Risk is a factor in every negotiation. It is a factor we confront at every step of the process. A negotiator’s willingness to accept risk or avoid it may determine outcome as much or more than other sources. Here are a few of the formidable risks you will be required to take in the process of negotiating.
- We take risk when we decide to negotiate rather than accept what has been offered. Many fear to negotiate or dislike it so much that they risk paying high asking price merely to avoid negotiating. The risks incurred by negotiating are like those in war. One cannot predict with accuracy the intended or unintended consequences of a negotiation and its outcome.
- Should we take time to plan before getting into negotiation? Of course the answer is “yes.” But planning doesn’t always pay off. It certainly takes time from other things more pleasant and important. Ad if we decide to get ready, how far should the preparations go?
- When an offer is received that is reasonable or favorable, should we accept it? Most good negotiators would say that it is wise not to accept the offer too quickly, that doing so diminishes the value of your “Yes” to the other party. That’s true, but good offers are sometimes withdrawn in the give and take of further talks and consideration. Continued talk takes time and work. Saying “Yes” allows you to go on to something more important, or fun, than the conflict inherent in continued bargaining.
- Effective negotiating, especially in the workplace, requires an open exchange of information. Deciding how much should be said always involves risk. The admonition, “Everything you say may be held against you,” applies to everything you reveal in dealing with those in your own organization.
- It is well-known that setting higher targets in negotiation generally results in achieving higher outcomes, but that is not always so. Setting higher targets often leads to deadlock. It may also lengthen the negotiating process beyond what is worthwhile or beyond what makes for better relationships between the parties.
- Accepting the final terms and conditions of an agreement always involves a risk. One can never be certain that the other side will perform as agreed or will be around long enough to do so. Everything changes over time. Whether time will reinforce the agreement or tear it apart remains to be seen.
Both sides are to a considerable extent aware of the risks to themselves inherent in negotiating. As a negotiator, you will be more aware of the risks on yourself than on the other party. The important thing is to recognize that they are also under pressure. As you negotiate, dwell not on the risks you are taking but on the pressures on them. They may be less willing to accept these risks than you are, thereby shifting the balance of power in your direction.