I coined the term, "negotiation consciousness,"
to describe the willingness of successful negotiators to
be assertive and challenge everything. Implied in this concept
is the practice of taking reasonable risks based upon reliable
information. Negotiators understand that we all need to
take risks. Face it, you wouldn't be alive and reading this
if your parents hadn't taken a risk.
The opportunity for taking risks occurs
in every step of the negotiation process. Taking risks can
involve asking for more than you think you can get. It can
involve giving the other side an ultimatum -- take this
or else.
Or it can manifest itself in the form
of theatricality. Have you ever taken the risk of getting
emotional in a negotiation? Next time you buy a car, for
example, try a little old-fashioned anger and threaten to
walk out. How do you feel when someone else gets emotional?
Suppose you have to fire an employee and they start to cry.
(It happened to me.) Histrionics can be effective.
When it comes to taking risks, the real question is, "How
much risk is justifiable?" My grandfather risked everything
he had in the stock market. It must have appeared to him
as a reasonable risk. Unfortunately, the year was 1929 and
he was wiped out. My grandmother didn't think it was reasonable.
She never spoke to him again.
I read a remarkable story in the newspaper
about risk-taking. It seems that a man in Arles, France,
made a deal with a woman for what we would call a reverse
mortgage. The deal was this: he agreed to pay her $500 a
month for the rest of her life. In return, the ownership
of her apartment in Arles would revert to him upon her demise.
What was the risk factor in this deal
-- the woman's longevity, right? Well, you'll be relieved
to know that our risk taker was pretty smart -- he was 47
and the woman was 90 years old! A great risk, wouldn't you
say? Well, guess again. The man just died at the age of
77 and the woman is the world's oldest person at 120! (What
makes it even worse -- or better, if you're the old woman
-- is that the man's widow is required to continue the payments.)
There is an important lesson in this.
Don't move to France! (Just kidding.) The lesson is that
we need to assess the viability of the risk AND our options
if the risk turns sour. Select an upcoming negotiation and
ask yourself these two questions (from my book, Negotiate
With Confidence):
1. "How much risk am I comfortable
taking in this negotiation?" If you are selling your
house, how long are you willing to hold on before you drop
your price? If it's a seller's market, it may be a viable
risk to wait until you get your price. If you're in a buyer's
market, however, you may want to grab the first warm buyer
who comes along.
2. "If I take the risk and it doesn't work out the
way I hope, what options/alternatives do I have? Do I have
a Plan B?" If you lose a buyer for your house because
you won't budge on the price, are you likely to have other
buyers knocking at your door? Brodow's Law says: Always
be willing to walk away -- never negotiate without options!
If you want the deal too badly, you lose your ability to
say no. Don't place yourself in a position where you have
no options.
What might Plan B have been for the poor fellow in Arles
-- a hitman? (Don't get me wrong, it just sounds like the
screenplay for one of those zany French comedies.) In this
case, the risk might have been more viable to a bank with
better options -- a bank would have other deals to offset
this one. The viability of the risk is relative to the nature
of the risk-taker.
The key thing to remember is that successful negotiators
take reasonable risks based upon reliable information. Have
you taken any risks lately?
