Anchoring indiscriminately: An ill-advised alternative to not offering at all

People commonly have one of two intuitions about whether to make the first offer in a negotiation. Many people’s intuition is simple: Don’t. Wait to hear what the other side says and try to learn from it. While appropriate in certain situations, this approach has major problems that I and others have detailed before.

But today, let’s explore the other common intuition about first offers. The more brazen among us tend to assume the opposite: Always move first. Always drop an aggressive anchor that will force the other side to play on your home turf. To that point, haven’t we all worked with someone who anchors indiscriminately on everything—who always suggests allocating themself the most staff, biggest budget, or smallest amount of work?

We’ve all worked with someone like that.

And so we should all know that this approach is just as ill-advised as the first—all but certain to make life non-negotiable. Since many people haven’t gotten the memo, though, let’s consider a few serious downsides of this strategy in the workplace. To all those who consider anchoring indiscriminately a wise tactic, consider the risks that:

  1. You’ll develop a reputation: Perhaps the biggest risk of anchoring indiscriminately is that everyone will associate your name with the tactic. When I mention the person who asks for the most staff, biggest budget, or least work, you’ll personally pop into everyone’s brain. And if the image sticks in their mind, they’ll probably start…
  2. Using the same tactic on you: If it was just you anchoring indiscriminately, the tactic might work. But there’s a whole world of savvy or at least cynical and battle-scarred negotiators who, observing you anchoring indiscriminately, might start anchoring just as indiscriminately against you in all future confrontations. And an ongoing war of indiscriminate anchors is not gonna end well. Alternatively…
  3. They’ll walk away: A deal anchored around your hopes and desires is great as long as it happens. But research suggests it may not if the recipient is offended by your offer. Instead, they’ll get mad and march away. This is not a justification for not moving first in an isolated situation, but it’s a consideration when considering whether to anchor indiscriminately, as those who detect the tactic are likely to get offended more easily and often.
  4. You’ll have to live with yourself: If you happen to work at a particularly pliable organization, you might get lucky and find others assenting to all your indiscriminate requests. But then you’ll have to live with an accumulating mass of guilt associated with a series of unnecessary requests, if not a groundswell of derision from your colleagues.
  5. You’ll lose touch with your real priorities: Less appreciated but no less important is the risk that you’ll get so fixated on anchoring indiscriminately that you’ll forget to consider your real priorities. In the process of dropping anchors wherever you can—and often it’s the quantifiable stuff like staff numbers, dollar amounts, and time commitments—you’ll forget to consider whether those issues matter most in a given situation. And since the qualitative stuff often matters more, you’ll miss the opportunity to anchor where it counts.

So if both anchoring indiscriminately and avoiding anchors entirely are problematic, what would I advise? Choosing your anchors carefully: identifying the negotiations that matter most and the issues that matter most within them, and anchoring unabashedly on those. But also identifying the less critical negotiations and less consequential issues and demonstrating the willingness to be a team player. Here’s to anchoring intelligently rather than indiscriminately!

The unreliability of our gut: Intuitions in negotiation

The recent summit between President Trump and Kim Jong Un has brought the issue of intuition in negotiation to the fore. The North Korean dictator reportedly spent years planning for such a meeting, trusting little to his gut and everything to his analysis and preparation. President Trump, in contrast, is widely known to rely on his gut, for example by saying that he would simply intuit whether a deal with Kim was possible within the first minute.

Given these two divergent approaches, each with its own appeal, it’s probably worth considering the reliability of our intuitions in negotiations. Unfortunately, I’m here to suggest that they are not very reliable at all.

In the spirit of making life (if not world events) negotiable, consider the following five ways that our intuitions can fail us. Our intuitions often tell us…

  1. To avoid making the first offer. Seems intuitive to let the other party move first. That way, we can learn about their preferences and maybe get a great deal. Right? Well, often wrong. As I’ve suggested often before, if we do that, we miss the golden opportunity to focus the other party’s attention on our own goals and desires, making us counteroffers very much in line with our own thinking. Instead, we end up making offers very much in line with theirs.
  2. To deal with one issue at a time. Seems intuitive to agree on each issue in turn, and probably the easiest first. Right? Typically wrong again. If we do that, we treat each each issue as a competitive fight, losing the opportunity to link and trade issues. Accordingly, we leave ourselves with a tremendous problem when we come to the truly contentious issues, typically at the end.
  3. That if I want something, you don’t. Seems intuitive that two negotiators want two opposite things. Right? Wrong more often than you’d think. People do want the opposite of some things, typically money or other quantitative issues. But, as I’ve suggested often before, they often want the same thing on qualitative issues—or at least care less about some qualitative issues than others, paving the way for tradeoffs. Intuition fails us again, precluding the possibility of a win-win.
  4. To focus on our bottom line. Seems intuitive to focus on our bottom line, and especially whether the deal under discussion is better than said line. Right? Wrong or at least woefully incomplete. If we focus exclusively on our bottom line, chances are that we’ll settle for something just better than that line, which is often not very good at all. Instead, we need to focus on our target, only coming back to our bottom line when we need to, at the end.
  5. That everyone negotiates pretty in much the same way. Seems intuitive that everybody around the world pretty much thinks about and approaches negotiations the same that way we do. Right? No, totally wrong. Mountains of evidence now indicate that negotiators from different cultures very markedly in their strategies, interests, and the ethical or legal standards they bring to the table. Intuition fails us again, and this time with a bang.

So you see that, appealing as our gut may be, it’s not particularly reliable in negotiations. And now that we all understand as much, maybe we can collectively convince our political leaders.

Influencing by volunteering

In organizations, tasks often arise that no one really needs or wants to do. An agenda needs to be developed; a Google doc needs to be compiled; a memo needs to be written. If it doesn’t fit neatly into anyone’s job description or fall squarely onto anyone’s plate, getting it done obviously requires someone to take the initiative.

Sometimes, someone volunteers—presumably out of goodwill or a desire to take this task rather than the next one. At least as often, though, a whole lot of people play musical chairs in hopes of quickly finding a seat. Even setting aside the goodwill or desire to avoid the next task, though, these opportunities offer an often overlooked opportunity to make life negotiable.

To see how, let’s take a brief walk through the world of negotiation research.

Taking such a walk, you’ll quickly encounter the first offer effect: the finding that the person who makes the first offer tends to better achieve their objectives. Dig deeper into the effect, and you’ll find that it’s grounded in one of the most robust findings in all of psychology: anchoring, or our tendency to make ambiguous judgments by focusing on whatever information happens to be before us at judgment-time. First offers matter because the second offerer uses them as a point-of-reference.

What in the world does this have to do with organizational tasks? Well, taking the initiative often amounts to making the first offer. In other words, avoiding the inclination to play musical chairs often allows you to put your own stamp on the agenda, the Google doc, the memo. Since somebody has to develop the agenda (which will inevitably influence the topics and their order), somebody has to compile the Google Doc (which will inevitably influence the facts considered and how), and somebody has to write the memo (which will inevitably influence its tone), it might as well be you. That way, you’ll claim at least some of the organizational influence so many people claim to eagerly covet.

Now, like any advice based on any decision-making bias (e.g., anchoring), you’ll have to use this one with extreme ethical caution. While it’s true that somebody has to do the stuff above, if you do it with devious intentions, you’ll not only curtail your influence—you’ll eliminate any semblance of goodwill. So don’t omit a key item from the agenda, key fact from the Google Doc, or key finding from the memo (for example).

And you’ll obviously have to be selective, volunteering for the tasks where you care rather than everything that crosses the transom.

Act ethically and choose selectively, though, and you may find your influence starting to wax. Because the fact remains that somebody has to do it. If you care about it and can find the time, it might as well be you.

Convincing kids to do things, part II

Last week, we considered convincing multiple kids to do things, characterizing the whole process as a multiparty negotiation. This week, let’s consider convincing one kid to do one type of thing: something good for them but not particularly appealing. For example: eating their veggies, getting their flu shot, or making some form of physical contact with the ocean during an expensive and time-consuming beach trip (not that the last holds direct personal relevance).

In my experience, a few simple, research-based tips can make these beneficial but fear-eliciting requests a bit more negotiable. For example, you might try to:

  1. Make an aggressive but justifiable first offer: Do you actually hope they ultimately eat but one veggie? I’d suggest starting by asking them to eat all their carrots, broccoli, and spinach. Then, when you eventually back down to carrots, you’ve become a reasonable and accommodating parent rather than an intransigent and annoying one.
  2. Plan for judicious concessions: I wouldn’t recommend jumping right from all of all three veggies down to the carrots alone. If you do, they’re likely to try and nix the carrots too. Instead, I’d suggest an initial concession of half the spinach, most of the broccoli, and all the carrots (or something like that). Then, make smaller and smaller concessions as you approach all the carrots, thereby signaling to your aspiring negotiator that you’ll go no further.
  3. Ask why: The most powerful word in the negotiator’s dictionary is “why.” Why? Because it often paves the way toward a creative solution. Perhaps it’s patently obvious they’re afraid of the ocean because of its immense waves. But then you ask why and hear something about its probably chilliness or sharp shells—problems you could solve by asking them to submerge a finger or wear their water shoes.
  4. Treat it as a multi-round negotiation: Supposing your aggressive first offer doesn’t work, you could always try the reverse: a multi-round negotiation in which you ask for a little and then progressively request more. Will your nervous daughter perhaps dip her toes today, wade to her waist tomorrow, and catch some crazy surf the third day? (For more on #1 versus 4, here’s a good reference.)
  5. Introduce new issues: Let’s be honest: there’s very little to like about a flu shot (other than avoiding the flu). Even you don’t even like it, so your kid won’t either—and you won’t get far by touting its benefits. In that case, you might consider adding an issue—namely, an issue that your kid will find more appealing than the shot, like stickers or lollipops. Introducing one of these possibilities upon the successful completion of the flu shot could spell the difference between a meltdown and mature acceptance.

In sum, adults know they have to do things they don’t much like. But kids often don’t, necessitating a creative and thoughtful strategy on behalf of their parents. Here’s hoping some simple tips can make these fearsome situations a bit more manageable.

Our many everyday opportunities to negotiate

I might write about negotiation, but I’m still amazed at how often everyday negotiation opportunities present themselves. And identifying such opportunities is nothing short of critical, as finding chances to negotiate is often the only way to make life negotiable.

To see what I mean, consider three recent interactions with a single bike shop. The background: My wife had dropped off her bike in a moment of panic—when a blown tube left her incapable of getting home. I knew my own bike needed a tune-up but couldn’t drop it off at that particular time. The bike shop had called my wife on a Friday, indicating that her bike was ready for pickup:

  • Negotiation opportunity #1: My wife really wanted her bike. With two small kids and one small car, however, she had few real opportunities to pick it up. Identifying an opportunity to help her and potentially get my own bike serviced at the same time, I asked her to call the bike shop and authorize me to pick it up. She did, and they agreed. Many people wouldn’t see this as a negotiation, it was. By simply taking the initiative to ask for what she wanted rather than wait for a window of opportunity months later, she proactively achieved her interests (retrieved her wheels).
  • Negotiation opportunity #2: Showing up on my own bike, I indicated my desire to pick up hers. I also expressed my interest in having my own bike serviced, but only if: A) it could be done before Monday (when I needed it to get to work) and B) there was a volume discount available given the two sequential repairs. The bike shop indicated that they were open over the weekend and had just finished their other repairs, so A was no problem. And, although they usually only give discounts when two bikes are repaired together, they would offer me a volume discount just this once. Cheers to request B! Again, this might not seem like a negotiation. But insofar as I shared and achieved my interests (and also made the first offer), it certainly was.
  • Negotiation opportunity #3: Showing up to pick up my own bike, I paid and happily rode off. Unfortunately, the ride home revealed that the annoying clicking sound I had noted when I dropped it off was still there, clicking away. It would not be unusual for a biker in this situation to suck it up and ride home, assuming the shop did its best. But here was another opportunity to negotiate—namely to return to the shop and report, politely, that the underlying issue had not been resolved. Finding the shop skeptical, I offered the owner his very own opportunity to ride my bike. And, sure enough, there was the click. And the click. And the click. A little work with his reliable wrench, and voila! The clicking disappeared. I rode away happier, able to enjoy my bike without earplugs. And I probably left the owner, despite his initial skepticism, pleased that he had retained a customer.

Now, none of negotiations are high-stakes deals likely to reshape the global business or political landscape. Not even one would probably appear in a book like The Art of the Deal. But they indicate just how common negotiations can be, and how identifying everyday opportunities to negotiate can improve at least one small corner of the world—namely, your own.

Have you recently encountered any unexpected, everyday opportunities to negotiate?

How do negotiators lead?

How do negotiators lead? Even the question sounds strange, as one negotiator is not really following the other. Nevertheless, negotiations need leaders. Indeed, the negotiator who leads is often the negotiator who triumphs. And leading in negotiations can often make your own life more negotiable.

So what exactly does leadership in negotiation entail? In my view, having the gall to set a strategic direction for the negotiation. And—since the other negotiator has no particular reason to comply—doing so in a manner that subtly encourages them to follow. Leadership in negotiations, I believe, involves doing five things first, in hopes that they take the cue and reciprocate each time:

  1. Be the first to state a goal: In sharp contrast to the image of negotiators as bombastic businessmen who start by lobbing threats and tweeting ultimatums (not that we know anyone like that), negotiators-as-leaders are quick to inform their counterparts, explicitly or implicitly, that they share the same goal: identifying a solution that solves everyone’s problems. However bombastic the subsequent tactics, the shared goal provides at least the possibility of trust.
  2. Share the first piece of information: Negotiators-as-leaders know that neither negotiator has a snowball’s chance of achieving their own objectives unless both negotiators, having built some trust, lay some cards on the table. But most negotiators are wary of card-laying, lest the counterpart see the full hand. Thus, negotiators-as-leaders lead by example, by sharing a particular card—namely, some subtle indication of their foremost priority. It certainly takes gall, and surely is not risk-free. But neither is leading, the last time I checked.
  3. Ask the first question: The beauty of sharing the first piece of information is that the negotiator-as leader can then ask the first question. Having laid at least one card on the table, they can now legitimately ask to see at least one of the counterpart’s. And here’s the wonderful part: research suggests that when you do something nice to somebody else (e.g., sharing information), they generally feel compelled to do something nice to you (e.g., answering your question).
  4. Make the first offer: Leadership in negotiation is not all lollypops and sunshine. Negotiators-as-leaders also know how to lay on a little bombast, albeit at the right time and in the right way. One appropriate way to unleash the bombast, as I’ve said repeatedly before, is to make the first offer. But the appropriate time to do so is after a sufficient number of cards have been revealed. So negotiators-as-leaders know that they ultimately need to make the first offer, but only after they play a few hands.
  5. Make the first concession: The beautiful thing about making the first offer is that it also enables a negotiator to make the first concession. Having anchored the other side on an aggressive first offer, and having heard the presumably aggressive counteroffer of the counterpart, the negotiator-as-leader can now show some goodwill by backing down from the precipice. And as negotiators-as-leaders well-know, a little backing down can take two negotiators a long way from the cliff.

In sum, negotiations need leaders just as much as other organizational situations. It’s just that negotiators-as-leaders don’t have the luxury of devoted followers sprinkling rose petals at their feet. They have counterparts who may see them as the enemy, and thus show no particular eagerness to follow. So negotiators lead not by issuing directives or strategic decrees from the mountaintop. They lead by taking action and hoping the other side follows. And surprisingly often, they do.

False anchors II: Don’t get sunk by your teenager

My latest post discussed the topic of false anchors: large numbers issued by retailers for the sheer purpose of anchoring the consumer, then creating an immediate contrast with the “sales” price. “Our amazing TV usually sells for $3000 but—today only—get it for an unbelievable $1800!” The purpose of the post was to alert unsuspecting buyers to the possibility of a psychological trap.

Well, an astute reader offered another example well worth relating, in the spirit of making life negotiable. She actually mentioned the idea of false anchors to a bunch of high schoolers, who recognized the tactic like the back of their hand. Indeed, they immediately offered an analog from their own lives. Whenever they have some bad news to relate to their parents—a D on their math exam, perhaps—they admitted they often say something like this: “Mom, don’t worry: I’m not pregnant, and I haven’t been arrested. I do have to tell you something, though: I just got a D on my math exam.”

What a perfect extension of false anchors! Teenagers, like retailers, are essentially anchoring the listener—in this case, their unsuspecting parents—on some really bad news. And shortly thereafter, they’re bringing up the real news, which is bad but not REALLY bad. In the context of the really bad news, the bad news doesn’t seem so bad at all.

Using this example to make life negotiable depends on whether you’re the teenager or the parents. If you’re the teenager, it undoubtedly works—once. It’s a good way to deliver some bad news and make it seem slightly less bad. Otherwise, why would your peers use it so often? But that’s not to say it’s ethical, preying as you are on your parents’ psychological biases. Nor that it will work more often than once. Your parents, having at least half a brain, will probably cut you some slack the first time but call you out the second time, not necessarily for the bad grade but for the well-worn use of a sketchy tactic.

Now if you’re the parents, making life negotiable means recognizing this tactic the first time. I can only hope that this post helps you to do so. And when you do, your response should resemble the consumer’s response to the amazing TV deal. Just as the consumer must ignore the first price and compare the second against competitors, you the parent must force yourself to ignore the anchor—in this case, the impregnation or incarceration—and focus on the real point—the D. Then evaluate that D against whatever standard you usually use to evaluate grades, not the prospect of grandkids or bail bonds. And, while calling Best Buy to tell them you spotted their false anchor won’t get you very far, telling your kid you spotted their tactic will probably go a ways toward nipping it in the bud in the future.

Have you ever dropped a false anchor as a teenager or detected one as a parent?