Summary.    The season four opener of the HBO series Succession features a contest between media tycoon Logan Roy and his children to acquire another media empire. The episode showcases classic mistakes that negotiators often make in high-stakes situations. The...

Many TV watchers are abuzz about the return of the hit HBO series Succession. The prestige drama doubles as a withering lens into the complex relationships, power dynamics, and jargon often found in corporate America. The first episode of season four, which aired on March 26, offers a moment of reflection on the pitfalls to which business leaders often succumb in high-stakes negotiations. And negotiations go wrong in real life all the time.

The show follows the Roy family, the wealthy and powerful clan behind the fictional international media and entertainment giant Waystar Royco. The family’s patriarch, Logan Roy, is a ruthless and much-feared businessman facing health issues. His four grown children — Connor, Kendall, Roman, and Siobhan (Shiv) — have their own ambitions and ideas for the company’s future. They also have a financial stake in Waystar Royco. As the series progresses, internal and external crises threaten the media empire’s stability and future.

In the first episode of season four, power-hungry Logan is in negotiations for digital media company Gojo to acquire his company. He has yanked control of Waystar away from his three younger children and has set his sights on acquiring Pierce Global Media (PGM), the left-leaning media conglomerate he’s been eyeing since season two. The company’s valuation has significantly decreased, yet matriarch Nan Pierce is eager to sell. Logan’s biggest obstacle in the negotiation isn’t the price tag, it’s his own family. Kendall, Roman, and Shiv team up to bid against their dad for PGM by liquidating their stakes in Waystar after the company is sold to GoJo. Their decision sets the stage for a fierce battle of wills and wallets.

Once they’ve decided to fight Logan for PGM, the siblings waste no time in meeting with the Pierces, who take advantage of the Roy family’s internecine animosity to drive up the sale price. After a few bids, Nan agrees to sell to the siblings for $10 billion without giving Logan a chance to counter. Losing a bidding war to his own children is a hard pill for Logan to swallow.

Notably, the PGN deal is contingent on the siblings liquidating their Waystar assets, so it’s not a done deal just yet. Even so, the contest highlights classic mistakes that business leaders frequently make in (real) high-stakes situations. Here are words to the wise on what to take away.

Avoid offers you can’t justify.

When Logan Roy learns about the presence of rival bidders (his own children), his advisors tell him he is “the solid option.” This leads him to feel confident about his bid. So, when Nan Pierce calls asking for a firm number, he replaces the “soft” $7 billion he floated earlier with a $6 billion offer.

In this case, Logan’s brazen confidence got in the way. Overconfidence leads negotiators to underestimate their counterparts, which in turn leads them to make unrealistic demands or unreasonably low bids. If the other party becomes offended, impasse is likely. Overconfident negotiators also underprepare for talks and overlook potential risks and weaknesses in their own position. As a result, they become overly aggressive or dismissive of the other party’s concerns, which can damage relationships and make it more difficult to reach a mutually beneficial agreement.

There is a second problem with Logan’s $6 billion bid: It is an aggressively low number, one that he did not bother to explain or justify to Nan. Negotiators who provide explanations for their proposals are more likely to reach agreements than those who do not offer any justification, research shows. Compelling, well-reasoned explanations show the other side that you’ve given considerable thought to your offer and that it is well justified.

Frame your proposal.

When Kendall, Roman, and Shiv meet with Nan Pierce in person to tell her they are interested in making an offer, she is quick to tell them that she has a solid offer already and that they made the trip in vain. Nan seems to be well aware of the power of framing in negotiation — the fact that the way an offer is presented can influence its perceived value and, ultimately, the negotiation’s outcome. In Nan’s case, she sends the clear signal to the siblings that they will have to beat a solid offer (Logan’s) if they are truly interested in getting her attention.

Negotiators can increase the likelihood of their offer being accepted by framing their proposal in a way that emphasizes its benefits and minimizes its drawbacks. Roman, Kendall, and Shiv themselves could have used framing to their advantage by highlighting the positive aspects of their proposal while downplaying the negatives. More generally, both buyers and sellers can powerfully impact negotiation dynamics by framing their arguments thoughtfully.

Anchors are sticky.

When the Roy siblings tell Nan they can likely make a better offer than the bid she’s already received, she comments, “I feel like I’m in a bidding war. Eight, nine, what’s next?” Enter the anchors that were likely to draw future bids in their direction.

A powerful tool in negotiation, anchoring involves introducing a specific reference point, or anchor, aimed at influencing the other party’s perception of the value of subsequent offers. Anchors are generally used as first offers in negotiation. This means that the first offer presented in a negotiation can have a significant impact on the final outcome, even if it is not accepted. For example, a seller who sets a high asking price for a car can anchor the buyer’s perception of the car’s value, making subsequent negotiations more favorable to the seller. Conversely, if the buyer sets the anchor with a lowball offer, he or she can shift the seller’s perception of the car’s value in their favor.

Nan Pierce dropped $8 billion and $9 billion anchors to signal the type of bid she was likely to accept. After the Roy siblings take a few minutes to think it over, Shiv returns with an offer of $8 billion. Told this might not cut it, Shiv and her brothers huddle again. They speculate that their father may be bidding in the $9 billion range and decide to come back with a final bid of $10 billion to decisively beat him.

Initial anchors have a strong influence on final offers in negotiation, research shows. However, the effectiveness of our anchors depends on whether we have enough information to set a proper anchor. Nan Pierce did. But if we know little about the value of the item at stake, then we may set an inappropriate anchor. Anchors become sticky numbers that drive offers that follow, like the Roy siblings’ extremely high $10 billion bid.

Emotions can derail negotiations.

Throughout the bidding war between Logan and his siblings, emotions are high. The siblings are so eager to beat their father that they make offers unjustified by thoughtful analysis. My Harvard Business School colleague Deepak Malhotra and his colleagues have written about the dangers of competitive arousal, a psychological phenomenon that occurs when negotiators experience strong emotions during a negotiation or auction.

Negotiators experiencing competitive arousal tend to make aggressive demands and extreme offers, and to become overly defensive or argumentative. This can escalate conflict and make it difficult to reach mutually beneficial agreements. It can also lead negotiators to make irrational offers, as was likely the case for the Roy siblings. The desire to win becomes more important than making sound decisions. Thus, the well-known insight about M&A competitions: Buyers often overbid and overpay.

More broadly, emotions can derail negotiations in various ways. Negative emotions such as anger, frustration, and disappointment can lead negotiators to make irrational decisions and engage in hostile behaviors. Meanwhile, positive emotions, such as excitement and enthusiasm, can cause negotiators to overlook potential risks and make overly optimistic offers. Both negative and positive emotions can impair negotiators’ ability to accurately assess situations and make rational decisions — and make it challenging to achieve a successful negotiation outcome.

Negotiate process, not just substance.

The type of bidding war that the Roy siblings and their father entered into is dangerous territory, as it can lead to overbidding and overpaying. To avoid this trap, the Roy siblings could have tried to negotiate the process before making a bid. For instance, they could have asked Nan to agree to a single-round auction with no “funny” bids (such as bidding a dollar more than what the other bidder offered).

Negotiating the negotiation process can include setting ground rules, agreeing on a timeline, and establishing the roles and responsibilities of each party. In a business negotiation, the parties might agree to a specific meeting format, including how long each person will have to speak and when breaks will be taken. Such rules establish a clear structure for the negotiation and can help ensure that both parties feel heard and understood.

When the process is negotiated in good faith and agreed upon by both sides, it can help establish a sense of fairness and transparency. This can set up a more collaborative negotiation process and increase the likelihood of reaching a mutually beneficial agreement.

While the idea of throwing around billions of dollars in bids as the characters do in this show may seem far from reality, some of the basics of what it takes to navigate negotiation still run true. You might want to check yourself against these tenets the next time your business is on the line.