Power is a critical part of any negotiation, and understanding the power dynamic between you and the other party can lead the discussion toward more successful outcomes.
Most people tend to think they’re entering a negotiation from a position of weakness. Moreover, they give the other side a huge benefit of the doubt, imagining them with all the information they need to succeed. Because of this, novice negotiators tend to hand over everything easily.
In fact, around 35% of surveyed professionals see negotiation as a potentially uncomfortable situation. When you walk into a negotiation with this perspective, you're setting yourself up for failure.
But what are the sources of power? What do they look like in real-world situations?
Let’s explore those concepts and more.
At RED BEAR Negotiation Training, we focus on providing the fundamental concepts that drive successful negotiations. It’s not about manipulative tricks or one-off tactics, but rather about teaching the roots that grow positive outcomes and build long-lasting relationships.
That’s exactly why our training is trusted by over 45% of the Fortune 500.
What Is Power in a Negotiation?
What is power? Here is how we define it at RED BEAR: power is your ability to favorably influence the outcome of a negotiation by analyzing, assessing, and managing all the factors that affect power.
Why does power matter? Well, when you come into a negotiation with an understanding of this concept, you're better positioned to ask the right questions and make better deals.
Understanding power also helps you build relationships and chemistry between parties.
While B2B negotiation environments might not feel like an exercise in human psychology, in the end, you’re talking with another person — and they all have similar psychological wants in common most of the time.
To put this into perspective, studies show that 25% of business leaders think chemistry between each side is a major part of their B2B decision-making process.
This chemistry can come from understanding the power dynamic and your influential power.
Skilled negotiators consistently evaluate their influence in comparison to the other party's strength.
But power doesn’t come from a single source. You’ll find six distinct Sources of Power within your typical sales or procurement negotiations.
Let’s explore the Sources of Power:
- Situational Power: Leveraging immediate circumstances to gain an advantage.
- Knowledge of the Other Party: Understanding the individual's motivations and drivers to tailor your approach.
- Informational Power: Using research and data to strengthen your position.
- Organizational Power: Drawing authority from your position or your company's reputation.
- Personal Power: Harnessing individual traits like confidence and persistence to influence outcomes.
- Planning Power: Utilizing preparation and foresight to guide the negotiation process.
For more information on the Sources of Power, be sure to check out our blog that dives deeper into these concepts.
Putting It Into Practice: Six Sources of Power Scenarios
So, what do these Sources of Power look like in the real world? Here at RED BEAR, we believe that perfect practice makes perfect. When you start with the right information and the right ways to negotiate, you practice more effectively.
To help you better understand these concepts, let’s explore a few quick scenarios outlining each Source of Power in a bit more detail.
Scenario 1: Situational Power
Here's our first scenario. Let’s say a company is bidding for a project and knows that the client has a tight deadline and limited alternatives.
Skilled negotiators will understand this situation in advance and come ready to leverage this information. By recognizing this and using it in negotiation, they can often reach more favorable terms.
That’s situational power in action.
Scenario 2: Knowledge of the Other Party
Next, let’s say a sales rep finds out a potential buyer prioritizes sustainability in their decision-making process.
What can they do to act on this information? Well, they might craft a pitch to highlight the eco-friendly aspects of their product or service.
On the other hand, ignoring such a key motivator might mean missed opportunities. This only highlights the importance of attentive listening in negotiation. In fact, skilled negotiators tend to ask more questions and do most of the listening.
Scenario 3: Informational Power
In our next scenario, imagine that, before talks begin, a procurement officer delves into a supplier’s finances and finds they had a less-than-stellar year.
For this negotiation, the procurement officer might approach the situation from a compassionate stance, possibly suggesting a mutually beneficial deal. The negotiator understands the supplier might be eager for consistent business and will act on the chance to build a long-term partnership — flexing the collaborative dimension of the negotiation.
Ultimately, these long-term relationships pay off, much more so than leveraging the upper hand of a momentary advantage.
Scenario 4: Organizational Power
In this example, a representative from a globally recognized software company is in talks to collaborate with another firm.
The negotiator leans into the company’s esteemed reputation to discuss favorable terms. They also address any potential misconceptions about the firm’s flexibility.
This is also important for smaller companies to understand. With their nimbleness and agility, they might underscore their ability to deliver rapid and tailored solutions.
Scenario 5: Personal Power
Next, let’s explore personal power — the power within. Amid a rigorous negotiation, one party’s perseverance and ease in high-tension situations takes center stage.
These traits become an asset, with things like resilience and confidence leading to a palpable shift in the room’s dynamics. It’s a reminder that genuine human attributes can be the most influential.
After all, people buy from people, and genuine connections lead to fruitful collaborations.
“After all, people buy from people, and genuine connections lead to fruitful collaborations.”
Scenario 6: Planning Power
Last up is planning power. Having a proper planning process in place around negotiation can lead to better outcomes. To put this in perspective, let’s explore another scenario.
Ahead of a major deal, a team dedicates time to strategizing every detail, from the meeting venue to potential counterarguments.
Their thorough preparation catches the other party off-guard, making them more amenable and less argumentative. Additionally, they have a well-prepared concessions strategy that makes sure any compromises maintain the negotiation’s overall balance and value.
Mastering the Sources of Power with RED BEAR
When you have a firm understanding of the Sources of Power, you can walk into any negotiation situation with confidence. You’ll understand the full range and strength of your power and work toward creative solutions that maximize the outcome of the deal while making everyone involved happy — that’s what we call a win-win result.
With this information in hand, you can build better relationships with clients that will last for years to come, producing much more value than any single negotiation could.
At RED BEAR, our mission is to transform your team into world-class negotiators. To do this, we focus on the principles and behaviors that drive successful negotiations — that includes the Sources of Power.
The value of our training is unparalleled in the industry. In fact, our customers realize the average return of $54 for every dollar invested in RED BEAR’s negotiation training!
In fact, our customers realize the average return of $54 for every dollar invested in RED BEAR’s negotiation training!
Experience the RED BEAR difference yourself.
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