Three easy ways to build trust: Listen as an ally, show sincere appreciation for your counterpart’s efforts, and make (but link) concessions.
Negotiation Blog - Limited Authority
Politicians' Negotiations -- What Can We Learn?
By Thomas Wood
Whatever the nature of our negotiations (commercial, legal, regulatory, internal, etc) we can learn from the ups and downs of some of the most prominent public negotiations. With the Euro in serious trouble and economies worldwide shaken, government negotiations over economic strategies are around the clock and very public. The US negotiations over federal budgets, taxes and spending are a prime example.
With several US significant tax and spending provisions set to kick in (or lapse) in December and January, official Washington will be furiously bargaining at year’s end. And the stakes couldn’t be higher: the fate of the US national economy, the credit rating of the U.S. government, and the confidence of the American people in their elected representatives’ ability to tackle big problems.
In last summer’s negotiations, President Obama and the Congress' House Speaker John Boehner came close to striking a “grand bargain” on long-term debt reduction. It combined restrictions on the growth of entitlement programs (which are trades dear to the Democrat party) with increased taxes on the wealthy (which is anathema to the Republican party). But at the last minute the deal fell apart. Examining elements of this failed negotiation through the prism of Best Negotiating Practices may well provide insight into what could happen at the end of this year, as well as provide guidance for our daily bargaining.
The 2011 budget talks were prompted by a deadline—namely, the need to raise the US government’s debt ceiling so it could borrow more money to pay its bills. Congressional Republicans used this deadline to try to force concessions: they refused to increase the government’s borrowing authority without obtaining agreement by the Administration to substantial budget cuts. While absolute deadlines can be helpful in focusing energy and avoiding unnecessary delay, skilled negotiators can also use arbitrary deadlines as tactic to gain advantage.
The Republicans took a position opposed to any tax increases. The President’s position was that he would not accept the level of cuts in entitlement programs sought by the Republicans without an increase in taxes on the wealthy. For both sides, the interest was to achieve debt reduction while maintaining the support of each party’s political base. Negotiators sought a solution—as good negotiators should—that served the two parties’ interests, even if it seemed to violate their positions (raising taxes by closing loopholes rather than raising rates, for example).
When the deal collapsed, Democrats charged that Boehner had lacked sufficient authority to bargain, and had been overruled by his Republican colleagues in the House. Negotiators should always have sufficient authority to strike a deal, but not absolute authority: carrying limited authority allows them to postpone or deflect unwelcome proposals. In the end, both sides decided that no deal was better than what they viewed as a bad one. They could both revert to the same, ready-made Best Alternative to a Negotiated Agreement (BATNA): elections, in which each side might achieve at the polling place what it couldn’t at the bargaining table.
While political negotiators in each country and all governments have special advantages and restrictions, everyone involved in negotiation can benefit from studying their successes and failures. It will be interesting to see if the US federal budget negotiators busy later this year are among those who have learned anything.
Six Halloween Tips to Unmask the Hardball Negotiator
By Marianne Eby
Do you ever feel like your negotiating counterparts are wearing the same Halloween masks that show up trick-or-treating at your door? Are the mad rush of negotiations in your business to spend year-end budgets and internally as you plan for the next fiscal year really any different than what goes on among the children’s back-room deals over their stashes of candy? Here are 6 tricks (or tips) to unmask the hardball negotiator.
Tomorrow night Halloween in the US evokes images of costumed children asking to trade a trick for a treat – the trick is they are masked as real and fantasy characters and in exchange they want lots of candy – a trade at the heart of every negotiation. With a strong commercial foothold in the US and Canada, this strange bargaining called Halloween has spread in recent decades to parts of Europe and Asia, and is also popular in Latin America.
Halloween celebrations permeate the US culture. More than $7 billion was spent on Halloween last year and about 74% of adults celebrate this holiday, defined by costumes, masks, and out of bounds behavior. Businesses and professionals often consider how to participate in the late October frenzy, since employees and customers experience and relish Halloween as a community celebration. In offices and schools and neighborhoods, in big and small businesses, in penthouses and party rooms, in C-suites and hotel suites, Halloween fun and zany antics are planned, encouraged, enjoyed.
For most businesses, there's also a scene behind Halloween. Often, late October marks the beginning of the end of the annual business cycle. Wrap-up issues are on the table, and plans are being made for the upcoming year. And if your house is like mine on Halloween night, the real bargaining goes on after the candy is collected, when the kids spread out their winnings and begin to trade. That's when we see the real masked characters using the best and worst of negotiating behaviors to get what they want!
Even if the Halloween fete and the year closing create a tension of opposing demands, deals will get closed. For example, while we are spending $1.2 billion annually on Halloween costumes, $85.5 billion is also being spent on computers. Corporate negotiators are working computer deals, equipment leases, supply contracts, phone usage and supplier agreements that keep businesses running, while $21.5 billion in candy passes from hand to mouth. Company representatives in all corners of the world commute their own shares of the $85 billion computer spending, or source and set prices for personnel who can create and support the internet architecture that will permit a share of the $255.5 billion in annual on-line sales. (Data source)
Negotiating is never frivolous and is not always sweet. The scary part is when our negotiating counterparts come to the bargaining table wearing their Halloween masks. We find ourselves faced with people dressed up as superheroes, who want to play “hardball.”
Hardball negotiators use tactics to distract, manipulate, or trick us into moving off our position. They believe that they can win more by playing hardball than by collaborating to create value. The hardball negotiator wears masks – meaning they don’t share their interests – why they want what they want, and don’t care about our interests – why we want what we want.
We want to make a deal, and our hardball counterparts seem only to be willing to make their deal. We are looking for flexibility, and our counterparts seem determined, inflexible, even intimidating. Whether we are are sales or procurement or management, trying to meet quotas, move excess inventory, or gain savings from volume and vendor choice, hardball counterparts are entrenched in their position and tactics.
In the spirit of this Halloween season, consider these responses to the hardball negotiator:
- Consider the tactic what it is – just a trick for a treat. Compliment your counterpart for their tough negotiating style as you would the costumed child at your door. Then suggest you are likely to give better concessions if you can get a commitment to collaborate. Once people make a commitment to be cooperative, most feel bound by it. Remember that their inflexibility is just a costume that can be removed.
- Model collaborative behavior by asking questions to discover your counterpart’s interests. Then offer to address any interests you learn about if they are willing to shift to a collaborative approach.
- Label the hardball tactic (not the person). For example, when they tell you their boss won't go for it, respond, “I see you've brought your bad cop in the room today. I could bring mine in too, or we could just get back to discussing possible solutions.” Then Probe, with sincere curiosity. Same if they tell you that discussing options is no use because they don't have any authority to commit to a different solution. You should say something like -- "We both have limited authority and for good reason; now let's talk possibilities so you can go back and get the authority you need."
- Negotiate the ground rules. Propose that the parties step back and mutually determine how negotiations are to be conducted, building in discussions of challenges and possibilities, proposals, brainstorming, counterproposals, etc.
- Co-opt them. Become friendly. It is always more difficult to attack/deceive a friend than an opponent. Ask yourself: Was rapport built in Exchange stage or did you skip it? Can you step back and build rapport now or interweave it throughout the remainder of bargaining?
- Respond in kind. For example, when the other side opens with an outrageous offer (high or low), respond with an equally outrageous counteroffer, and a smile. This works well if they are simply testing YOUR resolve, or if they are bluffing. If they see you are also skilled in hardball tactics, they may try these strategies to get you to be more collaborative. But be warned, people have a tendency to reciprocate negative behaviors more than positive behaviors.
As we begin closing our current year and preparing for the upcoming year, our negotiating teams can benefit from reviewing the collaborations and hardball negotiations we’ve encountered, just as we review our numbers. Remember to assess strategies to disarm the masked negotiator, since collaborative negotiations create bigger wins for all of us.