Everything good comes in threes, they say. For storytellers, this means understanding that readers and listeners find a sequence of three things to be memorable, satisfying, and compelling—whether it’s three bears, three little pigs, or three kings. For professional negotiators, sequences of three can be rewarding as well. The following examples of good negotiation skills include negotiating in three dimensions, identifying three alternatives, and making three offers.
1. Negotiate in Three Dimensions.
Although most of us understand the importance of preparing thoroughly for negotiation, we often focus too narrowly on tactics at the table: how to frame an opening offer, how to be persuasive, and so on.
By contrast, professional negotiators are more likely to grasp the importance of negotiating in three dimensions rather than one. In their book 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals, David A. Lax and James K. Sebenius encourage professional negotiators to move beyond the first dimension of “at the table” interpersonal skills and tactics to move on two other dimensions: setup moves and deal design.
Engaging in setup moves means taking steps to ensure that the right people are at the right table, engaging in the right issues in the right sequence. Too often, we assume that we’re talking to the right person in a negotiation. But what if we’ve overlooked someone with greater power to enact our proposals? The best professional negotiators set themselves up for success by scanning the environment to identify the most promising counterparts, options, setting, and so on.
It’s equally important to focus on deal design, a third dimension in negotiation. This includes identifying potential tradeoffs—issues that are relatively easy for one side to give and valuable for the other to receive. It also means thinking about how an agreement will unfold after the deal is signed and comparing it closely to your other alternatives.
2. Follow the “Fall in Love with Three” Rule.
Think about the last time you made a major purchase, such as a home, car, or piece of jewelry with a negotiable price. Did you feel like you “just had to have it”? If so, you may have violated a useful rule of thumb in negotiation, the “fall in love with three” rule.
In his book Smart Money Decisions, Harvard Business School professor Max H. Bazerman notes that homebuyers often fall in love with a particular home after seeing it at an open house and place a bid for it on the spot. By falling for one house, rather than several, they set themselves up for adversarial bargaining and are likely to fall victim to the other side’s power tactics in negotiation.
By contrast, professional negotiators understand that when they have several appealing alternatives, they gain the power they need to walk away from a negotiation without going below their bottom line. Although it can sometimes be tricky to line up multiple alternatives, such as several houses that you appreciate equally, doing so is likely to lead you to more satisfying outcomes.
3. Make Three Offers Simultaneously.
Another common practice for rookie (and even professional) negotiators is to carefully craft one offer to present to the other side. Either the other party turns it down, they accept it on the spot, or you end up haggling. Although this practice can lead to solid outcomes, it often prevents us from identifying packages that both parties would prefer more.
Compare this strategy to one that professional negotiators are more likely to follow: simultaneously presenting three offers that you value equally, but that vary across issues. Such “MESOs,” or multiple equivalent simultaneous offers, are likely to draw out your counterpart’s priorities and interests in a way not captured by direct questioning, according to Kellogg School of Management professor Victoria Husted Medvec and Columbia Business School professor Adam D. Galinsky.
For example, when negotiating a contract with a client, a web designer might simultaneously present three offers that vary on three issues: the complexity of the design, the delivery date, and the hourly rate. The designer should ensure that she would be equally happy with any of these options before presenting them, and each offer should be relatively aggressive to allow room for later negotiation. If the client prefers a package with a complex design, a higher rate, and a faster delivery date, then the designer has identified which issues the client values most and is in a good position to negotiate the details.
Have you ever followed the “fall in love with three” rule?