How to Use Emotions When Negotiating

Emotions can make you a better negotiator… 

Normally when you think of making decisions, negotiating or dealing with others you do so on the assumption that you are a rational person, and that the other person is a rational person. In short, logic makes you think, and thinking makes you act.

Think of how you negotiate. In the book, Getting to Yes, Fisher and Ury, outline four key steps to take when negotiating:

  1. Separate the person – the emotion –  from the problem;
  2. Don’t get wrapped up in the other side’s position (what they’re asking for) but instead focus on their interests (why they’re asking for it) so that you can find what they really want;
  3. Work cooperatively to generate win-win options; and,
  4. Establish mutually agreed-upon standards for evaluating those possible solutions.

There is only one problem with this – the assumption that people are rational is flawed. People are actually irrational in how they think, decide and act. Let me share with you an example of how this happens.

Playing the Ultimatum Game

This game has been run many times with students. Students are split into pairs – a “proposer” and an “accepter”. The proposer is given $10 and then has to offer the accepter a round number of dollars. If the accepter agrees he or she receives what’s been offered and the proposer gets the rest. If the accepter refuses the offer, though, they both get nothing.  What would do you think they did? If you were the proposer, what would you do?

Whether they “win” and keep the money or “lose” and have to give it back is irrelevant. What’s important is the offer they make. Almost without exception, whatever selection anyone makes, they find themselves in a minority. No matter what split of the $10 is used ($6/$4, $5/$5, $7/$3, $8/$2, etc.), no split is chosen far more than any other.

When the pairs were asked to explain how they made a decision their reasoning, in every case, they described it as rational. However, they were wrong for two reasons:

  1. For proposers: If everyone was rational they would all make the same offer, yet they made different offers. The reasons they all made different offers is that they assumed the other person would reason like them.
  2. For accepters: Accepters who turned down $1, or more, made an emotional choice. If you are rational since when is getting $0 better than getting $1?

So do you honestly think you are a rational person? You’re not. Like everyone else, you and I are all irrational, all emotional.

So what is the assumption that should underpin how we decide and negotiate?

Logic makes people think, but emotions make people act.

So when making decisions or negotiating use both logic and emotion – remember, a feeling is a form of thinking.

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Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

What to Do Before You Start Making Decisions

What you need to do before you start the decision-making process

by Andrew Cooke, Growth & Profit Solutions

Decisions Before You DecideWe make decisions every day; small ones, big ones, unusual ones, specific or general and those which have become a force of habit.  We get so involved in the decision itself that we become blind to the key dimensions that surround it. So what are they, why are they important and how can we use them to help us make better and more effective decisions?

The Four Key Dimensions

There are four key dimensions which need to be considered when making a decision.  This includes:

  1. Composition: Who should be involved in the decision-making process?  You need to make sure you have the right people, with the right information, who can contribute and develop the necessary decision.4 Dimensions of Decision-Making
  2. Context: In what type of environment does the decision take place?  Is it an open environment that fosters open, constructive dialogue?  Or a closed environment in which personal interests supersedes those of the group?
  3. Communication: What are the “means of dialogue” among the participants?  Does it involve considerable direct discussion with those with relevant knowledge and expertise, or is it ‘filtered’ through reports from senior people in the hierarchy?  Are there face-to-face meetings or is it via phone, email, reports etcetera?
  4. Control: How will the leader control the process and the content of the decision?
  • Control of the Process how do you want to shape the way that the deliberations are undertaken and followed;
  • Control of the Content how much do you want to control the outcome of the decision

This last factor- Control – is the hardest, and has the greatest impact on the decision.

A Balanced Approach

A balance between control of the process and control of the content is required.  Too little or too much control of the process and/or the content will result in sub-optimal decisions.  Some of the impacts of low or high levels of control on the process or content are shown below.

Impact of the Level of Control of Content & Process in Decision-Making

 Decisions and Control

So how can we achieve a balance in controlling both the process and content of a decision?  There are three steps:

 3 Steps for a Balanced Approach

1.      Be Clear on the Decision

Are you clear on what the decision is that you are making is?   For example, you are looking at how to improve your retention of key customers.  This is not a decision; this is a problem that needs to be solved.  Be careful not to confuse decisions with problems.

2.      Know What Objectives & Outcomes You Want to Achieve

Have a clear understanding of where you want to be as a result of the decision you have made.  Knowing this will help you understand what expertise and information you need, from whom you need to get it, and the people who should be involved.

3.      Have Checks & Counter-Balances

You will find that you and others involved in the decision-making process will fall into common decision-making traps or errors of judgement.  Understanding them, and how to avoid them will provide you with the means to check your collective thoughts, ideas and insights and reduce the likelihood of your decision being subverted.

Use this as a checklist – make sure you address the four dimensions: Composition, Context, Communication and Control – and build the means for better decisions.  Will you share this with your colleagues and those who participate in your decision-making processes?

It’s your decision.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.