GE­OF­FREY LEONARDELLI

Rotman Management Magazine - - FROM THE EDITOR -

on a new ap­proach to ne­go­ti­a­tions

it is IN MY OB­SER­VA­TIONS OVER THE YEARS, clear that many ne­go­tia­tors want to avoid los­ing, win big and come out strong. I get this. There’s a feel­ing of se­cu­rity that these words con­jure up. In any kind of com­pe­ti­tion where there’s a win­ner and a loser, peo­ple want to be the win­ner. Alas, it is these very thoughts that can make the most ex­pe­ri­enced ne­go­tia­tor sus­cep­ti­ble to poor judg­ment.

Based on a pro­gram of re­search that spans a decade, I would ad­vise peo­ple to adopt a dif­fer­ent mind­set when they ne­go­ti­ate by be­com­ing a ‘prospect­ing ne­go­tia­tor’.

The con­cept of be­ing a prospect­ing ne­go­tia­tor re­views a fun­da­men­tal shift in the ne­go­tia­tor’s mind­set. The term ‘prospect­ing’ evokes im­ages of 1800s Cal­i­for­nia and the Klondike gold rushes. In each case, peo­ple set out to find their for­tunes, to dig through and sieve the earth to iden­tify what they sought — nuggets of gold. About 100,000 peo­ple up­rooted them­selves for each gold rush, trav­el­ling thou­sands of miles by land or sea to seek their for­tune. By one es­ti­mate, about half of the Cal­i­for­nian prospec­tors found enough gold to eke out a mod­est profit, al­though the per- cen­t­age was much lower for the Klondike rush (more like 10 per cent). Not all came out ahead, but they shared a com­mon goal: They were ac­tively look­ing for some­thing bet­ter.

At its core, ‘look­ing for bet­ter’ is not how many peo­ple might char­ac­ter­ize their ex­pe­ri­ence ne­go­ti­at­ing. They may see it more like the Cal­i­for­nian or Yukon land­scapes of yore: We don’t know where to look for ‘gold’, the ter­rain can be in­hos­pitable and the peo­ple near us serve as re­minders of our worst fears about hu­man­ity (at least as the now con­cluded HBO show Dead­wood would have us be­lieve). How­ever — and this is key to the prospec­tor’s mind­set — with­out proac­tively seek­ing op­por­tu­nity, ne­go­tia­tors re­sign them­selves to ac­cept­ing the sta­tus quo with­out look­ing for more.

Such is the mind­set of the prospect­ing ne­go­tia­tor, a ne­go­tia­tor fo­cused on op­por­tu­nity and de­vel­op­ing re­la­tion­ships so as to fur­ther his/her prospects. My re­search on this sub­ject has led me to con­clude that this is not sim­ply a pos­i­tive re-fram­ing of ne­go­ti­a­tion, or a Pollyanna out­look on a very real and dif­fi­cult task. No doubt, ne­go­ti­at­ing ef­fec­tively is hard work, and even our best ef­forts do not guar­an­tee a sat­is­fac­tory deal. That noted, I have found that ne­go­tia­tors who fo­cus on ex­pand­ing op­por­tu­nity are more likely to find

bet­ter deals for them­selves and, if the cir­cum­stances al­low, for their coun­ter­parts, too.

Three sim­ple strate­gies set these ne­go­tia­tors apart and help them excel when they bar­gain.

They keep their eye on the prize. An im­por­tant con­clu­sion we have reached about prospect­ing ne­go­tia­tors is on the goals these ne­go­tia­tors set. As in­di­cated, they are look­ing for bet­ter, and they are com­mit­ted to get­ting there. Com­mit­ment and willpower are sturdy words that de­fine a tough ne­go­tia­tor. How­ever, prospect­ing ne­go­tia­tors are not sim­ply look­ing to be tough, they are look­ing for op­por­tu­nity. My re­search con­ducted with col­lab­o­ra­tors at Columbia Uni­ver­sity, Uni­ver­sity of Cal­i­for­nia and London Busi­ness School finds that this com­bi­na­tion is a pow­er­ful one.

In one study, we mea­sured how ne­go­tia­tors dif­fered in their de­gree of fo­cus on op­por­tu­nity. Those with a nat­u­rally stronger com­mit­ment to op­por­tu­nity did bet­ter when ne­go­ti­at­ing than those who do not. In an­other study, we ex­per­i­men­tally ma­nip­u­lated this goal. Here, we en­cour­aged par­tic­i­pants to set goals, but to do so by ei­ther seek­ing op­por­tu­nity or to pre­vent neg­a­tive ne­go­ti­a­tion out­comes. In this study, our meth­ods en­sured that ne­go­tia­tors were sim­i­larly com­mit­ted to the goals, but dif­fered in what they were try­ing to achieve. It is here that those prospect­ing ne­go­tia­tors — who set goals around what they hoped to achieve — gained more than ne­go­tia­tors who sought to pre­vent out­comes that would be detri­men­tal. These stud­ies tell us that a com­bi­na­tion of goal com­mit­ment and prospect­ing fo­cus lead to bet­ter out­comes.

Suc­cess for prospect­ing ne­go­tia­tors is flex­i­bly de­fined.

More re­cent re­search in col­lab­o­ra­tion with Rot­man PHD stu­dent Jun Gu and post-doc­toral fel­low Vanessa Bohns (now at Monash Uni­ver­sity and Cor­nell Uni­ver­sity, re­spec­tively), took a closer look at prospect­ing and non-prospect­ing ne­go­tia­tors and how they de­fine suc­cess.

A key dif­fer­ence in these two types emerged: Non-prospect­ing ne­go­tia­tors — in­di­vid­u­als who fo­cused on main­tain­ing the sta­tus quo, avoid­ing loss and in­hibit­ing threat — fix­ated on how well they did rel­a­tive to their coun­ter­part. For

By not proac­tively seek­ing op­por­tu­nity, ne­go­tia­tors re­sign them­selves to ac­cept­ing the sta­tus quo.

them, win­ning meant that their coun­ter­part had to lose, whereas a deal for both was de­fined by self-sac­ri­fice, or mak­ing con­ces­sions that min­i­mized dif­fer­ences be­tween their out­come and their coun­ter­part’s. There may seem to be some­thing no­ble about co­op­er­a­tion de­fined by self­sac­ri­fice, but it is a pyrrhic vic­tory; iron­i­cally, they chose to com­mit to a more con­ces­sion­ary out­come even when there were pos­si­bil­i­ties that both par­ties could end up with more. On top of that, there is a rigid­ity that this per­spec­tive brings: These ne­go­tia­tors ei­ther seek to win or con­cede, be­liev­ing it is not pos­si­ble to do both.

Our prospect­ing ne­go­tia­tors, by con­trast, un­linked their out­comes from those of their coun­ter­parts, in­stead seek­ing the best out­come they could iden­tify for them­selves. In­ter­est­ingly, this def­i­ni­tion of suc­cess some­times ex­tended to their coun­ter­part too: Prospect­ing ne­go­tia­tors sought to do bet­ter for both par­ties. In this re­gard, they could eat their cake and have it too. They could win, they could co­op­er­ate, and they could do both at the same time.

They Ini­ti­ate and prob­lem-solve be­fore con­ced­ing. The third strat­egy we have iden­ti­fied is that prospect­ing ne­go­tia­tors ap­pear to have a more ver­sa­tile tool­kit from which to en­gage their coun­ter­parts. We have found that they seek to ex­plore and en­gage with their coun­ter­part, and are more likely to ini­ti­ate the first of­fer. Oth­ers have found prospec­tors to be more cre­ative in gen­er­at­ing so­lu­tions to prob­lems, and this can turn out to be ben­e­fi­cial when bar­gain­ing, as it in­creases the like­li­hood of iden­ti­fy­ing bet­ter deals for both par­ties.

The data bears this out. Rel­a­tive to what con­ces­sion-mak­ing would dic­tate, prospect­ing ne­go­tia­tors are more likely to agree to deals that are bet­ter for them­selves and their coun­ter­parts too. Far from see­ing the ne­go­ti­a­tion as a win-lose com­pe­ti­tion, they had the flex­i­bil­ity to build a mu­tu­ally ben­e­fi­cial re­la­tion­ship when op­por­tu­ni­ties al­lowed — and to se­cure a bet­ter deal for them­selves when they do not.

In clos­ing

Ne­go­ti­a­tions are al­ways tough. The un­cer­tainty and po­ten­tial for con­flict can at times feel in­sur­mount­able, mak­ing it tempt­ing to adopt a pro­tec­tion­ist ap­proach. How­ever, the ac­cu­mu­lat­ing re­search is clear: The prospect­ing ne­go­tia­tor’s tool­kit is a source of strength and flex­i­bil­ity, and serves to build a broader range of so­lu­tions in the pur­suit of op­por­tu­nity.

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