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1-Page Summary of Leverage
A Lever Moves Objects
Every day, you negotiate whether you realize it or not. Negotiation starts well before the actual negotiation and continues after a deal is reached. Whoever has more power or influence has leverage over the other person in negotiations. There are two kinds of leverage: social and economic. Social leverage refers to something that would cost someone a lot if they don’t reach an agreement, whereas economic leverage refers to costs associated with reaching an agreement (such as money). To determine who has the most leverage in a situation, one must understand what would cost each party the most if they can’t reach an agreement.
What Kind of Leverage Do You Have?
Leverage is not fixed. It depends on the situation and the social contract between people involved in a negotiation. People can have leverage over others, but it’s dynamic and changes all the time because of new information that becomes available. Leverage has four types depending on how aware both parties are of their leverage in a given situation.
There are two types of leverage: active and blind. Active leverage is when both parties recognize that one party has the upper hand. Blind leverage is when one party doesn’t realize they have the advantage, but in fact do.
When you have leverage, ask yourself three questions: 1. What do I want? 2. Why should the other party negotiate with me; why should they negotiate at all? 3. What are my alternatives?
Who’s Got It Now?
Certain things can tell you who has the upper hand in a situation. If you ask for something, or contact someone first, you’ve given up some leverage. You’ve signaled that they have something that you want and they may make it difficult for you to get what you want because of this. They may even force your hand by making it inconvenient for you to meet with them (such as having an assistant screen your calls). However, if the other person dresses formally while “you” are dressed casually, then “you” have more power than them; if he/she hurries to pick up the check at lunch when “you” don’t do so quickly then “you” have more power than him/her.
People with leverage signal it in many ways. They take up more space and sit at the head of a table, or they use their body language to show that they have power. Some people are born into positions of power, but most gain it over time by developing skills and becoming influential leaders. In any society, older people are often seen as having more authority than younger ones, while men usually have more authority than women.
Controlling Your Leverage
Since leverage is always a matter of perception, you can manage it. You can increase your own leverage by focusing on the other person and using these tactics:
If you want to get a job, figure out what the employer wants and present your skills accordingly.
There are a few ways to change the way people think or act. One is by changing what they need or want, which can be done by appealing to their underlying needs and making them like you. Another is by changing what’s available, which can be done through legal means such as buying out your competitors or destroying them in court.
When you want to reduce the leverage of someone else, you need to look at his or her wants and needs. However, rather than focusing on that person, focus on yourself. * Pretend that you’ve lost interest – Point out flaws in what he or she is offering. Control the interaction’s pace by moving it forward quickly when necessary and slowing it down if things are getting too heated. Act as if you have more important things to do—for example, let your eyes wander around the room if you’re in a store.
