The other day, I found a new online magazine in my e-mail box. It was the very first edition, Vol. 1, No. 1 (October 2011) of ADR Times Perspectives on Dispute Resolution.According to the message from the Editor – Ms. Mikita Weaver – this publication started out as an interactive blog, gradually shifting to this very first edition of ADR Times.com covering negotiation, mediation, arbitration, diplomacy and peace.
Reading the publication, I found that many of the articles covered the fundamentals rather than the arcane. For example, Scott Van Soye discussed “The Negotiation Dance: Five Reasons Not to Sit Out” (at pp. 4-5). I have been in many mediations where counsel wanted to speed up the “dance.” Often, my response is that you can’t; if you do try – you will lose that magical something in the process of “dancing” and the negotiations will fail. Mr. Van Soye puts it more concretely, providing five reasons why the parties must dance!
The first reason, as identified by Professor Peter Robinson (co-director of the Strauss Institute for Dispute Resolution at Pepperdine Law School) is that most agreements are reached at about the midpoint between the first two reasonable offers. To get to this midpoint, social pressure is placed on each party to share the burden of conceding. “Without a pattern of concessions, sometimes called the “negotiation dance”, this mutual pressure is gone.” (Id. at p. 5).
The second reason is because it is normal to negotiate; “. . .failing to negotiate leaves your counterpart frustrated, angry that you are being “stubborn” or “unfair” and doubtful that you are really at your bottom line.” (Id. at p. 5). Consequently, without the “dance”, even the best deal may not be acceptable.
The third reason is that a “take or leave it” approach greatly limits your ability to negotiate as well as your credibility. If your first proposal is your bottom line, if it is not accepted – you must walk away to maintain credibility. If, instead, you offer something else, your credibility is gone.
The fourth reason is that the “pattern of the dance significantly impacts the ultimate amount agreed upon.” Studies show that the first move in a negotiation strongly influences the other party’s estimate of value. (Id. at p. 5). By anchoring your first demand at a higher (lower), but reasonable amount, the agreement ultimately agreed upon will be higher (or lower). By being the first to make the proposal, you can set the level (or playing field) of expectation.
The fifth reason involves “the value of aspirations or optimistic goals.” (Id. at p. 5). “Those with high hopes routinely do better than those with more “realistic” ones. Of course, this assumes that the demands are within the realm of possibility. Ridiculous demands will be ignored. (Id.)
In sum, if you refuse to “dance”, you will definitely be at a disadvantage in any negotiation. You must “dance” to get the most out of the negotiation: it is that plain and simple.
. . . Just something to think about!