It may come as a surprise to many, that honesty, not deceit, is a key piece to most negotiations. Although, they share many similarities, poker and negotiation are not always one in the same. In poker it’s important to hide your emotions, eliminate your tells, and keep opponents on the edge of their seat with a good bluff or two. While negotiation is similar, the major difference is that in most negotiations, especially those that deal with businesses, it is not a one off deal – you will have to deal with this person or organization over the long haul. And dealing with a deceiver is not something most of us like.
Before we jump to conclusions, it is important to understand there are two types of negotiations in which employing the “honest” tactic is optimal. The negotiation is either a win – win scenario or it involves multiple rounds (i.e. not a one-time negotiation). A great example that fulfills both requirements is a labor negotiation. It is win – win because both the worker and the management benefit from operations continuing, and it involves multiple rounds as the agreement will likely need to be renegotiated in the future.
Honesty is specifically important when the negotiator transitions from their side’s “flexible” positions to delivering demands and giving ultimatums. While “brinksmanship” and ultimatums are effective at forcing a deal and speeding up the process, it is important to be 100% willing to follow through on the threat. If a negotiator does not intend to follow through on a threat, and his bluff is called, then his credibility in future dealings with the same party (or other parties that are familiar with the situation) will be damaged. This ultimately damages the maximum benefits the party can receive in the next round of negotiations. Maybe even more importantly, it can be especially damaging to a working relationship should those two parties have to work together going forward.
To clarify, it would be ridiculous to say we should be 100% transparent in our negotiations. Hiding your emotions and eliminating tells will always be some of the biggest ways to sway a deal in your favor. But when applying pressure and placing ultimatums, you must be willing to follow through. A strong negotiating position will follow a progression of effectively detailing the data that supports your side, hiding tells and emotion, and, if it comes to it, effectively and honestly communicating your bottom line.