Notes on Negotiation:
Written by Marty Latz, Latz Negotiation Institute
“I would love to do the deal, but I just don’t have the authority.” I can’t count how many times I have heard this in a negotiation. It’s probably one of the most common statements in all negotiations.
It’s also often a smart strategic move, especially if you know the other side has authority (albeit sleazy if your counterpart falsely believes you have authority).
How does it work? Those with limited authority have the opportunity to come back, after checking with their boss/board/client/colleague and ask for more (thus blaming their boss and playing good cop (your counterpart) and bad cop (their boss)).
What should you do? Here are three recommendations, one of which will prevent you from facing this strategically disadvantageous situation in the first place.
1. Plan for the move before it happens
Explicitly ensure your counterpart has sufficient authority to negotiate in good faith early in the negotiation, perhaps even as a precondition to engaging in the first place. Your counterpart may not share their exact level of authority, but it’s almost always best to address this right away.
Interestingly, many with limited authority will also want to discuss this upfront, as they will not want to be perceived as playing games if this issue arises near the end and it looks like they were hiding the ball.
It’s better to know going in than get blindsided when you think you have a deal.
Professional mediators in legal negotiations won’t even start unless parties with significant authority are in the room or at least accessible.
2. I have limited authority too
If they have limited authority, you should have limited authority, too. And there’s almost always someone to whom you can legitimately say has more authority than you. Even CEOs defer to their boards in certain negotiations.
And the U.S. Speaker of the House, 3rd in line for the Presidency and one of the world’s most powerful individuals, has limited authority these days over his own caucus. (In my house, on all major spending decisions, I tell my counterparts I have to check with my wife!)
Of course, you need to be honest. Don’t say you have limited authority if you don’t. That would be unethical. But it’s relatively easy to plan with your boss – before the negotiation – to make sure you don’t have full authority.
3. Keep something in your back pocket for the end
If they have limited authority and you have full authority – and they know it, consider holding something back for the end just in case. It doesn’t have to be much, but at least you then have something to trade if they go talk to their boss and come back asking for more.
Latz’s Lesson: Plan upfront for the limited authority discussion. Then either limit it for your side or hold something in reserve just in case they say at the end “I would love to do the deal, but I have to check with my boss.”
Click here to read additional Notes on Negotiation. _________________________
Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research. He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com
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