Why Emotional Intelligence Matters in Negotiations

The ability to manage our own emotions and deal with those of our counterparts is one of the distinguishing factors of effective negotiators.

Although we might wish we could just focus on resolving the substantive issues and leave the emotions out of it, that’s not realistic when human beings come together to resolve differences and reach agreements.

The term “emotional intelligence” has become a fixture in discussions about leadership success, but it is equally relevant to successful negotiation.

In this article, we explore the central role emotional intelligence plays in mastering the negotiation process.

Understanding Our Counterpart
When we’re negotiating, what is front of mind for most of us is what we want to achieve, what is important to us, what we feel is fair, and how our internal stakeholders will react to the outcome.

Essentially, we tend to focus on our own agendas and don’t adequately take the other side’s point of view into consideration, which makes us more likely to push for proposals and make arguments that don’t resonate with our counterpart. Failing to read our counterparts well can damage critical relationships, waste time, and result in lost deals.

In contrast, negotiators who are regularly able to put themselves in another person’s shoes - the emotional intelligence capacity for empathy - are able to see the needs of their counterpart (as well as their own).

Empathy has two aspects, cognitive and emotional. Cognitive empathy is the ability to situate oneself in another person’s world. This means understanding how others see a situation, what their views and priorities are, and the pressures they face. The second is emotional empathy, which refers to the ability to understand how others are feeling about a situation. Both are essential for effective negotiation.

Good negotiators learn to quickly and systematically explore the key strategic factors that determine the negotiating landscape, and to evaluate those factors from both their own perspective and their counterpart’s.

Read: 20 Best Practices for Negotiating and Managing Key Supplier Relationships

Many people have difficulty truly putting themselves in their counterpart’s shoes because they are so focused on their own agenda, and are not used to distancing themselves from their own perspective -  especially when they have strong emotional investment in an outcome or viewpoint.

To help with this, we recommend putting clear structure around the preparation process, where time is spent deliberately looking at the other sides’ interests and constraints, and considering how the proposal and messages are likely to be received by them.

When preparing, it can also be helpful to ask someone to sit in the role of the other side to represent their concerns and perspective.

Empathy also enables us to read our counterparts as we negotiate, and helps us make critical decisions about whether to push harder or redirect to a different line of reasoning, what tone will be best received, and sense when our counterpart is bluffing.

Of course, at a more basic level, empathy is a critical tool for establishing rapport and building relationships with others. Rapport and relationship significantly impact the quality of conversation between negotiators and whether they are able to engage creatively with one another in joint problem solving or simply haggle back and forth, all of which determines the likelihood of reaching optimal agreements.

Handling the Hard Bargainer
In an ideal world, negotiators would approach even their starkest differences collaboratively and respectfully. Unfortunately, dealing with tension, conflict, and disrespectful counterparts is a common negotiation reality for many.

This is especially the case when responding to negotiators who engage in difficult tactics like making threats, hurling insults, manipulating information, or stalling in a deliberate attempt to throw their counterpart off balance and cause them to make concessions.

For novice and experienced negotiators alike, dealing with hard bargainers and difficult negotiation tactics is challenging, especially when the stakes are high and success is critical. Take for example the sales rep whose largest client keeps them waiting for a meeting, then disparages their product’s quality and threatens to move the business to a competitor unless they cut pricing by 15% next year.

Remaining balanced and constructive in the face of this kind of stress requires that we handle strong emotions well - both our own and our counterpart’s. Specifically, dealing with tough negotiation tactics requires the emotional intelligence capacities of self-awareness, self-management, and empathy.

Self-awareness means knowing which situations are likely to trigger negative emotions, how we tend to behave when we’re off-balance, and the impacts these actions have on others. Self-management is being able to stay constructive in the face of negative emotions, and make choices about how to respond in ways that align with our objectives.

When faced with hard bargainers, negotiators typically default to fight, flight, or freeze. This is a result of what is called an amygdala hijack. The amygdala is the part of our brain that operates instantaneously to protect ourselves. When it is activated by a real or perceived threat, our automatic stress responses kick in and our rational brain - the neocortex - goes offline. Although most threats our counterparts make in negotiations aren’t actually life threatening, our amygdala perceives them as if they were.

With some reflection, most of us have little difficulty identifying our common response to an amygdala hijack that occurs during negotiations - whether it be aggressively pushing back, giving in and rapidly exiting the conversation, or shutting down. This is a good first step in building self-awareness, but it does little to interrupt the cycle of reactivity if we can’t recognize in real time when we’re in a hijacked state.

A helpful practice is to metaphorically “go the balcony” when in a negotiation - being present in the negotiation and an observer of the negotiation at the same time. This gives us some distance to pay attention to what is happening between ourselves and the other party, and what would most effectively move the negotiation forward.

In addition, since the hijack is a physiological as well as an emotional stress response, monitoring both the sensations in our bodies (e.g., tension in our neck and shoulders, sweaty palms) and our emotional state (e.g., feeling frustrated, nervous, or shut down) can give us important clues about when we are starting to get triggered so that we can take action to prevent something we may regret later.

Learning how to shift ourselves out of a hijacked state is critical, as well. It requires bringing our neo-cortex back on line. Just doing something as simple as counting in our head or taking deep breaths lowers the hormones blocking our neocortex and allows us to access the thinking part of our brain.

Best Practices for Negotiation

Supplier negotiations are managed as a collaborative process
Focus is on maximizing value for both sides, while coercive tactics aimed at “squeezing the last dollar” out of suppliers are avoided.

Negotiation is used as an opportunity to build a strong foundation for a good working relationship
Focus is as much on setting the stage for working together effectively once a deal is signed as it is on arriving at specific contract terms.

Negotiators are assessed and compensated based on overall quality of the deal
Assessments and incentives are based on multiple dimensions beyond price, including, for example, total value created, positive or negative impact on the relationship, value created for the supplier, and the like.

Formal transition activities are conducted when new supplier relationships are established
Such events involve anticipating and jointly planning for challenges, agreeing on decision-making and escalation procedures for when disagreement or conflict arises, and jointly defining shared performance and relationship health metrics. Transition and joint launch events may also occur when major new contracts are signed.

 

Download the Paper: Best Practices for Negotiating with Key Suppliers

Getting curious (e.g., why might they be doing this), can also lower our emotional response and put us back into a thinking state. Finally, if the simpler actions do not help, taking time out from the negotiation - a five minute break or rescheduling for another day - may be needed.

Soldiers, fire fighters, and athletes alike know that under pressure we default not to what we know we should do, but to what we’ve repeatedly practiced. So, in order to respond to difficult negotiation tactics differently than their amygdala hijack induced standard stress response, negotiators need not only solid training but also practice.

Participating in simulations in lower stakes settings like a training workshop or a team meeting, and receiving coaching from a facilitator or manager can help us learn to master our emotions and redirect unproductive tactics toward meaningful dialogue.

Empathy is also critical for dealing with hard bargainers. When a negotiator engages in threats, insults or other tactics, whether consciously or unconsciously, they are doing so as a strategy to meet their interests, not just because their disposition or personality is disagreeable.

In the process, they are also revealing a great deal about their thinking and their emotional make-up.

Not only does empathizing with a difficult counterpart generate insight into their drivers or key interests, it also helps to assuage their negative emotions. Providing understanding (without giving in) lets them feel supported instead of attacked. This can help them address an amygdala hijack, which is good for us because it enables them to engage more productively.

Combined with assertively holding our ground, thinking creatively about mutually beneficial solutions, and leveraging the power of fairness and relevant market standards, empathy can redirect the hard bargainer toward seeking to meet their interests in more constructive ways.

Pathways to Improved Emotional Intelligence
Emotional intelligence is critical for negotiation mastery. But, unlike IQ or cognitive intelligence, emotional intelligence is not fixed, genetically or otherwise.

This means that emotional intelligence can be learned and developed with training and practice. When negotiators struggle with emotional intelligence it is often because they lack familiarity and practice with appropriate models of how to handle the challenges inherent in negotiation.

By orienting them to these models and providing guidance on how to implement them in the kinds of negotiations they face day in and day out at work, these capabilities can be developed and better results achieved.

Related: 20 Best Practices for Negotiating and Managing Key Supplier Relationships