Negotiation Space

Impasses or deadlocks stop your business negotiation in its tracks. Although it is hard to get past deadlock, it can be done.

Many negotiators are reluctant to return to negotiations due to loss of face or other personal issues. And, often, negotiators don’t want to make the first move toward breaking the impasse and wait for the other party to do so.

Here are few things to do to break an impasse (and save face in the process):

Make a plan to open the discussion in a face-saving way. Your goal is to get the other party to listen.

Try to break down what is causing the impasse. Various reasons, including personality differences or poor decision-making ability could be behind the impasse. Once you pinpoint the cause, you may be able to figure out a work-around.

Change the negotiator. This tactic serves many purposes:

• Shows you are making a conciliatory move
• You may be able to address personality issues
• Gives the team a way to retreat from previous concessions or to be able to introduce new arguments
• The unpredictability of this tactic is disconcerting to the other party.

Not all impasses can be broken. Negotiators who face an unbreakable impasse may have to be able to walk away from the negotiating table. Perhaps a more productive discussion can be held at another time.

How do you break an impasse? Please share your tips.

You’ve probably heard that getting through life is more like running a marathon than a sprint. That is because to succeed in a marathon you need endurance more than speed.

Marathon negotiations require endurance and focus and they often produce agreement. These types of long–usually overnight –negotiations, are seen often in diplomacy, international trade talks and in union-management bargaining.

Why are marathon negotiations so successful?

• The more time you spend with the other party, the better you will get to know each other.
• It isolates the parties at the table from their larger organizations, creating an “us versus them” dynamic.
• Repeating an argument many times makes both sides tired of it and more likely to want to compromise.
• Working on something so long makes the parties want to succeed (that is, to reach agreement)

Marathon sessions are more likely to be successful if you have very defined goals. It also may be that more highly charged issues benefit the most from the marathon treatment

However, as we said before, marathons are all about endurance. If you don’t have the stamina to hammer out an agreement over a very long stretch of time, you may actually be the party that buckles in or you may force a deadlock.

Most negotiators would probably prefer shorter sessions. Many would opt to have breaks and time-outs if the negotiations draw long.

In the end, it will depend on what is being discussed and who is discussing it to determine whether a marathon session will bring about agreement.

Here’s a scenario: You have been in a business negotiation for several days. There are ten items on the agenda and you have been reaching agreement on each of them, albeit slowly. You come to the tenth item and you can’t reach an agreement. What do you do?

• Do you agree to disagree on the tenth item but declare you have a deal?
• Do you call the whole negotiation off?
• Do you agree to negotiate on the tenth item at a later date?

This is a common occurrence since there will be items that are harder to agree on than others. But should you allow hard issues, or issues where you are deadlocked, derail the entire negotiation? Perhaps the best answer is that it depends on what it is and how big an issue it really is.

If you can’t agree on an item now that will keep most certainly keep coming up in the future, then you should continue to negotiate until you reach agreement. This is especially important if you are in the process of negotiating a joint venture. As is reported in “The Rules of Alliance,” a BusinessWeek article about an upcoming alliance between Intel and GE, joint ventures have to respond to compatible, mutually-agreed objectives. The article says:

“But there is a powerful temptation for two companies that are strongly attracted to each other to rush things along, like teenagers with hormones raging. ‘You get impatient. You want to get moving. You’re excited,’ says Louis Burns, vice-president and general manager of Intel’s Digital Health Group [...] Often during negotiations, Burns notes, if two sides agree on nine points and are stuck on the 10th, they’ll let the 10th one slide and agree to revisit it down the line, if need be. But for joint ventures, he warns, ‘the problem is that the 10th point will come and bite you in the backside later.’”

Read the article here: http://www.businessweek.com/managing/content/aug2010/ca20100826_270920.htm

If you are discussing something that does not have the ability to impact the entire scope of the agreement, or that is deemed to be minor, then you should agree to disagree on the one issue, and revisit it later.

What are your thoughts? Please share your experiences in the comments.

Is there a point where you stop negotiating? The emphatic answer is yes. There is always a point in a negotiation where you stop negotiating.

In the best case scenario, you stop negotiating when you get to your Both-Win deal, and everyone is satisfied. However, there are times when you are not getting to any resolution, and you have to know when to stop.

When either party has made a final (read unchangeable) decision: Say you have decided to terminate an employee. He/she needs to go because you need a different skill set from what this employee offers (or what he/she can learn). There is no more room for discussion. The employee may try to negotiate with you: he/she will learn new skills, he/she will try harder, etc. You have made a final decision and you are not looking to have your mind changed.

When you have reached deadlock: Sometimes parties reach an impasse and cannot reach an agreement. Sometimes one party uses deadlock as a tactic to test the resolve of the other party. Although sometimes deadlocks make it easier to reach compromise afterward, sometimes they just mean the negotiation is not going anywhere.

When there is a reluctance to reach an agreement. Sometimes parties enter a negotiation without really wanting to negotiate. It may be a requirement that they attempt to negotiate a deal, but there is no will to do so. If either party is reluctant to negotiate, stop negotiating because the negotiation is going nowhere!

When there is unethical behavior going on: Bad faith and lack of integrity will not create a solid, workable agreement. If there is unethical behavior from either party, you will need to clear it up or you won’t be able to continue your negotiation.

When either party is found to have no authority: If the party you are negotiating with does not have the authority to enforce a decision, chances are the agreement will not stand.

When do you stop negotiating? Please share your views in the comments.

Our parents and teachers drummed it into our heads that if we played by the rules, we’d get ahead. We wouldn’t run afoul of authority or of other players. Playing by the rules is generally a good idea, but in a business negotiation, it may depend on what the rules are and who imposed them.

During a business negotiation, either party can lay out the rules. Creating rules gives a party control of the negotiation. Be vigilant about the rules the other party is imposing—sometimes these rules are designed to stack the cards against you. So, if a rule seems arbitrary or unfair, you can question it or even disregard it.

The other party could create rules specifically to disturb the balance of power, as Dr. Chester L. Karrass writes in his book Give and Take. Some of the rules to watch out for are these:

• Speaking order
• Use of experts
• Rules of evidence and documentation
• When questions may be asked
• Recording/minutes
• Eating times
• Rest/caucus periods
• Seating arrangements
• Authority rules

For instance, if only one party can decide how many experts can be used or how you may question these experts, that party is benefiting at your expense by controlling the flow of information. You shouldn’t have to abide by this rule.

The conclusion here is that you play by the rules that are fair, and negotiate the rules that are not appropriate.

How do you deal with rules in a negotiation?

The previous Negotiation Space post was about hardening positions and how that generally makes negotiations more difficult or even impossible. Hardening your position during a negotiation may be considered “old school” while finding room for compromise is the “new school.”

Inc. Magazine published an article entitled “7 Tips for Masterful Negotiating.” To introduce the seven tips author Christine Lagorio writes the following:

“Think confidence, machismo, and stamina are the keys to winning a negotiation? Then your bargaining skills need a reboot. Over the past decade, a growing field of literature on the subject has come to the conclusion that checking your ego at the boardroom door is a must. Compromise and kindness are the new rules of negotiation.”

Machismo, and its feelings of superiority and infallibility, is “old school.” The “new school” is being kind and understanding and seeking compromise or common ground. In a sense, the old school is to think win-lose: one party wins and the other party must lose. The new school is to think win-win: both parties stand to gain from the negotiation.

To create a win-win scenario or to be new school, follow the seven tips listed in Inc. Magazine (most of which we have discussed here on Negotiation Space). These tips are:

1. Listen before you speak

2. Embrace your fear

3. Be credible and stick to the facts

4. Be prepared

5. Think compromise not fight

6. Find areas of agreement

7. Don’t underestimate your experience

Read the entire article here.

Are you old school or are you new school?

In business negotiations, we are usually looking to get a “yes.” Yes means agreement and generally indicates that we are ready to move forward. Anthony Tjan, CEO of venture capital firm Cue Ball, writes on his Harvard Business Review blog that sometimes you want to get to “no.”

“No” seems counter intuitive. We don’t want a no because it means that we have been denied, that we won’t get what we want. But as Tjan argues, “no” can often move a negotiation along. He writes:

“A yes is obviously the answer you always hope to get, but the ability to get a no, especially if it is a quick one, is critical to maximizing efficiency and effectiveness. The sooner you get a no, the faster you’ll be able to look for that next yes.”

Basically, Tjan is arguing that decisiveness or getting clear-cut answers moves a negotiation forward. When the other party is unsure and gives you a maybe, then you are going to be stuck on that issue. It’s not clear cut. “Maybe” is never a good answer, whereas “yes” or “no” are actionable.

Tjan gives four tips to drive a decision. The first one is the most important:

“Be clear on the “ask”. I have seen people pitch us with brilliant clarity of ideas, but a cloud of ambiguity on what they want from an investment partner in terms of both capabilities and dollars.”

In order to get a clear cut answer, you have to ask a specific question—a question that requires a yes or no answer.

Read Anthony Tjan’s blog post here: http://blogs.hbr.org/tjan/2010/04/how-to-get-to-no.html

The bottom line is that when you get no for an answer you have gotten a response. In a business negotiation you are not only looking to get your way, you are looking to engage and discuss with the other party. When the answer is maybe, or the question is not even discussed, you are not engaging and not moving forward.

In a negotiation, you have to know your negotiating terms: the limits for the transaction, but also the words you use to get to an agreement.

Every business type (real estate, finance, etc.) and every organization has its own vocabulary. Some might say that industry-specific terms are jargon. In any case, you will have a hard time understanding people in your field if you don’t know what their words and terms mean.

In business negotiations, these are some terms that come up frequently:

• Concessions
• Assumptions
• Deadlock
• Bargaining
• Escalation
• Reciprocity

We have discussed many of these terms here on Negotiation Space, so you are probably familiar with all of them. If not, check out our Negotiation Glossary where you will find over 270 negotiating terms described and defined. Another great resource for learning more about business language is the Business Dictionary at http://www.businessdictionary.com/

For non-English speakers who are looking to do business in the United States, it is especially important to learn the language of negotiation. Teacher Joe, a website dedicated to teaching business English, a list of 20 commonly used negotiation words is provided, along with definitions. Check it out here: http://www.teacherjoe.us

How good is your business negotiation vocabulary? How about taking a quiz? Over at EnglishClub.com there is a 10-question quiz you can take to see how you do. Here is the link:

http://www.englishclub.com/

Let us know your score. (If you have attended one of the Karrass Effective Negotiation Seminars or have been reading this blog regularly you should easily score 10 out of 10!)

Peter Foster, a reader of the Karrass Facebook Fan Page (if you are on Facebook, be sure to fan us!) asked the following question:

I have been following the breakdown in negotiations between British Airways and the cabin crew union, Unite. BA has lost about $70 million in revenue because of the subsequent strikes. Apparently the union and BA were about $10 million apart in reaching a negotiated settlement on pay and conditions. The strikes may ultimately put the airline out of business. How do you assess when to settle a negotiation, when the cost of not settling is so large? Anybody else been following this saga and have any further insight?

First, let’s get to up to date on the strike:

BusinessWeek reports the following in a March 31st article:

“British Airways Plc plans to get about 90 percent of its flights off the ground today at London Heathrow airport as the carrier recovers from a second walkout by cabin crew that ended at midnight.

… British Airways scrapped hundreds of trips when flight attendants followed a three-day strike with a four-day stoppage. The carrier faces the threat of more walkouts in April if it can’t resolve pay and staffing differences with 12,000 workers.”

The same article makes the point that BA stock actually has gained value since the strike:

“British Airways has gained 18 percent in London trading since Feb 22 when the Unite union said flight attendants had voted to strike, suggesting investors may be dismissing losses and supporting Chief Executive Office Willie Walsh in has attempt to reduce expenses and improve efficiency. The carrier’s stock fell 0.9 percent to 242.9 pence as of 12:57 today.”

Read the BusinessWeek article here.

Both parties have indicated that they want to continue negotiating.

Now let’s discuss settlements. According to Dr. Chester L. Karrass, the settlement range is defined as “the difference between British Airway’s estimate of union’s minimum and the Unite union’s estimate of British Airways’s maximum.” The important point is this: the settlement range is based on each sides estimate of the situation, not the real situation itself.”

We are talking about reaching a point where both sides feel they have gained (or lost) enough. When that happens you have reached a settlement point. This point is based upon estimates and perspectives. Clearly in this situation, British Airways has estimated that it can actually afford to operate in spite of the strike. It does not see itself as being put out of business. The Unite union has decided that it is worth trying to bring BA closer to its salary goals. Organizational pressures influence these estimates and perspectives. BA will experience pressures from its stockholders and Unite will experience pressures from its union members.

Many negotiations that fail to reach settlement (deadlock) end up using a third-party arbitrator, who is most likely not subjected to the same perceptions and false estimates. It remains to be seen if the British Airways- Unite union situation goes this route.

What is your take on this negotiation? Should the sides have settled already?

Negotiation lessons from the current Israeli-Palestinian situation

Negotiations and confrontations have been going on between Israel and the Palestinians for decades. Many US administrations have been involved in trying to reach a settlement between the two parties. Recently, there have been renewed efforts by the United States to move the process along.

This past week, diplomatic chaos ensued when Israel announced, during a visit by Vice President Joe Biden, that it was continuing to build housing in East Jerusalem. This is relevant because the status of Jerusalem is one of the main sticking points in the negotiations. To Israel, Jerusalem is the capital of the state, and therefore non-negotiable. Palestinians view Jerusalem as part of the disputed territories of the West Bank.

• Deal with other issues first

The biggest negotiating lesson from the US-assisted Israeli-Palestinian discussions is how to deal with highly sticky and intractable issues such as Jerusalem. The first step in dealing with sticky issues is to move to find other areas of agreement. In fact, this is what negotiators have been working on for the past several years.

• Defuse tension

In a March 21 article BusinessWeek is reporting that Israeli Prime Minister Benjamin Netanyahu has requested that US Secretary of State Hillary Clinton help create “mutual confidence-building:

“to defuse the tensions over the east Jerusalem project.”

“Clinton said in a March 19 interview with Bloomberg TV. ‘It’s about the overall atmosphere that is necessary to demonstrate clearly and unequivocally the commitment to the negotiations and the outcome of a two-state resolution.’”

(Read the article here. )

• Provide assurances

The US government has often functioned as an intermediary between Israel and the Palestinians. During the Bush II administration, Secretary of State Condoleeza Rice often traveled in the region.

Jackson Diehl, writing an op-ed piece in the Washington Post said this about the issue of settlements:

“The Bush administration privately offered him (Palestinian President Mahmoud Abbas) an assurance: Any Israeli settlement construction that took place during the talks would not be accepted by the United States when it came time to draw a final Israeli border.

• Do not get derailed by provocation

Diehl writes the following:

“As Rice might have told the current White House, lesson No. 1 from history is that there will always be a provocation that threatens to derail peace talks — before they start, when they start and regularly thereafter. (…) The trick is not to let the provocation become the center of attention but instead to insist on proceeding with the negotiations.”

Read Diehl’s piece, A Familiar Obstacle to Mideast Peace: Mahmoud Abbas, here.

Certainly, the Israeli-Palestinian peace negotiations will provide plenty of material to study negotiation practices, and to see what works and what doesn’t.