AI meets Negotiation Expertise
The art and science of negotiation is undergoing its biggest transformation in decades.
Our research, involving 120 experienced negotiators in complex business deal simulations, demonstrates that LLMs fundamentally change negotiation dynamics.
When only one party has access to LLM support, they achieve notably better outcomes: buyers gained 48.2% and sellers 40.6% more value compared to their counterparts.
Even more compelling, when both parties use LLM support effectively, joint gains increase by 84.4% compared to traditional negotiations.
However, achieving these results requires mastering both negotiation fundamentals and LLM capabilities. Neither alone is sufficient.
AI meets Negotiation Expertise
How Training Reduces Friction and Improves AI Adoption
In this second of three episodes based on my conversation with Professor Remi Smolinski, we share how targeted training and coaching reduce friction and build the confidence teams need to adopt AI in everyday negotiations.
If you enjoyed this episode, please leave a review and check out our website: www.negoai.ai
I welcome any suggestions, questions, or comments at yrana@negoai.ai
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[Remi]
Yes. So, we know that, currently current, state of development, in terms of applying or using AI in negotiation sort of, is at the crossroads. Or maybe these are two parallel paths. And so one path is the assistance path, and it's where it's the human that calls the shots, that controls the negotiation process and ultimately conducts it, and it's and AI's, objective is to support this process. And there's the other path, where companies out there create, autonomous negotiation agents that are able to handle spontaneous, re negotiation situations, based on certain training material and the objectives they are supposed to achieve, and sometimes also enriched by other historical data. which of these two paths, Yadvinder, is the one that you find more appealing?
[Yadvinder]
I'm leaning towards the augmenting side. It means, I create these workflows that can, help negotiators to better prepare for a negotiation. In six, seven minutes, they get a full report. They are able to enter the negotiation, but they're also able to have a coach next to them during the negotiation. but the negotiation itself is conducted by the human. So it's it's a human, AI combination that I find as of today is the strongest. you know, there are different theories about, the AI, generative AI, large language models, and one thing that I find really relevant is, the theory of, some scholars that are saying that large language models with... As of today that are predictors, will not lead to general intelligence as everybody's hoping, and maybe Sam Altman and others are hoping. so as of today, we still need humans. And I re I really like that side of the theory. I'm not really sure if it's true or not, but based on my limited experience and my limited knowledge on AI, I think, gearing towards the augmenting side, is the path I would like to pursue and this is what I'm pursuing. Even though I'm very interested in autonomous, AIs negotiating by themselves, because it's, it is fascinating. It is fascinating, for sure.
[Remi]
So let's start with those assistant systems. I know that, many companies out there, are building those, and you've built, yours, combined with an extended workflow, right from analyzing personal profile of negotiation, of the negotiation partners, all the way to suggesting me s suggesting negotiation strategies, to best deal or that me best match that to type of profile and that type of partner and the type of setting. And I was wondering, in terms of, in terms of the support systems, yes, what is your experience? are the recommendations usually followed, or do humans override the recommendations because they think they know better?
[Yadvinder]
most of the time, they follow the recommendations. even though not e everybody in the team will use AI to gather, information for the preparation phase. so I think training becomes fundamental. a lot of people are in some way rejecting AI, because of different reasons, and training and showing them how to use it in a very simple way, it's the best, it's the best way to get them involved. So and the rejection percentage, reject... The odds of rejection is really lower if they feel more comfortable in front of the tool. so making it very easy to understand, giving them step-by-step instructions so they become more comfortable, it's... Is very important. And, for example, I recently, worked with a company where sales, teams were not getting margins. The margins were decreasing because price was getting the real issue. The value proposition was not there, so we created these two agents in order to create a value proposition and to defend it. But at the beginning, it was very hard for them to use it. So I ha wh when I work with companies, there is the tool, yes, there is the workflow, but I also have to provide them with the coaching and the training. And that becomes, I think, the most important thing, despite the tool. Despite the tool, yes. So...
[Remi]
Please go ahead.
[Yadvinder]
To answer your to answer your questions, it, I have to give them, confidence that they are using a tool and it's not the tool using them.
[Remi]
That's, that's a great summary because, I think it goes along with, what we know about us, humans using complex, black boxes. Yes? So if we, if we cannot understand the mechanism, our trust in its, in its recommendations, deteriorates. Yes? So, I like the trick or it's probably not a trick, it's a part of the design, in your, in your, in your engagements, in your consulting engagements, that you first, try to explain what the black box, looks like, what it does, what it consists of, and how it can be used, how it can be helpful, to potential nego potential users, slash negotiators. Because I think it takes away the fear. Yes? if we un if we understand how things work, we are probably more likely, more likely to use it, and especial espe above all, especially, we are more likely to, rely on its recommendations, I think, right? So that's, that's probably the core, I can imagine, right? So comple to reduce the comple to increase trust in the recommendations by helping, users understand its complexity.
[Yadvinder]
I completely agree with you. There are two reasons for that. First of all, AI adoption is change management at the end, if you think of it. Second, because I deal mostly with the European companies, Europe is getting older and older, and, so I think there is also more resistance to change because we're getting older. And I think these two reasons combined require much more, careful focus on how to reduce the barrier.
[Remi]
Yes, we've tested, we've tested the assistant systems in our negotiation competition a few years ago, provided by an Austral Australian AI startup called Uncapped, and, we've noticed that, indeed not every human negotiator took advantage of free help that was offered by the, by the AI systems. And some of them simply said, "Well, I'm fine." Yes? "I'm, I'm an expert. I'm a negotiator. I'm here to compete. I'm here to test myself. So I do not, really need any support from a machine that I don't understand." But, you might be right, I mean, there may we might have, we sh we should have, we should have, offered, training sessions first, and explanations on how to use the mach how to use the assistant systems, that we offered to increase the incentive and reduce, the barriers, of usage. Okay.
