Winning Advice from a Shadow Negotiator
ne·go·ti·a·tion
nəˌɡōSHēˈāSH(ə)n/
noun
Discussion aimed at reaching an agreement.
nəˌɡōSHēˈāSH(ə)n/
noun
Discussion aimed at reaching an agreement.
Pause, for a moment, and think about a recent negotiation either at work or in your personal life. Then zoom out a little, and take stock of where in the world you are sitting. Asia? Africa? Europe? USA? Latin America? The UK?
Now take a few minutes to think about a major trade deal, corporate take-over, or regional conflict and how a different outcome would have changed or shaped your life. Our examples will be different, but the common thread between them is that negotiation steered the outcome.
From where I sit, I wonder how different things would be today if John F. Kennedy and Nikita Khrushchev had not negotiated a resolution of the Cuban Missile Crisis of October 1962. Or if Nelson Mandela, in my birth country, had not decided to initiate negotiations with the South African Apartheid government that had imprisoned him.
A current example is the UK’s fraught Brexit negotiations with the European Union. The outcome will have a lasting impact on people throughout the region.
These negotiations changed — or will change — the course of history. Not all negotiations have such portentous outcomes, but that doesn’t make them any less important. We are all engaged in some form of negotiation on an ongoing basis, whether it’s convincing a toddler to eat her peas, resolving a conflict with a coworker or spouse, asking for a salary increase, negotiating purchasing terms with a supplier, or any other discussion aimed at reaching an agreement.
“Negotiation management is much more than talking and arguing,” Foad Forghani told delegates at the CFA Institute European Investment Conference in Berlin. Forghani is a shadow negotiator and founder of Forghani Negotiations, and he has worked with international companies and institutions during complicated negotiations over delicate issues.
At the conference, Forghani explained the key principle that drives successful negotiations: “You start to negotiate in order to steer and influence the decision making process on the other side. “
Forghani noted that one never negotiates over an object, but over the added value of that object for the people involved. That makes it important to understand how the decision-makers on the other side of the negotiation assign value.
Negotiaton 101. Actions speak louder than words. You observe discrepancy between a statement and a decision? Use their decision to identify their motivation. -Forghani #EICBerlin
“You can influence a human being by addressing his interests and fears,” Forghani said. “The moment you address his interests, you are rewarding that person. If you address the fears, you are punishing them.” Forghani cited the ability to reward and punish counterparties as one of the core instruments of negotiation management.
That makes it important to understand your counterparty’s interests and fears, which can be done through careful observation. “If you want to understand people, you have to observe their decisions,” Forghani said. “If you want to understand your friend, you should take care about how he’s treating you and not what he’s telling you.” Once you are equipped with understanding, you can address your counterparty’s interests to advance your negotiation.
Forghani drew a clear distinction between punishment and insults. His example involved postponing an appointment with a counterparty when time was an important factor for them. “It’s fact based,” he said, and therefore a punishment. A deliberate attempt to offend the other person or to provoke outrage with an insult should be avoided. “Negotiations can break down if you insult people,” he warned.
“It’s always a negotiation over facts,” Forghani said, but he cautioned that the balance of power between you and your counterparty is important. “As long as you don’t know the power balance, you cannot plan anything, not a strategy, not a tactic.”
Forghani said that the balance of power is influential even when it plays out on the subconscious level. He asked the audience to imagine the following situation:
“You knock on the door. Somebody says, ‘Come in.’ You go in, he looks up, he looks at you, says hello. He looks down, writes something in his laptop for over seven or eight seconds, and then he stands up to shake your hand.
You have been devalued for over seven seconds in this case. Now the question is: ‘Is that important for the negotiation?’ and the answer is ‘yes.’ Why is it important? In order to explain that, we need to go back about 10, 20 thousand years, as we lived in very small groups.
Those groups had a very clear type of hierarchy, and at that time, we all wanted to go up, in order to survive. We still, nowadays, want to go up, but not in order to survive, but in order to have a better quality of life.
This is what we think, but the instruction in this case comes from our stem brain, and the stem brain doesn’t care about the quality of life nowadays. It just tells us, ‘Go up to survive.’”
Forghani warned that our instinctive deference to people farther up in the hierarchy can undermine our negotiation efforts. “The moment you want to voice statements, justified arguments, or ask some questions,” he said, “a critical instance within your own brain will come up and tell you not to do it, because that critical instance has already accepted the values of your counterpart as being predominant.”
However, there is a subtle difference between retaining dominance internally and expressing that dominance externally during the negotiation. Forghani explained that it is possible to negotiate while displaying deference. “You’re dominant in your inner stance,” he said, “but on the behavioral level, you respect the relationship. Here, we’re talking about people who are normally charismatic.”
This behavioral deference becomes important when dealing with counterparties who need to express their dominance. Unless you want to escalate to a full-blown conflict, “your inner stance, your feelings, need to be dominant but on the behavioral level you need to submit.”
Forghani: The value of logical arguments in a negotiation depends upon the constellation of participants. In the absence of a third party decision maker, arguments may not be productive. #EICBerlin
Another consideration is the arrangement of decision-makers and influential parties involved. Whenever possible, Forghani recommends working with a neutral third party who can be persuaded by logical arguments.
Forghani explained that when our counterparty is the only person evaluating our arguments, logic is less useful. “He compares our arguments with his interests and fears. If the arguments do not serve the interests and fears, he rejects them.”
On the other hand, bringing too many people into the negotiation introduces its own problems. “The higher the number of decision makers and decision influencers, the more difficult the negotiation becomes,” Forghani said.
For the best results, Forghani recommended building small teams with clear responsibilities. “You know exactly who is leading that team, who is talking about which topic, and then you run the negotiation.”
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