The Power of Understanding

Increasing Negotiation and Leadership Performance through the Power of Understanding

Laws of Power 33: Redefine Leverage

By Karen S. Walch

A classic slogan about negotiation leverage involves how to get others to do the work for you, but always taking the credit for yourself. It is important in this classic law of power to leverage the knowledge and “legwork” of others to solely advance your own interests. This manipulation tactic saves you valuable time and energy. By leveraging others’ support, you can be the negotiation winner while others will soon be forgotten. This week’s law will explore how leverage in the 21st century can be enhanced not by manipulating the support of others in order to win, but by supporting others to win as a strategy to win yourself.

Law 33 concludes our series on leverage by redefining its sources and application in the contemporary negotiation environment.

In the last several weeks, we have explored how “leverage,” as a noun, can be measured and, as a verb, can be applied. There has been a fundamental shift since the genesis of the classic laws of power in the meaning and practice of leverage from “power over” others in a negotiation toward “power with” others.

Today, negotiation leverage increasingly involves social capital or influence as a measurable resource and as an ability to engage others in problem solving negotiation processes in order to win sustainable and satisfying outcomes.

As we conclude our focus on leverage, it is interesting to note the root of this word, which is lever. A lever is used to elevate (French a levant) something by utilizing a very simple machine idea with a focal point or fulcrum that can be used to lift or move a load or weight. I have witnessed many negotiators today who may have considered themselves weak or vulnerable in a negotiation, but were able to elevate themselves out of a powerless situation through focused negotiation skills.

Several examples have been shared throughout the Laws of Power, but this week I draw on themes from women in developing economies. I like to use women from developing countries for leverage examples because in a structural sense these women have the least amount of traditional leverage there is in the global economy. They also happen to provide some of the most powerful illustrations of how leverage can be uncovered and utilized despite all the systemic odds against them.

I had an opportunity last week to participate with several educators in the Strengthening Women Entrepreneurs in Peru Program. This project provides business training and access to capital to thousands of Peruvian women. The program administration is a practical example of how to leverage resources and knowledge through the cooperation between Thunderbird, the Inter-American Development Bank, Goldman Sachs, Mibanco, Universidad del Pacificio and the Australian Government. Since micro and small enterprises generate half of Peru’s GDP, comprise 98% of all the businesses in Peru, and women own and operate over 40% of these enterprises, these organizations have committed to support women as a way to create more “wins” for all members of global economy.

An improvement in the status of women is one of most critical levers of international development. Microfinance and the cooperation of both the public and private sector organizations can yield significant support for women in developing economies through education and investment. Many multinational corporate leaders understand that empowering women in developing economies affects their bottom lines.

Goldman Sachs, for example, has committed its own resources behind global female empowerment with its 10,000 Women project. This program, and others like it, asserts that this is a good business investment because closing employment gender gaps in emerging markets stimulates global market growth. The World Bank for several decades has made the economic case that education and economic empowerment for women is primary to a growing and sustainable world economy.

These positive leverage practices are in sharp contrast to traditional negative leverage practices which often result in the suffering of a counterpart. Positive leverage examples like these illustrate the power of a negotiator’s willingness and skill in providing support for others while advancing one’s own interest.

Although the bargaining power of women in developing countries has been persistently and traditionally very weak, there is increasing support for their participation in the local and global economy. The recognition of women’s inequality and weak bargaining power in not only Peru, but also the rest of the world market has been a significant normative change in the evaluation of who ‘wins’ in the contemporary marketplace.

As a negotiator today, recognize how to utilize your positive leverage in getting what you need from a negotiation partner. The sources and application of negative leverage of coercion and manipulation tactics have limitations and are not as effective as positive leverage in the context of complex social relationships. The successful exercise of your leverage is represented in your ability to bring about or support others to achieve not only their own goals, but also your own even in a limited resource world. As you redefine your leverage in your next negotiation, remember what Archimedes, the inventor of the lever, said in the 3rd century BC: “Give me a place to stand, and I shall move the earth”.

Law 33 Exercise

1. Assess how success can be defined by you and your negotiation counterpart.

2. Request and share resources and skills which are necessary for the achievement of your goals in the context of the relationship.

3. Engage in problem solving with your negotiation partner to create solutions you may not have thought of alone.

Extra Credit

For more information on how supporting women in developing economies, read, The Global Glass Ceiling: Why Empowering Women is Good for Business, by Isobel Coleman, Foreign Affairs, Volume 89, No. 3, May/June 2010.

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.