along my career, as well as in other activities before, I always enjoyed negotiating.
often, I have been called in by partners after they had already built a contract-based relationship: that wasn’t working as planned
this post is long and without a chapter-by-chapter division: because it is a short summary of what I learned to do, and what to avoid, while doing three strongly related activities:
- negotiating
- crisis management
- conflict management
this posting is a catalogue of lessons and links: use it as a library reference.
I think that I will update it from time to time. Contact me if you want to discuss some specific issues.
time and again, I saw that the flaw reminded me something that, when on vacation in Prague in early 1990s with my by then German former girlfriend, I read in the local English newspaper.
the issue was simple: a typical Westerner would rent an apartment, and then be stunned when (s)he saw that the owner came by to use this or that room.
the suggestion: as, at the time, the court system in Czekoslovakia wasn’t yet ready to manage Western-style litigation, write as simple a contract as possible, and then sit down with the owner, and get through it point-by-point, to obtain explicit agreement and mutual understanding.
as I wrote long ago in my BusinessFitnessMagazine.Com online e-zine, most often I came across business contracts that seemed built to generate litigation, not as a business-relationship guideline.
and this applies not just vs. suppliers, but also internally (e.g. vs. employees).
a short digression: democracy on the work-place.
I remember that in late 1980s and early 1990s it was trendy to quote interesting works as “Democracy at work” (not anymore available in print, from Oxford University Publishing, I think to remember) and “Maverick”, by Ricardo Semler (Maverick: The Success Story Behind the World’s Most Unusual Workplace
)
the weakness of most arguments was a fatal one: the system was focused on sharing benefits, not costs- i.e. the proposals worked when everybody was taking something off the shared heap of wealth generated by the activities, but who was to decide who was going to pay the costs, or accept to be laid off, when business wasn’t working?
and, interestingly, most “family-like”, or “democratic” management arrangements were shattered to pieces at the first sustained, prolonged sign of crisis.
and this brings to the main point: negotiating.
if you followed this blog, you know that here and there I suggested an old book, “A theory of Justice” (A Theory of Justice: Original Edition
Despite the management cookbook-style title, one of the best books on negotiation is still “Getting to Yes” (Getting to Yes: Negotiating Agreement Without Giving In
My approach to negotiation? Preventive negotiation, if possible, by designing and negotiating a contract that is manageable.
But some negotiators are used to build “honey trap” contracts- i.e. contracts with automatic clauses that inflate the costs and shrink the results.
Probably, if you are selling used cars, that is acceptable- if you believe that your customer will anyway never again buy from you.
But in business, most relationship crises have side-effects on all the parties involved, and could generate ripple-effects inside the organizations involved.
As an example: if a consultancy expands the value of the contract by using a sleight of hand that was hidden inside the contract, the message that its employees will get from the customers’ employees that work with them on a daily basis is: you are like used car sellers (believe it or not, I heard this).
And your employees will start thinking that it is admissible, say, to ask for a cheque on each critical project event (I saw this too).
A typical example: selling something that does not exist; or selling something that, in order to be done or to work, requires something that is not inside the contract.
Whenever I was in a commercial negotiation, I always took care of verifying both the needs and motivations, and the perception of each position.
Because more than once I was called in to negotiate when the crisis had already generated a conflict (usually involving lawyers building stonewalls & legal siege machinery), and the first step was actually to identify a face-saving agreement.
The reason? Perception, in negotiation, is often reality.
If you do not like to read, I suggest a movie and a documentary, both with Robert Mc Namara involved. If you do not know who he was, see here.
In short, he worked both in the private sector and for the US Government, under the Kennedy and Johnson administrations.
The documentary is called “The Fog of War” (The Fog of War – Eleven Lessons from the Life of Robert S. McNamara
The ideas? Perception is reality. And the lessons given from Mc Namara in the documentary are relevant not just to politicians, but to whoever has to communicate with an audience- be it during a negotiation, while managing activities, or just meeting people that you never met (and that you would like to meet again!).
The movie is called “Thirteen Days” (Thirteen Days (Infinifilm Edition)
The story is slightly partial, as it is based about the memories of the Kenny O’Donnell son, but the scene most interesting, to me, is when Robert McNamara “explains” to Admiral George Anderson about the new way of communicating, where perception is reality.
Incidentally, the funniest scene in the movie is certainly the one when the U.S. UN Ambassador, Adlai Stevenson, says “I am prepared to wait for my answer until hell freezes over.”- that is a negotiating stance that I had to adopt few times… well before hearing about the phrase, or seeing the movie.
A final point to consider, and that is often forgotten by “data-driven” negotiators is the value of “face saving” or, as Mc Cormack wrote “let people off the hook”.
Sometimes, both parties negotiate according to the basic rules I wrote above- but the end result is a binding agreement to produce something absolutely useless.
Why? Change in market conditions, for example.
While it is appropriate to cover the costs, more than once I was able to extract more future business for my partners by offering to drop a clause, than by sticking to the original contract.
This could help your counterparty save face, and generate goodwill for future activities.
But do not overplay this game: I saw also negotiators that were always tought, data-driven… and ended up always abandoning clauses.
The net result? The market will know quite fast that you enjoy negotiating for the negotiating sake, your nice little show- not to achieve results.
When a crisis comes, probably the easiest way to avoid this escalating into a conflict is to defuse it, i.e. do not stay on the defensive, and be instead proactive in moving beyond the crisis, and focusing on shifting the territory.
No, I will not quote Sun Tzu or Machiavelli or Von Clausewitz- also because it scares me to hell when I hear a 20-something (usually male) that never had anything to do with the military talking casually about “collateral damage” or other Ramboesque terminology.
I will instead suggest that you drop playing sudoku, and start playing go, an Asian board game that will teach you more about negotiation than any other game (including chess).
I am not implying that you should become a master at the game- according to some, it would require a life or more… just to play a little bit, to understand the logic of give-and-take.
Another strategic (and simpler) game: Edward De Bono “L game”, that I learned as a kid, and stopped playing before high school.
Quite often I saw crisis escalate into conflict, generating further crises, etc- so tangled, that it became as “The War of The Roses” (The War of the Roses
While you are at that, add another movie, about the difference between negotiating and making an argument, “Thank you for smoking” (Thank You for Smoking (Widescreen Edition)
Another piece of gimmickry that I saw often in negotiations, and that sometimes was really badly played, is the “chickening out” game.
It is fine when both parties have the same resources and complementary interests- but when one of the parties is neutral toward the results, usually this approach produces a lopsided outcome, where one of the two parties gives more than needed, and feels cheated.
It is not a win- it is Phyrric victory: you win the battle, but the relationship is poisoned even before starting.
I already published here a funny example (thanks, Alexandra) from a friend on a Canadian and US “chickening out” game.
The lesson? as I said before- if one of the parties is neutral toward the results, for whatever reason, it is irrelevant how many resources you can commit to the “chickening out” game.
Finally- some negotiators love to waste time. It is what I call the “cunctator” tactic.
The name comes from Roman history (see here). It is not a strategy: it is an approach to take over by fatigue.
It is nice, again, if you do it as a one-off activity, i.e. to lower the price for a piece of antique.
But in business? Frankly, it is yet another way to “pre-emptive poisoning” a relationship.
And, sometimes, committing so many resources during the “delaying” phases, that maybe, in the end, you will be the one spending more on the delaying tactic than the other party.
Why this happens? Because, as with the “chickening out” game, the “cunctator” tactic is used often by the party that assumes to be the strongest one, and therefore it is easy that the game or tactic keep going on also when it becomes blatant that are economically counter-productive.
To use an example: you can stop a moped in few meters- but to stop a 2km-long freight train, it takes a little bit more…
As I wrote at the beginning of this post- I will eventually add more information, as this is the spirit of this blog, and you can suggest changes.
My approach? To leave the blog posting where it is, and to change its content.
If I will think that new post is more appropriate than simply expanding this one, I will add mutual links, to improve you “serendipity potential”, i.e. to get through the cloud and search to something that is of interest to you, and keep going around.
Who knows? Maybe you have the next smartest ideas- and you do not know it yet 
Tags: chicken, conflict, contract, crisis, cuban, cunctator, democracy, fisher, go, harvard, kennedy, machiavelli, management, mccormack, mcnamara, missile, negotiation, perception, phyrric, rawls, roses, semler, sun tzu, uri, victory, von clausewitz, war