The Art of Negotiation: How to Improvise Agreement in a Chaotic World

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9781480553378: The Art of Negotiation: How to Improvise Agreement in a Chaotic World

“Michael Wheeler has written a new business classic. He presents powerful negotiation strategies and techniques for managers in any industry.” —Henry McGee, former president, HBO Home Entertainment

A member of the world-renowned Program on Negotiation at Harvard Law School introduces the powerful next-generation approach to negotiation.

For many years, two approaches to negotiation have prevailed: the “win-win” method exemplified in Getting to Yes by Roger Fisher, William Ury, and Bruce Patton; and the hard-bargaining style of Herb Cohen’s You Can Negotiate Anything. Now award-winning Harvard Business School professor Michael Wheeler provides a dynamic alternative to one-size-fits-all strategies that don’t match real world realities.

The Art of Negotiation shows how master negotiators thrive in the face of chaos and uncertainty. They don’t trap themselves with rigid plans. Instead they understand negotiation as a process of exploration that demands ongoing learning, adapting, and influencing. Their agility enables them to reach agreement when others would be stalemated.

Michael Wheeler illuminates the improvisational nature of negotiation, drawing on his own research and his work with Program on Negotiation colleagues. He explains how the best practices of diplomats such as George J. Mitchell, dealmaker Bruce Wasserstein, and Hollywood producer Jerry Weintraub apply to everyday transactions like selling a house, buying a car, or landing a new contract. Wheeler also draws lessons on agility and creativity from fields like jazz, sports, theater, and even military science.

For more information, visit the author’s website at www.michaelwheeler.com.

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About the Author:

Award-winning Harvard Business School professor Michael Wheeler has taught negotiation to thousands of MBA students, executives, managers, and public officials from companies and organizations around the world. Wheeler is editor of the Negotiation Journal, published by the Program on Negotiation at Harvard Law School, and co-chairs the board of the nonprofit Consensus Building Institute. He lives in historic Gloucester, Massachusetts, his hometown.

Excerpt. Reprinted by permission. All rights reserved.:

The Art of Negotiation [ 1 ] Embracing Chaos


As manager of a private investment firm, Jay Sheldon bought a small cable television company in the Midwest some years ago. He didn’t know much about the industry, but the $8 million price seemed right, and the purchase would let him test the water. Jay and his partners quickly got the business into the black. A year later, they wanted to expand by acquiring nearby systems. After running the numbers, they figured that they could pay $11 million, maybe $12 million tops, to buy a second cable company in a neighboring city.

Jay began an extended series of talks with its owner, but after two months of back-and-forth, it became obvious that the parties were far apart on price. “Listen,” the other owner said. “I didn’t post a For Sale sign. You came to me. You’d have to dump fifteen million in cash right on my desk to tempt me. And I’d probably kick myself if I took it.”

Sheldon understood that this wasn’t a bluff, but he also felt the demand was unrealistic. By conventional logic, the parties were deadlocked. If a seller’s bottom line is three million higher than the buyer’s absolute top dollar, you can’t have a deal.

Or can you?

“Let me ask one last question,” Sheldon said before getting up to leave. “If you think your system is worth fifteen million, how about ours?”

“Oh, yours is a bit smaller,” was the answer. “I’d say fourteen or so.”

Sheldon turned the deal upside down. He adroitly became the seller instead of a buyer. In a little more than a year, he flipped his own system for almost twice what his firm had paid for it (and much of that had been leveraged). He was still bullish on cable, but when he encountered this particular owner, who was rabid about the industry, Sheldon had the agility to transform an apparent impasse into a lucrative sale.

His solution was clever. More important, though, was his nimble mind-set. In the impediment to his hoped-for acquisition, Sheldon spotted the seed of another deal that would serve him even better. When he let go of his initial plan, the insight arrived in a flash.

Sheldon’s agility is the mark of a master negotiator. Yes, preparation is important, but negotiation is a two-way street. We can’t script the process. Whoever sits across the table from us may be just as smart, determined, and fallible as we are. We can’t dictate their agendas, attitudes, or actions any more than we’d let them dominate us. Adaptability is imperative in negotiation from start to finish. Opportunities will pop up. So will obstacles. Power ebbs and flows. Talks that crawl along can race forward or veer off in another direction. Even our own objectives may evolve. We have to make the best of whatever unfolds.

Negotiators like Sheldon are great improvisers. When things aren’t going well, they’ll float a clever proposal, crack a joke, or even challenge the other side. If need be, they’ll also make major changes in strategy. What’s odd, though, is that there isn’t much about improvising in standard negotiation books. That’s true both for the hardball manuals on dominating the other side and for the “win-win” texts that preach joint problem solving. In spite of their obvious differences, both approaches start with the same static premise that you have your given interests and I have mine. The win-win message is that by laying your cards on the table, you can expand the pie by making mutually beneficial trades. The hardball line tells you to chest your cards (and maybe slip a couple up your sleeve).

But there’s much more to negotiation than bluffing and trading. The challenge lies in the fact that preferences, options, and relationships are typically in flux. Theorists may have sidestepped this reality, but top negotiators understand this very well.

I’ve seen this in my own research and also thanks to the work of colleagues at the Program on Negotiation (a cross-disciplinary consortium of negotiation experts at Harvard, Massachusetts Institute of Technology, and Tufts University). In a ten-year project led by Jim Sebenius, we’ve analyzed the work of great negotiators in a wide range of fields. They’ve included diplomats such as George Mitchell, who mediated peace in Northern Ireland; investment banker Bruce Wasserstein; and the visionary artists Christo and Jeanne-Claude.

The contexts in which these virtuosos negotiated differed. Their personalities ran the gamut as well. Some had a certain gravitas, while others were warm and entertaining—even funny. Yet in our workshops with them, they all emphasized the dynamic nature of negotiation and the importance of agility. The late ambassador Richard Holbrooke, who forged the accord ending the bloodshed in the Balkans, described negotiation as being more like jazz than science. “It’s an improvisation on a theme,” he said. “You know where you want to go, but you don’t know how to get there. It’s not linear.”

UN special envoy Lakhdar Brahimi, having mediated in some of the world’s most violent and unpredictable trouble spots, used a nautical metaphor to express the same idea. Negotiators must always “navigate by sight,” he cautioned. No matter how diligently we prepare, we’re bound to encounter surprises, pleasant and otherwise, that warrant course corrections.

Donald Dell, the sports agent-marketer, made his mark by hammering out huge contracts for basketball players Patrick Ewing and Moses Malone and earning millions in endorsement deals for tennis stars Arthur Ashe and Jimmy Connors. He’s orchestrated bidding wars between rival television networks for broadcasting rights to events like the French Open.

Dell has also done very well negotiating on his own behalf. In 1998 he sold his sports management firm ProServ to an entertainment company for what he describes as “the proverbial offer I couldn’t refuse.” A few years later, after buying much of it back for twenty cents on the dollar, he then resold his interest to Lagadère Unlimited, where he is group president in charge of TV deals, events, and tennis.

For all his success, though, Dell is quick to say that things often don’t go according to plan. “I can’t tell you how many times I arrived prepared for a negotiation, only to have someone or something come up that upset or changed the deal I thought I was doing. The only way to protect yourself one hundred percent against this situation is to assume there is something you don’t know. This advice will not only keep your mind up to speed with the deal and force you to consider other parties’ motivations, but it will also keep your ego in check.”
LEARNING, ADAPTING, AND INFLUENCING


Lesser known but highly talented deal makers make the same point. Tom Green is a remarkable negotiator who has worked in both the private and public sectors. Tom was a key figure in the sale of a storied baseball franchise and helped restructure a failing health maintenance organization (HMO) that many thought was headed for bankruptcy.

Tom also served on the public interest team that resolved massive litigation against the tobacco industry. Until that time, Big Tobacco had never lost a case or paid a dime to settle health claims out of court. When Mississippi, Massachusetts, and a few other states filed suit to recover Medicaid costs for smoking-related illnesses, their effort seemed quixotic. Yet one by one, Green and his colleagues enlisted forty other states to join the effort. That momentum brought the tobacco companies to the bargaining table. In 1998 the industry bowed to more stringent regulation and agreed to pay $350 billion in damages.

I wrote a case study about this meganegotiation for my MBA course. Tom visited the class the first time I taught it and listened as students analyzed the deft coalition building and old-fashioned horse trading that led to the unexpected outcome. Near the end of the discussion, I asked Tom for his own conclusions. After complimenting students on their observations, he added something that surprised them. The secret of his success, he said, has been “making chaos my friend in negotiation.”

When Tom speaks about embracing chaos, he’s not talking merely about cases involving scores of parties, thorny issues, and messy politics. Rather, he knows that all negotiations, large and small, are chaotic, since they take place in fluid and often unpredictable environments. But that’s not to say that negotiation is random. The process is propelled by how the parties interact. Understanding how seemingly small moves or gestures can change the course of negotiation can mean the difference between agreement and deadlock.

Saying that negotiators like Tom are agile improvisers doesn’t mean that they make everything up as they go along. Far from it. They’re well prepared, but they don’t hobble themselves with rigid plans. They understand that effective negotiation demands rapid cycles of learning, adapting, and influencing.

Each of those italicized words is critical. Learning, adapting, and influencing take place in most negotiations, of course, but all too often only by happenstance. Instead, I’m talking about deliberate learning. It entails updating your expectations on three levels: (1) the scope of the issues under discussion, (2) the best means for resolving them, and (3) the nature of your relationship with counterparts. “Another way of saying it,” Ambassador Brahimi asserts, “is keep an open mind and be ready to change and adapt to the situation. Don’t ask reality to conform to your blueprint, but transform your blueprint to adapt to reality.”



The learning can’t be passive. It’s not like browsing in a store, checking stock prices, or reading a text. Latent information in those contexts is unchanging. A book has the same number of pages whether you skim it or read it word for word. But the fact is that much of what you must learn in negotiation can only come by interacting with the other party. Let’s say that you reveal your priorities to your counterparts, hoping to foster a cooperative exchange. If you’re right, you may proceed down a collaborative path. But if, instead, they interpret your disclosure as a sign of weakness, the negotiation could take a turn you wouldn’t have chosen.

Or you make a proposal. It doesn’t work for them. They counter with something that’s not so hot from your point of view. But the two ideas together prompt both of you to come up with a third option that neither party would have conjured on its own. When the issue under discussion changes, you must adapt accordingly. It may be a slight adjustment, or, as it was with Jay Sheldon, it may be a major shift.

Likewise, you seek to influence those on the other side, to convince them of the value of what you’re offering. What they say in response—and how they say it—speaks to that particular point, but it is also feedback on how effectively you’re engaging your counterpart. Maybe your style suits them. If not, you’ll need to change your approach. Beyond the dollars and cents of a potential deal, you are negotiating how to negotiate.
SUCCESS AND FAILURE


Decades ago, in a low-rise section of Manhattan, the governing board of a church on a corner lot asked the Julien Studley real estate firm to conduct an appraisal. Board members hoped that they could fetch a price that would allow them to build elsewhere and have enough money left over to fund their social programs. The firm’s figure was far less than they needed, however, so the church paid the appraisal fee and abandoned its plan.

The young broker handling the matter had another idea, though. What if he could somehow acquire all the parcels on the block? The whole assembly would be worth far more than its component parts. But there were lots of challenges. For starters, his firm didn’t have the resources to buy all the properties, nor did it have a deep-pocketed buyer lined up. And there was the risk that its acquisitions would invite competitors and potential holdouts.

It took time, but the broker and his firm pulled it off. Parcel by parcel, they met the different needs of various owners. They paid the moving expenses of some elderly tenants in one case. In another, they kept a restaurant open so that its employees would have work until construction began. They even worked out a condo arrangement in which the church could rebuild on its current land. But the firm also got tough with potential competitors. If you ever happen to be in Midtown, just look up, and you can see the result: the gleaming Citibank tower with its sharply angled top. The story of how it came to be offers powerful lessons about adaptive, improvisational negotiation.

Other cases don’t end as well. The board of a co-op apartment building enacted a rule requiring everyone to install and pay for child safety bars in the windows. One particular owner refused to pay, insisting that the board pick up the cost: in that case, $902. The board, made up of his neighbors in the building, felt compelled to uphold its legal authority and filed suit, hoping the owner would relent. Instead, he retained his own attorney, and the parties were off to the litigation races.

The co-op board won before the trial judge, lost on appeal, and then got the original judgment reinstated by a still higher court. This battle dragged out almost five years. By that time, their combined legal bills had ballooned to more than $80,000—almost one hundred times the amount originally at stake.

They weren’t finished, either. The objecting owner gave up trying to overturn the judgment, but the parties turned to fighting over whether he had to reimburse the board for its legal costs. When they were finally done, they had broken through the $100,000 barrier.

From the start, each side assumed that the other would come to its senses and abandon the fight. Instead, they both dug themselves ever deeper and kept on shoveling. Nobody planned on investing so much time, money, and emotion in a lose-lose proposition, yet that’s the outcome they got.

The apartment owner himself finally learned his lesson. “I’m a man converted,” he said afterward. “Anything you can possibly do to avoid a lawsuit, do it.” The lawyer for the co-op’s board wasn’t chastened, though. “I think the expenditures here were appropriate and were pretty much kept to a minimum,” he said. He claimed that his clients “had an idea of what was going on” throughout the case. “There were no surprises.” His attitude betrays a fatalistic commitment to a strategy even when there’s mounting evidence that it’s not working.

Maybe the owner could have “donated” $902 for some other common use without having to back down on the legal principle. Or another resident, caught in the cross fire, might have made the case go away by anonymously sending the board $902 in cash to cover the cost of the window bars—a bargain compared with being assessed for the mushrooming legal costs. The fiasco also might have been averted if just one board member had asked the right question when they filed suit: namely, What’s the worst thing that could happen here? An obvious answer would be that the owner would be just as obstinate as they were.

Cookie-cutter strategies crumble in the turbulence of real-world negotiation. Persistence is often a virtue, but clinging to an obsolete plan is not. Jay Sheldon was intent on buying the nearby cable system. When it became clear that its owner wouldn’t budge on price, however, he didn’t try to beat him down further or cave on his own valuation of that business. Nor did he walk away. Instead, he adapted ...

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Book Description BRILLIANCE AUDIO, United States, 2014. CD-Audio. Book Condition: New. Unabridged. Language: English . Brand New. Michael Wheeler has written a new business classic. He presents powerful negotiation strategies and techniques for managers in any industry. --Henry McGee, former president, HBO Home Entertainment A member of the world-renowned Program on Negotiation at Harvard Law School introduces the powerful next-generation approach to negotiation. For many years, two approaches to negotiation have prevailed: the win-win method exemplified in Getting to Yes by Roger Fisher, William Ury, and Bruce Patton; and the hard-bargaining style of Herb Cohen s You Can Negotiate Anything. Now award-winning Harvard Business School professor Michael Wheeler provides a dynamic alternative to one-size-fits-all strategies that don t match real world realities. The Art of Negotiation shows how master negotiators thrive in the face of chaos and uncertainty. They don t trap themselves with rigid plans. Instead they understand negotiation as a process of exploration that demands ongoing learning, adapting, and influencing. Their agility enables them to reach agreement when others would be stalemated. Michael Wheeler illuminates the improvisational nature of negotiation, drawing on his own research and his work with Program on Negotiation colleagues. He explains how the best practices of diplomats such as George J. Mitchell, dealmaker Bruce Wasserstein, and Hollywood producer Jerry Weintraub apply to everyday transactions like selling a house, buying a car, or landing a new contract. Wheeler also draws lessons on agility and creativity from fields like jazz, sports, theater, and even military science. For more information, visit the author s website at. Bookseller Inventory # BRI9781480553378

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Book Description BRILLIANCE AUDIO, United States, 2014. CD-Audio. Book Condition: New. Unabridged. Language: English . Brand New. Michael Wheeler has written a new business classic. He presents powerful negotiation strategies and techniques for managers in any industry. --Henry McGee, former president, HBO Home Entertainment A member of the world-renowned Program on Negotiation at Harvard Law School introduces the powerful next-generation approach to negotiation. For many years, two approaches to negotiation have prevailed: the win-win method exemplified in Getting to Yes by Roger Fisher, William Ury, and Bruce Patton; and the hard-bargaining style of Herb Cohen s You Can Negotiate Anything. Now award-winning Harvard Business School professor Michael Wheeler provides a dynamic alternative to one-size-fits-all strategies that don t match real world realities. The Art of Negotiation shows how master negotiators thrive in the face of chaos and uncertainty. They don t trap themselves with rigid plans. Instead they understand negotiation as a process of exploration that demands ongoing learning, adapting, and influencing. Their agility enables them to reach agreement when others would be stalemated. Michael Wheeler illuminates the improvisational nature of negotiation, drawing on his own research and his work with Program on Negotiation colleagues. He explains how the best practices of diplomats such as George J. Mitchell, dealmaker Bruce Wasserstein, and Hollywood producer Jerry Weintraub apply to everyday transactions like selling a house, buying a car, or landing a new contract. Wheeler also draws lessons on agility and creativity from fields like jazz, sports, theater, and even military science. For more information, visit the author s website at. Bookseller Inventory # BTE9781480553378

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