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Patience is Rewarded

February 18, 2014 By Steve

It is true that being patient is a very good trait in a negotiator.  Waiting for a first-rate opportunity, not reacting too quickly, and tolerating delay in obtaining a goal are all qualities that pay off nicely for the best negotiators.  If you can avoid being hurried, you will probably do better.

Why is this so?  What is the magic that is released when you can avoid being hurried or anxious?  Basically, it comes back to having a strong “best alternative.” The negotiator perceived as having the least to lose from “no deal” is in the stronger position.  If you have all the time in the world to complete the deal, then you will be seen as powerful. And, of course, being in a great hurry will be perceived as desperation.

Another advantage goes to those who are unhurried; they have more time to shop.  If a strong best alternative is the ultimate path to negotiating power, having more time to search for better possibilities is the next best thing. Skilled negotiators work continuously to improve their current “best alternative” or find a new and even better one.

My old friend Fin demonstrated this many years ago.  He was trying to sell his condominium in a trendy Cambridge neighborhood and demand for his place was high. Fin was asking $350,000 for the apartment.  The first potential buyer clearly wanted the place but was reluctant to pay the asking price.  She urged that it was not worth that much and, also, that she could not afford to pay his asking price.

Right in the middle of the bargaining, Fin had to go out of town on a camping trip and was completely unreachable.  He might as well have traveled to the dark side of the moon. The hopeful buyer tried to contact him over the weekend without success.  When Fin returned on Monday, he clicked on this answering machine to retrieve his messages.  This is what he heard:

Fin, my highest offer is $280,000

Fin, I will go to $299,000 but can go no higher.  Please call me right away.

I am frustrated and disappointed that you don’t call back.  I will not go a penny over $310,000.  Please call me.

Fin, have you already sold the place?  Why don’t you call in response to my offer?

OK, I will raise my offer to $330,000 but that is absolutely the highest I can go.

The final message had been left late on Sunday night.  It sounded like this:

Fin, it hardly seems fair of you to bargain like this.  I am very unhappy with this entire situation.  I will offer you $355,000 – which is above your asking price – but you must respond.

While it is true that my old friend’s very successful negotiating technique was due primarily to the happenstance of his being out-of-touch on a camping trip, he nevertheless did everything right.  He sent the message (accidentally) that he was in no hurry, did not need the deal, and was not pressured in any way. This established him as powerful and in the strongest possible position.  It probably also invoked the scarcity principle and caused anxiety in the buyer.  A job well done, Fin!

There is a lesson here for you, negotiator.  Plan, prepare and strategize ways that will allow you to be patient.  These will always include having a strong alternative to the deal under consideration.  And, if it works to your advantage, don’t hesitate to take a camping trip to the far side of the moon.

Filed Under: Negotiation

About Steve

Steven G. Blum has been teaching in the Department of Legal Studies and Business Ethics at the Wharton School of Business of the University of Pennsylvania since 1994.

In addition to teaching semester-long courses for undergraduate and MBA students, Mr. Blum has taught in Wharton Executive Education programs, lectured and consulted widely, and frequently leads seminars and educational forums. Mr. Blum has five times won the William G. Whitney Award for outstanding teaching.

He holds the degrees of Masters of Laws and Juris Doctor. He also earned a Masters Degree from the Harvard Graduate School of Education, and the Specialization in Negotiation and Dispute Resolution from the Program on Negotiation at Harvard. In addition to teaching and consulting, Steven maintains a practice of law and is a registered investment advisor. He has a strong research interest in the area of ethics and fiduciary duty. His book entitled Negotiating Your Investments was published by Wiley in April 2014.

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