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The Power of Understanding

Increasing Negotiation and Leadership Performance through the Power of Understanding


Laws of Power 10: Improve Strategic Leverage

By Karen S. Walch, Ph.D.

In classic theories of power, it is asserted that the ability to precisely discern the interests of others is the most important skill in gathering and conserving power. Without it you are “blind” because you may think, for example, you are flattering someone, but you risk insulting them and losing necessary influence to achieve your goals. “Never rely on instincts,” classicists warn negotiators. Mistakes are made too often when negotiators act without an informed strategy.

Joseph Duveen, a 1920s art dealer, wanted to negotiate with Henry Ford to purchase the worlds’ greatest collection of art for that time. Duveen did not comprehend that Ford, although quite wealthy, had very simple tastes. Ford ultimately did not want to purchase the art from Duveen but was happy to accept a colorful book of the reproductions Duveen brought to the negotiation.

Lesson: Do your homework. Negotiate strategically, not instinctively.

Many negotiation practices and frameworks have been developed since the 1920s, and research concludes that confidence, power and leverage are the direct result of quality preparation knowledge, analytics and practices.

For several weeks in the 48 Laws of Power, we have highlighted the importance of how to strategically create the right atmosphere and relationships to achieve your goals. We also have explored psychological and social instincts and how this can enlighten negotiation decisions. This week we will explore how psychological and social insights must be combined with the cognitive mastery of data and analysis.

The emotional and behavioral insights of a negotiator cannot operate in isolation from the objective statistics, data, and analysis of negotiation preparation.

This week we will address some of the best analytic tools available in order to increase your cognitive leverage as a negotiator. The most critical way to increase your leverage in a negotiation is to ask the right questions in your preparation design and intelligence gathering. It is also critical to determine analytically the true strength of your alternatives in case you cannot reach an agreement in your negotiation.

In my journey of study and from interviews with others about power, I have found that there are many effective planning frameworks that assist negotiators to identify and satisfy personal or professional interests through negotiation.

Marty Latz’s “ExpertNegotiator” preparation framework is one of the most practical and useful tools anyone can use to increase quality negotiation planning and leverage. The “ExpertNegotiator” framework concisely guides negotiators to assess and manage the negotiation relationship, interests and agenda. This quality of analysis and evaluation for a negotiation also encourages negotiators to make time to research objective and independent standards that can be utilized in order to establish a practical offer-concession strategy.

The bad news is that many people like to jump right into a negotiation, which often makes negotiation more frustrating and disappointing than it needs to be. Most negotiation practitioners and researchers conclude that favorable outcomes are primarily due to luck. But that “chance favors the prepared mind.” When negotiators systematically prepare for their negotiation interactions in such circumstances, they are more confident and less likely to doubt whether they left a lot on the table.

The good news is that everyone can develop and improve their analytic negotiation skills and can learn the common strategies and tactics which underlie most negotiations. There are an unlimited number of variables in every negotiation, and each negotiation presents unique and challenging situations. The reality is that no matter what level of experience or expertise a negotiator may have, the dynamics of an actual negotiation often continue to be unpredictable.

Cognitive and analytic steps and procedures can, however, increase the effectiveness for any negotiator in the face of surprises. Combined analytic, social and psychological capabilities increase the potential of creative and powerful problem solving strategies.

With the steps designed in the “ExpertNegotiator,” there are straightforward questions to ask in order to get as much relevant information as you can throughout the negotiation process. This planning tool helps negotiators to set aggressive, realistic goals and to evaluate the other side’s goals. With this information, negotiators increase their power to negotiate and their ability to select the appropriate tactics. I agree with Mary Latz when he says that negotiation power goes to those who plan, listen and learn.

It is also critical to prepare for what is reasonable and rational for all the parties since the quest for fairness and the perception of fairness is central to most negotiations. Fairness is a matter of relatively objective standards or an independent process that ensures an acceptable and reasonable result. If both sides can agree on an independent standard rule or process that is fair and satisfying, it is inevitable that the parties can conclude with a sustainable outcome. If not, it is far more difficult to reach agreement.

Increased awareness and practice of the analytical tools for negotiation preparation, combined with the social and psychological capabilities to develop relationships and sustainable agreements enhances leverage and power for negotiators. In order to enhance your fundamental analytic skill set for your next negotiation, practice the following steps from Gain the Edge! and the “ExpertNegotiator”.

Law 10 Exercise

I. Focus on gathering objective information to determine your counterparts’ goals as you set your own.  Prioritize your own and others goals and evaluate the power of the relationship.

II. Systematically research substantive information, including the negotiation facts, issues, and opinions.  Explore negotiators’ interests as opposed to their positions on issues in order to be more creative in brainstorming about options.

III. Evaluate and analyze strategic information. Determine negotiation authority and decision making; profile other party’s history, reputation, and tactics.

IV. Maximize leverage by finding each side’s alternatives, and quality of others’ leverage.

V. Determine independent standards and procedures, such as market value, precedents, tradition, expert and scientific judgments, policy, and standards of industry, as well as from those in positions of legitimate authority.

Extra Credit

For a more comprehensive discovery of the planning process, read Gain the Edge! by Martin E. Latz (St. Martin’s Press, 2004) and visit: www.expertnegotiator.com.

48 Laws for 21st Century Global Negotiators: Join Thunderbird Professor Karen S. Walch, Ph.D., as she explores the laws of power for 21st century global negotiators. Each Monday she discusses one law and provides an exercise to identify and enhance individual negotiation power. Go to the main menu for the series.

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