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Taming Your Competitive Arousal

Prof. Deepak Malhotra
Harvard Business School
Author of “Negotiation Genius


On today’s show, we talked about the perils of Competitive Arousal, that adrenaline-fueled emotional state that takes a hold of us in the heat of competition. There are four primary

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factors that create this desire to “win at any cost”. Let’s go over some of the things you need to do to counter these forces:

1) Combating Time Pressure. The time pressure associated with a clock that is ticking down can cause us to narrowly focus on the situation we are in. Instead of thinking carefully about all of the options available to us, we get fixated on simple strategies that have worked in the past—or which are simply a continuation of the path we have taken so far. What can you do? It is wise, in the heat of competition, to try and give yourself more time to make your decision. Ask yourself: is it really necessary for me to make this decision (e.g., to increase my offer) this minute or this hour? Can I ask for more time? Can I at least take a little break to sit down and go through all of my options? Do what you can to avoid making a quick decision…think it through!

2) Diffusing Rivalry. When we see our competitors not just as opponents but as enemies, we often lose sight of our real objective (e.g., to make wise decisions or to make as much money as possible). Instead, a new objective emerges: to beat the other side, no matter what the cost. What can you do? Avoid making overly simplistic judgments regarding your opponent. Don’t see them simply as “evil”, “irrational”, or “incompetent”. If the perceived rivalry (and perhaps anger) is too much to bear, consider bringing in someone else from your team or organization to take over the decision-making. The decision should be made by someone who can evaluate the situation more objectively, and who is not overcome by rivalry-fueled competitive arousal.

3) Dimming the Spotlight. When an audience is watching and evaluating our every move and decision, it is often hard to decide that a change of strategy is needed. (“Will they think I’m cutting and running? Will they think I’m a quitter?”). What can you do? Some organizations have found that their sales persons feel that they are too much in the spotlight: when negotiating a deal with a potential client, they give away too much value and too many concessions—whatever it takes not to lose the client to the competitor! No one wants to walk into the next sales meeting being the one who lost the big account. One solution some organizations have implemented is to take away some of the spotlight. If a large client is pushing for huge concessions, the responsibility for that negotiation is given to an entire team, and not just the primary salesperson.

4) Managing the Stakes. When millions or billions are on the line, even the most experienced executive or manager can choke. What can you do? Some publishing companies have noticed that editors, when they are negotiating with an author, will sometimes agree to an extremely high advance on royalties. Because editors are disproportionately rewarded for signing a future bestseller, they often dip deep into the corporate coffers in order to make sure the author does not sign with a different firm. As every editor plays the same game, too much money flows out to too many authors, some who have little chance of becoming best sellers. What some companies have done is to place a cap on the advance on royalties that an editor can negotiate (often it is close to $250,000). The head of the company must approve any higher amount. This parcels out the negotiations such that no one editor is facing sky-high stakes.

Above all else, it is important to anticipate when these factors might arise, and to take steps in advance—either individually, or as a team, or as an organization—to mitigate their potentially dangerous effects.