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.
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.
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.
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.
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.
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.
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.