New Approaches to Negotiation – Real World Sourcing Slides Available Now

We held the latest in our Real World Sourcing series last Wednesday with BravoSolution, titled “New Approaches to Negotiation”. As the presenter, it was perhaps my favourite of all the sessions we have done in the series, because I got to do some “experiments” on the audience to demonstrate some aspects of behavioural psychology.

The session was also the first time I have worked properly with radio presenter, science communicator and Cambridge psychology graduate Ginny Smith, who helped explain the real “science” behind the topic. Yes, she is my daughter, but she knows a whole lot more than me about neuroscience, perception and the evolutionary basis of our behaviour, that’s for sure. The session drew on the work of Nobel prize winner Dr Daniel Kahneman, author of the seminal book "Thinking, Fast and Slow", which shows that we don’t think rationally or logically in many cases when we are making decisions. So we looked at how understanding these aspects of behaviour might help us become better negotiators.

Thanks to everyone who came, and we hope you enjoyed it and got something useful out of it. Whether or not you were there, you can take the post-event “quiz” now. Remember that the top ten participants across all six of the RWS sessions get invited to the end of year dinner in December, and the highest scorer overall wins the BravoSolution scholarship of £2500 to spend on training and development activities of your choice. And the slides are generally available here if you want to take a look at them.

As an example of the topics we discussed, we wrote here about the old-fashioned tactic of getting in early with a very low (or high) bid first in a negotiation. Old-fashioned maybe, but Kahneman’s work would suggest it does have a legitimate basis in behaviour. It is an example of what is called Anchoring – our tendency to think around a particular value that we have seen or been previously given. That applies (worryingly) even if there is no connection between the number and the actual question.

For example, Kahneman carried out an experiment at the University of Oregon. Participants spun a roulette type wheel that was fixed to stop at either the number 10 or 65. They were then asked – what is your best guess at the percentage of African nations in the United Nations? The average estimates of those who had previously seen 10 and 65 were 25% and 45% respectively. Of course, the spin of the wheel could not have possibly given any useful information about anything, and the result should have been ignored. But it wasn’t, it clearly influenced the answers to the UN question.

So that suggests this phenomena can be used in negotiation, and sometimes planting that “anchor” in your opponent’s mind is a good thing to do. But what about if they try and anchor you? How should you respond? We’ll come back to that another day - or you can download the slides which will tell you!

Finally, we’re pleased to announce that a briefing paper on this same topic will be available very soon – next week I hope. It will go into these issues in more depth and we’ll let you know of course when it is available.

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