Match your negotiating style to your objective

October 19, 2012

“Playing hardball” is a phrase often used to describe negotiations. The point is the deal –there’s a winner and a loser – and the toughest side prevails.

Hardball is a good game plan under some circumstances – if it’s a one-time opportunity, for example. But what if the client or customer you are negotiating with has potential to bring you business long term? In that situation, driving hard might not be your best approach.

Alan Goldman is a management professor of practice at the W. P. Carey School of Business. He’s teaching the negotiations classes in the 2012 Small Business Leadership Academy (SBLA) presented by W. P. Carey’s Center for Executive and Professional Development. Drawing lessons from the Harvard Negotiation Project, Goldman is helping students realize a more sophisticated approach to negotiating that goes beyond winner take all.

Key to the Harvard system is the theory that there are two broad approaches to negotiating: Theory X and Theory Y.

Theory X negotiators are the hard ball players. The process is adversarial and focused on the deal and the bottom line. A Theory X negotiator dominates by wielding power, exploiting weakness and elevating the rational over emotions.

Theory Y negotiators seek to build fruitful relationships. For them, the objective is agreement, so they work on establishing trust. They open with small talk. They’re empathetic, flexible and willing to yield for mutual benefit.

Each style has its place, says Goldman. If the objective is a one-time transaction, then driving Theory X-style for the best deal obtainable – no matter how hard-nosed you have to be – may be the best approach.

But sometimes the greater advantage – and profit – accrues across numbers of transactions. In that case you’d be doing yourself a favor to employ the tactics of a Theory Y negotiator.

Assigned reading in Goldman’s class is one of the classics of negotiating training, the core text of the Harvard Negotioation Project  –  “Getting to Yes: Negotiating Agreement Without Giving In.” Its lessons are valuable in your personal life as well as business.

The main principles of the Harvard Negotiation Project are:
• Separate the people from the problem (go easy on the people, hard on the facts)
• Focus on interests, not positions
• Invent multiple options looking for mutual gains before deciding what to do
• Insist that the result be based on some objective standard

Dr. Goldman talks about negotiation: