A Guide to Developing Effective Negotiation Strategies

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What are negotiation strategies? What negotiation skills do you need to land the best deals?

Negotiation strategies are the tactics used by parties to a negotiation to secure favorable terms in an agreement. Active listening, empathy, diligence, and information gathering are vital skills in negotiations.

Read on to discover winning negotiation strategies you can adopt to become a better deal maker.

The Inevitability of Negotiations 

Roger Fisher in Getting to Yes defines negotiation as a give-and-take effort by two or more parties to reach an agreement on a matter in which some of their interests conflict, some are shared, and some differ.

That being said, we’re all negotiators—negotiation is how we get what we want from others in business and in our personal lives. We negotiate with our bosses, clients, sellers, real estate agents, family members, and others. In fact, we reach most decisions in our lives through negotiation, often without realizing it.

The number of situations requiring effective negotiation strategies keeps increasing, which makes it essential to learn negotiation skills. Twenty or more years ago, command-and-control structures with a chain of bosses ordering our actions were common. Today, however, organizational structures are less hierarchical, more companies emphasize teamwork, and people expect a say in decisions that affect them rather than being dictated to. This requires negotiation.

Are We Good Negotiators?

Although we negotiate all the time, most of us are not good at developing effective negotiation strategies. According to Roger Fisher in Getting to Yes, people tend to approach negotiation from one of two extremes: overly aggressive or overly friendly (hard or soft).

  • Hardball negotiators view negotiation as a contest they must win. Their strategy is to take the toughest positions and hold out the longest. Their win-at-any-cost approach exhausts energy and resources and ruins their relationship with the other side. 
  • On the other hand, those who take an overly friendly approach seek to avoid conflict at all cost and reach an amicable agreement. They readily make concessions and may end up feeling exploited.

Whichever method people use, there’s a tension between getting along with people and getting what you want.

Types of Negotiators

Beneath the offers and counteroffers that are part of any negotiation, there is a swirl of deep psychological currents that drive our hidden wants, fears, and desires—and those of our counterparts. Your job as a good negotiator is to construct an accurate psychological profile of your counterpart so that you can develop effective negotiation strategies, and be better attuned to what they’re really looking for.

The Three Types of Negotiator

There are three main types of negotiators:

  • Givers: People-pleasers who tend to be highly sociable and agreeable—but also poor time managers. They’ll often agree to things that they can’t actually follow through on, since they’re so eager to make you happy.
  • Calculators: Methodological and diligent people who want to assess all the facts before committing to a decision. As a result, they’re fairly unconcerned with time and less likely to be pressured by deadlines.
  • Aggressives: Highly achievement-oriented people who prioritize getting things done. They hate wasted time and care a lot about meeting—and beating—deadlines. 

(Shortform note: Other analysts of negotiation have identified different negotiation styles. At Harvard’s Program on Negotiation blog, they list four main styles—Individualists, Cooperators, Competitives, and Altruists. Individualists are purely transactional, focused on their own return on the deal, and show little interest in helping their counterparts achieve their goals. Cooperators are those who strive to help all parties to a negotiation accomplish their objectives. Competitives are primarily concerned with relative outcomes, wanting above all to do better than their counterparts—whom they often see as competitors and even enemies. Altruists are a rare breed who are most concerned with ensuring that their counterpart gets what they want, even if doing so comes at their own expense.)

How Do Negotiations Work?

Interactions between people constantly include some sort of negotiation, big or small:” Where are we going to dinner?” “ What movie are we going to watch?” “ How much will you sell your product for?” “ How much will you buy it for?” 

How do you reach a resolution? Stephen Covey in The 7 Habits of Highly Effective People identified six paradigms for these interactions. 

  1. Win/Win
  2. Win/Lose
  3. Lose/Win
  4. Lose/Lose
  5. Win
  6. Win/Win or No Deal

Win/Win: You and I Both End Up Happy

The Win/Win paradigm aims to find a solution that benefits both sides, where everyone is happy with the decision and committed to the plan. People with the Win/Win frame of mind value cooperation over competition and believe that there is plenty — of money, success, happiness, and good fortune — to go around. 

Reaching a Win/Win resolution can be difficult, and sometimes feels impossible. It often requires you to persist in dialogues longer, even when it feels you’ve reached an impasse. You also must listen carefully and genuinely try to understand the other person’s perspective and goals, then explicitly and respectfully express your own point of view. Eventually, both parties can reach a solution that neither could have come up with on her own. 

Win/Lose: I Beat You

The Win/Lose paradigm makes everything a competition, making it seem that one person’s success must come at the expense of someone else’s success. People with the Win/Lose mentality tend to use their authority, power, status, or personality to get what they want. 

Most people have a deeply embedded Win/Lose mentality that’s taught early on and reinforced through different life experiences. 

When a child is compared — explicitly or implicitly — to her sibling or other children, it creates a Win/Lose framework; if you’re being judged and valued based on how you stack up against someone else, then there’s no way both people can win. As children get older, they often look from their parents to their peers for validation, and other children raised with the same scripting are likely to reinforce the Win/Lose paradigm. 

In school, grades are another form of external value. Distribution curves and percentiles inherently measure students’ performance against their classmates’, regardless of individual effort or immeasurable strengths and weaknesses: The position of a child in the 90th percentile depends entirely on the 89 percent of her classmates getting lower grades and 10 percent getting higher grades.

Sports is built on the Win/Lose paradigm: You can’t win a game unless the other team loses. And even our system of law is designed to determine who is guilty and who is innocent.

While there are situations when a Win/Lose approach is appropriate, most of life calls for cooperation, not competition. 

Lose/Win: You Can Have Your Way and I’ll Deal With It

People with the Lose/Win paradigm are more interested in taking the path of least resistance than getting what they want. They generally want to appease and gain acceptance by the other person, and they tend to be intimidated by others’ strengths and shy away from expressing their own wants and feelings. People with this paradigm have a permissive, indulgent approach to negotiations. 

Win/Lose people enjoy dealing with Lose/Win people because they face no resistance in getting what they want. But both the Win/Lose and Lose/Win paradigms stem from personal weaknesses and insecurities that are being expressed either in a power grab or acquiescence. 

People with a Lose/Win mindset lose not only in their interactions, but also in their own well-being: They tend to suppress a lot of feelings, which can fester and bubble up in anger, resentment, cynicism, and psychosomatic illnesses that can especially affect the respiratory, nervous, and circulatory systems. 

Lose/Lose: If I Can’t Win, You Won’t Either

When two people with a Win/Lose paradigm get in a standoff, their attitudes can devolve into a vindictive Lose/Lose mentality, meaning that you want the other person to lose so badly that you are willing to take a hit as well. Lose/Lose is the result of getting so focused on the demise of your enemy that you become blind to everything else, including your own well-being. You may also develop a Lose/Lose paradigm if you’re very dependent and have no sense of personal direction, so you think that if you’re unhappy then others should be, too (think: misery loves company). 

Ugly divorce battles are often examples of Lose/Lose. In one case, a judge orders a man to sell assets and give half the money to his ex-wife. The man sells his car, worth more than $10,000, for a meager $50 and hands $25 to his ex-wife. He does the same with the rest of the assets, selling them for far less than their true value just so that his wife also gets less money.

Win

A Win paradigm is different from Win/Lose or Win/Win because it only focuses on your own outcome—if you have a Win mentality, you want to get what you want whether the other person wins or loses. The Win paradigm is an every-man-for-himself mentality—you’re concerned with taking care of yourself, and you expect others to do the same for themselves. 

Win/Win or No Deal 

Sometimes a Win/Win resolution is impossible, and it’s better for the relationship if you walk away from a negotiation altogether. If it’s clear that the two parties aren’t going to see eye to eye, or they have entirely different goals and expectations, it can save a lot of tension and problems in the relationship to forgo a deal and keep the relationship healthy and options open to collaborate on something else down the road.

This is where the Win/Win or No Deal paradigm comes in: With this framework, you’re determined to find a solution that benefits both parties and, if that’s impossible, you’re at peace with walking away from the deal, knowing that your goals and values don’t align in this situation. 

Having the No Deal option in mind as you go into a negotiation—before either party has set any expectations or created any contracts —prevents you from forcing a deal that will inevitably bring issues later, potentially hurting the relationship. Win/Win or No Deal shows that you value the relationship more than the negotiation.

This paradigm can be especially useful in families. For example, if you can’t decide on a movie that everyone will enjoy for family night, skip the movie and do something else; this approach gives you the freedom to find something that everyone will enjoy, rather than sacrificing some people’s enjoyment for the sake of others.

In business, the Win/Win or No Deal paradigm is most effective at the start of a relationship or enterprise, because No Deal may no longer be an option in an ongoing business relationship. If implemented from the start, this framework can preserve the core relationship, especially in family businesses or businesses started among friends; if they reach a disagreement somewhere along the lines, they can both agree to walk away (or have a buy/sell or other agreement) without hard feelings. 

In certain relationships, No Deal is not an option. For example, if you can’t reach an agreement on something, you may not be willing to walk away from your spouse, and certainly not from your child. In those cases, you can find a compromise negotiation strategy, which is a lower form of Win/Win.

10 Negotiation Strategies for Getting Better Deals

Here are 10 negotiation strategies you can use in business deal-making or in your personal life.

1. Calculated Empathy: Make Them Feel Safe

Calculated empathy is a negotiation strategy that seeks to put the other party at ease. Chris Voss, the author of Never Split the Difference advocates using calculated empathy—understanding someone else’s feelings to get what you want from them. Calculated empathy gives you crucial insight into why someone is behaving the way they are. Ultimately, according to Voss, you need your counterpart to feel emotionally safe with you—you want them to see you more as a partner than an adversary. 

Voss outlines five calculated empathy techniques:

1. Active listening: Talk slowly and calmly to show that you’re concerned about how the other person feels. (Shortform note: Even small active listening gestures—like nodding your head, smiling, looking in your prospect’s eyes, and occasionally adding in short phrases like, “Got it” or “I see”—will make your counterpart feel as if you are listening to them.)

2. Using the right tone: Use a light and encouraging voice as your default tone to put your counterpart at ease. (Shortform note: Research supports the argument that tone can be crucial to achieving your goals, even in non-negotiation situations—and that using the wrong tone can lead to unfortunate consequences—for example, the highly gendered description of Hillary Clinton’s voice as “shrill” may have played a role in the failure of her presidential candidacy in 2016.)

3. Reflecting back: Repeat the last three words that the person has said in your next sentence. By imitating their speech patterns, you’re signaling to the other person not only that you’re hearing them, but also that you’re similar to them. (Shortform note: Reflecting back is closely related to the concept of familiarity. Someone who feels this sense of rapport or familiarity with you is far more likely to comply with your requests, because the social costs of saying “no” to a friend or even an acquaintance are much higher than they are for a stranger.)

4. Labeling: Identify and vocalize someone else’s emotions through phrases like, “It seems like you’re disappointed by what’s being offered.” (Shortform note: In Nonviolent Communication: A Language of Life, author Marshall Rosenberg identifies emotional labeling as an essential component of expressive nonviolent communication—a way of interacting with ourselves and others rooted in compassion and the conscious effort to avoid causing emotional harm.)

5. Accusation audits: List every bad thing your counterpart could say about you at the beginning of the negotiation, through phrases like, “You probably think I’m lowballing you on this offer, that I’m trying to cheat you, and that I don’t have any respect for your intelligence.” This triggers your counterpart’s innate empathy and makes them want to reassure you that you’re not as bad as you’ve portrayed yourself. (Shortform note: Although not specifically addressed by Voss, anticipating accusations could potentially be misused if you were to deliberately mislabel someone else’s perceptions of yourself, thereby tricking them into expressing empathy for you under false pretenses.)

2. Open-Ended Questions

Another effective negotiation strategy is to give your counterpart this feeling of autonomy by asking open-ended “how” or “what” questions.

For example, if you’re confronted with a price that’s too high or an offer that’s unreasonably low, you would respond with a simple, “How am I supposed to do that?” The key strategic benefit of open-ended questions is that they put your counterpart to work helping you. When you ask an open-ended “how” or “what” question, you’re putting the other person in a position where they’re providing solutions to your problems. 

(Shortform note: In Unconscious Branding: How Neuroscience Can Empower (and Inspire) Marketing author Douglas Van Praet writes that an effective negotiation strategy used by marketers is to give customers an active role in how they experience and consume a product. They will be more inclined to consume and purchase it, thinking that this is an intrinsic choice they’re making—but in fact, the positive associations were guided by external marketers.) 

3. Watch the Pronouns

Observe your counterpart’s language cues and speech patterns to see whether or not this person is truly integral to the decision-making process. Specifically, be on the lookout for their use of pronouns. The person really in charge seldom says “I” or “me.” Instead, they deflect to third-party pronouns, saying things like, “We’ll have to see if that’s a realistic path forward for us” or “We’ll have to review internally before we can commit to anything.” 

(Shortform note: A recent study out of the University of San Diego surveying over 90,000 conference calls found that CEOs who used first-person singular pronouns received a better response from investors, who found that the use of these pronouns demonstrated honesty, responsibility, and empathy. Conversely, those CEOS who leaned heavily on pronouns like “us” or “we” were more likely to be found by investors as craven, weak, and trying to evade accountability. This points to a possible difference between how leaders speak and how people interpret them, and may indicate a limitation of this theory, since leaders who are aware of people’s preference for “I” pronouns may use them for that reason, nullifying the technique.)

4. The Problem With “Yes”

“Yes” is often the fool’s gold of negotiation. People often say yes” just to get someone else off their back. A false “yes” does not signal any true agreement or commitment—it’s just a way to end a conversation with someone who has a negotiation strategy that is too aggressive and domineering. 

(Shortform note: Why do we say “yes” when we really want to say “no?” Some psychologists think it has to do with our innate human instinct for reciprocity. We comply with others’ requests because we would want them to reciprocate and comply with our requests if the shoe was on the other foot. Simply put, we have an instinct to follow the Golden Rule and treat others as we would want to be treated. In Influence, Robert Cialdini calls this the Reciprocity Principle and argues that it was the glue that enabled social cohesion in early human communities. If another individual brought you some firewood, for example, bringing them some of your own firewood would help the two of you survive and make the overall clan or tribe stronger. This created networks of obligation among early humans that made it easier for the group as a whole to multiply and survive.)

5. The Power of “No”

To avoid the false “yes” and get a real, firm commitment from your counterpart, you need to adopt a negotiation strategy that may seem counterintuitive—you need to get them to say “No.” Why? Because saying “no” makes your counterpart feel in control. When we say “no” to something, it is a way of setting boundaries and demonstrating our independence.

To get to “no,” you need to ask your counterpart questions that are designed to prompt negative answers. You can do this by 1) deliberately mislabeling their emotions or desires, forcing them to correct you, or 2) asking what they don’t want, giving them a free hand to draw their boundaries and establish their comfort zone. 

Say “No” Without Damaging Your RelationshipIn The Power of a Positive No, William Ury writes about the “positive no”—a way of saying “no” to people that doesn’t damage your relationship with them or hurt their feelings. Rather, the positive no is a self-empowerment tactic, a way of asserting your autonomy and confidently but respectfully refusing to comply with requests that you don’t want to. Rather than giving in by saying “yes” when you don’t want to, rudely and brisky saying “no,” or avoiding confrontation altogether, Ury recommends the positive no as a way to ground your refusal in mutual respect. For example, if a colleague asks you to stay late at work to finish a project, a positive no would be, “I’m sorry, I can’t work late tonight. I recognize that the project is important and I’m fully committed to helping you. But I want to be home to read to my daughter at night, and I won’t be able to do that if I’m here at the office. Instead, why don’t I move some of my meetings around tomorrow and clear time during the workday so that you and I can finish this project?”

6. “That’s Right”: Getting Affirmation From Your Counterpart

After you’ve set your counterpart at ease by giving them the freedom and autonomy to say “No,” you want to begin the process of bringing them around to your way of seeing things. Two words from your counterpart can be a great signal that you’ve achieved this—“That’s right.”

When someone says “that’s right,” it means that they’ve come to embrace what you’ve said. They’re crediting you with seeing things their way and now feel that they’re dealing with someone who understands and respects their point of view. By saying “That’s right,” they’ve stated their position unequivocally—which you can now use to commit them to your preferred course of action. To get your counterpart to say “That’s right,” Voss in Never Split the Difference recommends summarizing—putting their story into your own words to demonstrate that you really get it. 

(Shortform note: Voss writes that “That’s right” gives you a window into someone else’s mind by providing you their self-confirmed view of the situation under discussion—which you can then use to commit them to your preferred course of action. This idea of using someone’s else’s stated commitments to steer them toward desired thought and behavior is closely related to what Robert Cialdini calls the Consistency Principle in his seminal 1984 book Influence. Cialdini argues that humans have an obsession with sticking to their guns—and that consistency is closely related to commitment. Once we’ve committed to a course of action or to a belief, we pressure ourselves to conform to that commitment, going through great mental gymnastics to convince ourselves that our current behavior and beliefs align with our past behavior and beliefs—even when they clearly don’t. This creates a valuable opening for you in a negotiation. If you can get your counterpart to make even a small commitment, you can potentially get them to make larger and larger ones.)

7. Making Deadlines Work 

Your counterpart may try to exploit your anxiety by using deadlines to trick you into suspending your rational judgement and pressuring you to make a deal. However, deadlines are almost always arbitrary and flexible, and they rarely trigger the dreaded consequences people fear they will.  As long as you’re committed to not negotiating against yourself to meet the deadline, this can fit into your negotiation strategy—you can flip the table and force your counterpart to accommodate your deadline. 

(Shortform note: Deadlines are important to negotiations in professional sports. In Moneyball: The Art of Winning an Unfair Game (2004), author Michael Lewis describes how Oakland A’s general manager Billy Beane skillfully exploited Major League Baseball’s trade deadline in 2002 to acquire top players from other teams, while giving up little in return. Every year, the trade deadline created a time crunch in which losing teams with star players would be desperate to trade off their stars in the hopes of recouping at least something of value. This lowered the asking price for stars and gave Beane the opportunity to acquire players that he could never afford at the beginning of the season.)

8. Understand Cognitive Biases 

Voss, in Never Split the Difference, also writes that you also need to take advantage of the powerful cognitive biases that shape how we receive information and determine our best interests. The main cognitive biases Voss addresses are:

  • The framing effect: People respond differently to identical choices based solely on how they’re presented. For example, the framing effect would make health-conscious consumers more likely to purchase milk when it’s marketed as being “99% fat-free” versus “1% fat.”

(Shortform note: A variant on the framing effect is what’s known as the valence-framing effect. Research has shown that people hold their negative opinions—i.e. what they’re against— much more strongly and confidently than their positive opinions—what they’re in favor of. In other words, we seem to dislike what we dislike more than we like what we like. In one social psychology experiment, participants who expressed a preference for fictional political candidate A over candidate B showed a notable division in how they responded to information that their preferred candidate had engaged in corruption. Those who supported candidate A because they were pro-candidate A were more willing to abandon their support in light of this information; those who favored A because they were anti-candidate B were far more likely to dismiss the corruption allegations and even double down on their support for A.)

  • Loss aversion: People fear an equal loss more than they value an equal gain. Knowing this, you can put yourself in a strong negotiating position by framing your preferred solution as one that prevents your counterpart from incurring a loss. For example, if you’re making an offer on a house that needs some work, you might say something like, “The house is great but it definitely needs significant contracting work. Now, I’m willing to waive inspection, but if we take too long, I might have to start looking for other deals.”

(Shortform note: In Influence, Robert Cialdini argues that loss aversion is closely tied to an idea called the Scarcity Principle. The Scarcity Principle makes things with limited availability more appealing to us. Thus, rare goods are expensive and abundant items are cheap. We’re more compelled to buy these goods because we instinctively fear that we’ll lose our opportunity if we don’t act immediately. You can use this principle to your advantage when negotiating by making your counterpart feel your offer has an element of scarcity.)

9. Spotting a Liar

Sometimes, you’re going to come up against a dishonest or unscrupulous counterpart. Liars tend to be more verbose and use more complicated, rambling sentences—hoping to draw your attention away from the web of dishonesty they’re weaving around you. They also use more distant, third-person pronouns like “they,” “them,” and “we.” They tend to avoid saying “I” or “me.” Psychologically, this helps the liar distance herself from the lie.

(Shortform note: Voss writes that liars rely heavily on third-person pronouns, but we’ve also seen that people in positions of power do the same thing to avoid being pinned down to a definite position. Both are examples of deflection, but they are not the same thing. If you’re talking to a CEO, for example, and you notice that she’s using a lot of third-person pronouns, you shouldn’t immediately jump to the conclusion that she’s lying or trying to mislead you. Instead, she may be trying to deflect in order to avoid being too tied down to any particular course of action—that’s her being strategic, not dishonest. In order to distinguish between the two scenarios, keep asking open-ended questions, watching for tonal and nonverbal cues, and listening for key bits of information that your counterpart might reveal.)

10. Negotiating Powerlessly

Adam Grant in Give and Take advocates advice-seeking as another powerful negotiation strategy. In tense negotiations that may appear zero-sum to many people (like negotiations over wages or deals), advice seeking is a powerful tool for exercising influence when we lack authority

This negotiation strategy combines expressing vulnerability, asking questions, and talking tentatively. Naturally, takers tend to avoid advice-seeking because it jeopardizes their appearance of control and harms their ego of knowing all the answers.

Advice seeking has four benefits:

  • Learning: The advice giver is prompted to clarify details to give the best advice. This also puts the adviser in a brainstorming mood, where she’ll draw on more info than just voting yes/no on a pitch. The advisee benefits from this expanded knowledge.
  • Perspective taking: To give good advice, advisers have to look at the situation from the advice seeker’s point of view. This creates empathy for the advice seeker rather than setting up an adversarial structure.
  • Commitment: Because the adviser has put personal effort into the advice seeker’s situation, she feels commitment to follow through, especially if the top ideas are her own.
  • Flattery: When you ask for someone for advice, you grant her prestige by showing you admire her knowledge and wisdom. It makes her feel important.

The adviser is also prone to liking the advice seeker more through resolving cognitive dissonance: “there’s no way I would help her if I didn’t like her, so this must mean I actually like her.”

Advice seeking works for all 3 reciprocity styles in the counterparty. Takers love having their ego massaged. Matchers like racking up credits they can use later. Givers feel helpful.

> Example: Annie was a scientist who was part of a downsized company branch in the Midwest. She could keep her job by transferring to the East Coast, but this would mean giving up her nighttime MBA program. She tried to argue for her position with a few managers but made no progress.
> Ultimately, she reached out to a HR manager and asked for advice: “if you were in my position, what would you do?” The HR manager became her advocate. She took the woman’s perspective, learned new details, and found through the department head that the company had a private jet that Annie could ride on. Now the HR manager was committed to delivering on this solution. If Annie had lobbied more powerfully, she might never have learned about the jet.

Preparing for Your Negotiation

You need to be prepared before you head into a negotiation—regardless of the negotiation strategies you know or the type of negotiator you’re dealing with. That means you need to think about your open-ended questions, how you’re going to reflect back, and your labels before you go in. You may not need a script—but you do need a plan.

There are some specific dodge-and-counterpunch negotiation strategies you can use when you’re facing down a seasoned negotiator.

  • Dodging Tactics: This is what you do to deflect your counterpart’s “punches.” You can use open-ended questions to say “no” without actually using the word or pivot to non-monetary terms. Ask questions like, “Let’s put price aside for now. What else can you offer that would make this a good deal for me?”

(Shortform note: Some negotiation analysts have written that switching the conversation to non-monetary considerations can be an effective technique for negotiators dealing with a larger and more powerful counterpart. They suggest that you can restore some balance to the negotiating environment by appealing to principles like your counterpart’s sense of fairness and reputation or by emphasizing the unique non-monetary advantages you can offer—like agility, knowledge, or personalized service.)

  • Counterattack: You need to be prepared to hit back without getting angry. Voss champions a technique psychologists call “strategic umbrage.” This means being genuinely angry (not faking it), but in control of your emotions. The key to strategic umbrage is getting angry at the offer being made—not the person making it. Saying “I’m afraid there are no circumstances that would make what you just proposed work for me” in a displeased—but measured—tone is a good way to leverage a little bit of anger to your advantage. 

(Shortform note: Many psychologists argue that anger itself is not a “positive” or “negative” emotion. When used appropriately, anger can power professional success and fuel personal creativity. Instead, the key is to harness that anger to serve useful purposes in situations where it can actually make a difference. This is another way to think of strategic umbrage—angry but in control.)

Unknown Unknowns

Another major issue touched on by Voss in Never Split the Difference is the primacy of having information. Indeed, he says that at their most fundamental level, all negotiations are exercises in information-gathering.  But some pieces of information are easier to obtain than others. Voss writes that in every negotiation, there is some hidden piece of information that, if it were known, would completely transform the dynamic of the negotiation and the final outcome. He labels these Black Swans.                                                             

Unknown Unknowns: Black Swans

The most important pieces of information, according to Voss, are the unknown unknowns. These are the bits of information that we lack—and, crucially, don’t know that we lack. These are the Black Swans. 

For example, let’s say you were looking to buy a house from someone. If, in the course of your negotiation with the seller, you discovered that they were facing some sort of external financial pressures (from a lawsuit or a job loss), you would have great leverage over them. This information would tell you that your counterpart was a highly motivated seller who would likely accept a heavily discounted offer from you. This is a Black Swan—something you didn’t know before, didn’t know that you didn’t know, and that completely reshapes the negotiating dynamic.

Voss highlights some important tactics for finding your counterpart’s Black Swan:

  • Get face-time to pick up verbal and body language cues. Voss argues that too much is lost with impersonal media like email. 

(Shortform note: Although Voss couldn’t have anticipated this when he published his book in 2016, the COVID-19 pandemic made it difficult for businesspeople to conduct in-person meetings and negotiations, with such gatherings largely moving to virtual platforms like Skype, Microsoft Teams, and Zoom. Working with other people without the benefit of face-to-face interaction created a number of pitfalls, including the inability to see the totality of a person’s body language (since they usually just appear as “talking heads’); difficulty of making direct eye contact, which inhibits trust-building; and a heightened awareness of racial, ethnic, age, and gender differences between ourselves and our counterparts, since video conferencing enables us to simultaneously see ourselves and the other person—something that doesn’t happen with in-person interactions and that may subconsciously force us to lean back on stereotypes.)

  • Exploit the Similarity Principle. Voss writes that decades of social science research shows that we are more likely to trust people whom we see as similar to ourselves. This concept is known as the Similarity Principle. Voss advises you to look for what you have in common with your counterpart. Build a rapport with them and create a conversational—even confidential—atmosphere. 

(Shortform note: The Similarity Principle can also be used for nefarious purposes, unfortunately. Con artists often practice a form of deception known as affinity fraud, in which they target and exploit members of their own age, racial, religious, or other identity group. Their exploitation is effective because their victims see the con artist as being someone like them, which causes them to feel a level of trust and let their guard down in a way they might not with someone they perceive to be an “outsider.”)

Speaking Your Counterpart’s Language

Voss writes that Black Swans also give us key insight into how our counterpart sees the world, which helps us develop better negotiation strategies. Once you know this, you’ve cracked the code—you can speak to them fluently in a language they understand. This helps you avoid the mistake of thinking your counterpart is “crazy” just because you don’t understand their behavior. 

(Shortform note: Voss’s argument that irrational or inexplicable behavior by a party in a negotiation is often the result of their poor information speaks to a concept known as information asymmetry. In Freakonomics, authors Steven Levitt and Stephen J. Dubner write that information asymmetry occurs when information is unequally distributed between parties. This has major implications in a negotiation, in which experts will rely on knowing more than the other party to extract value from them.)

Conclusion

Becoming a better negotiator requires a firm grasp of the intricacies of deal-making and knowledge of tactics you can use to secure better deals.

Use the negotiation strategies outlined in this article to develop a winning approach to future negotiations in business and in life engagements.

A Guide to Developing Effective Negotiation Strategies

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Joseph Adebisi

Joseph has had a lifelong obsession with reading and acquiring new knowledge. He reads and writes for a living, and reads some more when he is supposedly taking a break from work. The first literature he read as a kid were Shakespeare's plays. Not surprisingly, he barely understood any of it. His favorite fiction authors are Tom Clancy, Ted Bell, and John Grisham. His preferred non-fiction genres are history, philosophy, business & economics, and instructional guides.

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