Negotiating from the Corner

by Moshe Cohen

It is very challenging to negotiate when the other party is more powerful

than you are. While differences in power do exist in negotiations, power is

complex, with some factors acting for you and others against you. You need

to be able to understand and exploit these dynamics. Even when you don’t

have much power, there are tools you can use to influence matters in your

favor. Your success in a negotiation is therefore largely based on your

ability to identify and use every point of power, skill, and influence to your

advantage, so you can negotiate as effectively as possible under any set

of circumstances.

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Negotiating from the Corner

Everyone loves to negotiate from a position of power.It is satisfying, easy, and fun to play the game whenyou hold all of the aces in your hand. It is much morechallenging to try and negotiate effectively when youhave a disadvantage in power, when the other partyis bigger, better funded, and more experienced or hasaccess to information that you cannot obtain. In suchcircumstances, it is easy to be intimidated by your rela-tive lack of power and give up on trying to meet yourobjectives in the negotiation, effectively surrenderingthe little power you still have to the other side.

The behavior of individuals in negotiating changesdramatically based on the power people have relativeto the other party and even more by the perceptionthey bring of their relative power. If people feel liketheir position is strong, they negotiate with greaterconfidence, and their perception of greater powerbecomes self-fulfilling. Similarly, if they feel like theother side has all of the power, they often lose confi-dence, make unnecessary concessions to the otherparty, try to rush the negotiation to its conclusionout of discomfort, and forgo any notions of strategy.Sometimes they get so intimidated that they forgetto negotiate altogether. As a result, they turn theirperceived powerlessness into actual powerlessness,creating the outcome that they feared.

While differences in power really do exist in negotia-tions, they tend to be amplified by the parties’ percep-tions of their own power, and very often people getit wrong. In any given situation, it is easy to over-estimate or underestimate your relative power and toact accordingly. Power comes from many sources, andit is easy to overlook aspects that, while perhaps notobvious, might give you an advantage. Moreover, it isnatural to paint yourself into a corner by exaggeratingthe impact of all of your opponent’s advantages andobsessing about your own vulnerabilities.

Many people tend to take a pessimistic approach whenassessing their power in a negotiating situation relativeto that of the other party. From where you sit, the otherparty’s position might seem pretty invincible. That

THIS MONTH’S AUTHOR

2 The Effect of Power Perceptions

4 Understanding Your Relative Power in Negotiations

9 Negotiation and Influence

11 Conclusion

11 Endnote

11 About the Author

Moshe Cohen

www.cutter.comEXECUTIVE REPORT 2

other party may be the customer, who can go else-where. Or it may be a sole-source vendor who isthe only company in the world that produces thecomponent that you need. The other party may havethe big-firm lawyer or the big bank account show upwith a team of negotiators or have 20 more years inthe industry than you do. Focusing on the other side’sstrengths in this manner can really psych you out ofthe game before you even begin negotiating.

On the other hand, no one is more aware of your ownvulnerabilities and frailties in the negotiation than youare. You know how little time you have before yourmoney runs out. You know how little real informationyou have in your hand going into the negotiation andhow difficult it was to find credible data to back yourposition. Only you know how badly you negotiated lastweek in a similar situation and how your boss beratedyou after you got back to the office. You know everyflaw in your case and can easily imagine additionalflaws that aren’t really there, to the point where yournegotiating position seems to be so weak as to makeyou question whether it is worth trying to negotiate atall or whether you should just cut your losses and agreeto the other side’s demands before they become evenmore extreme.

By exaggerating the other side’s strengths and yourown weaknesses, you make it nearly impossible foryourself to negotiate effectively in the situation. Thesimple truth, however, is that you do have some powerin the negotiation, as evidenced by the very fact that theother party is talking to you. If you truly had no powerat all and the other party controlled everything, thatindividual representing the other side wouldn’t bothertalking to you. If you think that the other side’s powercomes from its ability to walk away from the negotia-tion, but the party hasn’t walked away, there must besomething that you have and the other party wants, andin that party’s perception, the best way to try and getwhat it wants is by talking with you rather than goingelsewhere.

Remember that just as you are ultrasensitive to yourown vulnerabilities, the other person is also probablymisperceiving his or her own vulnerabilities. So much ofyour success as a negotiator depends on your confidence

in the negotiation, and your confidence is largely influ-enced by your perceptions and the way in which youframe the situation in your own mind. If you think ofyourself as powerful, you are likely to act more confi-dently and be more successful. A mother cat arches herback, fluffs her fur, bares her teeth, hisses, and advancesupon the dog that approaches her kittens. The actualrelative size difference between the cat and the dog isoften less relevant to the situation than the perceptionthat the cat creates through her demonstration of power.“I’m dangerous, and you’d better back off if you knowwhat’s good for you,” is the message she conveys.

Your success in a negotiation is therefore largely basedon your ability to shed your pessimistic assumptionsabout relative strength and to use every point of power,skill, and influence you can find to your advantage.You need to uncover sources of power you may haveoverlooked in order to build up your position relativeto that of the other party and to use these sources ofpower as effectively as possible. You also want todevelop as realistic a perception as you can of the realstrengths and weaknesses brought into the negotiationby the other party in order to diminish the impact ofthat party’s advantages and exploit its vulnerabilities.This Executive Report looks at sources of power in nego-tiations and explores ways in which you can use yourpower more skillfully to influence the outcome ofyour negotiations in your favor, particularly in thoseinstances where you are negotiating from the corner,with seemingly far less perceived power than the otherparty. It begins by looking at how power perceptionscan affect the outcome. The report then details the fac-tors that affect your actual negotiating power position.It concludes by presenting six principles you can useto exert more influence on the matter and meet yourinterests more effectively.

THE EFFECT OF POWER PERCEPTIONS

People’s behavior when they negotiate is largely shapedby the perceptions they have of their own power rela-tive to that of the other side. Sometimes people perceivethemselves as more powerful than they really are andtake an arrogant approach, in their mind dismissing theother party as powerless to resist their demands. Thistype of approach can be disastrous, since the other sideoften has hidden sources of power or potential coursesof action that then take the powerful party by surprise.

Consider the following fictional example. Tom is anaccount executive at a large technology company. Thecompany’s product is unique in its market, and thecompany has generally been able to demand any price

Only you know how badly you negotiated last

week in a similar situation and how your boss

berated you after you got back to the office.

3©2010 Cutter Consortium Vol. 13, No. 1 BUSINESS-IT STRATEGIES

it wants from its customers. After several years of this,Tom has become accustomed to negotiating from aposition of power and generally gives very little innegotiations with his customers. His attitude is that“if you want our product, and we know you need ourproduct, you will pay us whatever we ask.” For themost part, this strategy has worked pretty well. Thecompany’s larger customers grumble at the high priceof the product and complain to Tom that there is nogive on the price, but ultimately they resign themselvesto the situation and pay it.

Recently, Tom began to negotiate an order for the saleof multiple systems to a large existing customer of thecompany. Since the product was installed in severalof the customer’s existing locations already, Tom per-ceived his position to be even stronger than normal,since it was unlikely that the customer would want touproot the existing installed units and lose all of thatinvestment. He therefore priced the order at the highestpremium rate that he could and charged the customerfor every extra item and service fee possible.

Unfortunately for Tom, the landscape had changed andthings did not go as planned. For one, while there areno direct competitors that do what the company’s prod-uct does, there are other solutions in the market thataddress similar needs. Moreover, by pricing the orderas high as he did, Tom offended the customer and dam-aged the relationship. As a result, the customer beganto rethink the entire order. Given their experience withthe product, the customer’s engineers were ordered toinvestigate if they could develop internal solutions toachieve similar results. The customer also investedsome seed funding into a startup in order to begindeveloping a competing product. Finally, the customerdecided to do nothing for the moment and delay theorder for a minimum of six months while it reviewsits options.

The first clue that Tom got of any of this was when theCIO of the customer’s company stopped returning hiscalls. Eventually, after several weeks of no contact, Tomgot an e-mail from the CIO’s administrative assistanttelling him that everything was on hold for the momentand that they would get back to him when thingschanged. Many months later, after the economy hadexperienced a downturn and Tom’s company’s sales hadslumped for the first time ever, Tom was approached bythe customer with an offer to buy the product for halfthe price that he had quoted earlier. At this point, thecustomer indicated that it was pursuing other low-costsolutions and that if the company was unable to deliverthe order at this price, the customer would go elsewhere.In a panic, Tom got approval to negotiate his price and

eventually settled on a price that was 40% below hisoriginal quote to the customer while throwing intothe order many free services and upgrades to sweetenthe deal.

On the other side of the spectrum, it is actually morecommon for people to perceive themselves as havingless power than they really do, resulting in people giv-ing in more than they should in their negotiations. Inanother fictional example, Jane was the head of IS at alarge company. With the company’s systems gettingolder, Jane wanted the company to invest in new infra-structure, but she was new to the position and unsureof getting approval. After months of laying the ground-work, she approached the CFO, who she knew was apowerful figure in the company and had the ear of theCEO, about her idea for a $2 million upgrade and foundthe going to be slow. He said that the idea sounded likeit had some merit, but due to the economy and politicalconsiderations, he would have to get back to her afterchecking with the CEO and the board.

Weeks went by with no response, and Jane started get-ting nervous that her request had been too ambitious.Afraid of ending up with nothing, and rattled by thelack of response, Jane approached the CFO again, thistime with a much more limited proposal for slightly lessthan $1 million of improvements. When the CFO cameback to her with some questions, she panicked and tooksome more items out of the proposal, bringing thecost down to $750,000. Some time later, after gettingapproval for the upgrade, Jane ran into the CEO of thecompany, who expressed surprise at the limited scopeof the upgrade and suggested that Jane should havebeen more strategic in developing the infrastructurethe company would need to prosper in the future.

When your perceptions of your relative power areunrealistic in either direction, your behavior can there-fore undermine your success as a negotiator. On theother hand, power differences do exist, and behavingconsistently with those power imbalances can enhanceyour effectiveness. Having power increases your confi-dence, so knowing your power level and using it wiselycan produce very favorable results for you as a negotia-tor. Similarly, knowing when you are in a weak powerposition as a negotiator can help you discover sourcesof power that you have thus far neglected and can helpyou minimize your losses under unfavorable circum-stances. Having less power might cause you to seek outallies, delay action in the negotiation, or even disengagealtogether. The important thing is to align your percep-tion of the relative power dynamics in the negotiationwith the reality of the situation and to act accordingly.

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UNDERSTANDING YOUR RELATIVE POWER IN NEGOTIATIONS

Numerous factors determine your actual power in anegotiation relative to that of the other side. No matterwhat that balance, however, you need to understandthat it is extremely unusual for you to have either all ofthe power or none of the power in a given circumstance.Instead, power is a relative thing, driven by a complexset of dynamics. In any given situation, some factors actin your favor, while others act in the other party’s favor;the key is to understand what gives you power, whatgives the other side power, and where each of you isvulnerable.

It is dangerous to go into a negotiation without a solidunderstanding of the power dynamics and withoutconsidering the many factors that influence this power.Before getting into the details, let’s briefly review thetypes of factors you need to understand.

First, your power in a negotiation is determined byyour alternatives and the ease with which you can walkaway from the table. Your power is also influenced bythe resources that you have at your disposal and theresources you can bring to bear on the negotiations, aswell as your position in the organization relative to thatof the other party. People in positions of power havethe ability to make decisions or take certain actionsthat other less powerful people don’t. At the same time,people who have very little power and the perception ofhaving nothing to lose have the ability to take extremeactions without fear of losing anything. Time is also animportant factor in negotiations, and your ability to usetime to your advantage is an important determinant ofyour power.

In addition to the above factors, which are often outsideof your control, there are also power factors that youcan influence in your favor. Your preparation for thenegotiation, including your level of knowledge aboutthe subject matter, the information you have at yourdisposal, and the strategy you have developed priorto the negotiation can make a huge difference in youractual power as you negotiate. In addition, peoplealways negotiate in the context of relationships, andboth the relationship that you form at the negotiatingtable with your counterpart as well as your relation-ships away from the table with allies, advisors, bene-factors, and others can influence your power in anegotiation.

Your power in a negotiation is also affected by yourpersonality, your confidence, and your ability to man-age your emotions as you negotiate. The degree of con-viction you have in your ideas and positions, as well

as your sense of entitlement to the items for whichyou are negotiating, is also important in determiningyour power. Finally, your skills as a negotiator and thedegree to which you have rehearsed and practiced theseskills before the negotiation can have a big impact onyour power relative to the other party as you negotiate.Let’s look at these factors in more detail.

Walking Away to Your Alternatives

Nothing gives you more power in a negotiation than theability and willingness to walk away from the table toyour alternatives, and nothing takes away your powermore than the conviction that you must stay at the tableand come to an agreement at all costs. Of course, thereare times when it’s easier to walk away and times whenthe cost of walking away is very high, depending onthe alternatives that are available to you away from thetable. Unfortunately, many negotiators never take thetime to think about their alternatives before they startnegotiating and never consider what might happen ifthey can’t come to an agreement. By going into theirnegotiations this way, they predispose themselves tohaving a mindset that strives for agreement at any costand doesn’t consider the choice of walking away.

The truth is that in every negotiation, you do have thechoice of walking away from the table without an agree-ment, and you generally have more than one alternativeyou can walk away to, but that doesn’t mean that thesealternatives are good. Sometimes all of your alternativesare bad, and the costs of walking away are terrible, butyou still need to know what these alternatives are soyou can make rational decisions during the negotiationregarding when to stay and when to go. In addition tothinking about your alternatives, you need to do solidresearch so you discover which of those alternatives arerealistic as well as the costs and benefits of those options.Without this information, you will walk away fromagreements you should have consented to and cometo agreements when you should have walked away.

Once you have a realistic sense of your alternatives,based on good data gathering and solid research, youneed to consider the tradeoffs between the advantagesand disadvantages of the various alternatives so youcan decide which one to walk toward if the negotiationdoes not reach an agreement. You also need to shore upthese alternatives by creating better options for yourselfand by improving upon the weaknesses in your existingalternatives. At any point in the negotiation, you shouldaccept an offer from the other party only if it beats yourbest alternative, so the more you manage to improveyour alternatives before and during the negotiation, the

5©2010 Cutter Consortium Vol. 13, No. 1 BUSINESS-IT STRATEGIES

more power you have to reject bad offers from the otherside and demand more in return for your concessions.

Of course, this is easier said than done, especially if youare in a weaker position than the other party. Imaginethat your company is providing technical consultingservice to a huge client that is many times your size,and that this client accounts for 30% of your business.Although you’ve been working with this client for morethan five years and the technical folks you work withare very happy with your performance, your client’snew director of procurement has decreed that all newcontracts will have their day rate cut by a third. Whenyou try to resist this and negotiate for what you believeto be a fair market rate, you are told that the client com-pany understands your value and values the quality ofservice you provide, but that it has lined up a compet-ing vendor that is willing to do the work at one-thirdyour rate and that unless you agree to this rate, youwill be replaced.

The question is, how do you respond under this circum-stance? If you agree to this humiliating rate, you willsuffer a loss of one-third of your income from this clientand will set a terrible precedent for the future. On theother hand, not agreeing to these terms means that youwill potentially walk away from 30% of your business.You do have the choice of calling the client’s bluff, andthere is a chance that it will in the end agree to a com-promise of some sort, but based on what you’ve seenfrom the client’s dealings with other vendors and con-sultants, you’re pretty sure that if you don’t agree tothe new rate, you will lose this client. So what are youralternatives in this circumstance? Given that it’s been abad year for the economy and that several of your otherclients have cut back on work or put off work to nextyear, you really could use the money, even at the lowerrate. If you walk away, you could just downsize and tryto build your business on the basis of the other 70% ofclients that you still have. You could try to outsourcesome of the work to a lower-priced outfit to lower yourown costs so you can keep your margins despite thelower rate. You could say yes to the rate and try to padthe hours on your projects to gain back some of yourincome with the client.

The bottom line is that no matter how much researchyou do, your alternatives in this situation are simplydistasteful. In the short term, staying with the clienteven at the lower rate while you figure out what todo for the longer term is a perfectly rational choice.Similarly, taking a principled stand and walkingaway is also a rational choice, albeit potentially acostly one. The important thing is that during the

negotiation, you weigh your choices carefully, includ-ing choices that involve walking away, and reallybecome OK with going to those choices if pushedhard enough. Part of managing your alternatives isdeveloping an attitude that makes it OK to walkaway and suffer the consequences rather than agree toa bad deal. Just having this attitude gives you morepower in the negotiation, since now your compliancewith the demands of the more powerful party is nolonger a given in their eyes. Part of your success as anegotiator, particularly when you are the weaker party,is determined by your confidence and courage, andthis courage is demonstrated by your willingness togo down with the ship if you must. If in the end, youdecide not to sacrifice your interests for the cause, atleast you have given yourself the best chance you couldunder the circumstances and may have gotten a bitmore in the negotiation as a result.

Using Your Position and Resources

It’s always nice to be in a position of authority whenyou’re negotiating and to have more resources than theother party. In part this is true because your positionand resources affect your alternatives. If you are negoti-ating with your boss, then in this situation, if thingsdon’t work out, your boss can fire you, but you can’tfire your boss. As a result, the position of authority hasgiven your boss better alternatives in the negotiation,and alternatives translate into power. If your companyis involved in an intellectual property dispute with acompetitor, and you have more money in the bank, thealternative of litigating might be more palatable to youthan it is to the competitor, and therefore you havemore power to negotiate for favorable terms at thebargaining table.

So how can you negotiate effectively in situations wherethe other party is in a higher position of authority thanyou or where you are vastly outresourced? For one,accept the power imbalance due to these factors. Theworld is what it is, and no amount of fretting or whin-ing will change the fact that the other party has moremoney than you or sits higher than you in the corporatehierarchy. Once you can accept the world as it is, youcan then work with the resources that you do have andthe other sources of power you can muster to try andcounter your disadvantage in position or resources.

Second, don’t take it at face value that the other partyis necessarily as powerful as it seems. Your boss mightbe your boss but might be so conflict-averse as to bewilling to come very far toward meeting your needs inorder to keep you happy. The other party might have

www.cutter.comEXECUTIVE REPORT 6

more resources but may not be as skilled a negotiator oras effective as you are at using those resources. Test thelimits of the other side’s power and gauge the extentto which it is inclined to use its power as it negotiatesrather than make assumptions about the power that theother side has. Yes, you might be applying to do workfor a huge company that is 100 times your size, but youmight have a unique skill that this company desperatelyneeds and has had great difficulty finding.

Just as you are more aware of your weaknesses and vul-nerabilities in a situation, remember that the other partyis also likely to be more affected by its own weaknessesand vulnerabilities, and just because the other side ismore powerful doesn’t mean that it will act more pow-erfully. If you act powerless in a negotiation, you willbe committing a self-fulfilling prophesy in that you willnot even try to negotiate effectively for your interests.Treat every negotiator as just another person and let theindividual’s behavior inform you of his or her willing-ness and ability to throw around power before you givein to any assumed power that you think he or she has.

Finally, sometimes when you are truly powerless, youhave nothing to lose, and that makes you dangerous.People for whom coming to an agreement is as disas-trous as not coming to an agreement and who see all oftheir choices as equally awful are very unpredictable anddangerous. As such, the other party might fear the conse-quences of negotiating too hard with you and might bemore prone to making some sort of arrangement thatkeeps you from throwing caution to the wind and goingoff the deep end. On your end, having nothing to losecan actually be calming to the nerves, since there isnowhere to go but up. The important thing is to under-stand your positional or resource-related power relativeto that of the other side based on real information ratherthan assumptions and to be as cool as you can under fire,given that the circumstances are simply what they areand must be accepted as part of the context.

Using Time to Your Advantage

Time plays a huge role in negotiations and can increaseor decrease your power dramatically depending onyour circumstances, your strategy, and your skill. One

of the most significant effects of time is that your alter-natives change over time, and usually both party’salternatives do not change in the same direction. Yoursalespeople see the ticking of the clock toward the endof the quarter as making their alternatives significantlyless attractive, since they need to close sales by the endof the quarter in order to get their commissions. At thesame time, your clients may not much care whetherdeals close one week or the next, so they might see theiralternatives as staying pretty much the same as the endof the quarter approaches. This disparity changes thepower dynamics between your clients and salespeople,giving your clients disproportionate power over yoursalespeople as they negotiate closer and closer to theend of the quarter.

Sometimes, time, like positional power or resources,is simply a matter of circumstance. Your salespeopledidn’t create the quarterly sales cycle but simply haveto live and work within this construct. At other times,you might have more control over the timing of thenegotiation and may strategically advance or delay thetiming to your advantage. For example, if you need tonegotiate with a client over a particular part of a project,and you think that you will have some critical informa-tion in your hands next week that you don’t yet havetoday, avoiding the conversation with your client anddelaying the negotiation to next week is a great way touse time to your advantage.

Time is often used overtly in negotiations as a tacticspecifically to put pressure on the other party. Some-times the other party, feeling more powerful than you,might give you a time-limited offer with the hope thatyou will agree to substandard terms under the threat ofthe offer going away. This has sometimes been calledthe “exploding offer” since the offer is stated in such away as to explode if the time runs out. Faced with anexploding offer, you should realize that while there isindeed a chance that the offer will expire, it is morelikely to endure beyond the stated deadline. Just as thisdeal was deemed favorable by the other party prior tothe expiration of the deadline, chances are it will still bedeemed favorable after the deadline passes. The recom-mended strategy in the face of an exploding offer is toeither let it explode or try to defuse it by distracting theother party with other issues in the negotiation.

When time is used against you in the other direction,when the other party has all the time in the world andyou have a deadline that makes your alternatives worse,it is much harder to negotiate effectively, since here thetime issues are real as opposed to contrived by the otherparty. Your best bet is to try and alter your alternatives

Finally, sometimes when you are truly powerless,

you have nothing to lose, and that makes

you dangerous.

7©2010 Cutter Consortium Vol. 13, No. 1 BUSINESS-IT STRATEGIES

so slipping your deadline is not fatal for you. Barringthat, you need to work as hard as you can to find outthe other party’s interests and to see if you can useany of these interests to leverage an agreement morequickly. Just as you need certain things out of thenegotiation, so does the other side, and the betteryou understand what the other party needs and whenit needs it, the more power you gain back over theunfortunate deadline.

Finally, your response to the time issue again comesdown to attitude. Sure, time is not on your side and youare facing a loud ticking clock, but you don’t have to actas if you are desperate. Negotiating with the other partyas if you have more time than you really do and as ifthe impact of the deadline is not as catastrophic as it iswill give you a greater appearance of confidence andthe ability to negotiate more effectively with the otherparty despite the true circumstances of the situation.

Preparation, Information, Knowledge, and Strategy

In addition to alternatives, authority, resources, and time,which are generally outside your ability to control, thereare also things you can do directly to enhance yourpower in a negotiation. Your degree of preparation forthe negotiation, your knowledge of the subject matter,the information you have collected, and the strategy youhave developed prior to the negotiation can make a hugedifference in your actual power as you negotiate. Fartoo many people come to their negotiations completelyunprepared, thinking that seat-of-the-pants maneuveringwill win them the day. Nothing could be further from thetruth. Many negotiations are lost before they are begunbecause people do not prepare, do not prepare enough,or do not prepare the right information.

You always want to have good information at handprior to engaging the other party, and gathering thisinformation ahead of time is one of your most impor-tant responsibilities as the negotiation approaches.This is particularly true when you are negotiating froma disadvantage in power, since your preparation mayreveal hidden sources of power for your side or vulner-abilities in the power position of the other side.

You want to start your negotiation with a thoroughunderstanding of the context of the negotiation,including a familiarity with the players, their rolesand relationships, and the rules of engagement. Everynegotiation occurs within a negotiating culture, and it’simportant for you to understand the associated normsand rules. For example, there are some situations inwhich it might be acceptable to make a deal right atthe table, while in others the norm might be to come

to tentative agreements at the table but complete themaway from the table only once each side has been ableto consult with its management.

It is critical for you to understand who the real decisionmakers are on the other side of the table as well as toidentify those individuals who are likely to influencethe decision makers as they negotiate. Of the influ-encers, you particularly want to identify those peoplewho are in position to either block or promote anyagreement that you and the other party come to at thenegotiating table. In addition, it is important that youunderstand who the downstream parties are who willbe affected by the results of the negotiation. While theseparties may have little direct leverage or influence onthe course of the negotiation, the decision makers some-times have these people in mind during the negotiation.The better you understand their concerns, the morelikely you are to predict the actions and decisions ofthe decision makers at the table with you.

Once you understand the context of the negotiation,you simply need to gather as much objective data asyou can that pertains to the issues in the negotiation.Objective information is a pretty powerful and persua-sive force when you are negotiating. It is much easierto argue with you and your ideas or opinions than it isto dispute facts that support your positions and comefrom reputable and credible sources. In negotiations,information is king, and having more and better infor-mation than the other party can dramatically increaseyour power. It is also important that you organize theinformation you gather in such a way so as to make itaccessible to you during the negotiation. Having spe-cialized knowledge or power can also give you leverageas you negotiate. If your customer is trying to bullyyou into accepting an unfavorable contract, but you arethe only person with a real understanding of how theclient’s system is put together, your unique knowledgewill restore some of your power in the negotiation.

All of the research, preparation, and information yougather culminates in a strategy for the negotiation.Before you negotiate, write some notes for how youplan to begin, conduct, and conclude the negotiation.Pretend that someone else is going to negotiate thison your behalf and that you are writing the script forthat person to follow so he or she negotiates effectivelyfor your interests. Write a step-by-step plan, based onsome likely scenarios, and then ask yourself a wholelot of what-if questions to build in contingencies andprevent surprises. Finally, practice your strategy withfriends, trusted colleagues, or even your pet in orderto get used to saying the things you want to say whenyou’re actually negotiating.

www.cutter.comEXECUTIVE REPORT 8

When you are in the lesser power position and negotiat-ing from the corner, it is easy to focus on the fact that theother side has more power, and therefore it becomes eas-ier for you to act powerless. But, since most people don’tprepare well or prepare enough for their negotiations,you can regain some advantage over the other party bypreparing more and better than the other side. The otherparty may be in a position of authority, it may haveresources that you do not have, and your alternatives toagreement might be awful. However, none of these fac-tors means that the other side is well prepared for thenegotiation or realizes its own strength. The quality ofyour preparation depends mostly on your own effortsand the rigor with which you gather and organize infor-mation, and you might be able to turn the power balancearound through superior preparation.

The Importance of Relationships

Negotiations always involve people, and your abilityto connect with the other side and form relationshipsat the negotiating table can influence your power in anegotiation. At the beginning of the negotiation, tryto avoid getting into the substance of the issues rightaway; instead, try to engage the other party in conversa-tion. The more you can form a personal connection withthe other party, and the more you can build up trustand liking, the harder it will be for the individual to behard-nosed with you during the negotiation. Moreover,there will likely be tough times during the negotiationwhen things will seem stuck, and the relationship youhave formed with the other party will be the only thingthat keeps everyone from declaring impasse and walk-ing away from the table.

In addition to your relationship with the other party, itis important to develop strong relationships away fromthe table with allies, advisors, benefactors, and others.There will be times when you need help in the negotia-tion, either in the form of advice, resources, clout, orsomething else, and having the relationships in place inadvance of the negotiation will augment your power. Ifin a given negotiation, having certain knowledge wouldenhance your power, but you don’t have this knowl-edge yourself, knowing someone who has that knowl-edge can be awfully handy. If the other party is in aposition of authority over you, but you have an ally inthe organization who is at the same or higher positionof authority than your counterpart, the balance ofpower might be restored.

Relationships always matter when you’re negotiating,but their importance is much greater when youstart off in the weaker power position. Since in thiscircumstance, you may lack many other sources of

power that the other party has, your ability to developrelationships and form alliances may be one of the fewareas in which you can take control and regain someadvantage. Like in your preparation for the negotiation,the efforts you put in to build relationships are largelyunder your control — and therefore your responsibility— and can tip some of the power back in your direction.

Your Personality, Confidence, and Emotional Management

Some people have an easy time engaging in negotia-tions and seem to even enjoy the process, while othersavoid it and suffer through it if they must, hoping itends as quickly as possible. Some people have no prob-lem with conflict and seem to even seek it out, whileothers have great difficulty with disagreement and willtry to smooth over conflicts and make them go away.Your personality can therefore make it harder or easierfor you to negotiate effectively and plays a powerfulrole in determining your confidence as well as yourpower in a negotiation.

Unfortunately, while your personality makes a big dif-ference in how you negotiate and your power relativeto the other party, it is also one of the more difficultthings to change. Your personality takes years todevelop, and by the time you reach adulthood, manyaspects of it are deeply ingrained. If you reach adult-hood as a shy, conflict-averse person, it is very difficultto simply decide no longer to be shy or conflict-averse.Sure, you can make efforts to compensate for your per-sonality traits, and these efforts will work a little bit —some of the time — but just as your personality took along time to be created, and had many influences on it,it also takes a long time and many influences to changeyour personality. Particularly under the stress of negoti-ations, people tend to revert to their basic personality,and it is difficult to adhere to new, desired traits.

The same can be said for your self-confidence as anegotiator, though self-confidence is more easily influ-enced by your day-to-day experiences and can be builtup over time in specific areas. While your basic self-assurance as a person is deeply rooted in your personal-ity, you might become a more confident negotiator bynegotiating more frequently and developing compe-tence in your negotiation skills. Your ability to act moreconfidently and project self-confidence in your dealingswith the other party can greatly enhance your power ina negotiation, so creating experiences for yourself inwhich you can build greater confidence as a negotiatoris an important thing to do. At the same time, similarto your other personality traits, it is hard to maintainthis new confident feeling while under the pressure of

9©2010 Cutter Consortium Vol. 13, No. 1 BUSINESS-IT STRATEGIES

negotiating, and you might revert back to old habitsand patterns of behavior.

While your personality is therefore going to be prettymuch what it was coming into the negotiation, with allof its inherent strengths and weaknesses, it doesn’t haveto become the driving factor in how well you negotiateor how powerful you are compared to the other party.The more aware you are of how you’re likely to behavein certain situations or react to things that the otherparty does, the more likely you are to respond effec-tively in these situations rather than simply be a slaveto your emotional reactions. Your goal is to be deliber-ate and strategic rather than reactive.

In general, your emotional competence skills can go along way toward restoring your power in a negotiation.Emotional competence starts with your ability to recog-nize what is going on with you emotionally as it is hap-pening. Emotionally competent people can control theirimpulse to react to what they are feeling and can there-fore be more deliberate than reactive. The other side ofemotional competence involves your ability to sense theemotional responses of the other party and to use yourskills to influence the other party’s emotional behaviors.

Your emotional competence comes partly from yourpersonality, developed through years of personal expe-riences, and partly from the skills you develop deliber-ately. Chief among these skills is your ability to listencarefully to what another person is saying and fromwhat you hear pick out the important emotional dri-vers. You also need to learn how to identify your ownemotions and to slow the negotiation down to the pointwhere your strongest emotional reactions can subsideand allow you to respond strategically to situations. Athird skill involves your ability to communicate effec-tively in ways that move the other party emotionally.All of these skills are learned over time, and the moreyou invest in them, the more you can use them to shiftpower to your favor. This is especially true when youare in the corner and many other factors give the otherparty more power than you in the negotiation. Some-times your personality and emotional competence arethe only things that stand between you and disaster.

Negotiation Skills and Practice

Of all the factors that determine your power as anegotiator, none is more under your control than theinvestment you make in becoming a more skilled nego-tiator. Negotiation is an area of personal competenceand involves theory, practice, and skills. That said, rela-tively few people in the world have taken the time orhad the opportunity to get specific instruction in negoti-ation skills or to build up their skills through coached

practice. The better a negotiator you are, the more likelyyou are to make the best out of any situation, includingones where there are other power factors workingagainst you. In life, you need to be both smart andlucky, and especially in those situations where you arenot lucky enough to have more power going into thenegotiation, you need to use your skills to gain what-ever advantage you can.

Probably the most effective way to build your negotia-tion skills is to work with someone who has those skillsand can mentor and coach you. Like most interpersonalskills, negotiation skills take time to absorb and are situ-ational, taking on different manifestations under differ-ent circumstances. Learning from an expert and gettingcoaching as you practice over time within the context ofyour real negotiations is therefore the most effective wayto learn relevant skills that you can use in practice. Inaddition, attending negotiation classes, engaging in self-paced courses of study, and reading about negotiationscan also enhance your skills. Shoring up closely relatedskills, such as communication, conflict management, andinfluence, can also have a side benefit of enhancing yournegotiation skills, since there is a great deal of overlapbetween the basics of all of these disciplines.

Much of the power equation in negotiations comesfrom the structure of the situation, and your first line ofdefense in trying to change the power dynamics shouldbe to alter the structure to the best of your abilities, asoutlined in the preceding sections. At some point, how-ever, your ability to change the structure is limited, andyour personality and skills become your best tools forrestoring some power to yourself and giving you thebest chance of succeeding in your negotiation.

NEGOTIATION AND INFLUENCE

When you don’t have a great deal of direct power inany situation, including in your negotiations, there aretools you can use to exert more influence on the matterand meet your interests more effectively. In his book,Influence: The Psychology of Persuasion, Robert Cialdinioutlined six principles that enhance people’s ability toinfluence others.1 These principles, which are describedin more detailed below, are:

1. Principle of liking. People like to do businesswith people they like.

2. Principle of scarcity. Scarce items are seen asmore valuable.

3. Principle of reciprocity. People tend to respondto the behaviors of others in kind.

www.cutter.comEXECUTIVE REPORT 10

4. Principle of social proof. People look around themto see what others are doing in order to determinehow to behave themselves.

5. Principle of authority. People respond to authorityfigures or people with specialized competence orknowledge.

6. Principle of commitment. People are more likely tofollow through on promises if they commit to thempublicly.

These principles can be applied when you are trying tonegotiate from a position of weaker power relative tothe other party.

The Principle of Liking

As mentioned earlier, relationships form an importantpart of negotiations and can alter the balance of powerin your favor. The more the other person likes you, themore difficult it is for that person to be hard on you inthe negotiation. This doesn’t mean that you have to givein to the other person on substance in order to get theindividual to like you. Instead, the principle of likingimplies that you should find ways of connecting withthe other person around common interests, values, andbeliefs, forming a resonance between you that willencourage the other person to take actions that makeyou happy. If you are successful in this, the individualmight even use his or her power to promote your inter-ests rather than work against them, even when theperson has you over a barrel.

The Principle of Scarcity

You may not have a whole lot of cards in your handwhen negotiating from a disadvantage, but you musthave some or the other party wouldn’t bother negotiat-ing with you. There must be something you have thatthe other side needs, and it’s your job to identify whatthat is and to make it seem more precarious, more flee-ing, and more difficult to get. If the other party is morepowerful than you are but is pursuing a negotiationwith you because of a particular technology or skill youpossess, give the other party the sense that someone elsemight be in line to use this technology or take advan-tage of your skill. The more scarce you make the thingthat the other party is trying to possess, the morevaluable it becomes in its eyes and the more leverageit gives you in the negotiation.

The Principle of Reciprocity

People generally do to you what you do to them. Thisis a basic social framework that is ingrained deeply intomost people. Someone says hello to you, and so you say

hello to them. They ask you how you are doing, and youask them how they are doing, even if neither one of youcares. Applied to negotiation, this principle implies thatif you want people to engage in certain behaviors, youmight get them to do what you want by engaging inthese behaviors first. For example, if you want the otherparty to reveal something about itself and its position,you might induce the party to do so by revealing some-thing about yourself. Just be careful what you reveal.Similarly, if you would like the other side to be collab-orative in its approach to you, start by striking a collab-orative tone in your approach to the other party. Bytaking the initiative and engaging in behaviors that youwant to be reciprocated by the other party, you can driveits behavior and gain some power in the negotiation.

The Principle of Social Proof

People tend to behave consistently with what they seearound them and with the social norms of their culture.Therefore, in a negotiation, if you want the other partyto agree to contract terms that are favorable to you, youare much more likely to be successful if you can demon-strate that these terms are commonplace in other con-tracts or standard in your industry. Using your alliesto confirm behaviors and put peer pressure on yournegotiating counterpart might also make it more likelythat the other side will behave more consistently withyour interests.

The Principle of Authority

People respond to experts and to authority figures. Ina negotiation in which your own power is limited, hav-ing allies or friends in positions of authority can dis-suade the other party from using its power against you.Moreover, if you are trying to convince the other side togo along with a way of doing things that is more favor-able to you, having other experts confirm that this isthe better way makes it more likely that the other partywill listen to your arguments. On a more personal level,if you have credentials, degrees, documented accom-plishments, or other trappings of authority that you candisplay to the other party, it is more likely to take youseriously and view you as an expert. This might giveyou an edge in situations where other factors makeyou the less powerful party.

The Principle of Commitment

There is a story of two truck drivers coming towardeach other on a mountainous, one-lane road; each wantsthe other to pull off the road and waves frantically atthe other to let him go through, but neither veers fromthe course. Finally, as the two approach each other, one

11©2010 Cutter Consortium Vol. 13, No. 1 BUSINESS-IT STRATEGIES

driver rips the steering wheel out of his truck and throwsit out the window. The other driver, seeing no choice,pulls off to the side. The moral of the story is that youcan gain power by making commitments from which youcan’t back away. In negotiations, people do this by mak-ing public declarations to their own constituents andmaking these commitments known to the other party. Ofcourse, this strategy is not without risk, but an increasedsense of your commitment to getting your results or yourinability to back away from certain positions can enhanceyour power. Similarly, getting the other party to make itscommitments to you public, in the form of written agree-ments or published statements, makes it more likely thatit will carry out these agreements, particularly in situa-tions where the other side is more powerful than you andmight otherwise be tempted not to follow through on itspromises. The more public the commitment, the moredifficult it is to ignore.

CONCLUSION

It is always more fun and more effective to negotiatefrom a position of power, in which you have moreauthority, you control more resources, and you havegreat alternatives. Unfortunately, you are not alwaysgoing to be in this position. It is much more difficultand requires much greater skill to negotiate effectivelyfor your interests when you are the one with less powerand when the other party seems to be holding thebetter cards.

What this Executive Report has tried to demonstrateis that even under such circumstances, you are notentirely without power. You know you have somepower because the other party is negotiating with you,and it will only bother negotiating with you if there issomething you have that it needs. Since power in nego-tiations comes from a variety of sources, your challengeis therefore to find the areas in which you can buildyour power and reduce the impact of the other side’spower.

Some sources of power come from the structure of thesituation, and while you are often limited in your abilityto change the structure, the better you understand itbased on real information, the more likely you are toexploit whatever opportunities exist to make changes inyour favor. Some sources of power in negotiation comefrom your hard work and preparation, and it behoovesyou to invest the effort to outprepare the other party.A third source of power comes from your personality,skill, and emotional competence, and you can alsowork on these areas slowly over time to improve your

negotiation posture, particularly when you are the lesspowerful party. Finally, when you have no control overa situation, you might still be able to influence it in yourfavor by understanding and using the principles ofinfluence with your opponent.

In the end, negotiating from the corner is difficult andanxiety provoking. Despite your best efforts, the struc-ture of the power dynamics might overwhelm things,and you might still lose out in the negotiation. Youmight not be able to change this. What you might beable to do is to give yourself the best chance of maxi-mizing your interests in the negotiation by understand-ing the sources of power driving the situation and bydeveloping your strengths over time. In some situa-tions, you might reverse the power dynamic altogether,while in others you might just make things slightly lessawful than they would otherwise be. The importantthing is not to feel at the mercy of the power dynamicsin your negotiations. Rather, you should use your skillsand your understanding of power in negotiations toyour advantage so you can negotiate as effectively aspossible under any set of circumstances.

ENDNOTE1Cialdini, Robert B. Influence: The Psychology of Persuasion.Quill, 1984; revised edition, Collins, 1998.

ABOUT THE AUTHOR

Moshe Cohen is President of The Negotiating Table, a firmthat provides mediation services to people in conflict as well asnegotiation and conflict management training. Since foundingthe firm in 1995, Mr. Cohen has mediated hundreds of disputesin a variety of settings and in a multitude of topic areas, includ-ing workplace and employment disputes, discrimination com-plaints, torts, civil litigation, landlord-tenant evictions, divorce,family, and interpersonal matters. He teaches negotiation,mediation, facilitation, conflict management, and leadership atBoston University and has also taught at Bentley College andCambridge College. In addition, Mr. Cohen has conductedtraining programs for corporations, nonprofit organizations,government agencies, and conferences. He holds a bachelor’sdegree from Cornell University in physics, a master’s in electri-cal engineering from McGill University, and an MBA fromBoston University. Mr. Cohen’s career includes more than 12years’ engineering and project management experience priorto founding The Negotiating Table. He is a frequent guestspeaker at business functions, conferences, and universities.Mr. Cohen has also published numerous articles on negotiation,mediation, and conflict management. He can be reached atmoshe@negotiatingtable.com or via www.negotiatingtable.com.

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