The 1-Minute Trick to Negotiating Like a Boss

August 22, 2017

The 1-Minute Trick to Negotiating Like a Boss

 

NeONBRAND

 

Life is full of negotiations, big and small. We negotiate for raises, we negotiate with clients and providers over prices, and we negotiate for more staff, the best projects, and flex time. (Then we go home and negotiate with our kids about how old you have to be to get your own smartphone.)

To be successful, you really need to know how to negotiate well. But the truth is, this particular skill doesn't come naturally to many people. This is because a negotiation is an experience that is rife with conflicting motivations. When you haggle with another party over price, you need to somehow reconcile your desire to pay (or be paid) your target amount with your fear that if you push too hard, the negotiation may break down. You might end up empty-handed, humiliated, or out of a job. Negotiations are always gambles, and there is always a risk.

Who Keeps Their Eyes on The Prize?

One quality that great negotiators possess is the ability to stay focused on their ideal target, despite the risks they are facing. As research conducted by Columbia's Adam Galinsky and his colleagues shows, those ablest to do it have what's called a promotion focus.

Promotion-focused people think about their goals as opportunities to gain — to advance or achieve, to end up better off than they are now. Whenever we think about our goals in terms of potential gains, we automatically (often without realizing it) become more comfortable with risk and less sensitive to concerns about what could go wrong. Prevention-focused people, on the other hand, think about their goals in terms of what they could lose if they don't succeed — they want to stay safe and keep things running smoothly. Consequently, when we are prevention-focused, we become much more conservative and risk-averse.

As Tory Higgins and I describe in Focus, these different ways of looking at the same goal impact everything about us — our strengths and weaknesses, the strategies we use, and what motivates us. When the goal in question is to pay the lowest price or to get the biggest raise, our focus has profound effects on the way we negotiate.

In one of Galinsky's studies, MBA students performed the role of a job recruiter, whose goal was to hire the desired candidate (played by another MBA student) while paying the lowest possible signing bonus. Before beginning the negotiation, the recruiters completed an assessment of their dominant focus. The researchers found that the more promotion-focused a recruiter was, the less money they ended up doling out in the final agreement. Promotion focus and money paid were correlated an impressive -0.40.

Why were they so successful? Galinsky found that more promotion-focused a recruiter was, the more likely they were to report having kept their target price in mind throughout the negotiation. A prevention focus, on the other hand, leads to too much worrying about a negotiation failure or impasse, leaving the recruiter more susceptible to less advantageous agreements.

The Bold Opener

A second essential in negotiation is a strong opening bid since that bid is the jumping off point as well as the frame of reference for the negotiation that follows. You are never going to end up paying less than your initial offer when purchasing a car or making a bigger salary than you asked for when starting your new job. But a strong opening bid takes a certain amount of confidence — and promotion focus helps us achieve this.

In a second study, Galinsky and his colleagues divided 54 MBA students into pairs and asked them to take part in a mock negotiation involving the sale of a pharmaceutical plant. Both the "seller" and "buyer" were given detailed information about the circumstances of the sale, including the fact that the "bargaining zone" would range from $17-25 million dollars.

The researchers then manipulated the focus of the buyers to be either promotion or prevention (I'll explain how you do that later). The negotiation then began with an opening bid from the buyer. Promotion-focused buyers opened with a bid an average of nearly $4 million dollars less than prevention-focused buyers. They were willing to take the greater risk and bid aggressively low, which ultimately paid off in a big way. In the end, promotion buyers purchased the plant for an average of $21.24 million, while prevention buyers paid $24.07 million.

This is one of those things that are worth taking a moment to think about — two negotiators, each armed with identical information, facing similar opponents, and yet one overpays by nearly $4 million dollars. The only difference was that one negotiator was thinking about all that he could gain, while the other focused too much on what he had to lose.

Making The Pie Bigger For Everyone

Promotion focus helps you get a bigger piece of the pie than your opponent. But of course, not every negotiation has to have a winner and a loser. In multiple issue negotiations, there is the possibility of outcomes that are beneficial to both parties, because each party may not prioritize every issue the same way. By yielding on lower priority issues, both parties can reach compromises that get them what they want most - a solution that, as Galinsky and colleagues put it "expands the pie."

Who is most likely to find these optimally beneficial solutions? It probably won't surprise you to learn that when the researchers placed both parties in a multiple issue negotiation in a promotion focus, they reached the maximally efficient outcome 79% of the time (compared to only 65% of the time when they were prevention-focused).

How You Can Become More Promotion-Focused

Even if you are naturally prevention-focused or if you tend to become prevention-focused when faced with the uncertainties of negotiation, you can become promotion-focused when you need to be. All you need to do is take a minute or two to focus only on what you have to gain and what you hope to achieve and banish all thoughts of what you might lose.

For example, to put his buyers in a promotion focus, Galinsky simply asked them the following :
Please take a couple of minutes to think about the aspirations you have in a negotiation. What are the negotiation behaviours and outcomes you hope to achieve during a negotiation? How could you promote these behaviours and outcomes?

It's really as simple as that. When you are preparing for your next negotiation, take a moment to list everything you hope to accomplish and all the ways in which you will benefit if you are successful. Re-read this list just before the negotiation begins. And most importantly, shut out any thoughts about what could go wrong — just refuse to give them your attention.

With practice, this focus-training will become easier and eventually more or less automatic. Negotiating can become second nature to you if you think about your goals in the right way.

 

This article was originally written by Heidi Grant Halvorson PhD. and full credit goes to Psychology Today, which is where the article was originally published over a year ago. This article has been reprinted for the purpose of education.

 





Also in Portal's Daily Dose

3 Major Cross-Cultural Communication Points Of Failure, And How To Fix Them
3 Major Cross-Cultural Communication Points Of Failure, And How To Fix Them

May 17, 2019

The strength of cross-cultural teams is their diversity of experience, perspective, and insight. But to capture those riches, colleagues must commit to open communication; they must dare to share. 

Continue Reading

Better Planned Meetings Lead To Better Decisions
Better Planned Meetings Lead To Better Decisions

May 10, 2019

Decisions are the lifeblood of organisations, and meetings are where important business decisions often happen. Yet many executives are nonplussed—at best—when describing their own experience of meetings.

Continue Reading

Lifelong Learning Journeys - Digital Education's Next Opportunity!
Lifelong Learning Journeys - Digital Education's Next Opportunity!

May 03, 2019

In emerging markets, the digital transformation of education is gaining traction, and all stakeholders can benefit if they seize new opportunities for collaboration.

Continue Reading