Negotiation Techniques: Reducing Mental Preconceptions During Bargaining
In the world of business and negotiations, it's easy to become swayed by gut feelings and intuition. However, new research suggests that a more deliberate and analytical approach can lead to better outcomes, particularly in integrative negotiations.
More often than not, entrepreneurs overestimate their chances of success, with one-third describing it as certain. This overconfidence can lead to relying heavily on intuition, a fast, automatic, and unconscious thought process that can result in cognitive biases and suboptimal decisions.
To identify and avoid relying on intuition, it's crucial to engage System 2 thinking deliberately. This slower, conscious, and analytical process requires effort and reflection to override intuitive biases.
Strategies to avoid over-reliance on intuition include preparing thoroughly before negotiation, using structured models such as the Behavioral Change Stairway Model (BCSM), and resisting pressure to immediately seek agreement or split the difference.
By adopting a more deliberate approach, negotiators can enjoy several benefits. Better risk assessment and decision quality, enhanced creative problem-solving, greater emotional intelligence, more control and influence, and more sustainable agreements that address underlying interests are just a few of the advantages.
Exchanging preliminary information by email before initial discussions, scheduling breaks during negotiations, and negotiating over multiple days can also help manage complexity and unforeseen issues.
Entrepreneurs, especially those starting a new business, should critically and comprehensively analyse negotiations over land, construction, hiring, and so on, using an outsider lens. Hiring a true outsider, whether an expert within your firm, a consultant with unique experience, or a trusted friend, can identify factors that have been ignored.
Remember, the five-year survival rate for new businesses is only about 33%. Most people, especially busy managers and executives, fall back on intuition during their negotiations. Avoiding succumbing to pressure tactics that force negotiation or decision under time pressure can help engage in System 2 thought.
Keith Stanovich and Richard F. West have distinguished between System 1 and System 2 thought, with System 2 being slower, more conscious, effortful, and logical. Initial discussions over the phone can precede in-person negotiations, and partitioning the negotiation across multiple sessions can help manage complexity and unforeseen issues.
In summary, recognising when you are relying on fast, emotional intuition and intentionally shifting to slower, deliberate, and reflective System 2 thinking enhances integrative negotiation outcomes by improving understanding, creativity, and influence while reducing errors stemming from cognitive biases and rushed judgments. This approach leads to more sustainable agreements that address underlying interests rather than just surface positions.
- In the world of business, especially during negotiations, relying heavily on gut feelings and intuition may lead to suboptimal decisions, making it essential to engage in System 2 thinking, a deliberate and analytical approach that can help avoid cognitive biases.
- To foster better outcomes in complex negotiations, entrepreneurs are advised to prepare thoroughly, use structured models such as the Behavioral Change Stairway Model (BCSM), and resist immediate agreement or splitting the difference, encouraging a more deliberate and reflective thought process.
- By adopting a more careful and analytical approach, negotiators can enjoy several advantages, including improved risk assessment, creative problem-solving, emotional intelligence, control and influence, and sustainable agreements that address underlying interests, rather than just surface positions.
- Recruiting an outsider, whether an expert within the firm, a consultant with unique experience, or a trusted friend, can help entrepreneurs critically analyze negotiations, identifying factors that may have been overlooked, and ultimately contributing to more successful negotiations and business outcomes.
