Job Offer: How to Snatch Defeat from the Jaws of Victory

Let me introduce you to two negotiators. I’ve changed all names to protect the not so innocent parties.

First, there’s Matt Bishop, a freshly minted MBA from an Ivy League school (not my own, as it happens). And across the table from him is Annette Cummings, in charge of hiring at First Arundel, a prestigious consulting company.

Matt and Annette have two things in common. First they both wanted Matt to take a great job at her firm. Second, they're both skilled at messing up a deal, though in different ways.

As Matt tells the story, he breezed through the interviews. It was obvious that Arundel was eager to sign him—so much so they told him that he could choose whichever of the three open positions he liked best. Each was in a different location and each involved somewhat different responsibilities. The compensation packages varied, as well.

All that was left was nailing down a specific deal.

Matt says, “I told them repeatedly that I thought all the offers were fantastic.” In fact, when I talked with him later, he used that adjective "fantastic" at least six times.

But then he explained that after extolling each offer, he would ask for even more. First it was a bump in salary. Then a fast track for promotion. He even asked for prepayment of a performance bonus.

Matt thought that his conversations with Annette were going great. “Then suddenly,” he says, “there was radio silence." She didn’t return his calls or answer his emails.

In hindsight,he realizes that he overshot his target. As I wrote in a post several years ago, you never know how hard you can push in negotiation until you push too far.

But from what he told me, Matt made another mistake that compounded his problem. Listening to his story, it sounded like he was talking out of both sides of his mouth. He was sending Annette and her colleagues mixed signals.

If you tell somebody their offer is fantastic, the next thing you say better be, “Thank you! We have a deal.” If you keep haggling instead, people are bound to question your sincerity and wonder if you’re ever going to quit asking for more.

I think Annette stumbled, as well.

Offering someone multiple options should increase the size of the pie. That's the theory at least. It’s supposed to surface another party’s priorities and trade-offs. But there’s powerful research that shows that when you give people things to choose among, the odds greater that they won’t pick any of them. Barry Schwartz’s book The Paradox of Choice makes this powerfully clear.

In negotiation there’s a time to expand the possibilities. But when you want close a deal, you’ve got to narrow them down.

If you’re deft, you may be able to have it both ways. Annette might have told Matt, “Let’s focus on the San Francisco office and find a package that would work for each of us there.”

Then having reached agreement there, she could have followed the advice of my late colleague Howard Raiffa and engaged in “post-settlement settlement.”

With one bird now firmly in hand, she and Matt could have revisited the other positions, with the explicit understanding that they’d stick with San Francisco unless they found another outcome that would have been even better for both of them.

But unfortunately, that's not how it played out and Matt and Annette have gone their separate ways.

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Professor Michael Wheeler’s Negotiation Mastery course on Harvard Business School’s HBX platform has been taken by managers, leaders, and students in 80 countries around the globe. The application deadline for the next wave is December 31, 2018.