Secrets of Power Negotiating

Book cover image

I’m horrible at negotiating. Whatever price sales people tell me, I’m prone to accepting it, because I just assume that it should be the right price. A friend recommended me this book to overcome this aversion of negotiating, and it turned out to be a really good one. Dawson, who is a corporate trainer in negotiating and related matters, gathers some really impactful tips on the topic, delivered with many anecdotes and in an informal manner.

Dawson gathers his writing around what he calls “power negotiating”. This could be thought of as a set of practices (which Dawson calls gambits), with one underlying principle: A power negotiator always finishes a deal with her counterpart thinking that she got the better end of the deal. The book is essentially a collection of techniques for achieving this - and a few more (unethical) ones if you are past the point of caring. The first of these is a very obvious technique that pretty much every negotiator instinctively uses: Bracketing. This technique involves overstating your expectations to have room for haggling. Dawson gives some very interesting tips on how to set the bracket, and what can be gained from over-stating your position. If you start off with your MPP (Maximum Plausible Position), you can always go down, which makes you appear to be flexible and open. It also makes whatever you are selling or offering more valuable. Finally, opening high and going down will make the other person feel like she won, as per the power negotiating principle.

Looking more broadly, this first chapter already navigates two patterns that could be taken as the main driving factors of all gambits. These are non-symmetric information and psychological effects. All negotiators go into negotiations with previous assumptions and positions. A seller has a certain window within which she would move, and certain lengths she would go, given the right conditions. Her counterpart principally cannot know these. Both parties have to base their decisions and reactions on this fact of mutual ignorance. One practice deriving from this situation is to never accept the first offer, even if it’s good, because you don’t know whether the person is ready to go higher. How much you know about the other person should also inform your own position. Dawson points out that the less information you have about the other person, the higher your initial position should be. An example of a gambit that is based on information gathering is Cherrypicking, wherein the buyer asks the sellers to provide prices for individual services, and then tries to get the best offer from them based on this information. Dawson also has a list of gambits for collecting information for the negotiation. These are things like admitting you have little information, just plain asking, asking open ended questions, and using peer connections to gather information.

Psychological effects, on the other hand, go two ways. There are the effects you can have on the counterpart. By reacting in certain ways, or making certain assumptions, you can convince her to accept your offer or go higher. One example is flinching at a proposal, as in visually flinching. The assumption is that most people are “visual”, meaning they value visual queues higher than others. A clear flinch will thus strongly suggest to them that their offer is, in fact too low, and they need to go higher. Another interesting effect concerns the perceived value of things. When you make a concession in a negotiation, its perceived value will decrease right away, because the counterpart will already think that she has it, and it came for free. This is why, when making concessions, you have to ask for a reciprocal right away; getting it later will be impossible. Another principle that was an aha moment for me was never arguing with the counterpart. When you start arguing, you are giving people reason to stick their positions, and prove themselves right. In addition to money, their ego is on the table now, and no one wants to lose that. Dawson advises the reader to use communication techniques that aim to pull the counterpart to the negotiator’s side, instead of attacking her head on.

Just as important as the psychological effects on another person are those on your own self. It is very important that, as a negotiator, you come out with the feeling that you have achieved the best result you could. Otherwise, it’s a lost negotiation for you. This is one reason to use the Never accept the first offer gambit; if you accept the first offer, you forfeit your chance of getting the best offer you could. Also, during negotiation, you have to balance against certain psychological effects that would lead you to make suboptimal decisions. For example, you are conscious of only the pressures yo have, such as deadlines or internal targets. Your counterpart will have similar pressures, but you will not know about these. Therefore, you should consciously compensate for this fact, in order not to think that you have the weaker hand.

One thing you have to keep in mind while reading this book is that, having been written by someone whose primary job is negotiating, and who takes pride in being a tough negotiator, the tips and the anecodotes are sometimes rather harsh. Dawson appears to be negotiating when it wouldn’t be necessary (such as when he tries to get 50% off on his first night in an East Berlin hotel), for amounts that wouldn’t be necessary. There is a principle behind this behavior, which is that when you negotiatite, you make money in a short time just by talking to someone: “You’ll never make money faster than you will when you’re negotiating”. In many situations in which I would be happy to pay the asked price and be done with it, Dawson would try to get concessions. I guess it is a matter of character and experience.

One thing that I found utterly annoying, and had to flinch again and again at, was how the author identifies himself with the most right wing policies of republican politics. On page 180, for example, he talks about the bombing of Baghdad in the first Iraq war using “we” to talk about the US military, as in “we were able to take out their communication systems”. He also admits on page 304 that he is on the “exact opposite of the political spectrum” with Bill Clinton. This close identification with the writer’s political views and nationality harms the book; when reading the chapter on negotiating with Americans, for example one cannot help but wonder whether what he writes about them are sincere observations and tips, or wishful thinking.