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Source/Author/Copyright: Marty Latz, http://www.expertnegotiator.com
“What should I do if my counterpart appears to act irrationally, or if their behavior just doesn’t make sense?”
This possibility is extremely difficult to address as the negotiation research is dominated by how folks act and react in rational, logical ways. So if someone acts unpredictably, it can throw a wrench into the process.
In these situations, first try to figure out if they are actually irrational or faking it. If they are actually irrational (a fairly remote possibility in business), strongly consider walking away. After all, doing a deal with a truly irrational person is hugely risky – who knows if they will stick with it? Doing so would require a rationally decision to stick with it rather than go with their alternative.
What if they appear “crazy like a fox” or if something just doesn’t add up?
Here are a few suggestions, some from Harvard Business School professor Max Bazerman in his new book The Power of Noticing: What the Best Leaders See (as reported in Harvard’s September Negotiation newsletter).
1. Don’t Ignore It
First, Bazerman notes that many just ignore others’ confusing or seemingly irrational behavior and just push to get the deal done. That can be a major mistake.
Instead, start by evaluating if their behavior helps or hurts them. If their unusual or unpredictable behavior consistently helps them, it’s probably for a reason. Find it why.
For example, Bazerman writes about how Firm A was selling some intellectual property (IP) rights to Firm B and couldn’t figure out why Firm B was pushing for an unusually broad and ambiguous provision giving it such rights. It would have been easy to just give in. After all, it was a $100-million plus deal and both CEOs supported it.
But Firm A didn’t just ignore the inconsistency and lack of explanation and pushed back. Around that time a Firm B internal e-mail was inadvertently shared with Firm A – and it noted that Firm B needed that provision to protect it from having previously illegally used Firm A’s IP.
2. Put on Your Investigative Hat
“Wait,” you might say, “that was completely fortuitous for Firm A that they got that e-mail.” You’re right. But Firm A put itself in the right position by asking the hard questions and recognizing and highlighting the ambiguous provision.
I suspect Firm B’s e-mail would never have been written had it not been for Firm A’s aggressive investigative response to the ambiguity.
Bernie Madoff swindled billions from sophisticated investors in one of the biggest Ponzi schemes ever. He did it in part by preying on the trust he developed with his victims. I’m sure many of his victims now wish they had trusted less and investigated more. You will rarely regret doing more investigation.
Put your investigative hat on up front – it will pay off in the end.
3. Practical Suggestions to Smoke Them Out
Of course, it’s easy to say “clarify ambiguities” and “find out why.” It’s far harder to do it. Here are some ways to help smoke out misdirection and identify foxes at your door:
Finally, if you suspect something’s going on and you can’t find out much about it, be particularly aggressive when you make an offer or counteroffer. How they respond may confirm your suspicions – and lead to a much better deal for you.