Folks, it sounds obvious that time is money. We all hear this saying all the time. But in negotiation, time can be used to extract large amounts of concessions out of the other party. Please don’t use this tool I am about to teach you, unethically. Just because I’m teaching it to you, doesn’t mean you should impose this tool on all of your negotiations. It’s powerful, but it needs to be used sparingly. And at the same token, it’s so important to be able to recognize this ahead of time if another negotiator is laying a trap for you. You do need to be aware of it so that you can recognize the trap early and get ahead of it. Because if you don’t see it coming, you could unwillingly set yourself up for major losses.
Vilfredo Pareto discovered that 80% of effects come from 20% of the causes. What we now know as the Pareto principle or the 80/20 rule holds true in negotiation with time constraints as well. Generally speaking, about 80 percent of the concessions come in the last 20 percent of the negotiation. This may be for a variety of factors, but generally people are less open to making concessions early in the game because they “believe” they have time. This belief that time is one their side is a false construct. Time is a rapidly diminishing resource in any negotiation. If you leave important issues till the end of the negotiation to address, you’re setting yourself up to concede on them, and as a result you could lose out big time to someone who may be using time to get you to concede.
Be on the look out for this type of negotiator and don’t fall into their trap. Skilled negotiators identify your major needs that don’t cost them much up front and hold out on those right till the end to get major concessions out of you. So how do you get ahead of this? Make sure to address all the issues up front. Never ever fall for the trick line of, “Let’s figure that out later.”. A small issue early in the negotiation can get very big at the end.
People become a lot more malleable under time pressure. A lot of major concerns seem to slip or are consciously left out if we’re under a time crunch. I have a 3 year old and he fully understands the power of using time pressure against me. One day, some time ago, he had been poorly behaved for most of the afternoon and had several time outs already. We had already told him that he was going to bed early because he was being so poorly behaved. A melt down occurred just as we were putting him down for bed. We were visibly tired from a very trying afternoon and we likely looked very beaten. In some magical moment of clarity he very quickly realized that he had us on the ropes. He demanded 2 smarties before bed, and mentioned that if he got those 2 smarties he would very quickly go to bed with no more performance. Keep in mind, this is a 3 year old. At that point he could have asked me to buy him a new toy and I would have caved. He had us, He knew it and we knew it. I’m ashamed to say that we caved. We gave him his 2 smarties. We got him to bed early. But I’ll forever live with the knowledge that a 3 year old took me to school on a principle that I teach.
So we know that we need to try to address all the issues up front, but sometimes that’s just not possible. Especially when you’re negotiating with someone who is deliberately using time against you. Apply discipline to your negotiation. A disciplined negotiator knows when to walk away because they’ve already established their boundaries in their own mind about what they are willing to concede on and what they are not willing to concede. Never ever walk into a negotiation without knowing where your “walk away” point is. Stay disciplined in your approach. If you find yourself getting into a spot where the deal doesn’t make sense anymore, don’t hesitate to walk away. Very politely say, “Look, this deal no longer makes sense for me anymore based on what you are demanding or not conceding. I can no longer take part. Call me if you’re interested in pursuing a more fruitful discussion.” Pack up your stuff slowly, push away from the table, get up, and start walking to the door. I guarantee you that if you get into a spot where the value just doesn’t make sense anymore and you drop a line like that, 9 times out of 10 you’ll get the other side to concede on major issues in the next 10 minutes. But it can’t be a bluff. And that’s the key. Don’t bluff this, because you never want to be in a position of having been the person who walked away, only to need to call the other party back a few days later to concede to their deal. You need to have a BATNA (Best Alternative to a Negotiated Agreement) if you pull this move.
In conclusion, time is a rapidly diminishing resource in any negotiation and you should treat it as such by trying to get all issues brought up at the beginning of the negotiation. Recognize when someone is laying a time crunch trap for you and try to avoid it or call it out. And if the deal no longer makes sense, walk away. What we’ve just been through may be one of the most powerful tools in your toolbox and when used correctly it can deliver huge results. Don’t abuse it. Stay on the ethical side of the negotiation and try to work with the other party to get all the issues addressed as early as possible.