The weather is getting cooler, and the leaves are changing color, which means it’s fall — the season packed with more debates over sports outcomes than any other time of year. Hockey, basketball, and football are just getting underway, and Major League Baseball is squarely in the middle of the playoffs. It’s prime time for fans to banter about who will win the championship!
I sometimes make sports bets with my buddies. I don’t have a workable system or strategy, and I lose more often than I win. You see, I bet emotionally and with a bias toward my favorite teams, which is part of the fun. After we make bets, the only predictable outcomes are that we share a barrage of texts and maybe get together. The conversations are fun simply because we’ve all taken stakes in our preferred outcomes.
Fans placing bets on their favorite teams to settle differences is something we can also do at the negotiating table. When dealmaking, negotiators often argue about a future event that may or may not happen. This could be related to how performance may turn out, the impact of a change in government policy, or even the degree to which inflation will impact certain items. Any time the future is uncertain (like the outcome of a sporting event), a bet can be placed.
A bet can be a smart tactic because if the debate becomes emotional, it can lead to deadlock or even damage relationships. This type of senseless and circular argument is usually a waste of time and does nothing to move negotiators closer to an agreement.
To get out of this vicious cycle, both parties can agree to a bet to take action based on the possible outcomes of a future event. An example would be if your client exceeds forecasted performance like they say they will, they pay less per unit; however, if they don’t exceed forecasted performance, they pay more per unit. The advantage of this approach is that it stops the argument about the future and focuses the conversation on what is acceptable to both parties based on future outcomes. Moreover, it keeps the conversation moving forward.
Here are three ways to make an effective bet to move a negotiation forward:
- Take the emotion out of it. Don’t let the need to be right about your future prediction derail crafting a good deal. Remember, it’s not about who’s right; it’s about what happens when someone is right.
- Be willing to accept the outcome. Don’t be cavalier about your bet. Make sure you can live with the results of either outcome. Put differently, think through the implications of the outcomes so that if either were to happen, you could still support the deal. (And be a good sport if it turns out the other side is right!)
- Be specific about the bet. A conditional agreement is most effective when a specific event triggers it. The clearer you are about the measured outcome, the less likely there will be disagreements about who “won” the bet.
There’s never a shortage of opinions. However, negotiators who handle different opinions about the future effectively (like by making bets) can strengthen relationships, move a negotiation forward, and unlock additional value — leading to championship results!
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