Last semester I was teaching negotiation to a room full of entrepreneurs. I asked them a simple question:
“Put your hand up if you think you are a good negotiator?”
At least 70% of them raised their hands.
“Keep your hand up if you think you are a master negotiator? As in — you could negotiate for hostages in a kidnapping.” About 40% of the founders identified as master negotiators.
As an entrepreneur, almost everything is a negotiation. From clients to partners, employees, services, infrastructure, investors, heck even with your own family. Negotiation is part and parcel with the entrepreneurial experience.
Yet, as I have been tracking startup teams over the last three years for my PhD, I have seen first hand that even those founders who consider themselves master negotiators have considerable room for growth.
I have hooked founding teams up to biometric sensors that measure their heart rate and galvanic skin response (skin sweat). I’ve run an AI algorithm on footage of their faces throughout team interactions to measure exactly how, what, when, and why people fail to negotiate in their teams.
Part of the reason founders negotiate poorly is that they often think of negotiation as only the really big things in both business and in life. Things like negotiating equity, or securing an angel investor. Of course, those are big negotiations. But there are lots of little negotiations as well.
What about when you are negotiating with your founding team about the direction of the business? Or agreeing who does what? Or having a leadership negotiation — who leads what? Or even negotiating who will buy morning coffee.
The interesting thing is that many of us overestimate our negotiation abilities. This is called illusory superiority. It’s a cognitive bias which means we overestimate our own qualities and abilities in relation to the same qualities and abilities of others. It’s why 87% of MBA students estimated they were doing better than most of their peers, and 94% of professors think so, too
So, when I asked the 40% of founders who were self-proclaimed master negotiators to share a few tools they use when negotiating, I wasn’t too surprised when only 2 or 3 people could actually tell me a single tool or strategy they implement when they are negotiating.
Negotiation tools are the things you implement in the heat of the moment to change the dynamic of a negotiation. There are two separate dynamics in a negotiation:
- The relationship
- The issue
You should aim to negotiate from an interest-oriented angle.
An interest-focused lens shifts the dynamic throughout a negotiation, it means that you want to keep the person talking as much as they can. You are interested in their views, you want to know what they want.
You can separate the person from the issue and realize that even if you don’t see eye to eye about the position, through using set negotiation tools you can build and maintain a good relationship.
Former FBI hostage negotiator Chris Voss writes about tactical empathy in his book Never Split the Difference. Tactical empathy is the art of building trust with your negotiating partner, understanding your opponent on an emotional level, and using that to your advantage.
It’s an exercise in building trust to understand your counterpart’s motives and emotions. Voss says tactical empathy is deliberately influencing the other’s emotions to build trust-based influence and secure deals.
There are three practical ways of using tactical empathy that I want you to practice. These are mirroring, labelling, and accusation audit.
The more you bring in the emotional intelligence tools of tactical empathy into your negotiations, the more likely you are to get the tactical upper hand, all while making your negotiating partner feel valued and heard. Employing these tools helps you reach a win-win outcome, and help to understand the why rather than the what of your opponent.
Remember, the goal is to become absolutely aware of the other’s perspective, their take on the negotiation. Tactical empathy isn’t sympathy, it is engaging the other side to tease out the information you may not have otherwise.
You want to practice mirroring, labelling, and accusation audit to demonstrate that you are negotiating in good faith.
Mirroring is one of the most simple yet effective tools in any negotiator’s repertoire. Mirroring is a rapport-building tool. Through simple repetition, you can gather vital information in negotiation and put your counterpart at ease.
Mirroring is a tool to show you are genuinely interested in your counterpoint. When used well it will help you to understand their goals, motivations, wants, and fears. It will help you to keep your counterpoint talking, and to make them feel like you are sincerely interested in them.
Mirroring is simply repeating back the last few 1–3 words with an upwards or downwards inflection in your voice.
Customer: “Your price is too high.”
You: “The price is too high?”
Customer: “We’ve got a limited budget.”
You: “You’ve got a limited budget?”
Customer: “Yea we have other things we are trying to accomplish.”
You: “You’ve got other things you’re trying to accomplish?”
It can be used in place of “what do you mean by that?” or “please keep going”.
Don’t believe me? Watch this video to hear an example of a real hostage negotiation using mirroring.
•Mirroring should finish with a tone of voice of genuine curiosity
•Can defuse confrontation with mirroring, through tone of voice and showing genuine curiously
•Use the last one to three words, then practice directed silence. Let the other person think, and speak.
•Try it in low stakes practice, interactions with nothing at stake
Labeling is a tool that uses verbal observations of feelings to either neutralize negative emotions or reinforce positive emotions to create a better deal.
The practice of labeling is rooted in neuroscience. We know that putting feelings into words has a therapeutic effect on the brain. In studies that used fMRI brain scans, they found that verbalizing your feelings, called “effective labeling”, makes our sadness, anger and pain less intense.
The same works for labeling the emotions of others, a study found that having another person label your emotions can decrease your amygdala activity in the same was as labeling your own emotions (the amygdala is the part of your brain which controls your stress response).
This tool can be incredibly effective at keeping the dynamics positive and steering the negotiation away from potential negative pitfalls.
Labeling can deactivate negative feelings. By calling it out, you can work to dispel fear, suspicion, anger, aggression, and distrust. Watch your negotiation partner’s body language and tone to determine when they might be experiencing negative emotions.
You can also use effective labeling to magnify positive emotions. This can increase trust, comfort, and aid you in building rapport to help you seal the deal.
How to label:
- Be aware of the emotion from the other side. Keep aware of body language, facial expressions, tone of voice, language and sighs.
- Simply label the emotions you see e.g. “It seems like / looks like / sounds like you are frustrated”*
Don’t say “what I’m hearing is”, say it from your point of you — “it looks like…”. Don’t add a follow up statement. Allow for dynamic silence so the person can hear what you say.
Labeling negative emotions diffuses negative feelings and physiological stress. Why someone won’t make a deal with you is 9 times more important than why someone will. Labeling positive emotions reinforces the positive.
This is an example of labeling to reframe a positive is:
When speaking with a potential customer who is too busy for you “it feels like your being generous with your time”
It’s the combination of mirroring and labeling which can be really effective in shifting the negotiation dynamics. It is a common misconception in a negotiation that eliminating emotions creates the most logical outcome. Yet, there is no way to eliminate emotions in any experience, neurological research shows us that. The reality is, suppressing negative emotions will hurt the negotiation.
Watch this video to see an example of labeling negatives.
An accusation audit is something you might think about before the negotiation, and then let it play out when you are negotiating. An accusation audit like making an inventory of all the negative names, accusations, negative thoughts that someone might have about you.
There are two ways of framing an accusation audit:
- Long term relationships: If you have a stable relationship with your negotiating partner, you might just label the accusations straight out. You might say: “Now, it seems like you’re not getting all the information out of us that you want. It probably feels like we’re holding back on you. It probably feels like we’re wasting your time. It feels like we’re not being honest with you.”
- Beginning of the relationship: If you have just started your relationship you might want to be a bit more tentative. You might say: “You’re probably going to ask yourself why you’re taking this meeting. It probably feels like it might seem like everybody else is in this line of work and that there is no difference between me and anybody else. You may even think like that the people on your side of the table are going to think you’re getting pushed around.”
Doing an accusation audit may likely not come naturally to you. But it is proven to lead to better long-term relationships and better negotiations.
Negotiation tools and negotiation strategies are two different things. A negotiation strategy is a pre-determined game plan that you have established before you walk in the room. I’ll briefly mention these below, but the biggest improvement to practice is implementing negotiation strategies, which I’ll cover further below.
Are you attempting to get a win-win negotiation? Or a win-lose? Even if it feels good at the time to perceive you are winning, if you want a long term relationship with the other negotiating party, win-lose is probably going to be the wrong choice.
Your negotiation strategy needs to take into account your ZOPA (Zone of Potential Agreement) and your BATNA (Best Alternative To a Negotiated Agreement). Your BATNA is the most advantageous alternative you could take if your negotiation fails and an agreement cannot be made.
For example, maybe you are interviewing a candidate, you can only pay them $50,000, yet they won’t accept anything under $70,000. Your BATNA is to offer to your second-favorite candidate.
Though, the BATNA approach is criticized because it is widely overused. If you approach a negotiation like that and you don’t really want to offer to the second candidate, and the person you do want has a different job offer for $80,000, their BATNA is stronger than yours.
That’s why it’s a stronger move to think mutual dependence, not just best alternatives. Mutual dependence changes this question from “How much can I get out of this deal above my best alternative?” to “In how many ways can I demonstrate my company’s value to this person based on their need(s)?”
It changes the focus and the dynamic of the negotiation. But, to shift the dynamic, you need better negotiation tools.
A study released today, “Masculinity at the Negotiation Table: A Theory of Men’s Negotiation Behaviors and Outcomes”, notes that it is common in the workplace for men to appear eager to show how tough they are as negotiators.
That men often perceive negotiating as an activity through which they can signal their masculinity, and pursue social status. And that they may fear losing the negotiation for fear that their masculinity might be questioned. Because of this, men can adopt behaviors in a negotiation that underscore their masculinity and social status.
The reality is those true master negotiators know that using tactical empathy, exercising their emotional intelligence, calling out potential accusations, and showing genuine interest is much more likely to result in a successful negotiation. Falling into the trap of using negotiation as a way of showing your masculinity is going to result in worse outcomes.
- Chris Voss book
- Masterclass on negotiation: The art of negotiation
- Practicing tactical empathy, mirroring, affective labeling and accusation audit in low stake settings