What goes through your mind when you are at the negotiating table at the board meeting? Or when making that crucial deal that can make or break your career?
Emotions can be powerful, not only in derailing a negotiation, but also in helping both sides come to a better agreement, says Andy Wasynczuk, Senior Lecturer of Business Administration at Harvard Business School.
And who better to talk about negotiations and emotions than him; Wasynczuk served as chief operating officer for the New England Patriots for 15 years, where he was in charge of negotiating high-stakes player contracts involving millions of dollars!
His new teaching note, Emotions in Negotiations: An Introduction, traces the history, theory, and research on how emotions can affect transactions between parties.
A simple view of negotiation presents a cold transaction between what one person has and what the other person is willing to pay for it. If the price is right, the deal gets done. As anyone who has bought a car or sold a house knows, however, negotiations are rarely dispassionate, says Wasynczuk.
Business schools began teaching negotiation in the 1980s, when it was presented as a straightforward economic analysis. Assuming the other side was acting rationally in trying to maximise its position, the goal was to figure out how to respond in various scenarios to maximise one's own value. Research beginning in the '90s, however, found that negotiators rarely acted rationally, instead taking into account what they felt they deserved from the other side, and what they could do to save face when they didn't get it.
"Our MBAs generally feel they are ill-equipped for negotiation, whether it’s dealing with a landlord or buying a car—let alone the business situations they will be getting into," says Wasynczuk. So he keeps situations as universal as possible.
"We spend a lot of time talking both about what emotions we elicit in others based on our behavior, and what we need to do to manage our own emotions. There are lessons on both sides," says Wasynczuk. "I can't imagine a good negotiator who doesn't have either an explicit understanding about emotions, or is highly intuitive about the process."
Wasynczuk (HBS MBA '83) should know. He intuitively understood that emotions were an important factor in dealing with people as passionate as athletes. "The last thing I wanted to do was create an excuse for a player or agent to get angry. That would create a power struggle, which was a recipe for disaster."
Wasynczuk learned to enter into contract talks with a smile—and to rationalise away his own anger when a deal couldn't be struck. "If an agent was being greedy with me, they were probably being greedy with other teams as well," he told himself. "If the other team ended up paying that money they were making a mistake."
There is often a very strong emotional response to the lack of fairness, irrespective of the right rational decision, observes Wasynczuk. "The more we understand how people behave based on emotions, the more thoughtful and appropriate we can be in how we respond to them."
Anger, for example, is one of the most destructive emotions during negotiation—often causing deal making to break down as each side sacrifices its needs in order to save face. "It tends to start rising on both sides, and inevitably there is a point where it erupts," says Wasynczuk.
That said, anger isn't always a bad variable in negotiation. Deployed the right way, it can demonstrate passion and conviction that can help sway the other side to accept less. The trick is to direct the anger at the situation or problem—not the person on the other side of the table. "If one side puts a ridiculous offer on the table, it's all right to get angry and say, 'I don't see how that would ever work.'"
Research has also found that entering negotiations with a positive attitude tends to lead to better outcomes—when both sides are agreeable and conciliatory, it builds a level of trust that can lead to information sharing that allows both sides to get a better deal. Happiness can be dangerous as well, since happy negotiators tend to accept less than they might otherwise be able to get.
"You don't want your happiness to hijack other emotions," says Wasynczuk. "What we teach is not to settle for something that is just OK, but to keep searching for something where both sides are going to benefit."
No matter what emotions are present at the bargaining table, a smart negotiator first becomes aware of what they are—and then works to emphasise the positive emotions that can help the deal and downplay the negative emotions that might scuttle it. Such "emotional intelligence" may take the form of changing body language or tone of voice to influence the way the other person responds—or taking a break during a difficult point in negotiations in order to turn down the heat when anger starts flaring.
"To strip away emotions wouldn't be desirable," says Wasynczuk —even if it could be done. "Emotions are an expression of how people are processing information, and can give a strong signal of how the mind is internalising the discussion."
Managed well, they can turn a frustrating negotiation into one that is pleasant, productive, and even enjoyable.
Source : https://hbswk.hbs.edu/item/the-role-of-emotions-in-effective-negotiations
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