When we negotiate for others, managing expectations is often part of our job, especially if they aren’t familiar with the sometimes complex nature of negotiations. Similarly, we may find it necessary to deal with the expectations of our counterparts. However, it’s easy to overlook the fact that we have expectations of our own that we need to manage.
We spoke with Francesca Gino, Professor of Business Administration at Harvard Business School, and author of Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan (Harvard Business Review Press, 2013), about a question we received recently that deals with managing expectations that we have going into a negotiation session.
Question: I have been in the real estate business for many years and have closed many successful deals. Over the past year, I have been involved in a negotiation over the sale of a piece of land. It’s hard for me to believe we have made so little progress. This is an important deal in the portfolio of the company I represent, so I need to find a way to speed things up. I’m starting to think the problem lies with my counterpart’s lack of bargaining experience. How can I best use my own expertise to close the deal once and for all?
Looking in the mirror and managing expectations
A: Rather than thinking about how to put your expertise into practice, you might be better off setting it to the side, at least for a moment.
Our objectivity as human beings is often compromised, even if we have a hard time seeing that this is the case. And, in fact, feeling like an expert (or objectively being one) can actually make managing expectations even more difficult.
Consider a simple example from a laboratory study by psychologists Peter Ditto and David Lopez. They asked their participants to evaluate a student’s intelligence by examining information about him, which was presented one piece at a time on a series of cards. The information was quite damning, and participants were told they could stop examining it as soon as they’d reached a firm conclusion. The result? When participants liked the student (based on information they received from someone who interacted with the student on another task) they were evaluating, they turned over one card after another, searching for the one piece of information that might allow them to say something nice about him. But when they disliked the student, they turned over a few cards, shrugged, and wrote him off.
This research suggests that if we walk into a negotiation thinking our counterpart has little experience or not much to offer, we will interpret whatever she says or does in ways consistent with that view. Our expectations become self-fulfilling prophesies—often to our detriment.
There is another potential danger to feeling like or being the expert at the bargaining table: We may have difficulty listening to information that we consider “bad news.” Consider that when we hear something disappointing, we face the task of managing expectations between our prior understanding of the world and a new reality. We then feel driven to resolve this state of cognitive dissonance. Often, and particularly when they consider themselves to be experts, people do so by rationalizing that their prior view of the world was correct. People not only find ways to justify their prior choices but also often increase their investment in a failing course of action, a phenomenon called escalation of commitment. Experienced negotiators might choose either to ignore discouraging information or be overly optimistic that they can overcome it.
Perhaps most insidiously of all, we often fail to recognize that we are affected by such self-justification biases. In our research, my colleagues Bradley Staats (University of North Carolina) and Diwas KC (Emory University) and I made some of our participants feel like experts (for instance, by asking them to solve easy trivia questions) and then presented all the participants with bad news about a prior decision they made during the study (such as an investment of resources). Those who had been primed to feel like experts, even though the expertise was in a different context, were more likely to stick by their bad decisions rather than make adjustments as a result of new information.
Based on this evidence, I advise you to return to your negotiation with fewer assumptions about your counterpart and your own expertise. This fresh start may help you better use the information the other side is giving you and identify ways to finally come to a deal.
How have you handled situations in which you found yourself managing expectations that impacted your own negotiating?