Nice people make bad deals. They don't have to.

You have probably said yes to something you knew was wrong. It might have been a supplier's price that was too high, a deadline your team could not meet, or a client request that crept into the scope for nothing. Each time, saying no would have felt worse than the deal itself.

Most leaders know the feeling. The research suggests it is partly a matter of personality, and that it can be managed without changing who you are.

The trait that wants everyone to be happy

Psychologists describe personality with five broad traits. One of them, agreeableness, covers how warm, cooperative and trusting a person is, and how keen they are to avoid conflict. Highly agreeable people are easy to work with and good for teams. They are also, the research suggests, at a disadvantage in one particular kind of conversation.

Where it costs you

A key study came in 1998. Researchers ran two negotiation exercises. In the first, the two sides were dividing a fixed amount, as in most price or salary negotiations. In the second, both sides could gain by finding a deal that suited each of them.

In the fixed-amount negotiation, agreeableness was a liability from start to finish. More agreeable negotiators ended up with worse deals. In the negotiation where both sides could gain, it made no difference.

The effect shows up in pay. A study published in 2012 used three large data sets and found that less agreeable people earned more than agreeable people. The gap was large for men and small for women. In a separate experiment with 480 participants, people recommended the less agreeable candidate for a management fast-track more often, especially when the candidate was a man.

At the extreme, the cost is clearer still. A 2008 study looked at people with an extreme concern for others, who put the other person's needs above their own. When two such people negotiated with each other, they reached worse joint deals than other pairs, yet were more satisfied with the result. Worry about the relationship led them to set lower goals and claim less.

How big is the effect?

The effect is real but modest. Reviews of the research describe the link between agreeableness and negotiation results as slight. One leading researcher found that the strongest personal predictors of results are positive expectations and comfort with negotiating, and both can be changed. This is a tendency, and it can be managed.

When it matters less

The most useful finding is about targets. In the 1998 study, personality made the most difference when negotiators aimed low. When they set high targets before they started, agreeableness and other traits mattered much less.

A second finding concerns who you are negotiating for. In studies published in 2010, women negotiated better for someone else than for themselves, because pushing hard on another person's behalf did not carry the same risk of looking pushy. My reading is that many agreeable people, men and women alike, find it easier to hold a line when they are protecting someone else's interests.

When kindness is an advantage

Agreeableness is not only a cost. In negotiations where both sides can gain, it does no harm. Researchers who study the feelings people take away from a negotiation found that in job offers, how good the negotiation felt predicted how people felt about their job a year later, while the money they won did not. In my view, the relationship you leave behind matters, especially with people you will deal with again.

As I read it, the aim is not to become less agreeable. It is to make the hard decisions before the conversation starts, when your wish to keep the other person happy cannot get in the way.

What this is costing you

None of these studies looked at your organisation, so applying them to everyday leadership is my own step. The patterns will be familiar, though:

• the supplier contract renewed on the supplier's terms because the relationship is "good";
• the pay rise you did not ask for, or the one you gave too easily;
• the client scope that grows every month at no extra charge;
• the team member who always says yes to extra work and is quietly burning out.

The cost is rarely visible on the day. It shows up in margins, in budgets and in people who are overloaded because they could not say no.

Questions worth asking

A few honest questions show how much this applies to you.

• When did you last agree to a deal you knew was wrong, and what made you agree?
• Do you decide your walk-away point before a negotiation, or during it?
• Who on your team is too nice to say no on the company's behalf?
• When you negotiate for your team, do you push harder than when you negotiate for yourself?

What you can do this week

Everything in this section is a suggestion of mine, drawn from the research rather than tested by it. Each one takes minutes and costs nothing.

Suggestion

If you lead a team

• Set targets in writing first. Before any significant negotiation, ask the person leading it to write down the target and the walk-away point, and agree them together.
• Give your agreeable people a mandate. Frame the negotiation as acting for the team or the client, not for themselves. It gives them permission to hold the line.
• Pair a relationship-builder with a firm negotiator. For a hard fixed-price negotiation, pair a relationship-builder with someone comfortable saying no.
• Watch the yes-sayers. Notice who always takes on extra work, and check whether they are choosing it or simply unable to refuse.

Suggestion

For yourself

• Write your walk-away point. Before your next negotiation or request, write down the point at which you will walk away, and keep to it.
• Aim higher than feels comfortable. Set your target before you start, and set it above what you would accept.
• Use a pause. When you feel the urge to say yes, say "Let me come back to you on that" instead, and decide away from the other person.
• Negotiate as an agent. Imagine you are negotiating for someone you care about. Ask what you would accept on their behalf.

Suggestion

At home

• Practise a polite no. Help a child practise one kind, clear way of saying no to a request they do not want to agree to.
• Praise the honest no. When a child says no politely and stands by it, tell them that was well done, even if you were the one being refused.

Sources

• Barry, B., & Friedman, R. A. (1998). Bargainer characteristics in distributive and integrative negotiation. Journal of Personality and Social Psychology, 74(2), 345 to 359.
• Judge, T. A., Livingston, B. A., & Hurst, C. (2012). Do nice guys (and gals) really finish last? The joint effects of sex and agreeableness on income. Journal of Personality and Social Psychology, 102(2), 390 to 407. doi:10.1037/a0026021
• Amanatullah, E. T., Morris, M. W., & Curhan, J. R. (2008). Negotiators who give too much: Unmitigated communion, relational anxieties, and economic costs in distributive and integrative bargaining. Journal of Personality and Social Psychology, 95(3), 723 to 738.
• Amanatullah, E. T., & Morris, M. W. (2010). Negotiating gender roles: Gender differences in assertive negotiating are mediated by women's fear of backlash and attenuated when negotiating on behalf of others. Journal of Personality and Social Psychology, 98(2), 256 to 267.
• Curhan, J. R., Elfenbein, H. A., & Kilduff, G. J. (2009). Getting off on the right foot: Subjective value versus economic value in predicting longitudinal job outcomes from job offer negotiations. Journal of Applied Psychology, 94(2), 524 to 534.
• Elfenbein, H. A. (2015). Individual differences in negotiation: A nearly abandoned pursuit revived. Current Directions in Psychological Science, 24(2), 131 to 136.
• Program on Negotiation, Harvard Law School. "In negotiation, how much does personality matter?" https://www.pon.harvard.edu/daily/negotiation-skills-daily/in-negotiation-how-much-does-personality-matter-nb