by Terry Bragg
Be careful what you ask for because you may get it. This is the winner’s curse: getting what you want and then discovering it is not what you really wanted. Winners are cursed everywhere.
For example, mergers and acquisitions are rampant in today’s business world. Most mergers and acquisitions do not meet expectations because the acquiring company overestimates the value of the acquired company. Because of their unwarranted optimism and enthusiasm to make the deal, acquiring companies often inaccurately evaluate the worth of the acquired company.
Sales and negotiations are fertile ground for the winner’s curse. In sales, the winner’s curse manifests itself as buyer’s remorse. After purchasing something, the buyer begins to doubt the decision, or begins to see negative aspects of the purchase. If you give in too quickly in a negotiation, the other party wonders whether they could have gotten more from the deal.
The winner’s curse occurs because of poorly formed goals or outcomes, not understanding the psychology of other people, and overestimating our position or the value of what we are trying to get.
When I teach negotiation workshops or consult with companies on acquisitions and mergers, I give the ancient advice: Let the winner beware.
Three NLP processes help prevent and protect against the winner’s curse: (1) defining well-formed outcomes, (2) using the triple description process, and (3) establishing rapport.
Create Well-Formed Outcomes
Creating well-formed outcomes is a foundation of NLP. By asking a series of questions, you create well-formed outcomes and clarify what you really want.
The well-formed outcome process helps you distinguish between what you are asking for and what you really want. It is a process for clarifying what you really want by understanding what having what you want will do for you. The process, also, defines sensory specific outcomes so you understand how you will know if you get what you want. Finally, the process helps you figure out the steps for getting what you want.
This basic process is easily and often overlooked. Knowing what you really want is critical for avoiding the winner’s curse.
Use Triple Description
A second NLP process for preventing the winner’s curse is the triple description process. The process of triple description helps you better understand yourself, the other person, and an objective viewpoint. With this process, you first see a situation from your perspective. Next, you imagine stepping into the other person and viewing the situation from their perspective. Finally, you float outside yourself and view the situation from a third party perspective.
The goal of triple description is understanding and wisdom. Triple description is a formal process for walking in the other person’s moccasins.
The triple description process helps you understand the motives and thinking of others. It also changes your perspective so you can see other alternatives, options, and ways of evaluating a situation.
In negotiation and sales, the triple description process helps you understand what you can realistically get from an interaction with someone. To sell and negotiate effectively, you must understand the thinking processes, motives, and emotions of the other parties in the negotiation. Unfortunately, most people focus only on themselves in sales and negotiations.
The triple description process prevents the winner’s curse by giving information for making decisions, providing options, and promoting wisdom.
A third NLP process for preventing the winner’s curse is rapport building. Rapport is about relationships with others. By gaining rapport, you get in-sync or in-tune with the other person. Rapport helps you understand the other person and to build a relationship with them. You are more likely to be satisfied with a negotiated agreement with a friend than with someone you don’t know. Why? Because you trust your friend and believe that they have your best interest in mind.
Rapport changes the relationships among people. You act differently and have different expectations with a stranger than with a friend. Rapport creates trust, and with trust you are less likely to regret not getting the maximum out of a deal. Often, we give a better deal to a friend because they are our friend; we sacrifice for them. You have a long-term relationship with a friend. An interaction with a stranger may be a one time event.
NLP uses matching predicates, mirroring body postures, pacing and leading to establish rapport. The goal is to match the other person’s reality first before leading them to a new position.
By creating well-formed outcomes, using triple description, and establishing rapport, you can better understand what you want, what you can realistically get, and what the long-term relationship will be. These processes help keep you from making decisions based upon unwarranted optimism, greed, distrust, or insufficient information.
© 2001 All rights reserved. Terry Bragg, Peacemakers Training.