Why You Should Never Split the Difference
By Shirley Wu
The Stepping Stone, November 2023
The SOA Book Club jointly sponsored by the Leader & Development and Joint Risk Management sections went live on August 9th with a lively discussion on Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss. Here are insights from the book and our discussion.
Chris Voss is a former FBI hostage negotiator. In this book, he offers insights and techniques for effective negotiation based on his own experiences in high-stakes negotiations involving life-or-death situations. The central premise is that compromising is not always the best approach in negotiations. Instead, Voss advocates for a strategic and empathetic approach, emphasizing active listening, emotional intelligence, and the use of tactical communication skills.
Chris defines the language of negotiation as “primarily a language of conversation and rapport: a way of quickly establishing relationships and getting people to talk and think together.” With this broad definition, the language of negotiation applies to any situation involving two or more parties trying to reach an agreement. In the workplace, this can apply to:
- Negotiating a better salary.
- Performance management and coaching an underperforming team member to improvement.
- Dealing with demands that feel unreasonable.
- Negotiating critical project deadlines or milestones with your boss.
- Managing and securing the resources you need for your job or project.
During the 90-minute book club discussion session, we focused on these seven negotiation techniques:
- Tactical Empathy. Voss emphasizes the importance of active listening and understanding the emotions and needs of the other party. By practicing tactical empathy, negotiators can build rapport and create a connection that facilitates more successful negotiations.
Tactical empathy is grounded in authenticity and genuine understanding, and it's not about manipulation. When applied effectively, it can create an atmosphere of trust and cooperation that's conducive to finding solutions that benefit all parties involved. By showing that you genuinely care about and understand the other party's perspective, you create an environment where they are more likely to reciprocate that understanding. This leads to a higher likelihood of collaboration and a willingness to explore compromises that can lead to win-win outcomes.
It's important to note that tactical empathy doesn't imply sacrificing your own goals or needs. It also doesn’t require that you agree with the other party’s position, just that you fully understand it. It's about finding common ground while still pursuing your interests. The idea is to understand the other party's position and emotions to navigate toward a resolution that meets your objectives as well as theirs.
Practicing empathy also involves recognizing and managing your own emotions. By staying attuned to the other party's emotions, you can better control your reactions and responses. Being aware of your emotional triggers helps you anticipate moments when you might become defensive, aggressive, or frustrated during a negotiation. This awareness enables you to manage these emotions and prevent them from derailing the discussion.
One example of this shared by my co-leader John Hadley was how you might apply the “feel, felt, found” technique to reframe a discussion. First, you acknowledge how the other party feels, normalizing it by showing how others in similar situations have felt something similar, and then pivot to what you have found (your position).[1] - Calibrated Questions. Ask open-ended questions that encourage the other party to share information and reveal their priorities and motivations. Voss suggests starting every question with “what” or “how,” as opposed to any question that can be answered with a simple “yes” or “no.”
Using “why” is discouraged, as it tends to be heard as a challenge, and may come across as aggressive/offensive. Going into a conversation with an open mind and extracting more helpful information through a series of calibrated questions is a valuable technique in interviews, performance management conversations, business development discussions, etc. It is very much like peeling the layers of an onion, discovering the core or root cause of something by gradually narrowing the focus.
This technique is very applicable to anyone going through the transition from individual contributor to manager. When guiding someone through an exercise, ask calibrated questions to prompt more independent thinking and discovery of solutions, and also give the other side the “illusion” of control, which increases ownership of the task assigned. - Anchoring. Setting the first offer in a negotiation can influence the perceived value of the deal for both parties.
Anchoring takes advantage of a cognitive bias known as the "anchoring bias." This occurs when people rely too heavily on the first piece of information presented to them when making decisions. The initial anchor serves as a mental reference point that influences subsequent judgments. By setting the initial anchor, you establish the tone of the negotiation. This can influence the other party's perception of what's reasonable, acceptable or expected in the negotiation.
Anchoring can also fuel confirmation bias, where people focus on information that confirms their initial beliefs. This could lead the other party to become more convinced of their initial position. Unexpected anchors can capture attention and lead the other party to question their assumptions, potentially resulting in a more open-minded negotiation.
These behavioral biases are seen in many scenarios in the workplace, especially in actuarial settings where we are often anchored to carefully calculated figures. For instance, we could be spending a lot of time and resources on confirming/disapproving estimates which can be incomplete or flawed in themselves. As such, just as important as anchoring is the ability to remain flexible in negotiation and be able to reframe quickly as well. If the other party's anchor isn't aligning with your goals or the latest information and/or situation, it's okay to adjust and present a new analysis.
John suggested an example that many may not have thought of this way. Providing your boss a thoughtful self-appraisal well in advance of any performance discussion in effect can anchor your performance rating. Once your manager has already developed their own appraisal, and come to their own conclusions about the ratings that should apply, it is much more difficult to change those. By anchoring in advance, you have the chance to influence those assessments. - The "Accusation Audit." When you address potential concerns or objections the other party might have before they bring them up, this shows that you understand their perspective.
This involves simply listing the worst things your counterpart can say about you first. Such a technique shows proactive problem-solving and can defuse tension. This technique is helpful in managing performance issues, for which facing the pain directly is more productive than going around it.
In a way, the “accusation audit” is an application of the labeling technique, which is to validate someone’s emotion by acknowledging it. Voss suggests using “It seems like...” / “It sounds like...” / “It looks like…” This shows that you are attuned to their feelings and can prevent defensive responses. - Silence. Embrace silence during negotiations as it can prompt the other person to fill the void and disclose more information or make concessions. John’s clients have had great success with this in salary negotiation situations.
Often, when people are uncomfortable with silence, they tend to speak more than they initially intended. This can lead to them sharing information they might not have otherwise disclosed, which can be advantageous for you as a negotiator.
On the other side, watch out for the lack of silence from your counterpart, as this can indicate some lack of confidence as well. Some of us tend to speak very quickly in presentations and every second of silence may seem hours-long, as it can be uncomfortable to be interrupted with questions on things that we are not well-prepared for.
Using silence effectively can signal that you're confident in your position and that you're not in a rush to make decisions. Remaining silent after making an offer can test the commitment of the other party. If they quickly accept, it might suggest that the offer wasn't ambitious enough. If they hesitate, there might be room for further negotiation.
Silence can also help diffuse tense situations. Instead of responding impulsively to an aggressive statement, pausing and allowing silence can prevent escalating emotions.
Silence can be a chance for active listening. Instead of planning your next response, you’re fully engaged in understanding what the other party is saying. This “silencing the voice in your head” can be the most difficult part for a lot of people, and many in the book club audience shared the challenges of putting this technique into practice.
One audience member brought up the “9 kinds of silence,” which is discussed in Paul Goodman’s book Speaking and Language. The SOA Book Club will look to elaborate more on this technique in the future! - "No" as a Positive. Voss argues that hearing a "no" during a negotiation can be positive because it allows you to uncover obstacles and address concerns, leading to better solutions.
He presents three types of “yes”—confirmation, counterfeit, and commitment—and it is the latter that we would like to hear. Sometimes, hearing a “no” is preferred over a simple confirmation or counterfeit “yes.” Many of us have heard enough “yes” from team members promising to meet certain deadlines on tasks assigned, only to end up scrambling to fix things that are not completed. Such situations are a result of not getting true commitment in communication.
Voss shared an example of an email “magic subject line.” To follow up on a stagnant proposal, he used “Have you given up on this project?” to either prompt a “no” response or finally break the logjam. We discussed how this line might be used in the business setting. This could be a useful punchline during an in-person discussion, depending on the existing relationship. What do you think? Have you had success in prompting questions with “no” as the response. - Black Swans. There can often be unexpected and extreme events that could significantly impact the negotiation, so having contingency plans in place is very useful. Skill in uncovering these ‘black swans’ is a true game-changer in negotiations.
John shared the example of job interviews, where deep questioning into the interviewer's challenges, and the goals they could achieve if those were removed, can uncover a black swan that makes hiring you the optimal solution. If you do this skillfully, you can be the only candidate who knows that the game has changed, and you are being evaluated at least in part on criteria no one else is aware of.
Conclusion
The book was written from the perspective of an FBI negotiator looking to rescue hostages. Fortunately, we are in a career that does not involve life-and-death situations where there can be an “abrupt” end to a situation. Nevertheless, being able to communicate effectively to seek agreement is not as easy as reading off a prepared script or going through a cheat sheet of techniques. Every time we practice allows us to understand human nature a bit more and be more ready to handle any surprises and black swans!
The second SOA Book Club discussion session took place on Oct. 17, 2023. Our two hosts, Bryon Robidoux and Tina Tian, discussed Dare to Lead by Brené Brown. We hope you were able to attend and learned insights on daring leadership, a practice that focuses on stepping out of comfort zones, confronting difficult emotions, and embracing uncertainty.
The group discussed the following topics related to daring leadership:
- How has a fear of vulnerability and being armored led to operational or other types of risk?
- How do you deal with armored leaders vs. direct reports? What is an armor that you can put down as a leader or team member?
- In what ways have you seen empathy positively or negatively impact team dynamics and performance within your organization?
- How do you work with people who have different values from you?
- Can you share an example of a challenge you've faced where applying the principles of Dare to Lead could have led to a different outcome?
Keep an eye out for a newsletter article in a future issue of The Stepping Stone in which we will share takeaways from the call!
If you have not done so, you can also check out this Dare to Lead assessment to understand your own strengths and weaknesses in daring leadership.
Join the SOA Book Club to embark on an enriching journey of learning from popular professional and personal development books and sharing experiences with people with similar interests! If you are interested in learning more about the Book Club or volunteering to be a host for future discussion sessions, please reach out to Shirley Wu.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.
Shirley Wu, FSA, MAAA, is a principal and consulting actuary with Milliman’s Financial Risk Management practice in Chicago. She can be reached at shirley.wu@milliman.com or via LinkedIn.