The Top 3 Negotiation Challenges & How to Overcome Them

This article is an excerpt from the Shortform book guide to "Negotiation Genius" by Deepak Malhotra and Max Bazerman. Shortform has the world's best summaries and analyses of books you should be reading.

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How can you keep cognitive biases from ruining a negotiation? How should you handle it when your counterpart lies to you? Is it possible to negotiate from a weak position and come out on top?

In Negotiation Genius, Deepak Malhotra and Max H. Bazerman look into some common obstacles during negotiations that can impede your ability to understand and communicate with your counterpart. These obstacles include cognitive bias, deception, and a weak position.

Take a look at these negotiation challenges, and learn how to overcome them.

1. Cognitive Biases

The first negotiation challenge is cognitive biases—common errors in how we think, interpret information, and make decisions that can prevent us from negotiating effectively and recognizing ways to maximize value creation. To be an effective negotiator, you must learn to recognize and confront your biases, as well as those of your negotiation counterpart. The authors argue that it’s much easier to achieve a good outcome with a good negotiator than one who’s thinking irrationally.

(Shortform note: Malhotra and Bazerman focus on the ways cognitive biases can harm our negotiations, but other experts point out that these biases are, on the whole, necessary and even helpful in our daily lives. In Influence, Robert Cialdini explains that these biases are mental shortcuts that allow us to make quick decisions and thereby navigate the world effectively. Without them, we’d simply get overwhelmed trying to process every situation we find ourselves in. For the most part, these shortcuts lead us to accurate conclusions—that a crowded restaurant has good food, for instance.)

First, to recognize and overcome your biases, the authors suggest you try to adopt an outside perspective. You can do this by discussing your negotiation with an impartial expert or friend. You could also ask yourself how you’d view the situation if you weren’t involved. Also, the authors recommend you avoid negotiating under time pressure, which prevents you from thinking clearly. Consider separating the negotiation into multiple sessions to give yourself a better chance of catching potential oversights or flaws in your reasoning.

(Shortform note: Malhotra and Bazerman provide tips for getting different perspectives so you can make better decisions during your negotiation, but Ray Dalio writes in Principles: Life and Work that you must first adopt a truth-seeking mindset. He writes that your ego can discourage you from getting other people’s opinions, which is why you must commit to finding the truth even when you think you’re right. Because you won’t know what’s in your blind spot, you must practice humility and be fully receptive to other people’s viewpoints.)

Next, you should also help your counterpart deal with their biases so you can cooperate and agree on a mutually beneficial deal. Sometimes, the other person may act in a way that seems irrational to you—they may reject an attractive offer or get angry during the negotiation. In that case, you should try to give them more facts that they don’t know and try to understand why they feel or act that way. Likely, they simply don’t have enough information, are overwhelmed with emotions, or are influenced by factors you’re unaware of. Try to address the source of the problem and talk about how you can work together to meet their needs and interests.

(Shortform note: While Malhotra and Bazerman suggest you share information to resolve conflicts, others suggest you be more proactive and regularly seek feedback from your counterpart to make sure they understand what you’re trying to say. You can seek feedback and prevent misunderstandings in several ways: by asking questions, clarifying and reflecting back what they’re saying, and practicing active listening.)

2. Deception

Apart from recognizing cognitive biases, you must also learn how to handle deception during a negotiation. First, discourage lying by signaling to your counterpart that you’re well-prepared and have the ability to obtain and verify information. If you suspect that the other side’s lying, ask questions that you already know the answer to or ask multiple related questions that make it difficult for someone to keep their lies consistent. Depending on the situation, you should then decide whether you want to continue the negotiation or not.

(Shortform note: Some studies reveal that deception is shockingly common during negotiations, occurring, depending on what is considered deceptive behavior, between 30% to 100% of the time. Beyond signaling that you’re well-prepared, you can also discourage deception by reminding your counterpart of their reputation. Other experts note that many negotiators resort to using underhanded tactics because they’re too focused on getting advantageous results in the short term. Perhaps, then, simply reminding them of the long-term implications of unfair tactics can discourage them from using them.)

If you distrust your counterpart but want to continue negotiating, consider proposing a contingency contract. A contingency contract is an agreement that leaves parts of your deal dependent on what happens in the future. For example, you may agree to buy your child a new gaming console but only allow them to play on school nights if they maintain an A in all of their classes.

(Shortform note: To make a contingency contract, each party must describe the event they expect will occur in the future and define the actions they will take in response. For example, you and your child may outline two scenarios: They will either maintain all As or get a lower grade. If the first scenario is true, they can play on school nights. If the second is true, your child will study an extra hour instead of gaming. Ultimately, while contingency contracts can help you thwart deception and mitigate risks if you’re uncertain about your counterpart’s promise, experts suggest you always consider whether the other party has information you lack. If your prediction of future events is inaccurate due to a lack of information, you might end up paying the penalty for the contract.)

3. A Weak Position

Sometimes you may find yourself negotiating with an extremely weak position with little to no bargaining power. In these situations, you might have a weak BATNA (few or no good alternatives) while your counterpart has a strong BATNA. The authors describe ways you can negotiate from a position of weakness:

Method #1: Focus on their weaknesses. Don’t reveal how weak you are to your counterpart but, instead, make their weaknesses apparent during the negotiation. The other side might also have a weak alternative, and they may need you as much (if not more) than you need them.

Method #2: Identify what differentiates you from your competitors that your counterpart also finds important. In doing so, you may overcome your weak position simply by highlighting your unique value.

Method #3: Leverage your weakness. If your position is extremely weak, the authors recommend you simply ask the other side to help you out of generosity and grant you some of your requests. By acknowledging your lack of power instead of negotiating aggressively, you might convince the other party to give more to you.

Method #4: Reduce the other side’s power. If possible, form alliances with other weak parties and negotiate collectively so that you can’t be pitted against one another. You can also directly combat the source of the other side’s power. For example, if you struggle to negotiate house rules with your roommate because they pay the larger portion of the rent and feel entitled to make more decisions, you could take on a side job to increase your income and contribute more to the rent. This way, you can reduce their power advantage.

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• Why a good negotiation depends on your ability to create value
• How to avoid common negotiation pitfalls and make attractive deals
• How to decide whether or not to make the first offer

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