Host: What are the eight Ethical Power Techniques?
Sean McArdle: Well, keep in mind that the three components to all negotiations are power, information and time. We have to have some form of power in order to negotiate otherwise; we are not really the right person to negotiate with. We have to have all kinds of information about what the other side wants, the more we are willing to part with in returns for getting it. Then finally, we have to have some kind of time frame for getting it done or there is never really any motivation or incentive to get a negotiation finished. But power is the one that I think most people overlook. Some people do not like to go by cars, in fact, most. The reason is they say they do not feel like they have any power in the negotiation. After all, they want a car and the dealer has it and they have all the control over the price. I say, no, that is not true at all. In fact, we have eight different kinds of power that each of us can draw on every time we go into a negotiation. In fact, we should plan in advance on which specific types of power might be most effective in any particular negotiation. Now, the first type of power is Legitimate Power. Let us say for instance, you are at work and you are negotiating a contract with another company to perform a specific service for your company. You do that because you have legitimate power from your company to do so, you are acting as their agent. Let s say your child wants something and they come to you to ask for it; that is a form of negotiation and as parent, you have a specific type of legitimate power to negotiate for them. Now, the second kind of power would be Reward Power. Let us say for instance, we go back to the work example and you are negotiating for a service for your company. Well, you might say to them, Look, I can give you a price say 10% less on what you are asking, but if you get it for me by this Friday, I will actually give you a bonus of 5% for performance. That is reward power. So, that is the second, the first is legitimate, the second is reward. The third type is what we call Coercive power.
Now, Coercive power is when you actually force somebody into doing something. As a parent you say, You do that or I will put you in your room for two hours, right? As a boss you say, This is part of your job, you must do this or unfortunately, I will have to let you go. So, that is Coercive power. Policemen might say something to you like, Pull the car over and turn the engine off. Give me your license and registration. You might say, Well, why do I have to do that? I wasn t doing anything wrong. They say, Because if you do not do that I will arrest you. That is Coercive power. The fourth type is called Consistent Values Power. Now, I like to use a specific man as an example of consistent values power, because this particular politician had an extraordinary ability to negotiate and he was negotiating with the former Soviet minister Gorbachev, when Ronald Reagan said, Here is what I need and Gorbachev said, Can not give it to you and he said, Well, then we are not in the ball game. Now, Reagan was known for having a consistent set of values and Gorbachev knew that he meant what he said. He walked his talk. Consistent Values Power or negotiation says, look this is who I am, this is how far I can go, I will go no farther because that is outside of my values. Now, if you can get the other side to believe that, than overtime, those consistent values make you a very powerful negotiator. Of all the people Gorbachev ever negotiated with he always said he liked to negotiate with Reagan the least, because he had this consistent values power. So, that is the fourth type of power.
The next, President Clinton had in abundance, it is called Charismatic Power or Charm power, the ability to put on the smile and get what you want because you are likable. It does not hurt to be charming in a negotiation. The fact is, people like to be treated with charm, people like to have a smile on your face, people like to get treated well by you because you are happy. The next is called Expertise. Now, expertise in the negotiating process is of immense power. If you have expertise on a subject matter then you actually know more about it than anybody else sitting at the table. This puts you in a unique situation to get what you want because of what you know. So, it is called expertise power. The next one is called Situational Power. What do I mean? Well, let us say that you are in a movie theatre and there is a fire that breaks out right in front of you. Due to the situation you are in a powerful position because you also happen to be next to the door. You stand up, you turn to the crowd and say, We have an incidence here in the front, I would like everybody to file out slowly and I will attempt to put out the fire. So, in that situation, you had power. The final of the eight types of power is called Information Power. If you know more about your negotiating partner than they know about you, then that information gives you an advantage in the negotiation because you probably have a better idea of what they really want and what they are really willing to pay for it. So, get as much information as you can about the person you are negotiating with in advance.