Sunday, August 19, 2007

Won't get fooled again: negotiating with liars

Negotiating with liarsWhen it comes to negotiating, be trustworthy, not trusting--advice that many negotiation trainers give their students. Since lying may be endemic to the human condition, this is undoubtedly good advice.

But what can a negotiator do to counter deception at the bargaining table?

In "The fine art of negotiating (with liars)", an article in today's Boston Globe proffers some advice from the experts, including:

Ask negotiating partners upfront to disclose their credentials, credit record, or personal history as a way of establishing trust.

Set ground rules, requesting that bargaining be "good faith" rather than "arm's length." In the former, the parties agree to reveal everything they know to help reach a better deal for both sides. In the latter, they disclose only what's required and can mislead through omission.

Frame questions more narrowly or broadly, or make statements that will invite telling responses, if you feel your negotiating partner is providing vague, general, or yes-and-no answers.
I agree that asking questions is important. In Bargaining for Advantage, scholar and negotiation expert G. Richard Shell points to the results of a study that demonstrates something fascinating about the behavior of skilled negotiators: they ask twice the number of questions that average negotiators do. In fact, Shell reports that "skilled negotiators spend 38.5 percent of their time acquiring and clarifying information--as compared with just under 18 percent for these activities by average negotiators." Shell's advice is simple: "probe first, disclose later".

Another expert interviewed for the Globe article had other recommendations: Begin on the presumption that the person on the other side of the table is honest unless the evidence suggests otherwise. Then, "take precautions -- that includes jotting down notes during talks, putting the other person's claims in writing, and incorporating contingency clauses into agreements."

My own advice? Do like the Boy Scouts: Be prepared. Identify your goals for the negotiation, not just your bottom line, research your walk-away alternatives in advance to create leverage, and collect data that will support the dollar figures or outcomes you're seeking. And don't forget to follow Shell's advice--ask questions and listen.

By the way, don't be tempted to resort to bluffing yourself in an effort to come out ahead. It could end up costing you. According to Shell, "Bluffing distorts the information flow in negotiation in ways that can be costly. In one study, for example, 20 percent of the subjects, including some experienced professionals, ended up agreeing to options that neither side wanted due to bluffs that backfired."

Looks like in negotiating honesty may be the best policy after all--or at least the most profitable one.