How to Make Use of the Leverage?

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The strength of each party’s position is leverage and it is the key strategic element in any negotiation.

When you observe 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 advantage ? 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.

Analyzing the Leverage

Analyzing leverage is a delicate game. You can find out a lot from the definite facts of a situation, but awareness also plays a part.

Again, your opponent will do the same thing. Wars are sometimes won not by the armies you have, but the armies they believe you have.

You’ll be evaluating 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 find out the other side’s needs are greater than its wants, you have the benefit.

Don’t Give Any Information That Gives Others To Leverage?

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. On the other hand, 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 estimation of strengths and weaknesses. As talks move forward, events, positions, and attitudes change, so you must review leverage over and over again.

Guess About When To Use Your Leverage To the Most Advantage

When you utilize leverage, you are doing all you can to make the most of your strong points and reduce your weaknesses, while doing the opposite with your opponent’s case. Always remember 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 cause danger to your opponent’s king. So you must always review how and when to use your leverage to the most advantage.

Aware of Changes in Leverage

You must be constantly responsive to changes in leverage. If you aren’t, you may lose yours. If you need disaster 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 since the other side is noticeably 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.

Posted in: Negotiation Skills

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