Saturday, February 25, 2017

Lesson 7: The "F" Word in Negotiation

Law of the Universe #6: People will walk away from deals that would otherwise make them better off, if they feel they've been treated unfairly.

"That's not fair"

"Fair" is the "F" word in negotiations. It comes up in almost every negotiation.
It’s directly related to feelings of worth and loss. This can often become very personal.   The automatic implication is that the person it’s being used on is being unfair. If your counterpart uses this word you have a problem. People will walk away from deals that would otherwise make them better off if they feel they've been treated unfairly.
“Fair” comes up in three contexts, two of which are accusatory.

1. The Defensive

The "F" word can be used by someone not meaning to make an accusation against you, but simply intending to defend themselves. This might take the form of "We just want what's fair."
This accusation will immediately trigger emotions of defensiveness and discomfort in you. These are often very subtle, almost invisible to you. Accusations tend to create emotional defensive reactions
Example: A homeowner was selling his home. The market prices of houses in the area had dropped. Consequently, the offer for the house was much lower than what the owner hoped for. The owner responded to the potential buyer – "We just want what's fair". The buyer raised his offer. Yet, how is that fair to the buyer? Was it the buyer's fault that the market dropped?
The word can also be highly manipulative.

2. Manipulation

"We've given you a fair offer", "We've made a fair offer” or "What we put on the table is fair." Anytime a negotiator self-describes their actions or offers as being "fair" it's likely an intentional manipulation to get their counterpart to give in. It also can be an irritant for the other side and may well consequently diminish the working relationship.
Example: Remember the last National Football League (NFL) lockout? During the impasse the Players Association was trying to get the team owners to completely open their books. The team owners responded publicly that what they had offered the players was "fair". Note the timing of the "F" word with the refusal to disclose information.

3. Proactive (Recommended)

You can be proactive with the "F" word. It's acceptable to tell someone at the beginning of a negotiation that you're going to try very hard to be fair and that you want them to tell you if they think you're not being fair. (Note the timing of this: before you made any offers.)
Be both conscious of the "F" word and cautious with it. Understand its implications. Please do, in fact strive to be very fair and understand what your counterpart perceives to be fair. If they feel you're being unfair they could well walk away from a deal that would make them better off.

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