Most of us enter negotiations like it is a sport and there is only one winner or loser. But any good deal, between organizations, people, or between employers and employees, is one whose outcome works for all parties. Another common myth about negotiations between parties with clearly defined power equations – boss and employee, VC and founder for instance – is that only the party with higher power can control the outcome. Nothing could be further from the truth.
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In reality, as soon as a negotiation begins, both parties start to evaluate each other’s every move, arguments and prowess. A good negotiation is when you let this observation shape your end of the dialogue. Non-verbal cues become important in a negotiation, as does the psychological exchange that moulds future reactions. It is not the pre-existing relationship and power equation that shapes a negotiation. It is in fact this complex interplay that defines the equation and shapes the conversation. No matter which side of the power balance you are on, it is your verbal and non-verbal manoeuvring that eventually shapes the outcome of the negotiation.
According to an observational study conducted by German psychologists at the Department of Psychology, Saarland University and the Institute of Strategic Human Resource Management, Leuphana University, there are three key aspects that have the ability to shape a negotiation in favour of the party that is on the lower end of the equation:
- Negotiators who set goals for themselves and form if-then plans prior to the negotiation can overcome their weak hand. So, set realistic goals and link them to several components of the negotiation and not just the final outcome.
- Clear-cut and well-evaluated if-then plans can ensure that the low-power negotiator doesn’t give in to unfavourable deals. If the conversation is steering in an unlikely direction then present your contingency plan. This ensures that the second-most preferred outcome can be met from the discussion, instead of losing out completely.
- It is the first few sentences of the discussion that shape the outcome. Do not give in to unreasonable demands early in the discussion, as you won’t have the opportunity to make up for it later. Low-power negotiators have a strong incentive to start strong. Chances are that it is the single most important thing that can lead to an outcome they expect.
The key is in preparation
Often, low-power negotiators feel that in the absence of any leverage or power, it is pointless to enter a negotiation with much expectation or preparation. In fact, in several salary and appraisal discussions, I have observed millennials, who are outspoken and demanding for most part, just say their piece and wait for a “report card” from the boss. This is a cardinal sin as far as the art of negotiation is concerned. Without leverage or power, preparing to get the most out of every possibility is crucial.
There are three ways in which this preparation works for the low-power negotiator. It gives them a semblance of control over the discourse, ensuring that they don’t settle for the lowest possible outcome. Secondly, every time they stand to gain something out of the conversation, there is a boost in morale that sets the stage for the rest of the negotiation. And finally, when the low-power negotiator prepares for every possible if-then scenario, their ability to self-regulate during the negotiation increases.
In my experience, emotional reaction is a sure-shot way to ensure a negative outcome. Anything that helps your morale and emotional stability during a negotiation can only help. So, the next time you are about to enter a salary negotiation or a conversation with a venture capitalist, make sure you plan well, know the goal of your conversation, and don’t give in too quickly. This will help you regulate your response and most likely, you will win that round!