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Welcome back to the NEGOTIATEx podcast! Take it or leave it: The topic today is ultimatums. Have you ever gotten one from across a negotiating table?
At that point, if the demand is unreasonable, should you leave? How do you respond to arbitrary communication attempts? Your NEGOTIATEx is answering questions like these from a listener.
The listener recalled how in the later stage of a negotiation, the other side issued a demand. As a result, refusal to comply would probably end their participation.
In the shortest terms possible, the answer to how you deal with similarly inflexible demands and threats is, “That depends.”
In other words, if an ultimatum arrives early in the negotiation process, there’s a way to approach it. However, if it comes later, different tactics are probably required.
In either case, keep your cool. Don’t react. Instead, assuming they’ve been reasonably up to this point, try to uncover the source. Are they frustrated with you? Are they frustrated with how the process has gone so far?
On the other hand, is it an internal thing? Sometimes greater pressure is being exerted from within an organization. In fact, even inanimate factors like timelines and budget restraints can cause growing concerns.
It is human nature to frown at give-me-my-way-or-else attempts at communication. Regardless, put that aside (if only because it is a poor strategy).
Instead, be patient and relational. In other words, ask questions and seek to understand why the ultimatum was given. Empathy always negotiates better than hostility.
Human-to-human, share that you understand that they are under pressure. This is not a concession; it is a friendly acknowledgment. Nothing has a higher chance of unlocking barred gates than sincere compassion.
Aram advises against using the phrase, “I understand… but.” Convey sincere concern for your counterpart(s) without giving ground.
At the same time, review your own message and process. Has there been a breakdown? Sometimes negotiations accidentally develop a competitive tone. As a result, people think they need an inflexible stance to succeed.
Let’s assume that you’ve received an ultimatum early in the negotiating process. Additionally, you’ve learned that the problem is more procedural than emotional.
The good news is that to some degree, time is still on your side. In a non-threatening way, make sure that both sides are aware of the least desirable results. Ask things like “Where would that get us?” and “Is that really where we want to be?”
Keep aware of any precedents you set, as well. A concession now would probably be remembered later in unfavorable ways.
Now let’s change the scenario: You’re near the end of a negotiation. In fact, you believe an agreement is in sight… when the arbitrary demand comes. What then?
First, seek the source of the ultimatum. Even if you are 99% through the negotiating process, it is still vital information.
Seeking to uncover and understand is still important. However, as time runs out, weigh the cost of proceeding: How much further do you want to invest?
Nolan and Aram discuss responses to ultimatums further in today’s NEGOTIATEx podcast. Questions and topic suggestions to firstname.lastname@example.org are always welcome. Don’t forget to drop by negotiatex.com for more information on today’s topic and our negotiation prep tool, either.
Your time’s important to us. Thanks for listening!
Nolan Martin : Welcome to the NegotiateX podcast, I am your co-host Nolan Martin and with me today is my good friend, the professor extraordinaire, Aram Donigion. Aram, how are you doing today?
Aram Donigian : I'm good. I'm good. It's been a good summer. We're in those later days of summer, I wouldn't mind a little bit more sunshine and heat up here in New Hampshire. I'd like to see my garden growing a little better. [Chuckles]
NM : Yeah, well, I get to spend a lot more time as DC is opening up. We went to the Ford house or the Ford Theater and saw that…I hadn't seen that since I was a kid. So definitely getting out and getting to see DC, which is a lot of fun. I'm really excited though, as always, is that we get a, another response from one of our listeners and they had a question. It sounded like, and I'm trying to paraphrase here, but it sounded like they were approached with an ultimatum, and it sounded like it was a little bit later in the negotiation process, so it wasn't right up front, however, I think it'd be interesting to address, you know, what happens in a negotiation upfront, if you're served with an ultimatum and what happens, if it's later on in the path and you're hopefully getting closer to working out a deal. So we'll talk about that today. People need to understand that ultimatum is also…can be looked at as the, ‘take it or leave it’ approach or the ‘demands and threats’. I think we can classify all of those as ultimatums, just to kind of frame this up. So Aram, over to you, what would we do, if you are encountered with an ultimatum, that seems like, it kind of came out from nowhere?
AD : It's funny that you find this exciting because I don't know anyone who's excited about, about trying to deal with an ultimatum when it comes across the table.
NM : I think I just like throwing you in like awkward positions where you have to explain like, “Oh, this is the tactical approach of how I would handle this” and it's probably something that the majority of us don't necessarily encounter all the time. So I always like putting you in, in kind of that position to, to give us some good advice.
AD : Well, I'll do my best to do that. Let me note too, that it's always interesting to me, that it's always someone else who's delivering the ultimatum – it’s never us delivering the ultimatum. [Laughs] We're never, we're never the problem. We're never the ones doing it. I mean, I think you defined what it is really well, right? Somebody is telling us to kind of, you know – “this is my position and if you don't like it, I'm going elsewhere.” And probably there's, you know, what's kind of embedded in there is the ability to enforce some sort of like pressure on you to act, and there's also some sort of leverage that “I can walk away.” So that's going on in the background. The first thing I would do is, I'm not going to react and I'm going to try to uncover the source of where's this coming from.
NM : Yeah because it seems like it, it kind of came out of left field, it wasn't anticipated. So I am assuming that this is kind of tied to emotions, which we've already talked about previously, but maybe we can unpack that here a little bit more.
AD : Yeah so that's certainly one source, it’s kind of the emotional or relational source. Is that because of what's happening in this negotiation again, if we're looking in the later parts, the stages, is it something that has occurred? So they are frustrated with us, they're frustrated with the negotiation, the way that the outcome…so we wait or, or maybe they're under greater pressure internally in their own organization, because again, the timeline and they're under, under certain pressures, budgetary constraints, whatever – and so maybe that's creating the dynamic and that pressure, that frustration creates an emotional response, which really says, and, you know, so if that's the case, then we need to be able to be aware of that and deal with that. So that could be one source.
NM : But then how do we address it, right? Like if they're being super emotional, I mean, I feel, obviously we need to understand where it's coming from, but how do we address it?
AD : I think patience – be relational, seek to understand, ask questions. As this comes out, you know, don't just say you understand, but demonstrate true empathy, right? Get down in the trenches with them and try to see and feel the pressure that is occurring for them that's kind of causing this emotional response, that is coming out, at the surface level it's coming out as ‘take it or leave it’. Connect with them on that kind of deeper plane, through practicing, you know, genuine empathy and connection. It's rarely helpful to say I understand, but I think you should be really clear about what you understand about where they're at and then there’s an ‘and’ – “and I think we can do some other things, and I think there's another way to continue to resolve this.” With empathy, there's always a cognitive component –do I understand the words coming out of your mouth? There's an effective component – am I connected, have I demonstrated that I actually do understand and I am truly empathetic, not just sympathetic, but empathetic with what's occurring for you? So that's one source. You know, I think it's worth kind of considering where else this ‘take it or leave it’ thing might be coming from
NM : All right. So if emotion is one of the sources, what's kind of another source of where this could be coming from?
AD : So procedural would be the other one. Is that a process? Is it because there's been a breakdown, because we have framed the negotiation, at some point probably unintentionally to something that's more competitive? Are they defaulting to a more competitive framework? Is this how they think they close the deal, if it's in the later stages of the negotiation? Is this just how they think they should negotiate, if it's in the earlier stages, right? So I would look to see, is it just a breakdown in process?
NM : Okay. So let's first take, all right, this happens, this comes in at the beginning of the process. We've identified that it's not necessarily emotional; we think that it is procedural. That this, you know, they believe that this is the way to negotiate – is just giving you ultimatum. So what do you do when it's at the beginning of the negotiation?
AD : So I would negotiate how we're going to negotiate. I would get really intentional with making sure we're both aware the costs or the consequences of negotiating in this way. I think some people, especially when we're dealing with kind of adult learners and adults in general, they have to have what's called a disorienting dilemma – so you have to say, “if I were to respond with the same ultimatum or a similar ultimatum, where would that get us and is that where we want to be?” And for many people just that simple sort of engagement is going to help them see that this process isn't very effective.
NM : Well, I think that's definitely eye opening, as I kind of thought through that…of reframing that and I think that's definitely powerful. So, all right. Now what does that do for us though, right? If we address it early, I feel like that is going to make sure that we also set the precedence for the rest of the negotiation. Is that correct?
AD : Yeah, that's correct. And, and, and, and, you know, I'm always aware of the precedent I'm setting both for this negotiation with this person, for future negotiations with this person, and for future negotiations with others. And I don't want to necessarily create a bad precedent for myself by rewarding bad behavior.
NM : Now let's now let's reframe this. So the ultimatum is coming towards the end of the negotiation process. You think that you're going to be reaching some sort of agreement, is, is the way that you think about this or address this, is that different if you're kind of wrapping it up?
AD : Yeah, I think, I mean, to me, it's still just as interesting to uncover the source of it, particularly if we are 99% through and all of a sudden this sort of behavior, you know, rears its ugly head. So I still would try to uncover and understand it. I'm also going to weigh the costs for myself, for how much do I want to invest in dealing with this, if this is an issue, and again, we were 99% through the negotiation, this is an issue that I don't care a whole lot about. This may be a place…I hate the word concessions, but maybe this is the place where I just concede. I just ignore it. I just say fine, let's just go with it. Cause they're certainly still aware of the precedent that I'm potentially creating, but this may be a place just to say – great, let's, I'll take that, let's move on, and let's wrap this up. So the timing does impact the way I think about how I handle this.
NM : Well, I think during our pre-call we had kind of talked about, you know, the ‘take it or leave it’ – that you basically can break these down into two different avenues to take during the negotiation, two different ways to reframe this problem. So I don't know if it's good for us to start talking about that now…?
AD : Yeah, I think it is. So I think it is helpful to say, if it makes sense to engage and I've done a good job of trying to figure out if this is more emotionally based, or this is more procedurally based – then this idea of reframing comes into play and I can reframe around both parts of that ultimatum, right? The ‘take it’ part, we can do some reframing there, the ‘leave it’ part, we can do some reframing there.
NM : All right, I want to provide kind of an example here that just came to mind. So let's say that you are about to take a vice-president position at some company and you're hit with an ultimatum being a salary. Now let's say that, you know, they offer you 85,000 but you believe that, you know, is not appropriate. But you're getting hit with the ultimatum: hey, take it or leave it! So how would we address that?
AD : Sure. So we will do this in the context…and I think it's a good setup, we can certainly do it in the context of a salary. You can do this in the context of, as you know, a supplier relationship, you can do this in the context of, you know, any really, any other client, sort of services relationship – anywhere where there is, you know, we can imagine kind of – “here's my offer, you need to take this.” So somebody offers me an amount, I think its low, and at first I might reframe it to interest.
NM : [Laughs] Okay, let's talk about it.
AD : So if I were to reframe it to interests, I might ask – why is that a good number for you? Why do you think that would be a good number for me? If I accept that number, what does that allow us to do or allow you to do? But help me understand some of your other concerns? I would dig into, what are the motivations for kind of making that particular offer?
NM : Now, is this where the anchoring is? Is this kind of where this comes into place, identifying like how they're coming up with that…with that number?
AD : Yes and so anchoring does tie a little bit, maybe to their motivations. I think anchoring does a little more around the standard, the legitimacy of it, that's where I would go, kind of, next – why is that number fair? So, based on what standard, you know, how did you come up with that? Because as I looked at comparables, you know, where there are comparables for salaries, but as I looked at comparables, I was in a different range, right? I was between X and Y and we seem to be well below X. So that I would say the anchoring piece, a lot of times to me, is around standards and fairness; maybe a little less around what their motivations are – what are they trying to achieve, is it a budgetary issue, is it because they’re trying to bring other people onto the team, is it because whatever? The other place I would reframe this to, I think, and it's a nice tie to acknowledging what they've said, I would reframe it to options. I would say that is a fixed salary at 85 or whatever it is, is one option; and I'm also wondering what else we might explore – could we brainstorm some other possibilities around other perks, shares of stock, time off, flexible work schedule, parking, whatever it might be, you know, corporate car, are there other, other things that we could discuss in addition to just a fixed salary? So that's another way to reframe it to this discussion around options.
NM : Okay. And then, so let's assume that that's, you know, you get what you need to out of that. All right. So now let's back up and now you don't get what you need to, you have the ‘leave it’ option. Let's explore that.
AD : So I can imagine in that case, you know, there's a subtle…maybe a subtle hint that you're not the only person we're looking at for this promotion or this position or whatever, maybe there's some others – that feels very threatening, that's the sort of ‘leave it’, maybe put a little, a little less direct. And again, I think you can reframe and say when somebody presents that part of the argument to us, that's a real opportunity to learn and say, I know you could do that, and before you do, it would really help me to understand, you know, why you think someone else might be better suited or a better fit for this position, with the direction you want to go, help me understand that? So that's really a tie into understanding interests based on their sharing of an alternative and their kind of sharing of that, you know, or ‘leave it’ because I'm going to go elsewhere.
NM : Yeah, I guess it's the, at that point, you know, you explore their interests, you're either aligned or you're not, and, um, if you don't like what you hear, then hopefully you evaluate your BATNA and decide, all right, is it…am I actually going to walk away from this as a last ditch approach? Is that, is that accurate?
AD : Yeah. So I always would, you know, make sure I'm refining and considering my BATNA and what I can do if I don't reach an agreement. If it doesn't work to reframe it, the interest, if you can't uncover more about why they think one of their BATNAs, why their alternatives are better than, you know, keeping you on at a potentially, you know, higher compensation package – I would also reframe to options and I would, again, acknowledge, yes, you can certainly go with someone else and I'm also wondering if there's things we haven't yet considered creatively that we might do together, that would be kind of the reframing to, uh, the options piece from alternatives. And then I think I would also go to the standards piece, that you talked about, and just say, you know, what are the criteria that we are looking at as we consider this arrangement between the two of us and how does that apply or not apply as you consider other folks, you may offer something else to? And, you know, if I'm coming internally within the company, whether I'm coming externally, whether, you know, my background and subject matter expertise – all those things are different standards that we can point to; time that in the, in, in this particular industry or in this sort of work, do your alternatives match up in a fair sort of way, as you were considering that, and should we maybe have a discussion around what's really, you know, reasonable with regards to evaluating what we're talking about working between us and what you're talking about going with someone else?
NM : I think that's a great conclusion to the discussion. So with that, this is a podcast that is all about elevating your influence through purposeful negotiation. So I'd love to give our listeners a few action items to help them become better negotiators when they encounter an ultimatum. So Aram with that, what do you have for them?
AD : Yeah. First of all, identify where this is coming from. Second of all, really consider your own choice. Is it worth continuing to sit at the table? What's the value in it versus going elsewhere? That's where the, you know, want to refine my walk-away, my BATNA. And the third thing is be patient when you're reframing. We made it sound incredibly simple, it's not just one or two statements, it's often really a deliberate, intentional practice with reframing to motivations or other possibilities or fair standards of legitimacy, and it takes a lot of work to do – so be patient as you do that, to achieve better.
NM : Yeah. So I think the biggest takeaway that kind of stuck with me for this podcast is the disorienting dilemma. Is that what we're calling it?
AD : Yeah.
NM : That seems incredibly powerful. It seems like it definitely work as I thought through it. So take that approach, you know, let's reframe it. If someone gives you an ultimatum, then you can counter with, all right if I were to also give an ultimatum here, is that going to be beneficial for us to reach our desired outcome? I think that's pretty powerful. My last takeaway is for everyone listening to this, do me a favor, share this with one colleague or peer or what have you that would benefit from understanding how to be a better negotiator. I know that the podcast is growing. We greatly appreciate it. It's a lot of fun standing up here. So we just want to keep putting this content in front of the people who need it most. So if you have a question that you'd like for us to address in future episodes, you can do that by heading to, or excuse me, sending an email to email@example.com, we have a prep tool on the website, you can go to negotiatex.com/prep, and you can get that tool that's going to help you with all your future negotiations. We are excited to announce that we are working on a backstage pass for NegotiateX, more of that to come in the future. I don't want to spill the beans now, but you know, we have a blast with this all the time. So with that, that completes this episode. Thanks for listening. We'll see you in the next episode.
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