Design Choices: Explicit or Implicit?

When planning upcoming talks, should you and the other parties discuss the range of design choices explicitly or let them unfold on the fly? Clarity is usually preferable, because discussion can spur efficiency and commitment to head off misunderstandings – but not always. In contentious situations, the prospect of endless haggling about the “shape of the table” can consume valuable time. Before launching a negotiation about the negotiation, consider the context and the people involved.

Design Choices: Imposed or Negotiated?

Should one side try to impose its design-choice preferences, or should the choice be open to group negotiation? When your company stipulates elements of the process, you can gain control – but you may also generate resentment from parties that could later subvert the decision.

Once you’ve thought about whether your design choices should be negotiated, it’s time to consider several important options.

Auspices

Without deep consideration for the process toward arriving at agreement, you could unintentionally derail it by imposing negotiating conditions under your own ‘auspices,’ that is, you set the agenda, tone, time, and place for the negotiations – leaving your counterparts out of this early and critical process. Doing this may signal partisanship and unilateral control to more skeptical negotiators.

Asking a third party to host and chair the process sets up a more successful negotiation. When principal parties are at odds, a third-party, such as a mediator, may well take the lead in chairing the process.

Mandate

Parties also need to be very clear about the intended output of their forum. Do participants have voting rights or merely the ability to discuss possibilities? Should any agreements arising from the forum bind the participants and their constituents, or will your agreements merely be advisory to some other body, such as a government agency, that will later reach the formal decision?

An ambiguous mandate can also sink the deal.

Participants

When it comes to complex negotiations, the choice of who issues the invitations and who participates can be vital. Should participants be full principals in the process or nonvoting observers? You can directly negotiate such choices or invite groups to select representatives who may or may not have the power to bind their constituents. The underlying vision of the process – DAD or FC, or a hybrid of both – helps determine the breadth and basis of participation.

For more elaborate negotiations, parties may seek coordination, logistics, and process support from a body specifically created or hired for this purpose. In some cases, mediation or outside technical expertise may be desirable, especially when negotiators have divergent expertise and limited resources. To avoid actual or perceived bias, the issue of who pays for such support – the project proposer, an outside entity such as a foundation, or some combination of stakeholders – must be carefully considered.

Agenda and Staging

Negotiators must decide whether to set an agenda at the beginning of talks. Should issues be specifically related to an intended contract or formed by a wider set of stakeholders, as is common in the FC process? Once you’ve established an agenda, it’s time to decide who will deal with which issues. Participants might be broken into subgroups to confront specific issues, or they may negotiate each issue together.

Your negotiations can be ad hoc or consciously staged. For example, you might begin talks by jointly defining problems, followed by fact finding, negotiation of agreed upon issues, and a decision and commitment phase.

Procedures and Decision Rules

Procedures to be decided upon include determining whether to appoint a chair, how to recognize speakers, and how to adopt, revise, and accept documents. When it comes to the actual procedure for reaching agreement, at one extreme, ad hoc deliberation can occur informally; alternatively, decisions may be made through majority rule, through sufficient consensus - enough support to reach a meaningful decision – or by full consensus.

External Communication

Frequently, groups will have conflicting opinions about what information to share with those outside the negotiation, including constituencies and the press. When stakeholders trust one another and are genuinely committed to solving their joint problem, a more closed process will be productive.

However, a more open process will be less apt to generate controversy and opposition from excluded stakeholders and constituencies.

Postdeal Arrangements

The deal forum may not have a life beyond the agreement. Parties may agree in advance on a process for implementation and any possibilities for adaptation or renegotiation. Ultimately, your choice or process design can affect whether you achieve the result you intend and whether interested parties believe that the outcomes of a negotiation were fair, respectful, and inclusive.

Related Article: Mediation in Transactional Negotiation

To gain some measure of your counterpart’s trustworthiness, plant a “trust land mine”:
• Ask some questions to which you already know the answers.
• If someone avoid your information requests, or if he lies outright, that’s one sign you should be careful about what you reveal – or call off the talks altogether.

Of course, someone who answers a few questions truthfully might not always behave honestly.

Nonetheless, trust land mines offer a reasonably good way of determining if a person is leveling with you.

Related Article: Six Strategies for Building Trust in Negotiations

• Does the mediator operate from an interests-based perspective? (See Also: Salvaging the Deal)
• Did the mediator develop a relationship of trust and confidence with you? (See Also: Relationship Rules and Business Negotiation)
• Was the mediator creative? (See Also: Expanding the Pie – Integrative versus Distributive Negotiations)
• Was the mediator patient yet tenacious? (See Also: Using Mediators to Resolve Disputes)
• Would you hire this mediator again? (See Also: Navigating the Mediation Process)

To guard against acting irrationally or in ways that can harm you, authors of Beyond Reason: Using Emotions As You Negotiate Roger Fisher and Daniel Shapiro advise you to take your emotional temperature during a negotiation. Specifically, try to gauge whether your emotions are manageable, starting to heat up, or threatening to boil over.

Here are some suggestions for lowering your emotional temperature:

Develop an Emergency Plan

Give yourself an ‘out’ – a break that allows you to take a walk to cool down, to call a friend or colleague for reinforcement, or remind yourself of your BATNA (best alternative to a negotiated agreement).

Shift the Focus

Ask questions that you time, bring new information, and test your assumptions. (See also: In Deal Making, Broaden Your Focus)

Diagnose Your Ailment

What core concerns of yours are not being met? Are you hurt because you feel unappreciated or dismissed? Once you understand why you’re upset, you’ll be better able to signal what you need. (See also: Emotion and Judgment)

During the day-long event, distinguished panelists explored current trends and opportunities for aspiring scholars and practitioners in the alternative dispute resolution field through the perspective of Professor Fisher’s work.

Video of each panel is available on the HNLR website here: http://www.hnlr.org/symposium2013/ and includes the following:

Panel 1: “The Little-Known Professor Fisher: Path to a Life in Alternative Dispute Resolution”

Panelists: Amy J. Cohen, Andrea Schneider, Daniel Shapiro, William Ury

Moderator: Michael Wheeler

Panel 2: “The Impact of Roger Fisher’s Work at Home”

Panelists: Jared R. Curhan, David A. Hoffman, Grande Lum, Andrew S. Tulumello

Moderator: Michael Moffitt

Panel 3: “The Impact of Roger Fisher’s Work Abroad”

Panelists: Diana Chigas, Alain Lempereur, Jamil Mahuad, Bruce Patton

Moderator: Eileen F. Babbitt

Panel 4: “The Future of Dispute Resolution”

Panelists: Sheila Heen, Carrie J. Menkel-Meadow, Robert H. Mnookin, Robert Ricigliano

Moderator: Robert C. Bordone

The Negotiation Journal also published a group of articles celebrating Professor Fisher’s legacy, which are available on the Wiley website here: http://onlinelibrary.wiley.com/doi/10.1111/nejo.2013.29.issue-2/issuetoc.

1. Diagnose the Barrier

When you’ve made progress on certain issues but remain stymied on others, it’s time to take a hard look at what’s standing between you and a mutually acceptable deal. Professor Robert Mnookin of Harvard Law School and his colleagues at Stanford University have created a catalog of common barriers to agreement, including strategic behavior, reactive devaluation, and authority issues.

If you think strategic behavior – the unwillingness of one or both sides to make a best offer – may be the problem, enlist a trusted, unbiased third-party for help. The negotiators can then disclose their respective bottom lines privately to the neutral, who will tell them if there’s an overlap. If so, the negotiators should be able to hammer out a deal quickly within the zone of possible agreement (ZOPA).

If not, it may be wise to abandon talks and pursue other alternatives.

Psychological factors can block agreement, too. Professor Lee Ross of Stanford University demonstrated the all-too-human tendency to reactively devalue what other people offer us.

“If that were truly important to them. they wouldn’t have made the concession.” We tell ourselves.

We need to avoid that trap in our own thinking and be careful not to trigger that reaction from others. Rather than trying to wrap things up by putting a reasonable number on the table, for instance, wait for the other side to make a specific request. In this manner, you may increase the perceived value of your concession – and your counterpart’s satisfaction.

Sometimes a tag-team approach is needed to reach closure. The first cohort of negotiators may settle some important issues but run out of gas when it comes to others. A fresh team may bring a new perspective without the burden of personality problems that their predecessors developed. Changing the lineup may be especially useful if early negotiators have limited authority. This is common practice in diplomatic negotiations; foreign-service specialists often do much of the groundwork before heads of state meet to resolve any remaining issues.

2. Use the Clock

Negotiations expand to fill the time available. We may not like to make important decisions under the gun, but deadlines can provide a healthy incentive to come to agreement. It’s no accident that lawsuits settle on the courthouse steps and that strikes often are averted at the eleventh hour. Until that point, the daily costs of protracted negotiation may not seem high (though, clearly, they mount over time).

Only when the judge is about to be seated or the contract is due to expire are people jolted out of the relative comfort of the status quo. If you anticipate these moments, recognize your priorities, and keep channels of communication clear, you’ll be able to move quickly and wisely when you have to.

To avoid getting bogged down in never-ending talks, it pays to impose a deadline at the outset of negotiation. You also can put a fuse on the proposals you make, though exploding offers can backfire if the other party resents being put under artificial pressure.

3. Count Your Change

Even if you’ve done everything right, you have to be alert for gambits and tricks as the negotiation winds down.

A classic bargaining tactic among lawyers advises, “After agreement has been reached, have your client reject it and raise his demands.” It’s a common gambit for car salespeople, too, as  they return from conferring with the manager. The news is never good: “You’ve got to offer $1,000 more – but he’ll toss in the floor mats for free.”

Shame on those who resort to such tired old ploys. Shame on you, too, if you’re not ready for them.

When you reach agreement, confirm that all the key provisions have been covered so there will be no surprises. Even after you’ve gotten a sincere handshake, your counterpart may come back with further demands if she is having a tough time selling the deal internally. (You’ll sometimes be in that position yourself.)

From the outside, of course, it’s impossible to know when you’re being taken for a ride and when the need for revisions is legitimate. How the negotiation has gone up until that point may offer an important clue.

Either way, however, you should be leery about making any unreciprocated concessions. If your counterpart asks for new terms, even if you can afford them, you should get a favorable adjustment in return. Otherwise, you’re simply encouraging further requests.

4. Sign Here

Most important deals require a written contract. Whatever you’ve gained through artful negotiation will go down the drain if the understanding you reached is poorly reflected in formal documents.

The technical side of executing an agreement isn’t glamorous, but it’s where many battles are won or lost. Even if you’re weary, resist the temptation to let the other side “write it all up.”

It’s smarter to have your own lawyers and specialists get the language right than to seek their help later in rewriting a draft that the other side has mangled. Because you have control over your own lawyers, you can tell what risks you’re willing to take and where you need protection.

Your attorneys must known the limits of their responsibility, of course. While it’s their job to protect your rights and identify potential trouble spots, it ultimately falls to you to determine which risks you’re willing to assume. After all, in business (as in life) there are few certainties. As a practical matter, it may be sensible to leave some items unresolved and others ambiguous.

For example, if you have retained a corporate trainer to present a program to your company, you will likely want to include a clause for rescheduling if a conflict arises. If that seems unlikely, it may be sufficient to stipulate that the new date will be at a “mutually agreeable time,” rather than creating cumbersome procedures and policies that you’ll never need.

Instead of getting bogged down arguing tedious technical points, consider addressing them globally. A straight-forward dispute resolution clause, crafted while everyone is enthusiastic about the deal, can reduce the cost of unexpected problems and keep you out of court.

At the end of negotiation, boiler-plate clauses governing renewal options and the like may not seem like dealmakers or deal breakers, but they determine who is holding the cards when it comes time to renew the agreement. For this reason, take special care to get the language of exit clauses right so that you’ll be in a good position to renegotiate down the road.

Parties often are preoccupied with immediate dollars and cents when they execute a deal, but, in the long-term, the option to extend or terminate a deal may have much more financial value.

Finally, be ultra-careful about casually signing a “memorandum of understanding” or an “agreement to purchase.” These documents may entail real commitments and limit your ability to win any further benefits, ending the negotiation before you even realized it had begun.

5. Let Them Brag

You may not have liked your counterpart much at the outset, and after marathon haggling sessions, you may like him even less. It’s hard to be civil in such situations, yet grace is more important at the finish line.

To get a deal ratified, you may have to make your counterpart look good to his constituents. This is not just a question of virtue. If the other side loses face, he may be tempted to retaliate and spurn a deal that, by all rights, he should accept. If someone’s agreement comes grudgingly, getting him to deliver on his promises may be like pulling teeth.

To make the other party look good, you may need to orchestrate the concluding moves in the negotiation. In collective bargaining, for example, the management often prefers it when the union makes an offer that the company can accept, rather than vice versa. (Appearing weak is less of a concern for management than it is for the union’s elected agents.) Union officials can then say to their membership, “We got the company to accept our proposal,” rather than, “Here’s what we finally accepted.”

William Ury, author of Getting Past No: Negotiating Your Way from Confrontation to Cooperation, calls this strategy “building a golden bridge.” It involves allowing the other side to make a graceful exit – and practicing the diplomatic art of letting others have your way.

Related Article: In Deal Making, Broaden Your Focus

1. Finding More Value at the Bargaining Table

Before you sit down at the bargaining table, imagine a wide-range of options and packages, including some that may seem far-fetched

2. Why First Impressions Matter

When talks begin remember that getting down to business too quickly can stand in the way of building trust.

3. Squeeze That Orange

Emphasize to your counterpart the importance of separating “inventing” from “deciding,” as Fisher, Ury, and Patton suggest in Getting to Yes.

4. Bringing Outsiders to the Negotiating Table

Don’t worry about adding complexity. Bringing in new issues, options, and parties to the negotiation is likely to create value.

5. The Power of Deadlines

Avoid artificial deadlines, though it can be helpful to decide when it’s time to concentrate on the packages you’ve identified.

Related Article: We Have a Deal, Now What Do We Do

Normally negotiators focus on the deal-at-hand as well as those present at the negotiation, neglecting other aspects of the negotiated agreement that would not only impact others outside of the room but also require their cooperation for the agreement’s success.

Professor Salacuse calls this process of putting a negotiated agreement into action “the toughest challenge” in negotiation.

History is filled with examples of negotiated agreements that failed during their implementation phase, most prominent among them the 1993 Oslo Accords that promised peace between Israel and Palestine.

How do you avoid failure in the implementation stage of your negotiation?

Here are three negotiation tips from Professor Jeswald Salacuse:

Plan

Planning before the negotiation will focus negotiators on the most important issues at hand and help them concentrate on how the deal arrived at can be implemented.

After determining this, negotiators can develop a thorough plan of action that takes into account the various stakeholders necessary for the agreement’s success.

Sometimes negotiators fear that a focus on the details of implementation will prevent any agreement from being reached.

• Other times, the team tasked with negotiating an agreement is different from the team in charge of implementing the agreement, leading to a discrepancy in what is bargained for and what is actually needed to make the deal work.

This lack of coordination can doom the agreement to failure even though the negotiations were successful.

Build Relationships

Having a relationship with your counterpart implies a level of familiarity, and trust, that are both useful and conducive to the success of any negotiated agreement.

• Not only is trust essential for arriving at an agreement, but it is also key in implementation because there is a degree of risk for each party in this stage.

Trusting your counterpart helps mitigate these risks and thus leads to greater confidence in the outcome of the agreement reached.

Though having a counterpart you have a past relationship with and in whom you trust is ideal, it is an atypical situation for most negotiators.

• Not only are negotiators shouldering the interests and objectives of multiple constituencies, but also they must negotiate with complete strangers.

As discussed above, this lack of knowledge about one’s counterpart, or lack of trust and familiarity, raises the element of risk for the negotiators at the bargaining table.

To overcome this barrier, good communication is key to successful negotiation.

According to Professor Salacuse, negotiators usually, “expect communication between the two sides will happen naturally once they begin working together.”

• Of course, the savvy negotiator knows this is often not the case and will try to make sure that any challenges with language, verbiage, and issues with personal rapport are addressed or mitigated at the bargaining table.

Additionally, setting up regular meetings to review progress will help make sure that negotiations don’t get derailed and remain focus on the issues pertinent to each parties’ interests. Above all, respect and equality of treatment for all parties helps insure that any issues around miscommunication do not escalate into tensions at the bargaining table.

Involving a 3rd Party

Sometimes negotiations are emotionally charged and particularly difficult for two parties to work out alone.

In such situations, a third party mediator is needed to help move things along and insure the success of an agreement as well as its implementation.

Mediators can help keep the two parties on track as well as facilitate successful communication between the two. Additionally, they can provide resources and progress checks so that each side can focus on the negotiations at hand and evaluate her progress accordingly.

Related Article: Prepare to Create Value in Business Negotiations

The panel featured three veterans of high profile Israeli-Palestinian diplomacy: Ambassador Dore Gold, President of the Jerusalem Center for Public Affairs; Ambassador Alan Baker, also of JCPA and former chief legal advisor of Israel’s Foreign Ministry; and Ghaith al-Omari, executive director of the American Task Force on Palestine. All three have also participated in Track II diplomacy, in addition to their roles in direct negotiations.  Professor Robert H. Mnookin, Chair of the Program on Negotiation, moderated the event.

A primary concern of the discussion was a widespread sense that the prospects of resuming direct negotiations between Israelis and Palestinians on final status issues were, as Professor Mnookin said, “extraordinarily dim.” As a result, Professor Mnookin invited the panelists to consider alternatives to direct talks, including unilateral action, among other possibilities, as a means to resolve some of the remaining Israeli-Palestinian disputes.

Ambassador Gold began by warning against overestimating back-channel approaches, which – he pointed out – have at times falsely created the impression that agreement is closer than it is.  At the same time, he did cite an example of successful back-channel negotiation: the talks leading up to the peace between Israel and Jordan. And he indicated that similar approaches could produce diplomatic breakthroughs down the road, where direct talks have failed. Unilateralism, on the other hand, was far less promising to Ambassador Gold, as he recalled Israel’s “extremely negative” experience with unilateral withdrawals from Lebanon and the Gaza Strip.

Mr. al-Omari shared his co-panelist’s pessimism about direct talks at present, but he cited track II initiatives as essential to maintaining contact between the two sides, even where they do not reach tangible results. For example, he recommended continuing behind-the-scenes cooperation between Israelis and Palestinians on such issues as maintaining day-to-day security and tax revenue transfers to the Palestinian Authority.  He also parted company with Ambassador Gold’s stance on unilateralism, contending that small, security-driven unilateral steps could have positive results that pave the way for a multilateral diplomatic resolution.

Ambassador Baker took a more optimistic stance on the possibility of resuming direct talks. He spoke at some length on the sui generis nature of the Israel-Palestine conflict, as he saw it, suggesting that the impasse may resist conventional methods and models of successful international negotiation. Nevertheless, he felt that there were promising “islands of cooperation” now in place on issues such as water management, tourism, and security, which should be maintained, and that they bode well for the prospects of resuming direct talks on more contentious, final status issues.

The presentations were followed by a discussion among the panelists, and an open Q&A.