Tag Archives: William Ury

Nothing to Lose: Effective Negotiating Even When “Powerless”

Michael Schaerer

Most negotiators prefer to have a “fall back position.”
However, having no alternatives and less power than co-negotiators can improve outcomes, found INSEAD’s Michael Schaerer and Roderick Swaab with Adam Galinsky of Columbia.

Alternatives enable negotiators to gain concessions from co-negotiators because they have a BATNA – Best Alternative To a Negotiated Agreement, defined by Harvard’s Roger Fisher and William Ury.

Roger Fisher

Roger Fisher

Strength of the alternative is important in determining whether it helps or hurts a negotiation.
When an alternative is weak, it can undermine negotiating outcomes more than having no alternative because it establishes an “anchor point” based on competing options.

Anchoring is a frequent cognitive bias characterized by overvaluing one piece of information, according to Hebrew University’s late Amos Tversky and Daniel Kahneman of Princeton.

William Ury

William Ury

Negotiators usually anchor on the value of alternatives when making a first offer, and people with weak alternatives generally make lower first offers than those with no alternative.
“Lowball” first offers based on few or poor alternatives usually undermine a negotiator’s final outcome.

Professional athletes and their agents provide many anecdotal examples of negotiating better deals when they have no “back up” offers and “nothing to lose” because they can set ambitious anchor points.

Amos Tversky

Amos Tversky

In a separate study of job negotiation, Schaerer and team asked a hundred people whether they would prefer to negotiate a job offer with a weak alternative or without any alternative.
More than 90 percent indicated that they preferred an unattractive alternative offer, confirming the popular assumption that any alternative is  better than no alternative.

Another of Schaerer’s lab studies asked volunteers to imagine they were selling a used music CD by The Rolling Stones.
Participants were randomly assigned to three groups and gave each cohort received different information about their alternatives, ranging from:

  • No offers (no alternative),
  • One offer at USD $2 (weak alternative),
  • A bid at USD $8 (strong alternative).
Roderick Swaab

Roderick Swaab

Volunteers in each group proposed a first offer, and rated the degree of power they felt.
Not surprisingly, people with the strong alternative felt the most powerful and those with no alternative felt the least powerful.

However, people with a weak alternative felt more powerful than those with no alternative, but they made lower first offers, signaling less confidence than participants with no alternative.
Having any alternative can help people feel powerful but can undermine negotiation performance.

Schaerer’s team explored this paradox by pairing participants as a  “seller,” who offered a Starbucks mug during a face-to-face meeting, and a potential “buyer.”

Adam Galinsky

Adam Galinsky

Before the meeting, the seller received a phone call from “another buyer,” who was actually a confederate of the researchers.
For half of the “sellers,” the potential buyer either made a low offer or declined to bid.

“Sellers” without an alternative offer said they felt less powerful, but made higher first offers and received considerably higher sales prices than negotiators with an unattractive alternative.

In another situation, half of the “sellers” concentrated on available alternatives (none, weak, or strong) and the remaining negotiators focused on the target price.

Volunteers with unappealing alternatives negotiated worse deals than those without other options when they focused on alternatives.
“Sellers” avoided this pitfall by concentrating on the target price.
These findings validate focusing on the goal when alternatives are weak, and of the power of first-offer anchors.

Negotiators with non-existent or unappealing alternatives benefit from tempering their cautious first offers when they feel powerless.
Instead, the situation can be opportunity to set audacious goals, reflected in an ambitious opening offer.

  • How do you overcome lowball anchoring when you have few negotiation alternatives?

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Mastering the Power Sandwich with Skillful Upward Influence

David Bradford

David Bradford

Employees’ advancement in organizations is based on preventing problems before they develop, and pre-emptively uncovering opportunities to add value, according to Stanford’s David Bradford and Allan R. Cohen of Babson College in Influencing Up.

Allan Cohen

Allan Cohen

Complementing their Influence without Authority, they distilled common-sense win-win approaches to influence those over whom one has no formal authority or control: one’s manager and others higher in the hierarchy.

Influencing UpOrganizational power discrepancies can be accentuated when the employee is female or a member of a minority group.
Cohen and Bradford’s suggest six elements to reduce power differences, and improve influence and negotiation outcomes:

  • Clarify needs and priorities
  • Consider others as potential partners rather than adversaries
  • Establish trustworthiness by sharing information and develop understanding of the other’s perspective, concerns, and “care-abouts” — empathy in a business setting
  • Determine reciprocal value exchange in “currencies” that matter to others: information, budget, removing obstacles, brokering agreements, support
  • Gain access to others by showcasing your potential value exchange
  • Negotiate a win-win outcome
Robert Cialdini

Robert Cialdini

Bradford and Cohen’s work complements influential research by Stanford colleagues Margaret Neale and Deborah Gruenberg, as well as Robert Cialdini’s classic investigation of influence.

Roger Fisher

Roger Fisher

William Ury

William Ury

Their emphasis on crafting a win-win negotiated outcome echoes earlier work by Roger Fisher and William Ury in Getting to Yes and Linda Babcock’s consideration of negotiation challenges faced by women and minority group members in the workplace.

-*How do you manage the Power Sandwich, requiring skillful 360 degree influence in your organization?

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