Experience is often thought of as a “knowledge advantage” that directly helps people make better decisions, but there is also a hidden, more subtle value — it helps us identify better decision-making tools in the first place.
Whether you rely mostly on popular, academic, or institutional knowledge on the art of negotiation (or even the Envoy insight blogs!), you will have likely realised by now that there are far too many different ways to make a decision to possibly use all of them in a single negotiation. It would simply take too much time, and at a certain point that time would be better spent on further human interaction or research rather than refining your decision-making tools even further.
Luckily, there is a shortcut.
Human intuition and experience can go a long way towards selecting only the most appropriate decision-making tools for the negotiation at hand. This typically works through our mind (consciously or unconsciously) picking out prominent themes and traits of the people, solutions, and priorities we are dealing with, and then selecting the best possible, known decision-making tool to work through those themes.
For instance, in negotiations where some component of the deal (a person, company, industry, etc.) is liable to be highly volatile, an experienced negotiator or industry expert may quickly identify that risk analysis should be part of the conversation. Whether this takes the formal shape of some kind of risk analysis matrix, or the informal structure of a simple sentence (“Jim’s Farm is on some pretty low-lying floodlands and it’s coming up to monsoon season, we’d better get a great price from him to justify potential losses”)… risk will become a relevant factor in the decision-making in ways that, say, utility curves and game theory will not.
Experience doesn’t just help you weigh up relevant information better. It also helps you figure out what relevant information or factors should be fed into that decision-making process in the first place, and determine how you should weigh things up before you actually begin that process.