Beware of the status negotiation

(This is a repost from Filip’s original blog)

In my upcoming book I discuss the idea that every negotiation (and interaction!) we have is actually made up of multiple parallel negotiations.

When I ask you ”What was that last negotiation about?”, the answer you give me will probably be what we call the formal topic of the negotiation. Now, if this were the only negotiation we needed to pay attention to then life would be very easy.

But human interaction is much more complex than that. Our formal topic will be polluted by a range of covert negotiations (or competitions!) about status, perceptions, intentions, understanding, trust, rapport, fairness, values, beliefs, and so on.

So let’s today look at one of these; the status negotiation. We all want status and recognition. But we make two flawed assumptions that often make the status negotiation impossible to resolve. One assumption is that we should have most status. The other is that we assume there is only one source of status.

The pattern can look something like this:

  • Person A: “I have 20 years experience in this area, so I know what I’m talking about.” (i.e.”I’m right because of my status!” )
  • Person B: “Well I have education, so I understand this in much more detail than a simple practitioner.”
  • Person C: “I have the most senior title, so the organisation has decided that my view is most important.”
  • Person D: “Yes, but I’m much older than all of you, and have life experience that you can’t begin understand.”
  • Person E: “You are all wrong. I’m clearly the most intelligent person in the room, so my view is obviously the most important.”
  • Persons A, B, C, D in unison: “No, I’m the most intelligent person in the room!”

Do our negotiations really look like this? YES… they do! But not on the surface. All of this goes on behind the scenes. Still, the results are readily visible, and with focused attention we can pick up on the signals in time.

Each party that does not feel that their status is acknowledged will resent the others. Left unresolved, this unmet need will predictably pollute the rest of the negotiation or interaction. It is not uncommon for a failed status negotiation to cause an otherwise successful negotiation to derail.

So what can we do instead? How about we deal with those flawed assumptions! Let’s first appreciate that there are countless sources of status. The more sources we have, the more flexibility we have to let the other party also get their status needs met. We need to take responsibility for this. Because if we put all our eggs in one basket and only rely on a single source of status (e.g. our title or rank) then our ego will do everything it can to protect that source of status. And we already know that having a sensitive ego is incompatible with being a skilled influencer or negotiator.

Let’s also acknowledge that the goal is not to feel appreciated at the expense of the other party. Rather the goal is to feel sufficiently appreciated. There is no competition here, so stop competing!

Let’s try this out:

“So you (Person B) have a PhD? Fantastic! I’m sure that your education together with my (Person A) experience in this area will enable us to arrive at even better outcomes than those we could each have achieved individually!”

Now wasn’t that the easiest thing in the world…?

Why we don’t know what we want

(This is a repost from Filip’s original blog)

It is two days before Christmas, and I realize that my fridge is empty. I take a trip to the supermarket to get just enough groceries to get me by until Christmas (by which time my girlfriend and her family will feed me).

When I get to the fresh fruit and vegetables section I observe two older women frenetically checking each of the scraps of available red capsicums (or “ peppers” in American English) on display. Each capsicum is picked up, inspected from all angles, squeezed, and then put back into the crate. Eventually both women eye the one capsicum that is clearly the nicest of the bunch. After a bit of a scuffle, one of the women ends up the clear winner. I sense tension and bitterness in the air.

I thought this scenario was a b-e-a-u-t-i-f-u-l analogy of how most of us approach negotiation. Specifically, the story clearly illustrates the process by which we establish our success criteria. This is one of the earliest points where we can identify whether negotiations will go off track – and most of us will take the wrong turn.

Let me explain. Did either woman establish for herself what a desirable, or even acceptable quality capsicum would look like prior to going to the supermarket? E.g.: “This size, this hue, and no more than X number of spots” ? No, instead both women showed up with the intention of getting “the best available deal” (B.A.D.), whatever that deal was.

We think in this manner all the time. How do we decide what is a fair price for a car? Well, most people will estimate what the average price is, treat that as “fair”, and then decide that “success” is getting something that is better than “fair”. Now, replace “car” or (“capsicum”) with anything else, and there is a good chance that we follow exactly the same process.

Note that this way of determining success has nothing to do with what we actually want, and everything to do with wanting to feel good about getting a better deal compared to what others get. For negotiators, knowing what we (or our clients) want is critical. Unfortunately we all suffer from cognitive biases and mental traps that interfere with logic. (Yes, all of us. That means you as well.) The mental trap we are discussing today is called “relative valuation”, and is one of 30 covered in my upcoming book.

It is a simple as that. And this is why buying a business suit at 50% off feels so good, because we are convinced that a bunch of suckers out there paid twice what we paid! So our deal must be good. Of course, it is possible that this particular suit has never been sold at 100% of the list price. And, as soon as we see that same suit advertised at 60% off we suddenly don’t feel very good about our 50% off deal anymore.

Ironically, this is exactly what happened to the two older women. As soon as the women started to walk away from the fresh fruit and vegetables section, a store employee arrived to top up the crate… with newfreshluscious capsicums.

Of course, neither woman stopped to appreciate and reflect on the inherent irony, and instead launched straight back into checking each and every new capsicum in search of “the best available deal”.