Rotman Management Spring 2018 - The Power of a Prospecting Mindset in Negotiations

FACULTY FOCUS Geoffrey Leonardelli, Professor of Organizational Behaviour, Rotman School

The Power of a Prospecting Mindset in Negotiations IN MY OBSERVATIONS OVER THE YEARS, it is clear that many negotiators want to avoid losing, win big and come out strong. I get this. There’s a feeling of security that these words conjure up. In any kind of competition where there’s a winner and a loser, people want to be the winner. Alas, it is these very thoughts that can make the most experienced negotiator susceptible to poor judgment.

Based on a program of research that spans a decade, I would advise people to adopt a different mindset when they negotiate by becoming a ‘prospecting negotiator’.

The concept of being a prospecting negotiator reviews a fundamental shift in the negotiator’s mindset. The term ‘prospecting’ evokes images of 1800s California and the Klondike gold rushes. In each case, people set out to find their fortunes, to dig through and sieve the earth to identify what they sought — nuggets of gold. About 100,000 people uprooted themselves for each gold rush, travelling thousands of miles by land or sea to seek their fortune. By one estimate, about half of the Californian prospectors found enough gold to eke out a modest profit, although the per-

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centage was much lower for the Klondike rush (more like 10 per cent). Not all came out ahead, but they shared a common goal: They were actively looking for something better.

At its core, ‘looking for better’ is not how many people might characterize their experience negotiating. They may see it more like the Californian or Yukon landscapes of yore: We don’t know where to look for ‘gold’, the terrain can be inhospitable and the people near us serve as reminders of our worst fears about humanity (at least as the now concluded HBO show Deadwood would have us believe). However — and this is key to the prospector’s mindset — without proactively seeking opportunity, negotiators resign themselves to accepting the status quo without looking for more.

Such is the mindset of the prospecting negotiator, a negotiator focused on opportunity and developing relationships so as to further his/her prospects. My research on this subject has led me to conclude that this is not simply a positive re-framing of negotiation, or a Pollyanna outlook on a very real and difficult task. No doubt, negotiating effectively is hard work, and even our best efforts do not guarantee a satisfactory deal. That noted, I have found that negotiators who focus on expanding opportunity are more likely to find

By not proactively seeking opportunity, negotiators resign themselves to accepting the status quo.

better deals for themselves and, if the circumstances allow, for their counterparts, too.

Three simple strategies set these negotiators apart and help them excel when they bargain.

They keep their eye on the prize. An important conclusion

we have reached about prospecting negotiators is on the goals these negotiators set. As indicated, they are looking for better, and they are committed to getting there. Commitment and willpower are sturdy words that define a tough negotiator. However, prospecting negotiators are not simply looking to be tough, they are looking for opportunity. My research conducted with collaborators at Columbia University, University of California and London Business School finds that this combination is a powerful one.

In one study, we measured how negotiators differed in their degree of focus on opportunity. Those with a naturally stronger commitment to opportunity did better when negotiating than those who do not. In another study, we experimentally manipulated this goal. Here, we encouraged participants to set goals, but to do so by either seeking opportunity or to prevent negative negotiation outcomes.

In this study, our methods ensured that negotiators were similarly committed to the goals, but differed in what they were trying to achieve. It is here that those prospecting negotiators — who set goals around what they hoped to achieve — gained more than negotiators who sought to prevent outcomes that would be detrimental. These studies tell us that a combination of goal commitment and prospecting focus lead to better outcomes.

Success for prospecting negotiators is flexibly defined.

More recent research in collaboration with Rotman PhD student Jun Gu and post-doctoral fellow Vanessa Bohns (now at Monash University and Cornell University, respectively), took a closer look at prospecting and non-prospecting negotiators and how they define success.

A key difference in these two types emerged: Non-prospecting negotiators — individuals who focused on maintaining the status quo, avoiding loss and inhibiting threat — fixated on how well they did relative to their counterpart. For

Three Defining Strategies of Prospect Negotiating • Keep your eye on the prize: Maintain focus on what you hope to gain.

• Define success flexibly: Look for ways to accommodate your counterpart while minimizing concessions to your aspirations.

• Initiate and problem-solve before conceding: See what you and your counterpart can do together before leaping to concession-making.

them, winning meant that their counterpart had to lose, whereas a deal for both was defined by self-sacrifice, or making concessions that minimized differences between their outcome and their counterpart’s. There may seem to be something noble about cooperation defined by selfsacrifice, but it is a pyrrhic victory; ironically, they chose to commit to a more concessionary outcome even when there were possibilities that both parties could end up with more.

On top of that, there is a rigidity that this perspective brings: These negotiators either seek to win or concede, believing it is not possible to do both.

Our prospecting negotiators, by contrast, unlinked their outcomes from those of their counterparts, instead seeking the best outcome they could identify for themselves. Interestingly, this definition of success sometimes extended to their counterpart too: Prospecting negotiators sought to do better for both parties. In this regard, they could eat their cake and have it too. They could win, they could cooperate, and they could do both at the same time. rotmanmagazine.ca / 119

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They Initiate and problem-solve before conceding. The

third strategy we have identified is that prospecting negotiators appear to have a more versatile toolkit from which to engage their counterparts. We have found that they seek to explore and engage with their counterpart, and are more likely to initiate the first offer. Others have found prospectors to be more creative in generating solutions to problems, and this can turn out to be beneficial when bargaining, as it increases the likelihood of identifying better deals for both parties.

The data bears this out. Relative to what concessionmaking would dictate, prospecting negotiators are more likely to agree to deals that are better for themselves and their counterparts too. Far from seeing the negotiation as a win-lose competition, they had the flexibility to build a mutually beneficial relationship when opportunities allowed — and to secure a better deal for themselves when they do not.

In closing

Negotiations are always tough. The uncertainty and potential for conflict can at times feel insurmountable, making it tempting to adopt a protectionist approach. However, the accumulating research is clear: The prospecting negotiator’s toolkit is a source of strength and flexibility, and serves to build a broader range of solutions in the pursuit of opportunity.

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Geoffrey Leonardelli is an Associate Professor of Organizational Behaviour at the Rotman School of Management.

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