This Month's Topic:
Successfully Making Threats in Negotiations!
Studies have shown that promises combined with threats actually motivate cooperation and cause people to evaluate their counterparts more favorably.** However, to be effective, threats must not be about punishing the other side or teaching them a lesson.
Threats are about using the "carrot and the stick" to get more of what you want. When you lost sight of this, the dispute will escalate and the threat will backfire.
Here are a couple of rules to follow when making effective threats:
1. Make sure your threats/demands are within the realm of what is realistic and feasible for the other side so they can comply.
2. Make sure your threat is not based on your emotional reaction to the other side.
3. Make sure your threat will not incite a counter-threat that dwarfs your own threat.
4. Calculate whether your threat will cost you more than it does the other side?
5. If you decide that you should make the threat, state the threat in terms of how compliance will benefit your counterpart: e.g. "If you don't agree, I promise you'll never see your money" vs. "If we are forced into bankruptcy, it's unlikely that you will see your money and we all lose."
** "Negotiation", December 2004, a newsletter of Harvard Business School and the Negotiation Program at Harvard Law School, "Putting On the Pressure: How to Make Threats in Negotiations" by Adam Galinsky and Katie A. Liljenquist