One of the most fundamental sources of power in negotiation is the ability to say “No”. If one party to a negotiation can truly not refuse to agree it has a massive problem. Even when No is an option, many negotiators find saying No truly hard to do. This blog will take a look at the cause for this and will provide some food for thought.
The fundamental challenge – why saying No may be good
One of the most fundamental principles of good negotiations is to understand one’s alternatives to the deal under negotiation. This is covered in-depth in Chapter 8 of High Impact Fee Negotiation and Management for Professionals. Many people refer to this as BATNA (best alternative to the negotiated agreement). There are many other acronyms describing this concept. The concept has however been misunderstood in the past. Common misconceptions included:
- that BATNA cannot be another negotiated agreement;
- that the BATNA had to involve a different counterparty;
- that the BATNA had to be a “last resort”; and
- that there is no BATNA
Each of these indicate a fundamental misunderstanding of the concept of evaluating a potential agreement in the light of available alternatives. I will return to this topic in a later blog.
Great negotiators always review a potential negotiated agreement in the light of available alternatives. They often work very hard at creating such alternatives and of making them attractive alternatives. They do so with the explicit aim of forcing the other side to improve their offer. Great negotiators want to say No – not because they don’t want the agreement, but because they want to improve the terms on offer.
When they say No they may have one of three Nos on their mind
Three different ways to say No
The first type of No is one described in a recent article as a “tactical No” by James Sebenius, a recognised authority in Negotiation and professor at Harvard Business School. This No is intended to generate better terms during the course of the negotiation.
Sebenius describes a second type of No as a “reset No”. This is intended to change the set-up of the negotiation and often involves moving away from the table or taking adjournments.
The third type of No is the “final No”, when you have concluded that the negotiation is over and that you have a better alternative (which may include doing nothing).
When negotiating it is therefore important to both listen to the other side’s No to fully understand if it is a final No, i.e. no point in going on, or if it is a No with flexibility to continue to negotiate.
When saying No it is important to convey the right message with the No, to encourage the other side to try harder rather than giving up too early.