Early Use of a Threat Debilitates Your Negotiating Power
Understanding Negotiating Power in an Evolving Covid World
Covid has thrust all of us into unchartered territory at work and in business. People are fatigued, yet there continues to be many new challenges arise. Spending a moment to reflect on negotiating power could help turn a difficult conversation into an opportunity.
Organisations requiring their staff to be vaccinated could be perceived as a threat by some employees. Refusing entry to unvaccinated clients could also be perceived as a threat by customers. Roger Fisher discussed the debilitating effects of negative commitments, especially threats made at an early stage of negotiation in his article, “Negotiating Power, Getting and Using Influence”. So how do you prepare for these difficult conversations?
“its all very well, it is said, to tell people how they might jointly produce wise outcomes efficiently and amicably, but in the real world people don’t behave that way; results are determined by power – by who is holding the cards, by who has more clout.”
WHO IS HOLDING THE POWER RIGHT NOW? WILL THAT CHANGE OVER TIME?
Fisher discussed the use of a credible threat as one element of power that can be used. Fisher explored the debilitating effect of making threats at an early stage. He discussed five other elements of power and the importance the sequence the elements of power should be used to maximise their cumulative impact. Fisher defined “negotiation” as including all cases in which two or more parties are communicating, each for the purpose of influencing the other’s decision.
The next important step is to identify “negotiating power”, Fisher discusses negotiating power to exist if I have the ability to affect favourably someone else’s decision, but he also acknowledges that my power depends on someone else’s perception of my strength, so it is what they think that matters, not what I actually have. Negotiating power is all a matter of perception.
MISTAKEN VIEWS OF NEGOTIATING POWER
(1) Physical Force = Negotiating Power
Fisher explains that making threats is a particularly expensive and dangerous way of trying to exert influence. The pain that we threaten to inflict if the other side does not decide as we like is simply one factor among many. Fisher explained that negotiating power could be enhanced by the combined potential of all negotiating powers, force being one. Do you understand the other elements of power and how you can use them in your circumstance to influence others, rather than just threaten?
(2) “Start tough, you can always get softer later”
Should you start off flexing your muscle, with a hard line? Fisher discussed that even though this might work with positional bargaining, like the higher a price one demands or the lower a price one offers, the more favourable an agreed result is likely to be. This is very different when it comes to threats, he explains the more firmly one is committed at an early stage to carrying out a threat, the more damaging that threat is to one’s negotiating power.
So, how can you enhance your negotiating power with this in mind?
Fisher developed a checklist for negotiators:
The power of skills and knowledge;
The power of a good relationship;
The power of a good alternative to negotiating;
The power of an elegant solution;
The power of legitimacy; and
The power of commitment.
1. The power of skills and knowledge
Knowledge about the facts. It is impossible to appreciate the importance of unknown facts.
Fisher discussed the importance of being a skilled negotiator, the ability to listen, to become aware of the emotions and psychological concerns of others, to empathise, to be sensitive to the other’s feelings and one’s own, to communicate clearly and effectively.
Fisher discusses the importance of other skills such as analysis, logic, quantitative assessment and the organisation of ideas. The more skill a negotiator has, the more power they will have as a negotiator.
The importance of knowledge relevant to a particular negotiation is powerful. Knowledge of the people involved, understanding the issues at hand, their values, career hopes etc.
What are the interests in the negotiation, think about the other side, what are their personal concerns, their fears, their needs? How does that relate to the interests on your side?
Knowledge about the facts. It is impossible to appreciate the importance of unknown facts. The more that is known about the facts and the background of the problem, as well as how it sits within the legal, social and political implications, the more likely it is creative solutions can be developed according to Fisher.
2. The power of a good relationship
If you are going to persuade someone to change their mind, you first need to understand where their minds are
“The better the working relationship established with those with whom I will be negotiating, the more powerful I am”, according to Fisher. He goes on to explain that the two most critical elements of a working relationship are first, trust and second, the ability to communicate easily and effectively.
It is easy to focus on whether or not you can trust those on the other side, but Fisher says that your power depends on whether or not they can trust you. Fisher explains that your capacity to exert influence is significantly enhanced if you can establish a well-deserved reputation for candor, honesty, integrity and commitment to any promise you make.
If you are going to persuade someone to change their mind, you first need to understand where their minds are, otherwise according to Fisher, you are shooting in the dark. The longer people have known each other, and the more broadly and deeply each understand the point of view and context from which the other is operating, the more likely they can communicate easily and with a minimum of misunderstanding, says Fisher.
It is important to consider the importance of a good working relationship to the outcome that you are seeking prior to negotiating. You may be able to negotiate the terms of a deal, but what impact will that have where you have an ongoing relationship like in a workplace? If you negotiated hard on the price for a sale, but you ruined the relationship in the process, what does that mean when you ask for an extension of time to settle? How important is the relationship, now and later? How can you negotiate this issue and build the relationship?
3. The power of a good alternative to negotiation
How well can you do for yourself if you walk away?
How well can you do for yourself if you walk away? Fisher discusses the importance to develop and improve your “BATNA” – your Best Alternative To a Negotiated Agreement. Before negotiating, you should consider the alternatives if you are not able to negotiate an agreement and to improve that option as much as possible.
In a workplace, for an employer this could be if my employees leave, how readily can they be replaced and at what cost to the organisation. Conversely, employees could investigate alternative employment options available to them.
4. The power of an elegant solution
Negotiators battle like litigants in court, advancing their own argument for a result that will take care of its interests but would do nothing for the other side.
The more complex the problem, the more influential an elegant answer. Negotiators battle like litigants in court, advancing their own argument for a result that will take care of its interests but would do nothing for the other side.
Brainstorming in preparation many options designed to meet as well as possible the legitimate interests of both sides. Brainstorming enhances your negotiating power by enhancing the chance that you will be able to devise a solution that amply satisfies your interests and also meets enough of their interests to be acceptable to them.
Power of a mediator is working with the parties to an ingenious solution that reconciles reasonably well the legitimate interests of both sides. Either negotiator has similar power to effect an agreement that takes care of his or her interests by generating an option that also takes care of some or most of the interests on the other side.
5. The power of legitimacy
To be persuasive, a good negotiator should speak like an advocate who is seeking to convince an able and honest arbitrator, and should listen like an arbitrator, always be open to being persuaded by reason.
Fisher believes that you can substantially enhance your negotiating power by searching for and developing various objective criteria and potential standards of legitimacy in the eyes of the other side, like a result ought to be accepted because it is fair; because the law requires it; because it is consistent with precedent, industry practice or sound policy considerations.
To be persuasive, a good negotiator should speak like an advocate who is seeking to convince an able and honest arbitrator, and should listen like an arbitrator, always be open to being persuaded by reason. Being open to persuasion is itself persuasive.
Fisher suggests researching precedents, expert opinion and other objective criteria, other theories of what ought to be done, so as to harness the power of legitimacy – a power to which each of us is vulnerable.
6. The power of commitment
the earlier you make a negative commitment – the earlier you announce a take-it-or-leave-it-offer – the less likely you are to have maximised the cumulative total of the various elements of your negotiating power
All previous kinds of power can be worked on prior to the formal negotiations. The planning of commitments and making arrangements for them can also be undertaken in advance, but making commitments takes place only during what everyone thinks of the negotiation itself.
a) Affirmative commitments
(i) An offer of what I am willing to agree to.
(ii) An offer of what, failing agreement, I am willing to do under certain conditions.
Fisher discusses that affirmative commitments are decisions about what someone is willing to do, it is an offer. These offers may have time limits, but while the offer is open it carries some persuasive power.
Fisher believes this is where it all comes together, the terms of the offer should be formulated based on the skills and knowledge that has been developed; it will take into account the nature of the relationship; will consider the walk-away alternatives each side has; the offer will constitute a reasonably elegant solution to the problem; and the offer will be legitimate.
It is only after all the power of the above has been found to be unsuccessful that Fisher suggests as a last resort that a negotiator has one other form of power, that of a negative commitment, or threat.
(b) Negative commitments
(i) a commitment that I am unwilling to make certain agreements,
(ii) a commitment or threat that, failing agreement, I will engage in certain negative conduct.
Importantly Fisher outlines that the earlier you make a negative commitment – the earlier you announce a take-it-or-leave-it-offer – the less likely you are to have maximised the cumulative total of the various elements of your negotiating power.
Fisher explains that premature negative commitments weaken rather than strengthen our negotiating power. Negative commitments at an early-stage shift attention from attractive alternatives to negative commitments that invite the other side to engage in a contest of wills by making commitments that are even more negative.
Before you make that pressing decision in your organisation or approach a supplier or client, jot down this checklist and spend some time considering these elements of power prior to the conversation and see how long you can keep the conversation in the positive commitment space before having to resort to negative commitments or threats.
For further reading I recommend Roger Fisher’s books, “Getting to Yes” and “Getting to Yes With Yourself”.
Article referenced, “Negotiating Power, Getting and Using Influence” was published in the American Behavioural Scientist, Roger Fisher, Harvard University.