How to Take Charge in a Negotiation Even If You Believe the Other Party Has More Power Than You.
When I speak with clients about upcoming negotiations at some point we talk about power and assess which party has more power and why; and in most cases, my clients believe that the other party has the power over them. They see their opponent as someone who is much bigger, has much more influence, is a tough negotiator and often gets the better deal. They feel they have less power and are unsure of what to do to negotiate successfully.
They look at the negotiation like a David versus Goliath. Only that David the courageous shepherd boy has been able to battle a giant that many have been so fearful of and demonstrated that size does not always matter. David won the battle as he was not scared, he was confident and prepared. He was in control of himself and did not let anyone influence him by their fears. He had a strategy and he stuck with it, he decided against heavy armor as he knew it would slow him down.
By studying Goliath he understood his strengths and weaknesses and could therefore use this knowledge to shift the perceived power in his favor.
When I speak with my clients about their negotiations they often find themselves negotiating against such giants which can be any powerful opponent; a big brand, a big retailer, or any big corporation which makes them believe that they are the underdog and have to play by their rules. But as Malcolm Gladwell writes in his book ‘David and Goliath: Underdogs, Misfits and the Art of Battling Giants’, ‘giants are not what we think they are.’ Giants also have weaknesses, pressures, motivations and goals because at the end of the day we are all people and we all have certain aspects that motivate us. The key is to understand that and then figure out how you can shift the perceived power in your favor.
When we talk about power in a negotiation we refer to two types of power, actual power and perceived power. Actual power relates to the position and the capacity of the negotiator that enables the negotiator to get the better deal.
Perceived power is not objective, it is the perception one party has of the other as to how much power the other party has in the negotiation.
If you believe that the other party has more actual power than you then you need to work on building perceived power, just like David did when he took on Goliath.
Preparation is the key to success here. Through preparation an understanding of the strengths and weaknesses of the other party is gained. You then need to understand the motivations, desires and pressures of the other party and work out a negotiation strategy with that information. Think about how they will behave in the negotiation and why they behave the way they behave. Negotiating with an experienced opponent could mean that there is a negotiation history which can be obtained by talking to people who have dealt with that party before. Most people are creatures of habit meaning that their negotiation tactics and styles can be predicted which gives a huge advantage.
Once you have researched the other party and have gained an understanding you can look into the Power Toolbox and develop your strategy.
The tools we discuss here are Silence, Questions, Pause, BATNA and Conscious Competence.
In any negotiation information is power. The more you talk the more likely you are to give vital information to the other party that can then be used against you. We tend to feel uncomfortable with silence, but silence is a powerful tool in negotiations. You have the upper hand if you let the other party speak as they might give you important information that you might be able to use in the negotiation against them.
Asking the right type of questions is a skill that can be learned. Closed questions are questions that ask for a yes or no answer. They are ineffective as they don’t give any information, they need to be avoided. The type of questions that need to be asked are open questions, questions that require the other party to answer in one or more sentences. Ask questions that start with what, why or how. And if you didn’t get enough information the first time then just re-phrase the question and ask it again.
For example: Why are you selling? Then re-phrase: What is the biggest reason for you to sell? By rephrasing the question and asking again you will get additional information as your counterpart will think about an answer differently again.
While you need to exchange information in order to build trust and get to a deal, you don’t need to answer every question the other party asks you. Think carefully which information you can give and what you need to withhold. There are several techniques to avoid answering questions. You can answer by asking them a question in return. For example, if you are asked: ‘What calibre of clients do you have?’ you could answer: ‘That is an interesting question, what impact would that information have on the negotiation?’
Secondly, you can be open and say that you cannot answer this question at this point in time. A third technique is just to be silent and not say anything. This often requires some practice as this can be quite awkward. Another way to avoid answering a question is to just talk about something else. I call this the politician tactic as they do that very well in interviews, they hardly answer the questions that are being asked by a reporter.
Make sure you pause often. Pause after you have asked a question and give the other party time to respond. Pause once you have made your demands and pause once you have placed your offer. It makes you come across as composed and being in control.
BATNA stands for Best Alternative To A Negotiated Agreement. The more alternatives you have the less you are under pressure to come to a deal. The more BATNAs you have the more power you have. It is therefore imperative that you do your research on your BATNAs before you go into the negotiation.
When you prepare for a negotiation make sure you think about power and assess their levels of power and yours because you will often find that you do have more power than you think you have. Think about your strengths and weaknesses and how you react under pressure and in stressful situations; how you handle uncomfortable situations. You need to be conscious of your weaknesses, so you can work on them. Some people tend to talk more than they would normally do when they are in stressful situations, others tend to show that they are under stress through their body language. Any skilled negotiator is able to see these signs of weakness which put you in a powerless position.
The key here is to be conscious competent meaning that you are aware of your weaknesses and consciously work on them so that they don’t work against you in a negotiation.
Thinking about power before going into a negotiation is vital. If the other party does have the power than it is important to think about ways that will enable you to shift the perceived level of power in your favor. This gives you confidence and confidence helps you to take on the Goliath and negotiate a favorable outcome because at the end of the day they are also people and have motivations, pressures and goals just like you.