Negotiation 102: Going Deeper
With Colleen Graffy, former US Deputy Assistant of State for public diplomacy for Europe and Eurasia, law professor at Pepperdine university Caruso school of law.
Colleen has taken a 9 month course and condensed it into three 30 minute sessions for our members to study “The Art of Negotiation.” Colleen created the first ever “media hub” for the U.S. government with radio and television broadcasting facilities based in Brussels, established the “Ben Franklin Transatlantic Fellowship,” and was the first U.S government official to use Twitter. In the second of this three part series, Colleen will question some of the psychological traps in negotiation.
Colleen begins by recapping her first session particularly outlining the 7-step process of negotiation. She then talks us through her Top 5 Psychological traps used in negotiation:
Anchoring is an attempt to establish a reference point around which a negotiation will revolve.
Confirmation Bias is when our preconceived desires and wishes are favoured rather than information that contradicts our position.
Consensus Error (Projection) is when we tend to assume people have values similar to that of our own.
Framing is about the way you frame a question to make your argument appear better.
Loss Aversion is based. on the theory that “we often over value what we have to give up relative to what we might gain.” This means we are often willing to take more of a risk to avoid a loss than to obtain a gain.
Colleen talks us through some further factors that can be part of the negotiation process:
Impact of Fairness
Colleen highlights the importance of fairness, stating “an outcome that appears fair can be more important than winning or losing.” Procedural fairness (how did we go about making a decision) and Distrubutional fairness (are we dividing it equally or based on equity) also come into it.
Competitive VS Cooperation Negotiation
There are often two categories of negotiators. The first is competitive who see their task as distributing a fixed, limited resource between them. They assume “the purpose of bargaining is to gain the best economic result, usually at the expense of the other side” and “they do not care about the relationship.” The cooperative is more interested in “integrative bargaining” or “interest-based” negotiation). They will try to identify and align interests to find the best joint solution. This often can include creative solutions (inventing options for mutual gain for example) rather than bound by pre-determined positions.
Colleen highlights it is important to recognise what the type of negotiation is and know their tactics. For a competitor for example, they might ask you lots of questions to get as much information from you but reveal little themselves. Colleen also notes that there can be competitive elements to a cooperative negotiation and likewise, you can see if someone is competitive but is acting cooperatively.
She recommends that a competitor might use hardball tactics when there is no relationship. “Take the time to get to know them and build into your discussion that this will be a longterm relationship which might discourage hardball tactics.” She also adds, when you put out a number, remember to wait in the silence. This can prevent you negotating against yourself.
Claiming and Creating Value
This is another negotiators dilemma. “no matter how much creative problem solving enlarges the pie, it must still be divided; value created must be claimed.”
At the end of this talk, Colleen talked us through an example scenario negotiating freelance rates. She recommends to first separate the people from the problem and focus on your interests. Invent options for mutal gains and know your best alternative to a negotiated agreement. Anchoring is a good option here which can be integrated along the lines of: ‘Most are charging X amount and I’ve been keeping my rates low for X years….Now because prices are going up post-pandemic, I will be raising my rates in the fall (adds time pressure). I am looking to get my best clients the best price…’ This will make them feel special while getting the deal you need. Colleen also suggests by adding in your awards, achievements and positive feedback from clients, this will help with the narrative.