Thursday, February 5, 2015

Negotiating Leverage, Part 1

                                     Δῶς μοι πᾶ στῶ καὶ τὰν γᾶν κινάσω
                                    -Archimedes


One of the most challenging arenas of intentional fruition, and among the most rewarding, is that of deal-making. In my experience, the enneagram is quite useful in preparing and executing negotiations. A discipline straddling art and science, I believe that negotiation may prove to be the single most vital skill that humanity can acquire at this time, certainly as individuals and especially as a species.

As always, I am delighted to receive questions. The three below came in response to an earlier draft of thematically similar material. Together, they afford me an opportunity both to share my experience and to test my belief.

Here they are:

1) How would you strategize negotiating a price
    on a purchase of real estate?

2) How do you establish true needs, desires and
    fears in negotiation?

3) If a buyer is unable to force concessions or 
    increase the offer, does this negate the process?


In order to explain my answers, if not live them, I will draw upon the enneagram. There is no better map than the enneagram, yet the territory will always be more interesting, if interest can be measured as a specific potential for gain and loss in wordly matters. To actually live them, of course, requires other virtues.

There is more than one approach to negotiation, depending on the relevant circumstances and intentions. All too often, though, the parties involved treat it as an exercise in winning and losing - a purely zero sum game. Ever the contrarian, I prefer not to pretend that deal-making is a metaphor for combat, or vice versa.

I do try to deal exclusively with others of like mind, those who prefer the win-win scenario. Of course, I also know how to deal with combative types (who for their part strike me as predictable and boring) - indeed they can make for good practice, like sparring. More importantly, though, as much as I love human interaction, my ideal position is to retain the freedom to walk away from any deal whatsoever if I choose to do so.

It is not that I am stubborn; rather, it is a forceful reminder of the voluntary nature of any negotiated agreement and the best reason to stand by my word once I have given it.

T H E   E N N E A G R A M
Whether from fear or from shame, many laypersons simply dread negotiation, not unlike public speaking. Me, I love both these arts, for dissimilar yet overlapping reasons. Based on my experience, I advise that the best thing anyone can do to enjoy high-stakes engagements is to prepare.

If you are not enjoying yourself, then you are either failing to do something, or doing something wrong, or both. You might begin by refining your intention since an ability to maintain sang froid is crucial to success - whereas joylessness will undermine even the best strategy. In short, feel the fear - if any - and do it anyway.

I am seldom surprised or bored by the timeless connections between strategy and games, which are curiosity and joy. By finding ways to enjoy myself and fulfill my needs with one and the same gesture, I save energy and attention for those times when such gestures are not available.

Speaking for myself, what I enjoy most about negotiation is the balance of leverage between the parties. I admit this subjective detail in order also to highlight that there are other, equally important, aspects to the discipline - what I enjoy says as much about me as about anything else. Other, no less enjoyable aspects include simply knowing what kind of negotiator you are ... and what kind your counterpart is.

The third part of this essay surveys those idiosyncrasies in greater detail. Before that, though, the second part reconciles force and voluntarism at a delicate point. Meanwhile, this installment takes advantage of the first question to establish the causes of which leverage is the effect.

Q: How would you strategize negotiating a price on a purchase of real estate?


Speaking in general and only for myself, I would strategize any negotiation - be it a purchase, a sale or any other transaction - by maximizing my leverage. This, and not closing the deal, per se, is the focal point of the strategy. Each of the steps I describe, and the nonrandom order of their application, is subject only to this intention even though there are other aspects and approaches to negotiation.

A   P L A C E   T O   S T A N D
The reasoning is that with more leverage, you will need less energy in order to achieve a specific result.

Every deal is bound by an internal logic, its own unique permutation of the Law of Three, the generic terms of which are need, desire and fear. By defintion and in practice, they constitute the specific anchors binding any negotiation to space and time. Whether or not we trouble ourselves to discover them (much less than to name them correctly), they must necessarily be real and not theoretical, which is to say that the specific terms will vary according to the details.

Of the three, the greatest is need, and as such it constitutes what may be called the point of maximum attachment.

By convention, that point is placed at the zenith of the enneagram, position 9. The unique horizontal line connects the other two apexes, desire and fear at postitions 3 and 6, respectively. Because all three are real, they are independent of any strategy, no matter how arbitrary or how reasonable it may be.

A L W A Y S   K N O W   T H E   S T A K E S
As the antonym of iredesire has its source in rage and lives in tension with it. Many folks ignore this truth about the bulk of their wishful thinking. As the active force in the triad, the heart, if you will, it also tends to be the most obvious - more deals are brokered to satisfy desire than to satisfy need.

For its conspicuousness, desire is placed in the right-hand corner.

The least obvious element is fear, perhaps because negotiators instinctively, if not strategically, attempt to hide it, or at least obfuscate it - some better than others. Note that fear does not result in need, but need often results in fear. Ergo fear is not the passive force, but the neutralizing.

Notice also that need supports desire. The medium, being unknown, tends to inspire fear in one or more parties. So fear, not need, is the check against runaway desire.

S I X   S T R A T E G I C   P O I N T S
Although it is the passive force among the three, need is the point of maximum attachment. This may be because the environment (i.e the medium) is intrinsically abundant with challenges and scarce in resources. Therefore, once you know what is at stake for everyone, there are six steps to accumulating leverage, and the first (1) is this:

1 - discover your counterparts' TRUE need(s)


The easiest way to discover these is to ask questions, but this does not mean that you should believe all the answers that you hear. Even if you know the answer to a question, it may be useful to ask it anyway, in order to gauge your counterpart. The important thing is to learn as much as possible without asking, since relying on the counterpart at the outset does little to build leverage.

I mention this because there are needs and there are TRUE needs.

D R .   M A S L O W ' S   H I E R A R C H Y   O F   N E E D S
The third part of this essay will take a detailed look at the variety of true need(s) using the enneagram as a lens. This is not to reject Dr. Maslow's work on the subject (with which I recommend acquainting yourself, at least cursorily). Rather, my thesis is that individuals experience need subjectively, as individuals, especially nearer the top of the pyramid, which is to say, it varies as a function of an individual's type.

When someone's type is known, and it can be known, then their TRUE need, or what Dr. Maslow might call their individual sense of self-actualization, is also knowable. As we shall see, the variety is smaller than many professional negotiators might suspect. I will also include at that time some anecdotal advice on the most important question - how to discover these needs in real-live people or, in effect, how to determine your counterpart's type.

Meanwhile, you can discover plenty about your counterpart's superficial needs through research. This is true now more than ever, by means of the internet and especially social media (and if you can learn your counterpart's 'type', so much the better). There is no reason to walk into a negotiation uninformed.

Ideally, the more you know about your counterpart, then less s/he should be aware of the fact. Furthermore, your own inner motivation  - why you need whatever it is that you may need - should be as opaque to others as possible, whereas your desire should be more obvious. The same is true of fear, by the way - it should be opaque and desire should be more obvious.

The second step (2) in the strategy depends on the first (1) and has an unpleasant ring to it, which is this:

2 - acquire and display credible power to disable your counterparts


Here it should be remembered that we are considering only how to apply leverage and not how, for example, to establish rapport. This step need not be unpleasant, and indeed it may well be the lack of preparation and practice that often makes it seem so, whether one is sending or one is receiving the message. Nevertheless, skillful deal-makers can do this, or even get their counterpart to do it for them, without insulting anyone.

It may be wise to reread the previous paragraph several times, and then periodically after that.

To continue; two critical steps in the process depend almost exclusively on this second one, as we shall see. Uncouth, uninterested and unskilled individuals, if they think to include this step at all, may do so roughly. This is usually unnecessary, just as surely as a sincere disrespect for one's counterpart tends to squander more information than it accumulates.

Many folks balk at the apparent political incorrectness of the power display. Yet consider two real-world scenarios, one unusual and the other, universal. This is a relevant indulgence and not at all a detour, since there is far more to negotiation than buying and selling. 

The point is to make a case for this otherwise distasteful-sounding maneuver.

For example, suppose that a bank robbery gone wrong has evolved into an unplanned hostage crisis. When the response team arrives, both sides obviously and inevitably resort to this tactic, the power display, and with good reason. There are a great many other complex arenas where a show of power is natural and necessary.

Or else suppose that your child refuses to go to school anymore because - let's face it - school sucks. My aim is not to solve this particular problem just now, although it's a good one (and if you prefer, substitute going to school for eating Brussels sprouts, since the dilemma is the same). Rather, it is to demonstrate that, short of outright force, one must somehow establish enough credibility to compel at least the counterparts' attention, if not cooperation.

To take the initial question as yet another example - i.e when negotiating a price for a plot of land or for anything else - this step becomes difficult if you have an upper limit on what you can spend. In this case, the seller will likely display power before you can. If you are trying to buy in a seller's market, then you must try to concentrate on the non-financial details, if possible, and do so early.

In practice, one develops skill at the power display tactic over time by learning to neutralize it.

Under no circumstances should you bluff at this point, nor antagonize your counterpart. It is better to have almost no leverage than to risk losing what little you may have, since leverage is more easily regained once lost than is credibilty. You will probably make better, albeit less glamorous, deals in the long run with humility than with subterfuge, and you will definitely become more immune to scams and trickery.

It is never better to fake the power display. Bluffing alters perceptions but does nothing to enhance real leverage. Furthermore, it undermines later steps, such as the next (4), which is to:

4 - reciprocate


By now you should have discovered some or all of your counterparts' needs, ideally by your own efforts and/or research. Again, the third part of this series discusses that at greater length, laying out both a framework and a vocabulary for human motivations that are consistent with the universal laws encoded within the enneagram symbol. That being said, in order to genuinely reciprocate, you will need to put yourself in your counterpart's position - and your counterpart will know the genuine article from the ingenuine one just as surely as you will.

Any discussion of negotiation would be incomplete that fails to mention the existence of regionalisms, or local variations of conduct. These are virtually infinite, however it is your responsibility to learn whichever may apply to your situation. For example - since the given question pertains to sales - in certain traditions it is more customary to haggle than in others, and it is considered an insult not to do so.

This is one side of the coin - to demonstrate that you understand what your counterpart wants and what behaviors are "normal". In short, you want to show that you are a qualified buyer or seller in a manner that your counterpart will accept (which depends on him or her more than on you). The other side is that you should also make sure that your counterpart does likewise, or at least recognize if he or she has not done so and possibly use that to your advantage later (especially at point 7).

For now, let us take another, closer, look at the line connecting point 4 to point 2.

If you have more leverage than your counterpart at the outset, then by allowing him or her to take the second step before you do, you may be able to reciprocate by displaying your power (thereby gaining even more leverage). It is not a good bluffing tactic (see above), but requires experience and - how shall I say it? - good taste. It is not for everyone, and I include it for the sake of completeness.

In any case, reciprocity always depends at least partially on what is received. Similarly, if a counterpart does not display power, you may reciprocate by not displaying any either. Establish a foundation on which to reciprocate before initiating any potentially disruptive display of power - which is to say, see the third step before taking the second (encoded in the line from 1 to 4).

S O W   T H E   C A U S E S

The terms of the enneagram do not comprise an ordinary list. The order is nonrandom and nonlinear. In practice, we see the steps occur clockwise - 124 - yet they are causally connected by the hexad in another order - 142 - which is independent of time. Taken as a triad of its own - 142 - position 4 is the reconciling member relative to positions 1 and 2, or affirming and denying, respectively - inasmuch as positions 1 and 2 unfold in a medium of reciprocity.

These first three steps - 142 - those in the right half, illustrate the hemisphere of cause. The fourth step (5) in the strategy, perhaps the most critical step, has an even more unpleasant ring to it, namely to force concessions. The second part of this essay will examine and discuss this step as the first position in the hemisphere of effects.

Also, I will revisit one of the initial questions above - If a buyer is unable to force concessions or increase the offer, does this negate the process? - with this step in mind.

If any questions from readers should result from this series on negotiation, they will comprise a fourth installment. I hope that this topic, and its application with the enneagram, will prove as useful to you as it has to me. If you can think of another other arena of intentional fruition that you would like to see rendered with the enneagram, I hope that readers will let me know that, too...
U S E   F O R C E   W I S E L Y


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Questions are heartily encouraged. I will review and publish yours as soon as I receive it and respond as soon as I am able. Meanwhile, please reconsider the suggested guidelines and attempt to include at least one question. Many thanks.