Image Credit: Lisa
The reason that a negotiation is necessary is because the other side has information that we don’t have. Likewise, we know things that the other side does not know and the purpose of a negotiation is to use your negotiation styles and negotiating techniques to exchange enough information so that both sides can agree on a deal. Now this is where things start to get interesting. Just exactly how much information should we share with the other side? Do we tell them everything and hope to be rewarded for being so open with them? Do we hide everything so that we don’t accidentally reveal too much? This is a key question that every negotiator has to answer for themselves: during a negotiation what information do we need to keep secret?
Information That Is Either Privileged Or Sensitive
Negotiators have a tough decision to make when it comes to private or sensitive information, such as trade secrets and financial data, as well as what you’d like to accomplish during the negotiation (needs, targets, reservation prices, and interests). This information is often necessary to identify tradeoffs and create value, but there’s also the risk that the other side will take advantage of your disclosure.
In any negotiation, you’re likely to have information about the other party or about the deal (industry facts, economic health, new products, and so on) that they might not know you have. To gain some measure of the other side’s trustworthiness, use a “trust test” . You can do this by asking some questions to which you already know the answers. If someone avoids your information requests or if they lie outright, that’s one sign that you should be careful about what you reveal—or perhaps call off the negotiations altogether.
You need to realize that someone who answers a few questions truthfully might not always behave honestly. Nonetheless, trust tests offer a reasonably good way of determining if a person is willing to be honest with you.
Things That You Can’t Tell People
When you are negotiating on the behalf of someone else, as a lawyer, a broker, or a firm’s representative, disclosure decisions may not be yours to make. Instead, you’ll first need to discuss the risks and benefits discussed here with the person that you are negotiating for. It is your responsibility to realize that even if the information doesn’t “belong” to someone else, disclosure could hurt that person or their position. As an example, if you were negotiating to buy something from someone, you might be tempted to reveal what another vendor’s bottom line was. However, before doing this it might be wise to consult this party first.
Things That Will Make It Harder For You To Get What You Want
When it comes to negotiating, it’s really all about power. The side in the negotiations that has the most power is best suited to getting the best out of any deal that can be struck. If you have less power than the other side, take time to think through the potentially negative consequences of making “information concessions.” A good example of this is when one side of a negotiation has experienced physical injuries and they are negotiating to get financial compensation. They may be tempted to offer information about their current injuries in return for an early settlement, though they might obtain greater damage awards later if longer-term injuries emerge. Another example can be found in an hot real-estate market where the bidder who expresses the greatest desire for a given house risks being exploited by a seller who has multiple offers. During a negotiation you need to evaluate whether your desire for a given outcome might cause you to reveal too much and be exploited by the other side.
Information That Can Change Over Time
Sometimes you may choose to not reveal information to the other side simply because you think that you may have to go back to them and state that things have changed. Facts may change over time; prices and preferences certainly will. When important information seems unstable, you might choose to wait to reveal it or else seek a deal provision that will allow you to later modify the information you share. During a negotiation, contractual contingencies allow you and the other side to “bet” on your differing predictions; you also can add clauses that permit renegotiation of any deal that you have reached should facts or conditions change.
What All Of This Means For You
Modern negotiators face a real dilemma. On one hand, we’ve always been told that the information that we bring to a principled negotiation needs to be held tightly and not shared with the other side in case they might use it to gain a competitive advantage over us. Alternatively, modern negotiation training is telling us to open up and share information with the other side so that we can more easily determine what they want and how we can reach a deal with them that both sides can live with. It turns out that both pieces of advice are correct, a negotiator just needs to know what they should share and when they should share it.
If the information that you bring to a negotiation is considered to be either privileged or sensitive then you probably should not share it with the other side. During a negotiation you can always use a “trust test” to determine just how much you should reveal to the other side. If you are conducting a negotiation for someone else, then you need to check with them before you reveal any of their information. In order to be successful in a negotiation, you need to have power. This means that you are not going to want to reveal anything that will cause you to give up power during the negotiation. Revealing information that can easily change during a negotiation is not a good idea because you’ll have to keep going back and revealing the changed information.
When it comes to negotiating, information is the key to getting the deal that you want. What you know and what the other side knows hold the key to what kind of deal you will be able to reach with them. Over time you will reveal some of what you know to the other side in order to keep the negotiations moving in the right direction. However, you don’t always want to reveal everything that you know. Take the time to understand what information you have and what can and cannot be revealed. Understanding this will allow you to ensure that all of your information can be used to help you to get the best deal possible.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: When during a negotiation would you want to start to reveal more information to the other side?
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What We’ll Be Talking About Next Time
Let’s face it, by now you realize that not every negotiation is the same. Each and every negotiation that we engage in has its own set of characteristics and qualities that set it apart from all of the other negotiations that we’ve been part of. However, the good news here is that all of the negotiations that we participate in fall into one of several different categories of negotiations. In order to make sure that we’re able to get the best deal possible out of a negotiation, we need to make sure that we understand what type of negotiation we are preparing to enter into. Make sure that you understand what type of negotiation your next negotiation is.