How to Avoid Making Bad Decisions In Negotiating Scenarios

Using incorrect information can create poor decisions during a negotiation
Using incorrect information can create poor decisions during a negotiation
Image Credit: Martin Börjesson

I think that all of us would be willing to admit that we don’t know everything. When it comes to a negotiation, if we’ve never negotiated with the other side before, we understand that it would be wise to go have a talk with someone who has negotiated with them before. When we consult with others on our upcoming negotiations, we are going to have to weigh their advice against our own opinions and research. Research finds that all too often we tend to undervalue advice from others and overvalue our own point of view, even when we’re inexperienced at the task at hand.


How To Accept Advice

Studies have shown that when we are anxious, we will be more receptive to advice even when it should be obvious that the advice is of poor quality and when the advice giver may have a clear conflict of interest. When we are anxious we will accept advice even if we know that the person who is giving it is probably biased. By contrast, if we are in a neutral state we will be able to see the situation more clearly and reject bad advice much more often.

This brings up the question: what caused anxious decision makers to be especially trusting of advice, whether good or bad? It turns out that what is causing this is a lack of confidence in their judgments. Research shows that negotiators are generally too confident in their judgments. The common tendency is to focus on our own perspective and overlook what the other side’s bargaining position is. This can cause us to become overconfident of our abilities and the odds of success. However, if self-analysis prior to negotiation leaves us feeling insecure and anxious about how we’ll perform, we might choose to avoid the situation altogether – or bring in a trusted adviser to help us.

Overall, the research suggests that keeping a myopic focus on our own point of view can lead us to be either unrealistically overconfident or overly anxious about our negotiating ability. Strong anxiety, in turn, can cause us to place far too much confidence in our advisers’ abilities and give too much weight to their advice.


How To Avoid Making Bad Decisions During A Negotiation

In order to avoid making bad decisions, the first thing that you are going to want to do is to try to get some perspective. If you want to accurately appraise your bargaining strength, you are going to need to try to take the other side’s perspective. Before starting to negotiate and during the process itself, you need to analyze the other side’s underlying interests, needs, motivations, and alternatives thoroughly.

You are going to have to realize that you are anxious. When you can acknowledge this, then it will be time for you to face your anxiety head-on. If you take the time to thoroughly prepare and try various relaxation strategies then you can alleviate some anxiety. However, it’s important that you don’t feel that you need to vanquish it all together. Small amounts of anxiety may be “very constructive” in helping you concentrate and take the negotiating task seriously.

During your negotiation you are going to want to maintain a healthy skepticism. If you decide to consult with negotiating advisers – but especially when you are anxious – be sure to carefully vet them. Take the time to identify potential conflicts of interest, and factor their biases into the advice you receive.


What All Of This Means For You

Every time that we engage in a negotiation, we know that we are going to have make a series of decisions. We’d like each of these decisions to be a good decision; however, if we’re not careful we can end up making some that we will later on come to regret. We may be smart enough to consult with someone else; however, we may not be smart enough to use the information that they give us. We need to find ways to become better decision makers.

What has been discovered is that when we become anxious, we become more willing to accept bad advice. We’ll stop questioning the source of the advice and just take it at face value. If we are in a neutral state, we do a much better job of evaluating where advice is coming from. This happens because we lack confidence in our own judgements. If we focus too much on how we are seeing things, then this can lead to us becoming insecure and anxious about how we’ll perform. In order to prevent this from happening, we need to take a step back and get some perspective. We need to understand that we may be anxious. In order to make good decisions during a negotiation, we will need to maintain a healthy air of skepticism.

In order to start to make better decisions during a negotiation, the first thing that we need to realize is that we tend to make bad decisions when we are feeling anxious. This realization can go a long way in helping us to take the time to slow things down and become more careful in our decision making process. Developing this awareness can go a long way in helping us to become better negotiators.


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


Question For You: How can you deal with the anxiety that entering a negotiation can cause?


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What We’ll Be Talking About Next Time

Negotiators need to know how important body language is in the negotiation process. We are often advised to engage in small talk before getting down to business. The reason that we’re told to do this is because according to negotiation research, it pays to engage with your counterpart at the negotiation table. However, where things can get a bit strange is when we realize that whether it benefits a negotiator or not might depend on the negotiator’s gender.