Where Does Power Come From In A Negotiation?

You always need to be checking on what power is available in a negotiation
You always need to be checking on what power is available in a negotiation

Image Credit: Andy Armstrong

What do you need to do before a negotiation formally starts? Well, there are actually a number of different things that you should be doing, but one of the most important is to take a careful inventory of all of the “power assets” that will be potentially available to both sides during the negotiation. The reason for doing this is because it will help to increase your confidence going into the negotiation and it will also permit you to adjust both the preferences and the expectations of the other side of the table no matter what negotiation styles or negotiating techniques are being used. Power is always there during a negotiation, you just need to be able to determine where it is going to be coming from.

It’s All About Competition

One of the things that is all too easy to overlook during a negotiation is the simple fact that every negotiation is a game of exploration that allows you to discover and learn things that can then lead to you making changes to your behavior and your expectations for the negotiations. Competition is at the core of much of what we do during a negotiation. If we can generate completion among multiple parties for something that we have, then all of a sudden the value of that thing has just increased.

One of the things that we need to realize when we are dealing with someone who has something to sell is that they probably need us more than we need them. They realize that if we get up and leave the negotiations without making a purchase from them, then there is a very good chance that we’ll be going down the street and striking a deal with someone else who offers effectively the same product. One of the reasons that the other side is so very aware of this is because who else would know more about their competition?

If, on the other hand you are the one who has something to sell, then you’ve got your work cut out for you. It is going to be your responsibility to go out there and do your best to generate as many potential customers as you can. There is no one way to do this, but rather many different ways: advertising, social media, contacts, trade shows, mailing lists, etc. However, since you’ll be competing with other vendors who offer very similar products, you’ll need to take an extra step. What you’ll need to do is to differentiate yourself from everyone else who is doing what you are doing.

The Relationship Between Options And Power

A critical thing for every negotiator to realize is that having the belief that you always have options will provide you with a sense of independence. However, if you find yourself feeling that you have no alternatives then what’s going to happen is that you’ll start to develop feelings of submission and dependence. If you think that you have no options during a negotiation, then you are well on your way towards a deal that will place you in servitude. However, the good news is that in reality you always do have options.

What can you do when you find yourself in a situation where it appears as though the other side has presented you with no options – it’s their way or the highway? The answer is that you need to manufacture your own options. The first step is to determine who else you could be talking with. The person on the other side of the table is not your only option – there have got to be other people out there who would be willing to do a deal with you. If nobody else can provide you with what you need, then perhaps now is the time for you to start to make it yourself. Do you even need the person on the other side of the table? If indeed the party on the other side of the table is the only source for what you need, then they may be in violation of antitrust laws or be acting as a monopoly. These are things that you can bring up in order to motivate them to want to appear to be more reasonable and avoid any investigations of their business practices.

Since sometimes it is the other side of the table that has more power than you do, we always have to keep the concept of a BATNA in mind. What this means is that if you can’t reach an agreement with the other side, you always have to be aware of what your Best Alternative To a Negotiated Agreement is. No, this may not be the path that you want to go down, but it’s an option if you decide that you are just not going to be able to reach an agreement with the other side because they just have too much power.

What All Of This Means For You

Power is one of the key characteristics of any principled negotiation. Who has it, who doesn’t, and how you can get more of it are all important questions. Before your next negotiation starts you need to take the time to evaluate who has what power and who has the ability to get more power during the negotiations.

Competition is what drives a great deal of what will happen during a negotiation. If we are dealing with someone who is selling something, they are highly aware that if we walk away we can probably find someone else who can do a deal with us. If we are selling something, we need to work to get as many potential customers as possible. During the negotiation it will often be all about options. We need to realize that we always have options even if it looks like we don’t. When we find ourselves with limited options, we need to search for other negotiating partners, consider making solutions ourselves, or reminding the other side that if they have a monopoly they may be subject to regulator oversight.

Power is one of those things that we all know exists within a negotiation. No, you can’t see it and there is no way to measure how much of it each side has. However, we, along with everyone else, want more of it. In order to make this happen we need to understand how competition plays out in a negotiation and we need to realize that we will always have options – we just have to know how to look for them…

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: When you think that you don’t have any options left, should you call for a break to review your current situation?

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What We’ll Be Talking About Next Time

Everybody likes a bit of stability in their lives. As negotiators we enjoy having some stability in our negotiations no matter what negotiation styles or negotiating techniques are being used. However, we can run into problems when manifestations of control slide into a negotiation and end up stifling innovation, repressing new ideas, and in some cases causing blind obedience to an external authority.