Negotiate & Feelings: The Power of Emotions in Business

Scientific theories are constantly trying to explain the world rationally. It works without emotions and the power of interpersonal Psychology nothing - even in the oh so rational seeming Business.

The psychology of negotiation

During my brief stint at university, I realized that all the raw analytical Intelligence and the mathematical logic in the world without a profound understanding of the human psyche, without the acceptance that we are all crazy, irrational, impulsive, emotion-driven beings, in the emotionally charged interplay between the two Peoplethat with each other negotiate, do not offer any help.

Yes, we may be the only creatures that haggle—a monkey won't trade part of its banana for another monkey's nuts—but no matter how we dress our negotiations in mathematical theories, we're always animals that come first and foremost the basis of our deep-seated, but outwardly invisible and diffuse fears, needs, perceptions and desires act.

Where Harvard is wrong

But this is not the approach that is taught at Harvard Law School. Their theories and techniques had invariably involved intellectual superiority, analytical logic, rational value concepts, authoritative acronyms like BATNA and ZOPA, and a solid moral Concept about justice and injustice. And of course the process was enthroned above this false edifice of rationality. The students had to follow a script consisting of a predetermined series of actions of offers and counteroffers arranged in specific ways to produce a specific outcome. It was like operating a robot: if you steps a, b, c, and d in a specific, fixed order, you get x.

In reality, however, negotiations are far too complex and unpredictable for this type of procedure; you may need to do step d after step a and then maybe step q. If I could master the most brilliant students in the country using just one of the many emotion-based negotiation techniques I've developed and negotiating with terrorists and hostage-takers successfully used, why shouldn't they apply to the business world as well? What's the difference between bank robbers who take hostages and CEOs who use hard-core negotiating tactics to try and squeeze the price of a multi-billion dollar acquisition?

What hostage takers and business people have in common

Ultimately, hostage-takers are nothing more than businessmen trying to get the best price for their "goods." Old-school negotiations Hostage-taking and negotiations for their release have been around for as long as anyone can remember. The Old Testament contains numerous stories about the Israelites and their enemies taking each other's citizens hostage as spoils of war. The Romans, in turn, forced the rulers of the subject vassal states to give up their sons Vocational Training to Rome to secure the enduring loyalty of the conquered territories.

Until the administration of President Nixon, hostage negotiations invariably consisted of sending in heavily armed special forces to attempt to release the hostages. Most of the time, in police work, our approach was to talk to the hostage-takers until we figured out how to free the hostages by force of arms. Pure brute force. But then a series of bloody hostage dramas forced us to rethink.

The FBI's wrong strategy

In 1971, 39 hostages were killed when police attempted to end the riot at gunpoint in Attica Prison, in upstate New York. At the 1972 Olympics in Munich, eleven Israeli athletes and coaches were killed by their Palestinian hostage-takers after an unsuccessful attempt to rescue the German forces. However, the greatest impetus for institutional change in America's law enforcement agencies came on October 4th, 1971 on the tarmac at Jacksonville, Florida airport.

The United States was experiencing an epidemic of hijacking at that time; in 1970, five kidnappings occurred within three days. It was in this heated atmosphere that a deranged man named George Giffe Jr. hijacked a chartered plane from Nashville, Tennessee and attempted to hijack him to the Bahamas. At the end of the hijacking, Giffe had killed two hostages - his ex-wife and the pilot - and then taken his own life. This time it was Debt but not with the hostage-taker, but solely with the FBI. Two hostages had managed to persuade Giffe to release them in Jacksonville, where the plane had stopped for refueling. However, the FBI agents had lost patience and shot up the turbines. This had made Giffe so angry that he murdered the hostages. Such was the FBI's guilt in this outcome that the court in which the pilot's widow and Giffe's daughter brought wrongful death charges against the FBI found the plaintiffs correct.

How should negotiation processes run?

In the landmark 1975 judgment of Downs v. United States, the US Circuit Court of Appeals wrote that “there is a better one Alternatives to protect the 'welfare' of the hostages," and said the FBI had "what was a successful 'hold-out' tactic, two people during the course of it for sure able to get off the plane turned into a 'shooting tournament' that claimed three lives. The court concluded that 'a reasonable attempt at negotiation must be made before tactical intervention'.

The Downs hostage-taking epitomized all the things that should not be done in a crisis situation and inspired the development of today's theories, training and techniques in hostage negotiation. Shortly after the Giffe tragedy, the New York Police Department (NYPD) became the first United States law enforcement agency to assemble a special team of specialists to develop a crisis negotiation process and lead the negotiation. The FBI and other agencies followed. A new era of negotiations had begun.

4 steps to perfect negotiation

In the early 1980s, Massachusetts was the hotspot for negotiation science, where scholars from different disciplines came together and explored exciting new concepts. The Harvard Negotiation Project, founded in 1979, which was established for the Objective had to optimize the theory, teaching and practice of negotiation in order to increase the chances of success in all possible negotiation situations - from peace negotiations to corporate mergers increase, marked a real milestone. Two years later, Roger Fisher and William Ury, the co-founders of this project, published Getting to Yes2 , a seminal treatise on negotiation tactics that fundamentally changed the methodology of real-world negotiators.

Essentially, Fisher and Ury's approach was to systematize problem solving so that the negotiating parties could reach a mutually satisfactory agreement—as the book's title suggests. Her basic assumption was that the emotional Brain - the animalistic, unreliable and irrational beast - was overcome with a more rational, problem-solving mentality. Her System, which consisted of four basic guiding principles, was attractive and easy to follow.

1. Separate the person - the feeling - from the problem.
2. Don't get caught up in the other side's outward position (what they are asking for), instead focus on the underlying motivations (why they are making a particular request) so you can figure out what they really want.
3. Be cooperative to find mutually beneficial options.
4. Establish mutually accepted standards for evaluating possible solutions.

Does game theory help with negotiations?

It was a brilliant, rational and profound synthesis of the most modern game theory and legal thinking of the time. After this book was published, everyone, including the FBI and the NYPD, has focused on a problem-solving approach to any type of negotiation. It just seemed so modern and so smart. In another corner of the United States, two were chasing Professoren of the University from Chicago took a completely different approach, which they applied to every conceivable field – from economics to negotiation science. These were the economists Amos Tversky and the psychologist

Daniel Kahneman. Together they established the field of behavioral economics - for which Kahnemann was awarded the Nobel Prize - by showing that human beings are extremely irrational. Feeling, they found, is a form of thinking. When business schools like Harvard began teaching negotiation strategies in the 1980s, they conveyed this process as a straight economic analysis. It was a time when the most respected economists believed that people were "rational actors." And so it was taught in theCourses on negotiation strategy. It was assumed that the other side was basically rational and selfish in an attempt to strengthen its own position. The negotiating partner must therefore find out how best to react to different scenarios in order to maximize the value of his own position in a rational way.

Heart versus mind

This notion baffled Kahneman, who knew from his years of experience in psychology that "human beings are never fully rational, nor fully selfish, and their preferences are far from stable," as he put it in his own words. In decades of research he did with Tversky, Kahneman proved that all people suffer from a cognitive distortion. These are unconscious and irrational processes in the brain that distort our perception of the world. Kahneman and Tversky discovered more than 150 such processes. There is the so-called framing effect – also known as the interpretative framework – which means different formulations of one and the same content message affect how it is interpreted by recipients. (Investigations have shown that an increase from 90 to 100 percent - from the high probability to certainty - is perceived as more valuable than an increase from 45 to 55 percent, although in both cases it is objectively the same rate of increase, namely 10 Percent, trades.) The prospect theory or new expectation theory explains why we are willing in the face of a possible downside risk disproportionately high risks enter into. The best known is loss aversion, which describes the tendency to value possible risks more highly than possible gains of the same magnitude.

The 2 thought systems of humans

Kahneman later codified his research in his 2011 bestseller Thinking Fast, Thinking Slowly. In essence, he puts forward the thesis that humans have two systems of thought:

1. System; Our animal brain is fast, instinctive and emotional.
2. System: our rational brain, slow, conscious and logical.

System 1 is far more powerful and influential than System 2; in fact, it guides and controls all of our rational thinking. The immature beliefs, feelings, and impressions of the first system are the main source of the explicit beliefs and conscious decisions of the second system. It is the source that feeds the river. We react emotionally (system 1) to a suggestion or a question. Then the response of the first system affects the response generated by the second system.

Heart vs. Mind: how to manipulate interlocutors

Consider this: Using this model, if you know how to use the formulation and delivery of your Ask and statements can influence the thinking and unspoken feelings of your interlocutor's first system, then you can control the rationality of his second system and thus change his reactions.

That was what happened at Harvard to a fellow student named Andy. By once asking him, "How am I supposed to do this?" I influenced his first system into admitting that his offer wasn't good enough. His second system then streamlined the situation so that it would useful appeared to make me a better offer. According to Kahneman, negotiating on the basis of the rational System 2 concept, excluding the tools used to read, understand and understand the emotional basis of the first system manipulate trying to make an omelet without knowing how to break an egg.

Powerless against feelings: The FBI is getting emotional

It was obvious that Getting to Yes didn't work in negotiations with hostage-takers. No matter how many agents the book with a highlighter in the Hand studied intensively, we did not succeed in improving our methodology for conducting hostage-taking negotiations. There was a clear break between the book's brilliant theory and the everyday experience of police work. Why was it that everyone read this bestseller and praised it as the best negotiation book ever written, and yet hardly anyone with the ones described in it Strategies had success? Were we complete fools?

As the FBI's new hostage negotiation team grew in the 1980s and 1990s and its expertise in crisis management, clearthat our system was missing a central element. At that time we were completely convinced of Getting to Yes. And as a negotiator, Adviser and teacher with decades of experience, I am still drawn to many of the highly effective negotiation strategies in this book. At the time of its release, it delivered groundbreaking ideas for cooperative problem solving and formed the basis for the development of indispensable concepts such as starting negotiations with an alternative concept - called BATNA (»Best Alternative To a Negotiated Agreement«) - in the event that the desired negotiation result does not come about. It was awesome.

But after the devastating end of surveillance of Randy Weaver's Ruby Ridge farm in Idaho in 1992 and the 1993 siege of the headquarters of David Koresh-led Branch Davidians in Waco, Texas, there was no denying that most of the hostage-taking negotiations were anything but rational problem-solving situations. What I'm saying is this: Have you ever tried to find a mutually satisfying relationship with a person who believes he is the Messiah? Solution to find? After Ruby Ridge and Waco, a lot of people asked that question. Deputy US Attorney General Philip B. Heymann, for example, wanted to know why our hostage negotiation techniques failed so miserably. And we had to admit: we were powerless against the power of our feelings.