Some negotiators can be too aggressive and use risk to pressure their counterparts into a deal. They want their counterparts to focus on the consequences of saying “no” and might say things like:
- “You heard my offer, and if you don’t take it you’ll have to go home empty-handed;”
- “The longer we take discussing these terms, the more market share you’re going to lose;” or
- “You won’t get better terms anywhere else, if you can even get a deal anywhere.”
This is a problematic strategy because any unnecessarily aggressive pressure tactic is likely to make the counterpart defensive. Once someone is in a defensive mindset they are less likely to listen to you, less likely to believe what you have to say, and even less likely to remember what you were saying in the first place. Their impression of your relationship will be dominated by the fact that you were putting pressure on them.
A more subtle way to think about risk is that, rather than the risk of saying “no,” people focus on the risk of saying “yes.” During a negotiation both sides feel like everything is possible; however, once an agreement is reached there are consequences. Will I be able to live up to this commitment? Will they? Will it work out? If not, will I be blamed for negotiating a bad deal? Often, these are the types of worries that make it harder to say “yes,” even if, rationally, the proposal should be acceptable.
Managing your counterpart’s perception of these risks, can make it easier for them to say “yes” while also building your relationship with them. There are two steps to this strategy. The first is identifying what risks the counterpart sees in an agreement. These often fall into three major categories:
Financial risks: Simply put, this is the fear that the deal on the table isn’t good enough yet, so saying “yes” will be too expensive. These risks are often more over as negotiators often share their feelings about these risks; in fact, some negotiators don’t want to talk about anything else. They might sound like:
- “I won’t make enough money if make this deal;”
- “The margins aren’t big enough;” or
- “If I waited then I could get better terms.”
Emotional risks: This is the counterpart’s fear that they will feel bad by agreeing with the proposal. They might worry they could have done better, and want to avoid feeling like a weak or incompetent negotiator. In a business setting, negotiators often worry about losing face with their boss or colleagues. These risks can be trick to identify as they are rarely on the surface of the negotiation. They might sound like:
- “If I say yes right now, my boss will think I’m weak;”
- “My employees won’t respect my skills as a negotiator, unless I push them around a bit more;” or
- “These guys will walk away feeling like I’m a pushover if I agree to this proposition.”
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Measurability risks: There is always some risk that a deal might not work out and this can cause your counterpart to push for a better deal; not just to give themselves better odds of an agreement is good for them in the long run, but also so that they will feel like they’re more in control of the future. The crux of this risk is that very specific feeling that the unknown future is worrisome, and pushing for a better deal can alleviate that worry. This might sound like:
- “We are not sure what our supply costs will be like next year; we’ll probably make a profit under this contract, but a price that is a little higher would make me feel better;” or
- “I think we could probably meet these volume commitments, but just in case I’d better demand they reduce the penalties in the final agreement.”
Remember, it doesn’t matter if these fears are rational only that they’re genuine. A negotiator who feels that saying “yes” entails one of these risks has a reason to say “no.” This often means that the negotiator demands more value in an agreement to compensate for the risk.
The second step is to help reverse the counterpart’s risk for them. Resolving their fear about saying “yes,” removes an obstacle to the agreement. For example, if financial risk is undermining the deal then emphasizing the value on the table or helping improve monetary projections can make them more comfortable. Emotional risks can actually be easier to allay when you can identify them. This is way having a good relationship is so important; people are less worried about being taken advantage of (or, more importantly, being seen as being taken advantage of) by a trusted partner. It can help to give them a narrative: demonstrate to them why they’re negotiating the right deal, in a way they can use to explain to the people whose opinions concern them. Remember, this isn’t about whether they’ll actually ever have to defend their decision, just making them feel like they could if they needed to. Measurability risks are best resolved by giving your counterpart confidence about the future, for example by showing them that someone else has profited under similar terms. This makes the counterpart feel as if they have a grip on the future.
While these discussions can help reverse the perceived risk of saying “yes,” often, you must find some middle ground and give up some value to help reverse the perceived risks. People often feel more comfortable saying “yes” if they know they’ll be able to go back to their side and say, “I got them to agree to this extra value we didn’t expect to get.” Finding a way to make the other side feel, and look, like a strong negotiator is one of the most effective tactics in the long run.
Managing the risks of “yes” can avoid the hidden landmines that disrupt too many negotiations, and help strengthen the relationship between the parties. In your next negotiation, ask yourself: other than wanting more value in the deal, why are they saying “no”? If you can find and reverse those reasons, you’ll make it easier for them to agree to the terms you prefer and happier that they did so.
Who Is Nexus Negotiations?
For over 20 years the Nexus Negotiations has been offering world-class negotiation training and consultation to organizations of all sizes around the world. With strategies, tools and techniques developed by Harvard Alumni, Nexus Negotiations workshops help clients create value at every step in the negotiation process. Nexus has consulted on over $160 billion worth of transactions while working with more than 150 of the Fortune 500 and more than 50 governments, and dozens of universities, agencies, military groups and multilateral organizations. A few clients include:
Nexus Negotiations is now taking these same proven strategies, tools and techniques and customizing them for situations that you face every day. We know how CEOs negotiate, so let us help you use the same strategies and techniques to get the most you can out of every deal.
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