Negotiate like your life depends on it, because it does
Your life depends on negotiation. It really does. Want a higher salary? How about more leave? A romantic partner? A new friend? Starting a business? Need a car? In all these situations, negotiation can get you a much better outcome than merely accepting the status quo. You may not get what you ask for, but you will never get what you don’t ask for. So, ask! In this article, I am going to draw on the academic literature and discuss the sources of negotiating power and provide some practical tips on how to get more of what you want in life.
Sources of power in negotiation
In is intuitive that more power in a negotiation is better. But how do we prepare before a negotiation to ensure that we have more negotiating power? Research has identified numerous sources of negotiating power, so that even new entrants into the workforce can find and use some leverage to improve their outcomes (Schaerer, et al., 2020). The most frequently studied source of power in negotiations is referred to as the “Best Alternative to a Negotiated Agreement” (BATNA). This is intuitive, the stronger alternatives one has, the more power one has in each negotiation. In other language, being able to say “no” often leads to a very favourable “yes”. Ideally, it is best to have certain (as opposed to ambiguous), multiple (as opposed to singular) and strong (as opposed to weak) alternatives. If you are negotiating a salary for example, having multiple high offers on the table is likely to get you that dream job with great pay. The moral? Apply, apply, apply.
Power can be derived from other sources too. Information is power, in a negotiation. Knowing the interests of your negotiating partner (and you should think of them as a partner, not an adversary) allows you to build the basis for value creation. When I met my wife, I approached her as a stranger. I was polite, charming enough (I hope) and confident. I asked her out to coffee, and she said yes, the rest is history. I like to brag about that meeting because it makes me fell like James Bond, but I’m not. Her underlying interests happened to be aligned with mine. She was available for coffee and wanted to meet new people. If she had been married already, very few negotiating tactics would have worked in securing a coffee, and they would probably need to be rather unscrupulous too! The point is, underlying interests matter. A hiring manager wants someone to add value to the company, a car salesman wants to make a commission and a consumer wants to feel good. Finding out what your negotiation partner wants is vital. In some cases, you know a part of what the other side wants. A hiring manager does not want a lazy know-it-all at their workplace. But do they want a creative person? Someone with good attention to detail? A charismatic co-worker? Find these things out and focus on them and you’ll be a step ahead. A quick tip, if you aren’t sure, ask.
Status confers power, too, unsurprisingly. But what does status mean, in the context of negotiation. It doesn’t mean you need to be the president of the United States (however diminished that title now is). Being respected and/or admired is one way to tip negotiations in your favour. Respect and admiration can be garnered in various ways, none of them easy. Broad advice would include being honest, always (or as often as possible), being involved in your community in a real and meaningful way, and being a positive force in your place of work or residence. In a job interview, it is important to make a good first impression. Smile often, be enthusiastic and do your homework so that you can speak passionately about the job you’re applying for. A good rule to come across positively in a job interview is this: only apply for jobs you are genuinely excited about.
Power in negotiation also comes from increased expertise. Schaerer, et al. (2020) note that “negotiators gain power through their expertise, which can also help negotiate better deals.” These expertise can be in negotiation itself or through expertise that are related to the negotiation in question. A pro footballer can negotiate free goods (via, say, sponsorhip) where I would have to pay full price. A skilled negotiater can gain entry into a nightclub with a full line whereas the average socialite might have to wait in line for an hour.
Power has a dark side too. Research indicates that the ability to coerce others into compliance can cliam more value from a negotiation. I want to stress two things here. First, this tactic tends to underperform in an iterative game. Game theory distinguishes between once-off games (or negotiations) and iterative games (negotiations that happen multiple times). Life is a gian iterative game, and the succesful strategy is often cooperation, not coercion. Secondly, it is possible to aviod punishmen, dominant positioning and threats. The most powerful way is to have options. If you can walk away, you are immune to coercion in many instances.
In summary, important sources of power in a negotiation include:
1. Strong alternatives (being able to walk away)
2. Information (understand what the other side wants)
3. Status (attain respect and admiration)
4. Expertise (negotate often and buid your skillset)
5. Don’t allow others to coerce you if you can help it (See bullet no. 1)
For much more on negotiation by reading a former FBI hostage negotiator’s take on the topic. Get Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss here in paper or on audio-book.