How to manage the circumstances when you know you have less power

Let’s assume that you did your diligent assessment of the balance of power and it turns out to be against you, what can you do?

You need to be realistic and realize that even though you do have alternatives, in the worst case scenario (the situation becomes really tense and the other party stays intransigent), it is likely that you will have to concede more than the other party.

But before coming to that point, you have several alternatives that you can consider and here the key is preparation.

Prepare everything! What you are going to say; how you are going to move; what messages you are going to send before sitting down at the negotiation table? etc.

When planning the structure of the negotiation process, you need to think about three key aspects:

1. What are you going to do before the negotiation starts to sit in the best possible position at the table?
2. How long do you think the negotiation will take and how do you want to manage that time?
3. How are you going to move and what are you going to say at the different stages of the negotiation?

Let’s examine each of these in detail.

What are you going to do before the negotiation starts to sit in the best possible position at the table?

To answer this question, we need to visit two key concepts: BATNA and Preconditioning.

BATNA means Best Alternative to a Negotiated Agreement. The party who has a better BATNA is likely to get a better deal as their alternative to walking away from the deal is stronger. So before you go into a negotiation you need to think about how can you improve your BATNA and how can you debilitate the BATNA of your counterparty.

Examples of improving your BATNA might be: designing aggressive promotions with competitors of your counterparty in case the retailer threaten to stop buying from you; hiring temporary workers before renewing the long-term contract with your most important client; developing alternative distribution channels.

Examples of weakening your counterparty’s BATNA might be: offering differentiated and exclusive SKUs that increase their dependency on you; developing a marketing and communications strategy to differentiate you from your competitors; developing stronger or closer business relationships that generate synergies, efficiencies or easier ways of working that are not easily replicable.

Preconditioning, on the other hand, is the ability to use communication to plant seeds in the other party’s head and to start influencing them even before the negotiation takes place.

You should aim to precondition the other party to be seen relevant to them; to make them feel that discounts would be very difficult to give; to make them think that there is little room for them to capture more value at your expense or to highlight the factors that will strengthen your BATNA and weaken theirs.

How long do you think the negotiation will take and how do you want to manage that time?

This is a much more relative factor that will be subject to circumstances. Time might play to your advantage or disadvantage depending on many different elements.

If the other party has had organizational changes before the renegotiation of a deal, they might have less time to seek reliable alternatives and hence have a weaker BATNA, or you might find yourself negotiating against the ropes with a virtual obligation to come to a deal with your counterparty.

The best suggestion here is: plan and prepare in advance. Map the process, estimate how long it is going to take and what approach or strategy you are going to take at different stages of the negotiation. By this I mean at what point are you going to be more open, put more pressure, delay conversations or engage in creative solutions.

Think what you are going to do if things do not go as expected, what is your Plan B, Plan C, Plan D and so on (you have plenty of available letters on the alphabet).

Also, think carefully about what your breakpoint is as you need to coldly assess at what point not getting a deal is better than getting a deal.

It is likely that if the other party has explored a deal with you for some time and has been working with you in the past, they will not just walk away, because you both reach an impasse at a given point during the process. In different words, the more emotionally invested the other party is in the deal, the less likely they will walk away from it.

If you have less power than the other party, making things difficult to obtain might get you to concede less than the other party expected you to. Nevertheless, in order to do that the other party must be emotionally invested, so you shouldn’t pass an objective deadline or irritate the other party so they decide to stop doing business with you.

How are you going to move and what are you going to say at the different stages of the negotiation?

Negotiation is all about movement. Movement keeps things going in a negotiation. If the other party perceives that you are willing to reach an agreement and that you are making an effort, they will be likely to reciprocate and move closer towards your position.

The key questions are when and how much you should move? There are no easy answers to these questions, and I will give you an economist’s answer - “it depends”. As a general rule, you should move in decreasing amounts as every movement should imply that you have less room to move and that you are reaching your breakpoint.

Furthermore, in creative negotiations where there are multiple variables, if you have less power you should probably make more proposals to take control of the negotiation and get the other party to choose within your designed alternatives. Even though they might not agree to your proposals A, B or C, by stating different alternative proposals you are likely to frame the thinking of the other party and get them to move within your proposed framework.

You also need to have a clear understanding of your movement plan from where you want to start to how far are you willing to go and manage those movements through a reasonable timeframe. Work out what you are going to say to get them to move and make your proposals clear and firm at the different stages of the negotiation process.

The way you open and conclude meetings or communications is also relevant here. Saying things like “we have made an effort…”, “we listened to what you were asking for and this is what we can offer…” before stating a proposal might position properly the fact that there isn’t much space left to move.

Saying “we need you to move closer…”, “we need you to make a better offer…” or “think about what choice might be more suitable for you…” when wrapping up a meeting, might put the responsibility of the next movement onto the other party and get you something extra, while keeping them emotionally invested in the deal.

In summary

Always do a realistic assessment of the amount of power that you have. If the deal is very important, you can bring in outside help or ask someone from a different area to help you assess it.

Once you have made that assessment, plan and prepare extensively. Don’t assume that you are going to lose the battle but think about how you can maximize the chances of getting a good deal or minimize the amount of value you will have to concede.

Identifying BATNAs of both parties, working in advance to strengthen your BATNA and weakening theirs will give you an advantage and use preconditioning to help your strategy.

Identifying your breakpoint is certainly going to help you by setting a realistic limit and help you plan.

About the author

Rodrigo Malandre is the Head of Latam and an Associate Partner at The Gap Partnership. He has a degree in psychology and an MBA. He has over 20 years of experience in change management, training and consulting. He has done business projects in over 20 countries with over 100 companies.

About The Gap Partnership

The Gap Partnership is a management consultancy specializing in negotiation. We help organizations drive profitability, increase efficiency and reduce cost. 

Negotiation is an integral part of everything a business does. It exerts a critical influence on the profitability and market value of the organization.

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