You Could be One of the 7%: Get the Most Out of Every Deal

Someone recently told me that you can’t argue with a story, only with a position or another argument.

That’s why narrative is such a powerful negotiation strategy and why asking diagnostic questions that elicit stories is one of the best – but most overlooked – bargaining strategies for business men and women alike.

Professor Leigh Thompson of the Kellogg School of Management at Northwestern University has written that only seven percent of all negotiators ask diagnostic questions when to do so would dramatically improve the outcome of the negotiation. Diagnostic questions are those inquiries that reveal your bargaining partners’ needs, desires, fears, preferences and priorities.

They will also uncover hidden constraints on your negotiation partner’s authority to bind his principal or ability to satisfy your needs, unveil hidden stakeholders who hold greater sway over your bargaining partner than you could hope to exert, and unearth misunderstandings or knowledge deficits that are standing in the way of closing a deal.

Your bargaining partner will rarely acknowledge the rectitude, nor even the good faith, of your proposals or opinions.

She will, however, usually freely disclose what she needs out of the transaction – to infuse capital into her business, pay back debts, put her children through college or to acquire much-needed catastrophic health insurance.

Your bargaining partner will also invariably telegraph his risk averse or risk courting attitudes; his predictions for the future of his business and the economy as a whole, and what he believes the value of his business to be today and should be tomorrow.

Once you acquire this knowledge, you are far more likely to find ways to trade items that are worth more in your partner’s hands than in yours. You will also find ways to deliver value that is less costly for you to give up than it is for your bargaining partner to acquire.

Problems that were once hidden can now be brainstormed for the negotiators’ mutual advantage.

Asking diagnostic questions is one of the most important tools in my mediation kit and I’ve used them to beneficial advantage more in my ADR practice than in my consulting career. Below are just a few examples of how powerful – and surprisingly easy – it is to break through impasse using diagnostic questions.

Hidden Constraints

In a lawsuit seeking repayment of over-paid health insurance benefits to physicians, the plaintiff was stuck at a number that was curiously precise. It was a line in the sand that the Plaintiff absolutely refused to cross. I couldn’t tell if it was a matter of principle or if some hidden constraint or absent stakeholder was behind the impasse.

By asking a diagnostic question – why – both the hidden constraint and the absent stakeholder were revealed.

You seem stuck at $82,953, I said, which is mysterious to me. Why are you unable to accept anything less than that to settle this lawsuit?

Plaintiff didn’t hesitate to respond.

                       

Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >