This week's Friday resource comes from Harvard Business Review and discusses the impact of threatening to walk away during a negotiation.
A "walkaway" outcome to a negotiation occurs when one or more parties involved are no longer willing to consider other possible outcomes or alternatives. In walking away, perspective is limited and power is exercised in a way that eliminates opportunity for the needs of both parties to be met.
In any negotiation, each person holds a relative amount of power to influence the circumstances of the other party. However, there is a time to walk away, such as when the other party will not budge or accommodate any aspect of a request. But hastily walking away before reaching an alternative deal is to walk away without a solution and create a dissolution of the relationship. It is possible to find common ground with the mentality that enough resources exist to meet the needs of everyone involved.
Per Jay A. Hewlin, HBR, here are a few ways negotiators can produce the best outcomes:
Think mutual dependence, not just alternatives. "Ascertaining why and how deeply one's counter party needs what you're offering is central when it comes to relative power—the greater his need for you and/or your product or service, the greater your power, and vice-versa. You and your counterpart would do well to spend your efforts focusing on the power inherent in your mutual dependence. Mutual dependence is determined by the sum or the average of Party A's dependence on Party B, and Party B's dependence on Party A. The connection between mutual dependence and power is direct, and it exists in every negotiation.
Focusing on mutual dependence draws your attention toward inquiry and exploration, advancing the conversation 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)?'"
Find power in your context, not your feelings. "You'll often hear the following statement: 'When I feel I have more power in a negotiation, I negotiate better, but when the situation is reversed, I don't do as well.' Limited research has been done on the issue of negotiators' perceptions of power and how those perceptions affect outcomes, providing some evidence of a positive relationship between negotiators' perceptions of their power and the degree to which they engage in integrative bargaining."
Focus on learning, not buying or selling. "Three priorities during a negotiation should be:
• learning as much as possible about the person with whom you are dealing;
• learning as much as possible about the entity with which you are dealing;and
• ascertaining as much as possible about his/her/its circumstances."
Read additional tips and the full article here.