Win-win is an attitude, not an outcome: people who view negotiating as an opportunity capture more value than those who see it as a threat.
Negotiation Blog - Positions
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.
Position and Interest in the Sequester Negotiations
By Thomas Wood
Lawmakers engaged in the sequester negotiations are suffering from an awkward tension between their interests and their positions.
A negotiator's position, as we know, is their stated goal or desire, while their interest is their underlying reason or motivation for their stated goal. For example, a buyer wants a 10% discount (position) to stay under budget and improve profit (interest).
Usually, interests and positions are connected but not identical. Once a good negotiator knows the other side's interests, he or she can offer new creative options to the other party's original position by addressing its interests in other ways. A seller who knows a buyer's interest is primarily staying under budget, for example, might offer something else as valuable as the discount a buyer has requested, such as free training on the equipment being sold.
But what do you do when a negotiator's position is in direct opposition to its interests? An article in Politico yesterday reports that Republican governors have publicly signed on to letters bashing Obama and praising House Republicans' efforts in the sequester debate, but meanwhile their offices are urging lawmakers to keep bargaining -- the cuts that would kick in could be devastating to programs in their states.
In this case, as is often true in politics, the real interest behind the governors' stated positions is to "save face," or to satisfy both the party leadership and their constituents. Any feasible solution for these politicians would have to take those interests into account rather than responding to the face value of their position.
Like the Energizer Bunny, Washington’s debt ceiling negotiations keep on giving
By Thomas Wood
We tried to restrain ourselves from commenting in our negotiation workshops these last two months on the drama going on near our Washington, DC offices as the US President and Congress negotiated the US debt ceiling, with the President’s signature healthcare legislation – Obamacare – as the bargaining chip. Careful to stay neutral, but always alert to the strategy angles, we now have a few things to say, and they are all seeped in the fundamentals of negotiating. This Energizer Bunny just keeps on giving!
Negotiations to reopen the shuttered federal government and raise the nation’s debt ceiling were notable for one side’s insistence that it wasn’t negotiating at all. But despite the claims of President Obama and other Democratic leaders that they wouldn’t bargain over what they described as the basic functions of government, in the end they worked out a deal with their Republican adversaries. Most of us just don’t mean it when we say we won’t negotiate.
What other negotiating lessons can we learn from Washington’s latest fiscal crisis? At least five fundamentals.
1. The first is that preparation takes time. Although the partial shutdown of the federal government caught many Americans by surprise, defunding the government as a strategy for derailing health care reform was a plan in the making by an important faction of the Republican Party. President Obama, for his part, apparently decided in 2011—in the midst of another debt-ceiling confrontation—that he would never again negotiate over whether Washington should have enough borrowing authority to pay its bills. As it generally does, this early planning affected the outcome of the negotiations.
2. Another prominent feature is the power of deadlines. Deadlines often figure in negotiation—sometimes proposed to spur action in a cooperative way, sometimes wielded as a weapon by one side to intimidate the other.
Government funding was due to expire October 1 and the Treasury’s borrowing limit (the “debt ceiling”) would be reached on October 17. There was a difference between the two, however: the first was acknowledged by both parties to be justified and absolute, since it was the statutory end of the government’s fiscal year. The second was a less concrete estimate by the Treasury. Some Republicans probed this second deadline, suspecting it was arbitrary and changeable. Though the GOP was criticized for questioning the precision of the debt ceiling deadline because the consequences of default were so severe—regardless of exactly when it was triggered—in less drastic situations such probing of deadlines is entirely appropriate.
3. Third, our approaches can evolve as the negotiations evolve. Like most political confrontations, the strategy when this negotiation began was competitive. Each side felt it had right on its side and demanded the other yield. The Republicans, however, almost immediately shifted to what they presented as a compromise strategy, inviting the President and other Democrats to talk out their differences. But Democrats felt secure enough in their position—and viewed the GOP proposals as so unreasonable—that they didn’t feel pressured to go along. This is not usually a practical strategy for ongoing relationships such as the President and Congress must maintain, but such is the degree of political polarization in Washington today. Eventually, to break the weeks long deadlock, Democrats joined in the compromise strategy, which seeks to give something to each side.
4. Fourth, positions are merely one way to satisfy interests. That’s why positions move in negotiations. The general wisdom is that the Republicans got much less than the President out of this compromise settlement, but some commentators think that viewpoint is confusing positions with interests. In fact, Republican positions changed over the course of the negotiation: beginning with a demand to defund or delay the implementation of the Affordable Care Act (Obamacare), then moving to other tax and spending issues, and eventually to policies disconnected from the budget.
But Republican interests remained the same throughout: a smaller, less intrusive federal government funded by lower taxes. Viewed that way, even though health care reform was only slightly modified, a central GPO intereses was served by maintaining existing spending restraints in the temporary budget adopted as part of the deal.
5. And last, without a strong Plan B or BATNA, there is little likelihood of a big win. One reason President Obama could at least in the beginning maintain that he was not negotiating, and in the end get more of what he wanted, is that the other side began the process without apparently developing a strategic Negotiation Envelope. This is a planning tool that maps out wants (Most Desired Outcome), reasonable expectations (Goals), fallbacks (Least Acceptable Agreements) and “Plan B” (Best Alternative To a Negotiated Agreement—BATNA). The most aggressive GOP leaders of the confrontation seemed to have identified a lot of Most Desired Outcomes, but not one Least Acceptable Agreement. And there was no viable BATNA, since the public would not put up indefinitely with a closed government or with the economic chaos caused by a national default.
Perhaps that’s the principle negotiating lesson of the federal fiscal crisis of 2013: set a reasonable goal and chart a path to get there. Whatever the merits of the Republicans’ politics and policies, their negotiating strategy may need a recalculation.
What Negotiators Can Learn From Kids
By Thomas Wood
In our negotiation workshops, some of our favorite examples of effective negotiating strategies come from kids. They always get a laugh of recognition, because even our most experienced negotiators know that they can be outmaneuvered by a 4-year old.
There are countless parenting blogs and books devoted to negotiating with your kids, or avoiding negotiation with your kids -- all designed to help you handle the little wizards without losing your shirt. One blog, "Like A Dad," reviews a few common kid tactics as a way of helping parents recognize and prepare for them. But as negotiators, we need to ask -- what tactics can we learn from them?
Kids with caring parents do have a number of advantages over adult negotiators -- they won't do damage to their reputation if they are unprofessional, whiny, or outrageous in their demands. But here are five effective negotiation strategies kids use that we should too -- followed by a few we should leave to the less mature./learning-center-item/listen-loudly.html
Top Five Negotiating Strategies From Kids:
- Think big. When my son was two, he heard the crinkling of a candy wrapper in my pocket. He said "candy?" I said "oh, would you like one?" He said "two." Kids ask for what they want, not for what they think you'll agree to. In fact, they have a good idea that you will not agree. They have no compunction about starting with their Most Desirable Outcome (MDO). If they want three cookies, they'll ask for five, then do the "incremental number drop." Aiming high is the key to beginning negotiations that will produce a satisfying outcome.
- Don't take no for an answer. When kids hear "no," they get motivated, not discouraged. Kids often understand "no," or "time's up" as a signal to begin negotiating. You too should recognize "no" as a sign that you and your bargaining partner don't understand each other, and you need to ask more questions.
- Be genuinely curious. Kids' love to ask the question "why?" not to drive you crazy, but because they really want to know. They keep asking questions, open-ended questions, with the same enthusiasm as their first question. Kids have infinite energy for questioning and testing the limits parents establish. I once told my son he couldn't do something dangerous that his sister had just done. After a little back and forth I offered the standard stumper, "if your sister jumped off a cliff, would you?" His answer: "how high is the cliff?" And then "could you slide down it?"
- Be creative. My son's question about the cliff was so creative I had to hand it to him -- perhaps I even made a concession. Creativity always creates more -- more possibilities, more concession ideas, more value, more goodwill. If the other side sees that you thinking creatively about how to satisfy their real interests, you are more likely to get a concession and develop a good relationship. So nurture your childlike creativity, because research says that up to age 5, we are using about 85% of our creative power, but that by the age of 12, our creative output has shrunk to about 2% of our potential.
- Play one parent off another, or, know who to ask. Kids know how to manage ALL the stakeholders. They know which parent is more likely to say yes to certain things, and will approach that parent first, then parlay any positive response into something that might persuade the second parent. Or, if both parents say no, kids will try a grandparent (the ultimate stakeholders) or an aunt or uncle if they can -- ideally one who will make an emotional, rather than a rational, decision. "Okay, you can take your bath after the movie instead." In business deals, you too need to try to find the person most likely to benefit from your deal, and start there. All of this requires knowledge of the other side and of their real interests. What we may call manipulative is just knowing how to use the difference between positions and interests. Example: "I know my TV time is up but this show is about nature, Dad, isn't it good for me to learn this?"
Childish Tactics to Avoid:
- Pretending not to hear or understand. This is the ignoring tactic my kids use every day. It's an avoidance tactic, not a negotiating one, and it will not help you get what you want. If you have that impulse, recognize what it probably is: a need for clarification, for more time or for control of the timing in the negotiation process, and proceed from there.
- Throwing tantrums or crying. Though there are arguments for occasionally using tantrums as a tactic, it is part of a competitive, rather than a collaborative negotiation strategy. In general such behavior alienates and ultimately loses business. Kids don't have to worry (too much) about what they'll lose from a tantrum, because the relationship with their caregivers is (hopefully) guaranteed.
- Pretending to be sick -- just one of many ways kids have of playing on parents' sympathies and concerns, and not likely to be useful to a negotiator who wants to make more than one deal. It may work within your office to gain your boss' sympathy and concern, but not otherwise.
When I first became a parent, a final lesson from my mother: "Thomas, as a parent your goal is talk to your kids so they will listen. And listen to your kids so they will talk.