Image Credit: Geoff Livingston
Just exactly how committed to reaching a deal in your next negotiation are you? If you are like most of us, you really do want to have the result of all of your time and effort that you’ve spent on the negotiation be an eventual deal. There’s no problem feeling this way, but it is possible that we can take it too far. If we allow ourselves to become too committed to reaching a deal in a negotiation, it can start to affect our decision making abilities. We need to be aware of just how much we want that deal.
The Over Commitment Problem
It turns out that when a negotiator is more tightly bound to an agreement than the other side is, trouble could follow. When we are in a negotiation we need to learn how to manage our escalation of commitment and find ways to level the playing field in the negotiation. There is a very good chance that there will be differing levels of commitment between the two negotiating parties. All too often in a negotiation one party is more committed (or risks being more committed) to a deal than the other is.
Researchers have documented the tendency of negotiators to go ahead and irrationally escalate their commitment to a chosen course of action. As a psychological process, our escalation typically occurs when we are in competitive situations such as strikes, auctions, custody battles, and mergers and acquisitions. When talks get difficult it can be easy for us to conclude that we’ve invested too much to quit and feel trapped in a disappointing deal. Escalation of commitment is also a possible trap when negotiating tactics and contract terms that are part of your current negotiation would bind you to an agreement more than they would bind the other side. We have to be careful because accepting a bad deal can be a recipe for disaster. The question that we are faced with is how can we ensure that both we and the other side are similarly committed to a deal?
Avoiding Becoming Overcommitted
So how can we avoid becoming overcommitted in a negotiation? The first thing that we need to is to take time to play the “What If …” game. You can do this by before negotiating, ask yourself how difficult it would be for you to walk away without a deal, both psychologically and economically. Your goal is to reduce the potential for escalation by cultivating your best alternative to a negotiated agreement (BATNA). This can play out in many different ways during a negotiation. You may wait for more offers when you are selling something. You may impose a deadline on the other side in order to get them to cooperate.
You should be aware of how committed you are to reaching a deal with the other side. However, at the same time you are going to want to take the time to assess just exactly how committed the other side it to reaching a deal. During the negotiation (and, of course, before agreeing to a deal), you need to assess each side’s level of commitment. This will require you to ask yourself the following questions:
- How difficult will it be for you to back out of the deal if conditions change?
- How difficult will it be for the other side to back out?
- What will happen to you if the other side backs out?
Finally, you are going to want to take steps in order to level the playing field. The big question is if your answers to these questions suggest that you would be more committed to the potential deal than the other side would then what should you do? The answer is that first, you don’t want to assume the other party is trying to take advantage of you. Lopsided conditions may simply reflect industry convention, as with a car dealer who insists on haggling in person. Or it could be that the other side is simply trying to protect themselves from escalating commitment. It will be up to you to negotiate a more balanced deal. You will need to be prepared to walk away if the other side won’t cooperate. You can begin by pointing out your risk exposure to the other side. A negotiator who wants to do a deal will listen to you and consider making adjustments. Let us all agree that if someone won’t cooperate, you may need to explore alternatives to the current deal.
What All Of This Means For You
As negotiators we need to be aware that there are traps that we can fall into during a negotiation. One of these traps is when we allow ourselves to become over committed to reaching a deal. If we find ourselves in this situation, then we may be too willing to make concessions or agree to a bad deal. In order to prevent ourselves from getting into this situation we need to be able to realize when it is happening and know how to take steps to extract ourselves from it.
This problem arises when we are more committed to reaching a deal than the other side is. In situations like this we need to manage our escalation of commitment. This can happen when we find ourselves in a competitive situation. To prevent getting into a situation like this we need to start things off by asking ourselves “What it…?” By doing this we can make sure that we are aware of what our BATA is. You should also take the time to determine just exactly how committed to reaching a deal the other side is. If it turns out that you are more committed to reaching a deal than the other side is, then you need to make sure that you are prepared to walk away.
It is good to want to be able to reach a deal with the other side of the table. However, we need to be careful that we are not too committed to reaching a deal. We would like to be just as committed as the other side is. We need to make sure that we are aware of what our commitment level is. If we are the most committed person in the negotiation, then we need to take steps to make sure that we are aware of what our other option are so that we don’t make any unnecessary concessions or agree to a bad deal.
– Dr. Jim Anderson
Blue Elephant Consulting –
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Question For You: How can you make the other side want to reach a deal as much as you do?
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What We’ll Be Talking About Next Time
By now just about all negotiators have heard about “win-win” negotiating. These are the types of negotiations in which both sides walk away feeling as though they got what they wanted out of the negotiation. This is in contrast to “win lose” negotiating where somebody wins while somebody loses. If you want your next negotiation to be viewed as being a “win-win” negotiation, then you are going to have to take some steps to make sure that you can reach this outcome.