Books for Entrepreneurs: Negotiating for Advantage

This article recommends a book, “Bargaining for Advantage,” that can be beneficial for entrepreneurs looking to master the art of negotiation. This book provides a comprehensive guide to the topic, incorporating valuable principles from both "Getting to Yes" and "Influence".

• The article highlights the book's focus on leveraging principles to gain advantage in business negotiations.
• The author, G. Richard Shell, is a Wharton professor and a renowned expert in the field of negotiation. He offers a powerful synthesis of negotiation strategies.
• The article suggests that the book is particularly relevant for entrepreneurs seeking to refine their negotiation skills during crucial stages of their business journey.

The Significance of Leverage in Negotiations

The article emphasizes the importance of understanding leverage in negotiation, as it plays a pivotal role in determining success. Leverage is defined as the ability to influence the outcome of a negotiation by having the most to lose or gain in a deal.

• The book delves into different types of leverage: positive, negative, and normative.
• It explains how to assess leverage in a negotiation, recognizing the side with the most to lose as having the least leverage and vice versa.
• The article underscores the significance of building leverage by establishing a strong BATNA (Best Alternative To a Negotiated Agreement).

Exploring the Concept of Positive Leverage

Positive leverage is the ability to provide things that your opponent wants, thus giving you an advantage in the negotiation.

• The book emphasizes that every time the other party expresses a desire in a negotiation, it signifies positive leverage for you.
• It encourages entrepreneurs to identify and leverage their strengths and assets to create a win-win situation.
• Positive leverage can involve offering valuable resources, expertise, or opportunities that the other party desires.

Understanding the Dynamics of Negative Leverage

Negative leverage, on the other hand, involves the potential to inflict harm on your opponent. It's a more aggressive approach, and while it can be effective, it's crucial to use it cautiously.

• The book highlights that negative leverage often involves threats or potential consequences for the other party.
• It warns against using threats lightly, comparing them to explosives that can backfire if not handled properly.
• Negative leverage should be a last resort, used only when all other avenues have been exhausted.

Leveraging Normative Influence

Normative leverage focuses on using established norms or standards to advance your position. This involves appealing to the other party's values, principles, and ethical considerations.

• The book emphasizes that normative leverage is most effective when the norms you cite are viewed as legitimate and relevant to the negotiation.
• It advises entrepreneurs to carefully choose their arguments and avoid attacking the other party's standards unless absolutely necessary.
• Normative leverage can be particularly powerful in establishing credibility and building trust in a negotiation.

The Importance of Strategic Concessions

The article highlights the book's guidance on concession strategies, a crucial element of successful negotiation. The article suggests that the book provides valuable insights into how to make concessions effectively and strategically.

• It emphasizes the significance of timing and proportion when making concessions.
• The article encourages entrepreneurs to consider their BATNA and leverage when determining the size and timing of concessions.
• Strategic concessions can help to build rapport, demonstrate flexibility, and ultimately lead to a favorable outcome.