In November 2010, Jeff Weiss and Jonathan Hughes, along with Major Aram Donigian, published an article in HBR called “Extreme Negotiations.” It described the temptations we all face when negotiating under duress—for example, acting too quickly or relying too much on coercion—and suggested that the principles of effective negotiation become even more important when the stakes are high and the pressure is on. The authors used examples from military negotiations in Iraq and Afghanistan to illustrate those principles.

We followed up with Weiss and Hughes to understand more about how readers could apply these negotiating principles to their own situations.

Implementing Strategies in Extreme NegotiationsA conversation with Jeff Weiss and Jonathan Hughes

HBR: In a business context, what do you define as an “extreme” negotiation?Weiss and Hughes: It’s when the stakes and risks are especially high. Some examples in the corporate world would be resolving a dispute with a joint-venture partner, work-ing with a government that’s de-cided to nationalize your assets, or negotiating with a Top 10 customer who’s threatening to leave unless you cut prices drastically.

Remind us of what the principles are. W & H: They’re not so different from strategies you use in other negotiations—but they’re more dif-ficult to remember under pressure, and yet even more important to apply. Understand what’s motivat-ing the other party; come up with a variety of possible solutions and invite critiques; use facts to per-suade; demonstrate a commitment to a fair and reasonable outcome; build trust over time; and focus on actively shaping the process of the negotiation.

HBR.ORG To read the full article, go to hbr.org/2010/11/extreme-negotiations/ar/1.Ideas in Practice

Spotlight ARTWORK Stacy Pearsall, Lead the Way March 9, 2007, Old Baqubah, Iraq

Extreme NegotiationsWhat U.S. soldiers in Afghanistan have learned about the art of managing high-risk, high-stakes situations by Jeff Weiss, Aram Donigian, and Jonathan Hughes

SPOTlighT On leadershIp lessOns frOM the MIlItary hBr.Org

November 2010 harvard Business review 67

Jeff Weiss is an adjunct professor at the U.S. Military Academy at West Point and a partner at Vantage Partners, a Boston-based consultancy specializing

in corporate negotiations and relationship management, where he focuses on sales negotiations and strategic alliances. He is also the codirector of the West Point Negotiation Project. Jonathan Hughes is a partner at Vantage Partners, specializing in supply-chain management, strategic alliances, and change management.

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pothesis up front. And then, you will prob-ably need to ask them some questions.

Too often, under conditions of stress, we ask questions in an aggressive or disrespectful manner, which makes it less likely the other side will be forthcoming. Instead of saying: “How the hell could you try to take advantage of us like this?” you might say: “We value the long-term relationship our companies have had, and it has always seemed you did as well. The recent price increase you’ve demanded seemed to come out of the blue, without warning or explanation. We’d appreciate hearing more about what’s behind it.” The trick here is to ask questions in a way that makes it easier for the other side to answer, and awkward not to.

One other idea is to suggest a possible resolution and ask the other side to cri-tique it. In the face of disagreement and high emotions, it is very hard for most

counterparts to avoid sharing exactly how stupid or unreasonable they believe your idea is. Stay calm, and don’t be distracted by the manner in which they respond. Listen carefully because their criticism is likely to reveal their true interests—and that is pure gold for a negotiator.

Are the strategies culture-specific? Do they work in Asian cultures as well as Western ones? W & H: The strategies are not culture- specific, but you need to understand cultural norms when using them. For example, the underlying motivations and goals of the other side are rarely apparent in extreme negotiations. How you go about eliciting such information will vary both by culture and by context. And doing so is tied to another strategy: Build trust first. Trust is currency in any culture. There are common approaches

Do these strategies need to be reciprocated to be effective? W & H: No, although that is a very common concern. When facing an adversarial coun-terpart, you do not need to decide between responding in kind and giving in. We’ve found in research with our colleagues at the Harvard Negotiation Project that most negotiators act, and react, based on what the other side does. The bad news is that such responses are often based on a misin-terpretation of the other side’s motives and intentions. The good news is that you can lead the way by negotiating in a principled and constructive fashion, and the other party will usually respond in kind. As we stress in the article, we do not mean you should try to appease the other side, but, instead, negotiate in a deliberate and stra-tegic fashion, rather than simply react.

Can you give some examples of questions that will get at the other side’s motivations? W & H: Before asking the question, it’s helpful to brainstorm possible motivations for the other side. Once you have a few hy-potheses, you can begin to test them. Ask direct questions of your counterpart, but in a respectful and nonthreatening way, and you may well get a candid response.

Here’s an example: Let’s say you are negotiating with a supplier for critical components. They hit you with a large, unexpected price increase. Most people re-act by assuming the worst: They’re trying to extort as much money from us as they can. With this assumption, you are likely to act aggressively, rather than engaging in a more productive form of negotiation.

Instead, before responding to the supplier, you might first brainstorm a number of possible motivations for the price increase. Did the supplier’s costs go up significantly? Are they trying to increase revenue to fund a new R&D or growth initiative? Do they actually want to exit this business? Now you can decide different ways to test these hypotheses. A few phone calls and some market research might serve to validate or invalidate a hy-

to building trust across cultures: Do what you say you’re going to do, and deliver on your commitments. Others vary. In some cultures, direct eye contact is a sign of trustworthiness. In others, direct eye contact is perceived as aggressive and will impede building trust.

How should you respond if the other side makes threats? W & H: People make threats when they feel vulnerable or they believe it will cause you to give in. When you respond in kind, you only exacerbate or escalate the situa-tion. But of course, if you give in, you re-ward the behavior and invite more of it. It is often useful to be explicit and state that it appears the other side is making a threat and that you will not yield to such tactics. For example, you can say, “If you want to ‘negotiate’ by making threats, I can certainly play the same game. But I doubt

that will lead to an outcome either one of us will be happy with. Why don’t we spend some time jointly looking for creative solutions that will meet both our needs? If that doesn’t lead us to an attractive deal, of course we can both go our separate ways.”

There are also other moves you can make. You can ask them what they would achieve by taking the action they have threatened. Their response will likely reveal their interests, and you can use that information to improve the potential deal you are negotiating. You may also, without being adversarial, expose the fact that their walk-away alternative to a deal with you is not as attractive or feasible as they may have indicated, or assumed.

What work do negotiators need to do before they start a negotiation?W & H: Power in extreme negotiations comes more from preparation than from

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Power in extreme negotiations comes more from preparation than from how glib or agile you are at the negotiation table.

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how glib or agile you are at the negoti-ation table. You have to prepare. But not in the way that people usually do, by asking themselves—“What do I want? What can I give? What threats can I make?”—and then crunching numbers to come up with an opening position and some planned concessions. With that sort of preparation, you’re set up for zero-sum haggling and likely to end up with a mini-mally acceptable compromise; you’re not armed with information and ideas that would enable you to negotiate a creative and truly value-maximizing agreement. We suggest using a seven-elements checklist (see sidebar) to more strategi-cally prepare.

How can an individual negotiator develop the skills needed to use these strategies?W & H: Based on our experience, we offer a few key pieces of advice:

Prepare. Focus on structured, disciplined preparation. Use the seven- elements checklist to prepare yourself and to help others prepare.

Practice. Go out and practice negotiat-ing in low-risk situations first. Also, work on being able to mentally step out of the negotiation and look down on what is hap-pening. This “from the ceiling” perspec-tive can help you take purposeful action, rather than reacting.

Review. Do a postmortem on every ne-gotiation, asking yourself what worked and what you would do differently next time.

Get feedback. Have someone observe you and give you feedback about what you did well and what you might consider changing next time.

Teach and coach others. Offer to partner with someone to observe each other and offer feedback and suggestions.

On an organizational level, what can leaders do to build the capability to implement these strategies?W & H: First and foremost, leaders need to change their mind-set. Negotiation is not simply about being skilled in the moment

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Seven-elements checklistThink about each party’s interests.• What are our interests? What might theirs be?• Are there third parties whose interests should be

considered?• Which interests are shared, which are just different,

and which conflict?

Think about each party’s alternatives. • What is our BATNA (best alternative to a negotiated

agreement)? What might be theirs?• Can we improve our BATNA? Can we worsen theirs?

Brainstorm solutions. • What possible agreements or pieces of an agreement

might satisfy all sides?• What solutions can we propose?

Consider ways to legitimize the solutions.• What external criteria might plausibly be relevant?• What standards might a judge apply?

Identify commitments that each party can make. • What is our level of authority to make commitments?

What is theirs?• What are some illustrative, well-crafted commitments?• What would be good products of this meeting?

Analyze the relationships in play and how important they are. • Which relationships matter? How is each now? How would

we like them to be?• What can we do to bridge the gap at low cost and risk?

Plan your communication strategy. • What do we want to learn from them? How can we

improve our listening?• What do we want to communicate? How can we do

so persuasively?• What are our agenda and plan for the negotiation?• How should we handle inevitable disagreements?

Adapted from “Negotiation” by Bruce Patton. From The Handbook of Dispute Resolution, Michael L. Moffit and Robert C. Bordone, eds. The Negotiation Project/Jossey-Bass, 2005. For more details on the seven-elements checklist, click here.

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The situation. During a negotia-tion between a company and an alliance partner, one side was under tremendous pressure to renegotiate the financial terms of their underperforming partnership.

The assumption. Senior management had decided that it needed to change their partner’s incentives because they assumed their partner had lost interest in selling the jointly developed solution.

The strategy in action. After talking to the partner, it became apparent that they were very committed to the alliance and actively engaged in joint-account planning, sharing leads, and pursuing joint sales. They just weren’t successful in help-ing to sell the joint solution. In fact, the company’s partner was in the process of re-ducing the size of its direct sales force and had to reallocate much of its experienced sales resources to other products.

The resolution. Instead of renegotiat-ing the financial terms of the alliance, the partners explored a more fundamental re-structuring. The one partner would take on primary responsibility for sales of the alli-ance product and simply leverage the other partner’s brand and extensive knowledge of the marketplace. Within two months, the partners together had significantly improved their pipeline and had already begun to close a large number of sales.

Strategy 2UncOveR and cOllaBORateUncover motivations and concerns, take responsibility for proposing multiple solu-tions, and invite the other side to critique or improve on those ideas.

dashboards for tracking and reporting on the process for negotiations, and evaluat-ing outcomes; and they have sophisticated training and development programs for those who negotiate, as well as those who support negotiations in the background.

Send consistent messages. Watch what you say when you give instructions or talk about negotiations. Avoid saying things like, “Just go get a deal” or “Drive a hard bargain.” Instead, ensure your negotiators understand the underlying goals they need to satisfy (so they can be

creative) and that they have systematically analyzed your company’s best alterna-tives, as well as the other side’s (so they understand relative leverage in the nego-tiation and are neither overly aggressive nor insufficiently assertive).

Our readers often learn from the suc-cesses of others. Can you give readers an example of what success looks like in a business context with each of the strategies?

Strategy 1Get tHe BIG PIctUReStart by soliciting the other person or group’s point of view, and use that under-standing to shape the objectives of the negotiation and to determine how you’ll achieve those goals.

at the table. It’s a business process, not an event. Then, executives need to:

Define negotiation as a process. Treat negotiation just as you would a manu-facturing or quality-assurance process. Identify the set of activities to be performed in a disciplined way—getting instruc-tions, developing a strategy, preparing, prenegotiating, conducting negotiations, midcourse correcting, closing out the negotiation, and review. Decide who leads negotiations, who supports them, and who is involved in the process from end

to end. See “Sample Negotiation Process” above.

Make preparation and review inte-gral parts of the process. Every nego-tiation should be systematically prepared up front and then reviewed and analyzed when completed. Lessons should then be fed back into preparation for future negotiations.

Develop common tools and meth-ods. Large or even medium-sized com-panies that are involved in thousands of negotiations over the course of a year need the foundation of a shared vocabulary and mind-set when it comes to negotiation. On top of that, organizations that are best in class at negotiating equip their people with negotiation-strategy playbooks; they have midcourse deal-review committees and procedures; they have metrics and

Treat negotiation just as you would a manufacturing or quality-assurance process.

Sample negotiation Process

Execute agreement

Research and develop “walk-away” alternatives

• Define objectives• Form negotiation team• Conduct preliminary analysis• Define negotiation strategy• Prepare to negotiate

• Continually review strategy, revise and adjust tactics as needed

• Conduct formal midcourse review

Go to alternative

• Document and communicate terms of agreement

• Hand off to implementation team

• Document lessons learned

Phases

Activities

Strategy execution Transition to implementationOpen Conduct Close

Analysis, strategy, development, and preparation

Ask: Is the deal better than our walk-away?

Copyright © 2011 by Vantage Partners, LLC. All rights reserved.

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customer still refused, and our client sus-pected they were simply playing hardball.

The strategy in action. Rather than react defensively, the company asked more questions: “This doesn’t really seem to be a financial issue—so what is it?” The response was: “We have a policy against paying license fees when we

technology. But as soon as the issue of fees came up during negotiations, the cus-tomer refused to pay license fees.

The assumption. The technology company presented analysis showing that the license fees were minimal in terms of the revenue stream the customer would generate with the technology. The

The situation. A company had developed a new, promising technology, and had built its business model around a combination of license fees for use of their proprietary technology and service fees. A customer they had been working with for over a year finally said they wanted to proceed with full-scale deployment of the

Danger produces … … often leading negotiators to …

… resulting in In contrast, the skilled negotiator …

Pressure to act fast Begin negotiations with little preparation; act to project maximum confidence and thus negotiate based on perceptions rather than facts

Unnecessary conflict and often a negotiated solution that fails to address the real problem or opportunity

Starts by soliciting his or her point of view and uses that understanding to shape negotiation objectives and strategies

Perceived need to look strong

Stake out a strong position, convey little willingness to compromise, and forcefully demand concessions from the other side

Exacerbated resistance from the other side, contentious and inefficient negotiations, and the risk of no agreement when one was possible

Uncovers underlying motivations and concerns, takes responsibility for proposing multiple possible solutions, and invites the other side to critique or improve his or her ideas

Temptation to use force

Negotiatebased on threats

Resentment that sows the seeds for future conflict and compromises future negotiations

Uses facts and principles of fairness to persuade the other side, arm the other side with justifications to defend the outcome to constituents, and create useful precedents for future negotiations

Strong desire to defuse tension

Make concessions in an attempt to develop a positive relationship

Missed opportunities to develop true relationships based on mutual under-standing, respect, and trust

Deal with relational issues head-on, address them on their own merits, and make incremental commitments to systematically build trust and encourage cooperation

Desire to avoid harm to oneself or one’s constituents

give in on critical issues to avoid or minimize immediate threats

Agreements that create enormous future risk exposure

Consciously changes the game by not reacting to the other side and deliberately taking steps to reshape the negotiation process, as well as the outcome

cOmmOn (and RISkY) ReSPOnSeS tO danGeROUS neGOtIatIOnSEven skilled negotiators adopt less than ideal behaviors in high-stakes situations. Here are strategies to respond to danger, rather than react to it.

Copyright © 2011 by Vantage Partners, LLC. All rights reserved.

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The resolution. The supplier asked for a few days to review the numbers and then came back and said they had done a very rough estimate and failed to catch a couple math errors. They agreed with the alternate figure. The key was to avoid an argument over arbitrary numbers and focus on getting the other side to agree to something they could not deny was a fair and reasonable figure.

Strategy 4 BUIld tRUSt FIRStDeal with relationship issues head-on, and make incremental commitments to build trust and encourage cooperation.

The situation. A leading global IT outsourcing provider and one of its top customers were preparing for the renewal of what had been a five-year contract. The relationship was strained due to a major outage and what the customer perceived as a set of broken promises. In fact, the

help a supplier develop or prove out new technology.”

The resolution. This insight led to a series of productive conversations in which both sides jointly considered various com-mercial arrangements, including a joint ven-ture. Ultimately, an agreement was reached that included no license fees but did include upside payments to the supplier based on the performance of their technology, clear commitments of service support during the transition to commercial-scale deployment (with fees tied to specific services), as well as their customer taking a small equity stake in the company.

Strategy 3elIcIt GenUIne BUY-In Use facts and the principles of fairness (not brute force) to persuade others, arm them with ways to defend their decisions, and create useful precedents for future negotiations.

The situation. During a negotia-tion between a large electric utility and a single-source supplier for a major capital construction project, the supplier demanded a huge up-front payment. But paying it would jeopardize the economics of the entire project for the utility.

The assumption. The utility felt like they had no leverage, and thus no choice but to pay the fee. However, rather than agree to pay it, refuse to pay it, or haggle over the number, the utility asked the sup-plier why they were asking for such a large up-front payment. The supplier responded that they needed to place orders with their own suppliers for expensive, long lead-time items.

The strategy in action. The utility then conducted research as to what these items would likely cost. They came up with an estimate of about 20% of what the supplier was demanding. They went back with their analysis and said, “We agree in principle that we should cover your costs to purchase equipment for this project. That said, here’s our estimate of what those costs should be. What are we miss-ing here?”

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customer said it expected a major dis-count to repair the relationship and keep the contract.

The assumption. Given the size of the deal, it was tempting for the IT company to simply give in but it knew doing so would send a message that the customer could hold the relationship hostage whenever they wanted a price reduction.

The strategy in action. Instead, the IT company scheduled a set of meetings with the customer. In the first meeting, the negotiation team explicitly noted two issues: the damaged state of the relation-ship and quantifiable damages due to the outage. They produced a check for the latter, and proposed another meeting to explore how to rebuild trust and improve collaboration. They said nothing about making price concessions due to the strained relationship. In the second and third meetings, the team led a discussion about each side’s perceptions of broken

From To

What do you want? Why do you want it?

Will you accept/give up? What are some different possible ways we might resolve this?

How about we just split it? By what criteria/legitimate process can we evaluate (and defend) the best answer?

Saying, “I understand” Showing I understand

Thinking my strength comes from knowing I am right, anchoring well, and effectively using threats

Thinking my strength comes from being open to learning and persuasion, being skilled at figuring out their motivations, and being extremely creative

a cRItIcal SHIFt In neGOtIatIOnS aPPROacHTaking a purposeful approach to negotiations, rather than a combative one, requires a shift in mind-set.

Copyright © 2011 by Vantage Partners, LLC. All rights reserved.

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them to sidestep many turf issues and start to explore new solutions and creative hybrid models.

The resolution. Doing this as a shared task before negotiating over the substan-tive answers laid the groundwork for a more collaborative environment and more innovative solutions.

One last question. These strategies take time and patience, and yet, in extreme negotiations, executives are under immense pressures. How can negotiators manage the real pres-sures they face while allowing time for the negotiation to take its course? W & H: In our experience, these strategies don’t take more time than other ap-proaches, especially in extreme circum-stances. What most often takes up time is nonconstructive behavior. Typically, people lock into positions and default to reacting to what the other side does—and thus end up in a protracted, dysfunctional negotiation.

These strategies may require more time up front, but we believe they generally shorten the total negotiation time and generate better results more quickly. More than time per se, these strategies require patience and persistence.

tions company involved in a postmerger integration was engaged in constant, high-stakes negotiations over strategy, organizational structure, new reporting lines, budgets, and staff. They repeatedly found themselves deadlocked. Relation-ships were fraying, and the success of the merger was in jeopardy.

The assumption. They were negotiat-ing over very “big” issues. For example,

should we have a centralized IT function or separate IT departments for each busi-ness unit? But underneath these questions were smaller issues and a range of inter-ests: Will we have one corporate IT budget or separate business-unit IT budgets? Will help-desk staff be centralized, or assigned to business units? Without breaking down the big issues into smaller constituent issues, negotiations were almost always framed as a zero-sum debate over which the company’s prior way of doing things would prevail—with little ability to explore new or hybrid solutions.

The strategy in action. We helped both sides fundamentally change the tone of the debate by jointly discussing how to break down the big questions into smaller, more manageable issues. This allowed

promises, and jointly crafted a set of plans to minimize the chance of unmet expecta-tions and improve how both sides worked together. The company made a series of commitments to their customer, starting with some they knew they could deliver within weeks. By the time the customer issued the RFP several weeks later, the IT company had delivered on many of its commitments, and the talk of paying

“compensation” to “rebuild the relation-ship” had disappeared.

The resolution. In the ensuing months, the customer updated its require-ments to include risk-sharing provisions. Ultimately, they decided they needed a partner they could respect and trust, rather than the lowest cost vendor, and signed a new five-year agreement with the incumbent IT provider.

Strategy 5 FOcUS On PROceSSConsciously change the game by not react-ing to the other side, and deliberately take steps to shape the negotiation process as well as the outcome.

The situation. The new senior management team of a telecommunica-

More than time per se, these strategies require patience and persistence.

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