To a certain extent, you can get to “know when to hold them and when to fold them” before you get to the negotiating table. The key is to understand your counterpart’s thinking and position, and the key to achieving that understanding is preparation – research and analysis that gets you into the mind of your counterpart. These co-authors offer a highly useful, comprehensive guide that will enable you to come to the table thoroughly prepared.
Many individuals prepare for negotiations by thinking through considerations like what they want to get, what they are willing to give up, how much power or leverage they have, how they should start the negotiation, what their best arguments are, and at what point they would walk away from the deal. They then devise an appropriate negotiation strategy and attempt to craft a favorable deal at the table by implementing that strategy. This manner of preparation seems quite reasonable to many negotiators, as it has a number of positive attributes. For example, it is absolutely critical to think about most of the considerations identified by this preparation method before engaging in a negotiation. In addition, analyzing the information gathered during the preparation and formulation of a negotiation strategy consistent with that analysis is an important step that many negotiators – experienced and inexperienced alike – simply fail to take. However, while this approach may seem thorough and appropriate, it is, in fact, incomplete. Individuals who focus solely on themselves and their own situation during preparations neglect (often unintentionally) an important part of the negotiation equation – the other party. Since the other party must eventually agree to any deal, negotiators who fail to take the other party and its perspective into account make a common mistake that negatively impacts the quality of preparation. Developing an understanding of the other party during preparations (e.g., what is important to them, what sort of deal would appeal to them, when they would walk away from the negotiation, what arguments they will make, who will make the final decisions, and the like) makes it easier to accurately assess the negotiation context, develop an effective negotiation strategy, and achieve success in an efficient manner. Indeed, negotiators who prepare by assessing both their own situation and their counterpart’s are more thoroughly prepared for their negotiations than those individuals who focus only on themselves.
Since most experienced negotiators affirm that the quality of preparation directly translates into the quality of the ultimate deal and the efficiency of the negotiation process, improving your understanding of your counterpart can ultimately improve the quality of the deals you negotiate and reduce the amount of time you spend negotiating them. In our experience, the best way to understand the other party during preparation is to try to get in their minds and focus on a few key areas that are likely to shape how they see, and will approach, the negotiation. In this article, we will discuss those key areas and share our advice on how to learn as much as you can during preparation about the other side’s perspective on the negotiation.
The other party’s interests
To begin to understand the other party, you must first understand their interests, the things that are important to them (their underlying needs, aims, hopes, and concerns) and that they are tying to satisfy in negotiation. Developing an accurate understanding of the other party’s underlying interests is one of the most important things a negotiator can do.
If a party’s interests are not reasonably satisfied by any proposed deal, that party should not – and almost always will not – agree to that deal. Your job in the negotiation is to get your counterpart to agree to a deal that satisfies your interests as well as possible; the easiest and best way achieve this goal is to present a deal that satisfies your counterpart’s interests as well as your own. If you don’t know what their interests are, it is likely going to be difficult to present them with such a deal.
Getting a solid grasp on the other party’s interests will help you:
- Determine what you have or can do that might be of value to them, which can make it easier to figure out how best to get what you want;
- Craft deals that acceptably satisfy the other party’s interests, which will increase the likelihood that the deal will be sustainable (since the other party will be motivated by their own self-interest to successfully implement the deal);
- Uncover potential sources of value that might otherwise have been missed, which will increase your ability to invent creative, value-maximizing solutions;
- Avoid making proposals that have little or no chance of being accepted, which can save time and minimize frustration on both sides.
The other party’s walk-away alternative
The other side is negotiating with you to try to satisfy their interests. If they cannot satisfy their interests in a deal with you, they will do something else (on their own or with someone else) to satisfy those interests. That “something else” – the one thing that the other party would do if they were to permanently walk away from negotiating with you – is what we refer to as their walk-away alternative. Put another way, their walk-away alternative is their best way of satisfying their interests without involving you.
No negotiator should ever accept a deal that is worse than their walk-away alternative. If the deal that your counterpart negotiates with you does not meet their interests better than their walk-away alternative, they shouldn’t say “Yes” to it. They would be better off saying “No” and following that alternative path. Indeed, the number one reason that people say “No” to a proposed deal is because they have a walk-away alternative that meets their interests better than the deal they are being offered. If you want to get the other side to say yes to your proposal, that proposal needs to meet their interests more fully than their walk-away alternative. As a result, assessing your counterpart’s walk-away alternative is essential to understanding their perspective on the negotiation context as a whole, and your proposals in particular.
Having an accurate sense of the other side’s walk-away alternative will help you:
- Develop a more precise understanding of their different choices for satisfying their interests, which will allow you to determine the basic hurdle your proposal will need to clear in order to get them to say “Yes.”
- Get a better sense of when they are bluffing or posturing about what they will or will not accept (i.e. saying no as a negotiation tactic to see if you’ll improve your offer), so you can guard against giving up more value in a deal than is necessary
- Craft arguments that make their walk-away alternative look less attractive to them, which will consequently make your proposal look more attractive to them and increase their likelihood of accepting it
- Think about ways to limit their ability to pursue their walk-away alternative, which can once again make your proposal look more attractive to them
The other party’s authority
In our experience, negotiators often make the common mistake of assuming that the other party has the authority to commit to whatever deal they negotiate. This is often not true. In almost any complex, high stakes negotiation, the individuals conducting the external negotiation between the parties also must conduct internal negotiations with colleagues, bosses, and other interested parties to explain and justify any deal they negotiate and recommend. The more complicated the organizational matrix, the more extensive and difficult those internal negotiations are likely to be.
Without knowing the other party’s level of authority (e.g., ability to commit to an entire deal, ability to commit to parts of a deal, no ability to commit but tasked with exploring possibilities at the table) and with whom – if anyone – they have to negotiate internally, it is very difficult to negotiate with them in an effective, efficient manner. Furthermore, many negotiators use ambiguity about their authority as a negotiation tactic – they negotiate a deal that their counterpart thinks is complete, then come back to the table and say that although they are in favor of the deal, their boss (or approval group) needs a few more things included or improved before giving sign off.
Knowing the other side’s authority to commit will help you to:
- Avoid falling prey, and making substantive concessions, to commitment-related tactics like the one above, which can also save also you significant time and frustration.
- Determine if you need to invite different parties to the table to get direct access to key decision-makers, which can accelerate the speed of the negotiation process.
- Assess escalation as a strategic option and, if it is, to whom you should escalate and under what conditions and process.
- Decide whether to prepare documents or models that could help your negotiation counterpart in their internal negotiations.
- Gauge what progress you are making, so you can develop an accurate negotiation timeline and set appropriate expectations internally.
The other party’s arguments, questions, and tactics
Once you have a sense of the other party’s interests, walk-away alternative, and authority to commit, you should have a pretty clear picture of their perspective on the negotiation – what they want, what their choices are for getting what they want, and who at their organization will decide what to do. The final puzzle piece for understanding the other party and their approach to the negotiation is to anticipate what they are likely to do and say at the table – in other words, how they’ll go about trying to get what they want. To do that, it is useful to focus preparations on arguments they might make, questions they might ask, and tactics they might employ, since these areas require a response or reaction from you.
You don’t want to walk into a negotiation and have the other side surprise you with a compelling argument, incisive question, or destabilizing tactic. Whatever your response or reaction in that situation, it isn’t likely to be as thoroughly thought out and effectively delivered as it could be if you were prepared for it. In addition, if there is an argument you are hoping the other side won’t make, or a question you are hoping they won’t ask, you should absolutely assume that they will – and prepare your response. It’s too important to leave to chance, and you should always err on the side of assuming the other party will be well-prepared for every negotiation.
Anticipating the other party’s arguments, questions, and tactics will help you:
- Think through the strengths and weaknesses of their arguments and then prepare (and, if necessary, research) your most effective counter-arguments, which is preferable to relying on thinking quickly on your feet during a negotiating session.
- Decide what information you are and are not willing to share with them (at least initially) and prepare appropriate, skillful responses to their questions.
- Diagnose what tactics or negotiation games (e.g., “divide and conquer”) they are employing (or develop a plan for making that diagnosis) and determine how you would like to respond.
- Avoid making unconscious reactions and facial expressions (or other “flinches”) to particular questions, comments or antics, which can undermine what you are trying to accomplish – the flipside is that you can plan “flinches” that may support what you are trying to accomplish.
- Practice or role-play delivering those responses, reactions, and counter-arguments, which will improve your at-the-table effectiveness and decrease your chances of doing or saying something you might later regret.
Tips for getting into the other party’s mind
Focusing on the four are as above during preparations will help you develop as complete a picture as possible of how the other side views the negotiation and then reap the benefits that come with that understanding. Utilizing the additional tips and techniques described below will make you even more effective.
You can begin by posing questions to yourself like “What would I care about if I were them?” or “What you I argue if I had their interests and their information?” These types of questions are a fundamental way of beginning to think about things from their perspective. However, it often isn’t enough to just ask yourself questions.
To get into the other party’s mind, you should use all of the tools and resources available to you:
- Reach out to your colleagues who have negotiated or worked with your counterpart, your counterpart’s company, and their competitors and ask them what they learned during those past interactions.
- Call people in your organization who have the same role as the person with whom you are negotiating-for example, if you area procurement professional. Negotiating with an account representative from a supplier, call some account representatives in your organization and ask them about their experiences when negotiating with customers.
- Ask your marketing department for any industry research, reports or competitive intelligence it has gathered.
- Conduct your own research on the other side’s company, and its industry, and competitors by reading trade journals and news articles, visiting its website (press releases and news interviews can be great sources of information on an organization’s interests), and talking to friends and relatives who work (or used to work) in your counterpart’s position or industry
How much time you spend and to what lengths you go during preparation to understand the other side’s interests should depend upon considerations like how complex you think the negotiation will be, how comfortable you are with your own knowledge of them and their situation, and how confident you are in your ability to explore and understand their viewpoint during negotiating sessions.
Of course, there are limits to how much you can learn and how effectively you can assess your counterpart’s situation through thorough preparatory consultation and research. That’s why it becomes critical to prepare important questions and statements for the negotiating sessions and to role-play (with a colleague, your boss or a friend) parts of the sessions themselves. While you cannot control everything that will happen in the room, you can control portions of it – and there is no reason not to be well-prepared for those portions.
Finally, preparing in this manner takes time and effort, and getting in the other party’s shoes will be challenging the first few times you try it. However, in our experience, the benefits far outweigh the costs. The more rigorous you are in preparing a detailed, specific understanding of the other party and their perspective, the better your negotiated results are likely to be.