Do negotiation experts practice what they preach? To find out, we interviewed Harvard Law School and Harvard Business School professor Guhan Subramanian, the chair of the Program on Negotiation (PON) at Harvard Law School. Subramanian leads the PON Executive Committee in setting the program’s initiatives and direction. We asked him to describe the committee’s negotiations, including what it’s like to lead a team of negotiators, how they address conflict, and whether they conform to negotiation best practices.

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Before you became chair of PON, you were a member of the PON Executive Committee, which regularly engages in internal negotiations. Now you’re the leader of that committee. As you’ve changed roles, how have the committee’s negotiations changed for you?

Guhan Subramanian: The PON chair has always been first among equals. And, not surprisingly, given the nature of PON, we’ve tried to negotiate among ourselves as opposed to following any kind of mandate from the boss. Continuing a culture established by Robert Mnookin, PON’s longtime chair, I try to lead the group in reaching consensus rather than resorting to a majority-vote rule.

The nature of PON makes it a place where trying to reach decisions through negotiation is a natural thing to do. And the reality is that all the executive committee members are senior faculty members, so there are no real carrots or sticks I could offer in the way that a typical manager would. All I can do is appeal to the substantive arguments as to why one course of action would be better than another. We all realize that and try to work together to reach good outcomes for PON and for the field of negotiation overall.

Do you ever experience a conflict between what you believe would be in the best interest of the group versus what would be in your best interest personally?

Guhan Subramanian: Not really. It’s the responsibility of the executive committee to make sure that we always put PON first, and there are rarely such conflicts of interest. In the few scenarios where there are, we try to use processes that accommodate for those conflicts, such as asking someone to step out if we’re discussing a program they are responsible for within PON.

Professors are smart people who often have strong opinions. When disagreements become unproductive, what strategies do you use to address conflict with other negotiation experts?

Guhan Subramanian: As the new chair, I naturally wanted to make some changes to how things have been done. Obviously, some of them lead to debate. I try to make sure that everyone feels listened to and that the final decision is one that accommodates all points of view.

I often think of a quote from former President Barack Obama, which I’ll paraphrase: I want to hear their point of view, and then I provide my point of view, and then I want to try to find the truth that lies between people. In my experience being on faculty, being involved in negotiations, and now heading PON, I’ve learned that no single person has the truth; the truth lies between people. Therefore, to try to insist on your point of view or approach probably won’t lead to a good outcome in the end. So, I try to listen to dissenters and address their concerns.

The executive committee is made up of negotiation experts. Do you rely on the same negotiation strategies that you teach to others?

Guhan Subramanian: We do. I credit Bob Mnookin for instilling a culture in which every member has a voice. For example, as the leader, I try to make sure that everyone has a chance to weigh in on a particular topic, and I ask those who are negotiation experts in the area we’re discussing to contribute. Consistent with negotiation best practices, I also try to hear from potential dissenters. I myself sometimes play devil’s advocate if I feel like the counterarguments haven’t been fully conveyed among the group members. I’ll say, “What if this downside scenario happens?” and try to hear all the arguments against a decision.

One of the main insights to come out of PON over the past 30 to 40 years is that managers are negotiators. In the old days, organizations used to be more hierarchical, and leaders could just tell people what to do. In today’s era of flatter, matrixed organizations, you have to negotiate with your colleagues. Everyone has the same interest of advancing the organization’s collective goals, but we all have different views on how to get there. It’s fun to apply the tools we teach in class to running PON. We have the great gift of a wonderful staff of negotiation experts, which makes the job a lot easier.

If you are a negotiation adviser, do you practice what you preach in your own negotiations?

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In negotiation, our most powerful asset is often a strong BATNA, or best alternative to a negotiated agreement, as Roger Fisher, William Ury, and Bruce Patton explain in their landmark negotiation book Getting to Yes: Negotiating Agreement Without Giving In. Experienced negotiators scan the environment before and during a highly anticipated negotiation to determine their backup plan: Job hunters follow other job leads, buyers talk to suppliers’ competitors, union members consider the pros and cons of a strike, and so on.

Your BATNA can be both a useful measure of the quality of a proposal you’re considering and a source of power. When you compare a potential deal to your BATNA, you have a better sense of whether to accept it or push for more.

Although BATNA analysis is critical, an overly narrow focus on our BATNA can lead us to make major mistakes in negotiation and leave significant value on the table.

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BATNA and Long-Term Partnerships

Because the BATNA concept is often defined as an “outside option,” independent of one’s current negotiation, it can be difficult to apply to negotiations conducted between people involved in established partnerships, writes Harvard Business School professor James Sebenius in the Negotiation Journal.

“Think of a reasonably content married couple or successful business partners negotiating an issue of keen mutual interest on which they have different preferences,” writes Sebenius. If that married couple can’t agree on where to live after retirement, the only obvious “outside option” would be separation or divorce—hardly an appealing BATNA. Similarly, when partners in a successful business can’t see eye to eye on a critical issue, they are unlikely to view the dissolution of their partnership as an acceptable BATNA.

Rather than thinking of our BATNA as an “outside option,” Sebenius advises us to think of it more broadly as a “no-deal option.” When we frame our BATNA in this way, exercising our BATNA doesn’t require us to walk away from our current negotiating partner if we’re unsatisfied with their proposal; it just requires us to keep saying no.

Specifically, Sebenius recommends that we consider the full consequences of saying no to the other side and how we might try to influence those consequences to our advantage. Such consequences might include “costs or risks borne by each side, foregone benefits, altered settlement possibilities, damage to the relationship,” and so on, he writes.

Assess Your Opportunities for Value Creation

In the Harvard Business Review, New York University professor Jay A. Hewlin argues that a focus on BATNAs can lead negotiators to give up on a promising deal before thoroughly exploring opportunities for value creation.

To ensure that we work on both value creation and claiming, we need to ascertain why and to what degree our counterpart needs what we’re offering. According to Hewlin, focusing on mutual dependence advances the conversation from “How much can I get out of this deal above my BATNA?” to “In how many ways can I demonstrate my value to my counterpart based on their needs?”

Hewlin tells the story of a co-owner of a relatively new sustainability company who pitched his company’s services to a local school district. The co-owner faced strong competition from established companies, but he won a contract by asking questions that identified how his company was uniquely positioned to serve the district’s needs and by designing a multitiered plan that deepened the district’s need for his services. In this case, the business owner’s relatively weak  BATNA was rendered irrelevant thanks to his ability to create value for his counterpart.

Beyond the BATNA Basics

The following advice from Sebenius and Hewlin will help you take a broader view of your BATNA analysis and reach better negotiated agreements, particularly with long-term partners:

• View your BATNA as a no-deal option rather than an outside alternative. Productive relationships can be irreplaceable, so don’t assume you have to threaten to walk away from one to get what you want. As you continue to reject the offer on the table, look for ways to put pressure on the other party to compromise.
• Work to enhance the deal on the table. Negotiators who believe they have little power often leave the bargaining table empty-handed. Those with strong BATNAs, meanwhile, sometimes walk away from a deal too quickly. In both cases, negotiators pass up opportunities for value creation. Avoid this common mistake by probing your counterpart’s interests and exploring how you might meet them. The more value you can create, the more willing both parties will be to leave their BATNAs behind.
• Increase your counterpart’s dependence on you. In addition to determining your own BATNA, you need to research your counterpart’s likely BATNA. Then explore ways you might put pressure on them to do a deal by deepening their dependence on you.

How have you put the BATNA concept into action in your business negotiations?

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Industry rivals need to strike a balance between maximizing profits through competition and cooperating on ways to strengthen their market. Become overly competitive, and they risk fostering conflict and constricting innovation. Collaborate in the wrong ways, and they could end up cutting ethical corners or even breaking the law.

Strategic collaborative leadership can balance these issues and help all parties benefit. But when an industry is struggling, this balance can be especially difficult to maintain, a case study reported by Jonah Engel Bromwich in the New York Times shows.Top of Form

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Stealing the Pie?

In 2017, when Harry Overly became the CEO of Sun-Maid, the leading U.S. raisin producer, the $500 million U.S. raisin industry had been in decline for years amid growing competition from other snack foods and foreign raisin producers. An industry newcomer, Overly arrived in California’s Central Valley eager to explore ways to convince millennials to eat more of the healthy snack.

But when he first met with other raisin industry leaders to discuss how they might engage in collaborative leadership to increase sales, Overly told the Times, the ideas they came up with were “completely illegal” and “nothing short of collusion.”

It soon became clear to Overly that California’s compact community of raisin farmers, packers, and executives was riven with distrust due to long-standing disputes. The California Dancing Raisins, Claymation characters used to promote U.S. raisins, had been a wildly popular sales booster decades ago. But after the head of Sun-Maid restricted his competitors’ use of the characters, raisin sellers had resisted collaborating on advertising. Industry fault lines deepened in 2015 after a Supreme Court decision prompted the end of a system in which raisin farmers shared the risk of low raisin supply in off years.

“What I figured out fast was that this was not an industry [that] was interested in figuring out how you grow the size of the pie,” Overly told the Times. “It is one where they figure out how to just steal different slices of the pie from each other.”

Heard It Through the Grapevine

As is common for other U.S. agricultural crops, raisin growers are allowed to collectively set industry prices within a certain range. To try to preserve profits, they generally have responded to shrinking consumer demand for raisins by raising prices.

But to boost sales, Overly believed, Sun-Maid would need to lower the baseline price of raisins. In late 2018, he launched negotiations with Kalem Barserian, the head of the Raisin Bargaining Association (RBA), which represents raisin farmers and raisin producers. Raisin supply had rebounded from 2017’s heat-damaged crop, and Barserian, a 50-year industry veteran, wanted to raise the base price of raisins to a record high. Overly objected. “I don’t know [in] what world … supply goes up and price is supposed to go along with it!” he told the Times.

In California’s insular raisin community, “the gossip was that Sun-Maid’s new chief executive didn’t want to pay a fair price to farmers,” writes Bromwich. With negotiations at an impasse, Overly pulled Sun-Maid out of the RBA in October 2018. He claims he was then the subject of intimidation, harassing phone calls, and even death threats.

With industry tensions at an all-time high, Overly and Barserian followed through on a commitment to appear on an industry panel the following month. Addressing the crowd of raisin growers, Barserian warned about growing global competition and falling demand for U.S. raisins.

Overly talked about the need to raise raisin prices sustainably. He then appealed to the audience: “We need to spend more time focusing on growing the pie than fighting over our piece of [the] pie within this industry. This fighting needs to stop.”

At the forum, growers offered their support for Overly’s collaborative vision. American Vineyard magazine reported that raisin growers left “with their blood pumping fast in excitement for the industry to finally get together and trigger some much-needed changes.”

Growers agreed to lower the baseline price of raisins. Tensions began to ease. In April 2019, a delegation of raisin-industry leaders took a lobbying trip to Washington, D.C. Many federal officials expressed surprise at the display of unity and collaborative leadership within the raisin industry, according to Overly, who then had more time and energy to focus on new-product development and marketing.

Collaborative Leadership Strategies

Here are some lessons about collaborative leadership from the raisin industry’s breakthrough:

• Reframe the game.Rather than looking at negotiations with competitors as a scramble for scarce resources, try to reframe them as opportunities for parties to grow the value of the pie through collaborative negotiation so that everyone can claim more.
• Keep your ethics at the forefront. Recognize that collaborative leadership can morph into collusion when it goes unchecked. Run draft agreements by your lawyers to make sure the agreements don’t run afoul of the law.
• Address conflict head-on. Unresolved disputes can fester and taint interactions between parties for years, even decades. Whether through negotiation, mediation, or some other forum, allow parties to air and get to the root of their grievances.

How have you used collaborative leadership in business negotiations and disputes?

The television industry has undergone seismic changes in recent decades, first with cable TV joining broadcast TV, followed by the rise of digital streaming companies such as Netflix, Amazon Prime, and Hulu. In today’s “peak TV” era, companies are producing hundreds of shows to fill viewers’ binge-watching appetites. In some ways, it’s a golden age for TV writers, as more opportunities to create and work on scripted series are available than ever before. But because of changes the writers’ talent agencies have made to their business model, writers’ wages are stagnating at a time when they should be on an upward trajectory, according to the Writers Guild of America (WGA), the union that represents TV writers.

In April 2019, following unproductive negotiations with the Association of Talent Agents (ATA), the agencies’ trade group, the WGA told its members to fire their agents, at least until writer-friendly improvements were made to the system. The WGA also filed a lawsuit against the four leading talent agencies—William Morris Endeavor (WME), Creative Artists Agency (CAA), United Talent Agency (UTA), and ICM Partners—alleging unlawful conflicts of interest.

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At one point or another, most of us have hired an agent to negotiate on our behalf. When we feel out of our depth or stuck behind closed doors, an agent—whether a real-estate agent, lawyer, literary agent, or financial adviser—can provide the knowledge, experience, connections, and negotiating skills needed to get us a great deal.

Our agents can become such trusted partners that we tend to forget their financial interests are almost never perfectly aligned with our own. A busy real-estate agent may advise you to offer more for a house than is necessary in the hopes of wrapping up a quick sale and earning his commission. A lawyer who bills by the hour may have incentives to research a cut-and-dried case more thoroughly than is necessary.

In the worst cases, our agent may have a full-blown conflict of interest that could lead her to sacrifice our goals for her own. By the time we realize we’ve been harmed by this goal mismatch, we may have suffered unrecoverable losses. The ongoing dispute between TV writers and their agents shows what can happen when we fail to examine our agents’ financial motives closely, while also illustrating best—and worst—conflict-resolution practices.

A new model leads to an increasing risk of conflict of interest

Traditionally, Hollywood agents representing writers have taken a minimum 10% cut of the deals they negotiate. That business model began to shift in the early 2000s when the major talent agencies concluded that to grow their business, they would need to move from relying on agency commissions toward ownership of the content they help produce, Chris Bevilacqua, who led CAA’s sports media ventures in 2007 and 2009, told the New York Times.

To do so, the top agencies began accepting cash infusions from private- equity firms in exchange for partial ownership. After investing $500 million in CAA, private-equity firm TPG Capital now holds a majority stake in the agency. Private-equity firm Silver Lake has a $200 million stake in WME, which in May revealed plans to go public.

As Hollywood agencies have begun to mutate into “full-fledged media conglomerates,” Vanity Fair reports, they are increasingly being pushed by their new partners “to diversify in search of new revenue sources.” Most notably, the large agencies have switched in recent years from the labor-intensive practice of negotiating deals for individual clients to bundling clients into package deals.

In a typical package deal, an agency offers a studio the key elements of a TV series from its stable of talent, including a showrunner, a pilot script, and perhaps a star or director, according to the Hollywood Reporter. Rather than paying agencies indirectly through client commissions, studios pay packaging fees to agencies up front, as well as up to 10% of a show’s future profits. Because agencies can earn many millions of dollars on a successful show, packaging can be far more profitable to them overall than the commission model. Agencies have packaged deals for decades, but only recently did it become the dominant negotiating model.

The rise of packaging may be a boon to agencies, but it has created an untenable conflict of interest in their relationship with clients, according to the WGA. Because agencies are being compensated based on the predicted value and success of a show rather than on how much their client will earn from the show, they may be motivated to keep labor costs low to boost a show’s long-term profits. The agencies counter that their writers are earning more from packaging because their agents waive their commissions. But the WGA claims that weekly earnings for TV writers fell by 23% between 2014 and 2016, along with pay per episode. Using different calculations, the agencies dispute these claims, saying that writer pay is actually rising.

The WGA also objects to the fact that the three largest agencies (WME, CAA, and UTA) are using private- equity money to create their own content-production divisions. The agencies argue that their representation and production divisions are run separately and that agents have a strong motivation to retain their clients by getting them great deals. The WGA maintains that agencies’ activities all flow into the same pot and that writers get subpar deals when they are essentially hired by their agents.

The more beholden the agencies become to outside interests, the more pressure they will face to cut costs, writes Gavin Polone in the Hollywood Reporter. “Reducing compensation for employees is the surest way to boost the bottom line of any business,” he says. As writers’ representatives, agents are perfectly positioned to suppress writers’ wages, whether they would choose to do so consciously or not.

A time for new negotiations

Throughout the seismic changes to the television industry, the relationship between TV writers and their agents has been governed by an agreement negotiated in 1976. In surveys and at outreach meetings, writers complained to the WGA that the agreement was well overdue for an overhaul.

The WGA put the ATA on notice that their franchise agreement would be expiring on April 6 (2019). In February and March, the two sides held a series of meetings that both sides characterized as unproductive. The ATA accused the WGA of engaging in bad-faith bargaining after WGA executive director David Young openly promised the guild’s negotiating strategy would include threats and attacks. In a video address, David Goodman, head of the WGA West, told members that the guild would accept nothing less than total capitulation from the agencies on packaging: “There is no meaningful compromise where conflict of interest is concerned.”

The WGA drafted a Code of Conduct that would require any agencies representing its writers to discontinue packaging and in-house production, a plan supported by 95.3% of members, according to the Reporter. When the 10 largest talent agencies refused to sign the code, the WGA ordered its members to formally drop their agents until they do.

Then, on April 17, the guild sued the four major Hollywood talent agencies. According to the suit, packaging fees violate California law, which requires agents to act in the best financial interest of their clients and inform them of possible conflicts of interest, the Times writes.

Three days later, the WGA delivered termination letters to agents from more than 7,000 writers, including Patton Oswalt, Shonda Rhimes, and Stephen King. Goodman told the Times that the union had the “overwhelming support” of its members—about 80% of those with agents sent termination letters—and that the writers were prepared for a long fight.

Learning to prevent of conflict of interest

TV writers’ dissatisfaction with their agents’ negotiating practices grew gradually over time, but the parties appear to have devoted little effort to collaborating on solutions. The following guidelines can help you manage potential and existing agent conflicts of interest more constructively:

• Research your agents’ incentives. When interviewing potential agents, don’t accept their financial conditions at face value. Take time on your own to think about the conflicts of interest an agent may face when representing you. Compare the agent’s proposed compensation terms to industry standards.
• Negotiate to reduce conflicts of interest. If you’ve identified a potential conflict of interest, openly discuss any concerns you may have with prospective agents and explore alternative compensation models. Remember that agents, like the rest of us, are often unaware of their biases. Emphasize the need to agree to terms that will reduce or eliminate potential trouble spots and promote a productive long- term relationship.
• Question new business models. The WGA tolerated talent agencies’ packaging practices for decades before arguing that they were unlawful. Scrutinize counterparts’ new ways of doing business from the start, and renegotiate your contract at regular intervals.
• Open with collaboration. It’s tempting to launch negotiations and dispute resolution with threats and tough demands, especially if you believe you’re the weaker party. But a combative tone will invite reciprocation and short-circuit good-faith bargaining. When you stake out all-or-nothing positions upfront, you cut yourself off from opportunities to create value through tradeoffs. Meet privately, and ensure you’ve explored all avenues for collaboration before resorting to expensive legal action and other disruptive moves.
• Bring in unbiased experts when disputes arise. In the TV writers’ dispute, members from each side presented conflicting data to support their claims. Parties to a dispute will get nowhere fast when they argue about who’s right. Instead, mutually agree to hire a neutral third party to examine the data and reach an independent analysis—and promise in advance that you will abide by the expert’s conclusions.

Do experts on negotiation practice what they preach? To find out, we spoke with Harvard Law School and Harvard Business School professor Guhan Subramanian. The former academic editor of Negotiation Briefings, Subramanian was named the chair of the Program on Negotiation (PON) atHarvard Law School in 2018. He leads PON’s executive committee, a group of 11 negotiation faculty,in setting the program’s initiatives and direction. We asked him to describe the committee’s negotiations and whether they conform to negotiation best practices.

Negotiation Briefings: Before you became chair of PON, you were a member of the executive committee, which regularly engages in internal negotiations. Now you’re the leader of that committee. As you’ve changed roles, how have the committee’s negotiations changed for you?

Guhan Subramanian: The PON chair has always been first among equals. And, not surprisingly, given the nature of PON, we’ve tried to negotiate among ourselves as opposed to following any kind of mandate from the boss. Continuing a culture established by Robert Mnookin, PON’s longtime chair, I try to lead the group in reaching consensus rather than resorting to a majority-vote rule.

The nature of PON makes it a place where trying to reach decisions through negotiation is a natural thing to do. And the reality is that all the executive committee members are senior faculty members, so there are no real carrots or sticks I could offer in the way that a typical manager would. All I can do is appeal to the substantive arguments as to why one course of action would be better than another. We all realize that and try to work together to reach good outcomes for PON and for the field of negotiation overall.

NB: Do you ever experience a conflict between what you believe would be in the best interest of the group versus what would be in your best interest personally?

GS: Not really. It’s the responsibility of the executive committee to make sure that we always put PON first, and there are rarely such conflicts of interest. In the few scenarios where there are, we try to use processes that accommodate for those conflicts, such as asking someone to step out if we’re discussing a program they are responsible for within PON.

NB: Professors are smart people who often have strong opinions. When disagreements become unproductive, what strategies do you use to address conflict?

GS: As the new chair, I’ve naturally wanted to make some changes to how things have been done. Obviously, some of them will lead to debate. I try to make sure that everyone feels listened to and that the final decision is one that accommodates all points of view.

I often think of a quote from former president Barack Obama, which I’ll paraphrase: I want to hear their point of view, and then I provide my point of view, and then I want to try to find the truth that lies between people. In my experience being on faculty, being involved in negotiations, and now heading PON, I’ve learned that no single person has the truth; the truth lies between people. Therefore, to try to insist on your point of view or approach probably won’t lead to a good outcome in the end. So, I try to listen to dissenters and address their concerns.

NB: The executive committee is made up of negotiation experts. Do you rely on the same strategies that you teach to others?

GS: We do. I credit Bob Mnookin for instilling a culture in which every member has a voice. For example, as the leader, I try to make sure that everyone has a chance to weigh in on a particular topic, and I ask those who are experts in the area we’re discussing to contribute. Consistent with negotiation best practices, I also try to hear from potential dissenters. I myself sometimes play devil’s advocate if I feel like the counterarguments haven’t been fully conveyed among the group members. I’ll say, “What if this downside scenario happens?” and try to hear all the arguments against a decision.

One of the main insights to come out of PON over the past 30 to 40 years is that managers are negotiators. In the old days, organizations used to be more hierarchical, and leaders could just tell people what to do. In today’s era of flatter, matrixed organizations, you have to negotiate with your colleagues. Everyone has the same interest of advancing the organization’s collective goals, but we all have different views on how to get there. It’s fun to apply the tools we teach in class to running PON. We have the great gift of a wonderful staff, which makes the job a lot easier.

What is your greatest source of power in negotiation? You may have learned— perhaps in this newsletter or in Roger Fisher, William Ury, and Bruce Patton’s landmark negotiation book Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 1991)—that it is often a strong BATNA, or best alternative to a negotiated agreement. Experienced negotiators scan the environment before and during a highly anticipated negotiation to determine their backup plan and try to improve it: Job hunters follow other job leads, buyers talk to suppliers’ competitors, and so on.

Your BATNA can be both a useful measure of the quality of a proposal you’re considering and a source of power. When you compare a potential deal to your BATNA, you have a better sense of whether to accept it or push for more. But while BATNA analysis is important, even critical, an overly narrow focus on our BATNA can lead us to make major mistakes in negotiation and leave significant value on the table, according to two recent articles.

In our June issue, we described why negotiators have difficulty assessing uncertain BATNAs accurately and how they can do better. In this article, we stress the value of looking beyond your BATNA to make the most of your interdependence with your current negotiating partner.

Don’t assume you have to walk away

Because the BATNA concept is often defined as an “outside option,” independent of one’s current negotiation, it can be difficult to apply to negotiations conducted between people involved in established partnerships, writes Harvard Business School professor James Sebenius in the April 2017 issue of Negotiation Journal.

“Think of a reasonably content married couple or successful business partners negotiating an issue of keen mutual interest on which they have different preferences,” writes Sebenius. If that married couple can’t agree on where to live after retirement, the only obvious “outside option” would be separation or divorce—hardly an appealing BATNA if they are “reasonably content.” Similarly, when partners in a successful business can’t see eye to eye on a critical issue, they are unlikely to view the dissolution of their partnership as an acceptable BATNA.

When partners in a successful business can’t see eye to eye on a critical issue, they are unlikely to view the dissolution of their partnership as an acceptable BATNA.

Rather than thinking of our BATNA as an “outside option,” Sebenius advises us to think of it more broadly as a “no-deal option.” When we frame our BATNA in this way, exercising our BATNA doesn’t require us to walk away from our current negotiating partner if we’re unsatisfied with their proposal; it just requires us to keep saying no.

Specifically, Sebenius recommends that we consider the full consequences of saying no to the other side and how we might try to influence those consequences to our advantage. Such consequences might include “costs or risks borne by each side, foregone benefits, altered settlement possibilities, damage to the relationship,” and so on, he writes.

Reject—and add pressure

To see this strategy in action, consider the dilemma that some frustrated employees at Amazon’s warehouses in the Minneapolis area faced in recent years. Many of the workers are refugees from East Africa, primarily Somalia, who have struggled to meet increasingly challenging quotas for packing boxes for delivery to customers—as high as 400 boxes an hour, one worker told Vox.

Some Muslim employees said they were given breaks to pray but feared they would fall behind and be fired if they took them. Others complained that none of the managers spoke Somali and didn’t get them medical attention when they suffered health crises at work.

With the help of the Awood Center, a local nonprofit that assists East Africans, some of the employees banded together to protest for better working conditions, reports Karen Weise in the New York Times. Managers met with the employees and agreed to certain changes, such as requiring a Somali-speaking manager to weigh in on any proposed productivity-related firings and to assign a manager to respond to individual workers’ complaints within five days. Many of the workers viewed these concessions as insufficient and have continued to stage walkouts to push for greater representation and a less punishing workload.

Amazon is known for setting rigorous performance quotas for its warehouse employees and quashing their efforts to organize for better working conditions. “Nobody would assume a Muslim worker, with limited language skills, in the middle of Minnesota can be a leader in a viable fight against one of the biggest employers in the world and bring them to the table,” Awood executive director Abdirahman Muse told the Times.

So why have the Amazon employees made headway, and why do they continue to push for change? After all, as new immigrants facing language and other barriers, they risk being fired from well- paying jobs with good benefits and could have difficulty finding similar employment.

The employees implicitly looked beyond their individual BATNAs to Amazon’s BATNA—and how they might worsen it by banding together. The workers and Amazon disagree about what percentage of the workforce is East African—the workers say 60%; Amazon says 30%— but, either way, it’s a significant number. “Amazon would have a very difficult time replacing that many workers,” University of Illinois at Chicago employment researcher Beth Gutelius, told the Times. By protesting together, the workers made it difficult for Amazon to fire them and motivated the retailer to offer concessions.

The behavior of the Amazon workers in this story suggests what can happen when parties with seemingly weak BATNAs look for sources of power within their negotiation rather than assuming the situation is hopeless and giving up. In ongoing, mutually beneficial relationships, look at your BATNA as a no-deal option rather than an outside option. Continue to say no while looking for ways to create value and put pressure on the other party. Such pressure tactics can include enhancing your power by joining forces with other weak parties, allowing the costs of nonagreement to mount for your partner, or revoking benefits the other party receives from your relationship.

Assess your mutual dependence

In a 2017 Harvard Business Review article titled “The Most Overused Negotiating Tactic Is Threatening to Walk Away,” McGill University lecturer Jay A. Hewlin argues that a focus on BATNAs can lead negotiators to give up on a promising deal and exercise their BATNA before thoroughly exploring opportunities for value creation.

Hewlin argues that BATNAs “are a defense against an inferior agreement” but “are not designed to facilitate relationship building, exploration, creativity, or collaboration.” In fact, when you have a strong BATNA, as compared to a weaker one, you may feel less motivated to collaborate, innovate, and use your leverage because you feel comfortable walking away.

To ensure that we work on both creating and claiming value, regardless of the strength of our BATNA, we need to ascertain why and to what degree our counterpart needs what we’re offering. According to Hewlin, focusing on mutual dependence advances the conversation from “How much can I get out of this deal above my BATNA?” to “In how many ways can I demonstrate my value to my counterpart based on their needs?”

Hewlin tells the story of a co-owner of a relatively new sustainability company who pitched his company’s services to a local school district. The co-owner faced strong competition from established companies, but he won a contract by asking questions that identified how his company was uniquely positioned to serve the district’s needs and by designing a multitiered plan that deepened the district’s need for his services. In this case, the business owner’s relatively weak BATNA was rendered irrelevant thanks to his ability to create value for his counterpart.

Increase your counterpart’s dependence to claim value

Awareness of your interdependence with another party can foster value creation. It can also prompt you to claim value— that is, to get more of the pie you’ve expanded for yourself.

Here’s a case in point. At his February State of the Union address, U.S. president Donald Trump unveiled an ambitious plan to eradicate the human immunodeficiency virus (HIV) nationwide by 2030. As part of that plan, the White House negotiated with pharmaceutical company Gilead Sciences to donate enough of its drug Truvada, the only drug approved to prevent HIV infection, to supply 200,000 patients annually for up to 11 years, the Times reports.

HIV activists and experts told the Times that the deal between the White House and Truvada was a good start but noted that it addressed only one-fifth of the demand for the drug in the United States. Currently, only about 18% of at-risk Americans who need Truvada have access to it, according to the Kaiser Family Health Foundation. Gilead has long been criticized for pricing Truvada out of reach for most patients: a month’s supply, which costs about $6 to make, sells for more than $1,600. Gilead has kept affordable generic versions of the drug off the market through legal action and side deals with potential competitors, according to the Times.

In an op-ed, the Times’s Editorial Board argued that Trump had squandered significant leverage in the negotiation with Gilead. Truvada’s development was largely funded with taxpayer dollars, and the Centers for Disease Control and Prevention holds a patent on the medication. Trump’s Justice Department is currently investigating whether Gilead owes the U.S. government back royalties on that patent, which could add up to $1 billion. Currently, there are no plans to sue. By issuing a credible threat to sue for those royalties, the White House may have been able to secure the drug for thousands of additional Americans.

As this negotiation shows, focusing on mutual dependence doesn’t just mean collaborating to meet each other’s needs. It can also mean looking for ways to deepen the other side’s dependence on you, perhaps by worsening her BATNA. In this case, the Trump administration might have done so by threatening legal action.

BATNAs and beyond

The following advice from Sebenius and Hewlin will help you take a broader view of BATNA analysis and reach better agreements:

• View your BATNA as a no-deal option rather than an outside alternative. Productive relationships can be irreplaceable, so don’t assume you have to threaten to walk away from one to get what you want. As you continue to reject the offer on the table, look for ways to put pressure on the other party to compromise.
• Work to enhance the deal on the table. Negotiators who believe they have little power often leave the bargaining table empty-handed. Those with strong BATNAs, meanwhile, sometimes walk away from a deal too quickly. In both cases, negotiators pass up opportunities to create value. Avoid this common mistake by probing your counterpart’s interests and exploring how you might meet them. The more value you can create, the more willing both parties will be to leave their BATNAs behind.
• Increase your counterpart’s dependence on you. In addition to determining your own BATNA, you need to research your counterpart’s likely BATNA. Then explore ways you might put pressure on him to do a deal by deepening his dependence on you.

Industry rivals need to strike a balance between maximizing profits through competition and cooperating on ways to strengthen their market. Become overly competitive, and they risk fostering conflict and constricting innovation. Collaborate in the wrong ways, and they could end up cutting ethical corners or even breaking the law.

When an industry is struggling, this balance can be especially difficult to maintain. As reported by Jonah Engel Bromwich in the New York Times, the new CEO of Sun-Maid, the leading U.S. raisin producer, has learned this lesson firsthand.

Stealing the pie

When Harry Overly took the helm of Sun-Maid in 2017 from an industry insider, the $500 million U.S. raisin industry had been in decline for years amid growing competition from other snack foods and foreign raisin producers. A 38-year-old raisin-industry newcomer, Overly arrived in California’s Central Valley eager to explore ways to convince millennials to eat more of the sweet and healthy snack.

But when he met for the first time with other raisin industry leaders to discuss how they might work together to increase sales, Overly told the Times, the ideas they came up with were “completely illegal” and “nothing short of collusion.”

It soon became clear to Overly that California’s compact community of raisin farmers, packers, and executives was ridden with distrust due to disputes that went back decades. The California Dancing Raisins, Claymation characters used to promote U.S. raisins in the late 1980s and early 1990s, had been a wildly popular sales booster. But after the head of Sun-Maid restricted his competitors’ use of the characters on their packaging, the campaign fell apart, and raisin sellers had resisted collaborating on advertising ever since. Industry fault lines grew deeper in 2015 after a Supreme Court decision prompted the end of a long-standing system in which raisin farmers shared the risk of low raisin supply in off years.

California’s compact community of raisin farmers, packers, and executives was ridden with distrust due to disputes that went back decades.

“What I figured out fast was that this was not an industry which was interested in figuring out how you grow the size of the pie,” Overly told the Times. “It is one where they figure out how to just steal different slices of the pie from each other.”

Heard it through the grapevine

As is common for other U.S. agricultural crops, raisin growers are allowed to collectively set industry prices, within a certain range. To try to preserve their profits, they generally have responded to shrinking consumer demand for raisins by raising prices.

But to boost sales, Overly believed, Sun-Maid would need to lower the baseline price for raisins. In late 2018, he launched negotiations with Kalem Barserian, the head of the Raisin Bargaining Association (RBA), which represents raisin farmers and raisin producers. The supply of raisins had rebounded from 2017’s heat-damaged crop, and Barserian, a 50-year veteran of the raisin industry, wanted to raise the base price of raisins to a record high. Overly objected. “I don’t know [in] what world … supply goes up and price is supposed to go along with it!” he said to the Times.

In California’s insular raisin community, “the gossip was that Sun-Maid’s new chief executive didn’t want to pay a fair price to farmers,” writes Bromwich. With negotiations at an impasse, Overly pulled Sun-Maid out of the RBA in October. He claims he was then the subject of intimidation, harassing phone calls, and even several death threats.

Raisin’ heck

With industry tensions at an all-time high, Overly and Barserian followed through on a commitment to appear together on a panel at Fresno’s Grape, Nut & Tree Fruit Expo in November. Addressing the crowd of raisin growers, Barserian warned about growing global competition and falling demand for U.S. raisins.

When it was his turn, Overly talked about the need to raise raisin prices sustainably. He then appealed to the audience: “We need to spend more time focusing on growing the pie than fighting over our piece of [the] pie within this industry. This fighting needs to stop.”

The forum opened up to audience questions. Jim Phillips, a grower who sells raisins to a Sun-Maid competitor, agreed with Overly that the industry needed to stand together. “Kalem, you don’t have a plan,” he said to Barserian.

Other growers stood up to offer their support for Overly’s collaborative vision. American Vineyard magazine reported that raisin growers left the meeting “with their blood pumping fast in excitement for the industry to finally get together and trigger some much-needed changes.”

Growers agreed to lower the baseline price for raisins, and tensions began to ease. In April, a delegation of raisin-industry leaders took a lobbying trip to Washington, D.C. Many federal officials expressed surprise at the display of unity within the raisin industry, according to Overly, who now has more time and energy to focus on new-product development and marketing.

Raisins in the sun

Here are three lessons from the raisin industry’s breakthrough:

• Reframe the game. Rather than looking at negotiations with competitors as a scramble to grab scarce resources, try to reframe them as opportunities for parties to grow the value of the pie through collaborative moves so that everyone can claim more.
• Bypass unhelpful agents when needed. When Overly couldn’t reach agreement with Barserian, he made his case directly to the farmers the RBA represents. If you believe your counterparts’ representative is not serving them well, try going around him or her.
• Address conflict head-on. Unresolved disputes can fester and taint interactions between parties for years, even decades. Whether through negotiation, mediation, or some other forum, allow parties to air and get to the root of their grievances.

The television industry has undergone seismic changes in recent decades, first with cable TV joining broadcast TV, followed by the rise of digital streaming companies such as Netflix, Amazon Prime, and Hulu. In today’s “peak TV” era, companies are producing hundreds of shows to fill viewers’ binge-watching appetites.

In some ways, it’s a golden age for TV writers, as more opportunities to create and work on scripted series are available than ever before. But because of changes the writers’ talent agencies have made to their business model, writers’ wages are stagnating at a time when they should be on an upward trajectory, according to the Writers Guild of America (WGA), the union that represents TV writers. In April, following unproductive negotiations with the Association of Talent Agents (ATA), the agencies’ trade group, the WGA told its members to fire their agents, at least until writer-friendly improvements are made to the system. The WGA also filed a lawsuit against the four leading talent agencies—William Morris Endeavor (WME), Creative Artists Agency (CAA), United Talent Agency (UTA), and ICM Partners—alleging unlawful conflicts of interest.

At one point or another, most of us have hired an agent to negotiate on our behalf. When we feel out of our depth or stuck behind closed doors, an agent—whether a real-estate agent, lawyer, literary agent, or financial adviser—can provide the knowledge, experience, connections, and negotiating skills needed to get us a great deal.

Our agents can become such trusted partners that we tend to forget their financial interests are almost never perfectly aligned with our own. A busy real-estate agent may advise you to offer more for a house than is necessary in the hopes of wrapping up a quick sale and earning his commission. A lawyer who bills by the hour may have incentives to research a cut-and-dried case more thoroughly than is necessary.

In the worst cases, our agent may have a full-blown conflict of interest that could lead her to sacrifice our goals for her own. By the time we realize we’ve been harmed by this goal mismatch, we may have suffered unrecoverable losses. The ongoing dispute between TV writers and their agents shows what can happen when we fail to examine our agents’ financial motives closely, while also illustrating best—and worst—conflict-resolution practices.

A new model

Traditionally, Hollywood agents representing writers have taken a minimum 10% cut of the deals they negotiate. That business model began to shift in the early 2000s when the major talent agencies concluded that to grow their business, they would need to move from relying on agency commissions toward ownership of the content they help produce, Chris Bevilacqua, who led CAA’s sports media ventures in 2007 and 2009, told the New York Times.

To do so, the top agencies began accepting cash infusions from private- equity firms in exchange for partial ownership. After investing $500 million in CAA, private-equity firm TPG Capital now holds a majority stake in the agency. Private-equity firm Silver Lake has a $200 million stake in WME, which in May revealed plans to go public.

As Hollywood agencies have begun to mutate into “full-fledged media conglomerates,” Vanity Fair reports, they are increasingly being pushed by their new partners “to diversify in search of new revenue sources.” Most notably, the large agencies have switched in recent years from the labor-intensive practice of negotiating deals for individual clients to bundling clients into package deals.

In a typical package deal, an agency offers a studio the key elements of a TV series from its stable of talent, including a showrunner, a pilot script, and perhaps a star or director, according to the Hollywood Reporter. Rather than paying agencies indirectly through client commissions, studios pay packaging fees to agencies up front, as well as up to 10% of a show’s future profits. Because agencies can earn many millions of dollars on a successful show, packaging can be far more profitable to them overall than the commission model. Agencies have packaged deals for decades, but only recently did it become the dominant negotiating model. According to the Writers Guild, 87% of scripted TV series in 2016 and 2017 were packaged.

Ulterior motives

The rise of packaging may be a boon to agencies, but it has created an untenable conflict of interest in their relationship with clients, according to the WGA. Because agencies are being compensated based on the predicted value and success of a show rather than on how much their client will earn from the show, they may be motivated to keep labor costs low to boost a show’s long-term profits. The agencies counter that their writers are earning more from packaging because their agents waive their commissions. But the WGA claims that weekly earnings for TV writers fell by 23% between 2014 and 2016, along with pay per episode. Using different calculations, the agencies dispute these claims, saying that writer pay is actually rising.

The WGA also objects to the fact that the three largest agencies (WME, CAA, and UTA) are using private- equity money to create their own content-production divisions. The agencies argue that their representation and production divisions are run separately and that agents have a strong motivation to retain their clients by getting them great deals. The WGA maintains that agencies’ activities all flow into the same pot and that writers get subpar deals when they are essentially hired by their agents.

The more beholden the agencies become to outside interests, the more pressure they will face to cut costs, writes Gavin Polone in the Hollywood Reporter. “Reducing compensation for employees is the surest way to boost the bottom line of any business,” he says. As writers’ representatives, agents are perfectly positioned to suppress writers’ wages, whether they would choose to do so consciously or not.

A brief negotiation

Throughout the seismic changes to the television industry, the relationship between TV writers and their agents has been governed by an agreement negotiated in 1976. In surveys and at outreach meetings, writers complained to the WGA that the agreement was well overdue for an overhaul.

The WGA put the ATA on notice that their franchise agreement would be expiring on April 6. In February and March, the two sides held a series of meetings that both sides characterized as unproductive. The ATA accused the WGA of engaging in bad-faith bargaining after WGA executive director David Young openly promised the guild’s negotiating strategy would include threats and attacks. In a video address, David Goodman, head of the WGA West, told members that the guild would accept nothing less than total capitulation from the agencies on packaging: “There is no meaningful compromise where conflict of interest is concerned.”

The WGA drafted a Code of Conduct that would require any agencies representing its writers to discontinue packaging and in-house production, a plan supported by 95.3% of members, according to the Reporter. When the 10 largest talent agencies refused to sign the code, the WGA ordered its members to formally drop their agents until they do.

Then, on April 17, the guild sued the four major Hollywood talent agencies. According to the suit, packaging fees violate California law, which requires agents to act in the best financial interest of their clients and inform them of possible conflicts of interest, the Times writes.

Three days later, the WGA delivered termination letters to agents from more than 7,000 writers, including Patton Oswalt, Shonda Rhimes, and Stephen King. Goodman told the Times that the union had the “overwhelming support” of its members—about 80% of those with agents sent termination letters—and that the writers were prepared for a long fight.

What happens next? Having taken on their agents, TV writers are likely to seek greater revenue sharing from studios, writes Jonathan Handel in the Reporter. With the WGA’s contract with the studios set to expire in mid-2020, the guild may press studios to shift the packaging fees they’re not currently paying agents directly to the writers, regardless of how the WGA’s lawsuit against the agencies unfolds. The fight could get ugly: The WGA has held numerous strikes in the past, including a 100-day strike in 2007 that debilitated the industry.

Lessons from a disruptive dispute

TV writers’ dissatisfaction with their agents’ negotiating practices grew gradually over time, but the parties appear to have devoted little effort to collaborating on solutions. The following guidelines can help you manage potential and existing agent conflicts of interest more constructively:

• Research your agents’ incentives. When interviewing potential agents, don’t accept their financial conditions at face value. Take time on your own to think about the conflicts of interest an agent may face when representing you. Compare the agent’s proposed compensation terms to industry standards.
• Negotiate to reduce conflicts of interest. If you’ve identified a potential conflict of interest, openly discuss any concerns you may have with prospective agents and explore alternative compensation models. Remember that agents, like the rest of us, are often unaware of their biases. Emphasize the need to agree to terms that will reduce or eliminate potential trouble spots and promote a productive long- term relationship.
• Question new business models. The WGA tolerated talent agencies’ packaging practices for decades before arguing that they were unlawful. Scrutinize counterparts’ new ways of doing business from the start, and renegotiate your contract at regular intervals.
• Open with collaboration. It’s tempting to launch negotiations and dispute resolution with threats and tough demands, especially if you believe you’re the weaker party. But a combative tone will invite reciprocation and short-circuit good- faith bargaining. When you stake out all-or-nothing positions up front, you cut yourself off from opportunities to create value through tradeoffs. Meet privately, and ensure you’ve explored all avenues for collaboration before resorting to expensive legal action and other disruptive moves.
• Bring in unbiased experts when disputes arise. In the TV writers’ dispute, members from each side presented conflicting data to support their claims. Parties to a dispute will get nowhere fast when they argue about who’s right. Instead, mutually agree to hire a neutral third party to examine the data and reach an independent analysis—and promise in advance that you will abide by the expert’s conclusions.