Adapted from “Closing the Deal,” by Michael Wheeler (professor, Harvard Business School), first published in the Negotiation newsletter.
You’ve followed the negotiation guidebooks to a T, uncovered the parties’ key interests, brainstormed creative solutions, and even developed good rapport with your counterpart. You’ve done everything right…but you still don’t have agreement.
How do you turn the other side’s maybe into a yes? More concessions are seldom the right answer. If the other side faces a choice between accepting the deal you’ve put on the table and continuing to negotiate further, you may be unwittingly teaching him to hold out for even more each time you sweeten your proposal. At some point, before you reach your own walk-away point, you have to force him to choose between the deal on the table or no deal at all.
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 agreement. If not, it may be wise to abandon talks and pursue other alternatives. (Online mediation has become a growth industry for negotiators who’ve reached an impasse. Cybersettle, www.cybersettle.com, for example, has serviced more than 100,000 insurance claims in this fashion.)
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,” we tell ourselves, “they wouldn’t have made that concession.” 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.
No lawyer ever reveals his or her bottom line to a “neutral” third party. It boxes the disclosing party into a position /she needs to be sufficiently flexible to change and it “anchors” the neutral to the bottom line number and few are the neutrals who will not drive the facilitated negotiation to the bottom line. A savvy negotiator can tell the neutral that the payor’s bottom line is X + 10 when it’s X and the payee’s bottom line is X minus 10 when it’s X. I prefer using brackets to see if the parties can get within shouting distance of one another. No mediator, in any event, believes the parties when they tell the mediator that the number on the table is their “drop dead” number. I’ve had lawyers actually leave the building and drive away, only to call them on their cell and say “the buyer/seller says they’re willing to come off that number and asks that you please return.” Also, I’ve followed mediators (when getting my LL.M at Straus and I see them “suggest” what the “other side’s” bottom line is. Don’t trust the lawyers and don’t trust the mediators. The mediator wants the thing to settle and I’ve heard many of them justify as ethical a breach of their promise to keep separate caucus communications confidential because (in their words) “it gets the job done.” Sad but true. Don’t trust anyone in a facilitated negotiation. This is one reason why knowing the other side’s true interests – desires, fears, constraints, stakeholders, etc. – is more important that what their “bottom line” supposedly is. Also, studies show that negotiators are happier when the other side makes several concessions than when they get what they think they want. There are no real rules for this; only guidelines and experience. The integrity of the “neutral” is also critical. Were I still practicing law, I would be much more wary about the mediator’s separate caucus discussions with my opponent because I trust only the few mediators I know well not to sell a party out in pursuit of “any settlement is better than no settlement” and “by any means necessary.” Be careful out there.