NEGOTIATING PROPERLY

One of the most common yet often unnoticed process that most of us often experience on a daily basis is a negotiation. During an average day, people may negotiate with the bank manager over the terms of a business loan, or with a supplier about a problem with the raw materials, or simply with his/her child, over who will walk the dog.

Regardless of age, gender, ethnicity or social status, negotiations are well-engrained activity in our society and is crucial in influencing other’s people’s decision and achieving personal objectives. It’s not only a common activity but also essential to living an effective and satisfying life. Once fully mastered, it can help you achieve the goal without being detrimental to anyone.

That said, one must fully understand the proper negotiation procedure first in order to ensure its success. In this post, we will help you follow a structured approach to negotiation, allowing you to reach an agreement where both you and the other party gain something.

Do you ever find yourself compromising too quickly, ending up in a situation that you didn’t really want? Negotiation can be difficult, but with a few simple-to-implement tips, you can end up with an outcome you are happy with.

The response to any ultimatum — regardless of the type of negotiation or how the ultimatum was delivered — is usually quite simple, completely ignore it.  Don’t ask people to repeat or clarify ultimatums. Why? Many ultimatums are not true deal-breakers. Sometimes people are just emotional, or trying to assert control, or using strong language in an attempt to gain advantage. In such these cases, it will be easier for them to back down later if you have not engaged with or legitimized the ultimatum.  How so? There may come a day — a week from now, a month from now, or years from now — when the other side realizes that what they said they could never do, they must do, or is actually in their best interest to do. When that day comes, the last thing I need is for them to remember me having heard them say they will never do so — because then they will not be able to say “yes” without losing face. 

Too often, people will escalate matters, and even sacrifice their own best interests, if that’s the only way for them to save face.  If ignoring an ultimatum is not possible, you want to reframe their statement as a non-ultimatum before continuing.  For example, if they say “I will never do this,” I might respond as follows: “I can understand, given where we are today, this would be very difficult for you to do…”  This way, I’ve given them two ways out.  This would be “very difficult”, not impossible, and their reluctance is “given where we are today,” not forever.

It can be really frustrating when people keep adding new conditions when you think a deal has been struck. When it happens, it’s important to distinguish between two possibilities. They might think you are too committed to making the deal and are trying to take advantage of this. Or, their additional demands are truly important to them and they need you to agree. You have multiple options, but here is something that I do often: I explain that if something is truly important to them, I want to understand why and work with them to accommodate their legitimate concerns. But I am not willing to negotiate an individual issue in isolation — especially at this late stage in the negotiation. If they need adjustments, we will also have to discuss what kinds of concessions they are willing to make in exchange. If this is really important to them, they should be willing to show flexibility on other issues of value to me.

Negotiate process before substance.  For example: you’ve been negotiating for months, and just when you think the deal is done, they tell you that they need another six months, or that others need to sign off on it, or that they are now going to shop around your offer.  Many of these problems stem from a failure of not having negotiated process before substance. In other words, before getting too deep into deal terms, you want to get more information about the process — i.e. how you will get from where you are today to the finish line.  This includes discussing questions such as: How long does it take an organization like yours to do a deal like this? Who are all the people who need to be on board? What might speed up or slow down the process?  What will we discuss in the meeting next week, and when will we cover the other concerns we have?  When you negotiate process before substance, you make it less likely that you make substance mistakes later on.

Business executives regularly use sly tactics to get a better deal during negotiations—often making statements that are technically true, but are purposely skewed to mislead the other side.

It’s a distinct form of deception called paltering: the active use of truthful statements to influence a target’s beliefs by giving a false or distorted impression. But it’s not just businesspeople who palter. Donald Trump has done it. Hillary (and Bill) Clinton, too. Chances are you have paltered.

New research indicates that many people who palter see nothing wrong with it, whereas people on the receiving end feel scammed. People who palter may gain some ground in negotiating a better deal for themselves in the short run, but if their cunning ways are discovered, they can do long-term damage to relationships.

It’s interesting to see the difference between the person who is deceiving and the person being deceived. People seem to be using this strategy because in their minds, they’re telling the truth, so they think they’re being honest. But the people being deceived think they’re being just as dishonest as if they lie outright to their faces.

The truth is, lying is common. Previous research has found that on average, people tell one or two lies a day—often to partners, family members, friends, and work colleagues—many of them little white lies that are considered harmless.

Other lies are more serious and can lead to severe consequences. In the case of negotiations, which are information-dependent, deception can substantially change the outcome.

Paltering differs from two other deceptive practices:

  • Lying by commission entails the active use of false statements, such as claiming the faulty transmission on a car works great.
  • Lying by omission involves holding back relevant information—for example, by failing to mention any information about a faulty transmission.

The researchers conducted two pilot studies and six experiments to investigate the three deceptive tactics in different contexts, including face-to-face and online negotiations.

In one study, they asked participants to imagine this scenario: Over the last 10 years your sales have grown consistently, but next year you expect sales to be flat. If you are asked by your counterpart “How do you expect sales to be next year?” the response will be different depending on the type of deception:

  • If you lie by commission, you might answer: “I expect sales to grow next year.” In this case, you are actively misleading your counterpart with false information.
  • If you mislead with passive omission, you might remain silent if your counterpart says, “Since sales have gone up the last 10 years, I expect them to go up next year.” You are not actively correcting this false belief.
  • If you mislead with paltering, you might say, “Well, as you know, over the last 10 years our sales have grown consistently.” This answer is technically true, but it doesn’t highlight your expectation that sales will be flat in the year ahead, and you are aware that it is likely to create the false impression by your counterpart that sales will grow.

After being given these definitions, the majority of participants were able to categorize the responses correctly, which shows that people can discriminate between paltering, lying by commission, and lying by omission.

Experienced negotiators report that they engage in paltering as often as they lie by omission and more often than they lie by commission. Perhaps they palter more often because it doesn’t make them feel as badly as outright lying. The researchers found that negotiators consider paltering more ethically acceptable than both lying by commission and lying by omission.

People who lie by commission have trouble justifying the behavior in their minds because they are aware they gave statements that were explicitly false. However, many executives who palter tell themselves they aren’t doing anything wrong. They feel justified in doing it since they tend to focus on the veracity of their statements—often by thinking, “I told the truth.” In some cases, they may even shift responsibility for the misleading impression to the target by believing the target should have paid closer attention to exactly what they were saying.

Why do they palter at all? It’s simple: Most of the managers palter in an attempt to get a better deal. When people palter, they are not answering the questions they were asked. In a lot of negotiations, there is a temptation to deceive so you end up with a better deal, or at least this is what people tend to believe, especially in situations where they are claiming value. And here’s another reason paltering may be popular: It works. Palters can be quite difficult to detect, so negotiators are often able to get away with deceiving others to gain a larger share of profits.

But the risks associated with paltering are huge: If the deception is discovered, negotiations often reach an impasse—and even worse, negotiators who palter can do serious harm to their reputations that can permanently sever relationships.

That’s because targets of paltering feel misled and consider the practice to be just as unethical as lying by commission. Participants said that in both cases, they were less likely to negotiate again with the people who deceived them in these ways.

It’s difficult for negotiators to realize that the world really is small. When we use deception in negotiations, oftentimes the other side finds out. If that’s the case, the reputation could be harmed to the point that you’re unlikely to engage in negotiations with the same person. We’re so focused on the short term, we don’t think this through enough.

It’s considered even worse when a person is asked direct questions and chooses to palter, as opposed to unprompted paltering. At least in some cases, deceiving targets in response to a direct question is more unethical than deceiving targets proactively.

Executives and managers will take to heart: During negotiations, beware of bending the truth. We are too focused on our own side of the business during negotiations. Negotiators need to realize even if their focus is on truthful statements, the other side might view what they’re doing as very different in a way that really hurts the relationship in the future. People should realize more fully the consequences of their negotiating strategies.

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