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Return of the haggle?

Ellis Croft
Negotation Haggle
© Adobe Stock

 

Haggling has been around for a long time – my guess would be that pretty shortly after humans started to trade, haggling followed. As a means of achieving a good end result, it’s a step up from simply giving in and conceding ground in order to gain agreement without getting anything at all in return. However, by its nature, haggling is an activity that automatically diminishes value as it progresses: parties start some distance apart, and simply exchange movement towards one another, colliding somewhere in between the start points. Crucially the sole direction of travel is that hagglers only ever end up with less than what they asked for. And in that sense, it’s entirely different to negotiating, where value is created as the condition to secure required movement.

One of the many areas Scotwork has spent the last five decades helping negotiators achieve better outcomes is in highlighting that fundamental difference, and sharing alternative strategies, options and best practice that generate better deals. And, by and large, the direction of travel in the business world has mirrored that – the idea that getting what you want by starting with a demand for the moon on a stick is seen by most as being at best a little old-fashioned, and at worse as aggressive or competitive. With the second inauguration of Donald Trump looming into view, however, it’s interesting to observe that the haggle is on for the Don. In business Trump was notorious/widely admired (take your pick) for his aggressive demands, which by and large featured typical haggling tactics of starting unrealistically high or low. As a strategy in the commercial world, haggling has deteriorated in its effectiveness as negotiation has professionalised, data has been amassed and analysed, and extreme demands can be more clearly seen and dealt with effectively.

However, it would seem that politics and diplomacy may have some catching up to do. A couple of recent stories illustrate the thought that haggling might be about to exert its effects. Firstly, late last year Trump proposed Matt Gaetz as his pick for Attorney General – a nomination so controversial it lasted barely a week before Gaetz withdrew under significant pressure from multiple directions. Then more recently, Trump refused to rule out the use of military force with respect to the sovereignty of Greenland. Both of those were widely seen as extreme, but it’s the effect that they had which interests me as a negotiator. In the first instance, Pam Bondi was ushered in at Trump’s pick for Attorney General – and with very little by way of pushback. In the second, Denmark announced a “double-digit billion” investment (in Kroner) in Greenland’s defence infrastructure. The haggler’s dream dividend is that an absurdly excessive demand will help create the illusion that a merely outrageous proposal will look comparatively reasonable. Bondi as an initial pick for AG would almost certainly have seen more pushback but compared to Gaetz her past is not (or at least, less) controversial. Similarly, an opening proposal to the Danish government to spend billions of Kroner boosting Greenland’s defence may meet with a different response if they’re not wondering how to process a wildly unrealistic hypothesis of US invasion.

It'll be interesting to see whether this throwback tactic continues to produce the results it seems to have already generated – but given the fact that so far it has delivered tangible results, my view would be to expect more of the same. Whether the commercial world decides to copy it is a different matter – where longer-term relationships are at stake, such tactics would bring risk. Either way, those who have worked with us down the years will be better equipped than most to work towards the best available deals.

Ellis Croft
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