Follow or Tweet:#ent101

Michael Erdle Managing Partner

© 2009, Michael Erdle

 Negotiation Problems  Negotiation Skills  Dispute Resolution

In theory there is no difference between theory and practice. In practice, there is. -- Jan van de Snepscheut

 Everything can be negotiated.  Business Relationships

•  “I want a raise.” •  “I thought we were partners!”

 Personal Relationships •  “What movie to you want to see?” •  “Can I borrow the car?”

 Distributing Value vs. Creating Value   Opportunistic   Problem-solving

 Identify Issues   What does each side want and need?

 Consider Interests   Mutual   Complementary   Conflicting

 Interests vs. Positions   “Needs” vs. “wants”

 “Separate the People from the Problem.”

 Soft on the person

 Hard on the problem

 Consider other Options

 Use Objective Alternatives

 Determine BATNA and WATNA

 Best Alternative to Negotiated Agreement

 Worst Alternative to Negotiated Agreement

 Look for a “win-win” solution

 Successful relationships are built on communication and trust.

 Lack of trust leads to “win-lose” or “lose-lose” result.

 Negotiation is one way of creating trust – or deciding whether trust is justified.  Example: “The Prisoner’s Dilemma” a classic

risk strategy game

Scenario:   Bob and Alice are arrested near the scene of a

robbery where victim was badly injured.  Both are carrying stolen property.  They are questioned separately by the police.  There is enough evidence to convict both of theft,

but not enough to convict either one of assault.  Each has to choose whether to confess and

implicate the other.

 Simple dilemma: confess or don't confess.   If neither one confesses, both will serve one year

(possession of stolen property).   If each confesses and implicates the other, both will go

to prison for 10 years.   But, if one confesses and implicates the other, and the

other does not confess, the collaborator will go free, and the other will go to prison for 20 years.

 The penalties are shown in the following "payoff table”.

Payoff table for the Prisoners' Dilemma:

Alice

confess silent

Bob confess 10 10 0 20 silent 20 0 1 1

 Lack of trust is fatal – neither can trust the other to remain silent.

 So the only rational action is to confess.  That produces the best result no matter what

the other person does.

 This is true for a “winner take all” game.  Life is rarely like that.  Most negotiations are based on a continuing

relationship.  What happens if there’s a series of games?

Series Payoff Matrix

Player 2 cooperates

Player 2 retaliates

Player 1 cooperates 3, 3 0, 5

Player 1 retaliates 5, 0 -1, -1

 “Tit-for-Tat” strategy is most successful.  Four key conditions:

 Nice  Retaliate  Forgiving  Generous

1.  The player will always cooperate, unless provoked.

2.  The player will retaliate, if provoked. 3.  The player is quick to forgive. 4.  The game must continue long enough for

the ‘retaliation and forgiveness’ pattern to affect opponent’s behaviour.

 Assertiveness vs. Empathy  Three common negotiation styles

 Competitive  Accommodating  Avoidance

 Effective negotiator is assertive and empathetic

 Communication is the key to effective negotiation.

 What you say is often less important than how you say it.  Tone  Body language

 Understanding and recognition do not mean compromise and concession.   “I understand” vs. “I agree”.

 Your own emotions and subconscious brain can hinder your ability to negotiate effectively.

 The automatic processing of words interferes with the task of naming the colors.

 Selecting an appropriate response involves conflict between the right and left halves of the brain.

 This conflict is involved in a wide range of thought processes and emotional responses.   Source: PBS Online

http://www.pbs.org/wgbh/nova/everest/exposure/stroopdesc.html

 Listening  Develop “active listening”.

 Understanding  Acknowledge the other person’s perspective.

 Flexibility  Be open to other options.

 Pragmatism  Be ready to accept the best available option.

 Classic “Hard Bargaining” Ploys  Extreme claims, small concessions   “Take or leave it.”  Unreciprocated offers  Threats and warnings  Attacking the alternatives  Good cop, bad cop

 Extreme claims, small concessions  Tit for Tat – make equally small concessions

 “Take or leave it.”  Make a counter offer  Offer an alternative  Don’t be afraid to walk away.

 Unreciprocated offers  Don’t negotiate against yourself.  Wait for a counter offer.

 Threats and warnings  Don’t make a counter-treat.  Challenge the underlying assumptions .

 Attacking the alternatives  Ask for an explanation.   “Why do you have a problem with…?”

 Good cop, bad cop  Negotiate with the boss.  Use the “good cop” to your advantage.

 Negotiation  Mediation  Arbitration  Litigation

Litigation

Arbitration

Mediation

Negotiation

 Interest-based Mediation  Mediator is a facilitator  Focus on interests, not legal rights or

obligations  Options for creative solutions

 Evaluative Mediation  Neutral evaluation  Based on legal rights & obligations

 Qualities of a successful mediator:  Subject area knowledge  Negotiation & mediation process skills  Lets parties make key decisions  Creative approach to the problem  Patience

 Effective alternative to a law suit, especially for commercial disputes  Quicker  Less expensive  Private

 Especially good for international disputes  Avoid uncertain court systems  Easier to enforce an award

 Cohen: You Can Negotiate Anything, Bantam, 1980

 Fischer, Ury and Patton: Getting to Yes, Penguin, 1991

 Ury: Getting Past No, Bantam, 1993  Mnookin, Peppet and Tulumello: Beyond

Winning, Harvard University Press, 2000