Look at Your Negotiation From the Perspective of the Other Side

21.12.2016 |

Episode #6 of the course Psychological tools and traps in negotiation by George Siedel


Welcome to the sixth lesson of the course. The key message in this lesson: the most successful negotiators are those who understand a negotiation from the perspective of the other side.

In my MBA courses, I occasionally auction a $20 bill. The rules of the auction are simple. Bids are made in increments of $1. The high bidder gets the $20, but the second highest bidder also pays me and receives nothing. So if Sara is the highest bidder with a bid of $14, she wins $20, while if Pete is second highest at $12, he pays me and receives nothing in return. Typically, several students in class begin bidding at the outset, but as the bidding approaches $20, all but two drop out. These two often continue bidding well beyond $20.

Academics have derived a number of lessons from this devious game, which was invented by Professor Shubik of Yale. A lesson that is especially important for negotiators is the importance of looking at any negotiation from the perspective of the other side. At the beginning, the dollar auction looks great from your perspective in that you have a chance to win $20 with, say, a bid of $14. But when you consider the fact that there are forty or so other potential bidders in class with the same thoughts, the auction loses its attractiveness. This is an important lesson for all negotiations. As Bazerman and Neale put it, “We’ve found that managers who take into account the other side’s perspective are most successful in negotiation simulations. This focus allows them to predict the other side’s behavior.”

Here is a challenge to test your ability to look at negotiations from the other side. This challenge is based on a story in a great book called The Manager as Negotiator by Lax and Sebenius. Near the end of his campaign for the presidency, Teddy Roosevelt planned to use pamphlets with a picture of him looking very presidential. Just before his campaign team members were ready to begin distributing the pamphlets, they discovered that a photographer held the copyright to the picture.

Roosevelt’s team members did not have enough funds to pay for copyright permission, and they did not want to use the picture illegally. Yet they felt that they needed the pamphlets to win the election. Unsure what to do, they asked a successful negotiator (who was a Roosevelt supporter) for advice. What would you do if they had asked for your advice?

This is what the Roosevelt supporter did. Apparently able to look at the negotiation from the other side, he sent a cable to the photographer that read (as quoted from The Manager as Negotiator): “We are planning to distribute many pamphlets with Roosevelt’s picture on the cover. It will be great publicity for the studio whose photograph we use. How much will you pay us to use yours? Respond immediately.”

The response? The photographer offered to pay $250 if they used the photograph. This great negotiator had turned the table on the other side!

The importance of looking at negotiations from the perspective of the other side is, of course, not limited to business deals. A friend of mine was a senior advisor to a US president. When briefing the president on, say, an upcoming meeting with a leader from another country, my friend would explain the key issues that affected the United States in its relationship with the other country. He then observed the president’s uncanny ability to discuss the issues from the perspective of the other country and then to reframe the issues to address the other side’s concerns.

In the next lesson, we explain why you should understand and use reciprocity during your negotiations.

Best, George


Recommended book

The Manager as Negotiator by Lax and Sebenius


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