The Role of Luck in Negotiations

Almost 30 years ago, I was sitting in my office when a senior partner at the law firm stuck his head in my door and asked if I wanted to join him that day in judging a negotiation competition at Arizona State University’s (ASU’s) College of Law. A senior associate was scheduled to help, but she had a client emergency.

I jumped at the chance, as I had really enjoyed my law school negotiation course. I met ASU Law Professor Gary Lowenthal at that competition (he taught ASU’s negotiation course) and that led to him hiring me to teach ASU’s negotiation course several years later. And that ultimately led to my spending the last 25 years studying and training others to more effectively negotiate.

“Wow,” you might say, “how lucky that the senior associate had a client emergency and you were in your office and available!” I agree! Luck literally changed my life and career.

Luck similarly plays a significant role in almost all negotiations. As Harvard Business School Professor Michael Wheeler notes in “The Luck Factor in Great Decisions” (Harvard Business Review 2013):

“Philosophers, political theorists, and strategists have long acknowledged the large role that luck plays in every aspect of our lives. Even Nicolo Machiavelli, the cataloger of each and every lever that a prince can pull in the pursuit of power, acknowledged that ‘I believe that it is probably true that fortune is the arbiter of half the things we do, leaving the other half to be controlled by ourselves.’”

Knowing this, what can we do to maximize our ability to take advantage of good luck and minimize the problems with bad luck.

1. Bring an open and curious attitude to the table

British psychologist Richard Wiseman found, in a series of studies, that “the way [those that self-identify as lucky] think and behave makes them far more likely than others to create, notice, and act upon chance opportunities.” As Wheeler notes, “casual encounters become a platform for luck when people are curious about others and open to learning about their interests.”

Likewise, those who consider themselves unlucky tend to do the opposite and aren’t as open to new experiences. If this describes you, and some of this is hard-wired, push beyond your comfort level and engage your curiosity in negotiations.

I might have told this senior partner I had too much work and couldn’t join him at the competition. Luckily, I said yes.

2.  Be flexible and ready to capitalize on “lucky” opportunities

Wheeler in his article notes that Microsoft co-founder Bill Gates almost missed his big shot. When IBM first came to him and asked him to develop an operating system for a new line of computers, Gates told IBM he didn’t have the experience and referred them to another firm, Digital Research.

IBM tried to hire Digital Research. But it couldn’t reach a deal. So IBM – luckily for Gates – came back and hired him. Gates then secretly bought, on behalf of IBM, the rights to an existing operating system and modified it to become the DOS program. DOS drove Microsoft’s exponential success.

Luck played a huge role. But it wasn’t enough. Gates also negotiated what appeared to be a great deal for IBM. Except for one provision – Microsoft only gave IBM nonexclusive rights to DOS, meaning Microsoft owned the program and could license it elsewhere. Very smart negotiation move.

Bottom line: Gates had the background and expertise to capitalize on his lucky opportunity. And he was flexible enough to take advantage of it. Luck opened the door. Gates walked through. The rest is business history.

3. Consider yourself lucky

Let’s say two sales professionals are negotiating with two potential customers. Jane considers herself lucky and John figures he never gets the lucky bounce. Neither Jane nor John can close their deals. How will they act differently next time?

John may figure he got unlucky with a bad prospect and bring a bad attitude to the next one. Jane, by contrast, might think that prospect could have brought major problems to her company and consider herself lucky he didn’t sign. Next time, she’ll adopt the same positive attitude. That attitude will increase her likelihood of closing that next big deal.

Attitudes toward luck can be a self-fulfilling prophesy – for good or bad.

4. Recognize luck’s role in debriefing

Regular readers of this column know the crucial nature of debriefing after every major negotiation and identifying what worked, what didn’t and how you can improve.

Effective debriefing recognizes the role luck plays in your negotiations. For instance, if luck caused your deal to submarine after a market crash because your leverage substantially weakened, and you recognize this, you will not conclude you made a mistake and wrongly change your strategy next time.

Latz’s Lesson: I would love to always be in the right place at the right time. But you can’t control luck. You can control, however, your open and curious attitude, flexibility and ability to capitalize on unforeseen opportunities, “lucky” feelings, and debriefing.