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The simple life is not what negotiators have going for them. Instead, the world in which we find ourselves living in is a complicated place filled with many negotiation styles and negotiating techniques along with different things that can trip us up at any moment. It is this world that we need to come up with ways to not only survive, but to also thrive. What this means is that we need to learn how to take calculated risks.
What Are Calculated Risks
In my book, a negotiation is all about “winning” – getting what you want to get out of the negotiation. In order to make that happen, you are going to have to be willing to play. This means that at different points in time you are going to have to be willing to take risks. How you actually go about taking these risks is the key to determining how your negotiation is going to turn out.
If you have not taken the time to fully evaluate both the risk and the potential reward for the risk that you are preparing to take, then you are probably being reckless. This is never a good thing. On the other hand, a calculated risk is a different beast. It may be worth taking if, and only if, you are going to be both willing and able to live with the consequences.
What this means for you is that there is always the possibility that the calculated risk that you are willing to take may not turn out the way that you want it to. Prior to taking the risk, you need to first evaluate what will happen to your negotiating position if you lose this risk. Will it destroy your position or will you still be able to recover and walk away with a deal that you can live with?
How Can We Use Calculated Risks To Be Successful?
Understanding what a calculated risk is is a key place to start. Now what you have to learn is just exactly how to go about using calculated risks to improve your negotiating position. One of the things that you can do is to determine what the other side of the table is trying to do. If you see that they are trying to drag the negotiations out and delay the closing, then a calculated risk on your part would be to push them to close the negotiations now – take it or leave it.
Many times a negotiated risk shows up when the other side offers it to you. When this happens, you are going to have to take a step back and look at what has been offered to you very carefully. One of the biggest factors that you’ll have to take into consideration are the risk factors involved in your calculated risk. What you are trying to determine is if things don’t go the way that you are counting on them going, can you live with those results?
Having the ability to spot calculated risks when they appear in a negotiation is an important skill to have. If you have the ability to see a calculated risk, then you’ll also have the ability to consider the situation that you find this risk in. This will provide you with the ability to determine if it is a risk that you are going to be willing to take at this point in time. A negotiator who has the courage to take risks will always have an advantage over those who lack the courage to do so.
What All Of This Means For You
The distance between where you start in a principled negotiation and where you want to end up can often to seem to be very long, and in some cases almost insurmountable. However, good negotiators know that anything is possible as long as they have the skills to achieve it. In order to get to where you want to be in a negotiation, you are going to have to learn how to take some calculated risks.
There is a very big difference between taking a risk and taking a calculated risk. A risk means that there is a good chance that you’ll end up failing. A calculated risk means that you’ve weighted the odds and you feel as though you are going to be successful. Because there is always a possibility that even a calculated risk may not pan out, as a negotiator you need to make sure that you are going to be willing to live with the results no matter what they are.
When we engage in negotiating, we have to play to win. It would be wonderful and we could predict the action that the other side would take to any proposal that we make to them. However, we can’t. This is when the art of taking calculated risks comes in to play. If we can master how to do this correctly, then we’ll improve our odds of being able to get what we want out of our next negotiation.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: What signs do you think would tell you that now was not the time to take a calculated risk?
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What We’ll Be Talking About Next Time
One of the first things that all of us learn about negotiating is that in the end after we get over all of the negotiation styles and negotiating techniques being used, it’s all about time. There is only so much time to conduct a negotiation You only have so much time, the other side only has so much time, etc. Very quickly we all start to realize that time is a tool and whichever side uses this tool the best will probably end up getting what they want out of the negotiation. The big question is how to make this happen?