Each week on NBC, Howie Mandel asks his game show contestants the same question: “Deal or No Deal?” We sit there anticipating their answer, knowing that many of these contestants will say “no deal” and risk losing the mysterious banker’s most recent offer.
Many of these contestants say “no deal” once too often and end up settling for a sum significantly less than the banker’s last offer. Each of these contestants came to the show with the same goal of going home with the big money. Instead, they go home with significantly less than they expected.
Why do these contestants behave in such a way? The answer is that they do not have a plan, which includes a range of acceptable dollar amounts, to help them evaluate the banker’s offer.
The same is true in many business negotiations. Sometimes, experienced negotiators fall into one or more traps that are set by their opponent in the negotiation. These contestants have fallen into the “anchor trap” that was set by Mandel. Many times, Mandel states to the contestant that they have a chance to win $1 million dollars. As the game progresses he continually reminds them that the large amounts are still in play. His approach traps them and they forget their initial goal and increase their commitment to the game. This behavior parallels many business negotiations when the negotiator loses sight of their goal and pushes the negotiation too far and loses the opportunity to achieve their initial goal.
So, how do you prevent yourself from being trapped in a negotiation? The answer is quite simple: Have a plan. In a previous column, I mentioned that a successful negotiation is 80 percent preparation and 20 percent execution. It is the type of planning that is key to avoiding any of the traps that can be set in a negotiation.
Prior to entering into a negotiation, you must identify your interests and those of your opponent. You also need to have clear criteria to measure the legitimacy of options posed by either party. In addition, you should have a range of acceptable options. These options are the building blocks of your ZOPA (Zone of Potential Agreement) and provide the boundaries for your decision-making process. You need to isolate your BATNAS (Best Alternative to a Negotiated Agreement) and especially your WATNA (Worst Alternative to a Negotiated Agreement). These will provide the high and low values and help you maintain your focus during the negotiation.