Understanding The Perception of Power
This Weekly Walkaway explores 'Power'. A multifaceted dynamic that shapes all human interactions and manifests itself through various forms rooted in fundamental aspects of negotiation.
The Weekly Walkaway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Issue No. 56 (8th December 2023)
What to expect?
Quotes of the Week
“Power is based on perception. If you think you got it, you got it, even if you don’t got it.” – Herb Cohen.
“Information is a negotiator’s greatest weapon.” – Victor Kiam.
Tactic of the Week - The Power statement
Thought of the Week - Negotiation and the Importance of Customer Satisfaction.
Remember: You are a negotiator!
You are always managing some form of conflict, a difference of opinion or interest.
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Tactic of the week
The Power Statement
The "Power Statement" tactic is a deliberately negative or provocative remark from your counterpart.
Your rates are too high, compared to your competitors. We require [X] by [Y].
It sets the tone, sometimes by making assumptions about your circumstances and presenting them as factual.
Naturally, your instinct (Your fight, flight or freeze response) might push you to counter or defend against such assertions, potentially revealing valuable information in the process.
An effective countermeasure to this tactic involves a strategic shift in response. Rather than immediately correcting or defending, redirect the focus by responding with probing questions. For example;
"What makes you say that?" puts the spotlight squarely on their motivations.
The power statement is ‘powerful’. Be aware of others and use it well.
THOUGHT OF THE WEEK
Understanding The Perception of Power
Power is a multifaceted dynamic that shapes human interactions and manifests through various forms rooted in fundamental aspects of negotiation.
In the realm of negotiations, two types of power prevail ACTUAL power and PERCEIVED power.
Effective negotiation hinges on mastering self-control and influence over the controllable elements: what you say, how you say it, what you do, and how you do it.
“Presenting oneself as composed, confident, and knowledgeable—even when feeling otherwise—can redefine the perception of power to your advantage.”
First of all, before we do, a quick plug for an exciting new job opportunity at Kahvay; for more information, get in touch…
OK, so let's get to it… Delving into five key examples of power dynamics…
Scarcity
Authority
Choice
Change
Time
1. Scarcity
If there is too much of something, the value goes down. If there is not enough, the value goes up.
You can control this by making stuff, things, yourself, and others difficult to possess. This, therefore, increases their value.
“Scarcity hinges on the economic principle dictating that rarity begets value. If something becomes scarce, its perceived worth rises. Conversely, abundance dilutes its allure.“
Take control by restricting access to goods, services, or opportunities.
Limiting accessibility often amplifies their desirability.
For example, restricting a product or service to the market or restricting a specialist, a member of the authority, or an opportunity can control its value in the other party's mind if they want or need it enough.
2. Authority
If someone who is more senior speaks, their words have more power than yours. This is why you must think carefully about the roles on your negotiation team.
Utilising authoritative figures or invoking policies and regulations can strengthen your stance. Conversely, acknowledging constraints owing to one's authority level can also serve as a tactical move in negotiations. For example, conceding to a lack of authorisation or needing higher approval.
For example,
“My CFO told me that from this date, the annual price increase will be [X] per cent.”
The use of the CFO gives the message authority. This can be used in reverse.
“I do not know the answer. I would have to ask my director. Or,
“I cannot agree to that price; it is above my authority.“
Not surprisingly, if the authority is ‘policy or regulation‘, this has even more power.
“We cannot accept it because it is illegal in this country.”
3. Choice
We have spoken already about BATNA, the best alternative to a negotiated agreement…
If you have options, you have power.
And power thrives in the realm of choices.
Providing options during negotiations confers a sense of control, even if the choices predominantly align with your own preferences.
Recognise the nuances of these choices — some might be advantageous, while others could subtly steer you towards a predetermined outcome.
If you offer choices, then ‘they’ also feel in control even though they are your choices.
Like a menu in an a la carte restaurant… you feel powerful choosing, but who wrote the menu?
“Always be in charge of these choices.”
If offered a menu from your client or supplier, select from it what you want and add to it what is not offered. Create another choice.
For example;
We have created options for you to choose from.
Option 1 is 90-day payment terms. Win the business in locations A, B, and C, and give us an annual saving of 3 per cent globally.
Option 2 is 60 days payment terms. Win only location A and give us an annual savings of four per cent.
Option 3 is 60-day payment terms, not win locations A, B, or C, lose locations M, N, and P, and give us five per cent annual savings.
I think they want 90-day payment terms. What do you think?
“Be aware of the smelly choices. This can be offered alongside not-so-smelly choices to force you to accept their preferred choice. “
4. Change
If something looks, sounds, and smells different than people think it is.
By changing the look and feel, but not always the content of your proposal, it's called repackaging; you can create momentum and movement.
“The potency of change in wielding influence is undeniable. In proposals or negotiation teams, altering appearances can wield significant influence.”
Repackaging proposals or shuffling negotiators' ranks during discussions can pivot dynamics in your favour.
For instance, using junior members initially to decline propositions and then introducing senior decision-makers, the ones with authority, to change the deal structure and agree can profoundly impact negotiation outcomes.
Equally, controlling the flow of information can create the perception of change.
Selectively revealing details gradually impacts negotiation dynamics.
By sharing limited information or withholding key specifics can create curiosity. As discussions progress, strategically divulging crucial aspects alters the negotiation's trajectory.
For instance, in a business deal, providing preliminary data about a project's benefits or dates, without revealing all the details creates interest. As negotiations advance, releasing comprehensive data strategically—when the timing is most opportune—can sway the discussion positively.
5. Time
When managed appropriately, time is a potent force in negotiations. Whoever is in charge of the deadline is in control...
“If you have a time pressure, and you let it be known, you will give away your power. If you can find out that they have a time pressure, you can use it against them. “
Identifying or creating time pressures can confer leverage. Understanding deadlines and leveraging them tactfully can significantly tip negotiations in your favour.
For instance, both the European Union and the UK employed deadlines during the Brexit negotiations, knowing that as the deadline loomed, momentum would intensify.
Another example is when you see the US government negotiating budgets in Congress. The time delay tactic is often used to the extreme by the opposition, pushing the government to concede points in the budget to avoid a total shutdown of federal agencies. And indeed, Trump tried this in reverse, and failed, to use this tactic when trying to secure the budget for his Mexico wall with the longest shutdown in US history.
So that’s it for this week: understanding these dynamics provides a roadmap to navigate and influence various situations. If you can master them, you can go a long way to becoming an effective negotiator.
Tl;dr
Scarcity dictates that rarity elevates value.
Authority inherently exudes influence.
Choice empowers you through options.
Change is a catalyst and can pivot the dynamics of discussions.
Time, when harnessed effectively, becomes a compelling force in your favour.
Good luck!
#NavigatingBetterNegotiatedOutcomes
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