Bri Williams runs People Patterns Pty Ltd, a consultancy specialising in the application of behavioural economics to everyday business issues - http://www.briwilliams.com.au Negotiation is all around us because it is really about relationships. We fear negotiation because we think it is adversarial, and our behavioural biases get in the way of us getting into the headspace of our customers.
Here are five behavioural biases relevant to negotiation, and how to recognise and overcome them so that you can negotiate a decision to help all parties.
Not Invented Here Bias
We love ideas but struggle to take those of others on board. You may have heard this described as the Toothbrush Principle – everyone knows toothbrushes are important, but no one wants to use someone else’s! For negotiation this means you need to work extra hard to understand and consider an idea that the other party proposes. Better, try collaborating on a mutually beneficial idea, building it together to ensure all parties feel like they own the idea.
Loss Aversion
It’s likely we enter a negotiation more worried about what we stand to lose rather than gain. This can make us defensive and panicky. To overcome loss aversion it can be helpful to draft your worst case scenario and then what you would do to survive if that happened. It means you will enter the negotiation without fear and being able to concentrate on a solution.
Actor-Observer bias
We tend to blame the mistakes of others on their character, and our mistakes on the situation. For instance if someone cuts you off in traffic, they must be a bad driver. If you do, it’s because you needed to get into the other lane to make the turn. For negotiations this means we are prone to attacking the person and their motivations, overlooking the situational factors that may have caused the issue. To overcome Actor-Observer Bias (also known as the Fundamental Attribution Error), focus on the situation not the character.
Confirmation Bias
Noticed that it’s easy to find stats and facts that support your view? Confirmation Bias is our tendency to zone in on information that confirms our understanding of the world, ignoring, distorting or rejecting contradictory input. In a negotiation it means we are blinkered and may miss facts that actually disaffirm our position. To overcome Confirmation Bias you need to do a 360 degree assessment of the issue. In other words, how would you argue the case for the other party? Remove yourself from the situation, step into the shoes of the other party and you’ll suddenly find a world of new data that can be used by you both to construct a solution.
Revenge It is deeply ingrained that we seek revenge for actions we see as unjust. Despite our best selves, when someone cuts us off in traffic there is that little part of us that wants to tailgate to let the other driver know how dangerous they were. Sadly that little part of us is too often the foot on the accelerator. In a negotiation there is likely to be a lot of negative emotion, a desire by some for revenge. To overcome revenge – your desire or theirs – takes a lot of deep breathing and distance. When things get heated (known as a “hot state”) you are extremely likely to make poor decisions so take a break, calm down and refocus on the issue not the motivation.