Stop selling!

Today’s blog post is available on INSEAD Knowledge.


Liar liar

Hotel staff: “There’s nothing I can do. The amount has been entered into the system and it is impossible to change now. You will have to pay the amount on the invoice.”

But after 10 minutes of awkward silence (a sometimes excellent negotiation tool!) the lady behind the hotel counter promptly hits a few keys on the computer, and furnishes me with a new invoice that has the (according to me) correct amount. Today’s blog entry is not about the negotiation that led us there. Rather I’d like us to reflect on her initial position, which was clearly a lie.

As a professional negotiator and lecturer I have observed thousands of participants negotiate in simulations where I had access to all the background information. I have also observed countless commercial negotiations where I had access to at least one side’s information. Thus I could verify the authenticity of at least one party said. And a quite disturbing observation (i.e. not a recommendation) is that competitive tactics are frequently implemented using lies.

We don’t have to look further than the opening offer. “I can only pay ABC…” or “I won’t sell for less than XYZ”. How does the negotiation typically unfold after these opening positions? That’s right, both parties change their opening offers. Which means there was indeed flexibility and thus both parties have already lied to each other.

I ask a class of MBA students what they think, and to my surprise I hear: “So what, it’s business!”

Oh dear…

Here’s the thing… How much easier can negotiations get if we have trust? Enormously! And how many times do you have to lie in order for me to not trust you anymore..? Just the one time; after you lie once, everything you say is questionable! And that was your first move. Good job!

An interesting nuance on lying is that people are more comfortable to lie by omission than by commission. So many of the lies we need to look out for in negotiations are not in the information that people offer, but rather in the information they fail to provide.