The Naked Negotiator

To succeed as a negotiator you have to get inside the mind of your opponent.

But the question is; Does success come primarily from understanding the other side’s viewpoint? Or does it come from establishing deep emotional engagement?

In other words, does it pay to get into your opponent’s head or does it pay to get inside their heart?

The May 3 Economist shows research by Adan Galinsky of Kellogg School of Management at Northwestern University has revealed “that it pays to get inside your opponents’ heads rather than hearts”.

First, the researchers defined the two different approaches negotiators used to understand opponents:

1. Perspective-taking

2. Empathy

Negotiators often use these terms interchangeably but they are different.

Perspective taking is the cognitive power to perceive the world from someone else’s viewpoint.

Empathy is the power to connect with others emotionally - to feel the world from their viewpoint.

The simulations using 150 MBA students showed:

1. That the groups who focused on the perspective of the other side were much more likely to strike a better deal - 76% closed their deal.

2. The empathisers, that is those who focused on the other sides feelings were far less successful -only 54% closed their deal.

3. The control group, who simply focused on the own role without regard to the other sides’ perspective or feelings were even less successful - just 39% closed their deal.

Not surprisingly, negotiations when both sides make an effort to understand the perspective of the other side yield the highest joint gains.

But, even with just one negotiator having perspective taking abilities, the odds of a better deal for both sides are good.

In essence, this breakthrough research shows that deal making is about satisfying your opponent’s interests while meeting your own needs. Too much empathy can stand in the way of truly creative deals.

Popularity: 63% [?]

An Aesop Fable on Fairness
Several animals find treasure and must decide how to divide it fairly. The lion speaks up and says, “First, we must carefully divide the treasure into four parts. The first part goes to me, since I am king of the beasts. The second part is mine, owing to my strength. The third part is mine because of my courage. As to the fourth part, anyone who cares to dispute it with me can do so, at his own risk.”

A Bitter Divorce
In 1997 Gary Wendt, the chief executive of GE Capital, divorced his fifty-four-year-old wife of thirty-two years, Lorna Wendt. Gary’s net worth was about $100 million. Lorna wanted a 50-50 split. In court, Gary argued that since it was his talents that accumulated virtually all of the wealth he was entitled to the bulk of the assets. The judge awarded Lorna $20 million. Divorce law in Connecticut calls for equitable not equal distribution of assets.

Principles of Fairness
Our notions of fairness are guided by three, often conflicting principles:

1. The principle of equality says that regardless of contribution, everyone is entitled to an equal share.
2. The principle of equity prescribes that rewards should be based on each person’s contribution.
3. The principle of need prescribes that benefits should be based on need.

Tips and Tactics

• When slicing up the cake, always ask to whom will the recipient(s) compare themselves. People often care more about how their slice compares to others than they do about the absolute size of the pie.

• Make sure the process is seen to be fair and equitable. Commitment to a deal increases when the process is viewed as just and transparent.

• Aim for simplicity, clarity, and justifiability. Perceptions of fairness increase when agreements are simple to follow, deliver clear outcomes and can be easily explained.

• Remember, our egos clash with our notions of fairness. People pay themselves far more than they are willing to pay others for the same job.

Popularity: 57% [?]

In Shakespeare’s Hamlet, Polonius advises his son Laertes

“This above all, — to thine own self be true. And it must follow, as the night the day, Thou canst not then be false to any man.”

In one insightful quote, Shakespeare tells us what it is to be real — to be authentic. Shakespeare tells us there are two tests for authenticity

1. You have to be true to yourself
2. You must be what you say to others

Journalist Edward Murrow offered the same advice:

“To be persuasive we must be believable, to be believable we must be credible, to be credible, we must be truthful.”

When you lose your credibility everyone discounts what you say. The challenge is however, that lying in negotiation is widespread. One recent study found 28% of negotiators lied about a common interest during negotiations. Another study revealed that 100% of negotiators either failed to reveal a problem or actively lied about it during negotiations if they were not directly asked about the issue.

Omission or Commission

Lies of omission (not revealing information) are more common than lies of commission (actively misrepresenting information). Wharton researcher Maurice Schweitzer found negotiators lie about:

• Reservation prices. Virtually everyone lies when it comes to stating their bottomline or reservation price.
• Interests. Negotiators often mislead their counterparts over their real interests. For example, a negotiator may portray a common interest as a conflicting interest in order to win a concession.
• Intentions. Negotiators often try to bluff the other side by misrepresenting their intentions.
• Material facts. Intentional false statement about material facts can constitute fraud.

Popularity: 57% [?]

I have always been fascinated by how experts make decisions. Take chess. After a quick glance at a chess board, chess masters (who have 50,000 patterns stored in their memory) can play fast “blitz chess” with minimal loss of performance.

When we first learn a skill such as chess, we are novices, we learn by rules. Experts see things that are invisible to novices.

They notice:

• Patterns
• Anomalies
• The big picture
• Opportunities
• Differences too small for novices to detect
• Their own limitations

Experts, it seems, can rely on intuition because years of experience has given them the abilities to look for the “patterns” of whatever game they are playing.

As a result, when we teach negotiators, in our seminars we are always teaching to read the patterns.

We’ve found showing learners how to “read the patterns” dramatically accelerates negotiators learning and mastery.

Popularity: 62% [?]

Brilliant negotiators know how to play a weak hand. They appreciate that power or the lack of all - is often a state of mind - a matter or perception.

Consider the problems an Eskimo trapper faces when he emerges from the Arctic darkness to trade his fox furs at the one and only trading post for hundreds of miles around. If ever a buyer enjoys a monopoly, it has to be the Arctic fur buyer. Yet the Eskimo knows just how to limit the power of the trader.

When a fur laden sledge carrying an Eskimo trapper, his wife, and family, emerges from the farthest wilderness on its six monthly trading mission, all the inhabitants of the village gather round to welcome them. The trapper and his wife enter the trader’s house for a big feast. All the villagers come in too, listening and looking on. Peter Freuchen, a Norwegian fur trader, describers what follows in his Book of the Eskimos.

We discuss the weather, the hunting in the summer, the dogs. The only matter we don’t talk about is foxes. Next day the same thing - eating, dancing, talking - and the next day and the next, until for my part I think that the hospitality has come to an end. Then I just casually ask the man whether he has caught any foxes this year.

“Me, foxes?” he answers. “Nothing doing. One is a poor hunter as far as that goes, but especially for foxes.”

“Well,” I say, “I’m sorry, because I’d like to have a few foxes just to send home to the white people’s country when the ship arrives next summer.”

“Oh!” the man yells out. The big, nice white man has made a mistake. “Oh, you don’t know how unable I am to catch foxes.”

“Well,” I remark, “I saw a couple of bags out on the load which is now on the meat racks, and I thought they contained fox skins.”

“Well,” the man says, “maybe there’s just a couple of skins in the bags, but we just use them to wipe the grease off our hands and other dirty things.”

“Good!” I say. “But just the same I might like to have some of them. What about looking at them tomorrow?”

Next day comes, and after breakfast I again have to encourage the customer to show his merchandise. Now comes the big moment of the year. They bring in a couple of sacks, each containing some fifty blue fox skins, and they have beforehand assured themselves the whole village is present to witness their triumph. As if they were being dragged to the gallows, they open the sacks and pour the contents out. Now it is my turn. I look at the skins, amazed, surprised and beaten.

“Well,” I say, “as usual, these are the best skins in the year. I knew they would come from you; and they certainly did. Here is something I will have to mourn about for years, because I am unable to get those foxes.”

The man raises his head, interested. “What did you say? Are they too poor for you to accept?”

“Oh no; not at all. Just the opposite. You will have to take every one of your skins back with you because I have nothing to pay with. The trading goods that came out this year were especially bad. We haven’t got enough of them and they certainly aren’t of a kind that can pay for such skins as yours.”

“Pay!” yells the man at the top of his voice. “You don’t think that I should show myself low enough to take any pay for these poor skins?” I will feel myself happy if you’ll accept them.”

Finally I put in a question. “I am unable to pay for the skins but anxious to show my gratitude through my poor gifts. What could you be thinking of wanting in case I should be presumptuous enough to compare my unworthy goods to your valuable furs?”

He starts in. “What do I want! What do I want! Oh, I am a man without wishes. I don’t know if I want anything.”

It is then up to me. “Don’t you want a gun?”

“A gun! A gun! Oh, a gun had been in my mind and in my dreams for a long, long time; but I, the man you listen to now, am a terrible hunter. Why should I have a gun?”

“Well, I will give you a gun. You need a knife too, and you need some tools. And what more?”

Now that the big time is here he doesn’t know what he wants. But I have the skins, so I invite the man, his wife and his children to go into the store and look the things over. They get the key and go down to the store. They go in, closing the door carefully behind them, and spend the rest of the day going through everything.

Meantime, I get a chance to look these skins over and figure out my prices, and finally, in the evening when the couple comes back, the man has his wishes. He never tells what he wants, but he relates of what knives he saw, both those with the white handles and those with the brown, and the small ones with the point.

He goes on: “And then I looked at the files. My what beautiful files. And I saw out there you have axes.”

He is interrupted by a sort of yelling or crying from the background. It is his wife, carefully instructed by him, who now breaks in complaining what a bold and fresh husband she has, keeping on asking like a beggar even when it has been proved to everybody that he has nothing to pay with. This, of course, only serves to cause me to protest that his skins are marvelous, unmatched so far, etc.

I turn to the wife. “What about you? Aren’t you going to trade? Don’t you want something?

She blushes and looks for a place to hide. “Me? Certainly not! What should I want? Am I one who deserves anything? Oh, no; I have no wants, no wishes at all.”

“But wasn’t there something that you would like?”

“I would like to have — oh, I happen to be without wishes; only those people who are worth something should have something.”

“Well, but I just want you to take something with you.”

After several more excuses, she tells what she might like to have. A few needles. And she wanted some scissors, and she wanted thread. Maybe for the children some undershirts would be good, and some for herself; also combs. And “I would like to have a mirror, even though I, of course, will never look at myself in it.”

The wife keeps on asking, and finally I have to stop her from asking for more. Meanwhile I have figured out how much they can have for each skin and write it down on a piece of paper, sending them out to my clerk, who now is in the store ready to deliver the goods. Now the clerk has his troubles out there while they are making their choice between the different cups, the different kettles, the guns and whatnot.

And now comes the end of the trading, where they show their smartness and prove what fine businesspeople they are.

The man will come running in. “Oh, I’m so sorry; when I told you what my needs were I forgot to ask for tobacco. I’d like to have some tobacco.”

“All right.” I allow him the tobacco.

A few minutes after he will be back with his purchases.

“Well,” he will say, “I saw a knife out there I would like to have instead of this one, though it will ruin my sleep to part with this one, too.”

I let him have the knife.

The wife will be there. “There was also some red cloth.”

Then the man comes again. “I have the whole time been thinking of a saw, but the tongue refuses to pronounce the word.”

I let him have the saw. And they keep on. The only way to stop them is to have lunch ready. And the deal is closed.

Next day departure takes place. The dogs are harnessed up and attached to the sledge. But sure enough, he comes in at the last moment: “Oh, I forgot matches! Why didn’t I mention a saw file! If I had only asked for a little more goods! Enough for a harpoon shaft.”

The smartest man is the man who remembers most. He gets a reputation amongst his countrymen. Of course the perfectly straight-minded man doesn’t know about this and doesn’t allow for it, but the seasoned trader keeps back four or five fox skins to make up for the forgettings and additional wishes.

When everything is loaded on and woman and children place on top of the sledge, the man gives a signal to the dogs to rise up and be alert. Then I come out with a package in my hand, giving the wife some tea and sugar, or whatever else I know she would like. Of course these things have been allowed for too.”

The Eskimo showed all the skill of a master negotiator. From the start he involved the whole village in the negotiation. The villagers witnessed many of the proceedings. As a result the fur trader was always under public pressure to behave fairly and reasonably.

By playing the role of the reluctant seller the Eskimo forced the trader to publicly state how marvelous the furs were and how much he wanted them.

The Eskimo used time well. Throughout he displayed great patience; there was never any hint of desperation to sell.

Before they got down to the actual trading, the Eskimo and his family spent a whole day in the store sorting out their priorities. The actual trading was carefully orchestrated with his wife chiming in at opportune times. Then after the trading had supposedly ceased they were not averse to extracting a few last minute extras.

In short, the Eskimo understood the different ways power can be used, and exploited each of these to the fullest.

Popularity: 60% [?]