Professor Adam Galinsky was watching a negotiation unfold on the reality TV show Pawn Stars when a store employee asked a customer to name his price.
As an expert in how power can play out in a negotiation, Galinsky, the Paul Calello Professor of Leadership and Ethics in the Management Division at Columbia Business School, was surprised: It’s typically understood that the person who states the first value anchors the negotiation and therefore dominates the deal. But in this case, Galinsky could see the pawn shop broker had read the situation correctly. He’d assessed that the customer would likely undervalue the object for sale. Indeed, the broker wound up getting a bargain.
These dynamics, whether playing out on a TV show or in boardroom negotiations, all come down to power: who has it — and who can increase it in their favor. “Each party has their own power they bring to the table,” Galinsky says. “But what matters here is not your power independently, but how powerful you are relative to the other side.”
Galinsky’s research outlines four keys to expanding your authority in a negotiation, which he calls “the four horsemen of power”: improving the strength of your alternatives, gathering information about your counterparty, building social capital, and cultivating a personal sense of power. And if you’ve mastered these four elements already, he offers some advanced strategies to take your skills to the next level.
1. BATNA
For Galinsky, the key to understanding power is knowing that it’s not fixed. Even when you are negotiating your salary with your boss — who is inherently more powerful at your firm — you can always increase your relative power, Galinsky says. The solution is to work toward improving your best alternative to a negotiated agreement (BATNA).
Your BATNA might be a competitive job offer at another firm or another company that’s willing to make a similar investment. “When you do not have a strong alternative, you are more dependent on this negotiation,” Galinsky says. “Having a strong alternative means you could ask for more, because you could always walk away.”
2. Information
The second most important source of power in a negotiation lies in how much information you possess — about your side of the deal and your counterparty’s. That information might include what other deals are on the table, the type of financing your counterparty prefers, or how vital the deal is to their overall success.
As you approach a negotiation, it also helps to understand your counterparty’s values and motives. Getting a good read on what’s most important to the other side could present opportunities to expand the pie, offering to trade something you value less for something they appreciate more. “Knowing their preferences is a form of power,” Galinsky says. “If you know the other side really values location but you don’t care much about it, you can value their desire for location to get concessions on other things.”
Bolstering the information you have about your counterparty can also help you avoid committing cultural faux pas. “If you don’t know the cultural context, you could do something to offend them. And that puts you in a lower power position,” Galinsky says.
3. Social Capital
The third source of power lies in social capital: How much does the other side respect you? Research shows that when people are respected, other people are more likely to defer to them and consent to their requests, Galinsky says.
Social capital can also help you build practical leverage — using your connections, relationships, and reputation to strengthen other pillars, like gathering information about your counterparty. “Your connections can give you access to information, and that’s really important,” Galinsky says. “The more connected you are in a network, the more likely you are to know about the other person’s preferences.”
4. Personal Sense of Power
Your own personal sense of power is the fourth asset you bring to a negotiation. When individuals feel powerful, they tend to have a better negotiated outcome, according to Galinsky. His research shows that that feeling can stem from a strong BATNA or from going into a negotiation with good information. But it can also be summoned by thinking about a time you felt powerful. “When we’re feeling psychologically more powerful, we’re feeling more confident, more self-efficacious, and more optimistic,” Galinsky says.
Confidence is a psychological consequence of power, Galinsky says. And it can arise from a range of different experiences, like past negotiation successes or in-depth preparation. One concrete tool Galinsky encourages negotiators to develop is a planning document that includes your target price and a list of your sources of power. It should also establish your reservation price — the minimum price you would be willing to accept (or if you are the buyer, the maximum you would be willing to pay).
“It’s what I call your security blanket, and the target price is your motivational North Star,” he says. “The planning document will give you a psychological sense of power and control, and also show you what information you need to get to negotiate.”
Advanced Strategies
Once you’ve developed the four horsemen of power and you’re ready to approach the negotiating table, Galinsky’s research has found that specific tactics tend to lead to better outcomes — some of which are counterintuitive to what you might expect.
For example, he found benefits in opening a negotiation using a method he calls multiple equivalent simultaneous offers (MESOs). Using this strategy, you propose two offers and ask your counterparty to indicate a preference.
On the surface, some might object to the method because it reveals information about your own preferences. But Galinsky’s research shows that it also signals flexibility, and it helps assess the other side’s values and inclinations. “In most of the negotiations we looked at, it didn’t hurt the other side because it expanded the pie,” Galinsky says. “Because the pie was expanded, that person wasn’t any worse off. They walked away thinking you’re this great, flexible person, and you’ve improved your relationship.”
His research has also found that creating a cooperative atmosphere — by offering something rather than demanding something — can prove advantageous. “When people get demanding, the other side becomes defensive and concession adverse,” Galinsky says. “But if you say, ‘I can give you this; can you give me that?’ you can create a really different psychological atmosphere.”
The counterintuitive approaches of these two techniques — demonstrating flexibility with MESOs and offering rather than demanding — could be perceived as signaling weakness, but in reality, they accomplish two necessary goals, Galinsky says.
“It gives you an advantage this time, but it also builds power for the next negotiation,” Galinsky says. “You walk out with a better outcome and a more cooperative reputation.”
In this video CBS's Norman Eig Professor of Business Eric J. Johnson shares insights from his research into how the structure of choices affects outcomes: