Negotiation: Letting people have your way
Roping in knowledge from FBI negotiators, Game theory and Behavioral Economics - so that you can have your way.
“The most dangerous negotiation is the one you don’t know you’re in”
Any conversation where the word ‘yes’ is in the air, or the words ‘I want’ are in your mind, you are in a negotiation. In fact, we are in a negotiation right now. You are trying to understand if this piece is worth your time and we are trying to get you to say yes to reading till the end of the page. We go through a lot of day to day negotiations with unimportant consequences but there are some that show up with high stakes – a promotion discussion, an opportunity to change your field of work or confronting that non-supportive colleague. These conversations can have monumental consequences. No matter how many people claim that “you can win” at these conversations, all we can do is understand the rationale behind humans being irrational and take countermeasures. So today we will look at some basic principles of negotiation and understand the problem with BATNA.
Like most scientific deductions, we start by assuming ideal and then top it up with complexities to reach the final target. Game theory and behavioral economics somehow behave the same way.
Game theory starts with the assumption that people are rational. Here’s a quick refresher on the Prisoner’s dilemma:
Two members of a criminal organisation are arrested and imprisoned. Each prisoner is in solitary confinement with no means of communicating with the other. The prosecutors lack sufficient evidence to convict the pair on the principal charge, but they have enough to convict both on a lesser charge. Simultaneously, the prosecutors offer each prisoner a bargain. Each prisoner is given the opportunity either to betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent. The possible outcomes are:
If A and B each betray the other, each of them serves 5 years in prison
If A betrays B but B remains silent, A will be set free and B will serve 20 years in prison
If A remains silent but B betrays A, A will serve 20 years in prison and B will be set free
If A and B both remain silent, both of them will serve only one year in prison
What should these prisoners do? Think rationally. A dominant strategy is the one that provides a maximum pay-off, irrespective of how the other person acts. Translating this logic into steps:
Dominant Strategy for Player A
If Player B chooses to confess, what is the best choice for Player A?
To confess (Only 5 years imprisonment, instead of 20)
If Player B chooses to remain silent, what is the best choice for Player A?
To confess (0 years imprisonment, instead of 1)
Hence, confessing is the dominant strategy as it will lead to the best outcome in both the situations.
Two perfectly rational adults will always reach an outcome that is not the most favorable outcome for them – beautiful.
This is exactly the premise that Chris Voss sets up with the title of his book “Never Split the difference”. As an FBI negotiator, he does not recommend the idea of paying up 75 grand and releasing half of the hostages, against an ask of 150K ransom. (Neither does John Nash). And this is simply because humans are not rational. Nobel laureate Kahneman’s System 1 and System 2 in Thinking fast and slow are now used everywhere – marketing, product design and even negotiations. As much as we would like to deny, we are inherently bad intuitive statisticians and are run over all the time by our intrinsic biases.
With this understanding of rational and irrational decision making, all of us can become better negotiators by being cognizant of a few techniques.
Get rid of the fear of rejection. Many marketing techniques use the “yes trap”, where the sales person asks a series of questions which are most likely to responded in a “yes” and then finally, the sales pitch to which a person would say yes to. While this technique does provide a cognitive persuasion, it doesn’t lead to meaningful negotiations. A real negotiation starts with a “No”. That’s when you get to see what hesitation the other side has, and that’s when you get the opportunity to address it.
No isn’t the end. It’s the beginning of the negotiation.
Using mirrors. Using mirrors – repeating the last three words/keywords that the other side speaks, is an ancient technique. While everyone talks about mirroring, it is important to note that to enable mirroring, you also need to listen intently. It is only then, that mirroring shows it’s magic – of conveying that you are being heard, and more importantly helping the other people re-phrase and pave the way for a meaningful discussion. It helps bring out new information and new solutions to that problem.
Falling into the “You are right” trap. If during any negotiation, you are being praised or being conveyed “you are right”, you need to step ahead with caution. Not because the other person might be manipulating you. But hearing this might inflate you, and block you from thinking rationally. (You can leave pleasing the Limbatic brain for later)
Tactical Empathy. “Do not let emotions into the discussion” can be counter-productive. More often than not, it is the emotion - anger, or disappointment or lack of confidence that stands between you and a successful negotiation. Acknowledge the differences heads-on, in a calm way. In court, defense lawyers do this properly by mentioning everything their client is accused of, and all the weaknesses of their case, in the opening statement. They call this technique “taking the sting out.”
Pace it down. In a high-stake situation, a false sense of urgency is created. The result is going to send a signal and will be referred to in the future. Hence the golden rule – “You are not being paid to act fast, you are being paid to act right”. Slow it down. Keep your composure. Do not try to rush into the end goal, as it will impede your ability to see other pathways that can lead you to your desired outcome.
Coming back to the scientific theory analogy – Start with the ideal. In every negotiation, look at the rational outcomes. Then evaluate your method – the desired outcome, the effort you need to put in place. For some negotiations, the good old BATNA/WATNA (Best/worst alternative to a negotiated agreement) methods may work out, instead of the entire system detailed in this article. Negotiators like Chris Voss are not fans of BATNA/WATNA, but they might just save the effort and work in some situations. Chris argues that the problem with BATNA is that it becomes your goal. It becomes an anchor to what the outcome should look like and has the tendency to make the negotiator believe that they are doing good as long as they reach an agreement that is better than the BATNA.
Looking back at some of the negotiation situations from our past – working with a condescending colleague or getting the excess baggage fee reduced – they would all pan out a little different, with just a little conscious effort from our end.