Background

2014 almost saw the merger which would have created the biggest advertising group in the world, between advertising giants Omnicom and Publicis. The merger was unveiled in July 2013 with a champagne toast and warm embraces by the two chairmen on Publicis’s terrace by the Arc de Triomphe in July 2013. At the time of the announcement, Publicis chief Maurice Lévy likened the deal to a marriage and his counterpart, John Wren, emphasised the romance. However, in the full glare of the public spotlight, during the six first months of this marriage the relationship between the two became tempestuous, driven by egos and leaving both companies bearing a humiliating scar of failure. In the end the two companies decided to go their separate ways. It is understood that the fallout centred on an argument over which side would secure the chief financial officer position and neither wanted to concede a key power role. The failed merger cost the two companies hundreds of millions, mainly in lawyers and consultants. This is not to mention the management time and attention this negotiation must have taken.

This is a good example of the importance of the human factor in all negotiations.

Negotiation capability requires strategy, tactics, skills, financial and commercial acumen, and yet for the last twenty years it’s become well known that the element which can often make or break the negotiation is the chemistry between people, and the extent to which they are able to connect and communicate. These skills, which originate in the more primitive part of the brain, the emotional brain, are now accepted as the key to unlocking the edge for negotiators.

This idea of emotional intelligence has been around for the last 20 years and in our work with our clients we rarely see people building the psychological and emotional aspects of the negotiation into their planning. More often than not, people suddenly become aware of their emotions or those of the other party when something happens in the negotiation, by which time it’s too late to do anything about them.

Why emotions matter

Emotions determine people’s decisions. They can be helpful in certain circumstances, for example when the negotiator is unsure which way to go. For example, when a buyer has two suppliers who can deliver very similar products or activities of some kind, ultimately they’re going to select the supplier they sense a connection with, the one they best get on with.

Similarly, the same principle applies to a negotiation strategy. Once all the analytical work has been done, if there are two strategies which are equally possible, the negotiator is going to use their gut feel to decide… “which strategy feels right”?

It’s important therefore to recognise the impact of emotions on our decisions – and on the decisions of our counterparty. The best proposals are sometimes refused, not because they are not practical or advantageous, but simply because they are not framed in the way most appropriate to the counterparty’s communication style, or without empathy for how the other party may feeling at a particular time, for example.

So, on hand emotions are useful sources of information. On the other though, emotions can drive people’s behaviours – for better or worse. Stress for instance can cause inappropriate reactions, make people reveal too much information, cause people to lose control and even lead to unnecessary deadlocks.

So, for all these reasons we ignore our emotions and those of the other party at our peril.

Emotional intelligence

The term Emotional Intelligence was coined by Dan Goleman in the mid-nineties, and yet its importance in negotiation is still largely under-estimated. He brought out his book which said that there is no evidence to suggest that intelligence as measured simply by IQ will determine how capable and successful someone will be.

Emotional Intelligence is made up of four core skills that pair up under two primary competencies: personal competence and social competence.

  1. Recognising your own emotions – “self-awareness”.
  2. Managing your own emotions – “self-management”.
  3. Recognising the emotions of the other party – “social awareness”.
  4. Managing their emotions – “relationship management”.

 

What I see What I do
Personal Competence Self-Awareness Self-Management
Social Competence Social Awareness Relationship Management

 

“Self-awareness

The negotiator needs to get inside the other party’s head. Firstly though, they need to understand themselves.

Emotional triggers

It’s important to be aware of the kind of things which trigger our emotional responses, because this will help us decide what can be done to minimise their impact. The range of emotions experienced before and during a negotiation is vast and highly personal. The two most common emotions reported in negotiation are fear (or anxiety) and anger. These emotions are triggered by many different things.

These are examples of things that can trigger fear or anxiety in negotiation:

  • Lack of preparation;
  • Thinking that we are a less able negotiator than our counterparty (it is common to credit the other party with more power than they have);
  • The perception having few options;
  • Fear of failure and of its consequences;
  • The lack of control over the other party, or the unpredictability of the negotiation.

 

These are examples of things that can trigger anger or frustration in negotiation:

  • Rudeness;
  • Intransigence;
  • What we perceive to be unfair or unreasonable behaviour;
  • Abuse of power;
  • The other party not listening to our concerns.

 

“Self-management”

Having identified the things that trigger our emotions, (these of course will vary for each individual), we can develop strategies to minimise the effect of these emotions or even change the way we feel about particular situations or people altogether.

Your mind-set before the negotiation

Once the negotiation has started we can become victims of that primitive, survival instinct called Flight or Flight – which leads to an inability to think logically. So, the negotiator needs to try to head off strong negative emotions before they arise, in other words during their preparation.

Depending on the situation, our feelings may well be caused by behaviours of the other party. However, we need to take responsibility for these feelings too. And if we dig deep enough, we can identify thoughts, values and attitudes that may be causing these negative feelings in the first place. These may need reviewing.

For example, if Fairness plays an important part in our value set, someone behaving in a way that we would consider unfair may trigger high levels of frustration. If this is the case, perhaps we need to re-evaluate our perception of fairness in a commercial negotiation environment. We may need to accept that negotiation is not necessarily about a fair outcome, and that fairness is itself a subjective value.

Similarly, if someone defines themselves as a collaborative negotiator, they are going to find it very difficult to take up a position that may not lead to a win-win agreement; yet, there will be times when strategy or circumstances require us to take a unilateral approach. They will have to deliver a “hard” message with confidence. So, in this case, they would do well to re-define themselves as a negotiator, neither a hard or a collaborative negotiator – simply a skilled negotiator, and therefore give themselves licence to behave in whichever way is appropriate to the circumstances, with integrity.

Coping mechanisms during the negotiation

During the negotiation, if and when emotions do arise, it is important to be able to deal with them as early and as quickly as possible.

Sometimes we get sucked into a situation, and this can give rise to emotions, for many of the reasons discussed earlier. In this case, we need to mentally step back and take a deep breath. We need to try to emotionally rise above the situation, look at the bigger picture, fix our eyes on the prize. Can we change our underlying thoughts or attitudes about this deal of this person or their behaviour?

Thomas Jefferson said – “if you’re angry, count to ten. If you’re very angry, count to one hundred”.

Sounds rather prosaic, but there is a physiological reason why counting to ten works – when our emotional brain takes over it literally hijacks our brain. By counting, we are “re-booting”. We are switching back on our prefrontal cortex, the logical part of our brain.

If a mental pause doesn’t work, we should take a physical pause – a time out – for a few minutes or perhaps the meeting needs to be adjourned altogether. This will always be preferable to continuing the negotiation and doing something which we later regret.

 

“Social awareness”

Behavioural styles

I was coaching one of my clients’ a few days ago. He told me about a highly successful negotiation he was able to carry out, where he was able to collaborate very effectively with his customer and they managed to negotiate a great deal which created much value for both parties. When I asked him – what do you think was the most critical success factor in this negotiation, rather than speak about some sophisticated negotiation tactic or technique, he simply said – “well, when we first met we almost accidentally got talking about Rugby for a while, and somehow after that we seemed to understand each other and worked well together. There was a sort of connection, a level of trust between us, which allowed us to communicate very effectively”.

First of all, people have different personalities and we need to recognise their style. This will have a big impact on our approach. In the example above, if my client had been sitting opposite someone who has a highly analytical or controlling style, they would have had to take a very different approach to build credibility and form a connection with their counterparty.

Body language

In the meeting, we need to consider body language, especially facial expressions. The facial expression is by far the most accurate window into the other party’s emotions. This is a complex subject, and we must be careful not to apply the same standards to every person we are sitting opposite.

Some people are naturally fidgety for example, so the fact that they are clicking their pen may not tell us very much at all… similarly, if someone has their arms crossed, again it may not say very much other than this is a comfortable seating position. So, we need to try to look out for changes from the norm.

Therefore, as important as body language is, it must be seen as an indicator of how someone may be feeling, but we must be careful not to read too much information into it.

Empathy

Listening is about more than just hearing – it’s about observing the other party and trying to figure out what’s going on inside their head…

Dan Goleman talks about three different levels of Empathy:

The first is “cognitive empathy”, simply knowing how the other person feels and what they might be thinking. This may not be enough; for example, when Princess Diana died the Queen was criticised for not demonstrating sufficient empathy with the strong emotional response of many people –the Royal Family appeared almost detached at first, despite the abundant evidence on our TV screens of people’s grief. Sometimes, people need to see evidence of empathy.

“Emotional empathy” – when we actually begin to experience the same feeling as that of the other party, as though their emotions were contagious. Emotional empathy makes someone well-attuned to another person’s inner emotional world.

“Compassionate empathy” – with this kind of empathy we not only understand a person’s predicament and feel with them, but are spontaneously moved to help. This level of empathy can carry risk for the negotiator, because it can cause unnecessary concessions, for example.

Therefore, when we think about empathy, we need to recognise the benefit of recognising how the other party is feeling, but also the potential risk. As a negotiator, ultimately we need to remain in charge of ourselves and do what is in the interests of the deal. Our behavioural approach is critical. Sometimes the way we behave in the negotiation is as important if not more important than the message being delivered.

 

“Relationship management”

The final element of Emotional Intelligence involves managing the other party’s feelings. We have started discussing this in the paragraph above. There are many different emotions which we may need to engender in the other party, depending on our objectives; these are some of the most common:

  • Satisfaction;
  • Inspiration;

 

Satisfaction is the basis of all negotiations, simply because without satisfaction it may not be possible to reach an agreement. Or if someone does not feel satisfied with the deal, they may walk away from it or not respect the terms of the deal. Human nature is such that people value what’s hard to obtain. The negotiator needs to be mindful of this element of human psychology and plan how they can best give the most satisfaction to their counterparty. This can be done by a series of behaviours which may include for example taking time over the negotiation, and making small, conditional concessions demonstrating measured reluctance. Never rush the negotiation.

Inspiration. Depending on the type of negotiation and the negotiator’s objectives, it’s important to keep the negotiation positive and forward looking. It’s important to enable your counterparty to capture a vision of the future. This is done by maintaining an optimistic attitude, emphasising common ground, and showing empathy for the other party’s concerns, building on their proposals rather than rejecting them outright. Focussing on the distance and differences between the two parties is likely to generate an atmosphere of pessimism between the parties and move them further apart from each other.

Trust can be compared to a bank account – everything you do in negotiation either builds it or erodes it. The emotionally aware negotiator needs to consider and choose their tactics and behaviours in this light. If building an atmosphere or trust is important, for example, “opening extreme” is not going to be appropriate, despite of the advantages that it might bring in the short term. Sharing information and demonstrating impartiality, on the other hand, will help build trust.

Summary

Emotions are something which the commercial negotiator cannot afford to lose sight of. Our emotional brain provides us with useful information, but sometimes can take over and prevent us from thinking rational thinking. Therefore we need to learn to listen to it and control it.

We also need to be aware of the emotions of the other party. How are they feeling, and how do we want them to feel? What can we do to engender certain feelings in the other party? Remember that their feelings are going to drive their decisions.

Watch out – excessive levels of empathy can be dangerous if they lead to unnecessary concessions. Being emotionally aware does not mean you are going to go all soft on the other party.

Historically, some have elevated the value of the relationship to the highest levels, even at the expense of the deal. Others have perceived emotions to be problematic in the negotiation, and therefore something to be distanced and tamed.

A truly commercial negotiator is someone who has learnt to recognise, control and leverage emotions both in themselves and in the other party. They are able to recognise the importance of both the cognitive and emotional aspects of the negotiation to maximise the deal.