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No Lame Compromises – Negotiation expert Uta Herbst researches and teaches at the Negotiation Academy at the University of Potsdam

Prof. Dr. Uta Herbst. Photo: Karla Fritze.

Prof. Dr. Uta Herbst. Photo: Karla Fritze.

“Negotiating is like playing the piano,” Uta Herbst says with a laugh. “If you practice long enough, you will get good at it.” Her laughter is contagious, convincing. Herbst knows what she is talking about. She is Professor of Marketing at the University of Potsdam. Negotiation management, a subject that used to receive very little attention in Germany, is one of her main topics. Herbst has made negotiating into a management issue – and an object of research. After becoming a professor at the University of Potsdam she was able to make a dream come true. In 2013, she founded the Negotiation Academy Potsdam (NEP), which has since become an ideal platform for negotiation research – and for the publication of its results.

Negotiation skills are a matter of practice

“You can learn how to negotiate,” Herbst says. “If you want to negotiate successfully, you should be well prepared. It is said that 80% of the effort should go into preparation and only 20% into the actual negotiation itself. You also have to keep your interests in mind at all times – and be open to alternate ways of reaching them. Those who stubbornly insist on their position may miss out on a better deal. Be an active negotiator, since the person who puts things on the table steers how things develop.” There are, however, ultimately no hard and fast rules for successful negotiation, the researcher adds. “You can learn how to negotiate, but you also have to practice it.” She practiced what she preached. After all, she found her current research interest somewhat by coincidence, as she mentions confidently. She was neither a natural-born negotiator, nor did she find negotiating easy at first. “Originally, I was a communication scientist and for quite some time toyed with the idea of becoming a journalist,” she says. “But then I realized that I am more drawn to shaping events than to reporting on them. So I turned to marketing.”

During her doctorate in industrial marketing she researched how business clients, two firms for instance, negotiate. “I noticed that in business administration – and in practice, too – negotiations were considered a management-free zone,” the researcher explains. “The perception was ‘Negotiations happen between two people; this cannot be managed anyway.’ So it was left to the negotiating skills of the individual.” Studies point out that companies miss out on up to 30% of revenue opportunities as a result. But we have seen a paradigm shift over the last five years or so: Companies have begun training their staff to become better negotiators.

While Herbst very quickly found out that she wanted to stay in negotiation management after finishing her doctoral thesis, she ended up taking a position in a company: “After I received my doctorate, I was hired by BASF to work in procurement. They may have thought that someone who had researched negotiation management was a good negotiator, too,” she says with a laugh. “From my current perspective, I would say I could have done better. But I was always well prepared – and thus no worse off than anyone else.”

In the end, her passion for research won out, and she returned to academia when the opportunity arose. She held junior professorships at the European Business School Oestrich-Winkel and at the University of Tübingen, and was offered the Marketing Chair at the University of Potsdam in 2012. Within a very short time, negotiation management became the focus of her research and part of her lectures.

Men feel more comfortable negotiating than women

But how can negotiating be taught – and learned? “Ideally through coaching, in group seminars, where you not only learn approaches and techniques, but can also practice,” Herbst says. Classes focus on various negotiation situations and how to react to them. For instance, is the negotiation only a matter of money, or is the deal more complex? Is a person negotiating or a group? Do you meet at eye level, or is the negotiation power distributed unevenly? Even reading studies on the subject can help to improve negotiation performance, and the learning curve is steep: “You learn quickly at the beginning,” the researcher says. “The results of a trained newcomer do not necessarily differ much from those of an old pro.”

The students she has introduced to the world of negotiating prove the point. In the nationwide negotiating competition “Battle of Universities”, which Herbst helped establish in 2008, Potsdam student teams unsurprisingly took the top two positions in 2013. In early 2015, she launched a competition – open to anyone from Berlin and Brandenburg – to test and demonstrate their negotiating skills. Here, too, a University of Potsdam student climbed the winners’ podium, shoulder-to-shoulder with experienced company founders, doubly confirming that negotiating can be learned. “In general, men feel more comfortable negotiating than women – and also do better on average,” Herbst says. The reasons might be explained by the so-called “five factor model” of personality psychology, which classifies everyone into five dimensions: neuroticism, extraversion, openness to experience, conscientiousness, and agreeableness. “On average worldwide, women are less extroverted than men, more neurotic, and more willing to compromise. That is why they negotiate less frequently and perform more poorly.”

Not least of all, Herbst wants to use the new competition to demonstrate that this is not inevitable, and negotiating skills are not a question of character. She never misses an opportunity to reinforce her point: “You have to understand what negotiating is all about – conflict resolution. Striking a deal that works for both sides does not mean rushing and meeting in the middle,” the researcher says. “This would bypass the actual task and too often result in a lame compromise.” She seems completely in her element when saying this. The challenge is instead to tease out the interests of the other side and make your own interests clear without laying all of your cards on the table. “Many are too quiet in negotiations, ask too few questions, and wait too long. But the anchoring theory, for instance, suggests that the person who makes the first offer in negotiations is at a clear advantage because the negotiation will develop from this offer.”

Researching personal negotiating styles

Because Herbst is a researcher, she wants not only to teach, but above all to research and develop the field of negotiation management. Role-play scenarios, like the competition mentioned above, offer experiment-like conditions for its development. Better yet is looking at what is going on in the business world, since it more closely reflects reality and is very similar to field studies. “Sales documentations of companies offer the best possible data sets for our research projects,” she says. “We, all the while, support companies in effectively improving their negotiation results. Companies we cooperate with increase their profits by up to 10%.”

At the moment, Herbst and her team are studying individual negotiating styles. They focus on how authentically people act in negotiations – and what needs to be done to succeed. “Our findings indicate that you can be as inauthentic as you want,” the researcher says with a laugh. “All that matters is that you are perceived to be authentic.” A second project focuses on concession management, i.e. the way people make concessions and demands. Another core theme of the Chair is researching negotiation objectives and how certain objectives affect negotiations. “It is like in professional sports,” Herbst states. “A long jumper who can jump 8 meters should also set his sights as high as possible and not be satisfied with 7.5 meters. In practice, this is often not yet the case. Because companies often work with reservation values, or minimum margins, they end up staying around their lower limit. We research which objectives are most expedient.”

A particularly interesting point in negotiation management is the issue of outsourcing. Of course, knowing your interests and objectives very well is important in being able to assert them in negotiations, but when you are too closely involved, you are probably not good at negotiating, Herbst knows. “Often the general manager, for instance, is too involved, also emotionally, and should leave the actual negotiations to others, for instance a business consultancy or a trustworthy business partner.” Incidentally, this can also create a situation, in which women negotiate better than men – when negotiating about something they are actually not much interested in: buying a car, for instance. “An experience I have had in my own family,” she adds with a laugh.

Even children negotiate – and apply various strategies

Herbst is a very curious person, so she never switches off her interest in negotiation research, even at home. As a mother of three, knowing about the secrets of successful negotiation sometimes helps her to cope with her daily life, too. “My oldest son is six and does a lot of haggling with me,” she says with a smile, “but as a matter of principle we do not negotiate pedagogical issues. I always say: ‘Here the negotiating power is clearly with mummy and daddy!’” Nevertheless, she is sure that children are also very interesting subjects for negotiation research. For instance, two year olds “negotiate” in only two apparently primitive ways: batting their large eyes or screaming. Both methods are also very common among “grown-up” negotiators, where they are referred to as push and pull strategies: threatening and flattering. As early as at the age of six, children possess a sophisticated arsenal of negotiating strategies. “In one of my next projects I want to have a closer look at them!”

Negotiation Academy Potsdam – The first institution of its kind in Germany

There are many more issues Herbst would like to explore; negotiation research has many unexplored niches. This is why in 2013 she founded the Negotiation Academy Potsdam (NAP), Germany’s first institution focusing on negotiation research. It brings together research and business in the field of negotiation management and communicates its topics to the public. NAP rests on three pillars: research, executive education, and academia and practice. The first pillar bundles the results of negotiation research at the University of Potsdam and beyond. The majority of German-language publications on negotiation research appear in the NAP’s new monograph series. Successful papers and conference contributions indicate that the NAP is already firing on all cylinders. The transfer of the results into practical negotiation work forms the second pillar of the Academy.

In addition to seminars at the University of Potsdam, Herbst and her team organize numerous other seminars for students in MBA programs, members of the Academy, and individual companies. Herbst also takes the liberty of holding annually two seminars, in which she focuses on gender aspects of negotiation management – her “personal interest”, as she says. Under the third pillar, the NAP initiates the exchange between academia, business, and politics as well as interested citizens regarding the theory and practice of negotiation. For instance, on the occasion of the opening of the NAP, Federal Minister of Finance Wolfgang Schäuble recalled the negotiations of the 1990 Unification Treaty, and in the autumn of 2015, chairman of the train engineers’ union GDL, Klaus Weselsky offered insight into the wage conflict with Deutsche Bahn. Starting in 2016, the NAP will award its Negotiation Medal biannually to superior negotiation experts.

“By doing this, we hope to promote negotiation research – and showcase what we are working on here in Potsdam,” Herbst says. “Our learning curve has been extremely steep; we have established contacts to many researchers and companies and pushed many things forward, but I think we will have to work very hard for another two years. After all, we want to make NAP the top place to do negotiation research in Germany.” Again, she is setting her sights as high as possible.

The Researcher

Prof. Dr. Uta Herbst studied communication sciences at the University of Hohenheim, where she also did her doctorate on preference measurement in industrial negotiations. She has been Professor of Marketing at the University of Potsdam since 2012, Director of the Negotiation Academy Potsdam since 2013, and Director of Potsdam Transfer since 2014.

 

Harvard Business Manager is publishing their latest study on negotiation management. Prof. Dr. Uta Herbst is quoted there as saying, “managers often negotiate without training.” She offers seminars to address these deficits.

Contact

Wirtschafts- und Sozialwissenschaftliche Fakultät
August-Bebel-Str. 89, 14482 Potsdam
E-Mail: uta_herbst@uni-potsdam.nomorespam.de

The Negotiation Academy Potsdam was founded in 2013 by Prof. Dr. Uta Herbst, Professor of Business Administration at the University of Potsdam. The objective of the Academy is to put the latest results from negotiation research into practice. In its activities, the Academy promotes a holistic understanding of negotiation as a management process. In addition to negotiating, it also focuses on upstream and downstream management tasks.

Text: Matthias Zimmermann, Translation: Monika Wilke
Online-Editing: Agnes Bressa
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