It can sometimes be difficult to reach a point where we can compromise in negotiation. Even when both parties want to reach a deal, compromise may feel elusive. We spoke with Francesca Gino, Professor of Business Administration at Harvard Business School, and author of Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan (Harvard Business Review Press, 2013), regarding a question that came to us about compromise.
Q: During a complicated renegotiation, my company was unable to come to agreement with a longtime supplier regarding potential discounts (a key issue for my company) and order size (something the supplier prefers to change). We agreed to take a break and renegotiate at the end of this month. We also agreed that if we couldn’t reach agreement, our contract would stay the same as last year—an outcome we both want to avoid. We had hoped that this structure would motivate us to come to a reasonable compromise in negotiation, yet here we are, days from the deadline, with no solution in sight. What went wrong?
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Finding compromise in negotiation agreements when it doesn’t seem possible
A: Imagine you’ve just returned from your annual physical, and it didn’t go well. Your doctor told you that you’re overweight and are likely to have health problems if you don’t drastically change your diet and exercise routines. She sets a hard deadline for you to meet these goals by scheduling a follow-up appointment with a specialist in six months, explaining that you can avoid the need for the consultation by changing your habits in meaningful ways. Despite these incentives, you quickly find yourself cheating on your diet, and you end up having to see the specialist as a result.
Does this story help you begin to understand the psychology of the situation you described? Many research studies show that goals motivate people: Specific, difficult goals make people strive harder to accomplish what they set out to do. People who set goals for themselves consistently perform better and more effectively on tasks (particularly on onerous ones) than people who set no goals. These specific, difficult goals are intended to motivate us to do things that we do not like to do, whether it’s exercising and eating more vegetables or renegotiating with a counterpart who does not share our views.
But goals are not always beneficial. When people violate their goals (for example, by cheating on a diet), they experience further delays in task completion and tend to perform poorly, research has found. Seemingly impossible goals and failure to reach them cause us to experience negative emotions and resignation.
Assuming that your company and your supplier actually want to come to an agreeable compromise in negotiation, it seems likely that your negotiated deadline was demotivating rather than motivating. Knowing that avoiding the old contract was going to require a lot of work may have led to resignation rather than high motivation.
It’s also important to consider how time affects problem solving. Each party may have felt that the additional time provided the opportunity to convince the other side to see the issues her way. This, of course, is a problematic assumption. Research by my Harvard colleagues Mike Norton and Todd Rogers shows that people have an overly optimistic view of the future regarding their wants and preferences. In a 2011 study, they asked respondents to indicate their political orientation and then predict whether the U.S. electorate would be more conservative, more moderate, or more liberal in 20 years. As compared to the other two groups, conservatives were more likely to believe that the future will be more conservative, moderates tended to think the future will be more moderate, and liberals were more likely to believe that the future will be more liberal. Clearly, not all of them can be right.
Similarly, I’ve found in my own research that when we experience disagreements or conflict in negotiation and decide to meet at a later time to talk further, we believe that the additional time will help the other party realize that our perspective is the right one. Because both parties share this belief, the additional time turns out to be unhelpful in reaching a compromise in negotiation, or any other form of agreement.
Thus, your situation may have been a reflection of both sides believing that time would magically solve any disagreements. Wishful thinking, unfortunately, is often a good predictor of failure. Better to stay at the table (with short breathers as necessary) and look for other ways to move forward.
Have you found yourself in similar situations? How did you proceed?
