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“Never say no to a hostage-taker! It’s in the manual. Are you gonna tell me ‘no’ again? Never use ‘no’, ‘don’t’, ‘won’t’ or ‘can’t’. It eliminates options. The only option left is to shoot someone.”
Danny Ronan (Samuel L Jackson), The Negotiator
Tense, highly-charged encounters between powerful figures, with a huge amount at stake and a clear winner and loser at the end. That’s what negotiations look like in the movies. Now banish those scenes from your mind. In today’s complex business world, you’re advised to follow these well-researched pointers to achieve the outcomes you want, more of the time.
Be careful with the use of threats and hardball tactics. Forget what you think you know about negotiations. Those things might work in very simple negotiations – if you go to the flea market or you buy your secondhand car, these tactics sometimes help. But whenever it becomes more complex, they easily backfire. In movies you often see negotiators who use a lot of authority. That’s a powerful tool of influencing others but it does not promote creative thinking. You need your opponent to think creatively with you to achieve mutually beneficial outcomes. Working on the basis of authority can hinder that creativity.
Your instinct may be to hold back and get as much information as you can before making an offer. But making the first offer is extremely powerful. It builds on one of the strongest influences on human judgement, the anchoring effect. Once we have a number in our mind, our judgements are automatically assimilated towards that number. The anchor influences everything else. The initial offer influences the counter-offer and thus pulls the entire space in which the negotiation takes place towards it. In our research, we manipulated whether the buyer or seller in a simple negotiation made the first offer. What we found was that the first offer advantage was so strong that in some cases, the least skilled negotiator in the group that was allowed to make the first offer still obtained a better outcome than the most skilled negotiator in the group that wasn’t allowed to make the first offer.
There are only a few exceptions to this rule, most importantly situations where the relationship is more important than the outcome (for example, if you’re negotiating with your spouse).
You want the information that is talked about to be information that relates to your first offer. Typically there’s too much information to process all at once. The human mind bases its decisions and judgements on the information that is accessible and available. So the more you can make certain information emotionally relevant, the stronger weight it carries. Inexperienced negotiators think it’s about the numbers, but what influences decisions more in many cases is information described in a vivid way. For example, in a trade union negotiation about pay cuts and pay increases, you could just talk about the percentages or you could also describe what that means for the lives of the families involved. Make it resonate: what do the numbers mean? As an illustration, when you’re selling a car, you could focus on how many miles to the gallon it does or how smoothly it runs, what great trips you’ve had, how the car has been another member of the family and so on.
The most important thing in any negotiation is to prepare well for it. Negotiators are often too ego-centric in their preparations. They only think about their own position and their own interests, they do not try to take the perspective of the other party. Try and picture what potential alternatives the other side has. Typically in negotiations there is a way, if you prepare well and invest some time, to get that information. It’s usually available if you put in some effort. Often negotiators naively turn to deception and misleading information, essentially lying to cover up for a lack of preparation. If you really are well-prepared you typically do not have to misrepresent facts. If you’re not and you’re called out and you don’t know what to say… that’s often when people lie.
Naïve negotiators often view negotiations as a competition – a fight with the other side. In fact, the more complex the negotiations become, the more it is productive to see it as a joint problem-solving task. You need the other person to work with you, not to merely split a fixed pie that is given but to grow that pie in the first place. Complex negotiations involve a multitude of different dimensions that will not be equally valuable to both sides. Let’s take the example of a job negotiation: it may be that the salary is more important to the applicant than to the organisation, which is in a good place financially but wants you to travel more or be based in the office five days a week. Or it could be the opposite – maybe the salary is not that important to you but working from home twice a week is. It’s important to find out what the weights are on either side of the scale so you can engage in an open, problem-solving conversation. The objective still is to maximise your own outcomes but that is easier if the pie has grown.
On those occasions when negotiation is very obviously a competition, present yourself as very confident and make sure your offer is something you really believe in. It has to feel realistic. It’s important to create an atmosphere of trust in which information can be shared. To achieve that, it’s helpful to reveal some information yourself first, as a trust-building mechanism. We’re guided by the law of reciprocity in our social exchanges. Once you have given a little bit of information you are much more likely to be paid back, if you’ve created an environment in which information about preferences and interests can be revealed.
Sometimes no outcome is the best outcome. It’s not just about finding agreement. Never go into a negotiation without a good BATNA – a Best Alternative to a Negotiated Agreement. This gives you the power to say no. It’s your plan B. It’s not only negotiating one job, not only looking at one car, not only falling in love with one flat. It’s looking more broadly at your alternatives. It’s something that negotiators often have a hard time accepting but sometimes it really is better for both sides to say, sorry, I still like and respect you but it seems that I have better alternatives and you have better alternatives as well.
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