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Introducing Joshua Cooley, a Senior Consultant at The Gap Partnership, whose expertise in negotiation strategies and blind spots has helped clients close deals successfully.
Negotiating blind: I can’t close the deal and I don’t know why
Not long ago, a client of mine – let’s call him Tim – came to me for help. After eight long years of working with a small, profitable CPG company, their contract was due to expire with no sign of renewal on the horizon.
It didn’t make sense. They had a great relationship and were in a good position to renew, yet when the conversation came up, it was immediately shut down. They didn’t say “Here’s what’s missing” or “This is what needs to change.” No justification, just a straight “No.”
Days before the contract was due to expire, Tim came to us. He was frustrated because he liked the company, they were easy to work with and he always had positive feedback from them. Why was Tim’s customer being like this? Didn’t they know this would push Tim to look for opportunities elsewhere? Who in their right mind would tell someone they were doing a great job, only to treat them like this?
Are they crazy or are you blind?
We’ve heard the other party called just about every negative thing one could imagine.: “They are unreasonable! They’re idiots! They’re completely incompetent at their job!”
If you are dealing with someone who represents a large corporate interest, odds are they are not those things. People behave based on the information they have. Unfortunately, in a negotiation, the information they have is not what has driven the assumptions you have.
In the commercial world, when people sound or act irrationally, it often means that we’re not seeing the complete picture: we have a blind spot.
So, where was Tim’s blind spot? Three times during their eight years together, the customer had requested a small but important revision to their contract. They wanted to source from third parties in the event of a supply chain disruption. Each time the request was made, Tim’s company had said no. This time, instead of discussing the amendment, the customer decided it was better to allow the contract to expire.
Tim’s blind spot was sitting right under his nose the whole time. What kept him from seeing it? Perhaps he didn’t want to.
Peering through Johari’s Window: Blind spots
To illustrate this, let’s look at Johari’s Window. Created by psychologists Joseph Luft and Harrington Ingham, Johari’s Window is a heuristic way to reframe how people look at information by putting it into four quadrants:
- Known to self and others (Arena)
- Known to self and not to others (Facade)
- Not known to self but known by others (Blind spot)
- Not known by self or others (Unknown)
The first and third sections of Johari’s window focus on things we already know. The fourth section contains events neither party could foresee. The second quadrant contains the “why” behind seemingly irrational behavior. The information you don’t know that the other party is acting on.
Confirmation bias – The blind spot
Blind spots are crucial elements of negotiation that people often ignore. Why? Because blind spots are out of view. Human nature is to assume understanding. To build a map of the world and assume total accuracy. This tendency is so predictable it has a name, confirmation bias.
Confirmation bias refers to an individual’s inclination to give preference to information that corroborates their pre-existing beliefs or hypotheses.
In layman’s terms, people tend to act as if information outside their assumptions doesn’t exist. Think about that! If you assume that your negotiation plan is foolproof, you’re going in blind.
How does that Mike Tyson quote go?
“Everyone has a plan until they get punched in the mouth.”
You must challenge your assumptions by listening to what your counterpart is saying, and how they are acting.
Plan for a blind spot
The good news is that confirmation bias is predictable. Experiments like the Wason Rule Discovery Test show it’s a human condition. The question is, what to do about it?
Assume each negotiation contains one piece of information that, if you knew it, would change everything. Put it on a sticky note in front of your desktop, write it on the shower mirror, put it at the top of the page of your negotiation planning sheet.
Cognitive biases, like confirmation bias, require a mindset change. A conviction that your counterparty has information you don’t. Adjust your process to challenge your assumptions and set time aside to change course during negotiations.
Expect to find new or hidden priorities and review your plan of action regularly.
Luckily for Tim, he realized how important the addition was to them and took action just in time. The contract was quickly rewritten and signed. Had he continued with his same assumptions and said no, a great relationship could have expired with the contract.
Blind spots I’ve identified with clients in the last year
As a negotiation consultant, I often come across blind spots that hinder successful business deals. Two examples I’ve encountered in the last year include a large entertainment group putting their business out to bid after ten years and a CPG company securing extra advertising space for their money. In the case of the entertainment group, the assumption was that they were unhappy with their current supplier, but in reality, they were using the bidding process as a tactic to pressure their current supplier on pricing.
As for the CPG company, they assumed that retailers would remove promotional space as punishment for price increases, but in fact, retailers had removed display space for everyone, allowing the CPG company to make targeted offers and acquire 300% more display space for 60% of the cost. These blind spots could have resulted in lost opportunities if not identified and addressed in time.
To avoid blind spots in your own negotiations, it’s essential to challenge your assumptions and seek out missing pieces of information. Three key questions to consider are: Is the other party acting unreasonably? Have their business or market interests recently changed? By answering these questions honestly and seeking out complete information, you can position yourself for success in any negotiation.