When reading certain books on negotiations or listening to some so-called negotiation experts it is tempting to conclude that as long as a negotiator has prepared their negotiation position well, i.e. established their veto and set themselves a good target the outcome of the negotiation will fall within an acceptable if not desirable range.
Clearly some activity during the negotiation is needed such as communicating one’s opening position, i.e. demands, responding to the other side’s demands, managing the flow of concessions and going for the close but the impression often given is that focusing on the “hard” negotiation issues and outcomes is the most important determinant of the final result.
These sources are much mistaken. The reality is that the process of a negotiation has a greater influence on the economic outcome of most negotiations than the underlying negotiation parameters. After all, anyone can make outrageous demands, it is only the skilled and experienced who can actually see these through.
Process affects critical drivers such as trust, the building of constructive relationships (vital for creative, integrative negotiation) or even the propensity of a counterparty to either play “hardball”, to be co-operative or even to acquiesce.
I often observe, for example, how some negotiators who set out relatively unambitious opening positions, often in an attempt to be conciliatory, actually prompt their counterparts to try harder and dig their heels in. This is because the opening position put forward is so favourable to the counterparty that the other side have little to lose by playing hard ball. Consequently they have a go at holding out for an even better deal and inevitably gain a better outcome.
Even the perception of value can be influenced by the timing and sequence in which a concession is offered. The research literate has named this phenomenon “reactive devaluation”. The research shows that negotiators will value a concession more if they ask for it rather than if it is offered.
The timing of a concession also impact on value perception. Make a concession too early and give it too easily and the other side will expect more, thus giving the concession a lower relative value than if the concession was squeezed out during the process of a tough negotiation.
This is not to say that good negotiators always hold back and make themselves difficult to negotiate with – rather good negotiators know how to manage the process of the negotiation so as to generate the best possible outcome given their underlying negotiation position. They pay as much if not more attention to the ebb and flow of the negotiation, the timing and sequence of key activities as much as to the economic (or other) negotiation issues.