IF YOUR COUNTERPART CAN'T SEAL A DEAL, HERE'S WHAT TO DO

February 5, 2009“I hate it when I get near the end of the negotiation and, all of a sudden, my counterpart says he needs to run our agreement by his boss,” this business person said to me recently. “What can you do about this?”

First, recognize that this tactic can hurt you if you have authority and they don’t. While you might consider yourself more powerful as the decision-maker, you’re actually at a negotiation disadvantage. You can concede. Your counterpart can’t. The less authority you have, the less you can concede. Understanding this, I have three suggestions.

1. Do your strategic due diligence.

Research your counterpart’s reputation and find out if they commonly use this “limited authority” tactic, especially near the end. And research this before you start negotiating with them.

How can you get this intelligence? Contact individuals who have negotiated with your counterpart in the past and explicitly ask about this tactic.

And if you can’t find someone, at least find out his/her organization’s reputation regarding this move. Evaluate the amount of authority similarly situated individuals on his side - those with the same title or position - have had in the past. Organizations often train their negotiators to use similar tactics.

Then, if you find your counterpart commonly uses this tactic, consider early on telling your counterpart you will need to run the deal by your boss (or board or partner, etc.). This will effectively preempt the impact of their using this strategy later to your disadvantage.

2. Early on, explore their level of authority and personal interests.

Also explore the extent of your counterpart’s authority early in the negotiation. Get them to state their level of authority, if you can. If they explicitly agree in the beginning that they have a certain level of authority, they will be less likely to backtrack on it near the end. And if they admit to having limited authority from the start, you know exactly where you stand and can match it if you want.

Recognize also that their limited authority and agency relationship to their boss/organization may signal an opportunity for you.

Also explore your counterpart’s personal interests in addition to her organization’s wants and needs. According to Harvard’s Negotiation newsletter, especially find out a) how your counterpart is compensated, b) how long she has worked at her organization, and c) her long-term career goals. These will give you great insight into her needs vis-à-vis her organization’s.

3. Hold a little back for the end.

Finally, if you know your counterpart and/or his organization has used the limited authority tactic in the past or admits to limited authority early on, hold a little something back to concede after they have run the agreement by their boss. Chances are they will request an additional concession, even if small, after running it up the chain.

Of course, don’t hold so much back and have so little authority that you can’t even seriously explore mutual interests and reach a tentative agreement in the first place.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator Planning & Management Software. His column appears the first Thursday of the month. Reach him at Latz@ExpertNegotiator.com.