We negotiate everything, from starting salaries, raises, terms of employment, automobiles, homes, contracts of all types, commissions, fees, fines, hotel rooms and elements in personal relationships to table location in a restaurant and acts between countries in both war and peace time.
In light of this, it is no surprise that our political leaders must negotiate frequently and it would be difficult to overestimate the influence of negotiation on both our professional and our personal lives. Yet negotiation is taught at few professional schools and even many relationship experts skip instruction and advice in this area.
What makes negotiation especially interesting is that superior power coming from advantages including strength, knowledge and wealth does not in itself ensure a win. Even a so-called ‘win-win’ negotiation may be dramatically unfair to one side or the other depending on what one side expects and ultimately obtains.
Peter Drucker was a master negotiator and he knew its importance. He was not selfish and wanted to help individuals, their businesses and non-profits. This did not stop him from negotiating US$10,000 a day from willing corporations for his consulting services or charging zero to others if he had other objectives in mind.
Seven important rules for negotiating with a more powerful entity
The following simple rules for negotiating with powerful entities can help you to be effective:
- Prepare yourself fully. Never attempt to negotiate anything without conducting a complete analysis of the situation and preparing a plan, including your response to unexpected problems or opportunities.
- Never believe anything told to you by someone you are negotiating with unless the accuracy of the information presented to you has been confirmed previously. Otherwise, assume only that it could be true.
- There will always be pressures from your own side of the negotiations to make a deal. Usually, whoever you are negotiating with has an equal, or even greater, pressure to make a deal for their own reasons. You may be in a much stronger position than you think.
- Never be afraid to ask for more after someone has given you a ’best and final’ offer. Sometimes just the question “is that the best you can do?”, can be worth a great deal.
- Always be courteous and polite to the one you are negotiating with even if you cannot make a deal.
- Never disrespect a negotiating adversary.
- Think of the effect of anything you say to or about an adversary in a negotiation.
Below we outline some historical examples of successful negotiation tactics and approaches that have had significant impacts, ranging from shaping the outcome of a war to securing a profitable business deal.
A simple negotiation won American independence
Long before he became president, George Washington was a general and commanded the American Continental Army. In the final battle of the American War of Independence, he had a short-term advantage, but there was also great danger in his strategy.
Washington had moved the bulk of his army south to Yorktown, Virginia and maneuvered it so that he had superior numbers in the south as he confronted his British adversary, Lord Cornwallis. Another major part of the British Army was in New York, and because England had superiority at sea and had transport ships available in this situation, Cornwallis considered the two forces mutually supporting. This was because he could move the large English force from the New York area to Yorktown to join with the British army fairly easily.
If Cornwallis did this, his army would outnumber Washington’s and the advantage of numerical superiority in Yorktown would pass to the English. The Americans had no fleet to oppose such an operation, despite France being an ally with a French battle fleet in the Western Hemisphere commanded by Admiral Francoise de Grasse.
Cornwallis probably overlooked it because it was in the Caribbean where it was safe during the storm season occurring in the Northern Hemisphere. Washington wrote to Admiral de Grasse asking him to bring the fleet to stop the two British armies from joining together and to lend ship firepower in support against Lord Cornwallis’ army at Yorktown for the upcoming battle. De Grasse replied that although he could see the advantage of this move he was unable to comply due to the risk of losing his ships at sea.
If caught without a suitable port in northern waters, he would risk loss of his entire fleet. Washington immediately informed him that if he brought the fleet north at once, he would initiate the battle before the coming storms. He could therefore guarantee that his action against Cornwallis would be over before the fleet was endangered by the weather.
The fact that the fleet could help the Americans in battle without the risk of weather damage was an important factor in their negotiation, which convinced de Grasse, who moved the fleet and supported Washington during the battle.
Cornwallis was unable to bring reinforcements from New York and, outnumbered, outgunned and running low on supplies, he was forced to surrender his army to Washington, Ending the American War of Independence. During surrender ceremonies Cornwallis ordered music to be played, appropriately entitled “The world turned upside down”, confirming the enormity of the outcome from his point of view.
We may want a ‘win-win’ but there are many definitions of this term
The term ‘win-win’ negotiation has become popular over the last thirty years but if you look closely, even a negotiation under the most draconian terms may be considered a ’win-win’. The Treaty of Versailles was an example of this, as when this treaty was signed with Germany, ending WWI, it was thought that it ended “the war to end all wars”.
In fact, it led to a much larger war because Germany had little choice but to sign the treaty. Its armies were undefeated, but they could no longer be supplied well enough to meet the Allies’ increasingly stronger forces after the US entered the war.
The terms the allies insisted upon were extremely severe, with Germany not only suffering the humiliation of having to formally accept responsibility for the whole war, but loss of territory and agreeing to pay heavy war reparations to the allies. Still, it was a ’win-win’ in that Germany avoided complete collapse, starvation of its population and worse at the hands of the victors. Since Germany was defenseless, the Allies had the power to do what they wished.
Of course, there are situations where both sides may benefit mutually, and the situation may be considered fair-minded to each party.
One of the most popular books on negotiation infers that both sides in most negotiations should be fair-minded. That may be true in some situations but the assumption that this can be true in all, or even most, situations is a dangerous one.
We all want to be fair and ethical
One should be ethical and seek common interests and compromises that work. It is foolish, however, to assume that the other side will have such high moral principles that it will not take advantage of you if it can.
At minimum you may find that what you consider fair and ethical and how it may not be the same for the other party. A salesman may not weigh your interests equally when his own family’s welfare is at stake, nor an opposing attorney when the very ethics of their profession compel them to do everything within the law to protect and seek the other side’s best interests, not yours.
Another example can be drawn from salary negotiations. As a new employee, your employer may see it in the best interest of the company to keep your starting compensation as low as possible. They may be limited by company policy to salary increases of three per cent or less in a year, meaning that even a 10 per cent increase could be the equivalent of more than three years in raises, no matter how spectacular your performance. If you depend on a negotiating adversary’s goodwill, regardless of implied promises, you may be disappointed.
We frequently must negotiate with those more powerful
We frequently must negotiate with those who are more powerful or at least appear to be more powerful than ourselves. If you are a millionaire, you can hire a high-priced lawyer, but what if you are not and you must negotiate with an entity such as the US government, a large corporation or a police officer?
In international negotiations countries are happy to negotiate a result which leaves them in a position to attain future goals that cannot be attained in the present.
If there are any negotiation tips you want to share, or if you have found any of those shared above useful, let us know in the comments below.