The Science of Negotiation
Dr. Margaret Ann Neale, professor emerita at Stanford University, has studied the science of negotiation for her entire academic career. Here she provides insights into how you can get more of what you want by approaching negotiations as opportunities for collaborative problem-solving rather than as battles.
How do you define negotiation?
Negotiation is influence. You don’t have any command in negotiations, so you have to figure out how to get your counterpart to voluntarily engage with you. You can’t force them to say yes, but you can create a situation where they think it’s in their best interest to agree on a common course of action.
How can people do that?
Since you don’t have any control, you need to understand who your counterpart is. Consider their potential interests, preferences, and obstacles and how each may impact their willingness to walk that path of agreement with you. This can ultimately help you present a proposal that, at least from their perspective, benefits them. Otherwise, there’s no reason for them to negotiate. Too often in negotiation, we focus on what we’re getting out of it. And that just belies the notion that it is an interdependent process—you can’t do this alone.
What can you do to prepare for negotiations?
You need to first determine what your alternatives are. These are a source of power in a negotiation because the better they are, the easier it is for you to walk away. And the easier it is for you to walk away, the more your counterpart has to contribute to the goodness of your outcome to keep you involved in the negotiation.
Once you have your alternatives, you must consider your reservation price, which is the tipping point where the outcome goes from being one where you could say yes to something you should say no to. It’s one of the most strategic pieces of information because it will prepare you to recognize when you should walk away.
Lastly, you need to set an aspiration, or an optimistic assessment of what you could achieve in this negotiation. What would it look like for things to go well for you? What would you define as a good deal? When you have that aspiration, you can do better in the negotiation.
Are there any common negotiation mistakes people make?
A lot of people think you’re better off receiving the first offer instead of making it, but that’s not always the case. If you receive it, you get the benefit of information. But if you make it, you get the benefit of anchoring. Rather than just always looking to receive the first offer, you need to assess which strategy would leave you in a better position in the negotiation.
There’s also the common mistake of negotiating issue by issue. When you do this, you destroy value. For instance, you and your counterpart likely care more about different things. Instead of getting caught up in your list, you should look for where you can give your counterpart more of what they care about that’s not too important to you. In turn, you can get more of what you care about that’s not too important to them.
The last flawed approach is to solve the easy issues first. That just leaves the hard stuff. And when all you have is a challenging topic, it’s going to be a fight. This approach also assumes that your easy issues are the same as your counterpart’s, but people value issues differently. So it’s important to find out what those differences are rather than just assuming that you know.
How can you determine those differences?
You ask questions. You could start the negotiation by saying, “Before we begin, let’s spend some time talking to each other about what we’re trying to achieve in this interaction.” This can help you better understand what a good deal is for each of you and what your individual goals are for the negotiation. You can then use what you learn to verify and expand the information you got when you were planning and preparing, which will help you see if it is accurate or if you’re way off.
What are the benefits of becoming a better negotiator?
You get more of what you want. People tend to think negotiation is about fighting, but that’s not accurate. Most of the people we negotiate with are those with whom we have, or have the potential for, a relationship. If you think of negotiation only as a fight, you’re going to have to pick and choose who you negotiate with based on who you are willing to argue with. Viewing it as collaborative problem-solving instead allows you to broaden the perspective that you take. You can then engage in many more negotiations because you don’t have to limit yourself to antagonistic situations.
Do you have any advice for people looking to improve their skills?
Rather than just negotiate, problem-solve. It changes the entire conversation and process. Instead of preparing for battle, both parties end up more willing to work together to find solutions for the challenges they may both be facing. And that can leave them better off than had they only negotiated.
TAKE ACTION:
Examine your current approach to negotiations. Consider how you can better prepare for and approach them as opportunities for problem-solving.