Published in the San Diego Union-Tribune, January 11, 2016
My way or the highway.
I spend most of my day negotiating – with everyone from the plumber who can’t fix the leak, to the entrepreneur who in his lizard brain demands a pre-money of $22 million with no customers and no revenue, or with the angel investors who want a 3x liquidation preference, or with the CEO who wants the legal work to be done by his brother-in-law, who got his degree online at Casper the Ghost law school. Oy!
That’s what I do. Negotiate. So during this year, I propose to have several columns dedicated to illuminating some of the best thinking on this subject. And the initial effort is centered on how to deal with emotions – specifically anger.
Alison Brooks, a professor at Harvard Business School, thinks anger is a negative emotion. She says, “bringing anger to a negotiation is like throwing a bomb into the process.” But she also notes that many people believe that anger can be a productive emotion and that this perspective comes from a tendency to view the negotiation in competitive terms instead of collaborative ones.
If you have the choice of feeling angry or happy during a negotiation, she finds that anger escalates conflict, “biases perceptions, reduces joint gains, decreases cooperation and increases the rate at which offers are rejected.” So you would think anger is not so good, but she shows that more than 60 percent of people “think it makes them more effective and view it as significantly advantageous.”
It is wonderful how facts get in the way of beliefs.
So I would like to suggest a slight word modification. Instead of anger, I prefer to demonstrate “mild outrage.”
Looking at the other person and saying, “Are you serious, do you really mean that, are you actually going to stand there and tell me -?” And it matters greatly what volume you use in that instance. When I am truly angry, I talk very slowly and very softly. When I am in puffery/performance mode, I am louder with larger hand gestures. There is a slightly comic effect – a bit of a caricature – which allows me a place to fall back from. I leave myself some room to make fun of myself and then to potentially disarm the other side. But I agree with Brooks – the end game is always headed ultimately and without exception toward rapport.
Another perspective comes from Stanford professor Margaret Neale, who suggests all negotiations should be viewed as “a problem-solving exercise.” In her research, she finds “that when people are drawn into battle, they will sometimes give up too much – even against their best interests – just for the sake of resolution.”
This is the divorce lawyer’s greatest weapon. Anything for the sake of peace. You can have Aunt Tilly’s old Spode china, and I hope you choke on every mouthful.
Neale suggests a few strategies to avoid that outcome. Assess. Do you have enough data to go forward? Do you know enough, can you see the whole chessboard? I recently “lost” a negotiation. The other side’s position made no sense, and in a litigation I believe that I would have won hands down. But they were intransigent. In the end, I came to the conclusion that there was something I did not know and could not find out. And I did not have time to find out.
Prepare. Neale argues that “negotiation is not improvisational theater.” I politely disagree. While it is wonderful to have a game plan, as Mike Tyson famously has said, “Everybody has a plan until they get punched in the mouth.” I think a great teaching tool for CEOs is to take some theater improvisation classes, and I think in every negotiation there is “a moment” – when the right word, phrase, joke or concession seals the deal. Study the Shark Tank negotiations. Those guys are really good.
Ask. He who speaks first loses – is absolutely wrong. Study the concept of “anchoring” and “framing.” If I win the toss, I want to receive.
And Neale has one more piece of research that fascinates me. She says homes with precise listing prices (e.g. $789,500 ) sell for more on average than those with a rounded listing or “value range pricing.” My personal experience suggests the opposite and that keeping things “fuzzy” for a while in the discussion works better than a hard number.
But that is what is great about negotiation – we can both be right – at least for a while.
Be prepared, but also be ready to improvise.