Negotiation Approaches and Perspectives

‘It is human nature to think wisely and act foolishly’ Anatole France

The worst mistakes are the ones we know we should’ve avoided in the first place. Yet, we will occasionally err because we are infallibly human. The best thing we can do is to try and recognize those errors that are most avoidable.

When sitting down at the negotiating table, it might be a good idea to get ourselves into the habit of going through a mental checklist. This is the time to lean back and take a reality check. Often, we don’t recognize that we sieve out vital information which might skew our approach in solving a problem. We also have to be vigilant against being biased in how we apply our information. Take the time to sit back and look at what you’re doing with a critical eye.

Occasionally, it does not take a lot to divert our cerebral processes and develop bad habits, or faulted approaches. These mental errors and lapses are correctable when we recognize them for what they are.

Let’s review five of the most common errors made by negotiators. As you read through the descriptions below, ask yourself whether they apply to you.

1. Do You Know What You Need To Know?

One common practice everyone uses is to sift through their information. Information is processed selectively. We try to retain what we think is the most important, while discarding what we perceive as less relevant. This is how we generally approach and wrestle with our daily dilemmas in our personal and professional lives.

However, we have to be careful in how we select available information. Before we reach a decision, we must ensure that we carefully and objectively review everything that we’ve learned. Put all the information under the microscope.

People tend to retain vivid information easier, and gloss over material that is drab and verbally less striking. Studies reveal that when information is colourfully or dramatically presented, people are more inclined to see and remember it. Dull information has less sticking power. It tends to fade because it has less focus for us, so we absorb less.

We can learn two things here. The first is to always ask ourselves, whether we have properly used all the information on hand to our best advantage. Have we used it correctly in terms of its importance. Secondly, when we are making or replying to a proposal, we should ask ourselves whether our own presentation is going to stick with our counterparts or fade. Will they fully appreciate what is being said to them?

We have to be watchful that we don’t become biased, in how we analyze information because of our own unique expertise. If we’re negotiating a sales related issue for example, but the problem was framed or described from a production perspective, we are less likely to recognize the more important issues. Our production expertise alters how we will view a sales related issue and vice versa. Our approach will be off kilter because our perspective is distorted. Ask yourself whether you are truly being objective.

Our previous experiences, can also cause us to be biased in how we sift through and perceive information. It is another mental trap that we can fall into unknowingly. Although experience often acts as an enlightened teacher, because we learn by doing, we have to be wary that our past experience doesn’t anchor us in the wrong mindset. Cast your anchor aside and view each negotiation as something new, fresh and unique. Don’t make assumptions because of something you learned in the past. Be adaptable by seeing everything anew.

2. Only So Many Pie Slices

In negotiations where price is the only issue on the table, then the issue being negotiated is relatively straightforward. There are only so many slices of pie for each side to receive.

Most negotiations however, entail multiple issues. Nonetheless, some of us take the fixed pie approach by thinking that anything that benefits our counterpart is a loss for our side. By taking this limited perspective we suffer from tunnel vision. This will prevent us from appreciating the real priorities and limit our ability to find more valuable solutions. This one sided perspective prevents us from seeing both sides of the coin and seeking creative solutions. Problem solving needs to be a two way street.

You’ve most certainly heard the now overused expression of ‘Think outside of the box!’ A truly durable or productive relationship cannot be created in a joint venture, unless we’re working together. If either of us frames the issues solely from their own unique perspective, then two unique but separate perspectives will emerge. They may very well turn out to be perspectives that are incompatible. Neutralise your bias, and look beyond your side’s position and objectives, by embracing the whole picture.

3. Upping the Ante

When people commit themselves to winning, they might be sorely tempted to follow it through, sometimes to a bitter conclusion. Becoming fixated with winning at any cost. for the sake of the contest itself, can cause us to self-destruct. We must think beyond the game. Negotiations serve a collective purpose. Be watchful you do not fall prey to your own self serving ego. All of our actions are like the rippling effects in a pond as they will have an impact on the other players.

Irrational escalation can be like waving a red flag at a snorting, enraged bull. We need to step back and question whether raising the stakes is the smart thing to do, especially if it goes against the grain of commonsense.

4. Anchors Away

The term ‘anchor’ and how it applies to a negotiation, provides a vivid clue. In the opening rounds of talks between two parties, somebody has be the first to put a proposal or offer on the table.

Think of the asking price you see advertised for a car or house in the classifieds. The proposal, offer, or price becomes the center or nexus around which the whole negotiation process revolves. Like the term implies, the parties become anchored to the proposal or offer. We tend to evaluate and make our decisions based around this first proposal or offer. As a result, we can allow ourselves to become stuck in a restrictive, limited box of our own creation.

In a bargaining negotiation where price is the only issue, anchoring is a relatively common practice. Partnership negotiations on the other hand, are more value related. These types of negotiations require that we cut the anchor chain to give ourselves a greater opportunity to discover creative options. By allowing ourselves to be tied up by the dead weight of an anchor is just like ‘spinning your wheels’ in wet clay. Talks become stalled or result in a gunslinger match. We need to break free from the gravitational effect anchoring causes by constantly adjusting our positions to match the changing circumstances. By re-framing the issues in a different light, we might find more imaginative solutions instead.

5. Is It Confidence or Just a Big Head?

Everyone needs to be positive and confident about their proposed deal or offer, at the start of a joint business venture. Our counterpart has similar confident expectations about their own position. The tendency however, is that one or both sides, may have too much of a bias about their own respective positions. They become overconfident.

Overconfidence distorts our perceptions. Not only in our own narrow minded positional approach, but also in overestimating or predicting how the other side will respond in kind. This affects our strategy, by constricting the possibility of considering other options. Like an anchor, we become weighed down merely by becoming overly confident

The lesson here is not to over inflate our attitudes towards our position, but rather to consider reasons why our strategy might not work. This forces us to consider new scenarios, by re-evaluating and questioning whether our information is sufficient enough to achieve our objectives. Don’t let overconfidence cast a dark shadow on your expectations.

Moral of the Story

Acting illogically is part of the human condition, but it has no place in the world of business. By questioning our true motives in all phases of a negotiation, we should seek to ensure we are being rational and realistic in our views and perceptions.