First of all, there is a time and a place to make threats. Nobody can afford to toss them around like rice or confetti at a wedding unless you’re homeless and have nothing to lose. The obvious reason for this is that threats have to be credible in order to work. And in order to gain credibility, you should be in a position to follow through. If you want to know how to make threats, it also helps to have an intimidating disposition and a history of collecting on your threats. In other words, don’t issue empty threats because no one will feel threatened. Not only that, if your strategy backfires and you abort the threat, it will tarnish your reputation with colleagues and clients.
So, then, what kind of situation calls for a threat? Let’s say you’re in a negotiation with some kind of business associate. Maybe your client has been doing business at a pretty friendly price but the situation has changed. Now, all of a sudden, he needs you like a hit man needs a target. Naturally, your goal is to make your associate pay the financial price for his desperation. So when the time is ripe to raise the stakes, the well-timed threat is your trump card. It can knock your adversary off balance, leaving him stumbling and mumbling in no man’s land. Here are some tips on how to make threats.
The Potential Threat
Before you issue a threat, the first question to ask yourself is where your reputation stands with the competition. Let’s say you’re bidding for a new contract that will bring your company some serious dough if you get it. However, how much do you know about the relationship between your position and your competitor’s position? In other words, are you the underdog or the front runner? Not all is lost if you’re the underdog, you just have to know where you stand. Once you realize you’re the underdog, you’re at least in a position to tailor a more creative negotiating strategy since you likely can’t offer the best price.
Next, in any kind of negotiation, dialogue is inevitably clouded by potential threats on both sides. Typically, one party is looking for some type of service, while the other party is some type of service provider. Again, your reputation will have a big impact on negotiations because fear will factor into this daring game of chicken.
To maintain the upper hand, it is a great advantage to have a reputation that causes fear in your opponent. If, on the other hand, you have the reputation of being a pushover or a nice guy, forget about it. You can be a nice guy at home or in the lunch room, but when you deal, people better think you’re a hard ass or a loose cannon.
Use Ultimatums
On the subject of fear, Machiavelli wrote in his notorious book The Prince that “it is much better to be feared than loved.” The reason fear works is that, in business as in politics, people must fear your ability to harm them. If they don’t, you have no foundation for manipulating your opponent’s strategy.
The potential threat, then, is that hypothetical “thing” you can threaten to take off the table. And if your opponent fears losing that “thing,” and you have the will and the power to follow through, the ultimatum is like a trick up your sleeve.
Make a Credible Threat
Once you decide to go all in, if you want to know how to make threats loud and clear, you have to make them credible. Because you’re trying to intimidate your opponent by daring him to change his course, the threat has to be believable. If, for example, you threaten to take your business elsewhere, or you threaten to incite a bidding war in order to drive the price up and stick it to your competitor, you should have some serious interest in following that course. Then you need the balls to follow through. After all, the best way to stab your reputation in the back is by bailing out on a threat.
Since threats are designed to keep your opponent off balance, use any means available to demonstrate that you’re ready and willing to follow through. Threats can’t be static, so you need to follow up with a little trash talk, or a few reminders that you’re committed to your ultimatum. Having said that, you can’t get carried away while wheeling and dealing. The trick is to make threats that seem a little irrational, since they raise the stakes while reminding your competitor. In other words, your nemesis needs to be tempted to see your raise and find out if you’d been bluffing all along.
If you’re on the fence but want to know how to make threats, ask yourself a few questions before opening your mouth. Can you afford to lose a few dollars for the sake of principle? Do you have any “reputational capital” that you can lean on? Will your threat convince anyone that you have genuine interest in following through? Since threats can backfire in unexpected or unintended ways, do you have contingency plans with the right people on board? Finally, if the situation calls for a few backups, have you got a few good fellas who know the situation and know their roles?
Your Biggest Threat
While most of you may not play in such high stakes leagues that you need this type of elaborate plan, the principles of negotiating with threats can be widely applied. If you’re a supervisor in charge of a bunch of lazy pencil pushers, a threat can work as well as a reward, both are tools to improve cooperation or sharpen focus. If you happen to be on the receiving end of a threat, be thankful fortune made you a legit businessman who can threaten right back without fear of being summoned by the long arm of the law.
the audacious truth
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