Negotiation Myths vs. Reality

negotiation myths vs reality

A lot of myths surround the art of negotiation. Believing those myths can get you poor results. Rather than relying on old-school maxims, pay attention to social science research—you’ll be surprised at what methods have been proven to work.

Adam Grant, a professor at Wharton, whose book Give and Take was released in April, takes aim in a recent Linkedin post at some of the most potentially harmful negotiation myths.

Remove the mirrored sunglasses, please

Perhaps the most common metaphor tossed about with respect to negotiating is that it is a poker game. In poker, of course, you reveal only what you must, and, if you are a skilled player, you lie about what you have not yet been forced to reveal. Being able to successfully bluff allows you to win despite lousy cards in your hand. And being able to detect when an opponent is bluffing prevents the opponent from doing so. So, secrecy and the ability to fake confidence in your position are how you consistently come away with good results.

But negotiations, whether in litigation or in transactional work, are not a poker game, but a search for a mutually beneficial result. If you arrive at a negotiation with your poker face on, mirrored sunglasses in place, revealing nothing, you’ll get the same kind of behavior from your counterpart (note that I did not use the word “opponent.”) And the research shows that your results are likely to be worse than if you and your counterpart warm up to each other a bit. Most people are “matchers,” meaning they act toward you the way you act toward them. Grant calls this the “norm of reciprocity.” If you appear unwilling to share information, you won’t get any in return.

Should we talk about the weather?

So how do you share without providing information that will hurt your bargaining position? You shmooze. I’ve noticed that on negotiation conference calls that include people from all over the country, discussing the weather is a traditional ice-breaker. If you’re talking to someone in California, ask about how the morning commute was. (In California, unlike Minnesota, commuting, not weather, is the most important cultural cornerstone, since the weather never changes.) Shmoozing, even if it’s kind of awkward and silly, is important, because it forces both sides to act friendly, which begins to open up in the mind the possibility that the other person is honest and trustworthy. This leads to better results for both sides.

Once you start negotiating, Grant suggests it’s very helpful to start with your “rank ordering.” Describe to your counterpart what you think the relevant issues are, and rank their importance. If you are negotiating a contract to buy widgets, and your top concern is getting the best possible price, say so. If you are negotiating a plea to a criminal charge, and your client’s top priority is avoiding winding up convicted of a felony, say so. Then run down your other concerns in order of importance, and ask your counterpart to do the same. At that point you both will begin to see places to trade one important issue for another.

Keep all balls in the air

It’s important to keep everything on the table at one time. Too often, people try to wall off issues and deal with them one at a time. That’s a bad idea, because it precludes crucial give-and-take opportunities. For example, I’ve learned that business people are often more than willing to trade risk (liability) for money. They may know that, for instance, they’ve always been able to resolve any contract-driven conflicts and have never wound up in litigation. So they are happy to take on risk because they believe it will not wind up turning into harm. But you can’t make that trade-off if you insist on dealing with pricing first and liability limitations later.

Make the first offer

Some negotiations require that at some point an offer be made, e.g., the purchase price for something. Grant asserts that the idea that waiting to hear an offer from your counterpart will get you a better result is a particularly harmful myth, and that you should almost always make the first offer. This is called “anchoring.”

The term is a good one, because everything that happens after the initial offer is anchored irrevocably to that first offer. It pulls both parties in a particular direction. In a social-science study, real estate agents predicted a particular home’s appraised value after hearing the asking price. The higher the asking price, the higher the predicted appraised value. In other words, when you make the first offer, you affect your counterpart’s view of the value of the target of the offer. And you want to be the one doing the influencing.

I was glad to see Grant’s next point, which is one I’ve made myself: the importance of explaining what you are thinking during negotiations. In other words, if you ask for X, explain why getting X matters. Ask your counterpart to explain why she needs Y, and then sum up what she says. This kind of back and forth, which is easier to engage in when you start off with some friendly shmoozing, has worked very well for me. Give it a try in your next negotiation, and I suspect you’ll find the work significantly more pleasant and the results will be positive as well.

(image: professional poker player from Shutterstock)

Lawyering Skills

,

  • Stephen Hayes

    Grant’s points are consistent with the interest-based “win-win” bargaining championed by Fisher et al. at the Harvard Project on Negotiation, which I attended for a year in the 1990′s. That approach has worked well in many, many negotiations since, but seldom when I have lawyer-led opponents who prefer the poker, zero-sum approach. Many a good deal has been lost by those who refuse to recognize that people approach negotiations with differing priorities, and it is often possible to craft a good deal for all.

    • static

      Damn. An incredibly thoughtful and knowledgeable comment. I nearly got whiplash. Comments like this should come with a warning.