A second round of face-to-face meetings between U.S. president Donald Trump and North Korean leader Kim Jong-un, held in Hanoi, Vietnam, at the end of February, came to an abrupt end after Kim insisted that the United States lift all economic sanctions against his country in return for denuclearization. Trump refused and ended the talks, telling reporters, “Sometimes you have to walk.”
Trump’s decision was widely viewed as a sensible response to a brazen demand from an unpredictable negotiating partner, but it was also a stinging public failure. The president reportedly had expected Kim would capitulate on denuclearization as a result of what Trump perceived to be their strong personal rapport. Moreover, Trump told wary aides he would lead the negotiations himself and that having staff on both sides negotiate in advance was unnecessary, the New York Times reports. So optimistic was Trump about getting a great deal from Kim that he asked Japanese prime minister Shinzo Abe to nominate him for a Nobel Peace Prize, according to the Japanese newspaper Asahi Shimbun. The White House also planned a “signing ceremony” for the end of the negotiations in Vietnam.
Instead, any advantage gained in the aborted talks appeared to go to Kim. In addition to using the summit to try to legitimize his profile on the global stage, the dictator convinced Trump to agree to the opening of a U.S. liaison office in Pyongyang without having to offer a concession in return.
Organizational leaders, from middle managers to heads of state, often face the difficult task of overseeing mission- critical talks and managing individual negotiators and negotiating teams. As Trump’s latest negotiations with Kim demonstrate, their best-laid plans sometimes go awry. We describe the three types of errors leaders make most frequently when managing negotiators and how to overcome them.
Giving inadequate guidance
Leaders tend to expect the best from their negotiators, but they don’t always give them the tools they need to excel. Lacking clear guidance about negotiation best practices, team members end up bringing to the table different beliefs about what works and trying out various strategies haphazardly (threats and other hard-bargaining tactics versus active listening, for instance). Internal clashes, confusion, and subpar results are likely.
Solution: Provide a negotiation framework. To disseminate best negotiating practices throughout their organization or division, leaders should begin by choosing a negotiation framework, such as the “Seven Elements” approach popularized by Getting to Yes: Negotiating Agreements Without Giving In (Penguin Books, 2011) coauthors Roger Fisher, William Ury, and Bruce Patton and detailed in Fisher’s and Danny Ertel’s workbook Getting Ready to Negotiate (Penguin Books, 1995). A negotiation framework helps team members prepare thoroughly and gets them on the same page, according to Harvard Business School and Harvard Law School professor Guhan Subramanian.
Team members will need to be thoroughly trained on the framework and then must be required to use it as they prepare for important negotiations. Frameworks typically include worksheets that allow negotiators to analyze each party’s wants, needs, outside alternatives, and other critical variables before sitting down at the table. Managers can and should review negotiators’ plans before and throughout the negotiation process, Subramanian recommends. It’s also helpful to give team members chances to role-play negotiations before they begin.
Finally, leaders might hold post-negotiation reviews to debrief recent experiences. Create a sense of “psychological safety” by encouraging team members to speak candidly about their mistakes, as doing so will provide invaluable learning opportunities, writes Subramanian.
You’ve heard of “helicopter parents,” but leaders can be just as guilty of failing to give sufficient autonomy to those they supervise.
Sometimes leaders hold on to control because they fear their team members will give away too much at the bargaining table or make other critical errors. Unfortunately, these perceptions may be rooted in leaders’ overconfidence in their own negotiating skills. By insisting on leading the negotiations with Kim, for instance, Trump appeared to undervalue the knowledge that U.S. experts on North Korea could have brought to the table. While leaders can be great at seeing the big picture, their subordinates are more likely to be versed in the all-important details.
Because the powerful are susceptible to extreme overconfidence, leaders also may fail to recognize when they have a weak BATNA (best alternative to a negotiated agreement). To make matters worse, negotiators in a position of power often underestimate their counterparts, overlook their perspectives, and devalue their concerns, research by Columbia Business School professor Adam Galinsky shows.
When top leaders take a hands-on approach to negotiations, they risk conveying to the other party that their team members lack the authority or ability to get things done on their own, according to Subramanian. With their presence, leaders may also signal that they’re desperate to do a deal—a perception that will motivate the other side to push harder for concessions.
When top leaders take a hands-on approach to negotiations, they risk conveying to the other party that their team members lack the authority or ability to get things done on their own.
Solution: Negotiate their mandate.For all these reasons, it’s generally wise for top leaders to stay out of the room. This doesn’t mean giving subordinates free reign to negotiate a deal. Rather, leaders should open up a conversation about their negotiating mandate—that is, the types of deals they may explore and perhaps tentatively agree to, writes Tufts University professor Jeswald W. Salacuse in his book Leading Leaders: How to Manage Smart, Talented, Rich, and Powerful People (AMACOM, 2006).
As long as negotiators understand that top management needs to approve the final deal, your organization is likely to do better when negotiators have more freedom rather than less. When your counterparts are aware that your team has negotiating authority, they will take you more seriously and be more collaborative. And when your team members feel free to invent solutions and hash out the details, they’ll reach more creative deals that benefit from their expertise, writes Salacuse.
Judging performance based on results
To motivate stellar performance, managers often set high performance goals for their employees, which may be rewarded with bonuses and other incentives. Although abundant research confirms that setting specific, challenging performance goals can inspire employees and improve organizational results, such goals also prompt problematic behavior, according to a 2009 study by Lisa D. Ordóñez (University of Arizona), Maurice E. Schweitzer (University of Pennsylvania), Galinsky, and Max H. Bazerman (Harvard Business School).
Specifically, performance goals can lead negotiators to focus so closely on a task—typically, getting a great price— that they compromise their ethics. To take one dramatic example, in the years before its collapse, Enron offered its salespeople large bonuses for meeting challenging revenue goals. This focus motivated fraudulent behavior and contributed to the company’s demise. More recently, facing pressure from upper management to meet extremely difficult cross-selling goals, Wells Fargo employees resorted to opening millions of fraudulent checking and savings accounts in customers’ names without the customers’ knowledge.
Performance goals tend to cause problems because they reward short-term thinking at the expense of long-term planning. Even when behaving ethically, negotiators who are focused on closing a deal to win a bonus may overlook the importance of assessing whether a new partnership would succeed during the implementation stage. No surprise, then, that strategic alliances often fail to live up to expectations.
Solution: Assess the negotiation process. Rather than setting only results-based goals, leaders should monitor negotiators’ decision making before, during, and after the negotiation. Adopting the type of negotiation framework described earlier in this article will allow managers to examine how well negotiators prepare for a negotiation and to monitor their progress.
To avoid evaluating employees haphazardly, Massachusetts Institute of Technology professor Lawrence Susskind recommends that organizations institute benchmarks for negotiation performance and train senior managers on how to use them and offer constructive criticism, as pharmaceutical company Bristol-Myers Squibb has done. The sidebar includes a list of questions to consider when evaluating employees’ all-around negotiation performance.
The key, according to Susskind? “Reward self-criticism; don’t punish it.”
Negotiators can continue to pursue ambitious (but not impossible) price goals when representing their organization. But they also need to be encouraged to strive for less tangible but equally important goals, such as building a strong working relationship, assessing the other party’s ability to follow through on promises, and exploring alternatives to the current deal. To further promote long-term thinking, organizations can link financial bonuses to progress during the early years of a deal’s implementation, as IBM and Hewlett-Packard do, recommend Danny Ertel and Mark Gordon in their book The Point of the Deal: How to Negotiate When Yes Is Not Enough (Harvard Business Review Press, 2007).
Ask the right questions
How can leaders accurately assess negotiators’ ability to make wise decisions on behalf of the organization rather than merely rewarding short-term results? By answering questions such as the following before, during, and after each important negotiation, recommends Massachusetts Institute of Technology professor Lawrence Susskind:
- Did negotiators spend time thinking about not only the organization’s interests but also the other party’s interests?
- Did they clarify their mandate to make commitments within our organization before negotiating?
- Did they identify options for mutual gain to present at the appropriate moment?
- What kind of relationships did they build while negotiating?
- How effective were they at creating value?
- What steps did they take to ensure smooth implementation of the agreement?