I was recently in a high-stakes negotiation with a skilled negotiator. At the outset of the negotiation, he performed a few small gestures that made the parties feel comfortable with one another, and then he began his negotiation with a request:
He asked us “to assume positive intent.”
I smiled and nodded.
It’s a nice thought. Sort of.
But in this context, it was ridiculous. The parties had a long history of turmoil. They parties were in related and adjacent industries and were always going to have to deal with each other in some capacity. But their past interactions were littered with anger, distrust, and vitriol. There was no universe in which they were going to assume positive intent with one another.
But of course, the opposite approach would have been even more unhelpful. Assuming the worst would have killed any hope of a negotiated resolution. If you assume that your counterparty is nefarious, you can’t and won’t do business together. And if you can’t do business with parties in complementary industries, you’re not going to maximize your company’s value.
Both strategies strike me as equally unhelpful starting points in any negotiation. Assuming your counterparty is a benevolent altruist will result in you giving away all the alpha in a deal to your counterparty. Assuming that your counterparty is an evil maniac means you won’t make any deals, and you won’t generate positive-sum relationship.
Both are suboptimal.
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As a former competitive poker player, I like to use poker thinking going into negotiations. When I play poker, I’m not a scorched earth kind of guy. I go to every poker table planning to have cordial, fun, and pleasant interactions with the other people at the table.
But that’s not why I’m there.
I’m there to make money and to win. I assume that the other players are there for the same reason. A few might be jerks, but most are just there to do business. We all show up at the table with our strengths and weaknesses. Some of us are stronger players than others. Some of us are smarter. Some keenly read tells. Some just know how to randomize or alternate their strategy in a way that works against different kinds of players. Some are aggressive in ways that make them difficult to play. Some are nits. Some are fish.
At big tables with real money to win and lose, it’s usually smart people against other smart people. And it’s the same for big business deals.
It was rare to have unpleasant or acrimonious interactions with other poker players. But I never assume positive intent, either. Or negative intent, for that matter. I assume self-interest. Nothing more. Nothing less.
If I notice that a player is irascible or has a unique emotional tilt, I may adjust accordingly. But I wait for them to give me those kinds of signals.
Optimal strategies vary based on who you’re playing against and what they’re doing. You’re always operating with limited information. And you will always lose some hands when you’re favored to win. But if you play optimal poker and adjust well to the players around you, you should win more than you lose in the long run.
You’ll need to win hands with good cards to establish credibility. You should be credible most of the time. But there are times when you may need to show strength when you have weakness and vice versa. That’s necessary to have optimal results. Knowing when to do that is what separates the good from the great.
Smart play in poker and in legal negotiations should be strong, credible, and occasionally surprising. That’s how you win. But there’s no value to be gained by assuming anything about your counterparty, one way or another. Observe and adjust. But never assume.