Self Help

Leverage is the strength of each party’s position and it is the key strategic element in any negotiation. When you look at the leverage in a negotiation you should ask: who has it and who doesn’t? Who has the better bargaining position and why? How can I use my leverage to my greatest benefit? As you keep analyzing, every reason that the other side wants or needs an agreement is your leverage - provided that you know those reasons, and every reason that you want or need an agreement is the other side’s leverage - provided they know those reasons.

Knowledge of as many reasons the other side may have for needing the agreement is to your advantage. Hopefully, your preparation has given you this knowledge. Conversely, try not to give any information to the other side that would provide leverage for them.

When each side’s position is known, you make your first assessment of strengths and weaknesses. As talks progress, events, positions, and attitudes change, so you must assess leverage over and over again.

When you utilize leverage, you are doing all you can to maximize your strong points and minimize your weaknesses, while doing the reverse with your opponent’s case. Always keep in mind your opponent is also doing this. It’s like a chess game. Each move changes the position of the board; the right moves at the right time can endanger your opponent’s king. So you must always assess how and when to use your leverage to the most advantage.

You must be constantly aware of changes in leverage. If you aren’t, you may lose yours. If you need emergency surgery, the surgeon has all the leverage. You’re not going to quibble over his fee while you’re rolling on a gurney to the operating room. But if you want to buy a company whose stock price has just taken a tumble, your leverage increases because the other side is dramatically weaker.

It’s not entirely the analysis of powerful positions that creates leverage. It’s how that power is applied. You can use it subtly or with a hammer. You can apply it when conditions are right and when you look your best, or use it at the wrong time and ruin your advantage.

Analyzing leverage is a subtle game. You can determine a lot from the actual facts of a situation, but perceptions also play a part. Again, your opponent will do the same thing. Wars are sometimes won not by the armies you have, but the armies they think you have.

You’ll be assessing how much the other side wants or needs what you have, and how much you want or need what the other side has. Who needs it more? Who has the greater motivation? If you determine the other side’s needs are greater than its wants, you have the advantage.