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December 7, 2015 The QuintonNegotiating the Trade Process
In-season trading tends to be pretty straightforward: The buyers buy from the sellers, the sellers sell to the buyers. Consequently, when a player is made available in-season, there are usually a few suitors that logically want to acquire that player. During the offseason, though, the trade markets tend to be more wide open. When a player is made available during the offseason, there are more teams than not that might make sense as viable trade partners. With the wild, wild west that seemingly is the fantasy baseball offseason (combined with our illusions of the wild west), I have found that this is the time that we are most likely to see a deal we think is done get pulled out from underneath our feet. Put differently, this is the time of year when we are most likely to think we are close on a deal when we are not close at all. In the December 2015 issue of the Harvard Business Review, Deepak Malhotra writes in ‘Control the Negotiation Before it Begins’ that, “Some of the costliest mistakes take place before negotiators even sit down to discuss the substance of the deal. That’s because people fall prey to a seemingly reasonable—but ultimately faulty—assumption about deal making. Negotiators often take it for granted that if they bring a lot of value to the table and have sufficient leverage, they’ll be able to strike a great deal. While those things are certainly important, many other factors influence where each party ends up.” Malhotra goes on to explain that many of the conversations (or lack of communications) and planning prior to what most would consider to be the actual negotiation will largely influence the outcome of the negotiation. Today, we will take a look at some of the recommendations Malhotra makes and try to translate them to help us be more successful when competing in fantasy baseball. Malhotra writes, “Substance is the terms that make up the final agreement. Process is how you will get from where you are today to that agreement. My advice to deal makers: Negotiate process before substance.” A reasonable question/complaint: It is often hard enough to get our leaguemates to engage in trade talks, and now we are recommending that we negotiate the process of the negotiation before we even begin to talk trade? That is fair and this may certainly be a piece of advice that, when applied to fantasy baseball, works better in theory than in practice. That said, as we have mentioned in previous articles, just because something does not work all the time, or even most of the time, does not mean that it cannot help us when applicable. So, how do we go about negotiating the process? Malhotra recommends asking questions about process, such as “how much time [do they] have to close a deal?” or “What factors might slow down or speed up the process?” As simple as this recommendation might be, it is an important one for us as fantasy baseball participants (or really anyone negotiating anything) because it is very easy to become completely consumed with the substance, especially during complex negotiations (such as ones dealing with high amounts of uncertainty like fantasy baseball trades). While questions about process might seem like time-wasters that threaten to sidetrack negotiations, they can (speaking from personal experience) save time in the long run by (i) aligning the expectations of both parties and, more importantly, (ii) killing trade talks that are bound to go nowhere sooner rather than later. Discussing process before or in the early stages of the negotiation can also be particularly helpful when negotiating with a party for the first time, when each party’s assumptions about the negotiation process are most likely to be most different. For our sakes, this is not so much about negotiating a favorable process (as the recommendation’s title would suggest), but rather about having a process under which both parties tacitly, or otherwise, agree to operate. The next trick is then finding such a process that will work for every trade and trade partner. Back to Malhotra, “Normalizing the process entails discussing, in advance, any factors that might cause the other side to question your intentions or ability or to doubt the likelihood of a successful outcome. You might explain typical barriers that need to be overcome, moments during the process when it’s common for parties to feel anxious or pessimistic, events that might delay progress, and the difference between disruptions that are commonplace and easy to resolve and ones that are more serious.” Before continuing, it is important to note that while at first (in the article) it appears Malhotra is using normalize in the “to make conform to or reduce to a norm or standard” sense, the above quote indicates that he is actually using it in the “to bring or restore to normal condition” sense. This is a good thing because a cookie-cutter negotiation process is probably not going to be very successful given the vast array of negotiation styles and league norms. Understanding the negotiation from of your trade partner’s point of view and helping your trade partner to understand the trade from your point of view can go a long way here. While this involves understanding circumstance as discussed previously, it also involves understanding the negotiation style and process of our trade partners. Example time: Fantasy participant A likes to ask for as much as reasonably possible to start a negotiation. Over the years, she has found that she has occasionally left value on the table by not asking for enough. That said, participant A expects her trade partners to also ask for as much as reasonably possible and fully expects to negotiate a compromise somewhere between those two points. Conversely, fantasy participant B likes to “cut right to the chase” and will abandon any trade talks where there is an obvious attempt at anchoring. Over the years, she has found that she has given up too much in trades where she allowed her trade partners to anchor the negotiation. Both of these negotiation styles are completely reasonable, but there is very little chance these two participants would trade with one another unless they understood one another’s trade styles. Finding a process that works with each trade partner is thus hugely helpful if we do not want our trade options to be restricted by negotiation style. Moreover, the only way these participants would find such a process is if they were mindful of needing such a process. Again, this requires dialogue beyond player valuations, team needs, and strategies. While it is easy and fun to spend all of our time thinking about players, picks, future trade markets, and strategies, putting effort into the negotiation process can be hugely profitable and figures to be one of the few spots in fantasy baseball where low hanging fruit remains. We are never going to be able to trade with everyone or make every favorable trade, but the more opportunities we give ourselves to make these trades, the better odds we give ourselves for success each season.
Jeff Quinton is an author of Baseball Prospectus. Follow @jjq01
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