Associate Partner Rodrigo Malandre explores negotiation strategies on how to manage a counterparty who fails to realize that value could be generated with a more collaborative and rational approach.

This is a guide to help you successfully navigate through the oddities of irrational behaviors and closed mindsets to get better agreements. 

Everybody knows this situation…

You enter a negotiation with a collaborative win-win mindset willing to create value for both parties and your expectations get crushed with reality. You find yourself at the table with someone who is irrational, acts unpredictably, is over demanding or cold and arrogant or even uses threats. Sometimes, people may ignore your attempts to contact them and make you feel unimportant.

Sometimes that person works for a customer or supplier you cannot afford to lose. They represent a significant part of your business, or you have been assigned as the buyer for that category or the KAM for that account.

You know that in a long-term relationship, it is usually in the best interest of both parties to collaborate and get creative. However, sometimes things don't work out as expected.

So, what do you do? How to negotiate with difficult people, possibly leveraging negotiation training techniques??

This is one of the most frequently asked questions I receive and is at the forefront of interest in every survey I have run regarding what people would like help with in their negotiations.

Moreover, The Gap Partnership, a leader in negotiation consulting, conducted global market research with over 800 business leaders across the globe in 2023 and although 67% of them believe that collaborative negotiations yield more effective outcomes, 55% feel that negotiations have intensified in competitiveness over the past three years. Another reason to think about the importance of being able to manage difficult people who act competitively in negotiations.

Context and things you need to understand

There is no magic solution that solves all your problems and works with every single person, but there are a set of guidelines, tips and techniques that very often work in these circumstances and increase your probability of changing the dynamic of the relationship and help you to engage in a more collaborative negotiation.

Let's consider why the other party is behaving in that way. The most likely explanation is that the “difficult attitude” has worked for that person in the past to get better deals and get their counterparties to concede to their demands.

It works even better when the person who is behaving in such a manner has considerable negotiation power (they know that you need them) or when the nature of the negotiations focuses on very few variables, predominantly cost, margin or price.

This is a tactic. It is used to gain power in negotiation. If the other party is not mad at you, you are unlikely to lose the business. They are trying to take advantage.

It will require a conscious effort to get your counterparty to change the way they behave and engage in more open, collaborative, and creative negotiations because people tend to repeat what has worked for them in the past. It might even become their default way of negotiating.

The guidelines

The saying goes “It takes two to tango.” It is difficult for someone who tries to create confrontation and tension to keep on doing that when the other party doesn’t engage in that dynamic. If you let your ego get in the way and start confronting back, the chances of creating a more collaborative environment are reduced significantly. On the other hand, if you let the other party intimidate you, they will feel like they are on the right track and are likely to keep applying pressure to make you concede even more.

The key here is to maintain self-control. You cannot allow the other party to affect your behavior. You need to stay calm, manage yourself objectively and rationally and focus on the issues.

One Key Account Manager told me once at a negotiation training workshop: “If you are a KAAM, you need to cover yourself in butter, everything they throw at you needs to slip.” 

Keeping self-control is not enough, you need to be conscious at all times and manage the situation in a way that best suits your interests. A few general guidelines that we will cover more in-depth are:

• Don’t take it personally
• Do not attack their ego
• Establish rapport and make them feel that you are listening
• Uncover interests and motivations
• Try to find common ground
• Try to expand the conversations
• If nothing works, be prepared to hard bargain

Now, let’s look at how these guidelines can be implemented through techniques and useful tips, many of which are a core part of The Gap Partnership’s negotiation training solutions.

Don’t take it personally

As discussed, the tough behavior is not about you. It is about the other party trying to gain power and take advantage in a negotiation.

If you take it personally, it will cost you. You will start acting based on your emotions while you should focus on what is best for the deal that you are trying to achieve.

Realizing what role the other party is playing and that it is all an act, serves to diminish how it affects you and allows you to focus on what is important.

Don’t lose your focus, maintain self-control and don’t get trapped in the game.

Don’t attack their ego

Fighting back might escalate the conflict and trigger the other party to take punitive actions. If the other party has little emotional control or has a tendency to exercise their authority or power, fighting back or attacking their ego is like fighting fire with fire. It will create a bigger problem.

If the other party crosses the line in terms of aggressive behavior or insults you, don’t lose your temper. Politely but assertively suggest to stop the meeting and reconvene at a later date. You can invoke reasons such as “I don’t think we are making progress right now”, or “Perhaps we should take some time off and think about alternatives” but remember that you will have to reengage in the near future. 

If you lose self control and say something you’ll regret it, it can affect future conversations.

Establish rapport and make them feel that you are listening

It is always useful to establish rapport with someone in a negotiation when you are trying to collaborate.

In this type of circumstance, building a connection can work to your advantage. Do some research and find where that person used to work before or see if you share connections on Linkedin. Establishing that you have mutual friends or acquaintances could serve to build trust and create an obstacle for people to behave in a tough and irrational manner. After all, people don’t want friends or their close network to hear stories about how irrational or unpolite they behave in business.

Some people find it useful to talk about common interests at the start of a meeting. Briefly and casually discussing sports or hobbies can also work to build a warm environment.

Finally, making people feel that you are listening creates a better climate and usually changes people’s attitudes. The key is to not only make them feel heard but truly listen.

Here are a few tips and techniques that you can use:

• Summarize what the other party says: it highlights the fact that you have been listening and paying attention
• Restate the last phrase of words the other party said with a sense of curiosity: that will get people to expand their opinions and feel that you want to know more
• Put yourself in their shoes. Use phrases such as “I understand why X is important to you.” “If I were you, I would also look at it that way.” This doesn’t mean that you are accepting their demands. It just means that you are understanding their point of view or acknowledging their interests.

Uncover interests and motivations

There is a key distinction in negotiation and that is the difference between interest and position.

A position might be expressed in the following way “We need to extend payment terms from 30 to 90 days.” That is a position, a request. You don’t know why they are asking for that. You don’t know the underlying interest or motivation behind the request.

If you ask something like “Please explain to me why payment terms are so important to you?” or “Help me understand more about this request. What has changed?” you might uncover the interest or motivation behind the request.

The interest might be that your customer is going through some cash flow issues or they have a big project that requires massive capital expenditure, and they want to ease their cash flow and reduce financial costs.

Once you uncover the interest, you have alternatives. In this particular example, if you are a CPG company and your counterparty is a retailer, you can offer to do some actions on the point of sale, launch a promotion to accelerate sell-out or find logistical efficiencies to reduce inventories.

All of these alternatives to payment terms serve the same interest although they do it in different ways or through different positions. In all cases, there will be less immobilized capital on goods or there will be an inflow of cash (or both).

When dealing with difficult individuals, understanding their underlying alternatives and motivations empowers you to generate a range of options, enabling you to move beyond the singular issue that is causing tension and consuming their focus.

Try to find common ground

As we’ve said before, it takes two to tango, hence finding common ground is key to deactivating a “battle attitude” of the other party.

Understanding underlying interests and offering alternatives is one way of finding common ground, but there are others.

You can emphasize common goals: achieve synergies or efficiencies, innovate, grow together, make the supply chain leaner, optimize a portfolio of products for end-customers, enhance the shopping experience, etc.

Aligning on common goals can serve to get the other party to work with you and not against you. To do this, you need to listen and understand what is important for the other party and reframe the conversation towards what you can achieve together.

In some instances, the other party may steer the conversation towards topics such as price, cost, or margin. If this occurs, attempt to present alternative options and openly communicate any limitations you may encounter, while consistently redirecting the discussion towards areas or issues where potential opportunities lie.

Try to expand the conversations

To engage in more creative negotiations with difficult people, you will need to find a way to expand conversations.

It is common among difficult people to start meetings complaining about issues before engaging in negotiations. That serves them to make you feel guilty, to disincentivize you to ask for things and shift the balance of power in their favor. Do not get trapped by that and remember to maintain self-control.

When attempting to transition away from a contentious topic, it is crucial to avoid simply ignoring or hastily dismissing any attacks that may arise. It will only generate animosity. There are better ways to handle the situation.

First, it is always advisable to use a negotiation agenda. If the other party is complaining about a topic that was not included in the agenda, you can respond by acknowledging the importance of the issue and explaining that you did not prepare to discuss it since it was not included in the agenda. Then you can suggest either taking notes to get back to them at a later date or leaving it for the end of the meeting once you have covered what both parties agreed as the topics on the agenda for the meeting. Sometimes you can try the second first and if the other party insists you can go to the first alternative.

If you want to have more productive conversations, focus on interests instead of positions. Highlight relevant goals to elevate the discussion. So, what does this next level entail? Such conversations foster creativity and encourage the exploration of hypothetical solutions.

A lot of questions can help you at this level:

• “What would it take for you to increase the volume of your order?”
• “If we hypothetically can find a way to give you more of X, would that allow you to give us more of Y?”
• “If we can find a way to ensure that you solve this problem, what will that enable you to do?”
• “What alternatives do you see to get to an agreement?”

Discussing alternatives and hypothetical scenarios can help you explore solutions without having to commit to them. It also enables both parties to concentrate on solutions rather than problems and it fosters creativity.

Along the same line, focus on what you can do rather than what you can’t do. That will also help move deals forward and avoid getting trapped in what you cannot agree.

If the other party is closed to exploring new options, you can always mention success stories in other markets or in other channels where you implemented other solutions. Avoid comparing clients or customers from the same market as it may cause defensiveness and a desire to differentiate themselves, leading to a justification for not being treated like others.

If nothing works, be prepared to become intelligently competitive

If you have exhausted all possible solutions and none of them have worked, it might be necessary to reconsider your approach. Evaluate whether this relationship can be transformed or if it will continue to be competitive until something substantially alters the dynamics of the market, the person in question is replaced with someone who is more collaborative, or the culture of your counterpart undergoes a change.

If you think there is no way to engage in collaborative negotiations with your counterparty, you will have to intelligently get competitive. What do I mean by this?

Given the need to keep working with this counterparty, because of the high degree of dependency or an ongoing business relationship, adopting an intelligently competitive approach means engaging in the game without undermining the other party's ego. While you may feel inclined to be firm and defensive, it is important to maintain open communication. This will help manage the relationship, prevent things from escalating, and avoid any punitive and irrational actions that could harm both parties' interests.

The game of competitive negotiations is easy to play once you know the rules, it might not get you the best possible outcome, and it might not serve the interests of both parties in long-term relationships, but at least it will serve not to undermine your position and avoid leaving money on the table.

Conclusion

Collaborative negotiations often yield superior outcomes. However, throughout your business journey, you are bound to encounter challenging individuals who opt for competitive negotiations, even when the circumstances and interdependency suggest that it is not in the best interest of both parties.

You need to understand what game the other party is playing and recognize that there are plenty of techniques and tips to change the nature of that relationship into a more collaborative one.

To navigate effectively, prevent falling into the trap set by the other party, and maintain self-control, it is crucial to establish rapport and demonstrate attentive listening. Seek to understand their underlying interests and motivations, striving to find common ground. Employ techniques that foster expansive conversations and generate possibilities. However, it is prudent to be prepared for the unlikely scenario where all efforts have been exhausted without success.

In the end, you cannot control how the other party behaves (although you can certainly influence them), but you can control how you act and respond to them to play the game that works best for you and your company’s goals. 

More reading and listening...

How collaborative negotiation adds value article by Tamara Hodgson. 

Carol Loftus | Tricks of my trade podcast with Partner Mike Kamins and Senior Manager Carol Loftus. 

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