30 Jun 2014  Lessons from the Classroom

The Role of Emotions in Effective Negotiations

HBS Senior Lecturer Andy Wasynczuk, a former negotiator for the New England Patriots, explores the sometimes intense role that emotions can play in negotiations.

 

A simple view of negotiation presents a cold transaction between what one person has and what the other person is willing to pay for it. If the price is right, the deal gets done.

As anyone who has recently bought a car or sold a house knows, however, negotiations are rarely so dispassionate. As soon as the checkbook comes out a flood of emotions comes out with it—fear, anxiety, competiveness, anger, annoyance—all of which can influence what either side is willing to accept.

"I can't imagine a good negotiator who doesn't have either an explicit understanding about emotions, or is highly intuitive about the process"

Emotions such as satisfaction and elation can be quite rare in negotiation, says Andy Wasynczuk, MBA Class of 1953 Senior Lecturer of Business Administration at Harvard Business School. His new teaching note, Emotions in Negotiations: An Introduction, traces the history, theory, and research on how emotions can affect transactions between parties. Wasynczuk and his coauthor, independent researcher Colleen Kaftan, do so using an everyday example of a work-at-home consultant ("Kate") dealing with an electrician ("Peter") over restoring power after a storm. They intentionally picked the situation as one to which students could relate.

"Our MBAs generally feel like they are very ill-equipped for negotiation, whether that's dealing with a landlord or buying a car—let alone the business situations they will be getting into," says Wasynczuk. "Rather than discussing topics in the rarified air of investment banking, an industry foreign to many of our students, we wanted to be as universal as possible."

Emotions can cause the other party not to hear your message.
Photo: iStockPhoto

Not that it is a simple situation emotionally. Stressed out over lost work because of the storm, Kate is further annoyed when repairman Peter is three hours late. When he responds brusquely at her overtures toward friendliness and offers what she feels is an unreasonable price and timeline for repairs, she gets angry. Before long, both sides are yelling, and Peter marches out the door.

The question for students is: What could Kate have done differently to get a better outcome?

"We spend a lot of time talking both about what emotions we elicit in others based on our behavior, and what we need to do to manage our own emotions. There are lessons on both sides," says Wasynczuk. "I can't imagine a good negotiator who doesn't have either an explicit understanding about emotions, or is highly intuitive about the process."

Negotiating in the NFL

Wasynczuk (HBS MBA '83) should know—he served as chief operating officer for the New England Patriots for 15 years, where he was in charge of negotiating high-stakes player contracts involving millions of dollars.

He intuitively understood that emotions were an important factor in dealing with people as passionate as athletes. "The last thing I wanted to do was create an excuse for a player or agent to get angry. That would create a power struggle, which was a recipe for disaster."

Wasynczuk learned to enter into contract talks with a smile—and to rationalize away his own anger when a deal couldn't be struck. "If an agent was being greedy with me, they were probably being greedy with other teams as well," he told himself. "If the other team ended up paying that money they were making a mistake."

Business schools began teaching negotiation in the 1980s, when it was presented as a straightforward economic analysis. Assuming the other side was acting rationally in trying to maximize its position, the goal was to figure out how to respond in various scenarios to maximize one's own value. Research beginning in the '90s, however, found that negotiators rarely acted rationally, instead taking into account what they felt they deserved from the other side, and what they could do to save face when they didn't get it.

"What we teach is not to settle for something that is just OK"

Take this simple exercise: Player A is given $20 and has to decide how much to share with Player B. Player B's only decision is to decide whether or not to accept what is offered. If accepted, Player B receives the offered amount and Player A gets to keep the balance. But if declined, both players end up with nothing. Rationally, B should take any offer—even as little as $1—that's more than nothing. And yet, whenever this experiment is performed, B consistently rejects the money unless it is at least a quarter of the total—$5.

"There is a very strong emotional response to the lack of fairness, irrespective of the right rational decision," says Wasynczuk. "The more we understand how people behave based on emotions, the more thoughtful and appropriate we can be in how we respond to them."

Anger, for example, is one of the most destructive emotions during negotiation—often causing deal making to break down as each side sacrifices its needs in order to save face. "It tends to start rising on both sides, and inevitably there is a point where it erupts," says Wasynczuk. "People walk away and say there's value on the table, but I don't care."

That said, anger isn't always a bad variable in negotiation. Deployed the right way, it can demonstrate passion and conviction that can help sway the other side to accept less. The trick is to direct the anger at the situation or problem—not the person on the other side of the table.

"Some students try and have a poker face and not react to the other side's offer, but that's not useful," says Wasynczuk. "If one side puts a ridiculous offer on the table, it's all right to get angry and say, 'I don't see how that would ever work.'"

On the flipside, research has found that entering negotiations with a positive attitude tends to lead to better outcomes—when both sides are agreeable and conciliatory, it builds a level of trust that can lead to information sharing that allows both sides to get a better deal. Happiness can be dangerous as well, since happy negotiators tend to accept less than they might otherwise be able to get.

"You don't want your happiness to hijack other emotions," says Wasynczuk. "What we teach is not to settle for something that is just OK, but to keep searching for something where both sides are going to benefit."

No matter what emotions are present at the bargaining table, a smart negotiator first becomes aware of what they are—and then works to emphasize the positive emotions that can help the deal and downplay the negative emotions that might scuttle it. Such "emotional intelligence" may take the form of changing body language or tone of voice to influence the way the other person responds—or taking a break during a difficult point in negotiations in order to turn down the heat when anger starts flaring.

In the case of client Kate and electrician Peter, what Kate doesn't realize is that while she is annoyed at her lack of phone and Internet access brought by the power outage, Peter has been working 18-hour days since the storm, and dealing with multiple homeowners all making similar demands, putting undue pressure on his small work crew.

A Happier Ending

In an "alternate ending" to the story, Kate apologizes for how the negotiation has gotten out of control, and asks if they can start over. She shares her own anxieties and frustrations about an important conference call regarding FDA approval of a cancer drug, and Peter shares that his uncle died of cancer. Before long, the two are sitting at the table discussing whether Peter can split up his crew to handle the most pressing repairs for each of his clients.

"In that second version, she is being more transparent with her frustration and fears and reaching out whenever there is a reaction from him," says Wasynczuk. "That empathy leads them to understand some of the differences that motivate each side and makes them feel like they want to do something with the other person."

As that case illustrates, emotions can be powerful, not only in derailing a negotiation, but also in helping both sides come to better agreement.

"To strip away emotions wouldn't be desirable," says Wasynczuk —even if it could be done. "Emotions are an expression of how people are processing information, and can give a strong signal of how the mind is internalizing the discussion."

Managed well, they can turn a frustrating negotiation into one that is pleasant, productive, and even enjoyable.

About the author

Michael Blanding is a senior writer for Harvard Business School Working Knowledge. His latest book is The Map Thief: The Gripping Story of an Esteemed Rare-Map Dealer Who Made Millions Stealing Priceless Maps.

Comments

    • Seshadri N Iyer
    • NSM, G&B

    Very true and very well explained. It is always important to have a positive intent towards going into any negotiation.

    That sets the tone for the outcome. Also important are transparency and candidness about ourself and about our expectations from opposite party involved in the negotiation.

     
     
     
    • Phil Clark
    • Clark & Associates

    I will go one step further. All decisions are based on emotion. You are only fooling yourself if you think otherwise. In fact, this is true of all communications, not just in negotiations. Therein lies most of the crux of issues between managers, owners, workers and competitors. Sadly may companies forget that emotion is the driving force of their business with their customers. Andy Waswyczuk was a wise person to recognize the real game he was playing when negotiating.

    I tell managers and leaders that they must understand they are dealing with people. Learn that game. Spreadsheets and stuff is just data. Thinking that justifies a decision is playing the fools game. GM probably crunched the numbers and lawyers played the cover man in their latest fiascos. They missed the whole game. Now they are in jeapordy.

     
     
     
    • Pk
    • Ceo, SB

    Intresting read on a much ignored aspect of negotiation. First and foremost it's important to be in negotiation if you wan to close a deal. As a successful serial Enterpruner I have always been honest about value delivery and that passion and obsession reflects in the emotions expressed quit positively. Nothing working with emotions one just has to be careful in the way they are expressed.

     
     
     
    • Jim
    • Operations Manager, Euro Automobiles

    This well written article is much more relevant to me than most in this forum. However, the social skills are so basic that it makes me wonder what elementary levels of common sense and basic social skills are required in order to qualify or produced for/by the Harvard MBA experience. Thank you.

     
     
     
    • Cindy
    • housekeeper

    I'm sorry Harry, I know it's New Years Eve, I know you're feeling lonely, but you just can't show up here, tell me you love me and expect that to make everything alright. It doesn't work this way.

    Harry: Well how does it work? Sally: I don't know but not this way. Harry: Well how about this way. I love that you get cold when it's seventy one degrees out, I love that it takes you an hour and a half to order a sandwich, I love that you get a little crinkle above your nose when you're looking at me like I'm nuts, I love that after I spend a day with you I can still smell your perfume on my clothes and I love that you are the last person I want to talk to before I go to sleep at night. And it's not because I'm lonely, and it's not because it's New Years Eve. I came here tonight because when you realise you want to spend the rest of your life with somebody, you want the rest of the life to start as soon as possible.

    Sally: You see, that is just like you Harry. You say things like that and you make it impossible for me to hate you. And I hate you Harry... I really hate you. I hate you. (They kiss and make up.)

    Harry: What does this song mean? For my whole life I don't know what this song means. I mean, 'Should old acquaintance be forgot". Does that mean we should forget old acquaintances or does it mean if we happen to forget them we should remember them, which is not possible because we already forgot them!?

    Sally: Well may be it just means that we should remember that we forgot them or something. Anyway it's about old friends.

     
     
     
    • Penny Whitelock
    • MD, Improve Managers Ltd

    I liked this simple illustrative piece. Any snippet that we can learn - or be reminded of - to help ourselves or our colleagues to be successful negotiators has got to be worth reading. I am currently coaching someone who is struggling to negotiate without showing his anger - as a new manager he needs to learn as quickly as he can how bets to get to a win - win . I will be sharing this with him.

     
     
     
    • Olanma Edmund
    • consultant, Telecommunications

    I have worked over 5 years with both internal and external customers and all through these years one thing has made me better on my job is the realization of the importance of emotions. I negotiate day in day out and to be able to connect with both parties yields positive results more than often times. I'm truly glad that this is recognised has a tool for results. I once suggested this to my boss but he said we should stick to being professional, which is okay but people want to know that you do understand and somoetimes feel them.

     
     
     
    • Talha Khurshid Siddiqui
    • Founder & LearningZ Production Head, MyLearningZ.com

    Although I never took emotions that much seriously ever before, just the logical and rational reasons on the table. I'll try to work on the given theory in my next given negotiation inshaALLAH (God Willingly)

     
     
     
    • Thoko Mkavea
    • Chief Investment Banking Officer, CDH Investment Bank

    Good article with some very good illustrations. I agree that emotions can be positive in negotiations, and in my experience, better outcomes are achieved if any negotiation is backed with facts. For example, a well worked computation of a deal value versus a point where you can not take the deal anymore. This helps a negotiator focus his passion on the deal itself and explain points of view without losing focus on the deal at hand.

     
     
     
    • Charmaine
    • owner, BHE PRODUCTIONS

    All very interesting; any chance of a follow up addressing a slightly different scenario? What about all the foreclosures happening nationwide. In most, the homeowner is in all likelihood highly emotional while the lender's attorney is not. Also, because of the backlog of cases, many of these cases go through pre-hearing mediation that is not a face-to-face negotiation but a conference call. Any pointers for this situation? Thank you.

     
     
     
    • Seshadri N Iyer
    • NSM, G&B

    Very true and very well explained. It is always important to have a positive intent towards going into any negotiation.

    That sets the tone for the outcome. Also important are transparency and candidness about ourself and about our expectations from opposite party involved in the negotiation.

     
     
     
    • BabyBoomerWriter
    • educator, writer, mother

    People with emotional intelligence also have what it takes to be great parents. If they listen carefully, respond appropriately, handle novel situations without over-reacting, and respond with patience when a curious child asks, "Why?" they construct the kind of environment where creativity thrives.

     
     
     
    • Krishna Shankar
    • (Retd ) Air commodore , Indian Air Force, visiting Professor

    A well illustrated example and easy to assimilate. Any human being is full of emotions which are not always displayed. Positivity in our thought, deed and action is necessary to settle for a win - win situation. The human never wags his tail but needs to be satisfied before he agrees and use his tongue positively. It was an enjoyable article. Thanks .

     
     
     
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    Along side a good IQ, we also need a good EQ in order that we are able to successfully negotiate deals/ projects, etc. Unnecessary excitements and wild reactions lead to stalemates. One has to be absolutely balanced and honestly ( may even be critically ) appreciative of the others' viewpoints which could have value thereby leading to proper decisions. To conclude, emotions greatly matter in all spheres of life, business included

     
     
     
    • Lisa Horvitz
    • Director, Operations Projects, McLean Hospital

    "Beyond Reason: Using emotions as you negotiate" is a great book by Roger Fisher and Daniel Shapiro -- it offers a succinct model that helps us get at the underlying core concerns at the root of a lot of emotions at play in negotiation -- formal and informal. Basically, emotions roll up into 5 core concerns: appreciation, autonomy, affiliation, status, and role. By using core concerns as a lens to diagnose what is at play for ourselves and the other party, we can then put it into action to stimulate positive emotions that leads to a collaboration instead of adversarial brick wall.

     
     
     
    • Robert Brock

    Mike, The Patriots have all the power, and the knowledge of all the comparable salaries in the NFL. They have the support of member teams in the NFL. It does not cost you anything to be a lady or a gentleman! It is always about money...all of the time. The NFL players are clay pots walking down the road with steel pots, the NFL.

     
     
     
    • RobertoGarza-Castillon
    • Professor, Tecnol?gico de Monterrey M?xico City Campus

    I teach the Basics of Negotiation at BA's level and I found this article very practical and full of wisdom. It contributes to fill the gap between theory and practice in the negotiations literature. I will most certain ley use it in my class. Thank you so much for sharing this experiental knowledge with us.

     
     
     
    • Samuel Gyane
    • Administrative Manager, Ascot Pharmacy Ltd. Ghana

    My priority in every negotiation is to win at the end despite the fact that the writer claims. both parties in every negotiation should settle on something. I advise your something should always be winning.

     
     
     
    • N.R.Jothi Narayanan
    • HSE Consultant (chemical,gas &oil ), Palakkad-678001-India.

    When a human being is an output of the emotions of the two individuals' negotiation built up on love, every step to shape the life in this mundane life is a proper tuning of emotions. The successful individual is the one who knows very well to measure the voltage of the emotions of the individual on the other side of the negotiating table.