Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

“Go ahead, make my day,” said Clint Eastwood as inspector “Dirty” Harry Callahan in the movie “Sudden Impact.”

This threat, backed up with a large gun and delivered to a “punk” holding a hostage, was very effective — as intended.

But what about less violent threats, especially those in business and legal negotiation contexts? How should we deal with them when we are on the receiving end?

First, we must understand what strategic message a threat sends. In short, a threat is a very aggressive leverage tactic in which one party suggests they can make the other party’s alternatives to their deal really, really bad.

Dirty Harry was telling the punk he had only one alternative to giving him what he wanted: death. That’s a very bad alternative for the punk, right?

Likewise, a businessman threatening to sue his supplier over a breached written contract involving delivery of nonconforming goods is saying, “Give me what I want, or I will make your alternative much worse than accepting my offer. That is, you will lose a lawsuit and pay a ton in legal fees.”

Recognizing the nature of threats, we must then decide how — if at all — to respond.

Northwestern Kellogg School of Management’s Katie Liljenquist and Adam Galinsky presented some useful advice — called their DEAL approach — in a recent Harvard Negotiation newsletter.

Critically, they first ask if any response is warranted. In fact, they note that a study found “negotiators abandoned their threats 77 percent of the time when the threats were unreciprocated.”

What does this mean?

First, take a step back and examine your natural physiological instinct to retaliate. In short, don’t react immediately.

And second, in many if not most cases, counterthreats will be counterproductive.

Of course, a response may be warranted. If so, here is Liljenquist and Galinsky’s advice, along with some of my own thoughts.

1. Diagnose the threat.

Initially explore why your counterpart has threatened — either explicitly or implicitly — to make your alternative to his or her deal particularly poor. What motivated the threat?

Your response should be different if the threat arose from frustration, deep insecurity or a desire to dominate. First, find the underlying motivation. Then consider possible responses.

2. Express understanding.

If you’re dealing with a threat arising from frustration, explicitly acknowledging this emotion by saying, “I understand how you feel” can be extremely powerful.

But make sure you don’t communicate that you are conceding or rewarding the threat. Perhaps add the words, “I may not agree with you, but I understand where you’re coming from and might feel the same way if I were in your shoes.”

3. Ask questions.

At times, a threat may be communicated in a way that conveys a straightforward expression of your counterpart’s leverage evaluation.

“As I see it,” your counterpart might note, “you have two choices: Pay us now for our damages due to your delivery of nonconforming goods — or pay us later, along with your and our attorneys’ legal fees.”

Here, you might ask about your counterpart’s long-term needs and explore why a lawsuit might be worse for both parties than some sort of deal. Perhaps your counterpart has a continuing need for goods that you can provide at a substantial discount.

Or perhaps you might ask how a lawsuit would be good for your counterpart, given that their “success” in obtaining a large judgment might throw you into bankruptcy. Then they would have to pay their attorneys, get in line behind your secured creditors, and perhaps end up with pennies on the dollar years down the road.

That wouldn’t be good for anyone, right?

4. Label the threat.

Finally, if you have reason to believe your counterpart’s threat is an effort to intimidate or bluff you, consider simply labeling the threat and moving on. Liljenquist and Galinsky suggest this language: “I don’t consider threats very productive. Let’s put our heads together and come up with some viable solutions.”

They then note that research has found this labeling effort — which explicitly calls attention to what’s happening — has been shown to be “the most effective way to get a negotiation marred by threats back on track.”

Of course, some parties will ignore these countermoves or will view them as expressions of weakness and continue with their aggressive ways. In these cases, an explicit statement about your power and great alternative — and maybe even a counterthreat about what you can do to their alternative — may be the way to go.

But before you take that route, consider the DEAL way. It will be especially helpful if you anticipate a relationship with your counterpart in the future.

Published June 1, 2007 The Business Journal

Share This