25 Reasons to Embrace Chaos in Negotiation
IMPROVISING AGREEMENT IN A CHAOTIC WORLD
For some reason this morning I recalled a strange conversation I had at a large gathering a few years ago. A fellow I didn’t know came up to me and said, “I understand you’re an expert negotiator. Is that right?”
“More like a student of negotiation,” I replied.
“But you’ve written books about it. True?”, he responded, apparently not a fan of small talk. Following his example, I said, “Yes, true.”
Continuing the interrogation, he said, “And you don’t agree with what a lot of other people have written.” I answered, “Yes, to some degree.”
Not letting up, he asked me to summarize my thinking since he didn’t expect to have time to read my work. By this point I was scanning over his shoulder looking for someone—anyone—who might be more convivial company.
“Tell you what,” I said, “Give me your email and I’ll send you three pages from my book, The Art of Negotiation, that sum up some of my basic ideas.” I took his business card, waved to a friend across the room, and eagerly headed over there.
It was an awkward encounter,. But recalling it today gave me an idea. If I was willing back then to share that material with a stranger, a curt one at that, then I should certainly share it with Jazz subscribers who have kindly demonstrated interest in my ideas.
I look forward to your comments and questions. Thanks! Mike
Precepts
1. Negotiation is a dynamic, interactive process. Goals, interests, nonagreement alternatives, and, hence, potential solutions evolve as we negotiate. The changes are driven by our own actions, those of our counterparts, and external events. They can also be due to new ways that we (and others) construe the environment in which we operate.
Changes in circumstances and perceptions may be significant or relatively small. They may be beneficial or to our detriment. Rarely are circumstances the end of negotiation exactly as we anticipated at the beginning.
2. The better we manage and cope with the inherent uncertainty and unpredictability of negotiation, the more effective we will be. Even in seemingly simple situations, it’s hard to see the current landscape with perfect clarity. It’s harder still to predict exactly how things will unfold. Learning, adapting, and influencing are thus key elements of negotiation strategy and the tactics that implement it.
The actions we take and the statements we make to learn more about the negotiation environment, however, are also signals that are read (or misread) by our counterparts. Their perceptions will influence their actions and, hence, alter the world in which we must function. Thus, we must balance the strategic costs of how we endeavor to learn as well as the benefits.
3. Omniscience about the present, let alone the future, isn’t possible. We must therefore act, often in real time, on incomplete and ambiguous information, even when the stakes are high. A bias for action is important, but we must prepare for surprises, pleasant and otherwise.
4. The foregoing precepts all demand formulating robust strategy and executing nimble tactics.
Assertions
5. Conventional negotiation theory implicitly assumes a static environment by focusing on the individual decision maker instead of the interaction of the parties. It largely ignores problems (and opportunities) inherent in the dynamic nature of negotiation.
Familiar concepts and techniques (such as working from interests and improving one’s BATNA) are important but do not in themselves prepare practitioners for the complexity of real-world negotiation.
6. In negotiation, we don’t have complete control over our destiny. Exactly where we end up and how we get there is determined also by the needs, perceptions, and nature of our counterparts.
7. Striving for a degree of control that is beyond our reach is not in our interest.
8. A fresh look at negotiation is required, one that focuses on the interaction between the parties (their dance, so to speak) rather than just the steps of a single party.
9. Our success in negotiation turns on both luck and skill: luck, in terms of our circumstances and whom we deal with; skill, in regard to our ability to analyze our situation and influence it positively.
Our counterparts are often as smart, determined, and fallible as we are. With potential partnerships and collaboration, encouraging counterparts to expand their vision and flexibility is usually to our advantage. By contrast, in some disputes, being at least a step ahead of others in respect to discernment and agility is beneficial.
10. We can learn to manage strategic complexity and interpersonal dynamics in two complementary ways. Illuminating the implicit practices of master negotiators is one avenue. Another is adapting principles and techniques from other domains in which people collaborate, create, or compete with one another (such as jazz, improv theater, psychotherapy, sports, and even warfare).
Strategic principles
11. Deliberate, ongoing learning is a critical element of effective negotiation strategy. It’s essential to recognize what we do—and don’t—know about what may unfold. Rigid plans and untested assumptions hamper effective learning.
12. Having clear objectives provides discipline and focus in negotiation, but that advantage must be weighed against openness to unexpected opportunities or obstacles that may warrant revising our strategy.
13. Well-crafted strategies thus should contemplate not just likely outcomes but also best-case and worst-case scenarios. In some cases, that may require devising a Plan B. In others, undertaking parallel negotiations with different potential partners may be wise. In all cases, it’s useful to set benchmarks and trip wires to activate alternative plans, including possible exits.
14. A strategic direction should be chosen that will seek vantage points and generate opportunities to test assumptions. Reconnaissance is especially important in the early stages of negotiation, when direction may be set. It is also important to optimize (as opposed to maximize) the number and nature of different paths to our ultimate goal. We must balance the option value of alternatives against the possible strategic advantage of commitment to a particular course of action.
15. Ongoing learning informs us how best to influence the actions and perceptions of our counterparts, where possible, and how best to adapt to their behavior where necessary.
16. As negotiation unfolds, some options will close, while others emerge. Achievement of initial goals may still be possible, though perhaps through different means. New or unexpected conditions may call for a fundamental shift in strategy, including the execution of a Plan B or ending the negotiation.
Tactical Points
17. Many of the dynamic factors that inform broad strategy have micro equivalents in moment-to-moment interactions. How parties generally engage each other and define the task is enacted by the specific things that they do and say.
18. Tactics and interactions must serve and be consistent with general strategy. Aggressive gambits seldom promote constructive relationships. Negotiators must on the fly continually learn, adapt, and influence in both collaborative and competitive interactions.
20. Learning is an ongoing process of observing, orienting, deciding, and acting. We must begin negotiation with a clear set of expectations but be prepared to discard them when they do not match the situation at hand.
21. Learning goes well beyond simply uncovering other parties’ substantive interests and perceived options (and the corresponding value of possible carrots and sticks). Specifically, it includes recognizing how best to engage others in regard to our demeanor, voice, and tempo. It also entails gauging if and how others can be influenced to act in a way that advances our interests.
22. Maintaining situational awareness requires emotional balance and presence of mind. Paying heed involves more than merely processing the literal words that others speak. It also includes sensing their unspoken emotional nature and needs. Our own internal doubts and distractions can distort our perceptions.
Emotional balance requires comfort with uncertainty and lack of total control. It also involves mastering paradoxes, such as being simultaneously calm and alert, patient and proactive, and creative and grounded.
Negotiation Success
23. Measuring negotiation success is hard. We seldom know what our counterparts might have been willing to agree to, so we can’t access precisely how much value might be created and captured. Initial aspirations are an imperfect benchmark, as they may be unrealistically high or low.
Impasse may occur for a variety of reasons: strategic behavior, interpersonal issues, or a failure of imagination. In some cases, there simply may be no room for agreement. Correspondingly, if we achieve an excellent outcome, it could be due to our skill and creativity, but maybe we were just lucky. Perhaps our counterpart was desperate for a deal or negotiated poorly.
24. As a result, negotiation is a “wicked environment” for learning. Because negotiation is a complex process, isolating specific causes and effects is difficult. It is important to avoid mislearning from an outcome, good or bad, of a particular case. To learn from experience, we should focus on how we negotiated. Were we agile strategically and tactically?
25. Negotiation is an important, recurring process in our professional and personal lives. Even modest improvement in our skills can significantly improve our well-being. It can help us reach agreements that might otherwise slip through our fingers. It can enable us to create value through mutually beneficial trades. It can empower us to resolve small quarrels before they become major disputes. By negotiating well, we also benefit others—in our organizations, our homes, and our communities.
Postscript
I hope these ideas will prompt you to reflect on your own view of negotiation. Perhaps you’ll be persuaded by some of these notions and skeptical of others. That’s all to the good, as your vision should align with the kinds of negotiations that you do, your personal experience, and most of all, your values.
Housekeeping
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