Magazine

The Psychology Of The Deal


By Kerry J. Sulkowicz, M.D. I work in the investment business and want to understand more about the psychology of making deals. I notice that even seasoned negotiators, who have a knack for figuring out what makes a person tick, sometimes get it wrong. Can someone with psychological training analyze a target at a distance to provide an edge in talks? — A.G. Newmyer III, Palm Beach Gardens, Fla.The answer, in my view, is yes. My colleagues and I have been helping clients develop psychological profiles of executives involved in high-stakes mergers-and-acquisitions talks and other negotiations for many years. We find that having an understanding of the mind of the person sitting across the table can make all the difference.

Business talks are essentially psychological processes. Nobody ever says yes to the first offer. Why? Not just because it's bad business but because to do so would show weakness and submission, intolerable feelings for most people. When seasoned negotiators "get it wrong," it's often because they've miscalculated the other party's emotional attachment to what they're giving up, whether that's something they own or money itself. Or they assume their approach will lower the other party's resistance to saying yes, when in fact it increases it.

Applying dynamic insights, provided at a distance by a trained clinician, can unlock even the thorniest of business interactions. An analogous situation is that of a patient who describes his wife to his psychoanalyst. The analyst may never meet the wife, but as the analyst speaks with the husband, they jointly develop an understanding of what makes the wife tick, and this, in turn, can help the husband relate to her better.

Now substitute CEO A for the husband and CEO B (the potential acquiree) for the wife. CEO A has various interactions with CEO B in meetings, at industry events, on the golf course, or through phone and e-mail contact. In discussing those interactions with me, we can figure out how CEO A can better size up CEO B. The psychological portrait that emerges, while inevitably imperfect, is often good enough to make a difference in negotiations.

Your question touches on an interesting controversy: Psychiatrists got into trouble when one of them made a damning diagnosis from afar of Barry Goldwater during the 1964 Presidential race, deeming him unfit for office because of what was considered his paranoid behavior. The subsequent backlash caused the pendulum to swing too far in the other direction, with shrinks avoiding such bold pronouncements ever since.

That's too bad. A psychoanalytic assessment, even of someone you've never met, has a positive role to play not just in personal lives, but also in business dealings and even in helping to choose a President. Kerry J. Sulkowicz, M.D., a psychoanalyst and founder of the Boswell Group, advises executives on psychological aspects of business. Send him questions at analyzethis@businessweek.com


Soul Searcher
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus