The person leading the meetings, whether it’s Brad or the facilitator, must be proficient in group problem-solving techniques. A recorder should be assigned to produce ongoing summaries of key points of agreement so that there is one ongoing narrative describing the task force’s efforts. And team members must agree to an explicit set of ground rules governing their interactions.
In the case of Best Care, the facilitator suggested ground rules that included statements such as, “The group will seek unanimity, but it will settle for overwhelming agreement after every possible effort has been made to meet the concerns of everyone involved.”
3. Deliberate and brainstorm. In consensus building it’s important for team members to debate issues in a way that draws upon the best joint fact-finding information available and upon a broad range of possible ways to respond to everyone’s concerns. The goal of consensus-building deliberations can be understood as maximizing joint gains—coming as close as possible to meeting all the underlying interests of the relevant stakeholders. By brainstorming value-creating options, the team increases the chances that it will reach an informed consensus. Again, this agreement is the key to everyone achieving an outcome that is better for Best Care and better for each department than no agreement. It is within this context that each party must decide how to handle the difficult aspects of value claiming.
In its first few meetings, the Best Care team brainstorms ways of tackling the part-time consultant problem. Each member of the task force explains why the current situation works for them. Switching from part-time consultants (who can be easily added or let go as service demands shift geographically or required specialties change) to full-time employees on fixed salaries will have financial, legal, hiring, and operational ramifications. Additional managers may need to be hired. Training will become a more expensive line item. Reporting lines will need to be shifted. Depending on how these changes are implemented, marketing and sales may have to repackage what they are selling.
The department that has to make the fewest or least disruptive changes thinks it will win. But the best interests of the company and the best interests of the other departments may require substantial changes across the board. Reallocating resources (or rewards) to departments that have to make the most substantial shifts could change everyone’s calculations. Instead of defining success as minimizing the need to change, a very different framing that opens up new and desirable opportunities for each department could mean that each department imagines a very different winning outcome.
4. Reach a decision. In a consensus-building process, reaching a decision isn’t as simple as taking a vote. Rather, it means continually adding to a package of recommendations aimed at meeting everyone’s interests. The goal is unanimity, but overwhelming agreement is sufficient. Your desire, of course, if unanimity is not possible, is to be part of the “winning” group.
The group’s leader manages the decision-making process by summarizing each proposed package. “Who can’t live with this?” she will ask. If anyone indicates opposition, that person has the burden of suggesting ways to make the package acceptable to them—without making it worse for anyone else.
Eventually, the facilitator produces a final report for which the group leader feels comfortable taking responsibility. Group members are asked to take the proposed package of recommendations back to their department for comment. In their final report to the CEO, the team may propose radical changes in the way various departments operate, particularly during the transition.
At the final scheduled meeting, Brad or the facilitator asks team members whether they can live with the package they have taken back to their department for review. Last-minute improvements address almost all outstanding issues. When no one can come up with some other way to create additional value, the group thinks its work is done. But the representative of one department, unable to get the draft report to accommodate its existing practices while still incorporating everyone else’s concerns and suggestions, refuses to sign. The others, however, do sign the final recommendations, noting their commitment to work to implement them.
Brad then delivers the task force report to the CEO, indicating that consensus (but not unanimity) has been reached. The document describes the concerns of the department that was unable to support the package. Those who are part of the agreement consider themselves victorious.
5. Implement the decision. The group’s work isn’t actually done. Consensus building extends through implementation. The team needs to keep in touch regularly so that they can iron out any kinks that emerge.
Suppose that problems arise as Best Care lays off a number of experienced consultants while trying to hire new full-time staff. Rather than abandoning the new procedures, Brad might reconvene the task force to brainstorm ways of dealing with these problems. The task force is the ideal group to monitor implementation and tweak new procedures once they’ve been put in place.
Consensus Building Produces Better Results
CONSENSUS BUILDING TAPS the knowledge and skill of everyone in a group. It doesn’t depend on the strength of the leader or a bare majority to push through a winning agreement. It allows for a neutral facilitator—someone who has no interest in pushing his or her own agenda—to manage problem-solving conversations. And it gives everyone an incentive to keep searching for ways to create value when the going gets tough, since there won’t be any agreement until almost everyone gets on board.
The standard practice in work groups is to settle for what a majority wants or, worse still, to defer to a solution imposed from the top. Consensus building is the best alternative when a majority is not enough to ensure legitimacy and effective implementation. When cast in a leadership role, people like Brad focus almost entirely on getting the job done—rather than on doing the best possible job. Many leaders are more interested in taming their group than in tapping the group’s full creative potential.
INSTEAD OF MAKING DECISIONS BY MAJORITY RULE, BUILD CONSENSUS:
•Convene the group
•Clarify responsibilities
•Deliberate and brainstorm
•Reach a decision
•Implement the decision
Because group members must learn how to operate in a new way, the transition process from a majority rule orientation to consensus building can be slow. Organizations may need to invest in building their facilitation capabilities, either by training employees or hiring outsiders. In the long term, these costs pay off in the form of better decisions as well as employees, customers, and constituents who are more satisfied. Winning at win-win negotiation requires a commitment to consensus building.
3
EXPECT THE UNEXPECTED
Use Contingent Offers to Claim More Than the Other Side
THE ART OF THE IMPROVISER
WHETHER SEATED AT THE PIANO or at the bargaining table, expect the unexpected. The best negotiators know how to turn moments of surprise into opportunities to create something of value and significance. Just as jazz musicians spend long hours learning to be spontaneous, negotiators will have more opportunities to get into the trading zone and claim more than the other side if they enhance their improvisational skills.
At the Program on Negotiation at Harvard Law School, we’ve engaged in an ongoing study of improvisation in fields such as music, theater, and psychoanalysis. Two of my colleagues, Lakshmi Balachandra and Michael Wheeler, suggest several lessons that negotiators can use once they are in the trading zone. Overall, our work to date suggests that business negotiators would benefit from building a repertoire of improvisational capabilities, including attentiveness, flexibility, and a willingness to take advantage of the element of surprise. Later in this chapter I will talk about contingent agreements that can be used to deal with surprises that you think are coming but you can’t predict with any accuracy.
Successful Improvisers Are Attentive
FOR AN IMPROVISED JAZZ PIECE to really swing, each member of the band must be fully attuned n
ot only to the chord changes and tempo but also to the attitude of the other performers. If one musician shifts to a minor key during a solo, the others quickly adjust to the new mood. Along these lines, a cardinal rule of improv comedy is to unconditionally accept the “offers” contained in the statements of other performers.
Similarly, in a business negotiation, no matter what assumptions you bring to your first session, you have to listen closely to discern whether your counterpart is behaving as you expected. For example, imagine that your investment company hopes to purchase a commercial property you’ve targeted in a major urban center. In informal conversation, one of the property owners encourages you to make an offer to buy. You set up a meeting with his rep and prepare extensively for what you assume will be a typical real estate negotiation, determining the property’s market value, assessing the likely development trends, and testing your company’s willingness to pay.
Once the initial pleasantries of your long-anticipated meeting wind down, you inquire about the asking price. The smile disappears from your counterpart’s face. Her answer takes you by surprise: “It’s not for sale.”
Thrown off guard, you wonder if she’s playing hard-ball. Or is she so uncertain of her property’s worth that she’s afraid to toss out the first offer and anchor too low? With your homework to back you up, you make a preemptive offer that’s well below the amount your firm is actually willing to pay.
“As I just said, the property is not for sale,” she repeats.
“Come on,” you say, puzzled and annoyed. “Joe told me you were interested in selling. You must have a number in mind.”
“No,” she replies tensely. “Actually, I don’t.”
Her discomfort and reserve suggest something other than outright rejection. Should you get up and leave, raise your bid, or probe further? You take the third track: “Suppose we were business partners in this venture. What are your long-term plans for this property? Maybe there’s a way we could help you achieve your objectives.”
The rep’s posture changes immediately. She relaxes. She smiles. Then she says, “The truth is, we’ve decided there’s a huge upside for redevelopment. It seems that one of the adjacent parcels is going to be developed as a hotel, so we’ve decided to hold on to the property for a while.”
Based on your reading of both her verbal and nonverbal cues, you continue to improvise. “What if we became partners? We could help you put together a redevelopment plan. I haven’t talked with my partners about this, but we might be able to bring significant financing to the table.”
Standard negotiation theory stresses the need to brainstorm value-creating tradeoffs. The study of improvisation adds another step: to create value, don’t just think outside the box; remain attentive to the mood, posture, and unspoken signals your counterpart offers. Improvise questions aimed at maximizing value and opportunities for both of you, then listen carefully to how the other side responds. Winning in this situation means listening for entirely new opportunities. Practice being more fully attentive. At every moment in a negotiation, your counterpart is sending unspoken messages. If your substantive preparation is sufficient and your general confidence level high enough, you can devote more of your attention to picking up these important signals
Successful Improvisers Are Flexible
YOU’VE FOCUSED ON reading your counterpart’s intentions and asked questions that probe her interests. The next step in successful negotiation improvisation is to put aside your predetermined strategies and tactics and invent new ones on the spot. The ability to make impromptu adjustments requires flexibility. Just like musicians and other performers, some negotiators are endlessly and effortlessly flexible, while others need to become more comfortable with unplanned explorations.
One example from a negotiation I was involved in concerned “Painkillers,” a pharmaceutical company that for many years supplied a Veterans’ Administration (VA) hospital pharmacy with one of the most effective (and expensive) drugs for the treatment of prostate cancer. The company’s exclusive patent had expired, however, and generic versions of the drug were about to hit the market. Seeking to maintain its market share, the drug company’s sales team determined that they might be able to keep their customers for at least another year by raising doubts about the efficacy of the generic version of the drug.
Here’s a snippet of the type of dialogue that occurred between the head of the VA pharmacy and the drug company’s sales rep.
Pharmacy head: We don’t see a reason to pay any more than the going rate for the generic version.
Sales rep: Be careful. You can’t be certain that the generic will be fully effective. Do you really want to take that risk?
Pharmacy head: What are you suggesting?
Sales rep: We could reduce the current price we charge you by 50 percent if you commit to buying 100 percent of your supply from us for at least the next three years.
Pharmacy head: I don’t think I can do that. That would still be almost twice as much as the generic is going to cost.
Sales rep: Well, we could give you a 30 percent discount if you commit to two years.
Pharmacy head: You don’t get it. My advisory board will be all over me if I don’t supply the generic version at the lowest possible price.
It’s become clear that the Painkillers rep needs to jettison her original strategy; offering a discount on the prevailing price in exchange for a multiyear commitment just isn’t working. On the fly, she presents an entirely new plan.
Sales rep: What if we were to put together a package? You continue to buy our drug for the next three years at 50 percent off the current price, and we give you a 10 percent discount on all your other orders from us for the next calendar year.
Pharmacy head: Do you mean all of the other drugs we buy from you?
Sales rep: Yes. I have here a printout of everything you purchased from us last year. I’m offering a 10 percent discount on all these drugs for the coming year—in exchange for you sticking with our version of [Drug X] for three years at half price.
Pharmacy head: Well, that may give me what I need to convince my advisory committee that we should continue to buy the drug from you.
By considering the substantial volume of other drugs that the hospital was buying from her company, the sales rep was able to suggest an entirely new package. The key to her success: abandoning the sales team’s carefully planned proposal and being willing to play the What-If Game.
Too many organizations demand that their negotiators get preapproval for their script, usually from the legal and financial departments. This policy hinders flexible exploration of better alternatives. So seek permission to explore new options on the spot. Lobby your superiors for the freedom to brainstorm innovative proposals at the bargaining table (without making any commitments); then, clear any proposed agreements back at the office. What-if proposals should clearly reflect preapproved parameters set during internal preparatory talks. And they should always be offered with the proviso that both sides will need to get final approval before any deal can be sealed.
Successful Improvisers Use the Element of Surprise
MANY BUSINESS NEGOTIATORS open talks by trying to out-intimidate each other. Consider this all-too-typical script between two potential business partners:
“There’s no point continuing this conversation unless you concede that I deserve 90 percent of future earnings—my fair share, considering how much time and money I’m expending up front.”
“Ninety for you and ten for me? Are you out of your mind? I won’t settle for less than 60 percent.”
And so the hard-bargaining ping-pong match begins.
But what if the second speaker had responded like this: “Ninety percent might be feasible, but I think there’s a lot more value we can create before we reach any final decision. I have some ideas about how to turn our business into a real winner for both of us. I assume you agree that if I can show you how we can double or triple our earnings, then I ought to get
the lion’s share of the added value.”
Most hard bargainers will be taken aback when you try to shift from a win-lose mindset to one of value creation and collaboration. That leaves the door open for the person who makes such a surprising move to do a bit of claiming for herself. Sometimes the most compelling surprises have little or nothing to do with the substance of the negotiation. Suppose you notice that your counterpart is in a foul mood, for example. Instead of responding to his unreasonable opening offer, you might inquire about his life away from the table. “You don’t seem like yourself today, and I’m guessing this has little to do with our conversation,” you might say. “Do you want to talk about what’s troubling you?” He’ll likely be suspicious of your motives at first, and there’s no guarantee he’ll open up about his difficulties. But by expressing genuine concern for his well-being, you should at least be able to clear the air.
The jazz improvisers we’ve interviewed (and observed) indicate that unexpected moves by one member of an ensemble often lead to the most interesting, exciting, and satisfying group outcomes. Similarly, when you try out a surprising move in a negotiation, as long as you do it in a tentative fashion, you are likely to nudge stalled talks in a productive direction.
Prior to the negotiation, contemplate a few surprise moves in advance. Role-play the responses you might get to an unexpected statement or question—and your subsequent reactions—with some of your colleagues. Planned surprises may appear to be a contradiction in terms, but skilled performers told us they always have a set of potential options and responses they can draw on during their act. They also said that successful improv requires an element of playfulness—a willingness to look silly, not take yourself too seriously, and try things you’ve never done before. Winning at win-win negotiation may require a willingness to depart from a set script and a lot more improvisation than most people expect. The value of this approach can be even better illustrated by situations involving conversations with “true believers,” people who seem to stick to their beliefs no matter what evidence is presented. All too often the result is a shouting match in which little, if anything, is accomplished. It is entirely possible, on the other hand, to have productive conversations about a controversial issue, such as climate change, for example, without needing to agree on what is causing it.
Good for You, Great for Me Page 8
