An interest-based negotiation is like a bespoke suit—or at least, it should be. Often negotiations more resemble picking clothes off the rack, as each party hunts for the deal that fits them the best. Negotiators swap positions back and forth, trading terms like price, quantity, or length of contract against each other to see what suits them and what the other side can live with. The most successful negotiations are more like a garment tailored to fit, with options carefully chosen to suit the contours of everyone who has an interest in that negotiation. A deal that provides as much value to all sides, while costing each side as little as possible leads to faster, easier agreements and better relationships.
Experienced negotiators know how valuable such deals are, but also how hard they can be to get. There are many reasons why parties are unable or unwilling to conduct a careful interest-based negotiation. It may take too long or be too difficult for inexperienced negotiators, or simply be contrary to their perceived interests if they are fixated on one particular position. Perhaps the most common reason negotiators fail to engage in such discussions is that they aren’t used to it, and it simply, honestly does not occur to them that a better way is possible.
This seems unlikely, given how prevalent the interest-based paradigm has become in negotiation. Getting to Yes is a massive bestseller, and the basic principles of interest-based negotiation are taught in virtually every business and law school. But there is an enormous gap between knowing intellectually that interest-based negotiation can create unexpected value and actually believing it.
The Nobel laureate Daniel Kahneman summarizes a great body of psychological and economic research concluding that people tend to think in one of two different ways: System 1 and System 2. System 1 thinking is fast and reflexive; when someone asks you what you had for breakfast, System 1 thinking helps you answer immediately without having to pause and think carefully.
System 1 thinking can be useful to negotiators when they have to make quick decisions. It’s heavily biased towards instinct and memory, even though people tend to believe they’re reasoning things out. Consequently it’s highly vulnerable to certain cognitive biases, like the Availability Bias. This is the common tendency to think that the first thing that comes to mind is more probable or more valuable than it really is. Negotiators often have to choose to either do things the way they’ve always done them—another positional negotiation, trading the obvious negotiation points back and forth—or getting creative and focusing on underlying interests. If they’re stuck in System 1 thinking, they’re more likely to believe the standard operating procedure is the most likely to succeed, because the Availability Bias will cause them to overvalue the typical negotiation and overestimate its likelihood of delivering the best value.
System 2 thinking is the slower, more careful, more difficult and more demanding kind of reasoning that people use (usually) when asked a hard question. It relies on rational thought rather than instinct and memory. Doing math problems and reading a complicated map require System 2 thinking, as does creative negotiation. When asked to choose between the instinctive style of positional negotiation and the harder but more rational interest-based negotiation, many people will choose the former without realizing they’re failing to carefully and critically think through the alternatives. Transitioning from System 1 to System 2 thinking means slowing down and really analyzing the interests on both sides of the table, rather than assuming you know what they are.
While there is an enormous body of research analyzing the effects of System 1 and System 2 thinking, much less is known about transitioning someone else from one to the other. And that’s the critical skill here: a serious interest-based negotiation requires both sides to think carefully and rationally about their interests and ways to add value to the negotiation. It’s hard enough to get ourselves into the right mindset sometimes; it can be almost impossible to get someone else to change their thinking and come to the table relying on reason rather than assumptions.
The easiest ways to encourage rational thought in a counterpart are to demonstrate it yourself, slow the negotiation down, and engage them on unexpected fronts. Asking questions about things they haven’t thought about will nudge them to think critically rather than instinctively. And even food and drink make a difference. Research shows that System 2 thinking depletes the body’s physical resources, such as blood glucose. A well-fed negotiator will find it physically easier to think harder about creating value.
In future pieces we’ll explore more aspects of Cognitive Negotiation, the impact of thought and reason on negotiations.