How to Negotiate Situations That Feel Hopeless

 
 
New Book: In Negotiating the Impossible, Deepak Malhotra outlines key lessons for negotiating sticky situations, with examples that include the Cuban Missile Crisis, disputes in the National Football League and National Hockey League, and several instances of high-stakes deal-making where companies found themselves negotiating against the odds.
  • Author Interview

A Toolkit for Dealing with Negotiation Deadlocks

Interview by Carmen Nobel

Whether you’re angling for a raise, hammering out a deal, or trying to forge peace between warring nations, there are times when the prospects for success can feel bleak at best. Nobody understands this better than Harvard Business School Professor Deepak Malhotra, whose teaching, research, and advisory work focuses on negotiation—including both deal-making and conflict resolution.

In his new book, Negotiating the Impossible, Malhotra outlines key lessons for negotiating sticky situations, with examples that include the Cuban Missile Crisis, the ethno-political conflict in Northern Ireland, and several instances of high-stakes deal-making where companies found themselves negotiating against the odds.

Working Knowledge recently interviewed Malhotra about resolving seemingly impossible negotiation situations.

Carmen Nobel: How does this book differ from other books on negotiation?

Deepak Malhotra: One question that people always ask is how they can negotiate more effectively when things seem hopeless. There are certainly other books that offer thoughts on this issue, but when people have asked me to recommend a book that deals with very challenging situations, I’ve not had a good answer. That’s why I wrote this book.

I have come to believe that even the most difficult of negotiation problems have potential solutions. That’s why I wrote this book: to make the case that we can learn to better handle seemingly impossible (and even more mundane) situations, and to give people the tools they need to do so.

Q: You note in your book that people too often equate negotiation with haggling or debating, or hammering out a deal. Why is that a mistake, and how do you define negotiation instead?

A: Having advised on everything from high-stakes business deals to peace agreements with terrorists, from job offers to ceasefires to family business conflicts, I can say with confidence that negotiation is not about dollars or cents. Nor is it about lives lost or lives saved, or about any one currency. No matter the context or the stakes involved, negotiation is always, fundamentally, about human interaction.

"Empathy is essential for achieving your own objectives in the deal."

Whether we are trying to structure a strategic relationship, get more money, stop bullets, or deescalate emotions, the question we are always confronting in the world of negotiation is this: How can we engage with other human beings in such a way as to achieve better understandings and agreements?

It doesn’t matter whether that agreement is going to be written down on a piece of paper. So we should define negotiation accordingly: Negotiation is the process by which two or more parties who perceive a difference in interests or perspective attempt to reach agreement.

Haggling or debating might be a component of what happens in a negotiation, but it is the tip of the iceberg at best—and in many situations, a haggling or debating mindset can get you in trouble. Haggling and debating are zero-sum approaches. Most negotiations are not zero-sum games, so any zero-sum metaphor we use (“it’s like chess” or “it’s like poker”) is dangerously flawed.

Even war is not a zero-sum game. You will often have more than one winner, or more than one loser. It is possible to have outcomes that are better or worse for all parties. You don’t necessarily have to beat them to achieve your objectives—or, you may need to collaborate with them on some issues even while you are competing on others.

Q: Your book notes the importance of having a process strategy before entering negotiations. What is a process strategy, and what factors should someone consider when forming one?

A: As an example, let’s look at one of the many lessons from this part of the book: negotiate process before substance.

Consider the following situation. You have been negotiating for months and are finally at a point where you believe that the end is in sight and an agreement might be possible. There are a few concessions that you have been saving up to help cross the finish line. You make these concessions, and the other side responds, “Thank you. This is very helpful. Now let me just speak to my boss and see what she thinks about the progress we’ve made so far.”

You are shocked: You have a boss? I thought we were finished. I have nothing left to give. This is a problem of not having negotiated process before substance. Before you jump into a discussion of deal-terms, or start exchanging concessions, it is a good idea to first negotiate the process. This involves clarifying and shaping the path that will get you from where you are today to the end goal.

For example, you want to ask questions such as: How long does it take an organization like yours to get from where we are to a signed deal? Who are all of the parties that need to be on board? What factors might speed up or slow down progress? What are we planning to cover in next week’s meeting? When will we address the following concerns?

The book also looks at the importance of shaping/controlling the process, what to do when the other side reneges on the process they earlier agreed to, and how not to get too bogged down on process issues.

Q: You write about empathy, noting, “The mistake people make is to think that empathy is what you use when you want to be nice.” How does empathy actually benefit the empathizer in negotiations? And can empathy be learned?

A: Empathy is about understanding, as well as possible, the interests, constraints, alternatives, and perspective of the other parties. This is not about being nice or generous—empathy is essential for achieving your own objectives in the deal.

If you do not understand what drives them (their interests), you will have a hard time structuring a viable agreement, and you will not know how much leverage you have in dealing with them. If you do not understand their constraints, you may ask for things that are impossible, while miss opportunities for resolving the conflict in ways that they could actually accept. If you do not understand their alternatives, you will misjudge how strong or weak they are, and how much value you bring to the table. Finally, if you do not understand their perspective—how they are making sense of this deal or dispute, you will not be able to anticipate all of the barriers to getting the deal done.

"in many situations, a haggling or debating mindset can get you in trouble."

Ironically, empathy is needed most when you are dealing with people who seem to deserve it least. When you are negotiating with people who are behaving in aggressive or seemingly inexplicable ways, it is tempting to simply write them off as irrational or evil—but this limits your own options, because you get blinded to the possibility that there is a way forward that reconciles each side’s needs and concerns. When you instead seek to understand how they justify their actions to themselves, you have the possibility of identifying additional paths for resolving the conflict. This does not mean you have to have sympathy for them, or to agree that their demands and perspective are legitimate. But you must make the effort to understand why they deem them to be appropriate. The greater your capacity for empathy, the more likely you find a way forward.

Can empathy be learned? There are two answers. To cultivate a greater natural proclivity for empathy can take time—you are changing long-held beliefs or tendencies. On the other hand, you can start to change your behaviors very quickly. You can ask more questions in your negotiations to better ascertain the other parties’ interests. If you are unsure of how they are constrained, you can propose multiple options for structuring a deal, instead of making just one offer, to avoid getting locked into a path that ends in impasse. You can decide not to respond too quickly to seemingly hostile or irrational behaviors. These are all behavioral changes that you can start to implement today.

Q: What’s the toughest negotiation you’ve ever experienced or observed?

A: Some of the more interesting and challenging business negotiations tend to arise when I’m advising small companies (e.g., early-stage ventures) who are negotiating with bigger, established players on complex or high-stakes strategic deals. Sometimes, the party on the other side is not only your best potential partner, but also your biggest competitor. They have deeper pockets and more options; you’re not sure whether they want to partner in your success or find a way to destroy you.

As for “toughest” negotiations, these are usually situations where governments are trying to negotiate an end to armed conflict. There are many parties, a history of mistrust, hostility and grievances, and interests that range from economic, to security, to political, to ideological, to matters of pride and identity. I firmly believe that any problem humans have created can ultimately be solved by humans. It may not be solved today. It may not even be solvable today (or on the timescale we would prefer). But we can be wiser in crafting our strategy and more deliberate as we chart a path towards eventual resolution. A final point on this: The toughest negotiations require more patience, perseverance, courage, empathy and humility than we carry along with us on most days—or is typically rewarded in politics. This makes things that are already difficult even more so.

Q: What are you working on now?

A: I have a number of projects underway. One of them looks at how we might help surgeons communicate more effectively with cancer patients, to help patients achieve better outcomes. More specifically, we are trying to leverage negotiation principles to lower the rate of unnecessary surgeries among certain types of low risk patients—i.e., those for whom surgery would not extend life, but would have negative consequences for patient quality of life.

In another project, we are looking at gun violence. For example, do mass shootings lead to changes in gun policies? If so, what is the impact? Also, can we identify changes in policy that might lead to a reduction in homicides, suicides, and/or accidental deaths? Finally, I’m working on a number of case analyses of failed, successful, and ongoing negotiations between governments and armed insurgents (e.g., El Salvador, Colombia, Northern Ireland and Nigeria). So, in a sense, it’s a bit of a dark portfolio: cancer, gun violence, and terrorism. Hopefully something of value comes of it!

Related Reading

When Negotiating a Price, Never Bid with a Round Number

How to Spot a Liar

Sharpening Your Skills: Successful Negotiation

  • Book Excerpt

The Power of Process

from: Negotiating the Impossible
by Deepak Malhotra

The war for American independence between the United States and Great Britain lasted eight years, formally ending in the Treaty of Paris, which was signed in 1783. By that time, the Articles of Confederation had served as the governing document of the United States for six years. By design, the Articles gave little power to the central government, and the sovereignty of the 13 states was paramount. The Articles went so far as to clarify that the relationship between the states was merely a “league of friendship with each other.” This was to be expected given the confederation was formed by people who had just freed themselves from the grip of power vested in a distant monarch. Soon enough, however, problems with this arrangement emerged. George Washington, commander in chief of the Continental Army, had seen the failings firsthand during the war itself. Congress had no power to tax, and the states were often unwilling to contribute the funds necessary to pay military wages or the war debt owed to foreign countries. After the war ended, matters worsened. Congress was considered so powerless that its delegates often failed to even show up; on occasions when a quorum was reached, little was accomplished. Even bills aimed at raising tax dollars to pay the war debt were defeated, not because a majority of the states dissented, but because the Articles gave every state a veto. In 1786, Rhode Island defeated such a bill despite support in 12 other states; in 1787, New York cast the deciding vote to do the same.

Evidence that the Articles had serious shortcomings mounted. In 1787,the highly publicized but short-lived Shays’ Rebellion, an uprising among Massachusetts farmers who had economic grievances, made the economic and political problems plaguing the young nation especially vivid. Soon after, the various states agreed to send delegates to the Constitutional Convention in Philadelphia. The goal of the convention was explicitly modest: to consider modifications to the Articles of Confederation. Had the convention been seen as an event at which reformers would try to completely overhaul the government and wrest power away from the states, it is unlikely that any state would have even sent delegates. Yet, that is precisely what occurred.

Although it is certainly possible to overstate the role any one person plays at historic events, James Madison is quite rightly considered to have been one of the few indispensable characters in Philadelphia that summer. Yet, by almost any measure, the deck was stacked against him. At 5 feet 4 inches, and weighing close to 100 pounds, Madison did not project strength or stature. Far from being a captivating orator, he was shy and sometimes spoke too quietly in the debates to be properly heard. At 36 years of age, he was neither a war hero, nor a prominent national figure, nor even a senior member of the delegation from his home state of Virginia. Most problematic, there was very little support for a significant overhaul among the American population at large, and the notion that state legislatures would accept any sizable reduction in their powers was almost unthinkable. Nonetheless, in large part due to Madison’s efforts, when the convention ended, the delegates had drafted an entirely new constitution that shifted considerable power towards a new central government. By late 1788, the required supermajority of states (nine of 13) had ratified it, and by early 1789, the US Constitution became the law of the land. How did this happen?

NEGOTIATING THE IMPOSSIBLE

For his contributions, Madison would come to be known as the “Father of the Constitution.” And while he spoke over 200 times during the debates that took place in the summer of 1787, much of what he managed to accomplish might be attributed to what took place before most other delegates even arrived in Philadelphia. By the time the convention started, Madison had already shaped the deliberations that would take place.

Madison arrived in Philadelphia on May 3, 1787, 11 days before the Constitutional Convention was scheduled to start. True to character, he was the first delegate to show up. George Washington, a fellow Virginian—and the most popular man on the continent—would be the second to arrive ten days later. When Madison and Washington visited the convention hall on May 14 for the scheduled commencement of the now-historic deliberations, they discovered that apart from some local Pennsylvanians, they were the only two people from among the other 12 states to have made it to Philadelphia. While justifiably concerned by what the delay portended, Madison got straight to work. The task ahead, as Madison saw it, was to convince the other delegates that the Articles of Confederation needed to be thrown out completely. To be more precise, given the potentially fatal shortcomings of a system in which any one state could overrule all others on matters of national importance, the new system needed to vest significantly greater power in a national government.

Madison understood that the greatest barrier to the drastic change he wanted was the default process that was in place: the Articles of Confederation were going to be the starting point of any conversation. As long as the Articles served as the template to be revised, they would be too powerful an anchor in every discussion of how to structure government appropriately. A process based on, “How should we revise the Articles?” could never lead to as much change as a process based on, “What is the best system of government?” The process would need to be changed.

Madison, working with George Washington and other like-minded delegates from Pennsylvania and Virginia, started to draft an alternative document that could serve as the starting point for discussion. What came to be known as the “Virginia Plan” consisted of 15 resolutions that, although presented as revisions to the Articles, in fact upended the existing compact between the states. Among its proposals were the idea of proportional representation in Congress, giving power to citizens rather than state legislatures; the veto power of the executive branch; elements of checks and balances; and the ability of the legislative branch to negate state laws that were incompatible with the national interest. Perhaps most astutely, anticipating the resistance of state legislatures to the changes, it also proposed a revised process for ratifying the new Constitution: it called for ratification not by state legislatures, but by assemblies specifically selected for this purpose by the people of the various states.

Not even the considerable talent gathered in Philadelphia in May 1787 could have created such a document without the exhaustive preparation Madison had undertaken before setting foot in Philadelphia. One month earlier, in April 1787, after countless weeks of careful and extensive research on the history of different forms of government dating at least as far back as ancient Greece, Madison had drafted a document titled “Vices of the Political System of the United States.” In it, he laid out a careful critique of the existing system, as well as ideas on how the problems could be addressed. Shared with the Virginia and Philadelphia delegates in May, this treatise served not only as the backbone of the Virginia Plan but also as the basis for reformation presented at the Constitutional Convention.

The convention finally started on May 25. Only four days later, Virginia Governor Edmund Randolph presented the Virginia Plan. Reactions ranged from enthusiastic support to shock and anger. But the die was cast, and all of the debates to follow would take place in the shadow of the Virginia Plan. There was now an entirely new process in place; instead of debating the legitimacy of revisions to the Articles, arguments were focused on supporting or opposing elements of the Virginia Plan. Many compromises were made by all sides in the months ahead, but as each day progressed, the Articles of Confederation were left further behind.

HAVE A PROCESS STRATEGY

What truly exemplifies Madison’s genius is not merely the extent of his preparedness, but the focus of it. Whereas most people know to prepare for the substantive discussions that will eventually occur, Madison understood the power of shaping the process that will ultimately determine whether, when, and how the substantive discussions will take place. The most obvious examples were Madison’s extensive efforts in resetting the starting point of discussions and the coalition-building he did before the convention even started. If he had not executed these process interventions, the negotiations might well have gone a different way. Another crucial process element that favored Madison was the gag rule that delegates instituted to shield their debates from public interference; if too much information on the ongoing negotiations had leaked early on, it would have been difficult for some delegates to continue the controversial work of the convention. If these process elements had not been carefully considered and shaped, the debates would have started—and likely ended—quite differently.

The substance of a negotiation is about what the parties are trying to achieve. Process is about how they will get from where they are today to where they want to be. In the previous section, I discussed the peril of focusing exclusively on substance and ignoring the frame. In this section, I will make the same argument regarding process: even the most brilliant strategy for the substance of negotiations can be undermined if there is insufficient attention to process. Here are just a few elements of process to consider and try to shape:

  • How long will negotiations last?
  • Who will be involved and in what capacity?
  • What will be on the agenda, and in what order will issues be discussed?
  • Who will draft the initial proposal?
  • Will negotiations be public or private?
  • When and how will progress be reported outside of negotiations?
  • Given multiple parties or issues, will there be one negotiation track or many?
  • Will all the parties be in the same room at the same time?
  • Will negotiations take place face-to-face or via technology?
  • How many meetings will be scheduled?
  • How will major deadlocks or other problems be managed?
  • Will there be outside observers or mediators?
  • Will deadlines, if any, be binding or not?
  • What milestones might help build momentum and keep the process on track?
  • If the negotiations end in no deal, when and how might parties reengage?
  • Who are the parties that need to ratify the deal, and how much support is sufficient for passage?

In most negotiations, some or many of these factors will be predetermined, or there may be a default process in place due to precedent or the actions of other parties. But as we have seen, defaults need not be blindly accepted—they can be reset to great advantage. This happens only when negotiators have evaluated all of the important elements of process in advance and have assessed how alternative processes might facilitate or hinder progress.

DON’T IGNORE THE IMPLEMENTATION PROCESS

In the case of the United States Constitution, the crucial role of process can be seen even after the close of the convention. Much of the success in achieving ratification by the states can be attributed to the type of process that was implemented. Recall that many state governments would not have been in favor of the kinds of changes the new Constitution proposed. Moreover, many detractors of the Constitution were going to argue that delegates at the Constitutional Convention had exceeded their authority, that there was going to be too much power vested in the national government, and that individual rights were not sufficiently protected (a concern that was later remedied by the Bill of Rights).

How do you get sufficient support for a deal that is certain to shock many of those who have been outside of the negotiation? Fortunately for Madison and other supporters of the Constitution (dubbed the Federalists), the process for ratification was tailor-made to help them overcome opposition by the Anti-Federalists. First, and most crucially, according to Article VII of the Constitution, only nine of the 13 states needed to ratify the Constitution for it to go into effect for those states. This was despite the fact that any previous revision to the Articles of Confederation, which is what the new Constitution was supposed to be, had required a unanimous vote by all 13 states. Second, ratification took place through specially called state ratification conventions, rather than by the sitting state legislatures. Third, delegates were empowered to make only one choice—vote yes or no—and could not propose amendments or negotiate for revisions. And fourth, the Federalists moved quickly and strategically to schedule early votes designed to win passage in five of the pro-Constitution states. This made it easier for delegates in other states who might have been on the fence to feel more comfortable voting in favor. Certainly, substantive concessions were also made to shore up support in some states—most notably, reaching an understanding that the Bill of Rights would be taken up by the first Congress under the new Constitution. But it is hard to imagine how the Federalists could have achieved success without the right process elements in place. If ratification had required consensus, states like Rhode Island, which had not even sent delegates to the Convention, would have surely vetoed all efforts from the start. Had states been allowed to vote on different versions of the Constitution, or to reopen debates in the hopes of scoring concessions, deadlock would have almost certainly resulted. Likewise, had the Anti-Federalists been given more time to mount an organized challenge to the Constitution, things might have ended differently.

THE POWER OF PREPARATION

As evident throughout, Madison understood the power that comes from being the most prepared person in the room. It was this quality that inspired him to conduct his scholarly research before the convention and to reach out to other Virginia delegates asking them to arrive early to draft “some materials for the work of the Convention.” He brought the same quality into the Convention itself. William Pierce, the delegate from Georgia who became famous for penning character sketches of other delegates, referred to Madison as someone who “always comes forward as the best informed Man of any point in the debate.”

The benefits of thorough preparation are as evident in complex deal making as they are in board meetings, sales calls, legal proceedings, and promotion discussions in faculty meetings. In every one of these environments, some show up woefully unprepared, some have done enough preparation to get by, and others are ready to respond to almost anything. In a truly important situation, you don’t want to be any of these people. You want to be a Madison: someone who has all of the facts at your fingertips, who can anticipate the arguments and reservations of the other parties, and who has carefully examined not just the strengths but also the weaknesses of your own argument. This is the person who is hardest to ignore or push around, to whom others are most likely to give deference, and who will most easily shape or reshape the process and the substantive negotiations effectively.

Excerpted from Negotiating the Impossible by Deepak Malhotra, copyright 2016, Berrett-Koehler Publishers. Reprinted with permission of the publisher.

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