MasterClass — Mastering the Power of Negotiation

Negotiation is an effective method used every day by everyone. Children often use it to secure a later bedtime with parents. Adults use it for everything from negotiating a better rate on car insurance to a better salary. Regardless of how you use negotiation, it holds the key to getting ahead professionally, conflict resolution, and creating powerful deals. When disagreements arise in business and personal relationships, it’s often used to avoid conflict in an effort to salvage a relationship.

The Science of Negotiation

To be a better negotiator one must understand the science behind negotiation. Power in negotiation affects two primary neurological regulators of behavior: the behavioral approach system and the behavioral inhibition system. Powerful negotiators demonstrate approach-related behaviors such as communicating positive moods and seeking out rewards in their immediate situation.

In contrast, powerless individuals tend to experience a great deal of self-inhibition, activated by fear of possible intimidations. However, there are key differences between the powerful and the less powerful differentiation. Such variations can be used to secure an edge in negotiations. Let's examine some behaviors here:

Prospective — A most useful skill that negotiators can develop is the ability to appreciate and understand the world from another person’s vantage point, namely, prospective.

To be successful in negotiation one must recognize the most consistently negative effect of power on negotiation behavior and outcomes: powerful negotiators often fall short of taking their counterpart’s perspective. Power leads individuals to overlook what the other party desires and requires and why they must have it.

Power in negotiation is fully effective at the bargaining table when coupled with perspective. When a polished negotiator takes time to consider their counterpart’s points of view, they harness the positive benefits of power without succumbing to excessive risk-taking.

The key lesson here is to strive to possess power in negotiation and follow up with perspective-taking.

Power Shielding—Creating insulation by wielding power can serve as a dominant skill in negotiation. Adopting negotiation strategies that are characterized by angry eruptions and emotional diatribes can work very effectively. This is a proven method because power offers protective armor against the treacherous behavior of your opponents; the powerful are not easily manipulated.

Those with less power are usually strongly influenced by their opponent’s expressions of anger; which leads them to make larger concessions than when no anger is expressed. High-power negotiators scarcely seem to get noticed by their opponent's emotions; they identify their own true bartering interests and offer only the concessions necessary to reach a good deal.

Prior to negotiating with someone who is known to express extreme emotions as a tool and is demanding, maintain your sense of confidence and control.

Putting psychological power to work can immunize you from your opponent’s angry tactics.

Taking Risks — A common belief regarding power is that it leads to deep-rooted and extreme ways of thinking. However, in dynamic contexts such as negotiating scenarios, psychological power motivates individuals to become more creative. It helps people identify innovative ways of thinking about complicated issues in negotiation and makes them less likely to adapt to the restraints imposed by the opponent’s offer.

A consequence of this liberation is that power can lead to confidence and risk-seeking behavior. At times when powerful people are granted the option of engaging in a risky course of action, they tend to focus more on potential payoffs and less on the potential hazards.

This particular propensity has both positive and negative effects on negotiated agreements.

Powerful negotiators often exercise risk by divulging information about their preferences and priorities — a crucial step in creating value and expanding the size of their portion in integrative negotiation.

Power negotiators are also more inclined to engage in risky strategies that can provoke retaliation, such as demonstrating hubris or creating self-defeating threats and ultimatums. Power also increases the inclination to bluff; it can increase the competitive climate of negotiation, resulting in missed opportunities.

Taking Action — A powerful role or a sense of confidence, and/or power leads negotiators to behave more proactively throughout the negotiation process.

Sometimes simply having individuals recall an experience in which they felt powerful makes them more likely to decide to negotiate a received offer than to accept the offer as is. This can lead to significant long-term financial gains.

Powerful negotiators are more inclined than less powerful negotiators to make the first offer. Having a strong alternative to a negotiated agreement leads negotiators to be much more likely to try to make the first offer. Notably, making the first offer produces a distinct bargaining advantage.

The powerful are also more persistent than other negotiators, less likely to throw in the towel when confronted with setbacks and obstacles, and more likely to make and reach more aggressive goals.

As long as they have something to gain, high-power negotiators typically will not accept a stalemate.

This insistence not only produces advantages for the powerful negotiator but also empowers integrative negotiations and the discovery of mutually beneficial interchanges that can benefit both sides.

Keys to Closing a Powerful Negotiation

Research — The most valuable commodity in the world is knowledge. The more you know, the more that knowledge can be used effectively to support the execution.

Preparation — Identify your armor and tools going into negotiations. Knowing all that you can about your opponent, their inclinations, the way they think, their motivations, and how they conduct business is all crucial in properly preparing for the negotiation.

Strategy — In every negotiation there are a set of rules by which to play. There are a handful of elements to use in your strategy:

1. Competing — The competing strategy is suitable when the outcome is far more important than the long-term relationship. This is best for a one-off transaction when you are trying to get the best possible outcome.
2. Accommodating — On the other end of the spectrum, if the long-term relationship is much more important than the outcome of this particular negotiation, then you may want to use the accommodating strategy. This type of strategy gives the flexibility to pick and choose when you’ll take less or more in a series of transactions over the long term. This will ensure the solidification of a long-term relationship.
3. Avoiding — Sometimes a deal just is not worth the effort of negotiating. Rather than negotiate, it would be advantageous to just do the deal quickly.
4. Compromising — A compromise is when both parties are willing to give something up in order to reach an agreement that is deemed fair and favorable. This strategy is often used in government and politics.
5. Collaboration — This is when the long-term relationship is paramount and also the outcome. It is worth the investment of time and effort to work together. In collaboration, both parties are prepared to contribute more rather than both giving up something in the transaction.

Leverage — Using leverage is the ability to apply a small force to move the other party a long way. It is all about a disproportionate amount of effort and outcome. The key to using leverage in a negotiation is to not abuse the power leverage holds. If you use leverage carefully it can unstick sticky situations. If you use it badly, you can cause a tremendous amount of damage. It is a compelling advantage that can come from any number of sources. In particular, it can come from your ability to persuade and influence the other party. When offering a proposition that is highly valuable to the other side, highlight the value of the deal, the features that they absolutely need, and the benefits the party will reap as a result of taking advantage of your proposition.

Closure — Once both parties have reached an agreement, the final step in negotiation is the close. This stage can cause fear on both sides. The secret to closing a deal is to ask for the close of the deal in a way that doesn’t damage the rapport you’ve built with the other side. So how do you ensure that the deal in fact closes? Take these important steps:

1. Revisit the key agreements that have been made with the other party up until this point. Identify all prior issues and make certain that all issues have been resolved.
2. Double-check all the offers and accommodations that you’ve given to the other side have been in fact delivered.
3. Make certain that nothing has slipped through the cracks. Once you’ve verified that, make sure there isn’t anything more that needs to be done. If you’ve left something out, address it right away.
4. Recap all the terms and conditions. Make sure that both sides are satisfied with all parts that the deal entails.
5. Now summarize the deal and make the final offer.
6. Confirm and finalize the agreement.

In business, savvy professionals learn all kinds of techniques, skills, and strategies for successfully closing negotiations. However, this master class should help you significantly polish your negotiation skill.

Thank you for reading! If you enjoyed this article, feel free to read similar articles I have written:

MasterClass — Closing Sales in the New Economy

How to Keep Your Small Business Operational during a World Crisis

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How to Keep Up Your Startup’s Momentum

© Gena Vazquez 2021