Time Travel Negotiation: The Art of Framing
May 21, 2021 | Blog
Many businesspeople pride themselves on their ability to assess situations “objectively”, viewing the facts as they are. They would often describe this skill as one of detachment, in which letting go of emotional clutter and taking a bird’s eye view allow for more rational and consistent decision-making. In one respect they are right; emotional responses need to be curtailed in order to make a more accurate assessment of the facts. In drawing the conclusion that more rational decisions through this process lead to objective clarity, however, they are often dangerously wrong. Faith in pure logic can be just as devastating as belief in “gut feeling”, as it can blind negotiators to the practical limits of human rationality. Probing the restrictions of reason leads to developing the idea of Frame: the organizational structure of the mind that is both the foundation for rationality as well as setting its boundaries. Also known as a mental model, a conceptual frame is the lens through which the myriad of experiences focus into means toward an end. Assets, offers, counteroffers, parties etc all exist within and are defined by these internal picture frames.
Semiconductors and Bubblegum
To start unraveling the knot at the end of reason, we first need to zoom into its threads. The smallest unit of conscious understanding is the goal: the kernel of desire that is the basis for action. Goals act as both a catalyst for action and as a point of organization for perception. They allow us to narrow our focus, cutting out details that appear irrelevant and filtering our experiences. This is the zero level of the frame, because before beginning down the road of logic it is necessary to set a destination.
Here we arrive at the first critique of pure reason, that being the boundaries of the frame set by goals also limit our understanding of what is possible. For a simple analogy, consider both a child in a supermarket and a procurement rep for a microchip manufacturer. The child’s goal is to buy some candy this afternoon; the rep to negotiate a contract for silicon. Now suppose that you first offered them both $50, then fifty million to acquire their respective objectives. In this context it is easy to see how the vastly different frames of both parties can lead to wildly different outcomes, assuming both behave purely logically. For the procurement officer it is easy to see they would take the fifty million, as the scale of their operation requires that level of capital. The child, however, might be equally likely to take either sum. After all, if we assume perfect rationality then both quantities of money are well beyond the requirement for fulfilling their goal, and as such within this frame both are equally useful. This is the first problem of the frame: limiting possibilities to particular goals leaves out the potential for radically new goals given new potential. It is for this reason negotiators often “settle”, because their goals that build the boundaries for their mental models are restricted and thus they fail to push the realm of possibility out beyond it. However goals only set the inside-out features of the frame: the way the mind molds reality. The external world contributes outside-in aspects to the frame through perception, and these are what negotiators can use to transform their proposals.
Mind Paints a Picture
There are two avenues perception can alter a frame, namely presence and absence. We’ll begin with presence, the easier of the two to describe.
Any features present within a mental model contribute how all other aspects are perceived. A classic example of this are optical illusions of color, where context clues can “trick” our senses. If a color is perceived in a specific context (in shadow, against a “white” background) it can radically alter our experience of that shade. While this perceptive flaw is embedded in genetics, behavioral conditioning can cause similar effects in altering how we experience business proposals. If a counterparty repeatedly mentions how they can’t go below X price per unit, a sudden offer below that can be experienced as a victory. Even in situations where this might not “objectively” be a good market price, the subjective experience within the frame of negotiation can elicit a sensation of moving toward a favorable deal. Without constantly refreshing your frame with the broader state of your business in the market, it is possible for pure logic operating within a single negotiation event to override the primary goals in your large-scale business model.
The Philosopher’s Coffee
Absence is quite a bit more challenging to describe, as the inverse of a “real fact” can’t be quantified. Rather than referring to objective facts, it involves a rather arcane feature of subjective experience in setting the focus of attention on something that isn’t actually there. Despite this complexity, it is this aspect of non-reference to objective reality that makes it a supremely powerful tool for negotiators. To provide a concrete example, I’ll shamelessly pilfer from the legendary Slavoj Zizek (who himself borrowed the joke):
A man walks into a cafe and asks the barista for a coffee without milk. The barista looks at the man apologetically and says “I’m sorry sir, we don’t have milk. We do have cream, however, so if you like instead I can get you a coffee without cream.”
Through this somewhat absurd example we glean insight into a unique feature of conscious perception; the absence of a feature, when attention is brought to it, becomes itself a feature of the object in its negation. Objectively, of course, a coffee without milk is the same as a coffee without cream. Which is to say, both are black coffees in the external world of sense perception and present features. But by bringing attention to the absence, the lack itself is felt more potently. Neurologically this could be described as the fact that recall activates a portion of the sense perception network, and so absence of that feature attended to cause a repression of the reward structures affiliated with that aspect. While beyond the scope of this article, the key to take from this is that the tool of absence in negotiation can be just as potent as a presence. For example, laying out breach of contract terms emphasizing compliance as avoiding fees, rather than the fees as your party’s defense against risk, can alter the subjective experience. Despite both phrasings referring to the same present feature (contract violation), the first variation emphasizes the absence of loss on their part rather than the presence of gain on yours. Thus the experienced character of the statement changes despite the objective reality being the same. And as it turns out humans are preconditioned to avoid loss (fees) more than they seek reward (your cooperation), so emphasizing this absent feature is more effective in this situation.
Unique to the feature of absence is the fact that these aspects exist only in the mind’s eye. While altering goals requires changing your counterparty, and modifying present features demands drafting new proposals, to change absent context requires only to direct attention. In this regard absence transcends space and time, enabling negotiators to reach into the past and thereby mold the future. Referring to our coffee scenario, I clearly cannot go back and change the present features (e.g. changing the coffee into tea). What I can change however is my lived experience, imagining that rather than without milk my coffee was without cream. Through this conversion it is possible to retroactively change the past by inducing a context which frames the perception in a new light.
The power of absent features is that they are free; unlike present features which cost assets, the price of absence is only words. This is what negotiators intend when, for example, they need to backtrack an offer. Rather than stating directly that they now demand greater compensation, often these changes are framed in ways that alter the experience of the original proposal. “Our CEO wasn’t involved in that decision” , “we’ve learned of another business’ more competitive pricing” etc. While these specific statements could be interpreted as “excuses” in that they attempt to justify a change, the nature of this intended change is one of transforming the past into a state where the new proposal isn’t simply justified but entirely necessary. By directing the attention of the counterparty to a specific absent element, suddenly the present features are observed with respect to that “missing” piece. And because empty space includes all absent objects and features, it becomes possible to radically change the nature of a proposal without modifying anything in it at all. Absent features are a state of flux in which change in focus at any point can traverse across time, molding even the immutable. Only the creativity of the negotiator limits their power to move backwards in time, shaping reality through the mind of the counterparty. Use your negotiation superpower, and walk the fourth dimension.
Intellext is an AI startup that is revolutionizing the way contracts are negotiated, accelerating time to close, and improving deal terms. Intellext’s Intelligent Negotiation Platform™ eliminates the complexities of contract redlines and stakeholder collaboration and optimizes deal terms by applying machine learning during the negotiation process.