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How Time Pressure Affects the Outcome of a Negotiation by Roger Dawson

In Puerto Prince, Haiti, former President Jimmy Carter, Colin Powell, and Senator Sam Nunn were in intense negotiations with Haiti's military commander, General Cedras. The hone rang and it was President Clinton calling to tell them that he had already started the in!asion and they had "# minutes to get out of there. That was utting e$treme time ressure on the negotiation, and eo le %ecome fle$i%le under time ressure. &hen do your children as' you for something( Just as you're rushing out of the door, right( &hen my daughter Julia was attending the )ni!ersity of Southern California, she li!ed in a sorority house and would sometimes come home for the wee'ends and need money for %oo's. &hen would she as' me( Se!en o'cloc' on a *onday morning, +ust as she was racing out the door she'd say, ,-ad, I'm sorry, I forgot. I need /0# for %oo's., I'd say, ,Julia, don't do this to me. I teach this stuff. How come you'!e %een home all wee'end, and we didn't ha!e a chance to tal' a%out it %efore(, ,1h sorry, -ad, I +ust didn't thin' a%out it until I got ready to go, %ut I'm late now, I'!e got to get on the freeway, or I'll %e late for class. If I can't get my %oo's today, I won't %e a%le to get my assignment in on time. So lease, can I ha!e the money now, and we'll tal' ne$t wee'end(, Children are not that mani ulati!e, %ut instincti!ely, o!er all those years of dealing with adults, they understand that under time ressure eo le %ecome more fle$i%le. The ro%lem was that President Carter was utting time ressure on the wrong side. Power Negotiators 'now that an interesting 2uestion is raised when %oth sides are a roaching the same time deadline, as was the case in Haiti. Thin' of this in terms of you renewing your office lease for e$am le. 3et's say that your fi!e4year lease is u in si$ months, and you must negotiation a renewal with your landlord. 5ou might thin' to yourself, ,I'll use time ressure on the landlord to get the %est deal. I'll wait until the last moment to negotiate with him. That will ut him under a great deal of time ressure. He'll 'now that if I mo!e out the lace will %e !acant for se!eral months until he can find a new tenant., That seems li'e a great strategy until you reali6e that there's no difference %etween that and the landlord refusing to negotiate until the last minute to ut time ressure on you. So, there you ha!e a situation in which %oth sides are a roaching the same time deadline. &hich side should use time ressure and which side should a!oid it( The answer is that the side who has the most ower could use time ressure, %ut the side with the least ower should a!oid time ressure and negotiate well ahead of the deadline. 7air enough, %ut who has the most ower( The side with the most o tions has the most ower. If you can't reach a negotiated renewal of the lease, who has the %est alternati!es a!aila%le to them( To determine this you might ta'e a sheet of a er and draw a line down the middle. 1n the left side, list your o tions in the e!ent that you are una%le to renew the lease. &hat other locations are a!aila%le to you( &ould they cost more or less( How much would it

cost you to mo!e the tele hones and rint new stationary( &ould your customers %e a%le to find you if you mo!e( 1n the right hand side of the age, list the landlord's o tions. How s eciali6ed is this %uilding( How hard would it %e for him to find a new tenant( &ould they ay more or would he ha!e to rent it for less( How much would he ha!e to s end on im ro!ements or remodeling to satisfy a new tenant( Now you must do one more thing. 5ou must com ensate for the fact that whiche!er side of the negotiating ta%le you're on, you always thin' you ha!e the wea'er hand. 8fter all, you 'now all a%out the ressure that's on you, %ut you don't 'now a%out the ressure that's on the landlord. 1ne of the things that ma'es you a more owerful negotiator is understanding that you always thin' you ha!e the wea'er hand and learning to com ensate for that. So, when you list each side's alternati!es in this way, you'll ro%a%ly end u with the conclusion that the landlord has more alternati!es than you do. So com ensate for that, %ut if you do so and clearly the landlord still has more alternati!es than you do, he's the one who has the ower. 5ou should a!oid time ressure and negotiate the lease renewal with lenty of time to s are. Howe!er, if clearly you ha!e more alternati!es a!aila%le to you than the landlord does, ut him under time ressure %y negotiating at the last moment. &hen President Clinton called President Carter to tell him that he had already started the in!asion, and Carter had "# minutes to lea!e the country, it was an ultimate e$am le of a lying time ressure to a negotiation. The only ro%lem was that Clinton was utting time ressure on the wrong side. &e had all the ower in that negotiation %ecause we had all the o tions. It should ha!e %een Carter utting time ressure on Cedras, not Clinton utting time ressure on Carter. 9ecause %eing under time ressure wea'ens your hand, you should ne!er re!eal to the other side that you ha!e a deadline. 3et's say for e$am le, that you ha!e flown to -allas to resol!e a negotiation with a hotel de!elo er and you ha!e a return flight at 0 o'cloc'. Sure, you're eager to catch that flight4 %ut don't let the other eo le 'now. If they do 'now you ha!e a 0 o'cloc' flight, %e sure to let them 'now you also ha!e a : o'cloc' %ac'4u flight or, for that matter, you can stay o!er for as long as it ta'es to wor' out a mutually satisfactory arrangement. If they 'now you're under time ressure, they could delay the %ul' of the negotiations until the last ossi%le minute. Then there's a real danger that you'll gi!e things away under that 'ind of time ressure. In my Power Negotiating seminars, I set u e$ercises so the students can ractice negotiating. They may ha!e ;< minutes to com lete a negotiation, and I im ress on them the im ortance of reaching agreement within that time eriod. 8s I wal' around the room ea!esdro ing on the rogress of the negotiations, I can tell that during the first ;= minutes they ha!e trou%le ma'ing any rogress. 9oth sides are stonewalling the issues and there is !ery little gi!e and ta'e. 8t ;= minutes, with ># ercent of the time used u , I ta'e the micro hone and tell them they ha!e only " minutes left. Then I continue eriodic

announcements to 'ee the time ressure on them and end with a countdown of the seconds from fi!e to 6ero. It's !ery clear to see that they ma'e ># ercent of the concessions in the last =# ercent of the time a!aila%le to negotiate. So, the rule in negotiating is that ># ercent of the concessions occur in the last =# ercent of the time a!aila%le to negotiate. If demands are resented early in a negotiation, neither side may %e willing to ma'e concessions, and the entire transaction might fall a art. If, on the other hand, additional demands or ro%lems surface in the last =# ercent of the time a!aila%le to negotiate, %oth sides are more willing to ma'e concessions. Thin' of the last time that you %ought a iece of real estate. It ro%a%ly too' a%out ;# wee's from the time you signed the initial contract to the time you actually %ecame the owner of the ro erty. Now thin' of the concessions that were made. Isn't it true that during the last = wee's when things came u to %e renegotiated, %oth sides %ecame more fle$i%le( Some eo le are unethical enough to use this against you. They hold out, until the last minute, elements of the negotiation that could ha!e %een %rought u earlier and resol!ed sim ly. Then when you're getting ready to finali6e the arrangements these ro%lems come u %ecause they 'now you'll %e more fle$i%le under time ressure. 8nother thing that the rici le of time ressure tells you is that you should always tie u all the details u front. -on't lea!e anything to, ,1h well, we can wor' that out later., 8 matter that a ears to %e of little im ortance u front can %ecome a !ery %ig ro%lem under time ressure. I remem%er %eing in ?alis ell, *ontana, to do a seminar for the *ontana graduates of the @ealtors' Institute. These are the highest trained residential real estate eo le in the state. &e were doing an all4day seminar on Power Negotiating and during the %rea' an agent came u to me and said, ,Perha s you can hel me. I ha!e a %ig ro%lem. It loo's as though I'm going to lose a %ig art of my commission on a !ery large transaction., I as'ed her to tell me more, and she said, ,8 cou le of months ago a man came into my office and wanted me to list his /0##,### home. &ell, I had ne!er listed anything that large %efore, and I guess I didn't e$ ress as much confidence as I should ha!e, %ecause when he as'ed me how much commission I would charge, he flinched, and I fell for it. I told him si$ ercent. He saidA 'Si$ ercent. That's /"0,###B That's a lot of money.' So I saidA '3oo', if you ha!e to come down much on the rice of the ro erty, we'll wor' with you on the commission.' That's all I said, and I ne!er ga!e it a second thought. ,8s luc' would ha!e it, I ended u not only getting the listing, %ut I found the %uyer as well. He didn't ha!e to come down much on the rice, so now I ha!e almost the full /"0,### commission coming into my office, and the ro erty is due to close ne$t wee'. 5esterday he came into my office and saidA 'I'!e %een thin'ing a%out the amount of wor' that you had to do on that sale. 5ou remem%er you told me that you'd wor' with me on the commission(' ,I said, 'yes.' ,'&ell, I'!e %een thin'ing a%out the amount of wor' you had to do, and I'!e decided that /<,### would %e a !ery fair commission for you.', /<,### when she was due /"0,###. She was almost anic4stric'en. This illustrates that you shouldn't lea!e anything to ,&e can wor' that out later, %ecause a little detail u

front can %ecome a %ig ro%lem later when you're under time ressure. That story also illustrates how we always thin' we ha!e the wea'er hand in negotiations4 whiche!er side we're on. In fact, the real estate agent in *ontana was in a !ery strong osition wasn't she( 8s I e$ lained to her, she had a written contact for the si$ ercent. If anything, she had !er%ally modified it with a !ague comment that wouldn't hold u in court anyway. So in fact she had all the ower, %ut didn't thin' she had any. Howe!er, why e$ ose yourself to that 'ind of ro%lem( Tie u all the details u front. &hen the other side says to you, ,&e can wor' that out later, it's not going to %e a %ig ro%lem,, %ells should start to ring and lights should start to flash. -on't let eo le do that to you. 8lso reali6e that the longer you can 'ee the other side in!ol!ed in the negotiation the more li'ely the other side is to mo!e around to your oint of !iew. The ne$t time you're in a situation in which you're %eginning to thin' that you'll ne!er %udge the other side, thin' of the tug%oats in the Hudson @i!er off *anhattan. 8 tiny tug%oat can mo!e that huge ocean liner around if it does it a little %it at a time. Howe!er, if the tug%oat ca tain were to %ac' off, re! u its engines, and try to force the ocean liner around, it wouldn't do any good. Some eo le negotiate li'e that. They reach an im asse in the negotiations that frustrates them, so they get im atient and try to force the other side to change their mind. Thin' of that tug%oat instead. 8 little %it at a time, it can mo!e the liner around. If you ha!e enough atience, you can change any%ody's mind a little %it at a time. )nfortunately, this wor's %oth ways. The longer you s end in a negotiation the more li'ely you are to ma'e concessions. 5ou may ha!e flown to San 7rancisco to negotiate a large %usiness deal. 8t > o'cloc' the ne$t morning, you're in their office feeling %right, fresh, and determined to hang in and accom lish all of your goals. )nfortunately, it doesn't go as well as you ho ed. The morning drags on without any rogress, so you %rea' for lunch. Then the afternoon asses, and you'!e reached agreement on only a few minor oints. 5ou call the airline and reschedule for the midnight flight. 5ou %rea' for su er and come %ac' determined to get something done. 3oo' out. )nless you're !ery careful, %y ;# o'cloc' you'll start ma'ing concessions that you ne!er intended to ma'e when you started that morning. &hy does it wor' that way( 9ecause your su%conscious mind is now screaming at you, ,5ou can't wal' away from this em ty handed after all the time and effort you'!e s ent on it. 5ou ha!e to %e a%le to ut something together., 8ny time you ass the oint where you're re ared to wal' away, you ha!e set yourself to lose in the negotiations. Time is com ara%le to money. They are %oth in!ested, s ent, sa!ed, and wasted. -o in!est the time to go through e!ery ste of the negotiation, do use time ressure to gain the ad!antage, and don't yield to the tem tation to rush to a conclusion. Power Negotiators 'now that time is money.

Roger Dawson is a professional speaker and the author of two best selling books on negotiating: Secrets of Power Negotiating and Secrets of Power Negotiating for Salespeople, both published by Career Press. He was inducted into the Speaker Hall of a!e in "##". $ou can contact hi! at rogdawsonCaol.com. His website address is: htt ADDrdawson.com.