Business Schools Teach Negotiating Tactics That Don't WorkJim Camp
During a recent talk at Fisher College of Business at Ohio State University, it became clear to me that a crucial element was missing from the coursework: Many graduate students didn’t get training in the principles that come into play when people are negotiating, especially as they relate to human behavior.
You won’t go far in your career without being adept at getting people to agree—whether you’re managing a big acquisition or refereeing a word choice disagreement in advertising copy.
Business students are taught tactics, such as how to “get to yes” and close the deal, that almost never work. Worse, they destroy opportunities. Take a popular tactic known as BATNA (best alternative to a negotiated agreement), which is taught at many business schools. Students are told that a negotiator should have at the ready a partial alternative if his or her terms aren’t agreed to by the other party. You might offer a lower price on goods and services, for example, to get the contract, albeit at a smaller profit. This results in a “win-win,” or so say B-school professors.
These and other tactics share a fatal flaw: the mistaken idea that any agreement is better than no agreement. In other words, most business schools teach that compromise is the way to go.
The masterful negotiator never goes to the negotiating table with a set of preconditions, assumptions, or expectations for gaining agreement. This leads to making bad deals, giving up too much through compromise, and losing one’s advantage.
Negotiations are about human behavior and the way we humans make up our minds about things that are important to us. The best negotiators are the ones who identify what’s interfering with a deal, and help solve the problems that brought the other party to the table. Here are five skills business schools should be teaching:
Clearing away assumptions
Smart negotiators admit that they don’t know what they don’t know. In other words, they view negotiating as a process of discovery and an opportunity to find out what’s driving the other party to negotiate in the first place.
For example, a sales executive is meeting with a prospective client who is considering switching suppliers. After researching what the current vendor charges, an unskilled negotiator might assume that the client is looking to cut costs, and therefore simply offers lower prices. A skilled negotiator goes in with zero assumptions and discovers that the client is really looking for a supplier with better service and prompt delivery. The unskilled negotiator’s assumption killed the deal.
The student of negotiation needs to realize that he or she knows nothing until the other party has provided the key information. The only thing that matters is what the other party reveals in the course of the negotiation. When we admit that we don’t know the facts or the problem, we start with a clean slate, an open mind, and no judgment.
Understanding how decisions are made
No matter how much logic, reason, and facts one uses to persuade one’s opponents, they will not agree to a proposal unless it solves their problem. Only once a negotiator understands what’s hurting her opponents can she show how her proposal will help ease their pain.
What we call pain has nothing to do with actual physical pain; it’s whatever the negotiator discovers is the problem. For instance, a job candidate learns in the course of meeting with HR that the company is losing market share among women. This candidate now can demonstrate how his or her special area of expertise—marketing to women—can solve the problem and ease the “pain” of lagging behind competitors in this area.
People make decisions in order to alleviate and take away a problem—or pain.
Asking smart questions
Preparation and research are important, but their main purpose is to help the negotiator ask the right questions. Business schools should teach students how to ask well-crafted questions that get the other party talking and revealing.
Good negotiators ask open-ended questions that start with “what,” “how,” or “why.” Asking the right questions, at the right time, using the right tone, and injecting nurturing words and phrases is one of the best skills a negotiator uses. For example:
Wrong: “Is this the biggest issue you face?”
Right: “What is the biggest issue you face?”
Not nurturing: The other person asks: “What will this option do for me?” You say, “Well, what’s your biggest challenge at the moment?” (too aggressive)
Nurturing: The other person asks: “What will this option do for me?” You say, “That’s a good question, Sam. Before we get into that, what’s the biggest challenge you face?” (more respectful and puts Sam at ease)
A good questioner sets the pace and direction of the dialogue, reinforcing and clarifying as he or she goes along.
Listening and observing
The other party may reveal a critical fact about what they need in the course of answering a question about something completely different. A good listener is able to pick up everything the person is saying, including the way he or she says it.
For instance, a recent widow who is sitting on a beautiful ocean-side tract of land refuses to sell to a real estate developer looking to build a golf resort. The developer keeps offering more money, and the widow keeps refusing. In the course of discussions, the skillful negotiator hears her say that this was her late husband’s legacy. The negotiator, a great listener, now understands her pain—she is afraid that selling the land will destroy her husband’s legacy. The negotiator proposes a memorial to her husband—a park on the property with a statue—with the provision that it remain there in perpetuity and will be open to the public. Because the negotiator really listened to every detail the widow was saying, the sale went through at a fair price.
The skill of observing is also critical. Is the other party getting upset? Do they seem rushed or nervous? Are they avoiding certain topics? Students of negotiation need training in the unspoken messages and dynamics happening at the table.
Maintaining emotional neutrality
A good negotiator has to be emotionally neutral. That means no neediness, no excitement or hope, no fear or paranoia. This doesn’t sound like the type of skill a business school would teach, but it may be the most important skill of all because if we can’t learn to control our emotions, we lose the advantage in the negotiation.
The role of emotions is critical in every human transaction. Students of negotiation need to recognize when emotions creep in, making us speak too quickly or too loudly. Staying calm and unreadable is a key factor for success.
Until business schools start teaching students how to think, be circumspect, ask questions, listen, and not get emotional, they will churn out negotiators who lack the right tools for the job.