The next step in this predictable set of interactions? Too often, a lawsuit. In the worst cases, the parties argue endlessly, often in the press, hiding behind the findings of their respective hired guns. In many quarters this has been dubbed “adversary science.” From the public’s standpoint, if you can hire a scientist to say whatever you want, why take science into account at all? In some instances, the parties decide to ignore all scientific or technical considerations, since there are none that they trust. This is likely to produce an agreement that meets no one’s interests and may even create dangerous and counterproductive results.
MAPPING THE TERRITORY, TOGETHER
SOME MIGHT ARGUE that such confrontations are inevitable. But a wide range of collaborative efforts, many of which I have been involved in personally, have convinced me that the battle of the printout can be avoided. For example, groups for and against large-scale development projects or plant closings have come together to undertake joint investigations of potential impacts. These have led to decisions about whether and how to proceed, and also about what compensation should be paid to those who might be adversely affected.
How can negotiators in situations such as the battle between Anaconda and the abutters find their way quickly and easily into the trading zone? One method I’ve seen work time and again in a wide variety of negotiations is joint fact-finding, a multistep, collaborative process for bringing together negotiating partners with different interests, values, and disciplinary perspectives. By agreeing on how information will be gathered, analyzed, and interpreted, the parties lay the foundation for subsequent negotiation. Joint fact-finding, which helps maximize joint gains, has proven successful in helping parties resolve disagreements, particularly highly technical ones. While each party will seek to do the best it can for itself, joint fact-finding enables both to transition into the trading zone. As all sides seek to win, their chances of meeting their own interests while simultaneously meeting the interests of other parties will increase.
Unbiased expert advice is key. Without help from experts they all trust, each party remains too focused on its own interests to move together in the right direction.
Joint fact-finding typically proceeds as follows:
Scope the dialogue. People disagreeing about the legitimacy of each other’s claims must first reach agreement on the questions and topics to include on their negotiation agenda. In the case of the siting of the manufacturing plant, Anaconda and the abutters need to agree on a list of questions regarding the potential environmental and financial impacts of the facility. Such questions usually provoke an information-gathering process, although parties may not see eye to eye on the methods or the analyses required. How can they resolve these early differences? By setting written ground rules they can all live with.
The simplest way to generate ground rules is to have a trusted intermediary, such as a professional mediator with the appropriate technical background, carry drafts from party to party until they reach agreement. In their ground rules, parties must ensure that all sides have the technical background, or at least access to appropriate technical guidance, necessary to engage in a productive dialogue.
It’s useful for the ground rules to establish the amount of time and money participants will devote to data gathering and analysis. They may also include guarantees of confidentiality and clarification of the participants’ interests.
Jointly choose expert advisers. Once there is agreement on ground rules and a fact-finding agenda, Anaconda and the abutters are ready to select technical advisers and analytic methods that will deliver the answers they need. If each selects its own advisers, the likely result is the all-too-common situation of conflicting technical inputs and dueling experts. A more effective alternative is jointly selecting a set of neutral technical advisers. (Note another big benefit of joint fact-finding: a shared analysis can literally cut parties’ research costs in half.)
But the task of selecting advisers often brings philosophical differences to the fore. In the dispute over the manufacturing plant, Anaconda, motivated to show the financial benefits the plant would bring to the community, might insist on the joint hiring of an economist. For their part, the abutters might push to employ scientists who will focus on potential environmental risks. The solution? They agree to hire an array of advisers adept at working in a multidisciplinary fashion. Many people are surprised to learn that there are experts in a wide range of fields who prefer to operate in a collaborative mode.
Define the appropriate methods of analysis. It is important to ask all advisers to subscribe to the ground rules. They also need to make explicit the assumptions they bring to the task at hand. In the case of the manufacturing plant, the analysts—regardless of their disciplinary backgrounds—need to specify the geographic scope of the area that frames their analysis, for example. A natural scientist might want to look at the larger ecosystem, while an economist might focus on the relevant municipality. Their conclusions cannot be merged until they agree on a set of geographic boundaries for whatever studies need to be done. They also need to make clear the time frame they are using for their analyses, or their separate contributions won’t fit together. And they should accept responsibility for making clear the levels of uncertainty built into their analyses. For instance, in forecasting the impact of a new plant on water quality, a great deal will depend on the assumptions made about the chances of a new water treatment system breaking down or being operated improperly. Risk management assumptions can radically alter the forecast of the dangers that might be involved.
If the analysts have a hard time communicating with the parties or with one another, an intermediary with the appropriate technical background may be needed to carry the joint fact-finding process forward.
Clarify roles and responsibilities. Whether negotiations are taking place inside a corporation or in a more public setting, all parties need to meet with their hired technical advisers throughout the entire joint fact-finding process. Joint fact-finding will fail unless open communication exists among technical advisers, the negotiating parties, and each side’s constituents.
The jointly chosen advisers may be top experts in their fields, but there are many forms of knowledge that only stakeholders can contribute. In the end, it is the parties themselves who must decide how to act. For this reason, they need to be genuinely engaged with their advisers, but also responsible for drawing their own conclusions.
Assess tentative findings together. Once jointly selected technical advisers have produced the data or analyses requested by Anaconda and the abutters, it’s important that the parties engage in a face-to-face exchange to consider what their advisers have produced. Advisers can present various courses of action, highlighting the probable gains and losses associated with each, but decisions should be made by the parties. The analysts should help the parties make sense of the findings by pointing out the extent to which they hinge on critical assumptions. For example, if a team of analysts suggests that the risks associated with the proposed plant are minimal, they need to make clear what they mean. One way to do this is to relate the projected risks to comparable risks that most people choose to accept in their everyday lives. They also need to make explicit what they are assuming about the company’s probable response to a system failure, such as its commitment to immediately mitigate any adverse effects that might occur.
By questioning the advisers about their results, Anaconda and the abutters can assure themselves and each other that the joint fact-finding process has indeed answered their questions. The advisers’ initial findings are likely to trigger a set of second-order questions, and the parties shouldn’t hesitate to send the analysts back to work. Although repeated face-to-face exchanges will be limited by time and money, a collective examination of a range of what-if scenarios is crucial to finding the trading zone.
Note that the analysts’ objectivity remains essential even after they’ve delivered their results. For this reason, they must refrain from recomm
ending any one course of action that might follow from their findings.
Communicate results. In many negotiations, the parties at the table represent large constituencies. Whether the negotiators are corporate employees or neighborhood activists, it’s unreasonable to expect them to communicate the results of sophisticated technical analyses to their constituents without help. Instead, their shared technical advisers might present the results of joint fact-finding to each constituency separately, or they might put up a website that all participants can use to keep their constituents informed.
TO WORK TOGETHER TO FIND THE FACTS:
•Scope the dialogue
•Jointly choose expert advisers
•Define the appropriate methods of analysis
•Clarify roles and responsibilities
•Assess tentative findings together
•Communicate results
What happens next. Responding to the results of joint fact-finding is, of course, the next crucial step. Even if all sides agree that they asked the right questions and that the advisers answered those questions satisfactorily, the leap from ideas to action will always reflect the parties’ varied interests. Before they can function effectively in the trading zone, negotiators must confront the ways in which their conflicting preferences cause them to interpret the same data differently.
Having a shared database doesn’t mean that Anaconda and the abutters will be able to agree on what needs to be done next. But agreed-upon facts and forecasts do ensure that technical considerations won’t be brushed aside. And, if jointly developed facts and forecasts (of potential risks or impacts) suggest that a mandate provided by a back table is based on wrong assumptions, they offer a face-saving way for a negotiator to go back to her organization and ask for a new mandate or a clarification of interests. Joint fact-finding helps disputants guarantee that they’ve received unbiased technical advice—the very advice they need in order to work effectively in the trading zone.
Now, think about the connection between joint fact-finding, as I’ve just described it, and the first step in winning at win-win negotiation. If your goal is to get your negotiating partner to reframe their mandate or reprioritize their interests—because if they do so, it would be more advantageous to you—you can use the results of a believable joint fact-finding process to push in this direction.
Let’s say I’m the Anaconda representative who has been getting stonewalled by the abutters’ lawyer. All along I’ve said that the risks involved in building the computer chip plant we are proposing are minimal. I know that my claims are suspect in the minds of a frightened community. After agreeing to engage in a joint fact-finding process (with independent experts that my company, the community, and state and local regulators agreed upon), we now have a risk assessment that pretty much confirms what I have been saying. I know there are promises my company can make that will be meaningful to the abutters if they accept the joint fact-finding report. I can ask the lawyer for the abutters to share the report with his client and maybe even encourage them to meet with the members of the joint fact-finding panel. Now, perhaps, we can move into the trading zone.
You can’t win at win-win negotiation until you find your way into the trading zone. A joint fact-finding process can help you get there. You can use the results of such a process to suggest that your negotiating partner has too narrow a mandate, too rigid a sense of how their side’s interests might be met, or even the wrong idea about what their interests are. Use the results of joint fact-finding to get your counterparts to go to their back table and force a reconsideration of their interests. Here’s yet another example of what it may take to move a difficult partner into the trading zone.
NEGOTIATING WITH A 900-POUND GORILLA
DO YOU EVER HAVE TO NEGOTIATE with a behemoth that dominates your market—the so-called 900-pound gorilla—and face being forced to take its offer or be squeezed out of the market? Here’s how to expand your options, bring a very powerful negotiating partner into the trading zone, and ultimately win at win-win negotiation.
Whether they’re big-box retailers with aggressive pricing strategies or well-established computer software providers, one or two companies seem to set all the rules in many industries today. As a negotiator, your apparent choice is between taking what little the other side offers or being squeezed out of the market entirely.
When there was still one-hour photo processing, that is, before everyone had a digital camera, “PictureQuik” had one-hour processing booths in every U.S. branch of “SuperMart,” a huge global discount retail chain. Although the arrangement was profitable for both sides, SuperMart abruptly informed PictureQuik that all the booths were up for grabs in a single national contract renegotiation. PictureQuik knew that its competitors would be ready with lowball bids. If another company took over their thousands of booths, PictureQuik could take a devastating financial hit. Soon after its announcement, SuperMart told PictureQuik, “We have a great offer from one of your competitors. To keep the contract, you’ll have to pay us 10 percent more of your in-store revenue and 10 percent more to rent the booths in our stores. Take it or leave it.” Now what?
What choices do PictureQuik executives have, aside from accepting whatever SuperMart wants? They can take the deal and impose extreme cost-cutting measures, but that isn’t a feasible option. And walking away from their biggest client would be potentially catastrophic.
How should a negotiator in a weak position deal with a seemingly all-powerful opponent? How do you move a 900-pound gorilla like SuperMart into the trading zone? There are three negotiation strategies to use as you think through how to win the negotiation the next time your business confronts an organization like this.
Seek an Elegant Solution
WHEN CONFRONTED WITH an unattractive offer from a powerful competitor, the best way to alter the balance of power may be to seek an elegant solution—a counterproposal that will create even more value for both sides than what the 900-pound gorilla is trying to impose. An elegant solution often exploits the underused resources of one negotiating partner for the benefit of both. Such a solution may require a substantial investment of time, money, and effort—and it doesn’t emerge on its own.
How can you generate an elegant solution in your negotiations with a stronger partner? First, to improve your walk-away, think about altering your own business strategy. Specifically, look for low-cost ways to generate greater returns under your current contract. For PictureQuik, this means satisfying SuperMart’s revenue goals while increasing its own annual take. PictureQuik might, for instance, consider offering additional products or services at its booths, such as software for creating online photo albums. Or it might seek out a partner to sell related goods or services, such as a company that prints images on photo albums or mouse pads. PictureQuik might then be able to come up with the extra 10 percent that SuperMart is demanding while simultaneously increasing its own profits.
Second, to build an elegant solution, further explore the other side’s interests. PictureQuik might, for example, try to identify additional segments of the demographic market that SuperMart wants to bring into its stores. What current SuperMart product lines are on a downward profitability trend? In what areas is it losing to its competitors? With this information in hand, PictureQuik may be able to help SuperMart solve an existing problem. PictureQuik could make a side deal to distribute a computer game that SuperMart doesn’t currently carry but that would appeal to teenagers who don’t usually frequent the store. A potential partner seeking a featured spot in SuperMart’s stores might be willing to help PictureQuik create an attractive package to present to the retailer. By preparing a range of proposals, PictureQuik could alter the balance of power in its renegotiations with SuperMart.
Third, consider other ways of creating value for the stronger party. Instead of packaging finished photos in its own distinctive envelopes, PictureQuik could switch to a jointly produced envelope that features SuperMart’s logo. It could also includ
e SuperMart coupons in every pack of finished photos, or print SuperMart’s logo on the back of all finished photos. Through joint branding and other new forms of advertising, PictureQuik could add value to their partnership, demonstrating that SuperMart would be better off continuing their relationship rather than switching to a competitor.
Appeal to Principle
WHEN A STRONGER PARTY is taking a tough financial stance, it’s easy to believe that the negotiation is entirely about price. The fact is, nonmonetary considerations are often more important to one or both negotiating partners than you might expect. You can identify these factors by questioning the other side’s team about their interests. Once you’ve identified the underlying principle that the other party is following, you’ll be in a better position to brainstorm problem-solving strategies.
The trick is to determine how the other side is measuring its success, then think of a way to help them meet that goal at the lowest possible cost to you. Here are just a few of the appeals to principle that you might make in a business negotiation:
•We’ve worked well together in the past—and profitably. Remember, it took some time for us to work out the kinks at the outset. You would be sacrificing reliability if you switched to another provider. Do you see the risk in starting all over again with another company that can’t guarantee uniform, reliable performance?
•We know this business better than anyone else. If someone is offering the same service at a lower price, he’s lowballing you simply to get in the door. You’re going to have a lot of unhappy customers on your hands because the supplier won’t be able to deliver quality service at that price. How important is quality to you?
•We have a great working relationship. Some of your stores were delayed in opening, but we were willing to wait. Is our flexibility and loyalty worth something to you?
Good for You, Great for Me Page 3