Business Negotiation March 20, 2017

Testing Your Assumptions

What are your assumptions and can you trust them?

Assumptions are educated guesses or guesstimates about what the other person is doing, thinking and/or planning. In business negotiations, we work to assess the other person and part of that assessment is to make assumptions. We assume what their bottom price might be or what concessions he or she might be willing to make

Stephen Covey, the author of The Seven Habits of Highly Effective People, once said: “We simply assume that the way we see things is the way they really are or the way they should be. And our attitudes and behaviors grow out of these assumptions.”

It is human nature to assume things based on our experiences. Perhaps someone who looks a lot like the person you are negotiating with once lied to you and now you assume this person across the table looks like a liar. The point is that assumptions can be faulty and you should not trust them entirely.

However, we make assumptions each day about a whole slew of things: which line at the bank will move faster, which item at the store is better than another, etc. We often base our decisions on those assumptions regardless if they are correct. In decision-making theory, this is called bounded rationality (when people make decisions without all the information necessary).

Dr. Chester Karrass tells us that the “ideal negotiator should have ... the open-mindedness to test his or her own assumption and the other person’s intentions.” If, as a negotiator, you do not test your assumptions, you may become a victim of bounded rationality, which in turn could lead to costly mistakes as you negotiate.

Don Miguel Ruiz, in his bestselling book The Four Agreements: A Practical Guide to Personal Freedom says: “The way to keep yourself from making assumptions is to ask questions.”

In negotiations, always question your assumptions.