The Role of
Emotions in Effective Negotiations
HBS Senior Lecturer Andy Wasynczuk, a former
negotiator for the New England Patriots, explores the sometimes intense role
that emotions can play in negotiations.
A simple view of negotiation presents a cold
transaction between what one person has and what the other person is willing to
pay for it. If the price is right, the deal gets done.
As anyone who has recently bought a car or sold a
house knows, however, negotiations are rarely so dispassionate. As soon as the
checkbook comes out a flood of emotions comes out with it—fear, anxiety,
competiveness, anger, annoyance—all of which can influence what either side is
willing to accept.
“I CAN‘T IMAGINE A GOOD
NEGOTIATOR WHO DOESN’T HAVE EITHER AN EXPLICIT UNDERSTANDING ABOUT EMOTIONS, OR
IS HIGHLY INTUITIVE ABOUT THE PROCESS”
Emotions such as satisfaction and elation can be quite
rare in negotiation, says Andy Wasynczuk, MBA Class of 1953 Senior Lecturer of Business Administration at
Harvard Business School. His new teaching note, Emotions in Negotiations: An Introduction, traces the history,
theory, and research on how emotions can affect transactions between parties.
Wasynczuk and his coauthor, independent researcher Colleen Kaftan, do so using
an everyday example of a work-at-home consultant ("Kate") dealing
with an electrician ("Peter") over restoring power after a storm.
They intentionally picked the situation as one to which students could relate.
"Our MBAs generally feel like they are very
ill-equipped for negotiation, whether that's dealing with a landlord or buying
a car—let alone the business situations they will be getting into," says
Wasynczuk. "Rather than discussing topics in the rarified air of
investment banking, an industry foreign to many of our students, we wanted to
be as universal as possible."
Not that it is a simple situation emotionally.
Stressed out over lost work because of the storm, Kate is further annoyed when
repairman Peter is three hours late. When he responds brusquely at her
overtures toward friendliness and offers what she feels is an unreasonable
price and timeline for repairs, she gets angry. Before long, both sides are
yelling, and Peter marches out the door.
The question for students is: What could Kate have done
differently to get a better outcome?
"We spend a lot of time talking both about what
emotions we elicit in others based on our behavior, and what we need to do to
manage our own emotions. There are lessons on both sides," says Wasynczuk.
"I can't imagine a good negotiator who doesn't have either an explicit
understanding about emotions, or is highly intuitive about the process."
NEGOTIATING IN THE NFL
Wasynczuk (HBS MBA '83) should know—he served as chief
operating officer for the New England Patriots for 15 years, where he was in
charge of negotiating high-stakes player contracts involving millions of
dollars.
He intuitively understood that emotions were an important
factor in dealing with people as passionate as athletes. "The last thing I
wanted to do was create an excuse for a player or agent to get angry. That
would create a power struggle, which was a recipe for disaster."
Wasynczuk learned to enter into contract talks with a
smile—and to rationalize away his own anger when a deal couldn't be struck.
"If an agent was being greedy with me, they were probably being greedy
with other teams as well," he told himself. "If the other team ended
up paying that money they were making a mistake."
Business schools began teaching negotiation in the
1980s, when it was presented as a straightforward economic analysis. Assuming
the other side was acting rationally in trying to maximize its position, the
goal was to figure out how to respond in various scenarios to maximize one's
own value. Research beginning in the '90s, however, found that negotiators
rarely acted rationally, instead taking into account what they felt they
deserved from the other side, and what they could do to save face when they
didn't get it.
“WHAT WE TEACH IS NOT TO
SETTLE FOR SOMETHING THAT IS JUST OK”
Take this simple exercise: Player A is given $20 and
has to decide how much to share with Player B. Player B's only decision is to
decide whether or not to accept what is offered. If accepted, Player B receives
the offered amount and Player A gets to keep the balance. But if declined, both
players end up with nothing. Rationally, B should take any offer—even as little
as $1—that's more than nothing. And yet, whenever this experiment is performed,
B consistently rejects the money unless it is at least a quarter of the
total—$5.
"There is a very strong emotional response to the
lack of fairness, irrespective of the right rational decision,"
says Wasynczuk. "The more we understand how people behave based on
emotions, the more thoughtful and appropriate we can be in how we respond to
them."
Anger, for example, is one of the most destructive
emotions during negotiation—often causing deal making to break down as each
side sacrifices its needs in order to save face. "It tends to start rising
on both sides, and inevitably there is a point where it erupts," says
Wasynczuk. "People walk away and say there's value on the table, but I
don't care."
That said, anger isn't always a bad variable in
negotiation. Deployed the right way, it can demonstrate passion and conviction
that can help sway the other side to accept less. The trick is to direct the
anger at the situation or problem—not the person on the other side of the
table.
"Some students try and have a poker face and not
react to the other side's offer, but that's not useful," says Wasynczuk.
"If one side puts a ridiculous offer on the table, it's all right to get
angry and say, 'I don't see how that would ever work.'"
On the flipside, research has found that entering
negotiations with a positive attitude tends to lead to better outcomes—when
both sides are agreeable and conciliatory, it builds a level of trust that can
lead to information sharing that allows both sides to get a better deal.
Happiness can be dangerous as well, since happy negotiators tend to accept less
than they might otherwise be able to get.
"You don't want your happiness to hijack other
emotions," says Wasynczuk. "What we teach is not to settle for
something that is just OK, but to keep searching for something where both sides
are going to benefit."
No matter what emotions are present at the bargaining
table, a smart negotiator first becomes aware of what they are—and then works
to emphasize the positive emotions that can help the deal and downplay the
negative emotions that might scuttle it. Such "emotional
intelligence" may take the form of changing body language or tone of voice
to influence the way the other person responds—or taking a break during a
difficult point in negotiations in order to turn down the heat when anger
starts flaring.
In the case of client Kate and electrician Peter, what
Kate doesn't realize is that while she is annoyed at her lack of phone and
Internet access brought by the power outage, Peter has been working 18-hour
days since the storm, and dealing with multiple homeowners all making similar
demands, putting undue pressure on his small work crew.
A HAPPIER ENDING
In an "alternate ending" to the story, Kate
apologizes for how the negotiation has gotten out of control, and asks if they
can start over. She shares her own anxieties and frustrations about an
important conference call regarding FDA approval of a cancer drug, and Peter
shares that his uncle died of cancer. Before long, the two are sitting at the
table discussing whether Peter can split up his crew to handle the most
pressing repairs for each of his clients.
"In that second version, she is being more
transparent with her frustration and fears and reaching out whenever there is a
reaction from him," says Wasynczuk. "That empathy leads them to
understand some of the differences that motivate each side and makes them feel
like they want to do something with the other person."
As that case illustrates, emotions can be powerful,
not only in derailing a negotiation, but also in helping both sides come to
better agreement.
"To strip away emotions wouldn't be
desirable," says Wasynczuk —even if it could be done. "Emotions are
an expression of how people are processing information, and can give a strong
signal of how the mind is internalizing the discussion."
Managed well, they can turn a frustrating negotiation
into one that is pleasant, productive, and even enjoyable.
ABOUT THE AUTHOR
Michael Blanding is a
senior writer for Harvard Business
School Working Knowledge. His latest book is The Map Thief: The Gripping Story of an Esteemed
Rare-Map Dealer Who Made Millions Stealing Priceless Maps.
http://hbswk.hbs.edu/item/7560.html
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