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Negotiation Strategies
March 2018
Balancing Power and Principle in Negotiation
Dear Clients and Friends,

Much has been debated in negotiation theory and written of in negotiation journals, about negotiating from a position of perceived weakness. There is comparatively little on negotiating from a position of power, perhaps because that is not seen as very much of a challenge or maybe a challenge that we all hope for! 

In this March '18 edition of Negotiation Strategies, I explore some of the potential pitfalls in negotiating from a position of power, discuss the importance of balancing power with principle and provide ideas of how to achieve that balance.

For your reading convenience, this column is also summarized in the Lessons Learned bullet points at the bottom of the page.

With Best Wishes

Raphael Lapin
Balancing Power and Principle in Negotiation
Introduction
Much has been debated in negotiation theory and written of in negotiation journals, about negotiating from a position of perceived weakness. There is comparatively little on negotiating from a position of power, perhaps because that is not seen as very much of a challenge or maybe a challenge that we all hope for!

In truth, negotiating from a position of power comes with its own set of challenges, potential pitfalls and dangers. In this column I shall explore some of these dangers, discuss the importance of balancing power with principle and provide ideas of how to achieve that balance
Potential Pitfalls in Exerting Power in a Negotiation
The kinds of power we may access in a negotiation could come from various sources. Some examples are: hierarchy; knowledge; and having a strong alternative option.

Hierarchy is power. A CEO negotiating with a manager possesses a status which confers significant power upon him that can be exploited in the negotiation.

Knowledge can be a source of power. Suppose a real estate developer is interested in buying a rental property that is in a residential zoning law area. He has inside knowledge that the zoning laws are about to change and will soon include that area into a commercial zoning area. This knowledge which the seller is not privy to, gives the developer advantageous power in those negotiations.

Having a strong alternative option to a negotiated agreement is another source of power. Imagine the power that a trade union representative yields while negotiating with management, when he is in a strong position to declare a decisively decimating strike.

In any of these examples, if the party with the power chooses to exert that power unreasonably to impose their will on the other party, there are costs, risks and dangers involved which include:

Reputation:  Having a good reputation is arduously hard to earn and shockingly easy to lose. A reputation as an authentic, trustworthy, reliable and principled negotiator is no exception. With such a reputation we will be trusted and respected. Our negotiations will be constructive and will produce agreements that will create high value while building and maintaining strong working relationships. When we use our power to unreasonably coerce, we risk replacing that positive reputation with a very negative one, which is costly both now and in the future.

Relationship: We are all very aware how important relationships are to achieve and accomplish anything. When we use our power unreasonably, the other parties are likely to become resentful and we never know when we might need them to get our needs met in the future. We need to build our relationship credits while mitigating the debits as much as possible.

Compliance and implementation: When a party feels that they were coerced into agreement, the resistance that they feel will manifest in a reluctance to comply and efficiently implement. At times this might even require legal action to enforce which of course comes with its own frustrations and costs.

These risks make a strong argument against the abuse of power in our negotiations. A far superior approach is to ensure that we balance power and principle.
Balancing Power and Principle
Balancing power and principle means that rather than using our power to impose our will on the other side, we use it to protect ourselves against them imposing their will on us. Beyond that we negotiate with principle.

To be able to balance power with principle, we first need to know what our principles are. An effective way to identify our principles is to think about how we would want to be treated in a negotiation, and then to make sure to treat our counterparts accordingly. Would we want to be browbeaten and threatened, or would we want to feel that we are active and equal partners in crafting a solution? Would we want to be assailed with unreasonable demands, or would we want our needs and concerns to be heard and taken seriously? Would we tolerate insult and abuse, or would we wish to be treated with respect and dignity?

By giving thought as to how we would wish to be treated, we will uncover our true negotiation values and principles, which will guide us in how to inject the negotiations with principle while balancing with power.
How to Negotiate with Principle
Here are a few ideas for how to balance your power by injecting some principles into your negotiations.

Set a positive tone of respect: In a recent speech to the European Union in Brussels, Theresa May, the Prime Minister of the U.K. declared: “We will not be buffeted by demands (from her constituents) to talk tough or threaten to walk out. We will move forward by calm, patient discussion of each other’s position.”
Although remaining firm on the U.K’s national interests, she nevertheless set a positive tone of mutual respect for the negotiations which allows the other side to act equally magnanimously. She effectively balanced power with principle.

Make sure that the other side feels heard and that they are being taken seriously: Always spend adequate time at the beginning of the negotiation listening to the other side and demonstrate that you have understood them (even though you may not agree). This will allow them to be more receptive to your point of view, and you may learn some very important information that could potentially unlock the negotiation. Always make sure that you are listening more than talking.

Be passionate about your vital needs, yet open to different ideas of how they might be met: Many negotiators try to impose their solutions on the other side. Negotiating with principle is to be very clear about what needs are important to satisfy, but yet be open to creative ideas as to how those needs could be met. Work collaboratively with the other side in searching for and creating viable solutions that could meet both sides’ needs.

By not abusing your power and balancing it with principle, you will achieve optimal outcomes, build strong relationships and maintain a reputation of trust and reliability.
Lessons Learned
  • Negotiating from a position of power comes with its own set of challenges, potential pitfalls and dangers.
  • Examples of power in negotiation are: hierarchy; knowledge; and having a strong alternative option.
  • If the party with the power chooses to exert that power unreasonably, there are costs, risks and dangers involved.
  • These risks can impact reputation, relationships, compliance and implementation.
  • Balancing power with principle means that rather than using our power to impose our will on the other side, we use it to protect ourselves against them imposing their will on us.
  • To identify our principles, think about how we would want to be treated in a negotiation, and then treat our counterparts accordingly. 
  • Set a positive tone of respect.
  • Make sure that the other side feels heard and that they are being taken seriously.
  • Be passionate about your vital needs, yet open to different ideas of how they might be met.
Lapin Negotiation Services offers training, consulting, advising and executive coaching in negotiation, business diplomacy and dispute resolution services.

Our proprietary and aggressively results oriented services are designed to help your leadership, teams and individuals master the essential negotiation, relationship-building and conflict management skills that increase revenues, decrease the high cost of conflict and build strong working relationships.
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