Saturday, February 6, 2016

A632.4.5.RB - Deceptions in Negotiations






Hello readers and welcome to week four of our class on decision making for leaders! This week, we’ll look at deception in negotiations and how to identify when it is occurring.

Hoch, et al (2001) discusses four groups of cues that can be indicators that there may be an attempt to deceive being used. The cues, or “tells” as poker players would say, are separated into vocabulary, verbal, vocal, and visual categories. There are three categories relating to aural stimuli, however, it should be noted that the longest list is under visual cues. That is not surprising, as John Medina (2008) reminds us, “We learn and remember best through pictures, not through written or spoken words.” (2008, p. 240)

I would also like to make a plug for preparation. There is an old adage of “the five P’s”. The saying goes, “Proper Planning Prevents Poor Performance.” Having done ones homework prior to beginning negotiations will go a long way toward protecting against deceptive practices. Having learned lessons form not being prepared, I can attest to the validity of “the five Ps”.

Now, let’s get back to interacting with another human during negotiations. Because of our biological reliance upon visual stimuli, negotiating via electronic media automatically puts both sides at a disadvantage. If a side were to willfully intend to deceive the other, this fact could actually be turned into an advantage. Just be aware of that fact. More diligence in fact checking and direct questions needs to be applied if you can’t see with whom you are dealing.
There are some caveats to the list of cues provided in Table 11.1 (Hoch, et al., 2008, p.195) of the text. “First, none of these cues is perfectly correlated with deception. Second, despite the abundance of available cues, most people are not good at detecting lies, and third, most people are overconfident in their ability to detect deception.” (2008, p.194) People like Bernie Madoff and P.T. Barnum excelled in exploiting these caveats.

If we focus on evaluating information for deception during the negotiation process, the four main processes are shifting the frame, asking direct questions, listen carefully, and paying attention to nonverbal cues. (2008, p. 196-197)

Simply in the way questions or statements are posed, a point of view, or frame, is created around the topic. Is something a short-coming or a trade-off? Is a product that is $999.99 really more affordable that one that is $1000.00? There are tools that can be applied to statements to change the frame and allow for new perspectives to be viewed for clarity. Past lessons in our program have addressed this topic. The upshot is that frames, and presenting information in a particular light, are powerful tools in negotiation and are open to manipulation and, therefore, deceptive practices.

Listening, while not the primary way humans absorb information, still must be done with intention. Is the speaker qualified to make the statements they are making? As deception most often occurs through acts of omission, rather than commission, what is not said may be more important than what is said.

That leads us to asking direct questions of the other party. Specificity is important, but one must be careful to gather info in both the broad and narrow categories. One will miss much if using a microscope to view a landscape. Conversely, using a telescope to look for bacteria will produce less than optimum results. Proper preparation is a big key here. Data mining and ensuring the plan of action and desired results are extremely well defined provides a strong base from which to operate.

Observing and noting nonverbal cues, as we noted earlier, may provide the best indication of deception. These cues absolutely must be combined with other information to confirm any suspicions. Depending on the gravity of the negotiations, the pressure of the situation may cause people to demonstrate signs that could be construed as indicators of deception (sweating, stammering, nervous tics, etc.). Take note, but corroborate the cue with information before calling someone out.

An example of a negotiation where I feel I was misled would be the first home purchase I ever made. The situation is intimidating, to begin with, and complex. I was relying on the realtor and my then spouse to operate in my best interest as I was out of town over 20 days a month. The house was nice, but had numerous small defects. Taken separately, the items were not grandiose. However, as repair cost mounted, I realized that the parties I had relied upon did not have the same goals as I would have represented in the negotiation. The realtor wanted to get a sale and my wife just wanted to get out of apartment living as soon as possible. I learned that due diligence falls to me, especially when I’m signing the loan papers.

Looking back on a time where I may have overstated a position, I am reminded of the follies of youth. Overstating my abilities to teachers, coaches, friends…I am guilty. Not performing to the standards I had proposed I could led to embarrassment and damaged relationships. All the lessons learned have helped me to understand how important one’s reputation is to one’s dealings with others. Repairing the damage takes volumes of effort more than merely doing what one says one will do.

That leads to defining how far I would go in utilizing some form of deception in a negotiation. There is always a part of negotiation that falls under gamesmanship. I am reminded of a quote by Admiral Horatio Nelson of Trafalgar fame, “Gentlemen, when the enemy is committed to a mistake we must not interrupt him too soon.” I am bound by, and appreciate, ethical practices and also my fiduciary duties to my company. As Levine’s (2009) book on conflict resolution tells us, we must look for opportunities to have all parties come away having been heard and with a sense of resolution. Weighing all of these facets of a negotiation is what makes the complexities an even greater responsibility of leaders and negotiators. If it was easy, everyone could do it. History shows that negotiations of  seemingly little consequence can have large impacts and must be treated seriously.

Preparation, reputation, knowledge, trust, and a bit of cynicism are all a part of playing the negotiator role. Good luck in the situations you may face!

Hoch, S. J., Kunreuther, H. C., & with Gunther, R. E. (2001). Wharton on Making Decisions. Hoboken, NJ: John Wiley & Sons.
Levine, S. (2009). Getting to resolution - Turning conflict into collaboration (2nd ed.). San Francisco, CA: Berrett-Koehler Publishers, Inc.

Medina, J. (2008). Brain Rules (T. Cutchlow Ed.). Seattle, WA: Pear Press.

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