Avoiding “Close Calls” in Negotiation

By — on / Daily, Negotiation Skills

Adapted from “How ‘Close Calls’ Can Hurt You,” first published in the Negotiation newsletter, October 2009.

In the early 1990s, NASA managers and engineers were warned by an expert in risk analysis that the heat-resistant tiles that protected space shuttles during reentry into Earth’s atmosphere could be damaged by debris from the insulating foam on the shuttles’ fuel tanks. During missions over the next 10 years, debris did, indeed, hit tiles, but the damage was always minor and could be repaired between missions. As a result, NASA personnel accepted the design flaw as routine and insignificant—until a significant piece of debris caused the space shuttle Columbia to disintegrate on reentry in 2003.

The Columbia tragedy is a classic example of a common human decision-making error, according to Georgetown University professors Robin Dillon-Merrill and Catherine Tinsley: the tendency to overlook near-miss events. Rather than viewing each completed mission as a near miss—an event that could have been a tragedy if luck had not intervened—NASA personnel regarded each mission as a success. That overoptimistic outlook prevented the agency from addressing the problem of falling debris in time to prevent the Columbia tragedy.

In their research, Dillon-Merrill and Tinsley have found growing evidence that we all tend to overlook close calls that lack obvious cues a crisis almost occurred—a tendency that can lead to disaster in the realm of negotiation. After our decisions result in an apparent success, we tend to disregard the role of luck or chance in that positive outcome, Dillon-Merrill and Tinsley discovered in their research. Rather than interpreting a near-miss event as a potential failure, we code it as a success.

Unfortunately, when our risky decisions turn out well due to chance, we begin to believe we’re impervious to failure—and our decisions become even riskier. The key to preventing disasters in your organization is to pay more attention to near misses, according to Dillon-Merrill and Tinsley. To do so, follow three pieces of advice:

  1. Curb your optimism. To avoid engaging in overly risky behavior, develop a healthy skepticism toward apparent successes. Ask yourself, “What role did luck play? How close did we come to failure? What will happen if our luck runs out?” Perform cost-benefit analyses of risky decisions—and heed the results.
  2. Create a culture of safety. Instead of rewarding employees for seemingly successful outcomes or punishing them for apparent failures, examine their decision-making and negotiation processes. Encourage your employees to study recent near misses with the goal of avoiding future crises.
  3. Question amazing offers. Whenever you’re offered a deal that seems too good to be true, consider whether your counterpart might be caught up in a risky spiral of ignoring near misses. If the other side won’t take a more cautious approach, look for a new negotiating partner.

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