Your Bargaining Style

Much of the materials with the tag bfa comes from the Bargaining for Advantage book.

There are typically 4 steps in negotiation:

1. Preparation
2. Information Exchange
3. Explicit Bargaining
4. Commitment

The best negotiations outcomes occur when both parties know the “dance”. Being good at negotiation while the other party is inexperienced does not necessarily lead to a better outcome.

Side note: This is yet another example where success is not about skills, but about familiarity with other parties and familiarity with protocols.

If you are accommodating, do not try to play hard ball, and vice versa. If the situation calls for it, enlist someone else to perform the negotiations.

There are 5 negotiation personality types:

1. Competitors
   • They like to win. They like to control negotiations. They make ambitious demands from the start. They are prone to making threats and ultimatums. They will be ready to walk out of negotiations. They are more prone to dishonesty and lying.
2. Problem Solvers
   • This strategy is the most difficult. They discover the underlying problem. They give candid disclosure of interests. They brainstorm options to get the most elegant solution. They resolve tough issues. They are great for complex problems, but not for quick decision making. They do not work well when the other party prefers hardball.
3. Compromisers
   • They will go for what is fair, but have a slight bias towards preserving relationships than gaining an advantage. They want to get the negotiation done with, but will not avoid the negotiation altogether.
4. Accommodators
   • Eager to solve other person’s problems without negotiating in the hope that the other party will share the fruits with them. This behavior is common between employees and employers. Employees on a salary typically are not guaranteed anything for their toils.
   • Nurses are often accomodators.
   • Physicians and engineers, in hierarchical systems, are often avoiders, when they feel there is a “correct” answer (e.g. a technical one).
5. Conflict Avoiders
   • They will go to great pains and set up their home/work life to avoid conflict.
   • Avoiders are difficult opponents. They will keep avoiding the hard issues.

More broadly, we can classify the above into two types:

• Cooperative
• Competitive

A study of US lawyers in two cities: 65% of the lawyers were cooperative, and 24% competitive. About half were considered effective negotiators. Of these, 75% were cooperative, and 12% were competitive. The rest were “mixed” strategy types.

In a similar study in England, cooperative types dominated.

Another study looked at the use of irritants in negotiations (e.g. claiming how great their offer is, throwing insults at the other’s proposal, etc). Most of them were by competitive people. The average negotiator used 10.8 per hour. But “skilled” negotiators averaged 2.3 per hour. This is a bonus for cooperative types.

Skilled negotiators avoided defend/attack spirals (1.9% of comments vs 6.3% average).

Matchups of type:

• Cooperative vs cooperative: Good
• Competitive vs competitive: Good
• Cooperative vs competitive: Unless the cooperative person is careful, the competitive person will have an edge. It usually happens by the cooperative personality sharing more, then getting frustrated, and then striking back. The competitive person will assume the cooperative one was playing a ruse when in reality he was merely trying to be cooperative!

In general, people will usually view the others to be the same as they are. If a person is competitive, he will naturally assume that of the other. This is why a competitive person will mistake genuine amity for tricks.

So before you begin, figure out if your opponent is cooperative or competitive!

Four key habits of successful negotiators:

1. Willingness to prepare
2. High expectations
3. Patience to listen
4. Commitment to personal integrity

A study showed that more preparation is well correlated to positive outcomes.

For the outcome, set explicit expectations on the result. Figure out a range of “fair and reasonable”, and then target the high end. How can you tell if you do this? If you feel disappointment at the outcome, you know you didn’t meet your goals. Make it high enough to be a real challenge, but realistic enough to promote healthy relationships.

Cooperative people, especially compromisers and accommodators, need to put in effort to define high expectations. It comes naturally to competitive folks.

People generally will not consider you unreasonable for asking for more! Internalize this! They only get upset if they do not like the manner in which you ask for more. (e.g. People who incrementally make higher and more requests).

Ask for more, but respectfully.

Listening is harder for competitive types. They are preoccupied with thinking of their next move.

Good negotiators:

• Ask questions
• Test for understanding
• Summarize discussions
• Listen a lot.
  • Listening gives you important clues.
  • Listening is respectful.

Effective Negotiation:

• Keep promises.
• Don’t lie.
• Don’t give false hope.

Being straightforward helps better than deception. However, this does not mean showing your hand. But do not lie when unwilling to yield information.

Good negotiators are consistent. This gives them a reputation for reliability.