Power is everything in negotiation. Have it and get your way. Don’t, and be at the other party’s mercy. Skilled negotiators always look to increase the balance of power in their favor. 

Power is all about perception. If you think the other party is powerful, then they are. But we can change a person’s perceptions; therefore, we can change the balance of power. Skilled negotiators know they don’t need real power (although it helps); they need the perception of power.

Below is a simple five-step process to evaluate and influence power.

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1. YOUR POWER: Make a list of three (yes, only three) reasons why you have power. Next to each reason, note with a “Yes” or “No” if the other party perceives this fact. For example:

Reason                                                      Perceived by the other side

Market share of 55%                               Yes

Time is on our side                                  No

Their next best option for us is poor      Yes

 

Be sure to consider the following elements: 

• Who is under a time constraint – us or them?

• Where is the level of dependency? 

• Do they need us, or do we need them? Why? How?

 

2. THEIR POWER: Do the same exercise as if you were them. What would they say about their power? Do they think you know this?  For example:

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Reason                                   Perceived by the other side (in this case, you)

This is a very big deal           Yes

Our Plan B is very strong     No

We are not in a hurry            Yes

 

Note: Time is a key lever in any negotiation. Make sure you consider this aspect. Those who have a time constraint rarely negotiate from a position of power.

 

3. YOUR POWER ASSESSMENT: Based on the work above, give your side a number from 1 “No Power” to 10 “Ultimate Power.”  Whatever number you give your side, the other party gets the opposite.  For instance, 7 for you and 3 for them means you have more power. 5 to 5 would be balanced. If the numbers don’t add up to 10, you most likely need to re-evaluate.

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4. COMMUNICATION CAMPAIGN AND INFORMATION GATHERING: For all the “No’s” identified in Step 1, develop a communication campaign where you change this perception.  This could be subtle messaging or more formal presentations. For all “Yes” in Step 2, your communication campaign should look to diminish these perceptions.

 

5. TIMING EVALUATION: Given the above, will slowing the negotiation down give you more perceived power? Will it allow you to shift their perception of power, or allow you time to gain valuable information about their position? If so, do it.  If not, speed it up as best you can. 

 

Remember, power comes from perception, not reality.  How do you change perception, without changing reality?

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Case Story

Procurement manager in Brazil needed to buy a raw ingredient from the only supplier in Brazil. The next nearest supplier was in China. The Brazilian supplier knew this fact and the power held. As such, for the last 5 years, the supplier has implemented massive price increases.  Unfortunately, the China option was not an option for the procurement manager – just too complicated, no matter the cost. But the Brazilian supplier did not know this. 

 

So, we developed a simple communication strategy. The next time the supplier and procurement manager were scheduled to meet and continue the negotiation, the procurement manager canceled the meeting at the last minute. He would be “out of the country, traveling in China on business.”  The “Out of Office” email was enough.

 

At the next meeting, the Brazilian supplier lowered the pricing by 30% and signed a two-year deal. We simply changed his perceived power – the Chinese supplier was a serious option. (Psst…it never was. As the procurement manager was on a beach vacation, the supplier was stuck inside their own mind, figuring out how low to go.) 

 

IF YOU…                  THE OTHER PARTY…             THEN…

are weak                perceives you as weak         Be careful and build power over time.

are weak                perceives you to be strong   Leverage your power, but be careful, you are bluffing.

have ‘real’ power  perceives you strong             Leverage your power carefully.

have ‘real’ power  perceives you as weak          Show them why you are powerful so you can leverage it.

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Power is everything in negotiation. The more you have, the better the deal. Always understand your power and strive to increase it. Whether you use this power is up to you. But you cannot use something you do not have.

 

 

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