We are all increasingly aware of the importance of addressing bias in critical decisions like recruiting, promotion and remuneration. But what about in negotiation? Is the possibility of bias in negotiation real and if so, what types of bias might be at work and how might we mitigate against them?
When we consider the negotiation process, it could be seen as a series of deliberate professional judgements through the preparation phase, evolving into a collaborative team exercise to gather and respond to the new information, all while moving towards our goals and strategy. At first glance you could be forgiven for thinking that the deliberate nature of the preparation and the involvement of a team in the process would provide an automatic counter to the possibility of bias, and in any event how bad could the impact of bias be?
As Nobel prize-winning economist and author Daniel Kahneman established in his seminal book Thinking Fast and Slow, while our cognitive processes are far more complex than we might have previously understood, they are also prone to shortcuts or biases that simplify and speed up instinctive decision making. Unfortunately, these shortcuts can have serious consequences when allowed uncritically to influence our strategies and actions.
Who hasn't had the experience of a seemingly simple project or negotiation taking longer than confidently predicted? One key cause is the tendency towards optimism bias, where the decision-maker is unconsciously drawn more towards possible outcomes of the decision that favour them and their interest. Negotiation schedules get shorter, required budgets get smaller and the chances of success are assessed as more likely than proves possible.
Even where a more deliberate approach to decision making is pursued, another common bias can lead us astray. When reviewing our past experiences, confirmation bias tends to lead us to conclude our future will look more like our past successes than our failures. Failing to properly consider where previous negotiations underperformed or failed, and especially why, can blind us to the opportunity to improve our organisations performance. Similarly, believing that our previous success is a relevant guide to outcomes or approaches even when the circumstances are different, when we have a new counterpart or our own team has changed is another common error of judgement.
In another common scenario, the planning fallacy is a bias that leads us to conclude that the more planning we do, the more probable it is that reality is likely to conform to our plans. When getting approval to negotiate, we all need to provide the sense that we have anticipated all reasonable developments and that our planning has a high chance of delivering on the negotiation strategy and goals. That may indeed happen, but experienced negotiators know that being alert to the possibility of new information or some other strategic shock is always prudent.
Biases tend to hunt in packs, combining to greatest impact when decision-makers are under time pressure or perceive they will be judged harshly for not making rapid progress. Don’t let your team miss signals because they simply are too busy looking for confirmation of your assessment of the counterparts needs and intentions. Similarly, overconfidence is never a useful ingredient in negotiation planning and conduct and can amplify the tendency to ‘stick to the plan’. Beyond these examples, there are actually a myriad of biases negatively affecting individual and collective decision making.
Combating bias in negotiations starts with a realistic appreciation of how rife they are in human cognition, and a deliberate acknowledgement of the possible effects. Is your leadership team having the conversation about bias? How do you ask questions during negotiation planning, and especially in reviewing and approving negotiation strategies, that test for biases at work? Have you looked at best practice approaches to recognising and limiting the impact of biases? Scotwork’s Advancing Negotiation Skills program introduces the concept of bias in negotiations, helping bring your teams to a useful awareness of the pitfalls. Similarly, the Scotwork Strategic Negotiating program prepares team leaders and executives directing negotiations to deal with this and other real-world risks.