Bob had been Fred’s client for a long time. Normally, he was low-key and easy-going. Not today. He was angry and it showed. His wife Keiko sat teary-eyed and sniffling next to him.
‘Fred, I want you to make George Stevens’ life a misery, do you hear me?”
“I hear you, Bob. But I don’t get it. Sure, your tenant left the property a shambles. But Stevens is more than able to pay any damages. His lawyer is a friend of mine. We can probably settle by the end of the month. Why so upset?”
Keiko spoke for the first time: “Fred, you remember garden?”
Fred smiled at the thought of Keiko’s peaceful and precise Japanese garden. “Of course I do, Keiko. I especially love the koi pond.”
Keiko frowned. “Koi gone. Pond gone. …Garden gone! She dissolved in tears.
Bob grimly explained to a startled Fred: “Stevens re-landscaped the entire backyard. Now it’s a big lawn with a barbeque. Years of my wife’s work – gone. Every time I look out my back door I want to beat on him.”
Fred slowly exhaled. “Wow. But you know, suing instead of settling won’t bring the garden back. A lawsuit will cost a lot more than redoing the garden, and take much longer…”
“It’s the principle of the thing. — Just do it, Fred.”
Bob and Keiko’s story is based on real events. It illustrates that disputes are not always all about the money. Our emotions affect every decision we make, because the emotional centers in our brains (the amygdala) react much more quickly than those devoted to rational thought (the cerebral cortex).
Each emotion we experience has distinct effects on us, and on those we encounter. The table below summarizes those effects:
Effect of Various Emotions on Negotiations
|EFFECT ON NEGOTIATOR||EFFECT ON COUNTERPART|
|ANGER||The angry negotiator is overconfident, risk-tolerant, and over-eager to act. He or she feels in control. Objectively, he or she often overpays for “victory.” Anger shifts a negotiator’s focus from resolution to the injustice of the anger-producing event.||Anger is a ”high status” emotion; An angry negotiator is seen as tough and competent. An opponent in a weak position will concede more to an angry negotiator; But anger breeds competition, negativity, and a reduced willingness to negotiate in the future.|
|FEAR or WORRY||The fearful negotiator is pessimistic, risk avoidant, and feels out of control. He or she sees the situation as high risk, and is motivated to change conditions.||The fearful negotiator is seen as incompetent and low-powered. However, displays of fear or worry can lead to lowered demands or increased offers to assist a needy party.
|SADNESS||The sad negotiator is eager to change the situation, even to their loss. Sad negotiators are less likely to trust, and more likely to be analytical. Their willingness to spend rises.||Sad negotiators are seen as weak and incompetent. But like fearful negotiators, they are needy, leading counterparts to moderate their positions.|
|GUILT||Guilty negotiators punish themselves. They are cooperative, increasing concessions and decreasing demands, even against self-interest.||Opponents take advantage of guilt-induced generosity, unless the guilty one is also “needy,” so that demands are moderated|
|HAPPINESS||Happy negotiators concede more than others. In a competitive setting, they recover less. In a cooperative setting, joint gains are maximized.||Opponents concede less to happy negotiators, who are seen as content with the status quo. Happy negotiators are perceived as weak, with low settlement limits.|
To summarize, emotions can diminish the success of your negotiations, or derail them entirely. They can make you look and act weak, or make your counterparts less willing to deal with you in the future. And it doesn’t always matter that you are unemotional about the topic of the negotiation. Harvard professor Jennifer Lerner has discovered that the emotional effects set forth above apply even if the genesis of the emotion is completely unrelated to the dispute. Professor Lerner calls this effect an “emotional hangover.”
So, if before a negotiation you hear unrelated happy news, you will ask less and concede more than if you were neutral. The fact that even unrelated emotions can interfere with our negotiation performance means that we need to find a way to change the game.
Fortunately, there are simple, straightforward techniques that help diffuse emotions and mute their counterproductive results. In general, they work across the emotional spectrum.
Combating emotion usually means slowing things down and involving the thoughtful part of ourselves:
- Be mindful. We can’t address our feelings or those of our counterparts if we’re oblivious to them. Take a few attentive minutes to monitor your feelings before going in to any important session. What are you feeling right now? Why? Is your anxiety a result of the deal ahead, or something unrelated? Either can affect you. Write your answers down, because the act of identifying and writing will help engage your cerebral cortex and disengage your emotions. Also, if there are strong emotions about the deal, they probably signal issues that need to be dealt with for the deal to move forward.
In the same way, be attentive to your counterparts. What strong emotions are they showing? Does something about the deal trigger those feelings or does it seem to come from an outside influence? What, if anything, does that tell you about your next step? What does his or her negotiating behavior tell you about the underlying emotions? Don’t be intimidated by the idea of diagnosing emotions. You do it all day. You can walk into a room and know how someone feels without hearing a word. We’re all built that way.
- Before any negotiation, have a plan. Sit down and decide on concrete, realistic goals. Plan not only where you’d like to end up, what concessions you’re willing to make – and which you aren’t. Think about what the other side is likely to do and decide your reaction. Know when you would walk away, and what your alternatives are if the deal doesn’t work out. Don’t forget to factor in both the cost and the likelihood of success of alternatives to a negotiated agreement. If you want $100,000, but the chance of winning at trial is only 50%, and trial will cost $10,000, anything over $40,000 is an economic win in a negotiation ($100,000 x .50 – $10,000 = $40,000). Economists call this number the “expected value” of the negotiation, and it is crucial to determining whether an offer is beneficial or not.
Having a plan and committing ahead of time to stick to it introduces accountability, which has been shown to reduce the likelihood that emotions will warp our decision-making. Not only will a plan engage the thinking part of your brain (and disengage the emotional part), it will make you a better negotiator, because you know the alternatives to a successful agreement, your goals, your deal-breakers, and so on – without figuring them out on the fly.
- Pause to reflect. When emotions run high, it’s a good idea to take a break to cool down. During this time, you can review your goals, which will engage the reasoning, rather than the reacting, parts of your brain, and decrease the influence of feelings. You can also identify and explain your feelings, which may help pinpoint parts of the deal that aren’t working. (“Every time I think about the payment schedule, I get mad, because…”)
- Consciously change how you feel. Dr. Randy Chittum of Georgetown University notes that it’s hard to have two opposing emotions at once, and recommends dealing with strong negative emotions by focusing on what makes us grateful or happy. Our families, our hobbies, our vacations – anything, so long as it elevates our mood and dissipates our anger.
- Listen and Choose. If you have an advisor or team with you (or available by phone, Skype, texting, etc.) listen carefully to what they have to add. Decide what makes the most sense. Discuss alternatives. Not only will evaluating and choosing engage your rational thought process, developing alternatives has been shown to reduce negative emotions like fear and worry by increasing a sense of control.
- Treat each situation as unique. If you deal with similar issues day in and day out, certain situations or arguments might anger or frustrate you. You should treat each situation as unique. This will require a conscious effort, because we are hard-wired to treat past occurrences as predictive of future events. Think of how this case is different, not how it is the same. Remind yourself that to others involved, it is unique and important. Once again, this requires thought rather than emotion.
- Model how you want to feel. Emotions are contagious. Dr Sigal Barsade of The Wharton School says that mimicking an emotion leads to actually feeling that emotion.
“[W]e usually think of emotion as originating only from the inside out: I feel happy, so I show this by smiling outwardly. Emotional contagion shows that emotions can also be produced from the outside in: When you see someone smile, it makes you smile and then makes you happy. Emotional contagion has also been shown to occur at a conscious level through social comparison processes in which people look around and compare their affective moods to those of others in their environment and then respond accordingly.”
The emotional contagion phenomenon gives us a tool for emotional influence. If you want to change negotiating partner’s emotions – or your own – model the desired feeling.
- Help others change their negative emotions by recognizing and empathizing
Sometimes, all it takes to diffuse emotion is recognizing it. Not ignoring the emotions gives them importance. Recognizing an emotion validates it, while reducing its strength. Recognition meets the strong human need to be heard. For example:
“Bob, from what I understand, you’re angry about the rent escalation clause of the lease. Unfortunately, I can’t do anything about that … let’s focus on what we can do together” (or, “Here’s what I can do…).”
A statement like this is not a concession or an agreement, but it might help you reach one.
Each of these methods is easy to implement. Consider the vignette below:
Let’s say your client, Terry Timid, gets nervous about her ability to pay the mortgage on the house she wants, so that the transaction (and your commission) is at risk. Here’s how a conversation might go:
“Terry, you seem worried about whether you can make the payments on this house I understand that feeling very well; it’s a big commitment to make (acknowledgment of the emotion).
But let’s go through the numbers again. Your income is more than enough to cover your expenses, and your job is stable. You pay almost as much in rent now and have no mortgage interest tax deduction. What is it about the situation that scares you (engaging the analytical part of the brain)? If you can make a larger down payment your monthly payments will be lower. Let’s talk about ways you could do that (generating alternatives).”
This brief vignette should give you confidence. The techniques are simple and will be easy for you to use.
Using what you know…
How to Plan:
- Brainstorm about alternatives There’s almost always more than one good outcome to a dispute. Talk them out with people you trust. Listen if those people tell you an alternative is outstanding, or unrealistic. Ask why. If an economically beneficial alternative is unacceptable, force yourself to figure out why. What’s in the way? Recognize the underlying emotions and needs, and you’ll diminish their tendency to block your success.
- Know the facts – yours and your counterpart’s. Start early. Talk to your opponent as much as possible about the issues under negotiation, if you can do so without creating more strong negative emotions in them. Know their best arguments and think ahead about your response. Know what you want and what they do, too – by asking why a lot, and what would make the dispute go away. Whatever you learn will help you later. Know what you are willing to give up, and what is a deal-breaker. You won’t be able to predict everything but the process will give you confidence and reduce fearful emotions.
- Do your homework. Ask, look up, or estimate the cost of things and the likelihood of various outcomes, so you can figure out the expected value of your alternatives. Look for objective standards to help you, and ask people experienced in the area for their opinion. Not only will you be more persuasive in the actual negotiations, thinking about such standards and analyzing how they apply will engage your rational mind.
- Choreograph the dance Negotiation has been referred to as a “dance.” If that’s right, then planning is the choreography. Where do you plan to start? Where do you see your counterpart (or “dance partner”) starting? Where do you want to end up? What are the steps in between (demands you plan to make that exceed your bottom line?) If your ‘partner’ does X, how will you respond? Of course, you’ll need to improvise along the way, but if you’ve done your homework, you should be able to navigate the dance floor comfortably.
- Consciously reject “winning” as an objective. Don’t compete for competition’s sake. Think about what your counterpart needs. Can you give it at little or no cost, or get something better in return? A good example is an apology, which studies show can eliminate demands for damages, lower jury verdicts, and re-establish relationships without cost to the contrite party. Even if thinking about needs doesn’t result in an elegant answer – even if the best strategy is to aggressively maximize your return – focusing on meeting needs will give you insight into your opponent’s likely actions while helping you to be analytical.
- Practice attentiveness, analysis, modeling, and emotional replacement. We tend to think of emotions as unconscious forces beyond our control. They aren’t, but if we are to change them in the midst of a high-pressure negotiation, we need to practice doing so beforehand. Several times each day, ask yourself how you are feeling, and why. Resist the temptation to automatically say “I’m fine.” If there’s emotional content, name it, figure out the reason for it (is it a direct response to circumstances or an emotional hangover? What for? Try to replace it or diffuse it. Think about things with different emotional content, act as you would if you felt differently, analyze it, talk about it, write it down.If you can get a friend to help you, practice reducing or influencing another’s emotions, and get feedback on what’s effective. These practices may seem tedious, but they will pay off and make you better at getting what you want.
Testing your understanding. Below are a number of questions to help you think about and understand the previous advice. It isn’t a test, but it may help you be more confident:
- In the vignette about Bob and Keiko, what emotions was each feeling? Who is better suited to getting the most money from George Stevens? Why?
- Now assume that Bob and Keiko are being sued for defaming Stevens, and are likely to lose. The goal is to pay as little as possible. Does the answer change? Why?
- Write down at least two things Bob and Keiko could do to reduce the likely payout in Question 2.
- What emotion would you prefer your counterpart to feel, all other things being equal? Why? Is there an answer that applies generally? Why or why not? What could you do to stimulate that emotion in your counterpart.
- Why might someone feign anger against a weak opponent? Do you see any problems with feigning an emotion?
- Suppose you had only two minutes to advise a very sad Keiko in a negotiation to recover damages against Stevens. What brief advice would you give her and why?
- Suppose you are being sued for $400,000, and you feel sure that your chance of losing at trial is only 40%, but it will cost you $35,000 to go to trial. Plaintiff offers to settle for $175,000. Economically speaking, should you settle or not? Why?
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