Negotiation Research You Can Use: When Women Negotiate More Ethically Than Men

Gender differences in moral identity may affect how we bargain.

PON Staff • May 12, 2017

Men and women approach negotiation differently, on average, research suggests. Women initiate negotiations on their own behalf less frequently than men, for example, though they are just as likely as men to advocate for others. In addition, women—and not men—tend to face a backlash for bargaining on their own behalf, an outcome that may explain their reticence about negotiating, Linda Babcock (Carnegie Mellon University), Hannah Riley Bowles (Harvard Kennedy School), and Lei Lai (Tulane University) have found in their research.

Are there gender differences in how ethically negotiators behave at the bargaining table? Women are generally less accepting of unethical behavior than men are and tend to behave more ethically than men in a wide variety of contexts, past studies have found. In the context of negotiation, women have been found to be less tolerant overall of a wide array of unethical strategies as compared with men. In a study by Michael P. Haselhuhn and Elaine M. Wong of the University of California, Riverside, 25% of men used deception to negotiate a deal as compared with only 11% of women.

In a new study published in Organizational Behavior and Human Decision Processes, Jessica A. Kennedy (Vanderbilt University), Laura J. Kray (University of California, Berkeley), and Gillian Ku (London Business School) looked more closely at possible gender differences in negotiator ethics and found nuanced results.

Relationship goals

The researchers hypothesized that women internalize morality into their identities more strongly than men do. As compared with men, women are more likely to view themselves as interdependent with others and to be more attuned to relationships and others’ emotions. Generally speaking, men tend to define themselves as more independent and less reliant
on others.

“Because being moral helps people build and maintain relationships,” Kennedy and her colleagues write, “women are likely to adopt goals and values that promote the welfare of others. Over time, these goals and values may translate into identifying strongly as a moral person.” Because people with stronger moral identities tend to behave more ethically, the researchers hypothesized that women also would be more ethical negotiators.

The researchers found support for their theorizing in several experiments—at least under certain conditions. In one experiment, the researchers measured participants’ sense of moral identity, in part by asking how important it was for them to have certain characteristics associated with morality, such as being caring, fair, generous, helpful, and so on. Next, participants read a negotiation scenario involving the sale of a used car that had one minor and one major mechanical problem. The researchers then measured participants’ degree of moral disengagement—the extent to which they rationalized away unethical decisions—and assessed how committed participants were to negotiating ethically with a potential buyer of the used car.

Female participants internalized moral traits more strongly than male participants and were less likely than men to morally disengage from unethical negotiating practices, the results showed. In addition, the women were significantly less supportive than the men of unethical negotiating tactics.

When money trumps ethical concerns

It’s not the case that women behave in a morally superior manner across the board in negotiation, however. In a follow-up experiment, participants played the role of a hiring manager negotiating the salary of a job candidate. The participants were told that the job would be eliminated in six months due to a restructuring, a fact that the candidate did not know.

Would women be more likely than men to reveal this fact to the candidate? When participants did not have explicit financial incentives to reveal the information, women were more forthright than men about the short-term nature of the job in the simulation that followed. However, when participants were told they would receive $100 for negotiating the lowest salary, women were just as likely as men to behave unethically, despite their stronger sense of moral identity.

Overall, the findings suggest that women may be socialized to be more ethical negotiators than men. When financial incentives to lie or cheat loom large, however, women may be tempted to focus more on maximizing profit than on adhering to their moral standards. To encourage negotiators of both genders to behave more morally, look for ways to make ethical concerns salient in negotiation and reduce financial incentives to behave unethically.

Negotiation Briefings Articles

How Leaks Changed the Game in a High-Profile Negotiation

Kraft Heinz’s offer to purchase Unilever ended in a rare public retreat for investor Warren Buffett—and generated useful business negotiation tips for the rest of us.

PON Staff • May 12, 2017

In the world of mergers and acquisitions, some acquirers try to improve the companies they purchase by expanding them and emphasizing innovation, while others choose to focus on cutting costs. Due in part to millennials’ lack of appetite for prepackaged food, consumer-goods companies lately have been focused more on slashing budgets than on innovating. Many are exploring mergers to achieve greater efficiencies and scale, according to the New York Times.

In 2013, for example, the Brazilian private equity firm 3G Capital purchased Heinz and took it private, with financing from Berkshire Hathaway chief Warren Buffett. The legendary “Oracle of Omaha” had watched with admiration as 3G principal Jorge Paulo Lemann transformed a small Brazilian brewing company into Anheuser-Busch InBev through increasingly bold acquisitions and cost-cutting. Two years after their Heinz deal, Lemann and Buffett teamed up to buy Kraft, then took the combined business public as Kraft Heinz.

After making an acquisition, 3G follows a time-tested script that involves replacing most of the target’s executives with its own leaders, who then carry out mass layoffs, close factories, and institute internal penny-pinching. It’s been a recipe for success: Kraft Heinz saw its market value rise from about $63 billion to approximately $105 billion in the past two years.

Because innovation has not proven to be one of its strengths, to sustain its impressive gains, 3G instead repeatedly acquires companies and institutes cost-cutting measures. “It’s like the shark that can’t stop swimming,” one industry director told Fortune.

The latest big fish 3G set its sights on? Unilever—but the British-Dutch consumer-goods giant turned out to be the one that wriggled away. Our analysis of the deal reveals five lessons negotiators contemplating new partnerships should bear in mind before they approach
the table.

Polite conversation

In a February 27, 2017 interview with CNBC’s Squawk Box, Buffett recounted that in recent months, he, 3G’s Lemann, and Kraft Heinz CEO Alexandre Behring (a 3G cofounder) privately agreed to make a friendly offer for Unilever, as long as the company was “open to it.” (Buffett has said in the past that hostile takeovers are outside his area of expertise.) Unilever, whose brands include Hellmann’s, Dove, Knorr, and Lipton, was in a sales slump despite a strong presence in the developing world. The 3G-Berkshire team believed Unilever could give Kraft Heinz an international platform for its brands.

Buffett was happy to let 3G run the negotiation, despite owning a slightly larger stake than 3G in Kraft Heinz. (Together, Berkshire and 3G own just under 50% of the company.) “I’m not embarrassed to admit that Heinz is run far better under [3G] than would be the case if I were in charge,” he has said, according to Fortune. It’s a marked departure from Buffett’s usual strategy of trying to grow the companies he purchases through added investments in infrastructure and innovation. But his low-key role has allowed him to keep the “bloodletting” of American jobs and shuttered factories from staining his reputation, even as Berkshire’s $9.8 billion investment in Kraft Heinz has more than tripled, writes Fortune.

Behring traveled to London to quietly float the idea of a buyout to Unilever’s Dutch CEO, Paul Polman. “He didn’t get a yes, he didn’t get a no,” Buffett told CNBC. “He got perfectly polite conversation. And so [Behring] came back and said that he hadn’t been
thrown out.”

Two weeks after that meeting, sometime in February 2017, Behring returned to London, this time with a letter outlining a possible deal. Lemann, Buffett, and Behring agreed that if Behring again raised the possibility of a deal with Polman and got a neutral response, he would hand over the letter, but if he got a negative response, he would not. “He went over and felt he got a neutral response, and therefore gave the letter,” Buffett recalled to CNBC.

“No merit”

On February 17, the Financial Times’ Alphaville blog leaked rumors of a Kraft Heinz bid for Unilever in a live market chat.

“If this had involved only American companies, probably nothing would have happened, as the companies would have just declined to comment,” explains Steven Davidoff Solomon in the New York Times. But in Britain, where Unilever is traded, companies are legally required to announce the status of any potential acquisitions as soon as rumors emerge.

Likely not terribly surprised by the leak, the 3G-Buffett team went public with its takeover offer of $143 billion (roughly $50 per share). If completed, it would have been the largest cross-border merger since 2000, and shares of both Kraft Heinz and Unilever surged at the news.

But the Kraft Heinz team seemed caught off guard when Unilever immediately released a statement rejecting the Kraft Heinz bid, which it said “fundamentally undervalue[d]” Unilever’s worth; had “no merit, either financial or strategic, for Unilever’s shareholders”; and created no “basis for any further discussions.”

A friendly offer, spurned

Despite Behring’s earlier overtures, Unilever executives seemed to have been not only shocked by the offer but also horrified. Behind the scenes, they tried to persuade shareholders that Kraft Heinz’s cost-cutting culture and “lack of vision for cultivating brands” would be disastrous for Unilever, according to Bloomberg. The executives were also concerned about weighing down Unilever with a buyout funded largely by debt, the Guardian reports.

The political climate also discouraged a deal. Following the pound’s decline after the June 2016 Brexit vote, British lawmakers had been warning that foreign invaders might try to take advantage of “fire sales” of British companies, according to the New York Times. U.K. prime minister Theresa May had criticized Kraft in a speech for breaking promises not to close factories after its 2010 acquisition of British chocolate-maker Cadbury. As a result of Kraft’s behavior, British takeover law had been modified to require acquirers to be clear about their intentions during acquisition negotiations.

Unilever CEO Polman reportedly called Buffett and Lemann after the leak to warn them that neither the company’s board nor its investors were likely to support the proposed acquisition. For his part, Buffett said he told Unilever not to worry about receiving a hostile or unfriendly offer.

Backing away

Buffett and Lemann, who would have had to put up significant new capital to help fund the deal, were reportedly “spooked” by Unilever’s response, according to the Financial Times. Neither was used to having offers rejected, let alone so publicly and so soundly.

The odds of winning a public battle for their target were steep, they calculated. They would be pressured to commit to saving jobs and facilities in the United Kingdom, a promise at odds with 3G’s standard operating procedure. And any deal reached would face an uphill battle for regulatory approval in both Britain and the Netherlands, where Unilever is jointly based and nationalist fervor is also high.

On Monday, February 20, Kraft Heinz and Unilever released a joint statement saying that Kraft Heinz had “amicably agreed to withdraw its proposal for a combination of the two companies.” Unilever’s shares plummeted, and industry talk turned to guessing which consumer-goods company the Kraft Heinz shark would pursue next.

5 ways to set yourself up for a strong partnership

The following lessons from Kraft Heinz’s failed bid for Unilever apply to any negotiation dance between two potential partners.

1. Swing in your sweet spot.

Buffett famously formed his investment philosophy around baseball great Ted Williams’s observation that he tended to hit at an All-Star level at pitches thrown down the middle of the plate but swing poorly when balls came in low and outside the strike zone. “The trick in investing is to just sit there and watch pitch after pitch go by and wait for the one right in your sweet spot,” Buffett said in the HBO documentary Becoming Warren Buffett. “And if people are yelling, ‘Swing, you bum!’ ignore them.”

In investing, this means that Buffett is comfortable making friendly offers but not hostile ones. He also is not a price haggler: “I’m not a negotiator,” the famous dealmaker told CNBC. He “pays what he thinks something is worth and rarely stretches,” Jeff Matthews, who has written books on Berkshire Hathaway, told Bloomberg. “People tend to want to sell to him, so he usually gets his price.” And when he doesn’t, he is apparently ready to walk away.

When we play to our negotiating strengths and acknowledge our weaknesses, we can end up waiting patiently for the right deal or walking away from one we dearly want—and we avoid serious errors.

2. Prepare for cultural barriers at the table.

Buffett and Lemann had felt confident enough in Behring’s assessment of his early meetings with Polman to believe that Unilever was open to weighing an offer. When that seemed not to be true, Buffett was left trying to explain what had happened. He speculated to CNBC that cultural barriers may have played a role. Specifically, he suggested that the Brazilian Behring, who speaks English as a second language, may have misinterpreted Polman’s politeness in their earliest meetings as interest. Because even minor cultural differences can lead to major confusion, it’s wise to learn about cultural norms before sitting down at the negotiating table.

3. Anticipate long-term culture clashes.

Unilever has a reputation for investing in long-term sustainable environmental practices, a vision that many observers perceive to be at odds with 3G’s ruthless focus on short-term cost cutting. Although the two teams might have found a way to capitalize on the best of both worlds, it’s perhaps more likely that they would have had difficulty integrating. Before rushing into a deal, analyze how well your and your counterpart’s cultures—including your corporate, national, regional, and industry cultures—will mesh.

4. Consider the deal environment.

Current protectionist trends both in the United States and abroad mean that interested observers, including governments and citizens, are likely to view would-be international corporate raiders with alarm. In negotiation, it’s important to research not only your counterpart but also the deal’s broader environment. Ask and answer questions such as these: Who might try to block a deal? How likely are they to be successful? Are there ways to win them over? Who’s in power? Should we wait a year or two, when the political climate might be different? Who might intercede on our behalf?

5. Expect leaks to change the game.

Once a sensitive negotiation goes public, the way parties react to one another will fundamentally shift. In particular, scrutiny is likely to increase nervousness and competitive behavior. It could even change the rules of the game. Kraft Heinz, for example, was legally obligated to take its offer public in the United Kingdom after rumors of the offer emerged. Think hard about how you and your counterpart might be affected if your negotiations gain an audience. Do what you can to ward off leaks, but also have your response to them ready to go if word gets out, and anticipate how parties are likely to react.

Negotiation Skills

The Third Side Approach in Conflicts: How Can I Start?

PON Staff • May 2, 2017

In the The Third Side, William Ury suggests several concrete steps that you can take to start mobilizing the third-side approach to tackle nagging conflicts.

Start Close to Home

Look for opportunities in conflicts to play a helpful third-side role with friends, family members, and neighbors, whether it’s mediating a dispute over a home renovation or coaching a kid’s sporting team.

Change the Story

Though a problem may seem intractable, assume that you can help make things better. Start off by talking about the conflict in positive terms.

Learn Some Skills

Take a class or read a book on negotiation. Urge your company to bring in professional coaches. Commit to lifelong learning to improve your negotiation skills.

Mediate Your Own Disputes

Confront the conflict in your own life, and apply the lessons learned to the disputes of others.

Fill a Missing Role

Use your strengths to help others in the most appropriate way. Figure out what help is needed and fill the role yourself.

Create a Winning Alliance

Recruit help and build a team. You can’t – and shouldn’t – do it all yourself.

Win-Win Negotiations

When a Win-Win Negotiation Creates Controversy

Katie Shonk • May 1, 2017

In negotiation, the concessions we are willing to make in public sometimes are very different from the concessions we are willing to make in private.

Take the statement that U.S. secretary of state Rex Tillerson made during his visit to China in March: “The U.S.–China relationship has been guided by an understanding of non-conflict, non-confrontation, mutual respect, and win-win cooperation.”

To many ears, the phrasing might sound uncontroversial. The reference to “win-win cooperation” seems to be straight out of an American business negotiation class, and therefore not unexpected from Tillerson, who was the CEO of ExxonMobil before joining the Trump administration. The notion of “mutual respect,” as well as the goal of avoiding conflict and confrontation between two Superpowers, also seems innocuous.

Yet for many Asia experts in the United States, Tillerson’s messages of mutual-gain negotiations were startling. “The American foreign policy establishment . . . criticized Tillerson almost unanimously with full firepower” for his statement, writes D. D. Wu in The Diplomat magazine.

A Calculated Concession?

Why the strong reaction from U.S. policy experts? Because to them, the statement sounded familiar—and it sounded like capitulation.

Chinese officials have used phrases such as “win win” and “mutual respect” to describe their goal for U.S.–China relations, as it turns out. In the Morning Call, Laura Rosenberger, a former foreign policy adviser to presidents George W. Bush and Barack Obama, described Tillerson’s adoption of phrases used by Chinese president Xi Jinping and other Chinese officials as “nearly verbatim.”

In Beijing, “win-win cooperation” and “mutual respect” are much more than negotiation pleasantries. They convey the desire in China for the United States to respect its “core interests,” writes Simon Denyer in the Washington Post. And those core interests can be very controversial, encompassing China’s dealings with Taiwan, Tibet, and Hong Kong.

It’s common for Chinese diplomats to press for language that will signal “accommodation, non-interference, and spheres of influence,” according to Rosenberger. In 2009, she notes, the Obama administration took heat for agreeing to a joint statement, pushed by China, in which the two countries promised to “respect and accommodate each other’s core interests.” The statement unintentionally signaled a hands-off approach toward Beijing that “took years and lots of hard work” for the Obama White House to correct, writes Rosenberger.

A Rationale for “Win-Win” Talk

Now observers speculate that Chinese officials may have pressed Tillerson to signal that the Trump administration will allow China free rein to pursue its interests. The risk is that China will see the language as a green light to make aggressive moves, perhaps in the South China Sea, that U.S. allies may find threatening.

But, writing in the Diplomat, East Asia expert D. D. Wu argues that U.S. foreign-policy experts such as Rosenberger may have overreacted to Tillerson’s choice of “win-win” language. In an interview with the International Journal Review, Wu notes, Tillerson said he’d achieved negotiation successes in the private sector by making few public statements about talks. This policy helped the government officials with whom he negotiated avoid controversy—and apparently led to win-win situations.

Thus, Tillerson may have seen value in signaling capitulation to help his counterparts save face in public, while taking a tougher stance in private, Wu concludes. She notes, for example, that the United States recently rejected a request from China to respect its air defense zone over the territory it has claimed in the East China Sea. A concession on language may have seemed relatively inconsequential as compared to the substance of talks carried out with China behind closed doors—a potential negotiation win-win.

Risky Tradeoffs

In negotiation, it’s smart to make tradeoffs on issues you care little about in exchange for concessions you care more about. However, when it comes to framing public statements, making concessions to cater to your counterpart can be risky.

First, sending a false or misleading message to outsiders can lead to confusion and criticism. Second, your counterpart may expect you to negotiate in harmony with your public statements. Third, you can damage your own interests and reputation by making commitments that you don’t intend to keep.

So, think carefully about the consequences before making public statements about an upcoming or ongoing negotiation—such as a commitment to win-win agreement—that differ from your private stance, as the result may not be a win-win in the end.

Have you ever found yourself making concessions in public statements to please a negotiating counterpart?

Dealmaking

Learning from the Failed Negotiations to Repeal and Replace Obamacare

In failed negotiations to reform healthcare, President Trump and other Republicans committed key negotiation missteps, most notably a lack of thorough preparation and ill-advised threats.

PON Staff • April 24, 2017

“It’s going to be so easy,” Donald Trump said this past October, referring to his plan to immediately repeal and replace the Affordable Care Act (ACA) if elected president. But, once in office, President Trump found healthcare reform to be much more difficult than he’d expected.

On March 24, after failing to win over enough votes in the House to replace the ACA with the widely unpopular plan that he’d drafted, Speaker Paul Ryan withdrew the American Health Care Act (AHCA) and declared that Obamacare would remain the “law of the land.”

Following failed negotiations, it’s important to do a post-mortem to determine what went wrong and how you can do better in the future. In a recent interview with the Washington Post, Harvard Business School professor Deepak Malhotra, author of Negotiating the Impossible, analyzed the failed negotiations and identified some of the critical mistakes that Trump, in particular, made as he attempted to sell the deal.

A Lack of Preparation

Noting that Trump seemed to take a “day-to-day, hour-to-hour” approach to the negotiations, Malhotra told the Post, “That rarely goes right.”

Instead, when heading into complex negotiations involving multiple parties, we need to thoroughly research the parties, their interests and goals, and the various issues at stake. We also must have a strong sense of our own interests and goals.

For an issue as complex as healthcare, Trump and Ryan needed a firm understanding of how various factions, including the conservative House Freedom Caucus and the more moderate Tuesday Group, would react to elements of the draft plan. Instead, Ryan seemed to be guilty of assuming too much—namely, that Republicans would go along with virtually any plan that wasn’t the ACA.

As for Trump, “it was never clear whether [he] was really for [Ryan’s plan] or sort of for it, and it kind of changed over time,” Malhotra told the Post. “There was no grand strategy.”

Failed Ultimatum, Failed Negotiations

As the deadline for a vote to replace the ACA with the AHCA drew near, Trump issued an ultimatum to House members: support the plan on the table, or lose your last chance at repealing Obamacare during his term in office. Despite their vociferous opposition to the ACA, Republicans who were on the fence failed to be moved by the threat.

Because ultimatums and other adversarial bargaining tactics often escalate conflict, Malhotra advises his clients and students only to deliver them as a last resort. In addition, he cautions us that we need to be prepared to follow through with any ultimatums we make.

“Ultimatums are only going to work if you feel that you’re already at a place where the other side, if push came to shove, would say yes rather than no, and you just want to force the decisions,” says Malhotra. By contrast, if people are leaning toward no, they are likely to call your bluff. Power tactics in negotiation, like an ultimatum, could end up boxing you into a corner and leading to failed negotiations.

That warning might not apply to Trump, though, who has frequently changed his mind on policy matters and hasn’t seemed to be concerned about appearing inconsistent. “If a year or two from now he decides to revisit [Obamacare], nobody’s going to be that surprised,” notes Malhotra.

The Downside of Threats

As he attempted to cajole House Republicans to support the AHCA, Trump reportedly threatened to harm their chances of reelection. At a meeting with the Freedom Caucus during the negotiations, for example, he warned caucus leader Mark Meadows that he would “come after” him if he didn’t vote yes.

There are a number of risks of threats such as this, but Malhotra points out a pivotal one. “If you’re having to publicly threaten . . . people in your own party to get in line at that point in the negotiation . . . it makes you look desperate,” he told the Post. Desperation, in turn, licenses those who are undecided to turn against you—making the threat a self-fulfilling prophecy.

Because people most commonly issue threats when they’ve run out of other options, a threat may signal that you are on the path toward failed negotiations, according to Malhotra. “And that in itself can create its own momentum.”

What lessons have you learned from your own past failed negotiations?

Business Negotiations

negotiation topics in business and negotiation strategy make a bump plan

Negotiation Topics in Business: Make a Bump Plan

Negotiation topics in business negotiations: Here is the strategy used by the NHL in their collective bargaining negotiations

PON Staff • April 20, 2017

Regrouping from the cancellation of the 2004–2005 season due to failed labor negotiations, National Hockey League (NHL) teams and players faced the challenge of radically restructuring their collective bargaining agreement (CBA) in July 2005. The new CBA instituted a uniform cap (as well as a floor) on team payrolls. It also set maximums and minimums for individual contracts and declared many more players free agents, allowing them to sign with whatever team made the richest offer.

Negotiation Examples in Real Life and Negotiation Topics in Business: The NHL Players Association and the CBA

Imagine that you’re an NHL general manager. You have a month, at most, to fill your team’s roster before training camp begins. What’s your strategy? If you expect that your rivals will go on a spree and overspend for big-name players, it would be smart to sit back, protect your budget, and then scoop up the excess talent. But if the other owners move cautiously in this new terrain, it would be in your interest to aggressively sign stars before the market heats up.

The NHL general managers had to work on at least three different levels as they raced to sign players. They had to assess a particular player’s value to their own team and what other clubs would be likely to pay him. They also had to weigh what sort of precedent, good or bad, that deal would set for the other players they were trying to sign. Finally, they had to anticipate how their moves would affect the decisions of competing teams.

Military strategist Carl von Clausewitz coined the term friction, “the force that makes the apparently easy so difficult.” Friction doesn’t just refer to adverse weather or enemy fire. It can also be mental and self-induced, resulting from the “lack of a clearly defined goal, lack of coordination, unclear or complicated plans,” and other signs of ill preparation, according to Marine doctrine.

Friction was high in the hockey negotiations. Confidential information about contract talks was sometimes leaked to the press. Key players who seemed ready to sign with one team suddenly bolted to another. Some general managers gave fat contracts to players long past their prime. Each transaction altered the overall negotiation landscape.

In rapidly changing marketplaces, you can’t provide for every contingency. But you can take a page from Marine Corps practice and develop bump plans.

Two Negotiation Tips for Preparing for Success at the Bargaining Table

Rather than mapping out every possibility, commanders practice a form of analytic triage by focusing on two negative possibilities, discarding almost everything else. The first element is anticipating the enemy’s most likely course of action. The second is preparing for the biggest, most damaging risks by identifying the greatest threats to success.

Translated to the negotiation arena, creating a bump plan means ultimately making an informed bet on how you expect things to unfold, while also contemplating what you’ll do if events go the other way. A hockey general manager who values premier goaltending should identify a handful of potential players. But in case he gets stymied with all of them, he should be open to assembling a team that’s more offensively oriented.

Adapted from “When the Only Constant is Change,” by Michael Wheeler (professor, Harvard Business School), first published in the Negotiation newsletter.

Originally published November 2010.

Leadership Skills

A field of golden wheat and blue sky

“Chasing Heroin” with Situational Leadership and Negotiation

Adaptive leadership and a new negotiating lens on a public health crisis

Alex Green • April 20, 2017

Across the country, America’s leaders are waging a highly-publicized battle against a raging heroin epidemic. “Chasing Heroin,” an investigative report by Frontline, recently shed light on responses to the crisis, which currently contributes to over 27,000 opiate overdoses nationwide each year. What reporters found is that the best methods for combatting the problem have come from instances where situational leadership at the local level produced successful negotiated agreements between stakeholders. Nowhere is this truer than with a Seattle public defender who saw the right moment to take action.

Stepping into the Limelight

With limited resources, all levels of government have been negotiating agreements in order to combat the growing problem, from local police to the president. In Seattle, attorney Lisa Daugaard rose to prominence by negotiating the creation of a program that re-shaped the city law enforcement’s entire approach to drug addiction.

Daugaard’s story shows how situational leadership—where leaders adapt their leadership styles to a particular, pressing issue—can inform important negotiations that lead to nationwide responses to a serious problem. Understanding her approach provides an invaluable window into the role of situational leadership in any negotiation.

Is This a Moment for Situational Leadership?

Many effective negotiators have an instinctive sense of the right time for action, but it is always helpful to stop and ask if you are the best person to help address a situation at a given moment. A long-time public defender, Daugaard’s work gave her first-hand experience seeing how Seattle responded to drug addiction.

What she saw was a justice system that treated addicts like serious criminals, resulting in lengthy jail sentences that were not reducing addiction rates or the crimes associated with them. The moment called for someone with experience, an understanding of the issues at hand, and a willingness to act. In short, it was a moment that called for Lisa Daugaard’s particular style of situational leadership.

An Impasse Often Leads to Negotiations

While it is important to recognize where negotiation is needed, it is also important to acknowledge what cannot be negotiated. Often, what cannot be negotiated is continued acceptance of the status quo. Daugaard observed that Seattle’s response to drug addiction disproportionately affected young men of color, violating their civil rights. She demanded change.

Daugaard’s statements garnered significant attention, and the ire of many of the city’s law enforcement professionals. Despite the criticism, her claims catapulted her to the fore of a community discussion, setting the stage for a negotiation.

Turning a Conversation into a Negotiation

Daugaard’s persistence paid off when a county prosecutor asked her to join him in conversation with a Seattle police lieutenant. Instead of hurling insults at one another, the two set aside their opposition, and laid out their grievances in clear, simple terms. When they did, they realized that they actually agreed on the most important issue; the existing approach, which treated drug addicts as criminals, was not working. Their shared sense of the fundamental problem made it possible to turn a conversation into a negotiation.

Situational Leadership and Joint Gains

Good situational leadership relies on constant self-assessment, and a willingness to probe positions and interests in order to reach better agreements. By recognizing that they shared a perception of the existing problems, law enforcement officials and Daugaard’s Public Defender Association negotiated a new set of policies to respond more effectively to the crisis. Most importantly, what emerged from their negotiations was a sense that the crucial moment for dealing with drug addiction was at the time of arrest. At that moment, they realized, police needed more options than simply throwing someone in jail.

Reframing the Issue and Getting Better Results

In 2011, their negotiations paid off. Seattle and King County implemented a program called LEAD (Law Enforcement Assisted Diversion), which provides housing and support services for addicts instead of jail time. At the core of their agreement, Daugaard and law enforcement officials made the decision to re-frame drug addiction as a public health problem rather than a criminal matter.

In their discussions, they had discovered that jailing addicts was not reducing crimes, nor was it affecting the growing rates of addiction. The new approach allowed them to better help addicts, use public health resources more effectively, and reduce the burden on the criminal justice system.

Claiming Greater Value

A University of Washington Study has shown that the LEAD program has resulted in a 58% reduction in re-arrest rates for addicts. The remarkable success of the program has garnered national attention. Daugaard and other civic leaders have shown adaptive situational leadership skills, bringing their program to other communities and all the way to the White House. LEAD has gone from an unprecedented proposal to becoming the most promising way forward for struggling towns and cities across the country.

Daugaard’s success is the result of negotiations that were effective because of her situational leadership skills. By making clear assessments of what was working and what was not she was able to target the key issues and separate them from the positions of the people involved. As a result, she turned a tide of opposition into a coalition of supporters whose impact has helped to change how a nation approach the terrible disease of addiction.

Mediation

Arbitration vs Mediation: Using Teambuilding and ADR in Negotiation

Arbitration and mediation are very different dispute resolution processes - learn how they impact team management and bargaining scenarios

PON Staff • April 18, 2017

During his years as George H.W. Bush’s Secretary of State, one of James A. Baker’s III, goals was to encourage the free-market reforms that Communist Party of the Soviet Union General Secretary Mikhail Gorbachev had launched in the late 1980s. One day during his tenure, a high-level Bush administration official commented in the press that Gorbachev’s efforts were sure to fail. Baker called Bush to complain. “I said, you can’t have other people pontificating about these major foreign policy matters when this is one of our goals, and it’s totally contrary to our policy,” he said. “So they cut the knees off of this particular individual, and we didn’t hear that anymore.”

Baker shared this story on March 29, 2012 while receiving the 2012 Great Negotiator Award from the Program on Negotiation at Harvard Law School and the Future of Diplomacy Project at Harvard Kennedy School. In discussion with Harvard faculty at the Great Negotiator event, Baker elaborated on his greatest challenges as Secretary of State and shared negotiation lessons learned over the course of his long, successful career as a lawyer, campaign manager, and diplomat.

Baker’s anecdote about the Bush administration official who went off message raises compelling questions about the best way to manage conflict in negotiating teams when it emerges.

To prevent conflicts among diverse, strong-minded team members from overshadowing group goals, Professor Elizabeth Mannix of Cornell University advises the negotiation team to spend at least twice as much time preparing for upcoming talks as they expect to spend at the table. Because the other side will be ready and willing to exploit any chinks in your team’s armor, it’s important to hash out your differences in advance.

Start by encouraging the team to brainstorm and debate the issues to be discussed during the talks. Spend timed debating goals, the team’s best alternative to the present agreement, and your reservation point – the worst outcome you, as a team, will accept. Then, spend just as much time exploring the other side’s likely goals, background, alternatives, and reservation point. Having trouble coming to agreement on the facts? Teams sometimes resolve substantive differences by bringing in experts for guidance on areas of confusion, Kristin Behfar (University of California, Irvine), Ray Friedman (Vanderbilt University), and Jeanne Brett (Northwestern University) found in interviews with experienced team negotiators.

What about personality conflicts? In the Behfar study, some negotiators described the problem of coping with highly confrontation or emotional group members. Teams that overcame this difficulty did so by practicing their negotiation script in advance with the goal of directing and controlling the behavior of volatile members. To avoid conveying weakness to the other side, rather than calling for a break at the first sign of trouble, some teams devised secret signals they could use to bring wayward members in line – for instance, someone might stretch out her arms to communicate to another member that he’s getting off track.

Related Mediation Article: Arbitration vs Mediation: Teambuilding Using Negotiation Examples from Real Life – Which alternative dispute resolution process (ADR) is right for your conflict? In conflict management, there are many different avenues disputants can take to resolve their conflict – they can litigate it in the court system, they can hire a third-party neutral mediator to help them see eye-to-eye, or they can engage in arbitration, in which, like mediation, a third party is present but instead imposes a decision on the disputants. What dispute resolution process is right for your team? Learn conflict management skills drawn from negotiation research in this article.

Adapted from “Lessons in Diplomacy: Building a Successful Negotiating Career,” first published in the Negotiation newsletter, July 2012, and “The Surprising Benefits of Conflict in Negotiating Teams,” first published in the Negotiation newsletter, February 2009.

Originally published in 2012.

Dealing with Difficult People

dealing with difficult people first look in the mirror

Dealing with Difficult People? First Look in the Mirror

It takes two to tango, especially when dealing with difficult people - find out how Idaho and federal officials have endangered a multinational child-support treaty

Katie Shonk • April 17, 2017

We’ve all faced the challenge of dealing with difficult people – those who refuse to give you what you want in negotiation for no clear reason other than sheer stubbornness. But dismissing others as stubborn, irrational, and difficult is typically a mistake.

When dealing with difficult employees, clients, customers, and others, the most important step you can take is typically to stop looking at them as stubborn and to begin listening closely to their concerns.

One interesting example is that of the multinational child-support treaty, the Uniform Interstate Family Security Act (UIFSA) of 2008. The United States, the European Union, Albania, Bosnia and Herzegovina, Norway, and Ukraine negotiated the treaty over the course of five years in The Hague. The treaty’s goal was to improve enforcement of child-support orders across international and state borders.

In the United States, the treaty needed to be approved by all 50 states to be ratified. This treaty has been widely viewed as a noncontroversial means of improving the lives of children whose parents are trying to hide from their legal duty to pay child support.

Noncontroversial, except for in the US state of Idaho. In April 2015, a House committee of the Idaho state legislature vote 9-8 to kill a bill that would have given state approval of the treaty.

The nine committee members who voted down the bill expressed a variety of concerns about the treaty, according to the Idaho Statesman. They said they feared that foreign authorities would gain access to personal information about Idahoans, although federal officials said this would not be the case. They expressed concern about potentially having to enforce foreign laws and an international treaty.

In the press, the legislators were largely portrayed as obstinate and prideful. But they felt that they themselves were dealing with difficult people, reacting to what they characterized as strong-arm tactics from the federal government. To lawmakers’ dismay, they were told they could not amend or negotiate amendments to the bill because it was part of an international treaty, an awkward position for lawmakers who answer to their constituencies and not to federal officials.

Most distressing, federal officials threatened to cut $16 million in funding for Idaho’s child welfare system on June 12, 2015 if the bill did not pass. The move would “effectively dismantle the state’s child-support enforcement arm,” according to the Times. He paraphrased the feds message as, “You need to sign it, and if you don’t we’re going to beat the crud out of you.”

The situation speaks to the inherent problems with treating a potential negotiation as a means of managing difficult people. Whether you are dealing with difficult coworkers or working with difficult people more generally in your work life, the following guidelines should help you look at them in a more constructive light:

1. Listen to their concerns.

Rather than setting aside ample time to discuss the treaty with Idaho lawmakers, the federal government ineffectively conveyed the treaty’s provisions and thus Idaho lawmakers felt overwhelmed by what they saw as “new information.” Because of this, the Idaho lawmakers may have felt like the federal government was trying to rush them through the approval process by not allowing them to voice their concerns. To avoid dealing with difficult people, don’t give them a reason to be difficult in the first place.

2. Resist the urge to threaten.

The U.S. government’s decision to threaten to revoke federal funding served as a challenge to Idaho’s legislators. Sadly, it is the children who may pay the price for both sides’ destructive behavior. When dealing with difficult people (or, rather, those you consider to be difficult), avoid resorting to threats and punishment to try to get your way. Usually, an open and honest conversation is all that is needed for parties to begin to bridge their differences and find common ground.

3. Don’t go on a power trip.

In negotiation, powerful parties often have difficulty taking the perspective of their less powerful counterpart. This may explain in part why the federal government was so insensitive to Idaho lawmakers’ concerns. The more powerful you or your team is in a negotiation, the greater the need to avoid giving the other side the impression that they are working with difficult people.

Originally published in 2015.

Win-Win Negotiations

Business Negotiations: Win-Win Strategy for Hospices de Beaune Vineyards

How integrative negotiation scenarios can lead to win-win outcomes for both you and your bargaining counterpart

PON Staff • April 13, 2017

When the old ways of doing business aren’t working anymore, it may be time to break with tradition. Of course, doing so can be easier said than done. For inspiration, consider how the administrators of the venerable Hospices de Beaune charity wine auction in France shook up the wine industry over a decade ago, as described by the San Francisco Chronicle and Wine Spectator magazine.

The Way Things Were

The Hospices de Beaune, which is composed of two hospitals, produces 42 different Burgundy wines on 150 acres of prime vineyards that it acquired through donations over the centuries. Rather than bottling and selling the wines, the Hospices has traditionally auctioned off barrels of unfinished wine to large Burgundy négociants, or merchants, such as Louis Jadot and Joseph Drouhin.

As the first annual market indicator of the French wine industry, the 156-year-old Hospices de Beaune auction, which is held the third Sunday of each November, is closely monitored worldwide. Winning bids reflect the perceived quality of that year’s vintage of Burgundy and influence the prices paid for other wines.

After buying barrels at the auction, the négociants “raise” the wine—blending, finishing, and bottling it under their own labels. In France and other European countries, the widespread négociant system created a “win-win-win” scenario: the winemakers get paid up front for their wine, the négociants avoid the overhead of harvesting grapes, and the consumers reap these savings.

The New Rules of the Game

Yet for the Hospices de Beaune, the large négociants became a source of consternation in the modern era. The négociants controlled the auction—and, in 2004, succeeded in colluding to greatly drive down prices—amid wider industry changes. Smaller grape growers and wine merchants were clamoring to purchase Burgundy wine, yet they were excluded by tradition from the Hospices auction.

In 2005, the Hospices decided it was time for an overhaul. First, management of the auction, which had previously been run locally, was handed over to Christie’s auction house. Second, members of the public were invited to participate alongside trade members. Third, whereas only lots of multiple barrels had been sold in the past, single barrels were put up for sale, a change designed to attract smaller buyers.

In 2007, Christie’s introduced telephone and Internet bidding, and the auction went global. Prices for red wine (which outsells white in Burgundy) rose 40% over the 2006 vintage, though the 2007 vintage was widely considered inferior. The Hospices had reason to toast its success.

A Case of Sour Grapes?

Before the 2008 auction, one representative of a large négociant sniffed to the Chronicle that the new rules had made the auction “irrelevant” in the larger wine world. But most of the négociants were appeased when they finagled lower prices at the 2008 auction. (Red wine prices slid 31.5% from prices paid in the 2007 auction, a drop that seemed almost inevitable amid the global financial crisis.)

Despite the radical changes to the rules, the Hospices and the négociants remain interdependent, as the French wine-raising system remains too complicated for most private buyers to navigate. Meanwhile, the proud owner of his first two barrels of Burgundy told Wine Spectator, “Until today, I’d thought that for a person like me, the wines of the Hospices were untouchable.”

Related Win-Win Negotiations Article: Conflict Management Techniques – Should You Take Your Dispute Public? – What factors influence the decision to make a private conflict public? What negotiation strategies could negotiators use after making their dispute public? In this article, the advantages and disadvantages of making previously private disputes public is discussed with reference to negotiating tactics and bargaining dynamics.

Adapted from “The Hospices de Beaune Wine Auction – New World Tactics Meet Old World Tradition,” first published in the April 2009 issue of Negotiation.