Leveraging Against a Greater Power

The Communist takeover in China in 1949 affected American foreign policy interests in the Far East. Trade embargoes were put into place, and countries that traded with the expanding Communist bloc became ineligible for American foreign aid.

Indonesia was of primary concern. It considered itself neutral and had many radical elements within that sympathized with Communist China. The Indonesian government’s primary interests were stabilizing rubber and tin prices and developing its infrastructure. Yet, they remained unwilling to accept economic assistance from America if it meant conceding to American policies and interests.

By maintaining this resolve in their negotiations, the Indonesians forfeited lucrative American military grants. However, they satisfied the nationalistic sentiments of its people and managed to substantially water down American demands in their final agreement. For America, money was power, but Indonesia’s indifference to the influence of foreign aid was a key factor in their successful negotiation from a weaker position.

We’ve been discussing how to identify, gain and sustain leverage when your counterpart is in a more powerful position. To summarize, here are four simple tips to help you remember what to do:

1. Project and maintain confidence. The strength of your position lies in what your counterpart perceives, so lead them in the direction you want them to go.

2. Leverage time to your advantage. If you know your counterpart is negotiating on a deadline, save trading off concessions until the deadline approaches.

3. Highlight your strengths. It’s rare to enter negotiations with no strengths at all. Like the Indonesians, if you can identify your power points, you can use them to your greatest advantage.

And finally…

4. Highlight their weaknesses. Every negotiator has an Achilles’ heel -- a spot of vulnerability. When you find it, take advantage of it.

Achieving a successful outcome in any negotiation is not all about power. The strength of your position is relative. It’s your ability to leverage your strengths that determines your outcome.