Power
Power is an interesting concept as it relates to negotiation. We all have a sense of what power is, but usually from examples we can think of rather than because we know the definition. In fact, if asked for a definition of power in negotiation, we probably struggle, and prefer to just give examples of who has power and who does not.
The reason is that we use the word ‘power’ in negotiation to mean a number of different things. For example, some people think of power in terms of the repercussions of walking away from the table and not reaching a deal. If you perceive that not reaching a deal is bad for you and really good for the other side, you’ll feel like they have all the power. And vice versa.
Others perceive power in terms of how persuasive someone is in a negotiation. A ‘powerful negotiator’ is someone who has the skills, technique and confidence to persuade people who don’t want to be persuaded.
Both are forms of power; the first is ‘substantive’ power and the second is ‘process’ power. The one you have more control over, of course, is process power and the best way to become a powerful negotiator is to learn effective negotiation techniques and improve your ability to persuade.
Standards of Legitimacy
No one wants to be taken advantage of in a negotiation. So what can you do to protect yourself? How can you persuade the other side that they are not being taken? The answer to both questions is the same: use standards of legitimacy. That is, look for objective criteria, benchmarks, standards of fairness that were not created by the parties in the negotiation.
If someone makes you an offer, ask them for supporting facts as to why it’s fair. That way you protect yourself.
If you’re making an offer, ensure that you have an external standard that supports your position. This way you will be able to explain why your offer is objectively fair and not simply something that you want. Using an objective standard is far more persuasive than just arguing for what we want.
Threats
Sometimes the other negotiator is behaving in such a way that a deal may not be reached. It may be tempting to threaten them with what is going to happen if you don’t reach a deal. Threats, however, are rarely helpful. If threatened, the other negotiator may counter with a threat of their own. At a minimum, their back will be up.
In a negotiation, there is an important distinction between making a threat and enabling the other side to realize the consequences of not reaching agreement. Threatening will just get their back up, whereas calmly discussing the consequences of a failed negotiation may help them to reflect and adjust their stance. Suggesting that the result of not reaching a deal would be bad for you as well as for them is one way to get your point across without it landing as a threat.
Expanding the Pie
A lot of people talk about expanding the pie in negotiation, yet not everyone knows what this means. Expanding the pie means finding ways to create value in a negotiation that may not be initially apparent. It is a reminder that before we divide the pie, we should try to make the pie as big as possible.
Expanding the pie usually starts with exploring the interests of both sides. Once we learn both sides’ interests, we can look for creative ways to meet those interests by brainstorming options. If we can make one side or both sides better off than when they started, the pie has been expanded.
Partisan Assumptions
We all think we’re fair, but we’re all in danger of believing our own partisan perceptions. We think we know what others are thinking and how they’ll act and we convince ourselves that what we see is consistent with our view. If we see them as the enemy and treat them that way, we likely find ourselves in a fight. The best negotiators are careful about not making partisan assumptions and trying to see what the other person is really saying and doing.
Disclosing Information
Sometimes, it’s hard to get people to disclose information in a negotiation. They may fear that they’ll disclose something they shouldn’t and you’ll take advantage of them, so they err on the side of disclosing too little. How do you deal with someone who keeps everything close to the vest and won’t disclose anything?
Try modeling the behaviour you want them to exhibit by taking the lead and disclosing some information. If they see you sharing information, they may be more willing to reciprocate and disclose some information about themselves. They need to see you as a person who won’t take advantage of their disclosure. One way to do that is for you to take the lead and disclose information.
Emotional Negotiators
Some people get very emotional when they negotiate. They may do so as a tactic or they may just be emotional. They can get angry and sometimes extremely upset. How can you deal with someone who displays their emotions in this way?
Our natural inclination may be to tell them to calm down and not to be so emotional, or we may try to remove the emotion by focusing on logical arguments. We think they’ll be convinced that the logical thing for them to do is to be less emotional. This generally does not work because emotions are not formed out of logic and people can’t just make feelings go away.
When people are emotional, they need to be heard. Paraphrase and show them that you’ve heard what they said; that you can sense they’re upset; and that you want to hear more about what’s bothering them.
When people feel heard and understood, they’re more likely to regain their composure and focus on the problem that needs to be solved, rather than on their emotions.
Personal Attacks
What should you do if the other person engages in personal attacks? Some people think they can intimidate you and get the upper hand by saying things that they think will upset you. They think you may be afraid of them and make concessions. Other people may make personal attacks because they believe those things to be true of you. Either way, you have to decide how to respond.
When people attack us, our natural inclination is to attack back or defend ourselves. If you attack back, the negotiation is likely to break down. If you defend yourself, the discussion may shift to focus on your behaviour rather than on the issues you’re there to negotiate.
Instead of attacking back or defending yourself against personal attacks, try negotiation jujitsu: re-focus their attack on you into an attack on the problem. When the person says something derogatory about you, reframe it as a problem to be solved. For example, if someone says, “you’re obviously an inexperienced negotiator …,” you can reframe that by saying, “so how would an experienced negotiator find a fair solution to this problem?” Bottom line: don’t take the bait of a personal attack.
Options and Ideas
Sometimes, getting the other side to make an offer is like pulling teeth. They just won’t commit and you don’t know what they’re prepared to do.
Some people are afraid to make offers. They worry that their offers will either be too generous (and they will get a bad deal) or too aggressive (and you’ll walk away from the table).
One suggestion is to give them the time they need to make an offer. If they feel pressured to make an offer, you may not like the offer they make. Let them know that you’re always ready to talk and follow up regularly.
If you can’t give them the time, try to minimize their sense of risk about making an offer. For example, you may suggest that the two of you talk about options and explore what might be workable. They may be more comfortable putting options or ideas on the table, rather than offers. If an option they suggest is one you’d be prepared to accept, you may want to indicate that to them so that they will consider making it into an offer.
In a pinch, if you are prepared to do so, you can often get an offer from the other side by tabling your own offer, to which they will then likely counteroffer or respond.
Authority
Sometimes we find ourselves in a negotiation where the person on the other side of the table doesn’t have the authority to make a deal. They’ve negotiated as though they do have authority, but when it’s time to commit, they tell you they have to ‘take it back’ or ‘get approval’.
It’s always a good idea to ask at the beginning of a negotiation whether the other person has the authority to commit to a deal. If they don’t, you may be able to get the person with authority to come to the table.
If you have to negotiate with someone who doesn’t have the authority, you may want to try to reach a tentative deal, subject to approval by both sides. This allows you to avoid a situation in which you have a made a commitment and they haven’t, which increases the likelihood that they may come back to ask for more.
If you find out only at the end that they don’t have the authority to commit to a deal, you can ask whether they will at least recommend the deal to the person with authority. You could also ask them to troubleshoot with you any possible objections the person with authority might have to provide possible responses to any anticipated concerns.
Competitive Bargainers
How do you deal with a competitive or positional bargainer? Someone who takes a position, anchors and doesn’t move? These people frustrate us as we look for the magic formula to cause them to make concessions or show flexibility.
Unfortunately, there’s no magic formula.
Usually, we try to convince them that they should move off of their position. We think of all of the reasoned arguments we can make and hope they will be convinced.
Try something counter-intuitive: instead of focusing on why their position is wrong, focus on trying to get an understanding about why they think they’re right. Show them that you’re open to be persuaded by them. Ask them how they came up with the position. In order to change someone’s mind, we need to first understand where their mind is; it is only when we fully understand their view that we can strategize most effectively to change that view.
Also, once you understand their justification for their position and have shown that you’re open to be persuaded by them, they’re much more likely to be open to be persuaded by you.
Interrupting
How do you know when to interrupt someone? We all want to be polite and let people finish their thoughts. However, if we don’t interrupt the other person they may think that we agree with everything they’re saying. Also, if we let them speak for a long time we may forget our own thoughts.
As a general rule, it’s better not to interrupt. No one likes to be interrupted and the other person may resent the interruption.
If you are worried that they may interpret your silence as agreement, one strategy may be to interrupt at an opportune time and indicate that, “I may not agree with everything you say and I’ll address your comments at the end, but in the meantime, please continue and I won’t further interrupt.” That way, you let the person continue and make it clear that you’re not necessarily agreeing with everything.
If you are worried about forgetting your points, you can write down your thoughts instead of interjecting them; this allows you to track your thoughts while allowing the other person to finish talking.
Taking Breaks
We have a tendency to want to push quickly through our negotiations. Unfortunately, that sometimes means we don’t get the benefit of taking a break.
Taking a break gives us a chance to sit back and consider what we’re doing and to think about whether we’re being pushed into a decision that isn’t ideal.
Taking a break with the other negotiator also gives us a chance to speak to them on a social level. Getting a coffee with the person you’re negotiating with can lead to unanticipated benefits. You start to see each other as people rather than as adversaries; this change in perception can lead to more creative deals.
Expressing Emotions
How can you use emotion to your advantage in a negotiation? One answer is to actually express how you feel, but in a calm, productive, purposeful way. If something is bothering you or upsetting you, say so and talk about it with the other person.
We sometimes think it’s wrong or ‘touchy-feely’ to talk about our emotions, so we hide them and avoid talking about them. But if we do talk about our emotions, others may react positively with a far clearer and more balanced view of what we say and do.
Most people have an internal desire to help others who are distressed and ask for help. When someone expresses distress, the response is generally sympathetic and may generate a supportive response.
Discussing Consequences
People often use threats in negotiations. They threaten the other side with what they’ll do if the other side doesn’t agree with them. “If you don’t like those terms, I’ll walk.” The problem with threats is they often just lead to counter-threats and an escalation of the dispute.
There’s nothing wrong with educating the other side about the consequences of what will happen if a deal isn’t reached, but it’s better to do so in a way that suggests you would prefer not to go that route, rather than presenting it as a threat.
That doesn’t mean you should always tell the other side what you will do if no deal is reached. You should only disclose what you’ll do if it will be more beneficial than harmful. If your plan B is terrible, it’s better to avoid discussion about what will happen if you don’t reach a deal and just focus on the deal itself. Even if your plan B is good, if you reveal it, there is no incentive on their part to give you a higher value than your plan B would provide.
The “Gut Feel” Test
How do you know how much to disclose to the other side in a negotiation and how much to keep close to the vest? Many people think it’s just a ‘gut feel’ test and that you should disclose information if you feel comfortable but you should not if you feel uncomfortable.
The problem with a gut feel test is that your gut may not give you the right answer. You may disclose something that can hurt you or keep confidential something that may have allowed for a great creative deal.
It’s rarely a mistake to disclose information about your interests (your goals and concerns). If you let the other party know your goals and concerns, they may find ways to meet your interests that you hadn’t thought of.
Be Honest
What do you do when the other person in a negotiation asks you something and you don’t know the answer? You can’t be expected to anticipate every question.
Many people are embarrassed when they’re asked a question and don’t know the answer. They may feel the need to either make up an answer or avoid the question. Making up an answer definitely has pitfalls. Avoiding the question may not be much better as it may create suspicion.
The best approach is to be honest. It’s ok to say that you don’t know the answer to a question. You may need time to find out the answer, or you may not be able to get that answer. That’s okay. People appreciate it when you admit that you’re not perfect and don’t know everything. You will come across as genuine, which will be beneficial to your relationship.
You can also indicate that it’s a good question, and that you’d like to reflect and investigate further before responding, to ensure that the response is full and worthy of the question.
Deal or No Deal?
If you walk away from the negotiation, have you failed? Definitely not. Some of the best deals are the ones we don’t make. If you say no and instead, take a course of action that’s better for you than the deal on the table, you’ve made the right decision.
Untrained negotiators sometimes accept deals because they don’t want to fail. They see a deal as a success and no deal as a failure. Others accept deals because they’re bullied into them, or feel the time pressure and say yes just to get the deal done.
These are all bad reasons to say yes. You should only say yes if the proposal that’s offered is better for you than the result if you walk away. Otherwise, saying no is the right thing to do.
Pushy Negotiators
Some negotiators think that they get the best deals by being pushy and waiting for others to cave in.
Sometimes the other side does cave in and the pushy negotiator succeeds in getting what he or she wants. However, a number of things can go wrong if you’re too pushy in a negotiation. First, you may not get a deal when there is a deal that you could have reached. Pushing may push people away. Or a tit for tat reaction may occur, with both sides walking away from the table expecting the other to cave in and neither does. Everyone loses in this situation
Classic reactions to being pushed are pushing back, withdrawing, or locking in defensively.
Also, this style may permanently damage the parties’ relationship. That may or may not seem important in the moment, yet, it may be impactful at a later time.
Listening
Are the best negotiators quiet or more talkative? There’s no correct answer to this question. We all have to be comfortable with our own style. If you’re a talker, you may not be comfortable if you just listen. If you’re the quiet type, you won’t feel right if you try to dominate the discussion.
Studies have shown that the most effective negotiators do more listening than less effective negotiators. They gather the information they need while asking probing questions to find out more. Most people like to talk, especially about themselves and what they want. Asking them questions will make them comfortable and allow you to get more information. This can be very helpful in determining your next move in the negotiation. There is an old saying that one rarely learns anything while talking.
Explore Options
Can you negotiate with your wife or husband? Of course! You do it all the time. You decide who cooks, who takes out the garbage, who walks the dog, and what movie you go to. These are real negotiations that require real skill.
Negotiation is not just about giving in or bullying to get your way. Most of us wouldn’t consider bullying our partner about what movie we should go to, yet some of us might consider bullying the other side in a business negotiation. The challenge is in the long-term consequences to the relationship.
That’s not to say that giving in is the answer. Some of us just give in to our partner to avoid a fight. We end up doing things we don’t like and we resent it.
Neither extreme is necessary. In both our personal life and in business, we can explore options and find a solution that meets both our interests and the other person’s.
Reciprocity
We often hear about random acts of kindness and something inside of us wants to see the kind person benefit in some way. It only seems fair. Some of us even act on this and try to do something nice for the person who was kind, especially if they’ve done something nice for us. Reciprocity is a fairly universal value. People who receive something, tend to give something in return.
This is also true in negotiation. Random acts of kindness are often reciprocated. Some negotiators make a habit of giving the other side ‘gifts’ in the middle of a negotiation to try to improve the relationship and to trigger conscious or unconscious reciprocity. That is not to suggest that it’s always a good idea to give things away in negotiation, yet there are situations where the favour may be returned to you with even greater value.
When is the End of a Negotiation?
Most people think that the negotiation ends when the two sides shake hands or sign an agreement. The deal is done and they should stop negotiating. The truth is that there’s a lot more to negotiate.
First, most negotiations need implementation, and it’s a rare situation where there aren’t things we need to negotiate after we shake hands. If you’ve negotiated in an ethical way and preserved the relationship, you should be in good shape to deal with implementation.
Second, there are opportunities for all parties, if we continue to explore ways to sweeten the deal. Once you have an agreement, you can still discuss ways to improve it, as long as you do it in a way that doesn’t look like you are trying to get out of the original deal. Having such discussions is known as trying to make the deal ‘Pareto superior’ or ‘Pareto optimal’.
When we negotiate, we often keep information confidential and focus purely on the dollars. While that may help us meet our minimum needs, it may prevent us from coming up with the most creative and high value options.
With the safety of a deal in hand, parties are often more comfortable disclosing more information and exploring other ideas. That exploration may allow us to make the deal better for both of us. If we can’t improve the deal, we still have the one we’ve made to fall back on. The deal we’ve made is binding unless we both agree to change it. There is value, therefore, in disclosing information and discussing further ideas to see if you can improve on the deal you’ve already reached.
Negotiation Tactics
There are lots of negotiation tricks out there. Some people like to have the tallest chair, or sit at the head of the table, or have more people on their side of the table, or make you face out the window so you’ll be distracted.
These tactics often backfire by creating negative pushback. As a different approach, try to make them feel superior while negotiating a really good deal for yourself.
Being Passionate
We are all emotional, to a degree. Some of us show our emotions outwardly while others keep emotions in check. Many people think that effective negotiators hide and stifle emotions and that a show of emotion is a show of weakness. We disagree. There’s nothing wrong with being passionate about something. That can sometimes cause the other person to respond positively to your passion.
Even if you’re upset, it’s not necessarily bad to show that you’re upset. There is an honesty and fire in strong emotions that might strike a chord. One of our clients got angry during a pitch to a buyer. Instead of getting upset, the buyer was thrilled to see a pitch from someone who genuinely cared. Our client got the job.
Making the First Offer
Most people prefer it when the other side makes the first offer. We’re afraid that if we make the first offer, we may give away the farm. Or, that our offer may seem unreasonable to the other side and they will walk away.
Effective negotiators make offers that limit the likelihood of either of those scenarios playing out. For example, when they make first offers, they don’t present them as ultimatums, but rather as options to be discussed. Also, they try to base their offer on an objective, fair standard.
There can also be benefits to making the first offer. People who put the first offer on the table set the parameters of the negotiation. That first offer can establish a helpful precedent for how future offers should be made and communicated.
In addition, making a first offer can speed things up. Negotiators often go through a long drawn-out ‘dance’ where both sides are waiting for the other to make the first offer. The person who makes the first offer breaks the ice and allows the negotiation to move forward.
There’s No Harm in Asking
Most people assume that it is not possible to negotiate with retailers. When we see a price in a store, we assume that the price is final. In a lot of cases there is no ability to negotiate the price. However, in certain situations there may be an opportunity to negotiate.
The trick is to ask, and ask nicely, which few people actually do. The retailer can always say no. There was a study from the University of Pennsylvania where business students experimented with trying to negotiate the price of items for sale in retail stores. They were amazed to learn that, in many cases, they received significantly better prices simply by asking.
Price isn’t the only thing you can negotiate when you shop. You may be able to negotiate terms of payment, shipping fees, and a ‘throw in’ or another non-financial benefit. You’ll never know what is possible unless you ask.
Sacrificing Ethics
Do you have to sacrifice your ethics to be an effective negotiator? The answer is not at all. Some people believe that you have to mislead the other person to be an effective negotiator, which is just not true.
The most effective negotiators have learned the techniques that allow them to be honest and ethical while still being able to negotiate the best deal. There are ethical and effective approaches to all negotiation problems. Those who sacrifice their ethics become infamous and distrusted. People won’t want to negotiate with them and their careers end up being short-lived and stressful.
Be Open and Friendly
Does the environment surrounding your negotiations seem a bit chilly? We focus a lot on what we say during a negotiation, and not nearly enough on how we communicate our message. This is because we think more about the substance of what we’re negotiating and ignore the process. A friendly and open attitude toward someone else often causes them to be friendly and open to us. If you’re both open and friendly, your relationship will improve and you will be more likely to work out a good deal.
Educate and Persuade
When we want to persuade someone, we often tell them why we’re right and they’re wrong. The problem with this approach is that others rarely believe they’re wrong, and they certainly don’t like being put down. Instead of that approach, show them you’re open to their ideas and try to explore different options with them. If you have good information, use it tactfully to educate and persuade, not to prove the other party wrong.
Asking Questions
Salespeople are always negotiating with customers. What’s the biggest mistake they make when they’re trying to sell something? They talk about what they think their customers want rather than listening to what their customers have to say.
Customers and clients give us lots of clues about their needs and interests. We need to focus on listening to this information. The best salespeople don’t presume they know what their customers want. Instead, they ask lots of questions about the client’s goals, listen to the answers, ask clarifying questions, and only then provide potential solutions.
Continuous Learning
How much are you leaving on the table in your negotiations? What deals aren’t you making? Do others appear to know more about negotiation than you? No matter how much natural ability you have, you can improve your negotiation skills by learning new techniques.
Have you ever wondered why professional athletes still need coaches? The athletes are very skilled, yet they know that they can still get better results with coaching. If you learn one technique at a negotiation course that gets you a better result, wouldn’t that training be worth it? If you can improve your negotiation results by even five per cent in one year, you will have paid for the training.
Fairness
How do you convince someone that your proposal is fair? Fairness is a subjective concept and people have different ideas of fairness. Just because you think something is fair doesn’t mean the other person will think so too. One suggestion is to look to objective criteria, such as comparables. People are more likely to be persuaded by an objective verifiable fact-based standard than by your subjective (and biased) opinion.
Objective criteria are standards (such as legislation, industry standards, relevant facts, etc.) that originate from outside the specific negotiation and parties, but that can help negotiators answer questions about which they would otherwise argue. For example, if you’re buying or selling a house, you would want to know what similar houses have recently sold for, when trying to negotiate a fair price. Rather than relying on your opinion or theirs, you can share copies of MLS listings.
Persuading Others
Sometimes we forget that many of our conversations with family members are actually negotiations. We are trying to persuade them and they’re trying to persuade us about day-to-day matters such as where we will go for dinner, who takes out the garbage, and when the children go to bed. Effective negotiators are people who have the tools that let them persuade others at work AND at home.
One of the tools that effective negotiators use is that they consult before deciding. Most people don’t like edicts to be imposed. If you consult with others before you make your decision, they’ll feel that their voice has been heard and be more likely to accept the decision. It will also likely be a better, more-informed decision.
Creativity
A good negotiator is a creative one. We need to find creative solutions to problems so that we don’t get locked in a fixed-sum negotiation. How can we become more creative? One idea is to have a brainstorming session in your negotiation where all parties involved try to come up with creative ideas.
Brainstorming works best when you employ ground rules for the process, such as, no criticism of the options that are being generated; no comment or explanation on the front-end; and no commitment to the options during the generation phase (i.e. the options are not binding offers). If we free ourselves from having to worry about whether an option is good or bad when brainstorming, more creative options will likely flow.
Avoid the Word “But”
The word ‘but’ is the great eraser in a negotiation. It erases everything good that you said before. If I say to you, “You raise some good points, but your ideas won’t work,” you’ll likely focus on the second part of what I said – the dismissal part – and miss that I initially said you raised good points. When we use the word ‘but’ in the middle of a sentence, we can lose the positive aspects preceding the ‘but’.
If you can restructure your sentence and use the word ‘and’ instead of ‘but’, your opinions may land better with the other person. It’s even better to avoid either word. For example, what if I had said, “You do raise some good points. We also have to consider two practical difficulties we’ll encounter if we go down that path.” Your perspective will likely be received in a more favourable way.
Listening to Others
When we have something important to say, it dominates our thoughts and we feel a strong need to blurt it out. Unfortunately, the impact on others can be that they see us as pushy and unwilling to listen to what they have to say. When we listen to others first, they are more likely to want to listen to us. If we can take the time early in a negotiation to show others that we’re listening to them and then put forward our ideas, they’ll be more inclined to hear our ideas.
“Front Door” Questions
“What do you want?” and “Why is that important to you?” are important questions in a negotiation. They are front door questions to get us information about the other person. The more information we have about their motivations, goals, and concerns, the more likely we’ll be able to find a solution that works for everyone.
We are sometimes so focused on getting our own points across that we don’t take the time to obtain information from the other party that would assist us in coming to an agreement. Remember, we have two ears and one mouth and should use them in that proportion.
Positions and Interests
People often start a negotiation with their position. Your position is what you think the final result should be. Should we start a negotiation at the end, by asserting our pre-determined demand, or, should we clarify our goals and theirs, then work our way to a result that meets all our goals and concerns? What reaction do you think you will get to each approach?
If we take the time to hear other peoples’ ideas, find out about their interests and learn what’s important to them, we’re more likely to eventually craft an answer that we both find acceptable. If we lock ourselves into a position early in the negotiation, we may find ourselves arguing about our positions and making ultimatums, rather than searching for an answer that is good for both of us.
Power to Persuade
Sometimes you have to negotiate with someone who seems to have all of the power, such as your boss. In this scenario, you aren’t necessarily powerless. We all have the power to be more persuasive negotiators and use techniques to get others to cooperate with us.
For example, when you’re negotiating with your boss, you can refer to objective criteria or standards of fairness as a way to persuade them. Everyone likes to think that they’re a fair person. If you can persuade your boss as to what’s objectively fair, without embarrassing them, they may voluntarily head in that direction.
Power Imbalances
What is power in negotiation and how do you address a power imbalance? Substantive power in a negotiation may come from a negotiator’s ability to walk away from the table if the alternative is really good. If you want to improve your substantive power, you need to improve your plan ‘B’, the course of action you will take if you can’t reach a deal. By doing so, you’ll feel much more comfortable and empowered when you enter the negotiation.
Offers and Counter-Offers
A client recently asked why negotiations always include offers and counter-offers and can’t be focused on initially establishing each party’s real bottom line at the outset, in order to save time. It’s not necessarily efficient to start with offers and counter offers, yet, psychologically, some people like to see the other side make concessions before they are comfortable saying yes to a deal.
Concession-based styles can be frustrating, so consider how you can and will justify any offer that you make. Also carefully consider whether their offers and counter-offers can be justified. If their offer is arbitrary and unjustified, it should not prompt a concession from you. Making a meaningful concession to them in exchange for a meaningless concession from them only teaches that party that such strategies work. They will keep playing you.
