Never Split the Difference: Negotiating as if Your Life Depended on It

NEGATIVE LEVERAGE
Negative leverage is what most civilians picture when they
hear the word “leverage.” It’s a negotiator’s ability to make
his counterpart suffer. And it is based on threats: you have
negative leverage if you can tell your counterpart, “If you
don’t fulfill your commitment/pay your bill/etc., I will
destroy your reputation.”

---

This sort of leverage gets people’s attention because of a
concept we’ve discussed: loss
aversion. As effective
negotiators have long known and psychologists have
repeatedly proved, potential losses loom larger in the human
mind than do similar gains. Getting a good deal may push
us toward making a risky bet, but saving our reputation
from destruction is a much stronger motivation.
So what kind of Black Swans do you look to be aware of
as negative leverage? Effective negotiators look for pieces
of information, often obliquely revealed, that show what is
important to their counterpart: Who is their audience? What
signifies status and reputation to them? What most worries
them? To find this information, one method is to go outside
the negotiating table and speak to a third party that knows
your counterpart. The most effective method is to gather it
from interactions with your counterpart.
That said, a word of warning: I do not believe in making
direct threats and am extremely careful with even subtle
ones. Threats can be like nuclear bombs. There will be a
toxic residue that will be difficult to clean up. You have to
handle the potential of negative consequences with care, or
you will hurt yourself and poison or blow up the whole
process.
If you shove your negative leverage down your
counterpart’s throat, it might be perceived as you taking
away their autonomy. People will often sooner die than give
up their autonomy. They’ll at least act irrationally and shut
off the negotiation.

---

A more subtle technique is to label your negative
leverage and thereby make it clear without attacking.
Sentences like “It seems like you strongly value the fact that
you’ve always paid on time” or “It seems like you don’t
care what position you are leaving me in” can really open
up the negotiation process.