The paradox of the less powerful

January 10, 2018

 

Overtly or not, we negotiate on a daily basis. What we don’t know about our relative position of power can hurt us. Counter to intuition, it can be advantageous to be the less powerful negotiator. That is, if you recognize and understand how to harness the opportunity.

 

Generally it is assumed that the more powerful and dominant player has the upper hand in negotiations. These more powerful participants in a negotiation hold more attractive alternatives. They can simply walk away. More dominant negotiators then, we might assume, may only look at a scenario as a zero-sum game, in which one party’s gain is the other party’s loss. With less to lose if the negotiations fall apart, those with the upper hand are likely to negotiate harder to get more of what they want.

 

Curiously, empirical research by Margaret Neale and Thomas Lye of Stanford University shows the opposite can also be true. According to their research, a weaker player is less concerned with value-claiming and more interested in getting the deal done. Presumably, since the players with the lower hand have fewer options, they would prefer a deal in which more of the gain is transferred to the opponent than no deal at all. Here lies the paradox. Perhaps surprisingly, the weak player can exploit the synergies between the opponents and thereby expand the available pie, even obtaining a surprisingly bigger slice. Compared to negotiations between opponents of equal power, negotiations between those of unequal power have the potential to yield a greater outcome. This shifts the result, more optimally, from a zero-sum game. What Neale and Lye have found is that the lower-power party is the engine for this value creation.

 

One of the main takeaways from my graduate-level negotiations studies at Columbia Business School is this: Consider what your counterpart values and what you value. Chances are, these values do not overlap in every arena and therefore you can stand to gain more of what you want by giving up something less important to you but more important to your opponent. Too often, negotiations do not explore the hidden values and what trade-offs can be made outside of zero-sum thinking.

 

Returning to the research of Neale and Lye for a moment, another way to create value is for a negotiator to display the opposite behavior of the opponent. In other words, if dominant behaviors are displayed, show cooperation and deference. Conversely, in dealing with a deferential player, empirical research reveals that dominant characteristics will yield higher value creation. Matching dominance (or deference) prevents participants from focusing on creating additional opportunities to expand the available outcome from the negotiation.

 

Surprisingly perhaps, complementarity creates opportunities for successful coordination. For everyday and for important negotiations then, having a traditionally lower bargaining position can confer greater rewards if you employ a complementary stance and think about how to exploit the opportunities to expand the pie.

 

 

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