Is overconfidence detrimental to a negotiation? It’s a psychological bias that’s an important factor—but it’s also confusing. Many executives believe that confident people can achieve more than those who lack confidence. But George Siedel believes that they are confusing decision-making with decision implementation.
Decision-making versus decision implementation
When you make a decision, it’s important to obtain the views of your peers or subordinates. If you let your overconfidence win and make a decision based on it, that’s when trouble arises. Once a decision is made and implemented, that’s when overconfidence in hiring, arranging financing, etc., is a plus.
Putin had a meeting with his ministers to decide whether or not to go to war. But he was doing the talking, and everyone else said “yes.” He was not challenged. Leaders and decision-makers want to avoid an echo chamber. They should encourage feedback to avoid overconfidence at the decision-making stage.
It’s also necessary for people to respectfully question decisions that might be business-altering, especially if it doesn’t align with business OR life goals.
Considering your life goals
The American Bar Association asked George to give a talk at their annual meeting. He was paired with someone who is considered to be the leading mediator in the world, John Wade. George wanted to know if John had any unique approaches to mediation.
John encourages people to think about their life goals beyond the specific dispute that they’re in. He was working with a couple getting divorced. The husband was a prominent and respected physician with many friends. The wife had fewer friends and had realized far less success. They had agreed on how to divide their property but were struggling with how to divide the last $50,000.
John asked them to consider what their life goals were. The wife sat down and wrote out goals for her retirement, career, etc. The husband refused to do it. When they walked into the divorce hearing, he came in with a large group of friends. The wife walked in with a few friends. After the proceeding, the wife left the courtroom by herself.
As she walked out, she turned to the attorney and said, “Now it’s time to get even.” She walked into the office of the local medical society and filed a complaint against her husband. She reported him for performing an illegal abortion on her as well as sending drugs illegally to relatives outside of Australia.
He lost his medical position, ability to practice medicine, income, and friends. The point was that if he had thought about his life goals, he would have been receptive to providing for his ex-wife in a better way. Because he didn’t, he was destroyed.
George provides a life goals analysis tool that gives you factors to think about when you’re developing your life goals in resolving a dispute for free. To learn more about the importance of planning in negotiation, George shares more in episode #361 of the Negotiations Ninja podcast!