No Basis, No Deal by Brian Buck
Secondly, bluffing is done in order to augment or disrupt the power balance of a negotiation. Usually, the party with more power doesn’t have to rely on bluffing to get its way. That’s not to say that they won’t bluff; it simply means that when you have the majority of power, there are other, less risky methods at your disposal. Now, the real question becomes, “How do you recognize a bluff?” I’m sure we can go down a rabbit hole about micro-expressions and other physical tells, but the signs are actually easier to read than you might think. Bluffs usually occur around statements of time, money, or decision criteria. They’re typically quantifiable. However, they’re almost always based on something that only one party knows about. This is the critical characteristic of a bluff. After all, if everyone had insight into the data point, then it’s an inane or very weak bluff! When someone presents you with information that only they would know, it’s up to you to consider if the information is real or you’re being bluffed. The best way to do that is by curiosity and inspection. Let’s say someone tells you, “We need your price to be 20% lower” or “We can’t give you more than a 5% discount.” These statements are designed to anchor the conversation and manage your expectations. They may be entirely accurate, but any skilled negotiator will want to verify the validity of the statements. That begins with asking questions like these: 1. Why? Ask them why that’s their position. You want to understand the logic behind the statement. Is it a policy issue, a precedent issue, or just what they say as their opening position? 2. What’s the basis of that? Ask them how they came to that position as you seek to understand the justification for it. Is there data that supports it? Is there an analysis that defends it? Or is it just a platitude used to throw you off?
“The whole place stops when Johnny Chan walks in.”
If you play poker, or you like Matt Damon movies, then you probably recognize that line from the film Rounders . It comes from a story that Mike McDermott (Damon’s character) tells to Joey Knish, about the time McDermott played against real-life World Series of Poker champion Johnny Chan. The gist of the story is that McDermott was intent on proving to himself that he could play with the best in the world. He attempted to bluff Chan with nothing but “rags” (i.e., he had no cards that would beat even the lowest paired hand). As it turned out, he held his ground and bluffed his way to winning that hand.
Do you think you could survive a bluff at the negotiating table?
Bluffing at the negotiating table happens all the time. Bluffs range from little exaggerations (like slightly reducing or increasing the time on a deadline) to flat-out lies (like telling someone you have another vendor who’s offering you a far lower price, when you don’t even have another vendor to speak of). I’m not here to pass judgment on whether you should or shouldn’t bluff — that’s up to you. It’s an ethical matter that can, and should, be debated. Regardless of your position, just know that skilled negotiators know how to defend against bluffing (and, by extension, use bluffing to their advantage, regardless of whether they do so or not). For this post, I’m going to discuss only how to reduce your chances of being taken advantage of by characters like Mike McDermott. First, let’s recognize that there’s an element of risk to bluffing. If your bluff is called, you could lose credibility, damage your reputation, or derail the negotiation to the point of deadlock. Even at the poker table, when we discover that someone’s bluffing, we feel cheated and our defenses go up. In business, the consequences are usually more severe than a feeling of being cheated.
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