Using Leverage to Your Advantage in a Negotiation

Using Leverage to Your Advantage in a Negotiation

BKBG Conference workshop leader Derek Gaunt (Black Swan Group) had a great blog post this week about using leverage to gain advantages in negotiations. Derek defines leverage as a perceived advantage that gives you a leg up to achieve the outcome you want.

Leverage is a powerful feeling, Derek writes, and that is one of the reasons why Black Swan Group considers leverage one of the four most emotional words in negotiation. One of the challenges of leverage is that abusing it can lead to broken engagements, poor implementation or deals fraught with regret. Regardless of your position, successful negotiation requires gaining leverage. Derek offered advice for doing so:

Support or legitimize the counterpart’s position with facts, laws, policies or other types of data. The chance of a successful negotiated agreement increases when you demonstrate that you can look through and understand your counterpart’s position. Derek attributes the reason to human nature because most people love to be understood and a summary is a great way to show that you understand someone’s position, feelings and environment.

Use labels and calibrated questions to discover what the opposite party wants and needs. A label might be, “It appears the reason you have said X is because…” When you use labels and calibrated questions, you encourage, natural honest responses from those who don’t like being questioned or don’t like to negotiate.

Employ “What” and “How” questions to deal with inaccuracies. An example, “How did you reach the conclusion that your kitchen will cost $18,000?”

Derek says there are at least three black swans – something rare that has a great impact on the negotiation – in every deal. Discovering closely guarded or sometimes blind information enables you to change the direction of the conversation dramatically and provides advantages to reach a desirable outcome.

Use time to your advantage by slowing down the negotiating process. Reducing a sense of urgency sends the message that reaching an agreement is not a priority. Make the first 80 to 90 percent of the conversation about your counterpart, not you, advises Derek. Going slow helps to establish trust.

The last tactic is to use the word “no” to your advantage. Ask questions that will elicit a no response. This provides protection, Derek says and does not threaten autonomy. When you ask for a yes, you are asking for a commitment and most people hate to commit. Ask “how” questions and a bit of deference will make your counterpart feel in control. Using effective pauses and a tone that sounds serious and in control can help get the other person to speak more freely. Also make sure you take steps to control your and your counterpart’s emotions.

Using perceived leverage can make or break a deal. Once you understand what your counterpart’s objectives are, you have leverage.

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