In a Negotiation No One is Illogical. People View The World Differently.

by Apr 4, 2023Business, Decision Making, Entrepreneur, Negotiation

Here is a negotiation secret: No One Is Illogical.  If you are negotiating with someone irrational? Use it to your advantage.

Any time you find yourself in a negotiation, it’s possible that the person you’re interacting with might begin to act in an illogical way. You might have mapped out a perfect win-win deal, yet the other person asks for something that seems completely unreasonable. Or maybe they even nix the deal for reasons that don’t make sense. They seem completely irrational at that moment. Personally, this drives me crazy.  As an engineer, I have difficulty engaging with someone I don’t think is acting rationally.

But I have learned to change my tune over time. What I’ve come to realize is that no one is illogical. The key is understanding what drives their priorities and how they view the world. Once you understand that, everything will change.

Let me explain.

If Money Matters Most

Even someone who seems completely irrational will appear logical once you understand their view of the universe and what motivates them. Once you get where they are coming from, everything begins to make sense.

And once you figure out what’s important to them, you then have options for things you can give them in the negotiation that they prize and that you value far less. It becomes a vulnerability, a blind spot on their part you can use to your advantage in closing a deal.

One example is knowing someone’s upbringing and the circumstances of their youth. If someone grew up poor and without money, that could continue to influence their actions and decisions as an adult. If you’re negotiating with someone like this and all they seem to focus on is the amount of money they will receive in the deal, seemingly overlooking other beneficial terms they might receive, it might seem irrational at first. You might even think they are just greedy.

But, using the circumstances of their childhood as context, it all makes sense. They continue to be driven by the lower rungs of Maslow’s Hierarchy of Needs. They are money oriented because they never want to experience poverty again.

If you’re negotiating with someone like this, it might offer you the chance to gain something else–like better terms–in exchange for giving up some money. A smart negotiator can make the headline price look great, and win the negotiation in the terms and timing of the payments.

When Perception Is Everything

Another area that might drive someone to act in ways that might seem illogical is when they are extremely image conscious. These are people who worry about how others perceive them. These are the people who show up with tailored suits, expensive watches, and driving luxury vehicles. If you’re negotiating with someone like this, it might be extremely important for them to be perceived as “winning” the deal. The Japanese call this saving face. You might have a perfect deal on the table, but if they don’t think others will think they got the edge on you, then you’re not likely to strike the deal.

This can be a hard hurdle to overcome. But it does offer an opportunity to strike a deal where they look like they have won the deal, but they haven’t. An example might be that their company name will continue in the merged firm, but at a lower price, and you have total operational control.

Affiliation and Power

Another area to watch for is when people are affiliation driven. They may not care if the deal is good or bad if the “right” kind of people say yes to something similar. These people ask for your references and look to see if you have worked with people they like and respect. If you haven’t, you’re not likely to come to a deal because their primary motivation is to attach themselves to those affiliations.  An example of this would be taking a poor financial deal to become involved with a company founded by a celebrity.

A final attribute that might drive what seems like irrational behavior in a negotiation is when people are power focused, especially when it comes to political power. They might be obsessed with getting a grand-sounding title and having many people report to them. They might even be willing to give up some salary to get that kind of power–which you can use to your advantage if needed. This is how we ended up with Executive Senior Vice Presidents that don’t make much money.

Getting To Yes

So, the next time you negotiate with someone who appears irrational, hit pause. Take a step back and ask what might be motivating them to act the way they are. If you understand that, you might find a path to making a deal that works better for you.