Contents
Negotiations
Thomas
R. Colosi
V.P. for National Affairs
American Arbitration Association
Washington, D.C.
Rationale
Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.
Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Those who work in negotiation professionally are called negotiators. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers.
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- Etymology
- Approaches to negotiation
- Emotion in negotiation
- The pervasive impact of culture on international negotiations
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Mastering a multi-dimensional process
Negotiations make news - whether it is arms-control delegations from Russia and NATO, commercial teams from Xerox and Fuji, collective bargaining between labor and management, or discussions between Shell Oil and Greenpeace. Journalists usually report a negotiation as a simple two-party affair. This is not so; negotiation is a multi-dimensional process and most substantive work gets done behind the scenes - in corridor discussions with individuals from the other side, in arguments within your own team back in the hotel room, in panic calls and faxes to your organization, and in public press releases and impromptu press conferences.
As an experienced negotiator, you will seek to manage successfully:
(1) the vertical negotiations between your team and your organization,
(2) the internal negotiations within your team,
(3) the horizontal negotiations between your team and the other side, and
(4)
the external negotiations with interested outside parties,
such as the press, the public or the government.
1. The Vertical Dimension: managing your organization.
The "bottom line" of any negotiation is the line drawn by the organization which sent you to the table. The most important relationship is not with the "other side", it is with the people back home-your "closers". They have the authority to approve-or turn down-any agreement. If that relationship is not managed properly, it will be difficult, if not impossible, for you to manage the process at the table. Managing your vertical hierarchy can be done in the following ways:
Nail down the goal before you go. Many negotiators are sent to the table with sketchy instructions, and when they come back to "sell" the agreement their organizational hierarchy is surprised and rejects it. The negotiating team loses credibility with the other side and the subsequent table discussions become a form of damage control.
Define your organizational strategy early. At the very beginning, push your hierarchy to define its positions and, more importantly, its underlying interests in the negotiation. Challenge them to consider the likely reaction of the other side to their initial position and prepare them to alter it. By managing the expectations of your own organization early, you build a future flexibility into the process.
Keep your hierarchy informed. During formal talks, give your organization plenty of regular information about your progress. How much? Until they yell, "Stop!"-that's the right amount.
Represent the other side. Eventually you become convinced by some of the other side's arguments and you tell your organization, "The other side is making sense. We'd like to change our position." At this point, they begin to question your loyalty. "Whose side are you on, anyway?" they may ask. Good question. It is a bit of a paradox, but both teams eventually come to negotiate with their own organization on behalf of the other side.Keep your chief executive away from the table. Occasionally he or she will want to get involved, directly or indirectly, in the negotiation. Avoid this if you can - the CEO knows less about the negotiation than you do. If their arrival is unavoidable, then schedule them for a ceremonial role after the real discussions have been concluded, otherwise they can inadvertently upset the proceedings, or commit the organization to an ill-considered agreement.
2. The Internal Dimension:
managing your team
When we look across a negotiation table the other side looks
homogeneous. They are not. Like any group, the other side
comprises individuals with different views and personalities
and has both a formal and an informal structure. Usually the
negotiations within a team are more contentious than the horizontal
negotiations with the other side and involves more energy,
more emotion, and considerably less diplomacy.
Negotiation is a decision-making process and when differences inevitably arise within a team, three subsets of members typically emerge-stabilizers, destabilizers, and one or more quasi-mediators. How do you recognize them?
Stabilizers The stabilizers are the nice guys; they are easy to work with-for you and for the other side. They are usually conflict averse; they see negotiation as a way to avoid a war, a court battle or a strike. If left alone, they can be "taken to the cleaners" by the other side.
Destabilizers The destabilizers are the suspicious ones; they are difficult to work with-for you and the other side. They do not trust the other team, they may not even trust their own team. They see negotiation as an arena of conflict. If left alone, they can undermine the whole process.
Quasi-mediator If the head negotiator is a stabilizer, the final agreement may seem too soft and be unacceptable to your "closers". If the head negotiator is a destabilizer, the team may drive too hard a bargain, irritate the other team, and prevent an agreement. If an organization understands the process and seeks an agreement, it chooses a quasi-mediator to head its team.
The quasi-mediator orchestrates the entire multi-dimensional negotiation. In this role, you will find yourself mediating between conflicting points of view-between your team and the other team, within your own team, between your team and your organization, and between your organization and interested external parties. You may consider the following factors:
Carefully monitor any "shadow" negotiations. Much progress occurs away from the bright semi-public light of the formal table proceedings. These shadow negotiations can occur between any representatives from the two sides. A discrete "walk in the woods" by two competent head negotiators provides an opportunity to explore delicate options. If your stabilizers, destabilizers, or chief executives get into unauthorized shadow negotiations, on the other hand, they can unrealistically raise expectations, collude to block progress, or simply create confusion. Coordinate shadow negotiations.
"Win-Win" sounds nice, but somebody usually loses. If a deal is struck, the destabilizers on each team frequently feel they have "lost" and may subsequently attempt to sabotage the agreement. No pious talk of "win-win" can hide this fact: some on your own team may feel they have lost. This eventuality should be anticipated and managed from the beginning.
Pick your team. The context of a negotiation largely determines team composition, but it is helpful to select your own team. Aim at a balanced mix of people - sufficiently similar for clear communication, not gridlocked by unresolvable differences, but with a range of skills.Include those with behavioral skills. Technical knowledge in a negotiation is not enough. Some nationalities - the Japanese for example - focus heavily on the behavioral aspects. They include observers who are open to the subtle messages and meaning in the process. Does what the spokesmen say fit with what they do? Who are the informal leaders? Are they patient? Are they sincere? Are they reliable and therefore trustworthy?
Discipline your team. Having an open team is helpful but having a disciplined team is essential. The group must be ready to work as a team and take collective responsibility for the outcome. You should make it perfectly clear to your team how it will be managed, deciding on various roles and responsibilities such as who will speak at the table, who will speak away from it, on whether and when notes will be passed at the table, and so on.
Caucus often. Inexperienced teams argue at the table; sophisticated teams caucus in private. The caucus is an adjournment to hold confidential discussions out of sight and earshot of the other team. If anything happens during a negotiation that you do not understand, that makes you feel uncomfortable, rushed, or off-balance, call a caucus, retire with your team, and discuss the situation in private.
3. The Horizontal
Dimension: managing the other side.
Formal negotiation sessions occur horizontally "across
the table"; they set the tone for ultimate success or
failure. At the table, both parties agree on the process rules
and educates the other side. You present your proposals, articulate
your position, and introduce your computer printouts and your
experts. So do they. Negotiation is stressful and you can
reduce the uncertainty and pressure on your team in several
ways:
Have alternatives. Having alternatives to the negotiated agreement changes the nature of the process. If you have several attractive job offers, a negotiation with your boss about a salary increase is substantially different from one in which you have no options. This is true in virtually any type of negotiation.
Realize you have control of the process. The first rule of negotiation is this: "There are no rules for negotiation". They exist nowhere. The "rules" for any negotiation must first be negotiated, and agreed upon, with the other side. They cannot make progress without your assent. Nor can you without theirs.
Make a good first impression. Initial contacts set the stage for all subsequent meetings. Any salesman can verify that an early mistake will have a lasting effect. Think through the implications of what you do before you do it.
Practice makes perfect. Experienced negotiators prepare by putting themselves in the other side's shoes. Like a skilled legal team, if your team can argue both sides of the issues, imagine how well you will understand those issues and how well prepared you will be for the real discussions.
Give yourself time. An hour can be an unacceptably long time to wait in Germany and an insignificantly short time in the Middle East or Asia. If you are looking at your watch while the other side is looking at their calendar, you are already at a disadvantage. With an approaching deadline, you may be tempted to make hasty concessions. Ask yourself, "What is time doing to the interests of both sides?" Don't box yourself in.
Give yourself space. At some point the other side may probe the relationship among you, your team and your closers. This can be either a legitimate search for information or a tactic to split your team and throw you off balance. You are given the authority to negotiate by your organization, but you really do not want to have the authority to close the deal. Having your closers away from the table gives you more room to maneuver-and it makes for an easier relationship with the other side.
Avoid destabilizing the other team. Inexperienced negotiators often believe that they gain an advantage by surprising the other side. This is a mistake. Surprises destabilize and upset them. They may act unpredictably and then you lose control of the process. Furthermore, they will trust you less, and will be less enthusiastic about representing your point of view to their organization.
Notify the other team of your intentions. Predictability helps the other side to trust you; it increases the relationship's stability; it builds your credibility; it gives you advance warning of their probable reaction and it enables you to change course before you get publicly locked into an untenable position. Keep them informed.
Represent your true interests. Inexperienced negotiators think it is a good tactic to misrepresent their "bottom line" by making unreasonable demands or taking extreme positions. This is usually unwise. Extreme positions appear insincere, and you must subsequently make large or frequent concessions. If you misrepresent your true interests, how can the other side satisfy them?
Ask questions. An effective negotiator must create doubts in the minds of the other side about the viability of their position. If they trust you, it is easier for you to create these doubts. That is why you have taken pains to develop a good relationship with them. Asking questions about their positions, perceptions and assumptions creates doubt more effectively than making statements to them about what you want.
Take better notes than they do, paraphrase and summarize. Taking careful notes of all meetings and phone calls with the other side creates an accurate record and builds a framework for the difficult analytical work ahead.
Make a point of comparing your notes with theirs. If yours are better, they will become the ones upon which everybody relies. Rephrasing and summarizing their words and the proceedings in your own terms and getting their agreement allows you to control the language of the negotiation. Whoever controls the notes and language controls the memory of the negotiation. Whoever controls the memory controls the entire process.
4. The External Dimension: managing outsiders
Confidentiality in a negotiation is important because both sides must feel safe to explore alternatives without being publicly committed to premature and possibly embarrassing positions. There are usually interested outside parties-such as the press, the government, the public, or the competition-who would like to have more information on the progress of the discussions. Mishandled information can destroy the trust that has been built up with the other side, put your side at a disadvantage, and jeopardize the developing agreement.
Many negotiators regard external parties, such as the press, as an inconvenience, even as an enemy. They try to hide information and avoid contact with journalists. This frequently backfires as the media and other outsiders build up and make public a distorted picture based on innuendo and rumor. Generally, some information should be shared with the external parties, but public exposure must be carefully agreed upon by the negotiating parties and collaboratively managed. Prepare to manage information on the negotiation well in advance of the formal talks.
Conclusion
The horizontal negotiations across the table are only the most visible part of the process. Substantive negotiations also take place behind the scenes: vertically with your organization, internally within your team and externally with interested outside parties. Technical knowledge is insufficient to fashion a lasting agreement. A wise negotiator understands the behavioral implications of the negotiation process. The negotiator who is aware of the multi-dimensional nature of negotiation will be well-positioned to manage the process successfully.
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