Opening offers may backfire if …
Opening offers may backfire if they are too much like “shots across the bow” or like “gorilla chest thumping.”
Usually demands at the outset of a negotiation have very little to do with the numbers that bring about actual resolution. But they are part of the ritual. Most mediators know this.
People have to start somewhere so they have room to make concessions.
Some negotiators make mistakes in their opening demands however, i.e.:
∙ when they believe that their opening demands must constitute a warning to the other side, like “a shot across the bow.” (see, e.g, http://idioms.thefreedictionary.com/a+shot+across+the+bow)
∙ or when they believe that, like gorilla chest thumping, their opening demands must display their prowess or their dominance or mark their territory (see, http://wiki.answers.com/Q/What_does_it_mean_when_a_gorilla_beats_its_chest)
∙ or show that they are threatened or a threat to be reckoned with (see, http://www.primates.com/gorillas/gorilla-info.html).
To help soften opening demands that the other side perceives as outragious or insulting (and nearly everyone sees them this way), I suggest that the opening demand is like the MSRP (the Manufacturers’ Suggested Retail Price) of the settlement. Some people giggle a little and then feel better knowing that it is only the sticker price and that the settlement will be some other number. This allows people to reject the opening offer and make a counter offer.
However, if the opening demand is “just too much” for the other side, the risk is that the other side will not counter, but simply pack up and leave.
I saw that happen recently; the other side just said “no” and left. The party that demanded “too much” was stunned.
It is important for counsel, and sometimes the mediator him- or herself, to caution the negotiating party, to make the opening demand more “attractive” to the other side, to draw the other side into the negotiation if possible.
Sometimes this requires that the demanding party make an initial concession that shows the other side their willingness to compromise.
In a mediation training course long ago, I learned of a tale of a certain mediator from Texas who said, as to opening offers, “you have to hang the meat low enough for the dog to jump up and get.” Who knows if someone truly said this; I just like the story and use it.
But if the negotiating party wants to “chest thump” or “send that warning shot across the bow,” it is their privilege, even if it backfires on them.