“Playing hardball” is a phrase often used to describe negotiations. The point is the deal — there’s a winner and a loser — and the toughest side prevails.
Hardball is a good game plan under some circumstances — if it’s a one-time opportunity, for example. But what if the client or customer with whom you are negotiating has potential to bring you business long-term? In that situation, driving hard might not be your best approach.
Alan Goldman, a management professor of practice at the W. P. Carey School of Business, is teaching the negotiations classes in the 2012 Small Business Leadership Academy (SBLA) presented by W. P. Carey’s Center for Executive and Professional Development. Drawing lessons from the Harvard Negotiation Project, Goldman is helping students realize a more sophisticated approach to negotiating that goes beyond winner-take-all.
Key to the Harvard system is the theory that there are two broad approaches to negotiating: Theory X and Theory Y.
Theory X negotiators are the hardball players. The process is adversarial and focused on the deal and the bottom line. A Theory X negotiator dominates by wielding power, exploiting weakness and elevating the rational over emotions.
Theory Y negotiators seek to build fruitful relationships. For them, the objective is agreement, so they work on establishing trust. They open with small talk. They’re empathetic, flexible and willing to yield for mutual benefit.
Each style has its place, says Goldman. If the objective is a one-time transaction, then driving Theory X-style for the best deal obtainable, no matter how hard-nosed you have to be, may be the best approach.
But sometimes the greater advantage — and profit — accrues across numbers of transactions. In that case you’d be doing yourself a favor to employ the tactics of a Theory Y negotiator.
Assigned reading in Goldman’s class is one of the classics of negotiating training, the bestselling “Getting to Yes: Negotiating Agreement Without Giving In.” Its lessons are valuable in your personal life as well as business.
The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.