negotiation

Interest-Based Negotiation: In Mediation, Focus on Your Goals

Try bargaining with Russian President Vladimir Putin if you want an example of a difficult work situation

How can you get through to people who seem uninterested in finding common ground? How can you deal in negotiation with seemingly irrational negotiators who use insults, threats, and other hardball tactics to try to get their way?

“A tough guy with a thin skin”: That’s how former secretary of state Hillary Rodham Clinton summed up Vladimir Putin during a speech in Portland, Oregon, in April 2014.

“He is always looking for advantage,” she continued. “So he will try to put you ill at ease. He will even throw an insult your way. He will look bored and dismissive.” Saying she had a lot of experience dealing with people who acted like Putin, Clinton concluded, “Go back to elementary school. I’ve seen all of that.”

Clinton’s dismissive attitude conveys the exasperation and sense of annoyance that many of us have felt when dealing with difficult people in negotiation.

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In his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation, Massachusetts Institute of Technology professor Lawrence Susskind offers the following steps for coping with difficult counterparts who seem irrational at the bargaining table:

  1. Don’t respond to irrational behavior in kind, lest you make a bad situation even worse.
  2. Don’t make unilateral concessions in an effort to win over the other party. Doing so will only encourage them to continue their bad behavior.
  3. Don’t lose your cool out of frustration. Instead, take a break before you lose your temper.
  4. Consider bringing others from your organization to the table, and encourage your counterpart to bring colleagues with him or her as well.
  5. Put forth proposals that meet your interests very well and that seem to meet your counterpart’s interests at least reasonably well.
  6. Prepare for each interaction carefully. Before sitting down to negotiate, talk with others in your organization and rehearse as often as possible.
  7. After each meeting, summarize what transpired in writing and distribute copies to everyone involved. This will put your counterpart on notice that you are aware of his game.
  8. If your counterpart refuses to respond to a set of reasonable proposals by a reasonable deadline, understand that it may be time to walk away and pursue other alternatives—then do it.

Related Mediation Article: Real-Life Examples of Mediation: How Mediation Works

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Originally published May 2014.

5 Ways to Be a More Strategic Business Partner

Kraft Heinz’s offer to purchase Unilever ended in a rare public retreat for investor Warren Buffett—and generated useful business negotiation tips for the rest of us who want to be a strategic business partner.

If you’re looking to be a strategic business partner, you need to have your eyes and ears open at all times.

In the world of mergers and acquisitions, some acquirers try to improve the companies they purchase by expanding them and emphasizing innovation, while others choose to focus on cutting costs. Due in part to millennials’ lack of appetite for prepackaged food, consumer-goods companies lately have been focused more on slashing budgets than on innovating. Many are exploring mergers to achieve greater efficiencies and scale, according to the New York Times.

In 2013, for example, the Brazilian private equity firm 3G Capital purchased Heinz and took it private, with financing from Berkshire Hathaway chief Warren Buffett. The legendary “Oracle of Omaha” had watched with admiration as 3G principal Jorge Paulo Lemann transformed a small Brazilian brewing company into Anheuser-Busch InBev through increasingly bold acquisitions and cost-cutting. Two years after their Heinz deal, Lemann and Buffett teamed up to buy Kraft, then took the combined business public as Kraft Heinz.

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After making an acquisition, 3G follows a time-tested script that involves replacing most of the target’s executives with its own leaders, who then carry out mass layoffs, close factories, and institute internal penny-pinching. It’s been a recipe for success: Kraft Heinz saw its market value rise from about $63 billion to approximately $105 billion in two years.

Because innovation has not proven to be one of its strengths, to sustain its impressive gains, 3G instead repeatedly acquires companies and institutes cost-cutting measures. “It’s like the shark that can’t stop swimming,” one industry director told Fortune.

The latest big fish 3G set its sights on? Unilever—but the British-Dutch consumer-goods giant turned out to be the one that wriggled away. Our analysis of the deal reveals five lessons negotiators contemplating new partnerships should bear in mind before they approach the table.

4 Ways to prepare for a business partnership

1. To become a strategic business partner in negotiation, sometimes it starts with polite conversation.

In a February 27, 2017 interview with CNBC’s Squawk Box, Buffett recounted that in recent months, he, 3G’s Lemann, and Kraft Heinz CEO Alexandre Behring (a 3G cofounder) privately agreed to make a friendly offer for Unilever, as long as the company was “open to it.” (Buffett has said in the past that hostile takeovers are outside his area of expertise.) Unilever, whose brands include Hellmann’s, Dove, Knorr, and Lipton, was in a sales slump despite a strong presence in the developing world. The 3G-Berkshire team believed Unilever could give Kraft Heinz an international platform for its brands.

Buffett was happy to let 3G run the negotiation, despite owning a slightly larger stake than 3G in Kraft Heinz. (Together, Berkshire and 3G own just under 50% of the company.) “I’m not embarrassed to admit that Heinz is run far better under [3G] than would be the case if I were in charge,” he has said, according to Fortune. It’s a marked departure from Buffett’s usual strategy of trying to grow the companies he purchases through added investments in infrastructure and innovation. But his low-key role has allowed him to keep the “bloodletting” of American jobs and shuttered factories from staining his reputation, even as Berkshire’s $9.8 billion investment in Kraft Heinz more than tripled, writes Fortune.

Behring traveled to London to quietly float the idea of a buyout to Unilever’s Dutch CEO, Paul Polman. “He didn’t get a yes, he didn’t get a no,” Buffett told CNBC. “He got perfectly polite conversation. And so [Behring] came back and said that he hadn’t been thrown out.”

Two weeks after that meeting, sometime in February 2017, Behring returned to London, this time with a letter outlining a possible deal. Lemann, Buffett, and Behring agreed that if Behring again raised the possibility of a deal with Polman and got a neutral response, he would hand over the letter, but if he got a negative response, he would not. “He went over and felt he got a neutral response, and therefore gave the letter,” Buffett recalled to CNBC.

2. To become a strategic business partner in negotiation, sometimes you must predict your WATNA, or Worst Alternative to a Negotiation.

On February 17, the Financial Times’ Alphaville blog leaked rumors of a Kraft Heinz bid for Unilever in a live market chat.

“If this had involved only American companies, probably nothing would have happened, as the companies would have just declined to comment,” explains Steven Davidoff Solomon in the New York Times. But in Britain, where Unilever is traded, companies are legally required to announce the status of any potential acquisitions as soon as rumors emerge.

Likely not terribly surprised by the leak, the 3G-Buffett team went public with its takeover offer of $143 billion (roughly $50 per share). If completed, it would have been the largest cross-border merger since 2000, and shares of both Kraft Heinz and Unilever surged at the news.

But the Kraft Heinz team seemed caught off guard when Unilever immediately released a statement rejecting the Kraft Heinz bid, which it said “fundamentally undervalue[d]” Unilever’s worth; had “no merit, either financial or strategic, for Unilever’s shareholders”; and created no “basis for any further discussions.”

3. To become a strategic business partner in negotiation, consider the deal environment.

Despite Behring’s earlier overtures, Unilever executives seemed to have been not only shocked by the offer but also horrified. Behind the scenes, they tried to persuade shareholders that Kraft Heinz’s cost-cutting culture and “lack of vision for cultivating brands” would be disastrous for Unilever, according to Bloomberg. The executives were also concerned about weighing down Unilever with a buyout funded largely by debt, the Guardian reports.

The political climate also discouraged a deal. Following the pound’s decline after the June 2016 Brexit vote, British lawmakers had been warning that foreign invaders might try to take advantage of “fire sales” of British companies, according to the New York Times. U.K. prime minister Theresa May had criticized Kraft in a speech for breaking promises not to close factories after its 2010 acquisition of British chocolate-maker Cadbury. As a result of Kraft’s behavior, British takeover law had been modified to require acquirers to be clear about their intentions during acquisition negotiations.

Unilever CEO Polman reportedly called Buffett and Lemann after the leak to warn them that neither the company’s board nor its investors were likely to support the proposed acquisition. For his part, Buffett said he told Unilever not to worry about receiving a hostile or unfriendly offer.

4. To become a strategic business partner in negotiation, anticipate long-term clashes.

Buffett and Lemann, who would have had to put up significant new capital to help fund the deal, were reportedly “spooked” by Unilever’s response, according to the Financial Times. Neither was used to having offers rejected, let alone so publicly and so soundly.

The odds of winning a public battle for their target were steep, they calculated. They would be pressured to commit to saving jobs and facilities in the United Kingdom, a promise at odds with 3G’s standard operating procedure. And any deal reached would face an uphill battle for regulatory approval in both Britain and the Netherlands, where Unilever is jointly based and nationalist fervor is also high.

Then, Kraft Heinz and Unilever released a joint statement saying that Kraft Heinz had “amicably agreed to withdraw its proposal for a combination of the two companies.” Unilever’s shares plummeted, and industry talk turned to guessing which consumer-goods company the Kraft Heinz shark would pursue next.

5 Ways to Be a Strategic Business Partner and Set Yourself up for a Strong Partnership

The following lessons from Kraft Heinz’s failed bid for Unilever apply to any negotiation dance between two potential partners.

1. Swing in your sweet spot.

Buffett famously formed his investment philosophy around baseball great Ted Williams’s observation that he tended to hit at an All-Star level at pitches thrown down the middle of the plate but swing poorly when balls came in low and outside the strike zone. “The trick in investing is to just sit there and watch pitch after pitch go by and wait for the one right in your sweet spot,” Buffett said in the HBO documentary Becoming Warren Buffett. “And if people are yelling, ‘Swing, you bum!’ ignore them.”

In investing, this means that Buffett is comfortable making friendly offers but not hostile ones. He also is not a price haggler: “I’m not a negotiator,” the famous dealmaker told CNBC. He “pays what he thinks something is worth and rarely stretches,” Jeff Matthews, who has written books on Berkshire Hathaway, told Bloomberg. “People tend to want to sell to him, so he usually gets his price.” And when he doesn’t, he is apparently ready to walk away.

When we play to our negotiating strengths and acknowledge our weaknesses, we can end up waiting patiently for the right deal or walking away from one we dearly want—and we avoid serious errors.

2. Prepare for cultural barriers at the table.

Buffett and Lemann had felt confident enough in Behring’s assessment of his early meetings with Polman to believe that Unilever was open to weighing an offer. When that seemed not to be true, Buffett was left trying to explain what had happened. He speculated to CNBC that cultural barriers may have played a role. Specifically, he suggested that the Brazilian Behring, who speaks English as a second language, may have misinterpreted Polman’s politeness in their earliest meetings as interest. Because even minor cultural differences can lead to major confusion, it’s wise to learn about cultural norms before sitting down at the negotiating table.

3. Anticipate long-term culture clashes.

Unilever has a reputation for investing in long-term sustainable environmental practices, a vision that many observers perceive to be at odds with 3G’s ruthless focus on short-term cost cutting. Although the two teams might have found a way to capitalize on the best of both worlds, it’s perhaps more likely that they would have had difficulty integrating. Before rushing into a deal, analyze how well your and your counterpart’s cultures—including your corporate, national, regional, and industry cultures—will mesh.

4. Consider the deal environment.

Current protectionist trends both in the United States and abroad mean that interested observers, including governments and citizens, are likely to view would-be international corporate raiders with alarm. In negotiation, it’s important to research not only your counterpart but also the deal’s broader environment. Ask and answer questions such as these: Who might try to block a deal? How likely are they to be successful? Are there ways to win them over? Who’s in power? Should we wait a year or two, when the political climate might be different? Who might intercede on our behalf?

5. Expect leaks to change the game.

Once a sensitive negotiation goes public, the way parties react to one another will fundamentally shift. In particular, scrutiny is likely to increase nervousness and competitive behavior. It could even change the rules of the game. Kraft Heinz, for example, was legally obligated to take its offer public in the United Kingdom after rumors of the offer emerged. Think hard about how you and your counterpart might be affected if your negotiations gain an audience. Do what you can to ward off leaks, but also have your response to them ready to go if word gets out, and anticipate how parties are likely to react.

What do you do to become a more strategic business partner?

This article was originally published in 2017 and has been updated. 

Negotiation Mistakes: Apple TV’s Botched Expansion Deals

Negotiation mistakes can set back you and your organization by months, even years. Apple’s early attempts to adjust to the streaming era included missteps that offer valuable negotiation lessons.

Apple isn’t used to making negotiation mistakes. The company has often found success by charging headfirst into unfamiliar industries, from book publishing to music to mobile phones, and disrupting its long-standing business models. In the early 2000s, for example, the company’s cofounder, Steve Jobs, pressured music labels to switch from selling $15 CDs to selling songs online for 99 cents each.

No surprise, then, that when the company decided to take Apple TV to the next level, it tried to sell media companies on new ways of doing business. But the company’s aggressive strategy led to a string of negotiation mistakes, as Shalini Ramachandran and Daisuke Wakabayashi reported in the Wall Street Journal in July 2016. The failed negotiation case study resonates to this day.

A Bigger Bite out of TV

For years, Apple referred to Apple TV—a small box that connects to TVs so that users can stream content from providers—as a “hobby,” according to Fortune.com. But when sales of the iPhone began to level off, the company became eager to beef up its TV business. In 2009, Apple tried to entice media companies to contribute channels to its service by offering above-average fees, but they balked when Apple would take only some of their channels.

In 2011, Apple tried to reach deals with cable companies Comcast and Time Warner Cable for joint TV services. But Apple asked for too high a payment from subscribers ($10 per month) and was reluctant to share details about its proposed interface, sources told the Journal.

Two years later, new meetings with Time Warner got off to a rocky start when Apple executive Eddy Cue reportedly showed up late at the cable company’s Manhattan offices dressed in jeans, a Hawaiian shirt, and tennis shoes. Apple’s aggressive demands at that meeting and others—such as that viewers should be allowed to skip ads when watching new shows—led TV channel owners to wonder whether “the Apple guys” had “any idea how this industry works,” one former Time Warner executive told the Journal.

One cable-industry executive summed up Cue’s strategy as simply saying, “We’re Apple.” Another told the Journal that the TV industry was comfortable saying no to Apple because it didn’t need a “white knight to come racing in” the way the music industry had.

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More Unfruitful Talks

In early 2015, Cue began pitching media companies such as Disney, Fox, and CBS on the idea of putting together a “skinny bundle” of about 25 channels that would include their hit shows.

Cue reportedly made unheard-of demands of Disney, including freezing the monthly rate-per-viewer Apple would pay to license Disney channels for several years. Disney and other companies knew such a concession would set a bad precedent. Once again, talks broke down.

Following these negotiation mistakes, Apple was unable to announce a streaming TV service when it launched its newest Apple TV set-top box in September 2015.

Apple Tries to Go Hollywood

Apple then turned to revamping its TV device to allow apps from networks and to broaden its original programming. The company started meeting with Hollywood executives about creating new shows. The executives reportedly were “bemused” that Apple sent a little-known producer to negotiations that typically would involve high-level players from all sides, according to the Journal.

Eventually, Apple put its Apple TV set-top box on the back burner and invested heavily in Apple TV+, a subscription streaming service for original content, and Apple TV Channels, an app that manages users’ streaming services. According to one estimate, Apple TV+ was earning about $76 million in revenues by late 2020—but the company likely was still spending much more. Apple’s early negotiation mistakes contributed to it being slow out of the gate relative to competitors.

Lessons Learned from Apple’s Negotiation Mistakes

Apple made several common negotiation mistakes that could have been avoided by following these negotiation skills and strategies:

  • Study industry practices. When proposing an alternative model in an unfamiliar industry, you need to be able to compellingly explain what advantages it would offer your counterpart over the prevailing one.
  • Fulfill cultural norms. Norms surrounding meetings—such as what to wear, who should attend, and whether punctuality is important (hint: It almost always is)—can vary across industries and cultures. When meeting someone for the first time, research norms and expectations so you can make a great initial impression.
  • Analyze power levels. If an aggressive approach worked for you in one negotiation, don’t assume that a hard-bargaining style will automatically transfer to negotiations with other organizations. Apple’s disruptive mentality was effective in industries that were desperate to innovate. The TV industry, by contrast, had less need to do business with Apple. Thus, it gained bargaining power from its ability to walk away. A mutual gains approach to negotiation would have been more effective for Apple.

What negotiation mistakes have you observed and learned from lately? 

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How to Make a Good Deal When You Lack Power

When we’re lacking objective sources of power, we can still make a good deal through certain types of thoughts and behavior at the bargaining table.

Imagine yourself in the following negotiation scenarios and attempting to make a good deal:

  • You’re a chef who is having trouble finding cooks in an oversaturated restaurant market. You’re so desperate to get fully staffed that you find yourself making significant concessions on salary, scheduling, and other issues during interviews with potential hires.
  • You are trying to sell a used piano online before an impending move and receive only one lowball offer. You’re tempted to take the offer rather than negotiate for a number closer to your asking price.
  • You have received a relatively low financial-aid offer from your first- choice graduate school. The other programs you’ve been admitted to are not nearly as appealing. You debate whether to ask your first-choice school for more money or just go ahead and apply for loans.

In negotiation, we’re often advised that our most important source of power is our best alternative to a negotiated agreement, or BATNA. When we feel powerless, it’s often because we don’t have a strong alternative if the current deal falls apart or fails to meet our needs. The key to enhancing our power, therefore, is to do whatever we can to improve our walk-away alternatives.

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Even without objective power, you can make a good deal in most negotiations

What if you’ve done everything you can to bolster your BATNA and it’s still falling short? What if simply no other job candidates, piano buyers, or appealing grad-school offers are left to consider? In cases such as these, there may be other, more subjective ways to improve your sense of power and make a good deal, the results of two studies show.

When you lack power, there may be behaviors you can engage in to make the other party think you’re powerful, past negotiation research has shown. In particular, it’s been shown that negotiators can improve their outcomes through displays of dominance. Dominance behaviors include taking up more space than usual with expansive postures, speaking loudly, expressing your preferences more often and more clearly, being assertive, taking the lead in the conversation, and expressing anger. Expressing dominance isn’t as extreme as being domineering, which involves more controlling and antagonistic behavior.

In one study, University of Southern California professor Scott S. Wiltermuth and his colleagues looked more closely at whether the amount of objective power a negotiator has affects how useful his or her displays of dominance will be. In a negotiation simulation in one of the experiments, pairs of undergraduates played the role of two coworkers, a senior vice president and a junior analyst, hammering out the details of a new virtual-reality project.

In some of the experiment’s conditions, those playing the senior vice president were told that they were in a much stronger negotiating position and had much more power in the organization as compared to those playing the junior analyst, who were told that they were in a much weaker bargaining position and had much less power. Some of the negotiators were encouraged to engage in dominance behaviors (such as speaking loudly, interrupting, and taking up a lot of space) during the negotiation, which they were told might help them make a good deal.

The results showed that when low-power negotiators engaged in dominance behaviors, they felt more powerful and claimed more value as a result. Thus, when you lack power, behaving in a dominant manner during a negotiation may help you feel more powerful and perhaps negotiate more assertively.

By contrast, the high-power negotiators in the experiment didn’t feel more powerful or claim more value as a result of engaging in dominance behaviors. However, the high-power negotiators’ dominance behaviors helped them and their counterparts create new sources of value—that is, pairs were more successful at expanding the pie when the person with more power appeared dominant. Why? The high-power negotiators’ dominant behavior highlighted their power and cued their less powerful counterparts to avoid challenging them directly. Instead, the low-power negotiators relied on more collaborative moves, such as making tradeoffs across issues, to make a good deal. “High-power negotiators’ expressions of dominance may motivate low-power counterparts to invest the cognitive effort necessary to find an integrative solution,” Wiltermuth and his colleagues conclude.

The study contributes to a growing literature suggesting that negotiators, whether they have ample or little power, may be able to improve their outcomes by using a dominant negotiating style. However, the authors caution that dominance behaviors can backfire if your counterpart believes you’re engaging in them to try to gain status.

Make-believe BATNAs

Simply imagining that you have more power than you actually do can also improve your negotiated outcomes, INSEAD researcher Michael Schaerer and his colleagues found in seven experiments conducted on more than 2,500 people.

In one experiment, participants were instructed to make the first offer in a negotiation over a used CD with an online buyer (who was fictitious). Some sellers were told that a different buyer had offered them $8 for the CD—a strong BATNA. Others were told they had no other offer—a weak BATNA. Those in a third group also were told they had no other offer (a weak BATNA) and then were asked to imagine having a strong alternative offer. The sellers were instructed to imagine what this strong alternative offer would look and feel like, and how it would affect the upcoming negotiation.

Those who imagined having a strong BATNA made significantly more ambitious first offers than those who were simply told they had no alternative—$11.20 as compared to $8.65. In fact, those whose strong BATNAs were imaginary asked for about as much as those who actually had a strong BATNA.

In another experiment, participants in the role of seller who were asked to imagine having a strong BATNA before negotiating to sell a Starbucks mug face-to- face with participants in the role of buyer made more aggressive first offers and sold their mug for significantly more than did sellers who weren’t asked to imagine having a good alternative. They performed almost as well as those who actually did have a strong alternative.

Overall, the results of Schaerer and his team’s experiments imply that thinking about the BATNA we’d like to have may inspire us to ask for more and get better results. The study leads to the interesting conclusion that in negotiation, positive beliefs—even if they’re not rooted in reality—can make us more ambitious and successful. There are a couple of caveats, however. First, when negotiators who imagine a strong alternative don’t make the first offer, they often don’t make a good deal with this strategy, apparently because they become anchored by the other side’s first offer and become distracted by their high aspirations. Second, when negotiators are very far apart on price, imagining a healthy BATNA can make you overly ambitious and bring about an impasse when a satisfactory deal was possible.

How do you handle a lack of power at the bargaining table?

Bargaining Power in Negotiations: Leveling the Playing Field

Bargaining power in negotiations can have a dramatic effect on perceptions and behavior, research shows. Here’s advice on how to encourage negotiators who feel powerful to keep your best interests in mind.

Powerful negotiators can be formidable opponents. That’s in part because their bargaining power in negotiations—such as a high position in a hierarchy, wealth, or a great BATNA (best alternative to a negotiated agreement)—gives them considerable leverage. In addition, powerful individuals tend to demand more for themselves, in violation of fairness norms. Here’s a closer look at the effects of bargaining power in negotiations—including advice on how to level the playing field.

Accept or Reject?

In a study published in the Journal of Experimental Social Psychology, researcher Yi Ding (Southwest University in China/Vrije Universiteit Amsterdam) and his colleagues looked at whether the wealthy are less accepting of unfair offers than those with fewer resources. 

The researchers had participants play the well-known “ultimatum game” from the field of economics in which one party, the “proposer,” receives a sum of money and must decide how much of it, if any, to offer to a partner, the “responder.” The responder then must decide whether to accept or reject the proposer’s offer. If the responder accepts the offer, both players receive the money as allocated. If the responder rejects the offer, neither player gets to keep any of the money.

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In one online experiment, 630 participants recruited in China first played a game of luck in which they could earn a high bonus, a moderate bonus, or no bonus at all. This induction was found to lead the participants to temporarily feel wealthy, of moderate means, or poor, respectively.

Next, the participants played the role of the responder in an ultimatum game. All were told that their proposer had been allocated CN¥10 (about $1.60 at the time of the experiment) and had proposed a split of CN¥8 for themselves and CN¥2 for the participant—clearly, an unfair offer. Participants then decided whether to accept the offer. About half were told they would get nothing if they rejected the offer; the other half were told they would receive the money that the proposer offered even if they formally rejected it. (This was done to rule out the possibility that the “poor” would feel they couldn’t afford to sacrifice even an unfair offer.)

The results? In both conditions, those induced to feel wealthy rejected the unfair offer about 73% of the time, as compared to a 55% rejection rate for those in the moderate and poor conditions. When participants’ wealth was measured by family income, the wealthier group again was less accepting of unfair offers than were those with lower family incomes.

A Sense of Entitlement

The experimenters tested and ruled out the possibility that those endowed with wealth rejected unfair offers because they felt an altruistic sense of responsibility to enforce fairness norms.

Rather, a different motivation emerged for “wealthy” participants’ rejection of unfair offers: their sense of entitlement, as measured by their level of agreement with statements such as “I deserve fairer treatment than others.” Those who felt wealthy were less accepting of unfair offers because they felt entitled to receive more. 

The results imply that negotiators who are (or who feel) financially well off may be especially prone to rebelling against offers that give them less than others. Given that the study was conducted in China, the researchers also suggest that their results show that “people in a rapidly changing society find it exceptionally easy to justify their relative wealth,” including wealth that “occurs by mere chance.”

Leveling the Effects of Bargaining Power in Negotiations

Overall, the study adds to a growing literature on the role of power in negotiation and particularly the risks associated with bargaining power in negotiations. The following guidelines on power in negotiation can help you enlist powerful negotiators to work with you rather than against you:

  1. Align your goals with theirs. To gain the support of powerful negotiators, show them how advancing your interests and goals can help them. For example, if the CEO wants you to take on a time-consuming assignment, they might agree to ask your boss to temporarily lighten your workload if you promise to make the new assignment your top priority. 
  2. Make them responsible for you. Powerful parties become more generous and empathetic when they feel responsible for others, Adam D. Galinsky and his colleagues have found. For this reason, asking your fellow negotiator for a favor or otherwise appealing to their sense of generosity may inspire cooperation. 
  3. Increase their accountability. Asking the powerful to justify their decisions may encourage them to see your perspective, research by Philip E. Tetlock of the University of California at Berkeley suggests. If a potential customer tells you she’s negotiating with your competitors, for example, you might ask her if she’s willing to share any offers she receives with you. If she is, you may be able to identify how you could do better. 

What other effects of bargaining power in negotiations have you observed?

When a Little Power is a Dangerous Thing

Is it better to have some power in a negotiation rather than none at all? Find out why sometimes a little power is a dangerous thing.


In 1975, Leigh Steinberg launched his career as a sports agent by proving that even a little power can be a dangerous thing. He faced what appeared to be a tough negotiation with the Atlanta Falcons. The team had chosen Steinberg’s client, rookie quarterback Steve Bartkowski, as their first pick in the first round of the National Football League (NFL) draft. The Falcons had other choices they could turn to if the salary talks failed, but that was not the case for the quarterback. Bartkowski was forced to negotiate exclusively with the Falcons and would have to accept the team’s best offer, recalls Steinberg in his memoir, The Agent: My 40-Year Career Making Deals and Changing the Game (Thomas Dunne Books, 2014).

Despite this lack of power, Steinberg went for broke: He made an opening demand for $750,000 on behalf of Bartkowski, which at the time was more than any football player—let alone a rookie—had ever been granted. Not surprisingly, the Falcons were outraged by the request. Nonetheless, they ultimately signed Bartkowski for $600,000, the most lucrative contract in NFL history at the time.

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Why is a little power a dangerous thing in negotiations?

In negotiation, we tend to believe that even a small amount of power is better than no power. If we had to choose, we would prefer to enter a job negotiation with an undesirable job waiting in the wings than no job at all. If talks with a long-coveted client fail, we’d rather have a few unpromising leads to turn to rather than none.

This thinking makes perfect sense. Yet because of the way our minds work, a little power is a dangerous thing for our own gains, as it turns out. Rather than a benefit, weak alternatives can cause problems for us at the negotiating table, a study by researchers Michael Schaerer and Roderick I. Swaab of INSEAD and Adam D. Galinsky of the Columbia Business School in the journal Psychological Science suggests.

Offers and anchors

A negotiator’s best alternative to a negotiated agreement, or BATNA, is her greatest source of power at the bargaining table, as Roger Fisher, William Ury, and Bruce Patton first explained in their groundbreaking book Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 2011). Negotiators who are armed with a strong BATNA tend to set higher goals, make more ambitious first offers, and claim more value than those who are not, research finds.

Is any alternative, no matter how bad, better than nothing? It should be. If your negotiation fails, an alternative that will help you muddle along is better than nothing at all. But such clear logic doesn’t always translate to rational decisions in the real world.

Consider, as Schaerer and his team did, how Steinberg’s negotiation with the Falcons might have unfolded if Bartkowski had received an offer from another team back in 1975—say, a lowball offer of $100,000 per year.

Would Steinberg still have made a bold demand for $750,000? Probably not, the researchers speculated. In this case, the low offer likely would have led Bartkowski and his agent to view any salary above $100,000 as desirable and thus to demand much less than $750,000, essentially making a little power a dangerous thing for the quarterback.

This prediction hinges on the anchoring effect, or the tendency for negotiators’ judgment to be affected by any number that is mentioned during talks, such as an opening offer, whether or not it’s relevant or appropriate. The Atlanta Falcons, for example, clearly were anchored by Steinberg’s $750,000 demand even though they viewed it as unreasonable. A negotiator’s weak BATNA might anchor her judgments and outcomes in a similar manner, the research team hypothesized.

Weak BATNA, strong anchor

In a series of experiments, Schaerer and his team confirmed their prediction that weak BATNAs serve as anchors that cause problems for negotiators.

In one of the experiments, pairs of students were assigned to play the parts of buyer and seller in a negotiation over a Starbucks mug. The students had been chosen for the study based on their ability to recognize the mug’s retail price, which was 8.90 euros.

Before meeting their negotiating partners, students playing the role of seller received a phone call, purportedly from another potential buyer. Some of the sellers received a call from a buyer who made a low offer of 1.50 euros for the mug; others received a call from a buyer who declined to make any offer for the mug. Thus, some of the sellers had a weak BATNA, and some had no BATNA at all. In their subsequent negotiations, the sellers were instructed to make the first offer and to negotiate with their counterpart until they reached agreement on the sale price of the mug.

The results? After their phone calls (and before their face-to-face negotiations), negotiators who had no BATNA reported feeling less powerful as compared with those who had a weak BATNA. Nevertheless, those with no power set significantly higher opening selling prices for the mug than did those with a weak alternative, and those with no power went on to achieve better outcomes as a result.

The anchoring effect of a clear, weak alternative trumped negotiators’ sense of power, the team found. In other experiments in the study, a strong BATNA was also a powerful anchor, leading participants to aim high and perform better than those with a weak or no BATNA.

Look beyond your BATNA

The results of these experiments challenge the long-standing belief that having a BATNA is always a plus in negotiation. Although this should be true if we behaved logically, a weak BATNA may lead negotiators to irrationally aim lower than they would if they had no alternatives at all. In other words, a little power is a dangerous thing, giving negotiators a sense of control when they would clearly be better with no alternative.

This doesn’t mean that you should abandon the search for alternatives to your current deal if the pickings seem slim. The importance of having even a weak BATNA will become apparent if you ever need to turn to it. You should always be on the lookout for a strong BATNA. And before accepting a deal, you should compare it with your BATNA.

These new findings on power and anchors suggest the following guidelines:

1. Anchor on your target price. If your BATNA seems weak, concentrate on your ideal target price instead. In one experiment, Schaerer, Swaab, and Galinsky found that negotiators with a weak BATNA who were instructed to focus on their target price made higher first offers and reached better deals than negotiators who were instructed to focus on their BATNA.

2. When powerless, analyze risk. Negotiators who have no BATNA may be tempted to make aggressive offers, as Steinberg did for Bartkowski. Believing that we have “nothing left to lose,” we may decide to shoot for the moon. Though aggressively high offers can be successful in the short run (thanks to the anchoring effect), they could backfire later if the other party perceives you as naive or ruthless. Even worse, your counterpart could walk away from the bargaining table. Before aiming too high, analyze the situation carefully.

3. Add other issues to the discussion. Notably, the experiments in the Schaerer team’s study required negotiators to focus on a single issue: price. Fortunately, in our own negotiations, we can typically broaden the discussion to include other issues. By doing so, we may be able to overcome a weak bargaining position on price and find a deal that’s worth doing for both parties.

How have you dealt with poor BATNAs in your negotiations?

Ask A Negotiation Expert: How Conversational Receptiveness Might Bridge Our Divide

In the United States and elsewhere, people with very different worldviews on politics seem hopelessly and dangerously divided. A skill called “conversational receptiveness,” which involves using certain language to show you’re willing to thoughtfully engage with opposing views, can help lessen tensions, write researchers Michael Yeomans of Imperial College London, Julia Minson of Harvard Kennedy School, Hanne Collins and Francesca Gino of Harvard Business School, and Frances Chen of the University of British Columbia in a new study published in the journal Organizational Behavior and Human Decision Processes. We recently spoke with Gino and Minson to find out more. The bulk of the interview took place before the January 6 attack on the U.S. Capitol.

Negotiation Briefings: What motivated you to explore the possible benefits of conversational receptiveness?

Francesca Gino: I was looking for hope in a world where we seem to have difficulty having productive conversations when our beliefs are different. Julia and I have seen that some organizations and individuals are finding ways to bridge such divides. The not-for-profit Braver Angels, for example, was formed after the 2016 election to facilitate conversations between Democrats and Republicans. People with very entrenched beliefs become capable of having a thoughtful conversation, in part because the moderators foster receptiveness.

Julia Minson: One of the things that kicked off this work was the question of whether people recognize when you are sincerely trying to engage with them. Turns out, they don’t! We want to sound receptive, but we end up using the wrong words.

NB: What are some ways of demonstrating receptiveness that you found to be effective?

JM: We wrote an algorithm that picks up the specific words and phrases that sound receptive to people. The most important signal of receptiveness involves acknowledging your counterpart’s point of view: “I understand you’re saying . . .” or “I think you mentioned . . .” In other words, actively showing that you heard what the other person said.

Another signal involves finding areas of agreement. Even when people are on opposite sides of an issue, there are things that we all can agree on. Suppose colleagues are debating whether enough is being done to increase diversity. They can disagree on that issue but still agree with a statement like, “We all want to work in a company where people feel respected and valued.” This doesn’t mean compromising; rather, it’s recognizing that any argument is multifaceted and that most people have something valuable to say.

FG: I’ve used that one when my husband and I are in disagreement over a parenting issue. I say, “What I think we agree on is . . . ,” and it’s usually quite helpful.

Another receptiveness strategy that I love is hedging your claims. Rather than saying, “I’m 100% sure that this is the right way of looking at the problem,” you might say, “I think that one way to tackle this is . . .” The recipient is likely to see you as humbler when you speak this way.

NB: What benefits have you observed when people demonstrate receptiveness?

JM: In our experiments, we paired people who were on opposing sides of very emotional issues. We found that those who expressed conversational receptiveness were more persuasive than people who used their natural conversational style, which tends to be more argumentative and dogmatic.

A softer approach has the paradoxical consequence of making people more willing to come to your side. In addition, people who express conversational receptiveness are viewed as having better judgment, which makes opponents more interested in engaging with them in
the future.

In one experiment, we studied online arguments between Wikipedia editors about the content of Wikipedia pages. Sometimes these arguments get so heated that people insult each other and get kicked off the platform. We found that when one person expressed receptiveness very early on, the other person was receptive in return. These conversations were less likely to end with personal attacks and sanctions. Receptiveness is contagious, and it heads off conflict.

FG: I think this finding applies very well to the movement toward increasing diversity in organizations, which is obviously wonderful. But leaders in these companies need to manage the tensions and disagreements that come up. People can have more productive conversations by showing receptiveness.

NB: Is it difficult to learn to be more receptive in conversation?

JM: The participants in our experiments easily learned and practiced the features themselves, such as acknowledgment and hedging. But it’s hard to practice receptiveness on your own when you’re really upset. It’s hard to say, “So I think what you’re saying is . . .” and delay your own rant to make the person feel heard. It’s a self-control problem.

I had a conflict with a colleague recently, and I was so upset. I could not come up with any type of reasonable response. I shared this with my husband, who said, “Well, you know, you study conversational receptiveness. Use those strategies.” I used acknowledgment in the first paragraph of an email, and the rest flowed very easily. I got a very nice response back from the colleague, a 100% turnaround.

NB: So maybe taking a break helps, or switching to email if you were arguing on Zoom or in person?

JM: I think slowing down helps. Part of the task is to be more thoughtful about your words rather than just spewing the first thing that comes to mind, which is usually very negative.

NB: What if someone holds views that you find immoral or offensive? Is it still worth talking to them?

FG: I have shared the Braver Angels approach and similar stories in many classes. I sometimes ask, “Is there a limit to this approach? Are there conversations that are not worth having?” A lot of people, about 75%, say yes, they believe there is a limit.

I personally view this as a missed opportunity. I know of many situations where receptiveness has brought people together. I believe that if we allow ourselves to have a disagreement but look for commonalities, there is hope. If we have the courage to enter conversations with people we strongly disagree with on important issues, and open ourselves up to the possibility of leveraging receptiveness, I think we could have a better world.

Receptiveness is not about persuasion. We should be able to listen to someone attentively and evaluate their arguments without having to agree with them or compromise.

JM: Sometimes people refuse to engage in such conversations because they have a fundamental misunderstanding of what conversational receptiveness is. They might think, “If someone tells me they don’t believe in climate change, there’s nothing they can say to convince me they’re right. So, why waste my time?” Receptiveness is not about persuasion. We should be able to listen to someone attentively and evaluate their arguments without having to agree with them or compromise.

Another objection is that when you talk to a white supremacist or someone who thinks Covid-19 was introduced by aliens, you’re giving legitimacy to dangerous views. That by being receptive, you’re spreading the disease, in a sense. But from my perspective as a researcher, that’s an open empirical question. We do know that receptiveness makes people more willing to change their mind. So, it may in fact be the opposite: By muzzling people, we may be further entrenching them in their views. This needs to be studied.

The broader question is, when showing someone receptiveness, what’s your goal? Is it to give the other person a chance at some dignity? Is it to repair the relationship? Is it to learn about them?

Sometimes it is to avoid a conflict. It’s important to know what your goals are.

NB: Would it be a mistake to try to use conversational receptiveness to try to persuade someone that they’re wrong?

JM: It wouldn’t be a mistake, but you’d need to know what makes for effective persuasion. Quite often, our intuitions about that are wrong, maybe because a lot of the research on persuasion doesn’t involve conflict. For example, marketing research shows that a strong argument from an expert is incredibly persuasive. But that’s a different psychological dynamic than when people attribute bad intentions to the other side. If you’re disagreeing with someone, presenting all your data and facts is likely to make them dig in. Hedging and humility will probably be more persuasive.

NB: Did the January 6 invasion of the U.S. Capitol by Trump supporters affect your views on these issues?

JM: I worry that the riots changed everyone’s fundamental beliefs about what a “Trump supporter” is. Instead of picturing a typical older, rural voter—basically, someone’s grandpa— everyone is now picturing the guy with the horns on his head, dressed in furs, and brandishing a weapon. For many, the stereotype has become scarier, more extreme. But it’s important to remember that those people were the extreme of the extreme rather than an accurate representation of the vast majority of conservatives. So I think it’s even more important to try to have thoughtful conversations in the wake of this tragedy—to try to move beyond the stereotype to get at what people think.

FG: When I watched the riot unfold, I was saddened and felt angry about the state of the world. But those emotions were soon replaced by a strong desire to spread what we know about receptiveness more broadly so that, no matter the context, we approach conversations, even those we believe we have nothing to learn from, with curiosity.

Alison Wood Brooks

O’Brien Associate Professor of Business Administration and Hellman Faculty Fellow in the Negotiation, Organizations & Markets Unit, Harvard Business School

A scientist, teacher, entrepreneur, musician, and mother of three small-but-relentless conversationalists, Alison Wood Brooks is the O’Brien Associate Professor of Business Administration at Harvard Business School. An award-winning teacher (recently named Best 40-under-40 Professor by Poets & Quants), Professor Brooks was named an American Psychological Society Rising Star in 2017, serves as a member of the Harvard Behavioral Insights Group, and Faculty Recruiting Chair of the Negotiation, Organization, and Markets Unit.

Her research on the science of conversation has been published in many prestigious academic journals like the Proceedings of the National Academy of Sciences, the Journal of Personality and Social Psychology, and Psychological Science, as well as in popular media outlets such as the Wall Street Journal, Forbes, The New York Times, Scientific American, Harvard Business Review, and podcasts like Choiceology with Katy Milkman and Against the Rules with Michael Lewis. She presents her research at industry and academic conferences around the world, serves as an invited speaker at top universities, and works with industry partners like Gong, Google, Balto, Facebook AI, the Boston Celtics, and as a consulting advisor for start-up ventures. Her over-subscribed MBA course (TALK: How to talk gooder in business and life) has been adapted at other business schools and turned into an intensive program for executive education at HBS (Communicating for Impact). Her first book, TALK: The Science of Conversation and the Art of Being Ourselves (Crown) will launch January 2025.

Education

A.B., Princeton University

Ph.D., The Wharton School, University of Pennsylvania

Negotiation Mistakes: When Fear of Impasse Leads to Bad Deals

Negotiation mistakes can haunt us for years to come. Here, we look at research showing that the fear of reaching impasse can lead us to accept a subpar deal in negotiation.

Experienced negotiators understand that they should reject any deal on the table that is inferior to their best alternative to a negotiated agreement, or BATNA. At an auto dealership, for example, you shouldn’t buy a used car if you are pretty sure you can get a better deal on a comparable car elsewhere. Yet in the heat of the moment, people often accept options that are inferior to their BATNA, professor Ece Tuncel of Webster University and her colleagues found in a study published in Psychological Science. Negotiation mistakes such as this can lead us to squander our resources. They can also trigger regret and disappointment months and even years down the line. 

Documenting Negotiation Mistakes

In one of the experiments in the study, participants were told they were being paired online with a person whom they did not know and would not meet or deal with again. (In actuality, there was no such person.) Participants were asked to divide a fixed number of points between themselves and the other party nine times; each time, one party’s gain would be the other party’s loss.

For each of their nine choices, participants were asked to select between an option that gave them fewer points than their counterpart and an option that gave them more. In the “framed” condition, the former option (fewer points for themselves) was labeled “Agreement,” and the latter option (more points for themselves) was labeled “Impasse.” In the control condition, the former option was labeled “Option A,” and the latter option was labeled “Option B.” 

The results showed that participants in the framed condition chose the Agreement option 24.55% of the time, while those in the control condition chose the equivalent Option A only 3.99% of the time. That is, participants’ bias toward reaching agreement (and/or not reaching impasse) often led them to make negotiation mistakes—choices that left them worse off than their counterpart. This was true despite the fact that they knew they would not be building a long-term relationship with the other party.

In another experiment, MBA students in a negotiation course bargained face-to-face, and their outcomes were linked to their grades in the course. Participants in this study also made negotiation mistakes: They often preferred to reach a deal that was economically suboptimal for them personally rather than reach an impasse. In about 75% of the pairs who reached agreement, one party settled for a deal that was detrimental to their economic interest in the negotiation and their course grade.

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Agreement Attraction or Impasse Aversion?

The researchers noted that it’s worth looking at why participants made these apparently common negotiation mistakes. Did they agree to subpar deals because they felt psychologically compelled toward agreement or because they felt a strong desire to avoid impasse? 

Consider that negative events (such as impasse) tend to affect us more strongly than positive events (such as agreement), a phenomenon that Roy F. Baumeister of Case Western Reserve University and his colleagues dubbed the “bad is stronger than good” effect in a 2001 paper. For example, if you suddenly lose $1,000, you are likely to have a stronger reaction than if you suddenly receive the same amount of money. Based on this effect, Tuncel and her colleagues theorized that for most negotiators, the motivation to avoid impasse—a negative event—is likely stronger than the motivation to seek agreement—a positive event.

Indeed, that is what the researchers found in another of their experiments. Specifically, when making monetary allocations between themselves and a partner, MBA students were more likely to choose the personally disadvantageous option when it allowed them to avoid impasse than when it allowed them to reach agreement. So-called impasse aversion was the main explanation for their negotiation mistakes.

Overcoming Negotiation Mistakes: Becoming Comfortable with Impasse

In our own negotiations, how can we overcome this predisposition toward impasse aversion, which can lead us to accept an agreement that’s worse than our BATNA?

Awareness of the tendency could help motivate us to make fewer negotiation mistakes by more thoroughly comparing the option on the table with our alternatives away from it. In addition, simply avoiding the words “impasse” and “agreement” entirely during our business negotiations may help avoid stirring up the strong motivations associated with these terms, the researchers suggest.

Working as a team can help us avoid several negotiation mistakes, including this one. Researcher Taya R. Cohen of Carnegie Mellon University and her colleagues found that teams of negotiators were more likely than individual negotiators to reach impasse when impasse was the rational choice. Therefore, to avoid impasse aversion, you might consider working as part of a team or enlisting advisers to help you evaluate your options in negotiation.

Do you think you have experienced impasse aversion in your negotiations? What advice do you have for avoiding such negotiation mistakes?

When Our “Principles” Crash up Against our Negotiation Goals

To learn about setting negotiation goals, consider this billionaire’s fight to keep a gate locked that could have upended public beach access nationwide—to his dismay. It’s a cautionary tale for negotiators who are tempted to draw a line in the sand.

It’s not uncommon for us to get caught up in the “principle” of a negotiation, and forget all about our negotiation goals. Below is a cautionary tale of a years-long battle to keep the public away from a beach the owner had never even visited, and it stands as an extreme case study of how negotiations can veer out of control when we are unwilling to back down.

Martin’s Beach is a hidden gem on California’s Pacific coastline. Surrounded by cliffs, farmland, and a gated community, the beach can be accessed only through a gated road located on private land. Yet, for nearly a century, surfers, fishers, and others who prized the cove’s rugged and wild beauty have had access to the beach. The beach’s owners kept the gate open and maintained a parking lot, a café, and other amenities for visitors, according to the Guardian. The state’s 1976 Coastal Act, which prioritizes public access to the ocean, confirmed this policy.

In 2008, Vinod Khosla, a venture capitalist and cofounder of Sun Microsystems, reportedly paid $37.5 million for a 53-acre parcel of land that included Martin’s Beach and the road leading to it. San Mateo County informed Khosla before and after the purchase that he would have to either (1) maintain the road leading to the beach and charge those in cars a small parking fee or (2) apply for a development permit to limit public access to the beach.

For about two years, Khosla allowed the public to access the beach road. In 2010, he locked the gate that led to the road without applying for a permit and ignored a judge’s order to reinstitute public access, according to the Los Angeles Times. Since then, Khosla has done everything possible to keep the gate shut and the public off the beach. Threatened with fines of more than $11,000 per day for locking the gate, Khosla filed a slew of lawsuits against county and state entities, alleging extortion and infringement of his rights.

You might assume that beach visitors disturbed Khosla’s privacy or sense of peace. But in fact, in the 10 years since he purchased the land, Khosla has never actually visited Martin’s Beach or spent a single night on his property. He prefers hiking to swimming, he told Nellie Bowles of the New York Times, and regrets buying the property. Nonetheless, he tried to take his battle over the gate all the way to the Supreme Court.

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We’ve all met negotiators like Khosla: people who will go to any length to get their way, even if it means spending vast amounts of money and damaging their reputation in the process. And if we’re honest with ourselves, we can probably think of times when our own determination to get our way turned obstinate and nonsensical.

A wave of lawsuits

For Khosla, whose net worth is an estimated $2.4 billion, the battle over access to Martin’s Beach is a matter of personal principle, he has said. Legal rulings to the contrary, he has said he is not obligated to give the public access to the beach and thus shouldn’t have to pay $200 to apply for a permit to close the road. “In [Khosla’s] view, the government was forcing him to operate a money- losing parking business,” writes Bowles.

To avoid paying the $200 application fee, Khosla has spent untold sums on legal fees, lobbying efforts, and other expenses related to his cause. In 2012, he hired guards to patrol the closed gate. Five surfers were briefly arrested for hopping over it, an incident for which Khosla was widely derided. Khosla temporarily won the right to keep the gate shut after successfully arguing that an 1848 treaty between the United States and Mexico superseded the Coastal Act, but he lost a subsequent lawsuit and two appeals. Khosla reluctantly had the gate opened, but only on certain days and for limited hours.

In 2017, the State of California offered Khosla $360,000 for an easement on the road to the beach. Though willing to bargain, Khosla demanded almost as much as he’d paid for the entire property: $30 million. Despite never having visited Martin’s Beach, he insisted that was the value he placed on his privacy, according to the Times. In its 2018 budget, the State of California said it would take ownership of the road via eminent domain if Khosla didn’t agree to a reasonable price.

In February 2018, Khosla petitioned the U.S. Supreme Court to hear his case. If it had and he had won, the decision could have upended California’s Coastal Act— and potentially led to new restrictions on public access to coastal waters nationwide. But on October 1, the Supreme Court declined to hear the case. Khosla would have to apply for the $200 permit.

Navigating rough seas in negotiation

What motivated Khosla to keep pouring time, money, and energy into land he doesn’t even want? He appeared to succumb to two common negotiating traps:

1. An irrational commitment to a personal definition of “principle.” It’s good to have core beliefs and principles in life, such as a commitment to honesty or to our family’s core values. When we abandon our deepest principles in negotiation, we sacrifice our morality. Before refusing to negotiate “on principle,” however, we should pause to answer two questions.

First, would adhering to a particular principle require me to sacrifice principles and outcomes I value even more? All of us hold multiple principles dear, and sometimes they conflict. A person might aim to be truthful yet occasionally tell white lies to avoid hurting other people’s feelings, for example. In negotiation, we need to weigh and prioritize the various principles at play, keeping our ultimate negotiation goals in mind.

Most ultimatums are not true deal breakers. By ignoring or reframing them, you will enable your counterpart to back away from them later.

Khosla, for example, carefully built a reputation as an entrepreneur with a strong social conscience over the course of his career. An enthusiastic environmentalist, he invests in eco- friendly technologies and is at the forefront of the YIMBY, or “yes in my backyard,” movement, promoting an initiative to print 3-D houses for the homeless.

Those principles seemed to clash with what Khosla believes to be a principled defense of private-property rights: “If I were to ever win in the Supreme Court, I’d be depressed about it,” he told the Times. “I support the Coastal Act; I don’t want to weaken it by winning.” Though continuing to fight because, he says, “property rights are even more important” than public beach access, he appears torn and regretful about the situation. “I feel I could do the right thing much more caringly and with humility in a much more considerate tone if I could do it over again,” Khosla wrote to the Times, though he then added, “I’d mostly do the same thing.”

A second, related question to ask is whether you can adhere to the spirit, if not the letter, of a principle through negotiation. Some principles truly are non-negotiable, such as your family’s safety or your ethical values. We need to distinguish these sacred principles from “pseudosacred” ones—those we are willing to trade for something we value highly, according to Harvard Business School professor Max H. Bazerman. Khosla’s willingness to sell some of his land to the state (albeit for the nonstarter offer of $30 million) suggests that protecting private property rights may actually be a pseudosacred principle for him.

When you identify a principle of yours as less than sacred, you become open to finding creative ways to further your negotiation goals, break through impasse, and end destructive conflict. Khosla might have made a more reasonable offer for the easement and donated the proceeds to his YIMBY venture, for example.

2. Escalating commitment to a failing strategy. “If this hadn’t ever started, I’d be so happy,” Khosla told the Times. “But once you’re there in principle, you can’t give up principle.”

The statement illustrates one of the most common mistakes negotiators make, according to Bazerman: investing more and more resources in support of a failing decision. Whether it’s an ad campaign that has proven unsuccessful or a partnership that just isn’t working out, we tend to throw good money after bad. Reluctant to admit defeat, we become overconfident in our ability to save the situation even as it deteriorates by the day.

As economists tell us, the time and money we’ve invested in a course of action are sunk costs that we can never recover. It may be humiliating to own up to our mistakes and reverse course, but continuing to go down the same damaging path is a much more destructive—and stressful—option.`

3 strategies for getting back on track with your negotiation goals

We’ve identified ways to keep ourselves from getting caught in a dead-end conflict. How can we convince a negotiating counterpart with seemingly unlimited resources to avoid these traps? Here are three suggestions:

1. Aim for understanding. Negotiators often dig in their heels when they feel ignored and overlooked. Desperate to gain our attention, they may launch a value-destroying dispute.

Whenever someone takes a stance that seems hopelessly stubborn or refuses to negotiate “on principle,” resist the impulse to dismiss his concerns. Instead, ask for his side of the story. Listen without expressing your own views, repeat back what you’ve heard, and ask plenty of follow-up questions. The negotiation goal is not to come to agreement but simply to understand your differences better. Eventually, you may get to a place where you can begin to brainstorm solutions that meet everyone’s needs.

2. Ignore or reframe ultimatums. What should you do when the other party threatens to escalate a situation by taking you to court or making some other ultimatum? First, try to ignore the threat and move on to other issues, recommends Harvard Business School professor Deepak Malhotra in his book Negotiating the Impossible (Berrett-Koehler, 2016). If that isn’t feasible, try reframing the threat, advises Malhotra. Suppose the other party says, “I will never open this gate.” You could respond, “I understand that right now it would be very difficult for you to agree to open the gate,” and then move on to another topic. According to Malhotra, most ultimatums are not true deal breakers. By ignoring or reframing them, you will enable your counterpart to back away from them later.

3. Concede on your own pseudosacred principles. In research conducted from 2004 to 2008, Douglas Medin of Northwestern University and Khalil Shikaki of the Palestinian Center for Policy and Survey Research presented Israelis and Palestinians with a proposal that would require each side to make a concession on a “sacred” issue in exchange for lasting peace in the region. The groups became much more amenable to such concessions when the agreement also required the other side to make a significant concession on one of its own sacred values. For example, Israeli settlers were more open to Israeli withdrawal from the West Bank and Gaza if Hamas and other Palestinian groups accepted Israel’s right to exist.

The findings suggest that a negotiator may soften their stance if you offer to sacrifice on a pseudosacred principle of your own. When you demonstrate flexibility on a core issue, the other party may feel motivated to reciprocate.

It’s your turn to weigh in. Have you ever been in a scenario where your negotiation principle outweighed your negotiation goals?

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