One crucial way in which skilled negotiators improve the quality of their deal-making is by pricing in the different values that parties place on the variables under discussion. Understanding that difference can make the difference between no trade (where we might habitually give something away because we can), a poor trade (we place low value on the variable from our perspective, so let it go for too little) or a good deal, where we price in the extra value the other party places on a variable, even if it’s not important to us.
Time can be one of the biggest influencers on differential value. As I embarked on my first full-time job I cannot recall giving the pension benefits that were part of the package a second thought. They were unimportant to me, back then. That it was a final salary pension scheme (which may signal how long ago I started my career) only serves to underline the different value that I now place on my pension pot. Recognising that our own values shift is a good start when it comes to appreciating that others place different values on what we trade with.
But we don’t need the passage of decades to understand how time and value can be intertwined. As I write this, just over two weeks back from a fortnight away with my family, it’s fascinating to reflect on something relatively simple – like how we perceive and appreciate the passage of time. Spent on holiday, it can be luxuriously slow, appreciated in its entirety and prodigious in terms of memorable moments. Contrastingly, on occasion, some of the time spent at work (which I believe the pedants at Greenwich would insist equates to the same value in seconds, minutes and hours) can feel frenetic, even stressful. I suspect most of us would probably agree that in both cases, there’s never as much time as we want or need – but possibly from different perspectives. Understanding those perspectives is crucial if we’re going to start to be able to gauge what the different values we negotiate with place on common variables – such as time.
If, like many, you price time on holiday with a higher value than time spent at work, that leads us into another major driver of differential value – scarcity. Reversing the balance of time spent at work vs on holiday might create an entirely different perception of value (whatever we might be thinking in the immediate afterglow of a couple of weeks away). Sometimes an offer can be valued so little by its target audience that it is no longer viable – famously Concord announced its final flight just under 20 years ago, in no small part due to declining demand. The last flights available were snapped up in seconds as priceless mementoes of what was about to join the foreign country that is in the past.
I’m not suggesting that differential value is always as dramatic – or indeed as obvious – as was the case with Concord. But recognising that the value you place on something may differ – sometimes by a distance – from those you negotiate with will help you strike better deals at any time. Always be curious about how much your opposite party might price in a variable. Perhaps ask why it might be important – you never know what you might discover.