There are two things you MUST do in every negotiation.
One at the very beginning, one at the very end…
Negotiations are weird.
You (think you) know what they want.
They (think they) know what you want.
And if the goal is to make a deal…
…somehow you need to get to the space in the middle:
[TK insert illustration]
Win-win Zone: The space in the middle
The problem is:
Sometimes people are upfront about what they want. Other times no one wants to make the first move… and you end up in a standoff.
Sometimes people are honest. Sometimes… not so much.
You can’t trust anyone to cooperate.
That’s why negotiations can feel like a game of tug of war.
As a result, sometimes negotiations FAIL, even when there is space for common ground. The outcome would be better if people only negotiated better.
What a shame… But there’s good news:
There are lots of small things you can do to make negotiations less painful, less awkward, and more profitable – for both sides.
Sometimes it’s as simple as saying…
Negotiations take more than one conversation.
That’s why there are usually multiple “rounds”
Think about it…
Salary negotiations often go back and forth. The same goes for client proposals. You make a proposal. The clients gives you feedback and makes a counter offer.
That’s the nature of negotiations:
It’s a process.
If you want to reach the best outcome, there’s one thing you should do at the end of each round:
Say thank you.
The power of thank you is that it inspires cooperation.
The Harvard Business Review writes:
In negotiation and other contexts, showing gratitude also motivates those we thank to keep on giving.
This is all based on research by Adam Grant and Francesca Gino. I actually made a video about the power of thank you – watch it.
So if you want people to cooperate, say thanks at the end of each round of negotiation.
There’s a different, small gesture you can use at the beginning, too…
A handshake? Really?
Francesca Gino (with co-authors from Harvard University and the University of Chicago) studied the effect of shaking hands before negotiations.
Their idea was simple:
Handshakes before a negotiation are a strong signal. A handshake says: “Let’s work together to find a solution.” This should affect the outcome, right?
Right. At least, in situations where there’s some common ground.
Think about negotiating a job offer. Getting to an agreement is good for the employee and the employer. Sure, the employer wants to pay less, the employee wants to get paid more.
But in the end, both sides have the same goal: making the right hire. More importantly, hiring the right person will pay off for the company in the long-run, too. So, both sides have at least some shared interests.
This first type of negotiation is called “integrative.” Why? Because the outcome is better for both sides if people cooperate. Think of it as a win-win negotiation.
But what if people have NO shared incentives?
Imagine the sale of a real estate property. Seller A wants the highest price. Buyer B wants the lowest price.
In this case, the size of the pie (the property) is fixed. Whatever A gets, comes directly out of the pocket of B. So, there are no shared incentives at all. This is more of a win-lose type situation…
That’s why this second type of negotiation is called “distributive.” It’s a zero-sum game because both sides are fighting for the same piece of the pie.
The researchers assumed that a handshake would help even in these win-lose situations. How so? They figured that after shaking hands, people wouldn’t cheat and lie as much.
But does something as minor as a handshake really have a measurable effect? The researchers set up a number of experiments to find out.
Here’s what they found:
The first study examined how people feel about different gestures at the beginning of a negotiation.
The study asked:
“Imagine you are about to have an important business negotiation with someone you have never met before. Which of the following gestures would you feel comfortable doing with the counterparty (i.e., the person you will negotiate with) before the negotiation?”
Then, participants had to check multiple gestures. Things like hug, wink, touch on the shoulder, and, of course, shake hands.
100% of people are comfortable shaking hands.
Then, the study asked people to choose the gesture that would “lead to the most cooperative (e.g., the most friendly and positive) negotiation experience.”
Most people again said “shaking hands.”
So, one thing’s clear: People are comfortable shaking hands. And most feel that it’s a strong, positive gesture.
So far, so good.
But what about actual negotiations?
It turns out shaking hands does lead to more win-win outcomes…
In a first study, the researchers paired people up to negotiate the sale of a new car or a new job offer.
Here’s how the experiment worked:
Each participant was given a set of preferences. For example, in the car buying scenario, this included a preference for the color of the car, the price, etc.
How strong the preference was for each factor was measured by points on a scale.
The participants then had to get to an agreement by “trading points.” And the researchers were able to measure the overall outcome of the negotiation.
Now here’s the thing:
The preferences were such that participants had to COOPERATE in order to reach the best possible outcome…
In other words, both sides would need to be open and honest about their preferences. And both sides need to be willing to compromise on various preferences to reach the best outcome.
Well, here’s what the study found:
…results suggest that negotiators who shake hands earn higher joint integrative outcomes.
So, the data proves it: When people shake hands, the overall outcomes of the negotiations are better.
What’s interesting is how exactly this happens.
How come shaking hands leads to better outcomes?
As it turns out, a handshake at the beginning changes how we interact during the negotiation.
Specifically, the research shows…
- People are more open about their preferences.
- People are (slightly) more willing to make concessions.
- People are less likely to lie.
- People are more likely to talk after the negotiation is over.
- People are more likely to shake hands at the end.
…when there’s a handshake at the beginning.
Openly revealing preferences was the deciding factor which leads to more positive outcomes. But if you ask me, ALL of these things make negotiations a lot more pleasant and less stressful.
Now, one question is still unanswered…
So far, the negotiation scenarios were win-win. So, cooperating leads to a better outcome for BOTH parties.
But what about win-lose aka zero-sum negotiations?
In these situations, both sides know from the get-go they want different things. Remember, for example, the low-price vs. high-price in selling real estate.
The tricky part is: Sometimes one side knows something the other side doesn’t…
So, the real problem is that people LIE about what they know or don’t know. Can a handshake help make people more honest?
To test this, the following experiment was set up:
The two sides had to negotiate the sale of a property. However only one side, the buyer, knew that the zoning laws would soon change. So, only the buyer knew that the land would soon be much more valuable.
This, of course, gave the buyer an advantage… and an incentive to lie (or not disclose this information.)
Here’s how a handshake affected the outcome in this scenario:
A handshake in a distributive negotiation instead made outcomes more equitable and reduced lying behavior. Executives who shook hands before negotiating were less likely to lie to their counterparts and divided the available “pie” more evenly.
So, the answer is, yes: when you shake hands, your counterpart is less likely to lie.
All of these results confirm one thing:
At the beginning of a negotiation, shake hands!
It’s not only the polite thing to do. It’s also the SMART thing to do.
So you better know how to give a proper handshake.
You do, right?
This is actually important…
Because only a FIRM handshake sends the right message.
A study published in the Journal of Personality and Social Psychology found that a firm handshake shows…
- Emotional expressiveness
Another study, published in the Journal of Applied Psychology, found that people that know how to shake hands properly do better in job interviews, too.
Specifically, the “better” the handshake, the more likely they interviewer was to recommend a candidate. Especially for WOMEN – that’s when the effect seemed to be greatest.
So what makes a good handshake?
I wrote about it here:
(And If you know someone who regularly hands people a “limp fish” do me and everyone they’ll ever meet a favor and send them a link to these articles.)
Finally, I have a question for you…
Is there anything else you like to do before you go into a negotiation?
Leave a comment.