Sometimes the starting point for negotiations can be completely outside the anticipated ball park.
I was hit by an extreme anchor, a few days ago. Wasn’t anywhere near a boat, mind you, nor did I sustain physical trauma.
No, this particular type of anchor is a common negotiation-tactic, based on psychology you might recall from medschool classes in behavioral science, or even college. It uses a cognitive bias—our tendency to depend too heavily on the first information we have in a given situation. Subsequent info might be just as valid, even more so, but we cling to whatever we thought we knew first.
Metaphor: You’re out on a boat, and you drop an anchor. It doesn’t keep you rooted to a single spot; your boat can still drift in a radius with changes in wind and current. But, you’re not going far from wherever that anchor is sitting.
Suppose I’m negotiating with someone. We could be talking about compensation (salary, benefits like med-mal coverage, paths to partnership), responsibilities (hours to be worked, weekend shifts per year)…and, of course, this is not at all limited to radiology or even healthcare. One bit of conventional wisdom is that I should let the other party be first to make an offer, because that gives me an advantage: He’s establishing a “floor,” the absolute-worst outcome. For me, it’s all upside from there.
Related Content: No, You Can’t Have the Exact Same Thing
The disadvantage of that? I’m giving him the chance to drop an anchor. If he lowballs me, my brain is wired to be biased in his favor. It will feel like more of an uphill battle, even like I might be unreasonable, if I push too much higher.
Interestingly, cognitive science experiments show that anchoring doesn’t have to relate to the subject at hand. Just, as a “for instance,” suppose an employee is coming in to negotiate a raise…maybe from $35,000 to $40,000 a year. He makes some pre-meeting small talk: “Hey, have you been following that GameStop news story? One of those Reddit guys is up something like $31 million.” The mere mention of that big number tickles the boss’ brain, predisposing him to agree on more than he otherwise might have.
If you try anchoring, you’ll want to have done your homework so you can explain why your offer is supposed to be reasonable if the other side questions it. Also, you want to be sure that the number you’re offering is a smart one. If, for instance, an aspiring young attorney thinks he’s anchoring high by demanding his prospective firm pay him a starting salary of $140k, but he later finds out their standard first-year offering is $150k…well, in addition to missing out on some cash, he’s made himself look uninformed, even foolish.
I don’t rush to be first so I can drop an anchor. It’s very much on my radar that I don’t know all of the details in any given situation; at the very least, I don’t know what my negotiation-counterpart is thinking. Even if I have 100 percent of the facts on my side, s/he might not agree with those facts. I, thus, prefer to let the other side go first: Even if it means they can drop an anchor, they’re giving me free information in the process.
And sometimes, as I mentioned at the beginning of this piece, it’s an extreme anchor. For instance, going into an annual review for an expected raise and being told that there won’t be one, or even a reduction in compensation.
Related Content: The High-Stakes Poker Game of Job Negotiation
Christopher Voss, from whom I’ve gained most of my advances in negotiation-savvy this past year, describes being on the receiving end of an extreme anchor as “taking a punch.” He refers to a Tyson quote on the subject: “Everybody has a plan until they get punched in the mouth.”
Indeed, getting hit by an extreme anchor—especially if it comes from someone with whom you thought you were on good terms—feels an awful lot like getting sucker-punched. Wait, weren’t we working well together? Did I do something to deserve this? Is this person bargaining in bad faith? Trying to cheat me? Does s/he have no respect for what I’m bringing to the table and/or my understanding of the situation? How dare they!
Such a mental tailspin can play right into the hands of the extreme-anchorer. If you’ve been maneuvered to doubt yourself and everything you thought you knew about the situation, you’re a lot more liable to accept crummy compromises and generally not represent your own interests as well as you should.
I won’t rehash Mr. Voss’ teachings on how to take a punch—the guy wrote a great book, and has more than a little bit of worthwhile material online that I can strongly recommend.
Instead, I’ll share what I did after being hit by this extreme anchor: I took the punch. Rolled with it, by allowing myself to be disappointed, angry, and resentful. It’s helpful that we’re living in such a sequestered COVID world: The punch had been delivered by email, so I wasn’t sitting across a table from my anchorer or even on a live phone-call. I had all the time I could want to form a response.
Over a course of hours, the rawest of my emotions were done with. Far from gone; I’d had higher hopes for this particular negotiation, and instead of a climactic triumph, the not-movie I was living now more resembled a depressing tragedy. Still, no longer reeling from the punch, I was more capable of responding to it.
I mentally regrouped, confirmed for myself that none of the underpinnings of my own negotiation-stance had changed or been proven false. Resolved that the extreme-anchoring offer was a non-starter for me. Remembered that there were other parties with whom I could negotiate over the same thing; I’d do business with them if things failed to work out with the current one.
In other words, I cut the chain between myself and this particular extreme anchor. Sent a respectful, but firm, email in reply, in which I dismissed the anchor out of hand…and expressed my own offer, one I had put together weeks earlier, as if the anchor never existed. We’ll see what happens with that.
A parting thought, to folks who like the sound of extreme anchors and/or already use them: As mentioned earlier, they can make people angry, even permanently damage your relationships with them. No matter how your current negotiation works out, folks will remember if you made it unpleasant. Pursuing a slightly better outcome for yourself now might come back to haunt you later.
The best outcome for most negotiations is when both parties come away feeling that it was a “win-win,” and they look forward to working together more in the future. Paraphrasing another observation from Mr. Voss: Don’t bruise relationships with people who can hurt you, or potentially help you. In the fullness of time, just about anyone can.
Follow Editorial Board member Eric Postal, M.D., on Twitter, @EricPostal_MD
For more coverage based on industry expert insights and research, subscribe to the Diagnostic Imaging e-Newsletter here.