The 1 Minute Trick to Negotiating Like a Boss

Life is full of negotiations, big and small. We negotiate for raises, we negotiate with clients and providers over prices, and we negotiate for more staff, the best projects, and flex time. (Then we go home and negotiate with our kids about how old you have to be to get your own smartphone.)

To be successful, you really need to know how to negotiate well. But the truth is, this particular skill doesn't come naturally to many people. This is because a negotiation is an experience that is rife with conflicting motivations. When you haggle with another party over price, you need to somehow reconcile your desire to pay (or be paid) your target amount with your fear that if you push too hard, the negotiation may break down. You might end up empty-handed, humiliated, or out of a job. Negotiations are always gambles, and there is always risk.

Who Keeps Their Eyes on The Prize?
One quality that great negotiators possess is the ability to stay focused on their ideal target, despite the risks they are facing. As research conducted by Columbia's Adam Galinsky and his collegues shows, those most able to do it have what's called a promotion focus.

Promotion-focused people think about their goals as opportunities to gain — to advance or achieve, to end up better off than they are now. Whenever we think about our goals in terms of potential gains, we automatically (often without realizing it) become more comfortable with risk and less sensitive to concerns about what could go wrong. Prevention-focused people, on the other hand, think about their goals in terms of what they could lose if they don't succeed — they want to stay safe and keep things running smoothly. Consequently, when we are prevention-focused, we become much more conservative and risk-averse.

As Tory Higgins and I describe in Focus and in our recent HBR article, these different ways of looking at the same goal impact everything about us — our strengths and weaknesses, the strategies we use, and what motivates us. When the goal in question is to pay the lowest price or to get the biggest raise, our focus has profound effects on the way we negotiate.

In one of Galinsky's studies, MBA students performed the role of a job recruiter, whose goal was to hire a desired candidate (played by another MBA student) while paying the lowest possible signing bonus. Before beginning the negotiation, the recruiters completed an assessment of their dominant focus. (Want to try it? You can here.) The researchers found that the more promotion-focused a recruiter was, the less money they ended up doling out in the final agreement. Promotion focus and money paid were correlated an impressive -0.40.

Why were they so successful? Galinsky found that more promotion-focused a recruiter was, the more likely they were to report having kept their target price in mind throughout the negotiation. A prevention focus, on the other hand, leads to too much worrying about a negotiation failure or impasse, leaving the recruiter more susceptible to less advantageous agreements.

The Bold Opener
A second essential in negotiation is a strong opening bid, since that bid is the jumping off point as well as the frame of reference for the negotiation that follows. You are never going to end up paying less than your initial offer when purchasing a car or making a bigger salary than you asked for when starting your new job. But a strong opening bid takes a certain amount of confidence — and promotion focus helps us achieve this.

In a second study, Galinksy and his colleagues divided 54 MBA students into pairs and asked them to take part in a mock negotiation involving the sale of a pharmaceutical plant. Both the "seller" and "buyer" were given detailed information about the circumstances of the sale, including the fact that the "bargaining zone" would range from $17-25 million dollars.

The researchers then manipulated the focus of the buyers to be either promotion or prevention (I'll explain how you do that later). The negotiation then began with an opening bid from the buyer. Promotion-focused buyers opened with a bid an average of nearly $4 million dollars less than prevention-focused buyers. They were willing to take the greater risk and bid aggressively low, which ultimately paid off in a big way. In the end, promotion buyers purchased the plant for an average of $21.24 million, while prevention buyers paid $24.07 million.

This is one of those things that is worth taking a moment to think about — two negotiators, each armed with identical information, facing similar opponents, and yet one overpays by nearly $4 million dollars. The only difference was that one negotiator was thinking about all that he could gain, while the other focused too much on what he had to lose.

Making The Pie Bigger For Everyone
Promotion focus helps you get a bigger piece of the pie than your opponent. But of course, not every negotiation has to have a winner and a loser. In multiple issue negotiations, there is the possibility of outcomes that are beneficial to both parties, because each party may not prioritize every issue the same way. By yielding on lower priority issues, both parties can reach compromises that get them what they want most - a solution that, as Galinsky and colleagues put it "expands the pie."

Who is most likely to find these optimally beneficial solutions? It probably won't surprise you to learn that when the researchers placed both parties in a multiple issue negotiation in a promotion focus, they reached the maximally efficient outcome 79% of the time (compared to only 65% of the time when they were prevention-focused).

How You Can Become More Promotion-Focused
Even if you are naturally prevention-focused or if you tend to become prevention-focused when faced with the uncertainties of negotiation, you can become promotion-focused when you need to be. All you need to do is take a minute or two to focus only on what you have to gain and what you hope to achieve and banish all thoughts of what you might lose.

For example, to put his buyers in a promotion focus, Galinsky simply asked them the following :
Please take a couple of minutes to think about the aspirations you have in a negotiation. What are the negotiation behaviors and outcomes you hope to achieve during a negotiation? How you could promote these behaviors and outcomes?

It's really as simple as that. When you are preparing for your next negotiation, take a moment to list everything you hope to accomplish, and all the ways in which you will benefit if you are successful. Re-read this list just before the negotiation begins. And most importantly, shut out any thoughts about what could go wrong — just refuse to give them your attention.

With practice, this focus-training will become easier and eventually more or less automatic. Negotiating can become second nature to you if you think about your goals in the right way.

http://www.amazon.com/Focus-Different-Success-Influence-ebook/dp/B008BM4MM6/ref=tmm_kin_title_0

An HBR Management Tip: Give The Right People The Right Feedback

HBR Management Tip: How Successful People Reach Their Goals

An HBR Management Tip (Video): Know Your Team's Motivational Mindset

10 Insights on Achieving Goals: Interview with 33voices

I recently did a great interview on achieving goals with Moe Abdou of 33voices.  You can check it out in several formats:

Slidedeck (this is really cool): http://slidesha.re/15cugsG

Interview: http://bit.ly/13docPm

Clip:   http://bit.ly/17hSFSD

How To Get Better At Spotting Opportunities

To be a successful entrepreneur - or really, a successful anything - you need to be able to recognize an opportunity when you see one. Specifically, you need to be able to identify a problem or gap, and come up with an innovative solution. (Of course you also need to be able to execute that solution, but without spotting the opportunity in the first place, you aren't going anywhere.)

So how, exactly, does one become good at spotting opportunities?

It's probably innate — you're either good at that sort of thing or you're not, you say.

Wrong. Try again.

Well, then it's probably a matter of practice — of getting experience.

Probably not. (Hang on and I'll explain why.)

The suspense is no doubt killing you, so I'll go ahead and tell you the secret to recognizing opportunities: promotion focus.

As I've written about with Tory Higgins in our new book, Focus, when you see your entrepreneurial venture (or your career, or your goals in general) as being about the potential for advancement, achievement and rewards, you have a promotion focus. You are promotion-focused when you think about what you might gain if you are successful — how you might end up better off.

Alternatively, if you approach your venture focused on not losing everything you've worked so hard for, on avoiding danger and keeping things running smoothly, you have a prevention focus. Prevention focus is good for many things — careful planning, accuracy, reliability, and thoroughness, just to name a few. But it doesn't lead to creativity, open-mindedness, and the confidence to take chances the way promotion focus does. And as new research by Andranik Tumasjan and Reiner Braun from Germany's TUM School of Management shows, that's the combination you need to be an opportunity-spotter.

Tumasjan and Braun asked 254 U.K. entrepreneurs from a variety of industries to take an assessment to determine their dominant focus, and to then demonstrate their opportunity-recognition skills. They were provided with comments from real focus groups that dealt with five kinds of problems associated with footwear (durability, comfort, performance, style, and price.) After looking them over, the entrepreneurs were told to make a list of the underlying problems revealed by the comments, and to provide solutions for those problems.

The results painted a very clear picture: Promotion-focused entrepreneurs were better able to detect opportunities — i.e., they generated more solutions to identified problems. In addition, those solutions were judged by independent raters to be more innovative than prevention-focused solutions.

That's not all. Being promotion-focused even compensated for low levels of creative and entrepreneurial confidence, which are usually considered to be essential ingredients for success. Equipped with the right focus, even low-confidence entrepreneurs were among the top performers.

If you don't have enough of it at the moment, there are many research-based techniques you can use to strengthen your promotion focus. Here are a few that work well:

• Write down several goals you have for your venture (or for your career). For each goal, make a list of ways in which you will gain something if you are successful. Read through these goals and potential gains on a daily basis, or before undertaking any important task.
• Picture yourself five or ten years down the road as you would ideally like to be. What are your aspirations? Your dreams? What do you hope to accomplish? Thinking about your ideal future self will put you in a promotion focus.
• Reflect on your past. Think about a recent big win or accomplishment — a time when you felt really pumped up about what you were able to achieve. A time when you felt on top of the world. Thinking about our past gains puts us in a promotion focus.

The more often you use any or all of these techniques, the more automatic the shift to promotion focus will become.

Is Your Team Promotion or Prevention-Focused? Here's Why It Matters to Leaders

This post originally appeared on Tanveer Naseer's awesome and award-winning leadership blog.  Check it out.

Is your employee a risk-taker, or does he avoid risks like the plague? Does she get uncomfortable with too much optimism or praise, or is she known for her sunny outlook? Do some assignments always seem particularly hard for her, while she excels at others naturally?

The answers to these questions give you a window into your employee’s motivational focus – something every leader needs to understand in order to give feedback and create incentives that are persuasive and motivating.

There are two ways to look at the goals we pursue at work (and in life). Let’s start with a goal many of us share: “doing my job well.” For some of us, doing our jobs well is about the potential for advancement, achievement and rewards. It’s about what we might gain if we are successful, how we might end up better off. If you are (or your employee is) someone who sees goals this way, you have what’s called a promotion focus.

For the rest of us, doing our jobs well is about security – about not losingeverything we’ve worked so hard for. When you are prevention focused, you want to avoid danger, fulfill your responsibilities, and be someone people can count on. You want to keep things running smoothly.

What’s important to know is that promotion and prevention-focused people work very differently to reach the same goal. They use different strategies, have different strengths, and are prone to different kinds of mistakes. One group will be motivated by applause, the other by criticism. One group may give up too soon – the other may not know when to quit.

The key to helping your team reach their goals your goals is to identify their focus, and learn to work with it instead of against it.

What’s Their Focus?

There are online assessments you and your employees can take to identify your motivational focus, but you can also get a pretty good sense of it by comparing any employee’s behavior to each of the following descriptions:

Promotion People are…

• Creative and innovative
• Comfortable taking chances
• Optimistic
• Speedy workers
• Good at seizing opportunities
• (Downside: They are also more likely to make mistakes, less likely to have a back-up plan if things go wrong, bad with details, and more likely to take a risk that lands them in hot water.)

Prevention People are…

• Great planners
• Deliberate, thorough
• Cautious, skeptical
• Accurate workers
• Analytical, good at evaluating
• (Downside: They are also more likely to miss out on great opportunities, get too bogged down with details, and have a tendency to be overly-anxious.)

Working With Focus

Studies show that the way to be most effective in leading your team is to understand how they work best, and use the strategies that match each individual’s particular motivation. Here is a sample of what I mean:

Feedback

When your employee is promotion-focused, their motivation feels like eagerness – an enthusiastic desire to really go for it. So encourage them to be optimists, and provide frequent praise (though only when it’s deserved, of course). Confidence heightens their energy and intensity. Doubting themselves takes the wind right out of their sails.

When your employee is prevention-focused, their motivation feels like vigilance – they are always on the lookout for danger. Vigilance actually increases in response to negative feedback or skepticism. There’s nothing like the looming possibility of failure to get their prevention juices flowing. Over-confidence or effusive praise, however, may lead them to let down their guard, and undermine their motivation – so beware of both. Offer honest, realistic feedback and focus on ways to improve performance.

Decision-Making

Allow your employees to make decisions in the way that feels right for them. Promotion-focused people make the best decisions when they weigh the relativepros of Option A and B, when they think about why something is worth doing, and when they trust their instincts.

The prevention-minded, on the other hand, prefer to weigh the cons of Option A & B, and go with lesser of two evils. They make the best decisions when they think about how something could be done, and when they can point to rational reasons, rather than feelings, to justify their choices.

Problem-Solving Approach

Expect your promotion employees to be more exploratory and abstract in their thinking. They generate lots of options and possibilities when coming up with ways to reach goals – they are creative, and always consider alternatives.

Prevention-focused thinking is concrete and specific – they will pick a plan and want to stick to it. Prevention people drill down to the details, and focus on the nitty gritty of what’s still needs to be done. And they are more comfortable with tried-and-true methods rather than “innovative” but untested ones.

Incentives

Promotion-focused employees are more motivated by incentives that are framed as gains or reward. If you meet this sales target, you will get a bonus. If generate a certain amount of new business, then you get a Caribbean vacation.

Prevention-focused employees care more about hanging on to what they already have, so frame incentives as opportunities to lose. Everyone gets a bonus this year,except those who fail to meet their sales target. Everyone on the team gets a Caribbean vacation, except those who generate too little new business.

Which Focus is the Best Focus?

People always want to know – is it better to be promotion or prevention focused? The truth is, both kinds of motivation can bring you success, and each has its pitfalls. Each brings something of value (e.g., bold solutions, attention to detail) to your organization. In fact, no organization can truly thrive without a balance of promotion and prevention motivation – to keep you moving forward, while maintaining the progress you’ve already made.

As a leader, be sure to appreciate and recognize the value of your promotion and prevention-minded team members, and help each of them to work in ways that bring out their very best.