What is Crisis Management in Negotiation?

What is crisis management in negotiation, and how can you deal with a growing crisis in your organization? Advice from hostage negotiators can help defuse tensions to all parties’ satisfaction.

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What is Crisis Management in Negotiation?

Organizations often establish elaborate business crisis management plans. Through a rapid, centralized response, an organization can shift swiftly and efficiently from day-to-day operations into crisis-management mode, whether that crisis involves a building evacuation, a tumble in the company’s stock price, or a product recall.

Why does the need for crisis negotiation arise, what is crisis management in negotiation, and how can your organization get through a crisis effectively? Professional hostage negotiators have provided answers that can help those dealing with a business crisis negotiation.


Crisis negotiation skills can make or break a negotiator in heated conflicts. Learn these skills from the experts at Harvard Law School when you download our FREE Special Report, Crisis Communication: How to Avoid Being Held Hostage by Crisis Negotiations.


Characteristics of Crisis Negotiation

What is crisis management in negotiation? Just like a hostage negotiation, a crisis negotiation in the business world usually has the following traits:

  • High stakes, including the need to communicate to resolve a tense situation.
  • Just as hostage negotiators don’t know what a hostage taker will do next, business negotiators may have no idea how a crisis will unfold.
  • Heightened emotions. In tense situations, negative emotions tend to run high. It’s common for people to lash out and escalate the situation.
  • Multiple parties and teams. Crisis negotiations are often complex, requiring the participation of many different groups and teams.

5 Steps for Effective Crisis Negotiation

The following five proven hostage negotiation tactics should prove useful to business negotiators dealing with crisis:

  1. Prepare for crisis. Organizations benefit from putting crisis-management plans in place. During talks with a new business partner, discuss the possibility of a dispute arising during the life of your contract and how you might handle it. For example, you might insert a clause requiring that you meet regularly to discuss problems that have come up and how to address them. You might also include contract provisions for dispute resolution, such as requiring the parties to engage in mediation before filing a lawsuit.
  2. Establish ground rules. If you do find yourself in the midst of a crisis negotiation, such as a dispute over a delivery delay, take time before you begin substantive talks to establish the ground rules. For example, you might suggest that you make an explicit commitment to being honest and to following up your promises with actions. According to FBI crisis negotiator Richard J. DeFilippo, hostage negotiators earn hostage takers’ trust by being honest. Ground rules establish a foundation for trust, and they also give you room to say no to extreme demands. Hostage negotiators find that hostage takers become more willing to accept a denial of their requests when they believe they are being treated ethically.
  3. Confront emotions head-on. Because most hostage situations are driven by strong emotions, hostage negotiators have developed effective strategies for managing those emotions. Jack J. Cambria, the retired commanding officer of the New York Police Department’s hostage-negotiation team, stresses the importance of listening carefully to a hostage taker’s demands with the goal of identifying his primary underlying problem or motivation. Common hostage negotiation tactics include managing the hostage taker’s anxieties through active-listening techniques, such as self-disclosure, paraphrasing, and supportive remarks. Similarly, business negotiators dealing with a crisis need to remember that time spent exploring the emotions behind a counterpart’s stated positions is never time wasted.
  4. Don’t rush the process. Business negotiators often assume that a crisis negotiation needs to be conducted as quickly as possible. If someone is threatening to go to the press if you can’t reach agreement, for example, you may assume you have to reach a deal swiftly. Somewhat surprisingly, hostage negotiators advise us to slow down the negotiation process. Because hostage takers’ strong emotions have a tendency to de-escalate over time, negotiators such as DeFilippo and Cambria counsel patience. “Time is on our side, and we take all the time we need,” says Cambria. Working methodically through a heated situation is usually the best approach.
  5. Strengthen the relationship. When a police negotiator tells a hostage taker, “We’re in this together,” he’s not just paying lip service, according to retired NYPD police commander Robert J. Louden. Rather, the negotiator is trying to create the kind of bond that will allow the parties to find a solution to the crisis together. Similarly, in the business world, their problem is your problem, so focus on collaborating on an agreement that satisfies you both.

Crisis negotiation is one of the most challenging situations you will face as a negotiator. In such stressful times, all negotiators can benefit from following the motto of the NYPD’s negotiation team: “Talk to me.”

What strategies have you found to be effective in dealing with crisis negotiation?

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