The imbalance of power

One of the prerequisites for a negotiation to take place in the first place is that there must be motivation on both sides of the table. In the absence of an answer to the question “What’s in it for me?” there can be no trading. Persuasion may win the day, or there may be a (long) conversation,  perhaps a problem-solving solution might arise, or of course – if one party has enough power – a solution may be imposed.

The various answers to the “WIIFM” question – be they good things that might happen if we trade, or bad things we’d rather avoid happening should we not – tell us what the balance of power between parties looks like. It’s a truism, but the majority of negotiators have a tendency to overestimate the power of the party they’re negotiating with at the same time as not fully weighing up their own. This is a habit to be recognised and avoided as it dramatically narrows our understanding of what a good deal may look like.

On a macro scale, we can see how this works through the machinations the EU has been having as member states debate how to accommodate refugees. After years of failing to get member states to agree to quotas, the European Commission persisted with the idea that a problem-solving approach might pay off and reframed their proposal to allow member states to pay mandatory “financial contributions” of €20,000 for each refugee not taken in. However, the inheritors of the UK’s mantle of awkward squad, Poland and Hungary, said they’d refuse to pay these fines, er I mean contributions. Various media reports signal that the European Commission is looking at the EU funding both states receive (a combined €17bn) along with measures that would withhold portions of that funding if the recalcitrant member states continue to refuse to come to the table. My view would be that the introduction of this sanction is likely to enable both Poland and Hungary to find some flexibility in their approach that they previously hadn’t noticed, but we shall see. If it does work, it’s an example of the effective use of sanction to reinforce the balance of power – from a negotiator’s perspective, at least.

Of course in our own negotiations, we’re unlikely to be sitting on top of multi-billion budgets we can use to drive motivation in those with whom we negotiate – but the principle is the same, in this case raising the sanction of something happening that the other party would wish to avoid. Recently an online order I made with a major supermarket failed to deliver – not particularly dramatic, but irritating as I’d managed to place the order within some time-limited offers that added up to a substantial saving. Being the complainant, I proposed that they re-arrange delivery, honouring the order value as it was at the time it was placed. Their response was to say that they were sorry and that they would refund the non-fulfilled order – leaving me with the problem that re-purchasing the same order outside of the offer period would cost a great deal more. I replied by saying that if that was their position, I would cease online shops with them until I’d spent a minimum of 10x the order value with their competitors before deciding whether to come back, or if they did have some flexibility in fulfilling the order as made, I would be happy to hear back. The delivery arrived six hours later.

Power is not always about the size or financial muscle – it can be relative, and being able to see the opportunities that may present can unlock the chance to do a deal that we may otherwise allow to pass us by. Don’t do yourself down – you have power!