Are You Ready for Online Negotiations?

Negotiations can take many forms: they can be face-to-face or in a team or multilateral, and in some, multicultural factors play a large role. But in an increasingly interconnected and global world, negotiations marked by physical distance and the use of new communication technologies are more and more common.

Without doubt, the means through which we interact affects the quality and the outcome of negotiations. The further apart we are physically, the harder it is to build a fluid relationship based on mutual trust. Indeed, the space-time dimension in which we negotiate determines how we must prepare and act.

To successfully manage digital negotiations, it’s important to first understand the most common biases related to agreements and what strategies to pursue to overcome them.

Beware of biases

Biases are a challenge that come with any negotiation, but when communication is digital, the impact of bias may be amplified. These are some of the most common to guard against:

Time synchronization bias. This means we’re negotiating at a distance but behaving as if it were in real time, launching offers and counter-offers without arguments or clarifications that will help us reach a final agreement.

Confrontation bias. Here, the absence of social norms regulating online communications, and a feeling of protection afforded by remoteness and anonymity, may provoke greater confrontation on digital media.

Fundamental attribution error. This involves the tendency, especially if we haven’t prepared beforehand, to assume that the counter party has negative intentions or is keen to exploit our interests.

Negotiation exit bias. This means we take the negotiations to be finished prematurely, when, if we continued for longer, the terms would improve. This often happens because a lack of visual information and distance reduce our ability to anticipate and retaliate.

6 strategies for more effective online negotiations

To overcome bias and the limits of online communications, we can apply a series of strategies to help reduce uncertainty and psychological distance from the other party, while improving the relationship, obtaining information and taking advantage of every phase:

  1. Preparation. In this phase we analyze expectations, interests, power and available information. It’s advisable to consider an initial approach, without the explicit purpose of negotiating, to reduce the perception of distance.
  2. Contact. Establish the negotiation bases. We recommend actively listening and even remaining silent, so that the other party reveals more information. Making the first call can give you an advantage, if you’re well prepared for it. If you opt for a video conference, dress appropriately and maintain visual contact, attempting to capture non-verbal clues. If this is taking place in writing, the negotiator must rely on formality and good manners.
  3. Approach. In this phase the creation of value continues. It’s advised to control information (being brief and concise), to show interest and willingness to collaborate, and to put forth your position well. We should avoid the time synchronization bias, or negotiating as if it were in real time.
  4. Generation of options. To avoid confrontation in this phase, it may be useful to propose different offers in an ordered manner, using elements that elaborate on the argumentation. It’s important to respond in accordance with the urgency of the situation, and not take longer than a day, in order to avoid generating anxiety and to favor a more collaborative experience.
  5. Creating the agreement. At this stage, it’s key to create a concession strategy and to craft a concrete and specific agreement. There are two elements that should not be forgotten: how the solution decided on will be implemented, and how its compliance will be measured. A precise agreement helps avoid future conflict and confusion.
  6. Closing and follow-up. Before the final agreement, both parts should take time to review all the operative terms. Afterward, all the points of the contract should be verified via email. By doing this, we avoid ending negotiations prematurely.

Article based on IESE technical note Negotiation and Digitalization: Keys for Closing Agreements Successfully in the Digital Age, by professors  Guido Stein and Kandarp Mehta, and research assistant Alberto Barrachina.

This post is also available in: Spanish

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