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You’ll win every game of ‘chicken’

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in Leaders & Managers,Leadership Skills

If you want to win a negotiation, your threats to walk away have to be credible; making empty threats will only turn your whole team into losers.

Here are five ways to reinforce your credibility while demanding more:
  1. Show your resolve. In the Age of Exploration, captains sometimes sank their ships as soon as they landed to lock in their soldiers’ commitment to fight … and to intimidate the locals.

  2. Sink some money into it. If you’re negotiating with an IT consulting firm, you can threaten to take its services in-house. You both know that outsourcing would still be cheaper, so to show that you’re serious, you can buy basic hardware and software. Aside from being a strong gesture, that also reduces the value of the vendor’s contract.

  3. Delegate authority. Spending your own time and energy on a deal may suggest that you’re desperate. Your threat to walk away becomes more credible if you assign somebody to handle the deal who has less riding on it and would be more likely to fold.

    That person could be your boss, as in the car salesman’s bow to the manager. “I’d hate to lose this deal,” you might say, “but he makes the final decision and has less at stake than I do.” Or: “I don’t want to walk away, but she’s in charge and she’s not happy right now.”

  4. Build a reputation for credible threats. Sometimes, being rash or obstinate in defense of your threats bolsters the notion that you will always carry through on them.

  5. Leverage the future. Say you’re selling intellectual-property rights. A regional publisher may lowball his offer because he knows he’s the only game in town. You can decline (even without another offer), explaining that accepting a lowball offer would set a bad precedent for future deals.
—Adapted from “Making Threats Credible,” Deepak Malhotra, Negotiation.

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