In the classic movie, The Godfather
It turns out that, with a twist, yes there is something here for us negotiators. Specifically, what we can do is make the other side of the table an offer that they MUST refuse. Now why would you ever do such a thing?
This is a powerful negotiating tool and when used correctly it can produce amazing results. When you make an offer to the other side that you know that they just have to refuse, what you really are doing is setting the stage for when you make offers later on. These future offers will look reasonable in comparison to the offer that they refused.
During a negotiation, time is one of your most valuable tools. The more time that you have, the more power that you have. Making an offer that the other side must refuse will buy you more time that will allow you to spend it exploring additional alternatives that may end up being acceptable to both sides.
Interestingly enough, this technique can also be used to either stall the negotiations or even perhaps cause the negotiations to break down and come to a complete halt. You may want to do this if it turns out that moving the negotiations to a different time would be more favorable to you. This may allow you to create a better set of arguments that will result in a better outcome for you in the end.
If we could read the other side’s mind this whole negotiation thing would go much quicker. Since (most of us) can’t do this, making an offer that the other side must refuse will help you to bound the negotiations and get closer to finding out what the other side views as being an acceptable offer.
What’s interesting about making a clearly unacceptable offer is that it will interrupt the flow of the negotiating conversation. When the other side starts to believe that perhaps no agreement may be able to be reached, they are often likely to drop their “negotiating face” and talk candidly with you.
This is your best chance to discover their real motivations – sorta like reading their minds. Once you have this information, then you will be well positioned to make use this knowledge to make a follow-up offer that will be much more acceptable to the other side.
Yes, yes – as with everything in life, there is some risk associated with using this technique. The other side may become so upset that they just up and walk away from the negotiations. However, using this technique carefully and in the correct negotiating situations can open up avenues to reaching a solution that were not previously available. Remember that before you use this technique, you want to make sure that you have left yourself a way to re-enter the negotiation – don’t get shut out!
Have you ever been given an offer that you just had to refuse? Did you refuse it? What happened next? What was the final outcome of negotiations? Leave me a comment and let me know what you are thinking.