“I messed up, and I don’t know what to do. Now I need to ask for something back that I already agreed to provide. What should I do?”
What should you do if you’ve made a mistake in a negotiation and you know it?
First, realistically, sometimes it’s not possible to do anything. If you underbid on a house and the seller does not counter but accepts another bid and has a legally binding contract, you need to keep looking.
Of course, keep an eye on that house, as seemingly done deals sometimes unravel later.
Second, the best long-term recipe for avoiding mistakes is to increase the strategic nature of your efforts.
Regular readers of this column will recognize a constant theme in my columns — be strategic, not instinctive. Off-the-cuff negotiators make far more mistakes than strategic negotiators.
Having noted this, often you can take certain steps to try to salvage negotiations even when you make significant errors. What can you do?
Here are four common negotiation mistakes and strategies that will help put the genie back in the bottle.
1. Beware of the premature offer. One common mistake involves making an offer or concession too early. In the United States, we sometimes want to cut to the chase and start sooner, not later. Resist the urge. Make sure you have sufficiently prepared and have enough information to truly evaluate when and where and how to start the offer-concession stage.
But if you mess up by starting too early, and you know this because your counterpart openly views your first move as extremely reasonable (signaling it’s really good for them) and your counterpart then makes an aggressive counter, what should you do?
You likely will need to become more stringent and aggressive earlier in the process than usual, even though it might not have been otherwise appropriate. In other words, move less and string it out over a longer period of time to make up for your premature and insufficiently aggressive first offer or concession.
2. Making up for an over-the-top first move. What if you start with a really aggressive first offer or counter and your counterpart doesn’t even respond after an appropriate period of time? Or your counterpart appears offended by your apparently overreaching approach?
First, re-evaluate your move and measure it against independent objective criteria that might support it as fair or reasonable. If you can find standards like market value, precedent or an expert opinion that supports your move as reasonable, use them to justify it.
Sometimes, the mistake is not the aggressiveness of the offer, but your failure to accompany the offer with an objective reason why it’s fair.
And if the offer really was too aggressive and you can’t find any standards supporting it, consider betting against yourself. No one likes to do this, but if your alternative is to lose the deal and the move you make is better than walking away, hold your breath and do it.
3. Don’t underestimate the value of an apology. Everyone has lost his/her temper and/or become excessively and unproductively emotional in some negotiations — be it with your spouse or others.
If this happens, take a break and a cooling off period. Walk away. Don’t continue saying and doing things that will make the situation worse — and that will ensure you have an even bigger hole from which to dig out of later.
Then after an appropriate amount of time, which may be 30 minutes or 30 days, consider an apology. Don’t underestimate the powerful impact of a sincere apology if the parties have a continuing relationship, be it in the personal or business world.
4. Revisiting a closed issue. What if you have already conceded an issue and need to revisit it? Here, your credibility is at stake. And even though you may have an understanding that there is no deal on any issue until the final deal on all the issues, parties psychologically feel that once you have agreed to something that it is not fair to revisit it.
So what should you do? Consider explaining why you need to revisit it.
Say “Look, I know we already seem to have resolved this issue, but my client has re-evaluated it given what happened to the market Friday, and we need to put it back on the table.”
Or repackage that issue in an offer with another issue that has not yet been resolved. “How about we provide you with your closing date, and you — in return — agree to the arbitration clause (which you had already conceded) and that Arizona law applies?”
Let’s face it — we’ve all made mistakes in negotiations. But if we learn from them and take steps to correct them, it will lessen their negative impact. Then we hopefully won’t need that second — or third — bite at the apple.
Published March 4, 2005 The Business Journal