Some of the most successful negotiation examples that we have covered here include negotiators engaging in improvisation at the negotiation table, turning chaotic situations into unseen opportunities.
“I’ve learned to make chaos my friend in negotiations,” says Thomas Green, managing director of Citigroup Global Markets and former first assistant attorney general for the Commonwealth of Massachusetts.
Green’s provocative remark flies in the face of conventional wisdom drawn from negotiation research. Shouldn’t we be able to get our ducks in a row before going to the bargaining table?
And when we’re done, aren’t we supposed to dot all the i’s and cross all the t’s of the successfully negotiated agreement?
We’re taught that the purpose of a strategy is to chart the optimal path for reaching our goals. Embracing chaos in negotiations seems the opposite of discipline and planning.
Green’s insight, however, draws on his remarkable experience in both the private sector and public life. As a managing director of a major financial firm, he’s restructured a failing HMO and negotiated the sale of a storied professional sports franchise. A part of a team representing more than 40 states, he helped forge the $350 billion settlement of lawsuits brought against major U.S. tobacco companies.
Successful Negotiation Examples and Tossing Out Scripted Plans in Bargaining Scenarios
Seasoned practitioners like Green know that the world won’t sit still for carefully scripted plans. Chaos and uncertainty are features of everyday business negotiations, or otherwise. Managers who ignore that fact and follow rigid strategies risk being blind to unexpected perils – and to unforeseen opportunities, especially when engaging in integrative negotiation strategies.
By contrast, those who can adapt quickly to changing circumstances gain an important edge on their competition.
Green is convinced that chaos can be a positive advantage in negotiations, provided it’s properly understood and managed.
A few people are naturally gifted in this regard, but even talented negotiators such as Green refine their negotiation skills through experience. The rest of us can learn from analyzing that same experience.
“Mega-negotiations” can be particularly instructive for those seeking to better cope with disorder, as their chaotic features are writ large and their significance impossible to overlook.
Consider the global tobacco settlement. Until an ad hoc coalition of states filed reimbursement suits for the Medicaid costs of smoking-related illnesses, the tobacco companies had never paid a cent in damages. Speaking of past strategy, a lawyer for Winston-Salem, N.C.-based R.J. Reynolds says, “To paraphrase General Patton, the way we won these cases was not by spending all of R.J. Reynold’s money, but by making the other person spend his.”
How did the states force Big Tobacco to the bargaining table when everyone before them had failed? (For more on the importance of planning before and after the bargaining process, (see also: Negotiation Examples in Business: Putting Your Negotiated Agreement Into Action).
It wasn’t through a carefully designed strategy – there were far too many stakeholders and uncertainties to craft a precise plan. But it certainly wasn’t dumb luck, either.
Green and his colleagues succeeded because they were more agile and creative in dealing with uncertainty than the opposition was.
Their negotiation strategy rested on five key bargaining principles:
- Try Out a Bold New Strategy
- Work on Multiple Fronts
- Keep Pushing the Game Forward
- Provoke Opportunities
- Avoid Strategic Gaps
How have you used chaos to your advantage in negotiations? Let us know in the comments.
Related Dealmaking Article: In Employment Contract Negotiation, “No Haggling” Isn’t the Answer
Creating and Claiming Value Through Haggling – Assess Their BATNA in Dealmaking Negotiations
Adapted from “Turn Chaos to Your Advantage in Negotiation,” by Michael Wheeler in the April 2004 issue of Negotiation.