When it comes to great business negotiation strategies, there’s no better example than the cast of Friends in their heyday.

David Schwimmer, the actor who played Ross on the hit NBC sitcom Friends, famously convinced the show’s five other leads in the early years of its run to negotiate their contracts with NBC as a team. The “mini union” formed by the actors ultimately helped them negotiate an unprecedented $1 million each per episode during the show’s final season.

But if the TV network and the show’s producer, Warner Brothers, were willing to make steep concessions on salary to keep the cast, there was one issue that was not open to compromise. “The only time that I think we really put our foot down was when the cast wanted story approval,” show cocreator Marta Kauffman said on a panel at the National Association of Television Program Executives conference in January. Kauffman explained that she and cocreator David Crane worked collaboratively with the cast and were open to their story pitches, as reported in Broadcasting & Cable magazine. But the show runners resisted giving the cast veto power over scripts.

Kauffman’s anecdote reminds us of a fundamental fact of negotiation: Typically, multiple issues are at stake (here, salary and creative control, to name just two), and parties have different preferences across these issues. By making tradeoffs based on what each side values most, negotiators may be able to avoid impasse, at the very least—and, at the most, create a larger pie to carve up.

“Friends was a gorgeous, generous pie, and everyone had slices,” said Kauffman of the show, which ran from 1994 to 2004. But what happens when the pie is disappointingly small? Instead of Friends, imagine a network show that is experiencing a ratings free fall. When few resources are at stake and when conflict is brewing, negotiators have to work hard to both create new sources of value through collaborative moves and claim as much value as they can.

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Business negotiation strategies: When to share, when to hold back

The tension between creating and claiming value is pivotal in business negotiation strategies, write Robert H. Mnookin, Scott R. Peppet, and Andrew S. Tulumello in their book Beyond Winning: Negotiating to Create Value in Deals and Disputes (Harvard University Press, 2000). Share too little information about your interests in a negotiation, and you will have difficulty identifying possible value-creating tradeoffs. Share too much, and the other side may take advantage of you.

Imagine, for example, that a woman named Jane is trying to sell her car because she is moving overseas soon. Her natural inclination might be to hide the fact that she is facing such a time deadline. After all, prospective buyers might wait out the clock in the hope of getting a steal from her at the last minute. On the other hand, explaining that she needs to sell the car quickly because she is moving overseas might reassure buyers concerned that she is in a rush to unload a lemon. Providing this information might allow Jane to sell for a higher price than if she did not disclose that she’s moving.

How can you create more value for all the parties involved while minimizing the risk of being exploited? The tension cannot be fully resolved, caution Mnookin and his coauthors. But as part of your negotiation preparation, they advise you to follow a number of steps that can improve your odds of reaching a better-than-satisfactory deal. Here are four of them.

1. Identify issues and interests.
One of the first steps in preparing for a negotiation is to think about the array of issues that could be discussed, as well as the interests of each party. But too often, we approach negotiation with a narrow mind-set. If the value swirling around a negotiation appears to be anything less than a “gorgeous, generous pie,” we tend to assume that we will be fighting with our counterpart to grab as much as we can.

This win-lose mind-set is what Harvard Business School professor Max H. Bazerman refers to as the “mythical fixed pie” of negotiation. Rather than looking for ways to expand the pie, we focus on carving it up. Rather than capitalizing on our different preferences, we accept impasse. By contrast, when parties can trade on their preferences across different issues, they reduce the need to haggle over price and percentages.

As part of your preparation for important negotiations, make a list of all the possible issues that may be at stake. Then consider your interests and your counterpart’s interests in each one. In addition to identifying tangible interests, such as price and deadlines, don’t forget intangible ones, such as building a long-term relationship or saving face in the aftermath of an error.

2. Contemplate value-creating opportunities.
Once you have identified your interests and the likely interests of the other party, it is time to begin thinking about the types of value-creating trades you might offer, write Mnookin, Peppet, and Tulumello in Beyond Winning.

In a New York Times post, Deb Weidenhamer, the founder and CEO of Auction Systems Auctioneers & Appraisers, describes what happened when an agreement she had reached in China went awry. Her team had negotiated a deal to auction products from a luxury watchmaker. Following her company’s standard business model, the retailer agreed to allow the bidding to start at a steep 80% off the retail price.

Later, when inventory was due to be delivered, however, the client rejected the agreed-upon starting price. By this point, Weidenhamer’s company had already advertised and marketed the client’s auction, so bowing out wasn’t an option. Moreover, Weidenhamer saw no point in arguing over the details of the signed contract.

Over the course of several long meetings, Weidenhamer and her team identified a key interest of her client’s and suggested an irresistible trade: In exchange for the Chinese company accepting the starting bid, the American company would hand over the contact information of auction participants, who would be informed.

“In the end,” writes Weidenhamer, “it was a win-win settlement.” The client expanded its database of luxury buyers, and Weidenhamer’s company gained credibility from its association with the respected brand—in addition to retaining its standard starting point for bids.

3. Assess and improve your BATNA when possible.
When managing the tension between creating and claiming value, you must determine the point at which you would walk away from the current negotiation and accept your best alternative to a negotiated agreement, or BATNA, write the authors of Beyond Winning. Because it allows you to reject a mediocre agreement, a strong BATNA is typically your best source of power in a negotiation.

After identifying your BATNA, you should take steps to improve it, when possible. To take a simple example, suppose you’re feeling uninspired in your current job and ready for a change. You have a string of interviews with a start-up and believe you are about to get an offer. How can you avoid accepting a package that would require you to compromise more than you’d like on issues such as salary? You might explore the possibility of taking on more interesting responsibilities with your current employer (perhaps for higher pay) or you might expand the scope of your job search.

You should also think about what your negotiating counterpart will do if she is unsatisfied with what you are offering, as this will affect how hard you can push when it comes time to claim value. As they approached their final year of shooting, the cast of Friends, for example, understood that NBC and Warner Brothers had no strong BATNA. The show was surging in the ratings, and fans were eagerly anticipating satisfying resolutions for their favorite characters. With the cast negotiating as a unit, NBC and Warner Brothers had to deal with them as such—and accept virtually any financially sustainable demand they made.

4. Set reservation values and aspirations.
Another important part of your business negotiation strategy preparation is to assess two values: your reservation value, or bottom line—the least you will accept in the current negotiation—and an ambitious yet realistic aspiration level, or goal.

Your reservation value typically will be closely tied to your BATNA. If you are choosing between two very similar used cars and know that one has a firm price of $10,000, then this will be the reservation value in your negotiation for the other car: There may be no reason for you to buy it for more than that amount.

Reservation values can be much harder to calculate in more complex negotiations, as when you are weighing two job offers that vary on dimensions such as salary, responsibility, and benefits. It would be a mistake, for example, to fixate on salary as your reservation value to the exclusion of other issues. In this case, you might want to set up a scoring system—a grid that allows you to assign point values to different options and make comparisons across your various alternatives.

It’s at least as important to set a clear aspiration level in your negotiations. Ideally, you should aspire to an outcome that is better than your BATNA, write Mnookin, Peppet, and Tulumello. That doesn’t mean making outrageous demands; rather, prepare arguments that will make your aspirations seem reasonable. Though you are unlikely to get everything you asked for, you should be able to anchor any haggling that follows around an ambitious yet realistic aspiration level.

What’s your experience sharing information and using techniques like these in business negotiation strategies?

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You feel a little nervous during your first meeting with a new colleague, Steve, to negotiate a long-term project to be co-managed by your respective divisions, but he immediately puts you at ease. Warm and friendly, he makes it clear he’s highly motivated to reach an arrangement that will help both divisions. When talks grow difficult, Steve openly addresses the issues that crop up.

As your admiration for Steve’s social and communication skills grows, you recognize in him the hallmarks of emotional intelligence in negotiation. Thanks to your strong rapport, you’re confident you will breeze to the finish line with a new business relationship and amazing results. Or will you?

In 1995, psychologist Daniel Goleman’s bestseller Emotional Intelligence burst into the cultural imagination and spawned a new field of study. Leaders dared to hope that fostering emotional intelligence could solve a range of problems, from school bullying to low morale to international conflict, writes Adam Grant in the Atlantic.

Experts predicted a positive impact of emotional intelligence in negotiations. After all, the qualities that characterize emotional intelligence—awareness of our emotions and how they affect others, the ability to regulate our moods and behavior, empathy, the motivation to meet meaningful personal goals, and strong social skills—seem as if they’d be highly useful in negotiation.

But research suggests the benefits of emotional intelligence in negotiation may be less clear-cut.

Claim your FREE copy: Negotiation Skills

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.

High Rapport, So-So Gains

In a 2014 study of emotional intelligence and negotiation in the Negotiation Journal, researchers Kihwan Kim, Nicole L. A. Cundiff, and Suk Bong Choi examined whether the trait correlates with key negotiation outcomes, namely trust building, the desire to work together in the future, and joint gain.

The research team had about 200 undergraduate students fill out a questionnaire designed to measure emotional intelligence. At a later date, the students were paired and assigned to play the role of personnel manager or new employee in a negotiation over a job contract. They could negotiate issues such as salary, vacation, starting date, and medical coverage, and had opportunities to both create and claim value. Because points were assigned to the outcomes, the researchers could measure participants’ success objectively.

Perhaps not surprisingly, higher levels of emotional intelligence were associated with greater rapport within negotiating pairs. Strong rapport nurtured trust and a willingness to work with the other party again. Counterintuitively, however, high emotional intelligence was not linked to better joint negotiation outcomes.

Why didn’t emotionally intelligent negotiators better leverage their skills? Kim and his team speculated these negotiators’ sense of empathy may have led them to make excessive concessions at the expense of their own gains. Emotionally intelligent negotiators may be vulnerable to exploitation by their counterparts for this reason.

Strategies for Fine-Tuning Emotional Intelligence in Negotiation

Be aware of empathy’s limitations. In one study, negotiators who were naturally empathetic or encouraged to be empathetic were good at assessing the strength of their connections with others. However, empathy didn’t help them predict their counterparts’ moves in a strategic game.

Take time to cool off. If possible, postpone negotiations or call for a break when you are feeling strong negative emotions or detecting them in a counterpart. Anger can cause us to rely on stereotypes and make risky decisions, and sadness can cause us to make purchases we’ll later regret, research shows. We also tend to make excessive concessions to angry counterparts.

Beware the carryover effect. Feelings triggered by an outside event, such as an argument at home or a difficult commute, can linger and have a strong effect on our negotiations. Simply thinking about the source of your mood can help defuse any negative impact on performance.

Dangerously Persuasive?

Because the emotionally intelligent are excellent at reading others and communicating their own emotions productively, the trait can make people highly persuasive—with potentially negative implications for emotional intelligence and leadership.

As illustration, Grant describes two highly influential leaders of the 20th century who showed signs of keen emotional intelligence. In his electrifying speeches, Martin Luther King Jr. “chose language that would stir the hearts of his audience,” demonstrating “remarkable skill in managing his own emotions and in sparking emotions that moved his audience to action,” writes Grant. Now consider Adolf Hitler, who spent years honing his body language to enhance its emotional effects until he had become “an absolutely spellbinding public speaker,” according to historian Roger Moorhouse. The two men had polar-opposite values but were both persuasive communicators.

As the example of Hitler suggests, the better someone is at controlling their emotions and reading others’ feelings, the better equipped they are to manipulate others and persuade them to act against their best interests. Emotional intelligence enables people to “intentionally shape their emotions to fabricate favorable impressions of themselves,” write University of Cambridge professors Martin Kilduff and Jochen I. Menges, and Texas A&M professor Dan S. Chiaburu in an article in Research in Organizational Behavior.

Once portrayed as a universal balm for discord, emotional intelligence is being recognized as a skill that can be used for good or bad, suggests Grant. A keen emotional intellect can promote trust and long-term partnerships. But when used to manipulate or to prompt unnecessary concessions, emotional intelligence in negotiation may undermine the connections it is touted to enhance.

What other negotiation strategies and tactics have you found to be effective when dealing with difficult people?

Resource: “The Influence of Emotional Intelligence on Negotiation Outcomes and the Mediating Effect of Rapport: A Structural Equation Modeling Approach,” by Kihwan Kim, Nicole L. A. Cundiff, and Suk Bong Choi. Negotiation Journal, January 2014.

Under the terms of the Major League Baseball (MLB) 2011 collective bargaining agreement, the New York Yankees, known for their deep pockets, faced incentives to break with tradition and keep their 2014 payroll under the league’s luxury tax threshold of $189 million.

Thanks to its habitual sky-high spending, the team faced a 50% league tax on the amount it spent above the threshold in 2014. If it spent below the limit for just one year, however, it could “reset” its tax for exceeding the threshold in 2015 to a much lower 17.5% and get more players for its bucks that year, Ken Davidoff explains in the New York Post. Consequently, a new plan was born for 2014: Work more on bringing young players up through the ranks and less on winning over the hot prospect of the moment.

A new game plan
Then came the 2013 season. With many of the Yankees’ best players on the disabled list and others underperforming, attendance and television ratings plummeted. For only the second time in 19 years, the team failed to reach the playoffs.

In panic mode, the team began aggressively signing free agents, scooping up Brian McCann in an $85 million, five-year deal and Jacoby Ellsbury for $153 million over seven years. Alex Rodriguez’s doping suspension for the 2014 season gave the Yankees an influx of $25 million. But salary, benefits, and other player costs reached $186 million, just shy of the $189 million threshold.

Revising the rule book
Going for broke, the Yankees entered the race for Masahiro Tanaka, a Japanese pitcher with an impressive 24-0 record in 2013 for his team in Japan.

Until recently, MLB teams pursuing a player in Japan had to engage in a sealed-bid auction with one another for the right to negotiate exclusively with the player.

At a November 2013 meeting of MLB team owners, Pittsburgh Pirates president Frank Coonelly successfully proposed revising this procedure to give small-market teams more leverage, the Post reports. Now any MLB team that promises $20 million to a player’s Japanese team for his release can negotiate with the player.

Bases loaded
In the first test of the rule change, seven MLB teams stepped up to promise $20 million to Tanaka’s team in exchange for negotiating rights.

As Yankees general manager Brian Cashman made his pitch, Tanaka complained that other U.S. teams had told him that they would ease him into their rotations slowly. Cashman assured him that if he joined the Yankees, he would be a starting pitcher right off the bat.

After Tanaka had met all seven teams, his agent, Casey Close, informed them that they would have to offer at least a $120 million, six-year contract. The Yankees, the Los Angeles Dodgers, and the Chicago Cubs submitted bids.

Tanaka accepted the Yankees’ $155 million, seven-year contract, the largest deal ever secured by a player from Japan. The deal puts the Yankees well over the luxury tax threshold yet again—and facing the 50% tax rate they had planned to avoid.

Under the terms of the Major League Baseball (MLB) 2011 collective bargaining agreement, the New York Yankees, known for their deep pockets, faced incentives to break with tradition and keep their 2014 payroll under the league’s luxury tax threshold of $189 million.

Thanks to its habitual sky-high spending, the team faced a 50% league tax on the amount it spent above the threshold in 2014. If it spent below the limit for just one year, however, it could “reset” its tax for exceeding the threshold in 2015 to a much lower 17.5% and get more players for its bucks that year, Ken Davidoff explains in the New York Post. Consequently, a new plan was born for 2014: Work more on bringing young players up through the ranks and less on winning over the hot prospect of the moment.

A new game plan
Then came the 2013 season. With many of the Yankees’ best players on the disabled list and others underperforming, attendance and television ratings plummeted. For only the second time in 19 years, the team failed to reach the playoffs.

In panic mode, the team began aggressively signing free agents, scooping up Brian McCann in an $85 million, five-year deal and Jacoby Ellsbury for $153 million over seven years. Alex Rodriguez’s doping suspension for the 2014 season gave the Yankees an influx of $25 million. But salary, benefits, and other player costs reached $186 million, just shy of the $189 million threshold.

Revising the rule book
Going for broke, the Yankees entered the race for Masahiro Tanaka, a Japanese pitcher with an impressive 24-0 record in 2013 for his team in Japan.

Until recently, MLB teams pursuing a player in Japan had to engage in a sealed-bid auction with one another for the right to negotiate exclusively with the player.

At a November 2013 meeting of MLB team owners, Pittsburgh Pirates president Frank Coonelly successfully proposed revising this procedure to give small-market teams more leverage, the Post reports. Now any MLB team that promises $20 million to a player’s Japanese team for his release can negotiate with the player.

Bases loaded
In the first test of the rule change, seven MLB teams stepped up to promise $20 million to Tanaka’s team in exchange for negotiating rights.

As Yankees general manager Brian Cashman made his pitch, Tanaka complained that other U.S. teams had told him that they would ease him into their rotations slowly. Cashman assured him that if he joined the Yankees, he would be a starting pitcher right off the bat.

After Tanaka had met all seven teams, his agent, Casey Close, informed them that they would have to offer at least a $120 million, six-year contract. The Yankees, the Los Angeles Dodgers, and the Chicago Cubs submitted bids.

Tanaka accepted the Yankees’ $155 million, seven-year contract, the largest deal ever secured by a player from Japan. The deal puts the Yankees well over the luxury tax threshold yet again—and facing the 50% tax rate they had planned to avoid.

“I’ve always had a Republican partner, every time,” says former Democratic senator Chris Dodd, speaking of his legislative victories during his 30 years of service.

Members of Congress do not always need bipartisan support to push through their legislative agendas, yet some of the most significant initiatives passed by the U.S. Senate and House of Representatives were the product of intensive negotiations between the two major parties.

Yet bipartisan negotiation is rare in Washington these days. And in his January State of the Union address, President Barack Obama revealed that he will pursue many of his initiatives in the remainder of his second term by circumventing Congress altogether.

Many reasons for the recent inertia are familiar ones: fierce competition between the two major parties due to close elections, the pressures of fund-raising and special-interest lobbying in Congress, and redistricting, to name a few. As a result, lawmakers tend to view the pie of available resources as fixed and to ignore the other side’s perspective.

This is unfortunate, as Congress is well positioned to find integrative solutions to policy problems, given the power it has to address a multitude of unrelated issues simultaneously. By identifying different priorities across these issues, members have abundant opportunities to make value-creating trades.

In an effort to inspire Congress to take up the lost art of negotiation, the American Political Science Association (APSA) convened a global task force of political scientists and negotiation experts and recently published their conclusions in a report, “Negotiating Agreement in Politics.”

The task force identified four “rules of collective engagement,” summarized here, that might spur greater collaboration in Washington. Though the report is tailored to Congress’s unique challenges, business negotiators may find that the results apply to their own intractable conflicts as well.

1. Build unbiased advice into the process.
When debating approaches to reducing the national debt, each party typically enlists opinions from economists at the far ends of the political spectrum. With each party swayed by its experts’ clashing conclusions, it is no surprise that negotiation seems fruitless. The tendency for members of Congress to cherry-pick expert opinions when arguing their points of view contributes to the partisan divide.

By contrast, some nations build unbiased fact-finding into the negotiation process, assigning nonpartisan third parties to research solutions and propose recommendations for thorny issues. Nonpartisan fact-finding helps negotiators overcome self-serving interpretations of the “facts” and develop a common language. In 1995, for example, the Italian government launched a successful effort to address a crisis over government pensions by soliciting independent technical expertise on the issue and then negotiating closely with labor unions based on the results.

2. Mandate repeated interactions.
In 2012, a so-called Gang of Eight of U.S. senators—four Republicans, four Democrats—formed to tackle the hot-button issue of immigration reform. For months, the senators and their staffs met regularly to hash out an immigration bill covering issues ranging from border security to citizenship. The bill passed handily in a vote of 68-32 in the Senate, though it was rejected by the more partisan House of Representatives.

In its report, the APSA finds evidence that repeated interactions between opposing parties help them find common ground and take the long view. Congress could promote bipartisan negotiation by requiring the two sides to meet at regular intervals, as the member states of the United Nations and other international bodies do, and by strengthening the role of congressional committees.

3. Consider penalty defaults.
In Congress, inaction on an issue typically goes unpunished—and, indeed, is often rewarded by special-interest groups that prefer the status quo. By contrast, “penalty defaults” for failing to negotiate or failing to meet a negotiation deadline can impose real costs on Congress. A penalty default is an undesirable situation that all parties involved will seek to avoid.

Congress has adopted penalty defaults in the past, with mixed results. In 2011, the bipartisan Joint Committee on Deficit Reduction failed to reach a much-touted “grand bargain” even after setting punishing cuts to military and entitlement programs. The cuts, known as sequestration, failed to frighten lawmakers into reaching agreement because they foresaw little political fallout from inaction.

By contrast, the specter of a middle-class tax increase did motivate a compromise agreement in the “fiscal cliff” crisis at the end of 2012. To be effective, penalty defaults may need to impose political costs on individual members of Congress in addition to ideological costs on their parties.

4. Beware the “spectator effect.”
In the summer of 2013, when 98 of the Senate’s members met for a retreat, “there was no rancor at all,” reported Republican senator John Boozman. “I think if the American people were watching, the tone would have been quite different,” he said.

As this anecdote suggests, the “sunshine” laws that exposed congressional dealmaking to public view in the 1970s have been a double-edged sword. Greater openness promotes more ethical decision making and public accountability, but it can also cause lawmakers to negotiate cautiously for fear of antagonizing supporters due to a so-called spectator effect.

Politicians who meet behind closed doors have greater freedom to explore policy options that deviate from the party line. But privacy can be elusive: Bipartisan negotiations on deficit reduction in 2011–2012 were thwarted by leaks on both sides. Members of Congress need to recognize that the relative privacy of brainstorming sessions can spell the difference between a deal and no deal.

“I’ve always had a Republican partner, every time,” says former Democratic senator Chris Dodd, speaking of his legislative victories during his 30 years of service.

Members of Congress do not always need bipartisan support to push through their legislative agendas, yet some of the most significant initiatives passed by the U.S. Senate and House of Representatives were the product of intensive negotiations between the two major parties.

Yet bipartisan negotiation is rare in Washington these days. And in his January State of the Union address, President Barack Obama revealed that he will pursue many of his initiatives in the remainder of his second term by circumventing Congress altogether.

Many reasons for the recent inertia are familiar ones: fierce competition between the two major parties due to close elections, the pressures of fund-raising and special-interest lobbying in Congress, and redistricting, to name a few. As a result, lawmakers tend to view the pie of available resources as fixed and to ignore the other side’s perspective.

This is unfortunate, as Congress is well positioned to find integrative solutions to policy problems, given the power it has to address a multitude of unrelated issues simultaneously. By identifying different priorities across these issues, members have abundant opportunities to make value-creating trades.

In an effort to inspire Congress to take up the lost art of negotiation, the American Political Science Association (APSA) convened a global task force of political scientists and negotiation experts and recently published their conclusions in a report, “Negotiating Agreement in Politics.”

The task force identified four “rules of collective engagement,” summarized here, that might spur greater collaboration in Washington. Though the report is tailored to Congress’s unique challenges, business negotiators may find that the results apply to their own intractable conflicts as well.

1. Build unbiased advice into the process.
When debating approaches to reducing the national debt, each party typically enlists opinions from economists at the far ends of the political spectrum. With each party swayed by its experts’ clashing conclusions, it is no surprise that negotiation seems fruitless. The tendency for members of Congress to cherry-pick expert opinions when arguing their points of view contributes to the partisan divide.

By contrast, some nations build unbiased fact-finding into the negotiation process, assigning nonpartisan third parties to research solutions and propose recommendations for thorny issues. Nonpartisan fact-finding helps negotiators overcome self-serving interpretations of the “facts” and develop a common language. In 1995, for example, the Italian government launched a successful effort to address a crisis over government pensions by soliciting independent technical expertise on the issue and then negotiating closely with labor unions based on the results.

2. Mandate repeated interactions.
In 2012, a so-called Gang of Eight of U.S. senators—four Republicans, four Democrats—formed to tackle the hot-button issue of immigration reform. For months, the senators and their staffs met regularly to hash out an immigration bill covering issues ranging from border security to citizenship. The bill passed handily in a vote of 68-32 in the Senate, though it was rejected by the more partisan House of Representatives.

In its report, the APSA finds evidence that repeated interactions between opposing parties help them find common ground and take the long view. Congress could promote bipartisan negotiation by requiring the two sides to meet at regular intervals, as the member states of the United Nations and other international bodies do, and by strengthening the role of congressional committees.

3. Consider penalty defaults.
In Congress, inaction on an issue typically goes unpunished—and, indeed, is often rewarded by special-interest groups that prefer the status quo. By contrast, “penalty defaults” for failing to negotiate or failing to meet a negotiation deadline can impose real costs on Congress. A penalty default is an undesirable situation that all parties involved will seek to avoid.

Congress has adopted penalty defaults in the past, with mixed results. In 2011, the bipartisan Joint Committee on Deficit Reduction failed to reach a much-touted “grand bargain” even after setting punishing cuts to military and entitlement programs. The cuts, known as sequestration, failed to frighten lawmakers into reaching agreement because they foresaw little political fallout from inaction.

By contrast, the specter of a middle-class tax increase did motivate a compromise agreement in the “fiscal cliff” crisis at the end of 2012. To be effective, penalty defaults may need to impose political costs on individual members of Congress in addition to ideological costs on their parties.

4. Beware the “spectator effect.”
In the summer of 2013, when 98 of the Senate’s members met for a retreat, “there was no rancor at all,” reported Republican senator John Boozman. “I think if the American people were watching, the tone would have been quite different,” he said.

As this anecdote suggests, the “sunshine” laws that exposed congressional dealmaking to public view in the 1970s have been a double-edged sword. Greater openness promotes more ethical decision making and public accountability, but it can also cause lawmakers to negotiate cautiously for fear of antagonizing supporters due to a so-called spectator effect.

Politicians who meet behind closed doors have greater freedom to explore policy options that deviate from the party line. But privacy can be elusive: Bipartisan negotiations on deficit reduction in 2011–2012 were thwarted by leaks on both sides. Members of Congress need to recognize that the relative privacy of brainstorming sessions can spell the difference between a deal and no deal.

As you sit down to negotiate with a new colleague over a long-term project being managed by your divisions, you feel a bit nervous. Steve, though, immediately puts you at ease. He is warm and friendly, undaunted by the challenging task confronting you. As you begin your discussion, Steve makes it clear that he is highly motivated to reach an arrangement that will make both of your divisions better off. As talks grow difficult in the weeks ahead, you are struck by how attuned Steve is to your emotions and how quickly he tries to address them. Meanwhile, he rarely seems to be ruffled by the inevitable misunderstandings and delays that crop up as you involve others in the process.

As your admiration for Steve’s social skills grows, you realize that you are dealing with an “emotionally intelligent” negotiator— the kind of sensitive yet unflappable person you have read about in the popular press. Consequently, you have every reason to believe that you will breeze to the finish line with a strong new business relationship and amazing results. Or will you?

In 1995, psychologist Daniel Goleman’s bestseller Emotional Intelligence burst into the cultural imagination. The book inspired hundreds, even thousands of articles and books on the topic. Educators, managers, and other leaders dared to hope that fostering emotional intelligence could solve a range of social problems, from school bullying to low morale to international conflict, writes Adam Grant in the Atlantic.

Though little research has been conducted on the impact of emotional intelligence on negotiation, experts have predicted that scoring high on this personality trait would offer a clear boost to one’s bargaining outcomes. After all, the qualities that characterize emotional intelligence—awareness of our emotions and how they affect others, the ability to regulate our moods and behavior, empathy, the motivation to meet meaningful personal goals, and strong social skills—seem as if they’d be highly useful in getting what we want from others and finding common ground.

But a new study on emotional intelligence suggests that its benefits for negotiation may be less clear-cut than anticipated. And other research on the topic implies that there is a dark side to the trait that negotiators in particular would be wise to keep in mind.

High rapport, so-so gains
In one of the few studies of emotional intelligence and negotiation, researchers Kihwan Kim (Buena Vista University), Nicole L. A. Cundiff (the University of Alaska, Fairbanks), and Suk Bong Choi (the University of Ulsan, South Korea) recently sought to determine whether the trait correlates with key negotiation outcomes, namely trust building, the desire to work together in the future, and joint gain.

The research team began by having their participants, about 200 undergraduate students, fill out a questionnaire designed to measure emotional intelligence. At a later date, the students were paired and assigned to play the role of personnel manager or new employee in a negotiation over a job contract. They could negotiate issues such as salary, vacation, starting date, and medical coverage, and had opportunities to both create and claim value. Because points were assigned to the various outcomes, the researchers were able to measure participants’ relative success by adding up their points.

Perhaps not surprisingly, higher levels of emotional intelligence were associated with greater rapport within pairs of negotiators. Strong rapport in turn nurtured trust in one’s counterpart and a willingness to work with the other party in the future. Counterintuitively, however, high emotional intelligence was not linked to better joint negotiation outcomes.

Why didn’t emotionally intelligent negotiators leverage their skills to help both parties achieve more? Kim and his team speculated that these negotiators’ keen sense of empathy may have led them to make excessive concessions to their counterparts at the expense of their own gains. Past work has suggested that emotionally intelligent negotiators may be vulnerable to exploitation by their counterparts for this reason.

Dangerously persuasive?
Because the emotionally intelligent are excellent at reading others and communicating their own emotions productively, the trait can make people highly persuasive. It can also make them dangerous as leaders and, presumably, as negotiators.

As illustration, Grant describes two highly influential leaders of the 20th century who showed signs of keen emotional intelligence. In his electrifying speeches, Martin Luther King Jr. “chose language that would stir the hearts of his audience,” demonstrating “remarkable skill in managing his own emotions and in sparking emotions that moved his audience to action,” writes Grant. Now consider Adolf Hitler, who spent years honing his body language to enhance its emotional effects until he had become “an absolutely spellbinding public speaker,” according to historian Roger Moorhouse. The two men had polar-opposite values, but they were both powerful communicators.

As the example of Hitler suggests, the better someone is at controlling his emotions and reading others’ feelings, the better equipped he is to manipulate others and persuade them to act against their best interests. Emotional intelligence enables people to “intentionally shape their emotions to fabricate favorable impressions of themselves,” write University of Cambridge professors Martin Kilduff and Jochen I. Menges and Texas A&M professor Dan S. Chiaburu in an article in Research in Organizational Behavior.

Research has not yet examined whether and under what conditions emotional intelligence might inspire manipulative behavior in negotiation. But results from other spheres suggest that it is important to question the arguments of especially poised and persuasive negotiators.

A mixed verdict
Once portrayed as a universal balm for discord and bad behavior, emotional intelligence is now being recognized as a skill that, like any other, can be used for good or bad, suggests Grant. Emotional rapport and other signs of a keen emotional intellect can promote trust and long-term partnerships. But when used to manipulate others, or when it prompts unnecessary concessions, emotional intelligence may undermine the same connections that it is touted to enhance.

Resource: “The Influence of Emotional Intelligence on Negotiation Outcomes and the Mediating Effect of Rapport: A Structural Equation Modeling Approach,” by Kihwan Kim, Nicole L. A. Cundiff, and Suk Bong Choi. Negotiation Journal, January 2014.

David Schwimmer, the actor who played Ross on the hit NBC sitcom Friends, famously convinced the show’s five other leads in the early years of its run to negotiate their contracts with NBC as a team. The “mini union” formed by the actors ultimately helped them negotiate an unprecedented $1 million each per episode during the show’s final season.

But if the TV network and the show’s producer, Warner Brothers, were willing to make steep concessions on salary to keep the cast, there was one issue that was not open to compromise. “The only time that I think we really put our foot down was when the cast wanted story approval,” show cocreator Marta Kauffman said on a panel at the National Association of Television Program Executives conference in January. Kauffman explained that she and cocreator David Crane worked collaboratively with the cast and were open to their story pitches, as reported in Broadcasting & Cable magazine. But the show runners resisted giving the cast veto power over scripts.

Kauffman’s anecdote reminds us of a fundamental fact of negotiation: Typically, multiple issues are at stake (here, salary and creative control, to name just two), and parties have different preferences across these issues. By making tradeoffs based on what each side values most, negotiators may be able to avoid impasse, at the very least—and, at the most, create a larger pie to carve up.

“Friends was a gorgeous, generous pie, and everyone had slices,” said Kauffman of the show, which ran from 1994 to 2004. But what happens when the pie is disappointingly small? Instead of Friends, imagine a network show that is experiencing a ratings free fall. When few resources are at stake and when conflict is brewing, negotiators have to work hard to both create new sources of value through collaborative moves and claim as much value as they can.

When to share, when to hold back
The tension between creating and claiming value is pivotal in negotiation, write Robert H. Mnookin, Scott R. Peppet, and Andrew S. Tulumello in their book Beyond Winning: Negotiating to Create Value in Deals and Disputes (Harvard University Press, 2000). Share too little information about your interests in a negotiation, and you will have difficulty identifying possible value-creating tradeoffs. Share too much, and the other side may take advantage of you.

Imagine, for example, that a woman named Jane is trying to sell her car because she is moving overseas soon. Her natural inclination might be to hide the fact that she is facing such a time deadline. After all, prospective buyers might wait out the clock in the hope of getting a steal from her at the last minute. On the other hand, explaining that she needs to sell the car quickly because she is moving overseas might reassure buyers concerned that she is in a rush to unload a lemon. Providing this information might allow Jane to sell for a higher price than if she did not disclose that she’s moving.

How can you create more value for all the parties involved while minimizing the risk of being exploited? The tension cannot be fully resolved, caution Mnookin and his coauthors. But as part of your negotiation preparation, they advise you to follow a number of steps that can improve your odds of reaching a better-than-satisfactory deal. Here are four of them.

1. Identify issues and interests.
One of the first steps in preparing for a negotiation is to think about the array of issues that could be discussed, as well as the interests of each party. But too often, we approach negotiation with a narrow mind-set. If the value swirling around a negotiation appears to be anything less than a “gorgeous, generous pie,” we tend to assume that we will be fighting with our counterpart to grab as much as we can.

This win-lose mind-set is what Harvard Business School professor Max H. Bazerman refers to as the “mythical fixed pie” of negotiation. Rather than looking for ways to expand the pie, we focus on carving it up. Rather than capitalizing on our different preferences, we accept impasse. By contrast, when parties can trade on their preferences across different issues, they reduce the need to haggle over price and percentages.

As part of your preparation for important negotiations, make a list of all the possible issues that may be at stake. Then consider your interests and your counterpart’s interests in each one. In addition to identifying tangible interests, such as price and deadlines, don’t forget intangible ones, such as building a long-term relationship or saving face in the aftermath of an error.

2. Contemplate value-creating opportunities.
Once you have identified your interests and the likely interests of the other party, it is time to begin thinking about the types of value-creating trades you might offer, write Mnookin, Peppet, and Tulumello in Beyond Winning.

In a recent New York Times blog post, Deb Weidenhamer, the founder and CEO of Auction Systems Auctioneers & Appraisers, describes what happened when an agreement she had reached in China went awry. Her team had negotiated a deal to auction products from a luxury watchmaker. Following her company’s standard business model, the retailer agreed to allow the bidding to start at a steep 80% off the retail price.

Later, when inventory was due to be delivered, however, the client rejected the agreed-upon starting price. By this point, Weidenhamer’s company had already advertised and marketed the client’s auction, so bowing out wasn’t an option. Moreover, Weidenhamer saw no point in arguing over the details of the signed contract.

Over the course of several long meetings, Weidenhamer and her team identified a key interest of her client’s and suggested an irresistible trade: In exchange for the Chinese company accepting the starting bid, the American company would hand over the contact information of auction participants, who would be informed.

“In the end,” writes Weidenhamer, “it was a win-win settlement.” The client expanded its database of luxury buyers, and Weidenhamer’s company gained credibility from its association with the respected brand—in addition to retaining its standard starting point for bids.

3. Assess and improve your BATNA when possible.
When managing the tension between creating and claiming value, you must determine the point at which you would walk away from the current negotiation and accept your best alternative to a negotiated agreement, or BATNA, write the authors of Beyond Winning. Because it allows you to reject a mediocre agreement, a strong BATNA is typically your best source of power in a negotiation.

After identifying your BATNA, you should take steps to improve it, when possible. To take a simple example, suppose you’re feeling uninspired in your current job and ready for a change. You have a string of interviews with a start-up and believe you are about to get an offer. How can you avoid accepting a package that would require you to compromise more than you’d like on issues such as salary? You might explore the possibility of taking on more interesting responsibilities with your current employer (perhaps for higher pay) or you might expand the scope of your job search.

You should also think about what your negotiating counterpart will do if she is unsatisfied with what you are offering, as this will affect how hard you can push when it comes time to claim value. As they approached their final year of shooting, the cast of Friends, for example, understood that NBC and Warner Brothers had no strong BATNA. The show was surging in the ratings, and fans were eagerly anticipating satisfying resolutions for their favorite characters. With the cast negotiating as a unit, NBC and Warner Brothers had to deal with them as such—and accept virtually any financially sustainable demand they made.

4. Set reservation values and aspirations.
Another important part of your negotiation preparation is to assess two values: your reservation value, or bottom line—the least you will accept in the current negotiation—and an ambitious yet realistic aspiration level, or goal.

Your reservation value typically will be closely tied to your BATNA. If you are choosing between two very similar used cars and know that one has a firm price of $10,000, then this will be the reservation value in your negotiation for the other car: There may be no reason for you to buy it for more than that amount.

Reservation values can be much harder to calculate in more complex negotiations, as when you are weighing two job offers that vary on dimensions such as salary, responsibility, and benefits. It would be a mistake, for example, to fixate on salary as your reservation value to the exclusion of other issues. In this case, you might want to set up a scoring system—a grid that allows you to assign point values to different options and make comparisons across your various alternatives.

It’s at least as important to set a clear aspiration level in your negotiations. Ideally, you should aspire to an outcome that is better than your BATNA, write Mnookin, Peppet, and Tulumello. That doesn’t mean making outrageous demands; rather, prepare arguments that will make your aspirations seem reasonable. Though you are unlikely to get everything you asked for, you should be able to anchor any haggling that follows around an ambitious yet realistic aspiration level.