Schools’ negotiating lessons just don’t work
During a recent talk at Fisher College of Business at Ohio State University, it became clear to me that a crucial element was missing from the coursework: Many graduate students didn’t get training in the principles that come into play when people are negotiating, especially as they relate to human behavior.
Business students are taught tactics, such as how to “get to yes” and close the deal, that almost never work. Worse, they destroy opportunities. Take a popular tactic known as BATNA (best alternative to a negotiated agreement), taught at many business schools. Students are told that a negotiator should have a partial alternative if his or her terms aren’t agreed to by the other party. You might offer a lower price, for example, to get the contract, albeit at a smaller profit. This results in a “win-win,” or so say the professors.
These and other tactics share a fatal flaw: The mistaken idea that any agreement is better than no agreement. In other words, most business schools teach that compromise is the way to go.
The masterful negotiator never goes to the negotiating table with a set of preconditions, assumptions or expectations for gaining agreement. This leads to bad deals, giving up too much through compromise, and losing one’s advantage.
Negotiations are about human behavior, and the way we humans make up our minds about things that are important to us. The best negotiators are the ones who identify what’s interfering with a deal, and help solve the problems that brought the other party to the table. Here are five skills business schools should be teaching: Clearing away assumptions. Smart negotiators admit that they don’t know what they don’t know. They view negotiating as a process of discovery and an opportunity to find out what’s driving the other party.
For example, a sales executive is meeting with a prospective client. After researching what the current vendor charges, an unskilled negotiator might assume that the client is looking to cut costs, and therefore simply offer lower prices. A skilled negotiator goes in with zero assumptions and discovers that the client is really looking for a supplier with better service and prompt delivery. The unskilled negotiator’s assumption killed the deal.
The student of negotiation needs to realize that he or she knows nothing until the other party has provided the key information. The only thing that matters is what the other party reveals in the course of the negotiation. Understanding how decisions are made. No matter how much logic, reason and facts one uses to persuade opponents, they will not agree
The masterful negotiator never goes to the negotiating table with a set of preconditions, assumptions or expectations.
to a proposal unless it solves their problem. Once a negotiator understands what’s hurting her opponents, she can show how her proposal will help ease their pain.
For instance, a job candidate learns in the course of meeting with HR that the company is losing market share among women. This candidate now can demonstrate how his or her special area of expertise — marketing to women — can solve the problem. Asking smart questions. Preparation and research are important, but their main purpose is to help ask the right questions. Business schools should teach students how to ask well-crafted questions that get the other party talking and revealing.
Good negotiators ask openended questions that start with “what,” “how” or “why.” Asking the right questions, at the right time, using the right tone, and injecting nurturing words and phrases is one of the best skills a negotiator uses. For example:
Wrong: “Is this the biggest issue you face?”
Right: “What is the biggest issue you face?”
Not nurturing: The other person asks: “What will this option do for me?” You say, “Well, what’s your biggest challenge at the moment?” (Too aggressive.)
Nurturing: The other person asks: “What will this option do for me?” You say, “That’s a good question, Sam. Before we get into that, what’s the biggest challenge you face?” (More respectful and puts Sam at ease.)
Good questioners set the pace and direction of the dialogue, reinforcing and clarifying as they go along. Listening and observing. The other party may reveal a critical fact about what they need in the course of answering a question about something completely different. A good listener pick ups everything people are saying, including the way they say it.
For instance, a recent widow sitting on a beautiful oceanside tract of land refuses to sell to a real estate developer looking to build a golf resort. The developer keeps offering more money, and the widow keeps refusing. In the course of discussions, the skillful negotiator hears her say that this was her late husband’s legacy. The negotiator, a great listener, now understands her pain — she is afraid that selling the land will destroy that legacy. The negotiator proposes a memorial to her husband — a park on the property with a statue — with the provision that it remain there in perpetuity and will be open to the public. Because the negotiator really listened to the widow, the sale went through at a fair price.
Observing is also critical. Is the other party getting upset? Do they seem rushed or nervous? Are they avoiding certain topics? Students of negotiation need training in unspoken messages and dynamics. Maintaining emotional neutrality. That means no neediness, no excitement or hope, no fear or paranoia. This doesn’t sound like the type of skill a business school would teach, but it may be the most important skill of all because if we can’t control our emotions, we lose the advantage in the negotiation.
Emotions are critical in every human transaction. Students of negotiation need to recognize when emotions creep in, making us speak too quickly or too loudly. Staying calm and unreadable is a key factor for success.
Until business schools start teaching students how to think, be circumspect, ask questions, listen and not get emotional, they will churn out negotiators who lack the right tools for the job.