Chapter 9 - Common Errors Made By Negotiators
The author refers to the folk-wisdom that a contents is often won by the competitor who makes the fewest mistakes. This is the reason that in sports competitions, people of the same level of ability are often paired with one another - a master can easily trounce an amateur, but two masters or two amateurs are considered a "fair fight" and, their skill levels being roughly the same, it is often the mistakes that determine the outcome. More to the point, it is sometimes seen that an weaker opponent can even beat a stronger one if the stronger one is careless.
In terms of negotiation, you can't always count on a fair fight and may not have the ability to pick your opponent - and while you can refine your skills before entering into a negotiation, it's also important to be attentive to avoiding common mistakes at the negotiating table.
Overconfidence
Overconfidence is the worst of mistakes, the one that enables an underdog to best an odds-on favorite. Overconfident people feel they can handle a negotiation without much preparation, and proceed without being very attentive, and as a result they get clobbered by less skilled people with whom they negotiate.
Overconfidence arises by measuring yourself against your opponent, and feeling (rightly or wrongly) that your skills at negotiation are far superior to their own, and that pulling them to your desired outcome will be a relatively simple matter that will require little effort.
The best way to avoid overconfidence is to focus on the task of negotiation rather than the party with whom you will negotiate. Even if you feel you will not need to bargain very hard, vet your argument with a colleague who's skilled at negotiation to test its strength, and plan counterattacks should your opponent prove more skilled than you assume them to be.
Irrational Expectations
Another major mistake is entering into negotiations with irrational expectations. The other party may hear your opening position and refuse to negotiate at all. Alternately, they can simply point out how unrealistic you are being and set a counter-anchor, which moves the discussion to attacking their position rather than defending your own, and generally on unfamiliar grounds.
Also, recall that the rationality of expectations may be related to objective facts, but may also be irrational given the position of the other side. For example, an employee is entitled to take a certain number of vacation days, so using them is an entirely reasonable request - but failing to consider when other employees may be taking their time off may result in requesting to take those days at a time when the office will already be short-staffed, and the supervisor may consider the request unreasonable.
Rationality is generally based on an argument, and people approach a negotiation table with different bases for what they consider to be rational. A seller may want $20 for an item based on a fair markup on the cost he paid for it wholesale, but a buyer will insist it is only worth $10 because of the way it compares to items other sellers are offering on the day he is buying it.
(EN: the author seems to be blurring the line a bit between an offer that is "irrational" and one that is "unacceptable" to the other party. The consequences might be the same, but it's important to note that you can defend a demand against accusation of being irrational by substantiating your claim, but you cannot use such a defense on a position the other party finds unacceptable, even though it may be rational.)
Irrational expectations must be avoided because they make agreement impossible - no negotiator will accept a deal on terms that do not conform to the facts as he understands them.
(EN: Again, I beg to differ. A buyer who offers a seller far more than he was going to ask is also making an irrational offer, and many sellers will gladly take him up on it. Though in some instances it causes a bit of concern as to whether what is being offered is genuine).
The antidote to irrational expectations is to avoid forming any expectations until you've researched the relevant facts about the economics of the deal, the context of the situation, and so on. Not only will this help you avoid making irrational demands, but it may also help you to recognize when your opponents' position is irrational.
Trying To Win at Any Cost
Another serious mistake many negotiators make is in approaching any negotiation with the perspective that "winning" means making the other party yield to their will. For some it is merely a competitive spirit, for others it borders on (or in fact is) a psychological defect.
The self-destructive effect of ego is quite common, and very profitable for others to exploit. The standard auction format is an excellent example of this: when two competing bidders get lost in the game, and regard winning the item as a matter of esteem rather than paying a fair price for the item, the price itself can be bid way out of proportion. Even the bidder who "won" has paid for the satisfaction of a moment by paying a significantly higher price.
The same can be seen in corporate takeovers, in which a firm goes very deeply in debt in order to buy another firm for much more than it's worth, for fear of "failing" to make good on their statement of intent. Alternately, a company that does not wish to be taken over ends up poisoning itself to avoid the merger (or, spitefully, to harm the other firm when a takeover is inevitable) to the detriment of shareholders, customers, and employees.
Much of this can be avoided by having a clear notion of what you are trying to achieve by entering into a negotiation, considering along the way of these interests are still being met, and what other consequences might arise, and, most importantly, being prepared to walk away if the outcome is no longer attractive.
Another tip for keeping negotiations civil is to enlist a mediator, whose primary function is to bring two parties to agreement, but whose secondary function is to ensure that each is still getting a fair deal from the negotiations.
Ignoring Relationships
Inexperienced negotiators see negotiation as a sort of game, played to win the terms of a negotiation. They want to get right down to business immediately and get to the deal as soon as possible. However, negotiation is a form of social interaction that occurs in the context of a relationship - and if there is no existing relationship, the negotiation is the start of one.
Parties who enter into negotiations to solve a mutual problem or accomplish mutual goals will likely meet again to solve other problems and collaborate once more. Negotiating to get favorable terms in a one-time interaction may damage an existing relationship or smother a budding one, and one whose mutual benefit could be perennial.
A good negotiator is relationship-oriented. He recognizes the importance of a transaction, but in the context of a sequence of interactions between individuals or firms. He recognizes that "doing business" is an ongoing process, which starts before and continues after an isolated deal-making discussion, and recognizes that a good relationship makes each transaction easier.
Fostering relationships takes a great deal of care and patience for the sake of a long-term benefit, which is a difficult perspective for a transaction-oriented person to adopt. It also requires openness and trust, which are two other concepts that seem counterproductive to tough bargaining at the negotiation table.
It's also noted that the "strictly business" attitude is largely a relic of the colonial and early industrial eras that spread from Britain to some parts of northern Europe and North America, but is largely unheard of in other cultures: people in Asia, Africa, the Middle East, and Latin America are far more concerned with relationships and may refuse to talk business until they feel comfortable with you and your firm.
This is not merely a matter of arbitrary preference: negotiating with a person who is dishonest or untrustworthy is a waste of time, and getting to know them better as a person is necessary to making that assessment.