You dont need to be a master of all five tools to step onto the negotiation playing field. With some natural instincts for one or two tools, you can get into the game. Most professionals navigate the commercial world in just this way. But five-tool negotiators, or 5TNs, as I call them, play on a different level entirely. They are rare, even among those who routinely achieve good results in their particular line of work. This book will put you on the road to mastering all five tools and becoming a part of the negotiating elite.

The 5TN approach is universal . Negotiation is a communication process that we use to engage the assistance of others to accomplish our goals. This book breaks down this critical social process into the core elements that are present in every negotiation, describes how they fit together, and provides a road map for navigating them. The five tools encompass the entire variety of tactics and techniques that provide an advantage in bargaining. You can use them to negotiate with your clients, your boss, a used-car dealer, or your spouse and kids.

The 5TN approach is rigorous . The lessons you will learn have been honed over my 25 years of studying, writing about, and teaching negotiation to law and business students on four continents as well as to professionals in business and law. My approach is built on the platform of decades of research in a range of fields, including economics, decision theory, game theory, behavioral economics, cognitive psychology, social psychology, business, and law, and is also molded by my practical experience as a management consultant and a lawyer. This is a book for negotiators, not for scholars, but it is based on science. Throughout these pages, youll learn about dozens of fascinating social science studies that underlie the 5TN framework.

And finally, the 5TN approach is manageable . I provide a simple structure that you can easily learn, remember, and immediately apply. When you go to negotiate, you will have only five points you need to remember and put to use. You can then evaluate your performance and continue to improve your skills by critically assessing how well you were able to use each of the tools in your bargaining interactions.

For Sarah and Jessica

I n August 2011, Jered Weaver, the pitching ace of the Los Angeles Angels baseball team, was offered $85 million by the team to extend the term of his contract for five seasons. This might seem like a lot of money, but most analysts thought it was a relative bargain for the Angels, even at the time. The prior season, Weaver had finished fifth in the voting for the American Leagues Cy Young Award, given annually to the best pitcher in the league, and he was performing even better in 2011. In April, he tied a Major League record for the speed with which he recorded his first six wins, and in July he was chosen to be the starting pitcher in Major League Baseballs All-Star game.

Weavers agent, Scott Boras, urged him to decline the offer, wait a year until he was eligible for free agency, and then sign a long-term deal with another team, probably for much more money. Weaver rejected the advice and made the deal. Boras was so upset by his clients decision that he refused to attend the press conference at which it was announced.

Matt Harrington was another star pitcher from Southern California with a promising outlook, but his story had a very different ending. In 2000, Harrington was Gatorades High School Baseball Player of the Year, He never made it to the major leagues.

Negotiation forces us to compare two possible futures: one in which we reach agreement with the other party, and one in which we reach impasse and do not make a deal. Unlike an exchange of goods or money ordered by a judge, the Internal Revenue Service, or a mugger, a negotiated agreement requires the consent of both (or several, as the case may be) negotiators. There is always a choice to be made between reaching agreement and walking away.

Bargaining Zone Analysis the first of the five tools of negotiationenables 5TNs to make the right choice between these alternative futures. It also enables them to predict how their counterparts will view the same choice, which in turn makes it possible to understand what can be achieved in the negotiation and what cannot. Negotiators who fail to use this tool, or do so incorrectly or half-heartedly, enter into agreements that they shouldnt, fail to seize opportunities that they should, and are often poorly equipped to obtain as much benefit from deals as is possible.

Jered Weaver was skilled at Bargaining Zone Analysis. Matt Harrington was not. Before I can explain, I need to define a few terms of art:

The bargaining zone is the range of agreements that both negotiators would be willing to accept, if they could do no better, rather than walking away from the table with no deal. (If there is no set of terms that both parties would prefer to an impasse, there is no bargaining zone.) If you and your boss would both prefer you to keep working for your company for a salary of $80,000, $90,000, or $100,000 rather than taking your services elsewhere, we can say all of those potential points of agreement fall within the bargaining zone.