The Negotiation Handbook

Patrick J. Cleary

• Editorial: Routledge
• Año: 2016
• ISBN:
  9781315291635
• Edición: 1
• Categoría: Negocios y empresa
• Categoría: Negocios en general

Whether you're involved in a labor-management dispute or a landlord-tenant disagreement, considering a major purchase or overseeing a large commercial transaction, there are elements that are common to all negotiations. This book walks the reader through the world of negotiating in an easy-to-follow, step-by-step fashion, covering the macro and micro-process of negotiations, the importance of adequate preparation, knowledge of the rules, and the role and usefulness of a mediator.Written by a senior business policy analyst and former labor mediator for the U.S. government, the book focuses on labor-management negotiations; however, the concepts, skills, and insight it offers go well beyond labor-management disputes. The book is as useful for a first-time homebuyer or a business student as it is for a veteran union arbitrator or a busy executive.

Chapter 1


The Dynamics of Negotiation

More than anything else—yes, even more than money—the negotiation process is about power, ego, leverage, saving face, and, of course, “being right” above all else.

Power: At the core, every negotiation is a power struggle, no matter how small. It is one side’s attempt at primacy over the other side’s point of view or position. And, no one ever wants to feel powerless. Even police hostage negotiators know as a first tactic to create the illusion of power or control in the mind of the hostage-taker. If he/she feels powerless, the situation could erupt. The same is true in even more calm surroundings.

I was involved in a case between two warring professional associations. On one side was Group A, an association of very highly paid professionals. On the other was Group B, an association of state civil servant bureaucrats who regulated this particular profession. The average compensation of the professionals was several multiples of the average pay of the state workers. Group B could not seem to find consensus on a uniform set of regulations, so Group A faced a patchwork quilt of rules, which they found totally unacceptable. They were trying to force Group B to reach that consensus, but to no avail. While Group A felt a sense of urgency, Group B appeared to be taking their own sweet time. Group A was totally agitated and called me for advice. Before we met, Group A had issued a list of “demands” to Group B, which they were reinforcing through near-daily public statements. In between whacks with this stick, they would employ the carrot and try to ply select members of Group B’s leadership with gifts and resort vacations. Money was clearly no object. For their next move, Group A told me they were preparing a massive public-relations campaign directed at Group B, a full-frontal assault, to get them off the dime.

“First,” I said, “Vd stop issuing demands.” I cited the well-known adage that it makes no sense to holler at a pig. It only frustrates you and it annoys the pig. In all aspects of life, Group B was subjugated to Group A. At every meeting, at every intersection, they were reminded of their inferiority to Group A. Time and again, they were quite literally left in the dust of Group A’s limousines. In short, Group B felt almost powerless—almost. Group B had only one bit of power, of leverage, and that was that they set the rules that Group A lived by. Group A could spend, scream, pound the table or their chests as much as they wanted; Group B would work on a uniform set of rules when they were damn good and ready The angrier Group A grew, the happier Group B became. Power Having it for a change felt good. Once they issued the uniform rules, they would never have it again.

In the labor—management setting, labor is used to taking orders from management. During negotiations, they are on a more equal footing, however, and can make demands of management that they can’t make in the ordinary course of business. During negotiations, labor can hold up the sale of a company unit, or delay a merger, or cause a slide in the stock price if they decide to rock the boat. For the rest of the year—and in fact, once the deal is done—they can feel quite powerless. As a result, there can often be random exercises of power by those in a negotiation who aren’t used to having it and who may not ever have it again. Like a teenager behind the wheel of a Porsche, they find the novelity both thrilling and dangerous.

Leverage: Leverage goes hand in hand with power. When you have power, you have leverage. Leverage, however, can be more temporal and fleeting. It often moves back and forth in the course of a negotiation and can change from issue to issue. In a labor negotiation, there’s typically a balance of leverage overall. In fact, in most negotiations, there is a balance of leverage. But if, for example, you’re in an affluent area trying to buy a luxury car that is in short supply, you’ll discover what it feels like to have no leverage at all.

Leverage is a wonderful thing when you have it, and it’s pretty rotten when you don’t. In most people’s lives, there are only a few times when they actually have leverage. It’s inebriating. Like our friends in Group B, above, they had leverage for the moment, and by God, they were going to use it to the fullest extent possible.

For the world’s best example of leverage, we have to step outside the world of labor negotiations and turn instead to the world of Uncle Bernie. Uncle Bernie is one of my many uncles. He is this wonderfully ethnic, great, good guy. All his life he had pretty mediocre luck, which is to say he had pretty rotten luck, but no matter. After retirement, he hit the mother lode of leverage, thereby changing his luck forever.

Uncle Bernie lives in Northern New Jersey, and like many of his neighbors, dreamed of escaping New Jersey some day, And so, many years ago he drove off several hours into the hills of Pennsylvania. Uncle Bernie bought himself a nice parcel of land. That is, he put down about a hundred dollars on a nice parcel of land and signed a loan for the rest.

Back he went to New Jersey, where he continued to live and work for more than another decade. Each month, he very dutifully wrote his check to the lender and crept ever closer to owning the land free and clear Yet he never visited the lot itself; he left it out there like a dream that he only thought about. He wouldn’t go back, he vowed, until he owned it and was ready to build his retirement home. Like all good Irishmen, he was a little superstitious, and he didn’t want to jinx his dream home.

Soon, retirement was nigh. And so it was time for Uncle Bernie to make the trek to view the lot, meet with the builder, and decide on the plans for the house. En route, anticipation was high. It had been so long since he had been there, he even wondered whether he could still find the neighborhood.

Find it he did. As he drew closer, he could see that it was no longer the desolate outpost that he had visited more than a decade ago. Indeed the area had built up as the builder had promised. Finally, Uncle Bernie pulled up in front of his lot. There it was, after all these years. Right there where he had left it, just as he remembered it from the day he bought it.

Except that someone had built a house on it.

That’s right. Somebody actually built a house on Uncle Bernie’s lot. Somebody had made a major mistake. In fact, more than one person had to make a major mistake for something like this to happen. Among those in the deepest trouble would be a few lawyers, a title company or two, probably a bank, a builder, and some other bit players.

At that moment, as Uncle Bernie stood there, mouth agape, looking at his lot and somebody else’s house, he became awash in leverage. I know of no other example in history where anyone ever had more leverage than Uncle Bernie at that moment.

As you might imagine, Uncle Bernie pretty much had anything he wanted from the builder. He built a beautiful house on a much better lot, and it really didn’t cost him all that much. And he never even filed suit.

Leverage. It’s great when you have it. It’s awful when you don’t.

Ego: Ego also drives many negotiations and lies at the heart of many disputes. Negotiators of all shapes, and sizes, and levels of sophistication have enormous amounts of ego invested in their proposals, their view of beauty. It is, after all, “my” proposal, “my” language that “I” wrote, “my” organization, “my” building, “my” house. Also, people like winning, however they might define it. To lose is a blow to the ego, and no one wants that. Negotiations grow more difficult the more the negotiators are wed to their proposals, to their way of seeing the world.

In any negotiation, the person with the smallest (or the largest) ego wins. In other words, those who are comfortable enough checking all that baggage at the door will ultimately prevail. Why? Because they will be able to see through the haze of ego to the merits of the various proposals, regardless of where they originated. Sometimes in negotiations, one side makes demands of the other as a sort of “love test,” to try to exercise some leverage. They might insist, for example, that they meet only at a location that they choose. The egoists among us would bristle and insist on meeting at a place of their choosing. The best negotiators don’t care where they meet or whose proposal is discussed. Their interest is in getting a deal, and they do.

Saving Face: Also tied up in ego and power and leverage is the concept of saving face. No one wants to be taken advantage of. At the end of the day, both parties must be able to save face. The more high-profile the dispute, the harder this is, which is one reason why mediators attempt to institute “media blackouts” in very public cases. Former Labor Secretary John Dunlop—a fine mediator in his own right—says that the greatest decisions are made when no more than two people are in a room. Even mediators must some times clear out and let the parties talk directly to one another, because they’ve been busy posturing for the mediator as well. They need to save face even with the mediator.

As a negotiator, it is very easy to become caught up in your own point of view and to grow increasingly averse to the point of view of your counterpart. This is natural—you are an advocate after all. In difficult or prolonged negotiations where personalities clash, it is easy for each negotiator to want unconditional surrender from the other. However, the best negotiators understand that it is their job to make sure their counterpart saves face. You need to give your counterpart a “back door,” a way out, a way to claim even partial victory. If you do, it makes it easier to reach a deal on your terms, which, presumably, is your goal.

There is a type of face-saving in every labor—management negotiation. Once a deal is reached, the handful of union negotiators must take the tentative agreement to the full membership for ratification or approval. Typically, the union crows about its big victory over management while management remains silent. One reason for management’s silence is to assure some degree of face-saving for the union, and it is wise for management to do so. If after every deal, management publicly boasted that they had carried the day, the union members might believe them, reject the contract, and send their bargainers back to the table to extract more concessions from the company. By showing some restraint, the company allows the union to save face and secures a final agreement, hopefully one containing some terms favorable to the company as well.

One final thought on saving face: at the end of the day, the tonic effect of getting a deal is great. Think back to the most high-profile disputes you can think of. Do you remember what the issues were and who prevailed on each? Neither does anyone else. Think of some of the most public major-league sports negotiations and strikes. On the day they end, there is a story about who gained from the agreement and who lost. After that story, the agreement is never mentioned again. The only thing the parties—and in this case, the public—care about is that there is a deal, the dispute is behind them, and the season can begin.

This is also true in negotiations over leases, buying a car, and so forth. In fact, ask those who’ve been through a divorce settlement how they feel when it’s done and put behind them.

Fact is, issues of face-saving vanish in the glow of a final deal.

Being Right: “You must allow people to be right,” said Andre Gide, “because it consoles them for not being anything else.” There is no virus more pernicious, more damaging to decorum and peaceful negotiations in our society than the human need to be unassailably, unequivocally, 100 percent right. Forget food, forget water, forget love. At the top of Maslow’s Hierarchy of Needs¹ should be the persistent human need to be right.

The sad truth is that in negotiations it doesn’t matter. No points are awarded for being right. Learn this and the rest is easy.

About forty-eight hours before a strike deadline, I was discussing options and issues with a senior executive of a Fortune 50 company. He was obviously frustrated with the union’s inability to see the wisdom of his point of view. He wanted to know when he’d get a chance to go before some tribunal, tell his story, and be vindicated. But this was not arbitration, where some third party will hear each side and hand down a final decision. This was negotiation, where you must work together with your counterpart to find a solution. No matter, he was red in the face and was shaking. “But I’m right!” he kept shouting at me, “But I’m right!”

“That’s great!” I responded as cheerfully as possible.

“Tell you what we’ll do,” I said. “Let’s go find a print shop and have them make up a big button that says T’m right,’ and you can wear it right there on your lapel for all the world to see.”

I emphasized my last point. “If you want,” I said, “You can wear it all through the strike.”

I wanted to make the point. It didn’t matter if he was right or not. He was two days short of the strike deadline. He needed to dispense with his obsession over being right and focus instead on getting a deal.

It’s like the scene in The Fugitive when Tommy Lee Jones has Harrison Ford cornered above the waterfall, and Harrison Ford, as the wrongfully convicted fugitive yells, “I didn’t kill my wife!” Tommy Lee Jones, as his pursuer, the U.S. Marshall, hollers back quite matter-of-factly, “I don’t care!” His job was not to adjudicate his guilt or innocence, his job was to bring the fugitive back.

So, too, in negotiations. It matters little who’s right and wrong. Those terms grow increasingly more relative—and meaningless—the more negotiations you experience. What’s “right” is what the parties agree to. What’s “wrong” are all those issues that keep them apart. No points are awarded at the end for being right, only for getting an agreement. Imagine a game of golf where you’re not scored on how many strokes you take, only whether or not you get to the cup.

To put it another way, all the moral certitude in the world is worthless if you don’t get what you want from a negotiation.

Drain the Swamp: One point about the end of the process, the goal. Although perhaps more appropriately filed elsewhere, there is a theme that has been mentioned thus far and will run throughout the entire book, so it must be stated here. Throughout the entire negotiation process, throughout the clashes of ego, the power struggles, the jiu-jitsu of leverage, the Scylla and Charybdis of saving face and being right, you must keep your eye on the prize. You must never lose sight of your goal, which is to get a deal. Recall the well-known adage that when you’re up to your waist in alligators, it’s hard to remember that your original objective was to drain the swamp. So, too, in negotiations, your goal is to drain the swamp. You must not let the other issues, the noise—in whatever form it takes—the distractions, the rhetoric, distract you from draining the swamp.

The best example of keeping one’s focus comes not from a negotiator but from a mediator, a former colleague of mine, Maggie Jacobsen. She and the great Bill Usery are the best mediators I have ever known. It is not often known that the mediator, too, bears the brunt, the ire of the parties (more on that in chapter 6). The parties often try to exert leverage over the mediator, too, to throw him off stride and to create heightened sensitivity, which might pull the mediator closer to their corner. Whatever the re...