Negotiating from a Position of Weakness
I was cruising around the blogosphere this morning looking for links to the prime directive of all negotiations -- know your BATNA -- when I ran across this great 2007 post by Penelope Trunk of the Brazen Careerist -- How to Negotiate When You Have Nothing to Leverage.
Penelope suggests the weakest strategy available -- exchange power for sympathy. "If one person has a great BATNA," writes Penelope, "and the other has a terrible one, it’s not really negotiations; it’s trying to get a little something extra. It’s asking for a favor. If you approach negotiations from this perspective then you are much more likely to get a little bit of what you want."
Two of the savviest negotiators around Deepak Malhotra and Max Bazerman in their tremendously practical book Negotiation Genius have devoted an entire chapter to Penelope's problem called, not surprisingly, Negotiating from a Position of Weakness. Their recommended strategies include the following:
- Don't Reveal that You Are Weak
[H]aving a weak BATNA is not terribly problematic if the other side does not know that your BATNA is weak. If you have a weak BATNA, don't advertise it!
- Overcome Your Weakness by Leveraging Their Weakness
[W]hen both parties have a weak BATNA, it means that the [Zone of Potential Agreement] is large. In other words, a lot of value is created when the two sides reach an agreement. Who claims more of this value? . . . [T]he one who fares better is the one who makes the other side's weakness more salient throughout the negotiation.
- Identify and Leverage Your Distinct Value Proposition
[V]ery often, you do bring something to the table that distinguishes you from your competitors. This is your distinct value proposition (DVP), and it need not be a lower price. You may have a better product,, a higher-quality service, a good reputation, a strong brand, or a host of other assets that your [bargaining partner] values and that you can provide more effectively or cheaply than your competitors.
- If Your Position is Very Weak, Consider Relinquishing What Little Power You Do Have (This was Penelope's strategy in the Yahoo negotiation subject of her post).
[I]f you can't out muscle the other side in a negotiation, you may want to stop flexing our muscles and, instead, simply ask them to help you. When negotiators try to leverage their power, others reciprocate. This pattern can be disastrous when you are the weaker party. But when you make it clear that you have no intention of fighting or negotiating aggressively, others also may soften their stance.
- Strategize on the Basis of Your Entire Negotiation Portfolio
[A]udit the implicit assumptions you make when formulating your negotiation strategy. You may perceive yourself as being "weak" if you only measure strength as the ability to push hard in any given negotiation without losing the deal. But you may discover that you are actually quite "strong" once you begin to think about your ability to withstand losing some deals because you are maximizing the value of your entire negotiation portfolio.
- Increase Your Strength by Building Coalitions with Other Weak Parties
In the realm of international relations, a vivid example of the power of coalitions surfaced during the 2003 World Trade Organization negotiations in Cancun, Mexico. Disgruntled by the continued lack of attention paid to the issues of concern to developing nations . . . twenty-one "weak" countries banded together to create the Group of 21. This group is now in a much stronger position to negotiate for the interests of its members than any member nation would have been on its own.
- Leverage the Power of Your Extreme Weakness-They May Need You to Survive
[I]t is often useful to tell the negotiation "bully" that an overly strong show of force can be counterproductive: "If you push me too hard, you'll destroy me -- and lose a value-creating partner."
- Understand -- and Attack -- the Source of Their Power
A number of Planned Parenthood clinics around the country have adopted a particularly creative strategy for fighting back [against protesters], usually referred to as the "Pledge-a-Picket" Program. Here's how it works: The clinic asks its supporters to pledge donations to the clinic on a per protester basis. The more protesters that show up to picket the clinic, the more money the clinic raises in donations! . . . The Planned Parenthood of Central Texas in Waco has even posted a sign outside its clinic that read: "Even Our Protesters Support Planned Parenthood."
Once the Planned Parenthood clinics understood that the source of their opponents' power was the ability to draw large numbers of protesters outside the clinic, they were able to think of a novel way of diminishing the benefits of doing so.
Malhotra and Bazerman conclude their chapter on Negotiating from a Position of Weakness by noting that
while being in a position of weakness is sometimes unavoidable, you will negotiate most effectively when you leverage the fundamentals -- systematic preparation and careful strategy formulation.