THINK YOU’RE POWERLESS? THINK AGAIN

1호 (2008년 1월)

the Program on Negotiation at Harvard Law School(www.pon.harvard.edu)
 
So, you've communicated your interests, probed your counterpart about his needs, and attempted to uncover hidden sources of value -- and you're still feeling as if the other side has all the power.
 
When your options to the current negotiation are limited, it's common to assume you have no choice but to accept the unappealing deal on the table. Before you cave in, though, consider whether any of the following five strategies could boost your bargaining power.
 
1. Closely examine your BATNA.
You probably understand the importance of cultivating your BATNA, or best alternative to a negotiated agreement. In a job negotiation, your BATNA might be a promising lead or, worse, the prospect of going on unemployment and waiting for other opportunities to arise. The more you can do to build a strong outside alternative, the more power you will have in your current negotiation.
 
In addition to cultivating a strong BATNA, you also need to assess your best alternative as carefully as possible. This means translating your BATNA to the current deal; prospects that look similar on the surface may differ quite a bit in the details. For example, two job offers might be comparable in terms of salary, but when you weigh one job's flextime opportunities against the other job's limited vacation days, you may discover that one offer is far superior to the other.
 
2. Assess the other side's BATNA.
Negotiators often err in assuming that the other side is in a much stronger bargaining position than it is. In negotiation, it pays to spend as much time thinking about and researching the other side's bargaining position and BATNA as you spend assessing your own options. You may be pleasantly surprised to discover that your counterpart needs you even more than you need her.
 
3. Change the game.
If your organization regularly bids for business, you may be accustomed to feeling like the weaker party. Those facing auctions that are won or lost based solely on price may find they're constantly fighting an uphill battle for coveted contracts.
 
In such cases, your best option may be to change the game. Instead of accepting that you've got to compete on price, find ways to show your desired partner that you offer better all-around value than your competitors. If you have a highly reliable product, a stellar reputation, or impeccable service, it's up to you to convince other parties that they would benefit from working with you.
 
How can you educate an individual or organization that's fixated on short-term pricing (or another single issue) that they'd get a better long-term deal from you? First, submit two or more equivalent bids simultaneously, such as one that's low on price and service and another that's higher on both.
 
Second, even if you lose an auction, reach out to the potential customer with a multi-issue package. Assuming your bid was in the low range, the customer may be tempted to work with you instead of the rock-bottom bidder.
 
Finally, reach out to potential customers between auctions. Encourage them to discuss their needs and then show how you can meet those needs. By doing so, you may lock up a deal before it has a chance to go to auction.
 
1. Examine your portfolio.
In the heat of an important negotiation, it's tempting to assume that your entire career hinges on your ability to seal this particular deal, especially in the midst of an economic downturn. Needless to say, this approach to negotiation is counterproductive. When you're stressed, you are likely to be less creative and more concessionary than when you're feeling stronger and calmer.
 
One way to feel more powerful is to consider your entire portfolio of negotiations. By creating a broad strategy for your entire portfolio of negotiations, you take the pressure off each individual negotiation and gain the strength you need to pass up a bad deal.
 
2. Acknowledge your weakness.
Experts usually advise negotiators to conceal weak BATNAs from their counterparts. After all, if someone knows you have nowhere else to go, he could take advantage of your weakness.
 
In some instances, however, you may be in a position of such extreme weakness that it's impossible to hide. If so, don't assume you have nothing to offer. It could be that your counterpart has a strong incentive to help keep you afloat. The $700 billion government bailout of the U.S. banking industry in October 2008 stands as one dramatic instance of this type of scenario. As banks teetered on the brink of collapse, Congress decided that some were simply too big to fail. For similar reasons, banks are often willing to negotiate new terms with borrowers facing mortgage defaults. A bank may prefer to refinance an existing mortgage than to sell a property at a loss.
 
With any luck, you and your organization will never have to appeal for help to avoid a ruinous financial collapse. But there are instances in which you can call on your counterpart's sense of fairness to get a better deal.
 
When you've been unable to improve your bargaining power through the other means we've described, appealing to your counterpart's sense of fairness may be the best strategy you have.
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