Mastering the Psychology of Negotiation
Anyone can learn the mechanics of negotiation - preparation, active listening, and knowing your BATNA, to name a few - to become a good negotiator. But it s not enough to be good. Mastering emotions is the key to effective negotiation and involves not only understanding and taking control of your own emotions, but also those of your adversary. Are you willing to make an investment into the emotional realm to become a truly great negotiator?
Negotiation is an exercise in simultaneously obtaining value and managing risk. As Elroy Dimson, Emeritus Professor of Finance at London Business School, famously observed: "Risk means more things can happen than will happen." Indeed, emotions pose risks in every negotiation. Unchecked emotions can both enhance a relationship or destroy it beyond repair; emotions can open up new solutions and possibilities or be used against you.
I highly recommend Roger Fisher and Daniel Shapiro s fantastic book, Beyond Reason: Using Emotions as You Negotiate, which distills some of the many tools that help negotiators master the emotional tension that threatens every negotiation. Below are a few of the critical tools I use:
- Focus on each party s interests, not positions. If you focus exclusively on the end game you have envisioned for the negotiation ("I won t accept a purchase price of less than $5 million"), rather than interests ("I want to receive adequate compensation for my hard work and I don t want to worry about money in retirement"), you ll miss win-win solutions (perhaps a lower purchase price can be more than made up by a package of other benefits such as continued rental income, lifetime health insurance payments, etc.). Same goes for your adversary - consider what their interests truly are.
Build affiliation. In my early years practicing law, I was fortunate to have a mentor who did something practically unheard of in today s business world. When a client was on the receiving end of a lawsuit or had a difficult transaction to be negotiated, my mentor would pick up the phone, call the attorney for the other side, introduce himself and say, "It seems we have some issues to work out. Why don t we meet for dinner, get to know each other, and talk things through?"
It s too easy to let social norms dictate how we should act in a negotiation - "I need to come in guns blazing" - that we completely miss important opportunities to build connections that will help us negotiate to win. Don t belittle your adversary (or, on the flip side, don t be intimidated by someone who "outranks" you in experience and prestige); instead, strive to connect on a personal level. And once you do get talking, discuss things you care about - don t be another in a long list of people who commiserate about LIE traffic or the weather.
- Respect autonomy. Hurt feelings over being left out aren t limited to the middle school cafeteria: negotiations often break down because someone feels slighted. If you show up to a negotiation and see a first-year associate on the other side of the table, don t assume he s there just to take notes. Build a connection with him ("I see you won a research award in law school - nice job") and be respectful. And if his boss shows up too, don t act like the associate is invisible. There are enough moving parts in a negotiation to manage - don t blow it by making an easy-to-avoid mistake like this.
Mastering the psychology at play during a negotiation is critical, whether you re negotiating the release of hostages or negotiating with your two-year-old to try a new food. If you invest the effort into managing the emotional tension, I guarantee you will achieve better results at your next negotiation.