Image Credit: ZONES1 GRAFFITI
One of the biggest questions that we all struggle with when we are in the middle of a negotiation has to do with goals. When a negotiation includes such items as price or delivery dates, we need to understand what we want and then we need to understand how we’re going to go about getting it. This is where the zone of uncertainty comes into play.
The Zone Of Uncertainty
I think that we can all agree that in a negotiation there are two values associated with every issue that is under discussion. The first of these values is the value that you initially ask for. This can be the price that a house is listed at or a salary that is initially requested. The next value is the minimum value that you will accept. This is the value that if the other side moves below, then the deal is off.
The area that lies between these two values is called the zone of uncertainty. Your goal during the negotiation is to get the other side to agree to a value that lies within this area. Of course you’d like it to be somewhere towards the top end; however, you could live with a value that was somewhere towards the bottom end if everything else met your requirements. If you find yourself in the buyer’s role, then you are going to have to make sure that your initial offer is high enough to keep the other side’s attention and low enough to give you room to negotiate.
One of the most challenging things about establishing a zone of uncertainty in a negotiation is that you are going to want to find ways to leave yourself as much room to negotiate as possible. The reason that this can be hard to do is that your offer is going to have to be seen by the other side as being reasonable. The reason that this is so important is because if the other side thinks that you are making unreasonable demands (offering too low of a price) then this negotiation will be over even before it ever got started.
How To Use The Zone Of Uncertainty
The zone of uncertainty is a powerful tool in the hands of a skilled negotiator. Often what will happen is that you’ll start a negotiation by proposing a value such as a purchase price. The other side is going to counter with what they believe is a more reasonable value. Once they have done this, boundaries for the zone of uncertainty for this negotiation have now been defined.
You don’t always have to focus on the value that has been associated with the zone of uncertainty. Once the zone has been established, you now can bring other negotiation items into the mix. There will be a gap between where your offer is in the zone and where the other side is. One way that you can take steps to bridge this gap is to suggest something new that the other side wants or to make a compromise on some other issue that is being negotiated.
Knowledge of the zone of uncertainty can pay off for a negotiator when a negotiation starts to become tricky. They can also help out if you discover that they other side is starting to play negotiation games. The zone will allow you to maintain your perspective on what is working in your negotiation and what is not working.
What All Of This Means For You
The key to having a successful negotiation is to make sure that you have a good understanding of your goals. One way to go about making this happen is to take steps to establish a zone of uncertainty around a specific part of the negotiation. This will allow you to focus on what you want to get out of the negotiation.
A zone of uncertainty is created when you determine what the maximum value that you would either like to get or are willing to pay. Then when you determine the minimum value that you’ll accept or the value that you want to start with the zone has been established. If you can get the other side to agree to a value that falls within the zone then you will have been successful.
The zone is a powerful negotiating tool that can be used to gain the upper hand in a negotiation. The next time that you are negotiating, spend the time to determine the zone that bounds the value that you want to obtain. Knowing what your upper and lower limits are, you’ll be in a much stronger position.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: How can you avoid making an iniial offer that is too low?
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What We’ll Be Talking About Next Time
What a wonderful age we are living in! We have the ability to watch 500 TV channels at any time of the day, we can hop on a plane and get to almost any corner of the globe in a matter of hours and, even better, we can get in touch with almost anyone at any time simply by placing a phone call to them. This has dramatically altered how negotiations are being performed. Has it made them better or worse for us?