Leveling the Field: Why Negotiation Power Isn’t About Size

What if they are Goliath and I’m David? Remember, the other side is talking to you because they believe you can help them, no matter who they are.

Negotiation is a crucial skill for closing business deals, forming partnerships, and finalizing contracts. Whether you’re a beginner or an expert refining your negotiation skills, understanding leverage and power is essential.

With the right negotiation strategies, you can achieve better outcomes and avoid losing valuable opportunities.This guide will show you practical examples and proven frameworks for negotiating effectively in any situation. Even if you’re up against a stronger negotiator, these tools will help you secure better results.

How Does Negotiation Power Matter in Business Deals

People are often overwhelmed and intimidated by negotiation, especially when they feel they’re going up against someone with much more power or leverage than they do. Realize that the concepts of power and leverage only exist in the minds of negotiators. Professional negotiators understand that they can play multiple roles, and their approach to negotiation depends on the situation and the strategies of the other parties.

In negotiation, a party’s size, perceived strength, or status is irrelevant. All parties have power because any party can decide to walk away. People give away their power when they are needy or dependent on the decisions and actions of others.

Everyone is negotiating for a portion of the additional or excess value. This value is created only when all parties create an agreement together. If the joint agreement does not create additional value compared to maintaining the status quo, then there is no reason for a joint agreement.

What Is Negotiation Power?

People often negotiate about what they think they can get from the other parties.

• This is the wrong place to start. Before discussing what you want from the other side, consider starting the conversation by determining why they agreed to talk to you in the first place.
• You can assume they want to improve their situation by getting something from you that they can’t get alone or choose not to.  
• Before you start negotiating, you have to discover what they want. Understand the value it brings them if they get it. Also, consider what happens if they don’t get it.  
• Only then are you in the position to decide:
  • Can you help them get what they want?  
  • Do you want to help them?

People often negotiate from one of three positions.  

1. My position is strong. How can I use my status, size, resources, or other assets to force my counterparties to give me what I want?    
2. My position is weak. How much can I give up and still get something?
3. I don’t have a position. If the other side wants to talk to me, they must think I may be able to help them.  I don’t know if I can help by adding value for them or if I want to help them.

Once you decide if you can and want to help the other side, most people choose a negotiation strategy based on their perception of their bargaining strength.  

A negotiator at a big company may feel strong in their position. This is because they have many options from their purchasing, sales, and finance teams.  Just because they have options and means to pursue them doesn’t mean they automatically get a favorable joint agreement with others. They still must find and negotiate with willing and capable partners.

The same negotiator may consider themselves in a weak position because they require a raw material or service that is in limited supply but is needed to complete a product.  In this case, they may have to be creative and encourage alternative suppliers to enter the market or negotiate with their R&D teams to figure out a way to replace one raw material with another.

As you can see, the size of your company does not solely determine your negotiation power.  Similarly, suppose you are a small business with many competitors. In that case, your ability to generate excess value is a function of your differentiation from competitors and how your differentiation currently solves a specific problem.

Even though you are a small business, the counterparty requires your products and services to achieve their goals.  You deserve a share of the value that is created solely by your presence and contribution.  

Key Negotiation Principles Every Deal Maker Should Know

1. You have the right to make your own decisions – no one can force you to do anything 
2. You are negotiating for the share of the additional or excess value that is only created when each party contributes to the agreement.  If there is no agreement, then there is no excess value.  If there is no excess value when the parties work together, there is no reason for an agreement.
3. What you are negotiating for and how you choose to negotiate is your decision.  Your choice to feel powerful, weak, or neutral is independent of your relative size, status, or number of resources.  
4. The other side has options about how they negotiate. But they are negotiating because they think you can help them get something they can’t or choose not to get on their own.  

OmniLevel Proven Negotiation Strategies

1. Describe what happens if YOU do not negotiate an agreement with a specific party. If you don’t negotiate, the probability of maintaining the status quo is 100%, but the probability of achieving your best alternative to a negotiated agreement (BATNA) is <100%. This is because you still have to negotiate a contract, and that outcome is never certain.
2. Describe what happens if THE OTHER PARTIES do not negotiate an agreement. Then the probability of them maintaining their status quo is 100%.  Similarly, the probability of them achieving their BATNA is <100% because they, too, have to negotiate an agreement.
3. Describe what happens if you reach an agreement. What is the excess value over the Status Quo and probability-adjusted BATNAs for all parties?
4. Choose how you intend to negotiate.  I suggest option #3 as it gives you the best chance of getting what you deserve, protects you from being taken advantage of, and will not damage any business relationships.  Plus, it is consistent with the OmniLevel Framework.
5. After discovering what the other parties want in the negotiation, consider sharing your view of the excess value created by working together. Also, explain that all you want to do is negotiate a fair distribution of the value to all parties. This will allow you to frame the negotiation around the distribution of excess value created, rather than worrying about how much you or others will lose. 

Frequently Asked Questions:

Q: What do you do when your respected counterparty insists you agree to terms that don’t make sense to you?  Negotiation is the process of creating lasting agreements between parties, where each party has the right to make their own decisions. 

If you truly internalize this definition, you always have a right to decide to say no to the other side if it doesn’t suit you. Ask them how they would feel if they were asked to do what they want you to do.

Or you can say, “What I’m trying to do is give you what you want. But under those conditions, I’m just not able to do it the way you deserve. Where do you suggest we go from here?”

Q. What happens when someone tries to go back on a decision made during the negotiation process?

First, don’t be surprised if this happens.  Agreements are the culmination of all the decisions made during the negotiation process. These decisions can be modified at any time before the final agreement. 

In practical terms, most decisions made during the negotiation stick until the end. But some don’t stick.  When your counterparty elects to change a decision, don’t be surprised. Consider how their “changed decision” impacts your decisions and communication throughout the negotiation. 

You, too, have the right to change your decisions if their change impacts you.  For example, if they change one agreement term, like the price, you should first discover the reason for their change. Then decide to accept, reject, or conditionally accept it.  A conditional acceptance is: “I can accept your request to change the price if you agree to increase the volume.”

Q. What do you do when the other parties insist on getting more than 50% of the excess value?

Your request for 50% of the excess value is principled and fair because there would be no excess value if you were not part of the agreement.   Before deciding your next step, confirm that your counterparty agrees to the total value of the deal and that they trust you to deliver your obligations when all parties participate. Then, confirm that they truly have the authority to commit to the agreement. 

Only after they confirm the value under negotiation and their authority to commit to the deal, can you accept or reject their request to get more than 50%.

Best Practices:

Never forget that the other side is talking to you because they think you may be able to help them… no matter who they are.

Choose your position about how you will negotiate. Remember, don’t let others dictate the structure and rules of the negotiation process.

But when deals stall – when communication stops, emotions rise, or surprise demands emerge – even experienced negotiators can find themselves stuck.

That’s why we’ve identified the five specific roadblocks that kill most stalled deals and developed practical frameworks to overcome them.

Our time-tested methods have helped organizations secure over $1.1B in successful outcomes by transforming complex conversations into lasting agreements.