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How Negotiators Shoot Themselves in the Foot – Part 1

January 14, 2011

There are a fairly predictable set of behaviors that cause negotiators to fail. I have broken the list into two segments because of its length but, taken together, you will have a solid understanding of the behaviors and perspectives that cause one party to de-rail a commercial negotiation and come away from the table with a poor result.

1. Seeing only half the negotiation – These negotiators see the negotiation only from their perspective: what they will have to give in order to get back what they want. They are preoccupied with protecting their own interests and do not view the negotiation as a SMARTnership™. If they were working in SMARTnership they would approach the project with the purpose of reducing the overall costs and risks and increasing the joint earnings.

 2. Aiming too low – Instead of having an open mind about what the best possible deal may look like, this negotiator’s goal is to keep within budget or to reach an offer which is somewhat better than their second best alternative.

 3. Failing to actively search for the added value – This negotiator is passive and lets the opponent control the negotiation. He rarely has all the necessary information to find out where to create added value. Often he is an inexperienced negotiator who may allow the bargaining to glide into a traditional zero-sum game. He does not know which variables to negotiable. An agreement can only be reached if one of the parties makes concessions.

 4. Having only one strategy: combat – Argument seems to be the only approach this delegation understands. They spend their energy and preparation time formulating good arguments. The more arguments they come up with, the more they believe that they are right. They lack the ability to recognize that they were wrong. Their ego and power positioning take over the dynamic between the parties.

 5. Focusing on the parts, and failing to see the whole – These negotiators have a poor grasp of the overall costs and the revenue associated with the project. They fail to see the whole deal. The price they have to pay is more important than the overall cost or the overall return. Often they have not analyzed the negotiation variables or discussed possible solutions and how these might affect the result.

 6. Lacking knowledge and perspective, operating from a defensive posture – This problem can best be illustrated by a remark by the famous Swedish skier Ingmar Stenmark: “You can only talk with those who understand”. Many negotiators lack economic, technical, business, and practical knowledge about the things they are bargaining for. They do not think like business people. When someone suggests that a project can be handled differently from their traditional approach, this negotiator sees the comment as an invasion of their territory, a criticism of their work, and a questioning of their experience and competence. To this person, negotiating is about defending against an invading enemy.

 7. Obsessing on the details – For these delegates individual details become far too important. These negotiators get stuck on questions which do not involve important financial issues or big risks. Each member of the delegation wants to express his personal opinion. There is no discipline in the group and the individual members find themselves in verbal combat. The negotiators have not established priorities, therefore all details seem to be of equal importance. Each delegate wants to present her view. Nobody listens. Power positioning takes over.

 8. Failing to acknowledge that your opponent needs to make money – This negotiator has a hard time accepting that the loyal opposition is entitled to make money on the transaction. He believes: If our counterpart makes money on this deal, we have not done our job.  The really smart negotiator demands that his counterpart make a profit on the transaction.

 My next post will continue this list of ways negotiator’s get in the way of their own success. If you have ideas about other ways negotiator’s self-destruct in the bargaining process, please share your views by commenting below.

 This post is excerpted from Keld Jensen’s upcoming book Power Bargaining: Adding Value to Commercial Negotiations to be published  mid 2011.

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