Assessing the power balance between you and the other party is always a subjective matter. A satisfactory and long-lasting agreement is only possible if you negotiate at eye-level with your counterpart. If that is not the case, you are unlikely to be successful. So think about whether you have enough power for this negotiation, whether you are at the same level or whether you are in a superior/inferior position.
Realizing your own power
Whoever has the power in negotiations will obviously want to push their demands through. The party that believes they can win will not abandon any of their claims, unless they want to distract attention from these negotiations and direct the focus elsewhere. If you wonder why your negotiating partner is not pushing their demands despite having the power to do so, you should become suspicious – either they are naïve or other tactics are at play.
Important to know: consciously analyze where in the negotiation you have power.
The party that has the power does not necessarily have to show it. It is sufficient to know that one can fall back on it when needed. It is therefore important for you to know and be aware of your own power. If you do not believe in your own power, you will appear and behave powerless. This will put you in the worst negotiating position possible. You hand all power over to your negotiating partner and they will certainly not be afraid to use it. This phenomenon is often seen in salary negotiations when employees meet their boss – questions like “can they operate without me?” or “what would my resignation mean for the team and the company?” will be helpful to realize your own power.
When both negotiating partners are at the same level, negotiations can begin. In case you are in a superior position, I recommend you take a step down as the imbalance will negatively affect your negotiation outcome otherwise. But what if you are in the inferior position compared to your negotiating partner, what if they hold all the cards? Again, this feeling is subjective; it is you and you alone who decides what the balance of power is. You will know that your negotiating partner thinks they’re in the better position if they do not take you seriously or do not keep their word.
A power imbalance is one of the greatest threats to a negotiation because your negotiating partner believes they do not need you. They are convinced they will succeed without your assistance. This kind of winner’s attitude leads to an arrogant and even hostile negotiating style. Spouses, supervisors and politicians are all capable of this behavior if not warned in time. They become stubborn and careless negotiating partners.
If your negotiating partner believes firmly that they can win, you must remind them that victory is not possible without you. Since you cannot bring them down to your level, you must step up to theirs. Ask yourself:
1. How can you demonstrate your power?
2. What could you do to reach a balance of power?
3. What will you actually do to reach a balance of power?
4. Why will you do it?
5. What could my negotiating partner do to keep the balance of power even?
In your preparation you should approach these questions in a constructive mood. Do not think about the consequences of failure. Think about what you must do to keep negotiations on the right track.
There are a number of things you can do to shift the power balance in your favour:
1. Creating alternatives
The larger your number of alternatives, the more power you have. If you have enough alternatives to react flexibly to pressure during negotiations, this will allow you to stay in the lead.
2. Room to manoeuvre
The more responsibility your job entails, the more power you have. A hostage negotiator with the police can decide about cigarettes and food, but the big decisions are taken elsewhere. A police commander can decide about the exchange of hostages, but the decision maker is the one who can fundamentally steer negotiation by saying yes or no.
Credibility needs to be earned. The world is not as bi gas it used to be – if you have ripped off a partner in the past, other business partners will likely hear about it. Therefore, your reputation needs to remain impeccable.
4. Access to information
Knowledge is power. Always try to have more information than the opposite side. Negotiations will turn into an uphill battle if too much information is leaking from your organization to the other side.
Knowledge is power, and expertise is king. The more you know about the subject the bigger your power.
6. Power to introduce sanctions
Sanctions mean putting pressure on the other party. Think carefully before the negotiation if and when you would be willing to use sanctions as they will result in a counterreaction. Always announce sanctions before going there – and when your warnings remain ignored, you will have to implement your sanctions or risk losing all credibility.