“Everything is a negotiation,” says leadership expert John Burrows. Whether you’re working on a multimillion-d
ollar M&A deal, arguing for a better salary during a job offer, or simply trying to choose where to order takeout for you
r family dinner, “we’re all negotiating all the time, which means there’s huge opportunity and upside to getting better at it.”
But Burrows noted during a recent Travelers Institute webinar that “in the real world, we very rarely have hard
data on how we performed in a negotiation. Sometimes we come
out and feel like we can put our hands up and uncork some champagne. Maybe that’s justified, but the truth is we’re much more reliant on reactions to the negot
iation and our feelings, which aren’t necessarily a good guide to how we did.”
Burrows, a senior lecturer at the University of Chicago and Associate Fellow at Oxford University, sp
oke during an Oct. 29 webinar from the Travelers Institute: Strategic Connections: Short-Term Negotiation T
actics for Long-Term Success
He gave the example of a job negotiation, where you ask for a bit more money than you’re hoping for because you
know “some haggling is going to ensue. They’re going to beat me down a little bit and I’ll end up somewhere else
… So, I want $120,000. I ask for $140,000 and they say yes. Did I win?” There’s really no way to know, he said. “No one pats you on the back at the end of that conversat
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ion and says, ‘Oh, by the way, if you’d asked for $180,000, we might have gone up to $160,000.'”
“The reality is we often hold ourselves to fairly low bars and maybe overachieve. But that isn’t the same as success,” he said.
So, how do you become a successful negotiator? Burrows offered the following advice.
Know your bottom line. “I would argue [BATNA] is the most important term in negotiations,” Burrows said, noting that
the acronym stands for “best alternative to a negotiated agreement.” It’s the benchmark against which any proposed deal is measured, he said.
“A mistake that is often made is people don’t fully understand what happens if they get up and walk away,” he said. Kn
owing your BATNA “gives you a very good sense of who has the power and leverage at the negotiating table and enables you to assess more methodically, more acc
urately, ‘Are we coming to terms on an agreement that’s actually better than my BATNA?'”
Burrows said that people often do deals “because they get caught up in the moment… A BATNA can be thought of as a f
lashing neon light reminding you what happens if you get up and walk away.”
Knowing your BATNA also gives you a chance to improve your leverage, he said, giving the example of secu
ring a job offer from a competitor before negotiating with your top-choice employer.
Bundle the options. “We tend to take what we think is a logical approach” when we negotiate, going through the issues one by one to determine where we’re in agreement and then fighting over the remain
ders. Burrows suggested that a better approach is to bundle the issues into several different options that you’re “relatively indifferent about” and then asking the other si
de if they have a preference. He gave the example of offering a job candidate a choice between two packages, each with a different location, salary and bonus. “What I’m doing is revealing some preferences in a somewhat masked way, but you perceive this as I’m shari
ng, I’m initiating, and you feel the urge to respond in kind.” This approach subtly reveals your preferences and encourages the other party to do the same, he said.
During the process, pay attention to the other party’s emotional reactions to glean data on their priorities, he said. “Through the back-and-forth, you start to build rapport and trust one another.”
Trade on your differences. “We often think of negotiations as things that must be won, and in order [for me] to win, the person across the table must lose,” Burrows said. But that’s only true in zero-sum negotiations, where you’re “fighting over a fixed pie.”