Negotiations Training

When Negotiations Heat Up:
Power and Perceived Power

Many in the business world are familiar with Sun Tzu's famous treatise, The Art of War. In it, Sun Tzu discussed various areas related to tactics, strategy and battle plans. Over the years, business professionals have seen many parallels in Sun Tzu's teachings and what takes place in the business world on a daily basis. One of the areas that Sun Tzu touches upon is power and perceived power, something that is must be taken account during any negotiation. Often, whoever is perceived to be more powerful actually ends up being more powerful. While reality may speak otherwise, those with the advantage of perception often find themselves in a position to control their situation and, ultimately, the final outcome.

As part of your preparation process, time should be devoted understanding the power position of each party. This may be based on existing situations or past meetings with the other party. To increase your personal power position, there two key areas where you or your team should focus. The first is knowledge. Knowledge is critical as it helps with preparation and it provides understanding of what may be taking place during a negotiation. In some cases, your perceived knowledge of the other party's power may be inaccurate. Test your perceptions to get a better feel for who truly has power in a negotiation. The second is communication. When you communicate effectively, not only do you eliminate misunderstandings, you also increase your knowledge base by asking well-thought out questions. The other party may be able to provide you with the right type of information to increase your power position.

There are good and bad times to use power in a negotiation. The decision on when to use power is up to you but there are some guidelines to consider. For example, in a competitive negotiation where you may be dealing with an individual or organization only one time, it may be to your advantage to use your power more firmly. In a situation where you are purchasing a car (dealerships most assuredly will be looking to flex their negotiation muscle), it may be more prudent to focus on outmaneuvering the other party rather than collaborating with them. However, keep in mind whether you truly want to use this approach. In a highly competitive situation, you can use power to your advantage as you have less to lose.

In some cases, people use power to outflank the other party. Some sales professionals use this approach when dealing with a difficult purchasing department bent on receiving several competitive bids. Rather than continuing to struggle with purchasing (a department who generally has more power in a negotiation), they focus on "selling" to other key decision-makers and influencers on the value of a product or service. By the time they have worked their way through the organization, the purchasing department has little choice but to move forward with the preferred product or service. The danger in this use of power is the long-term effect on the relationship with the purchasing department. The sales professional may have won the battle but may have a difficult war ahead of them.

Ultimately, power can be used to one's advantage but there are marked drawbacks. When wielded too extensively, it can lead to damaged relationships. Choose your battles carefully and know when to use power accordingly.