What if Bradford had merely matched the Ames base salary but done nothing more, or, worse still, had simply held firm at $95,000? In either case, Stephanie could ask Bradford to explain the reasoning underlying the offer. How does the agency justify its number? On what norms is it based? Why should it persuade her? And in both cases, Stephanie would have to decide whether to stay at Ames or to move. Based on the facts, this would be a very close question. It’s possible that she would turn down $95,000 because she concluded that her interests would be better served by staying at Ames. At the same time, Stephanie could have accepted the offer without losing face and without having damaged her relationship with Bradford.
Sometimes, of course, you won’t be able to find a solution that satisfies both sides. No matter how hard you try, you will continue to disagree about salary, the amount to be paid in a bonus, or some aspect of a dispute settlement. Norms may have helped move you closer together, but there’s still a big gap between the two sides. What should you do?
Think about process. How can you design a process that would fairly resolve this impasse? In a dispute settlement, you might be able to hire a mediator to address the distributive issues that are still open. Is there anyone both sides trust enough to decide the issue? Could you put five possible agreements into a hat and pick one at random?
Procedural solutions can often rescue a distributive negotiation that has reached an impasse. They need not involve complicated alternative dispute resolution procedures that cost money and time. Instead, you can often come up with simple process solutions that will resolve a distributive deadlock and allow you to move forward.
CHANGING THE GAME
Not everyone approaches negotiation from a problem-solving perspective. The basic approach described in this chapter—with its emphasis on the sources of value creation and the importance of a problem-solving process—obviously departs from the norm of adversarial haggling. To be a problem-solver, a negotiator must often lead the way and change the game. We explore this theme in Part III, where we not only describe how to defend against hardball distributive tactics but introduce other game-changing possibilities, including adding or subtracting issues, changing the parties, creating effective relationships, and otherwise altering the system of a legal negotiation. Here we merely note that a problem-solver does not assume that the issues, process, or structure of a negotiation are fixed. Instead, one is always alert to game-changing possibilities.
CONCLUSION
The tension between value creation and value distribution exists in almost all negotiations. But as our teaching and consulting have shown us, many people tend to see negotiation as purely one or the other. Some people see the world in zero-sum terms—as solely distributive. We work hard to demonstrate to people that there are nearly always opportunities to create value. Others believe that, with cooperation, the pie can be made so large that distributive questions will disappear. For these negotiators, we emphasize that there are always distributive issues to address.
Of course, some negotiations present many value-creating opportunities, while others are very distributive. Very distributive negotiations typically involve a one-shot dispute or single issue (such as price); fixed transaction costs; and parties with no continuing relationship. An example would be an accident victim’s damage claim against an unknown or arm’s-length insured driver. If both parties have fixed legal costs, the negotiation is essentially about how much one party will pay the other. A dollar more for the plaintiff means a dollar less for the defendant.
Other negotiations have many value-creating possibilities. If the parties value an ongoing relationship, they can both gain by pursuing this shared interest. If transaction costs are high relative to the amounts at stake, both parties may gain by designing an efficient negotiation process. If many issues or variables are involved, the parties may have different relative valuations and may thus be able to make trades.
The problem-solving approach we have suggested here will not make distributive issues go away or this first tension of negotiation disappear. But it does outline an approach that will help you find value-creating opportunities when they exist and resolve distributive issues efficiently and as a shared problem. We now turn to the interpersonal dynamics at work in negotiation—and our second tension.
2
The Tension between Empathy and Assertiveness
Four years ago, Susan Reese and Martin DiPasquale opened a restaurant and take-out catering business on Main Street in Winchester amid much fanfare and high hopes. Unfortunately, things have not gone as planned. Although the business has done well and continues to turn a profit, the relationship between the two partners has soured. Martin finds Susan unbearably pessimistic and difficult to work with—the restaurant just isn’t fun anymore. Susan thinks Martin has no business sense and won’t take their finances seriously—he’s constantly giving away meals and drinks to friends and neighbors, wants to spend extravagantly on fancy ingredients and overpriced advertising, and occasionally treats customers in a flamboyant way. Because of their seemingly insurmountable differences, Susan and Martin have decided to end their partnership. They face the difficult question: How? Should they sell their business to a third party and split the proceeds? Should Susan buy out Martin’s 50 percent share, or vice versa? If so, how should the price be set? What would best meet their interests?
The partners are having their first conversation about what to do. They’ve already been talking for about ten minutes when Susan says:
SUSAN: I think that it makes the most sense for you to sell your 50 percent to me. You never wanted to be in the restaurant business anyway. You just don’t have the business sense to run this place alone, and you wouldn’t enjoy it. Too much administrative hassle—paying the staff, dealing with the suppliers, all of it.
MARTIN: Hmph. I don’t really see it that way, but I’m curious about why you do. Why do you think that I never wanted to be in the restaurant business and wouldn’t like running it by myself?
SUSAN: It’s not your style, Martin. You’ve just never shown much interest in the business side of the business—you’d be terrible on your own.
MARTIN: So you think that I don’t like the business side of running the restaurant, and that I wouldn’t do well here without you?
SUSAN: Exactly.
MARTIN: And you got that impression because I don’t work on the books or fire people, that sort of thing?
SUSAN: Right. That kind of stuff always fell on me to do.
MARTIN: Well, I guess I always thought you really liked the bookkeeping side of the restaurant, so I left those jobs to you. I focused my energy on connecting with our customers and getting the restaurant noticed. I never thought you were much of a people person, quite frankly. And obviously you never thought I was much of a business person. But I’m sure I could do those things—or hire someone to help manage the place if it got out of hand.
SUSAN: Well, we obviously disagree. Anyway, I think you should sell me your 50 percent.
MARTIN: We’ll see—I’m not so sure about that yet. But you don’t have any doubts that you’d like to buy me out and stay here, right?
SUSAN: That’s right. I don’t feel ready to quit.
MARTIN: What do you mean?
SUSAN: I just think that we’ve spent all this time and energy building the business, especially the catering side. You’ve never shown any interest in the catering business—and I really enjoy it. And I think that the customer base is growing and that the catering side could really take off.
MARTIN: OK. So for you, selling out now would be bad timing; we wouldn’t get paid back for all the money and effort we’ve put in?
SUSAN: Right.
THE GOAL: COMBINING EMPATHY AND ASSERTIVENESS IN NEGOTIATION
How are Martin and Susan doing as they try to have this difficult conversation? How is their negotiation going? Are they likely to be able to solve their problem by finding ways to make them both better off? Or is a potential dea
l going to dissolve into a bitter dispute that destroys the business in the process?
Martin is doing two things well in his discussion with Susan. First, he is demonstrating his understanding of Susan’s perspective. He notes that Susan thinks Martin should sell his share to her, that he has never shown much interest in the business side of the restaurant, and that it would not be a good time to sell the catering business. Martin is asking Susan questions about her views and opinions and is demonstrating his understanding of her answers by paraphrasing them back to her.
Showing Susan that he understands her perspective can’t be easy for Martin in this conversation. The substance under discussion is difficult; neither Susan nor Martin is willing to sell half of the business at this point, and it’s an emotionally charged issue for both of them. In addition, Susan is saying things in an aggressive and confrontational way—making a lot of assumptions about who Martin is and what he wants (such as, “You just don’t have the business sense to run this place alone, and you wouldn’t enjoy it”)—with which Martin disagrees. Despite this, Martin works hard to listen, and to show Susan that he’s listening.
At the same time, Martin is asserting his perspective and interests in the conversation. He has explained why he focused more energy on customers and less on managing the restaurant’s books. He says that he’s sure he could handle the accounting side of the business, or that he’d know how to find help if he needed it. And he consistently notes that even when he’s showing Susan he understands her views, he has views of his own that differ from hers.
In our experience, the most effective negotiators try, like Martin, to both empathize and assert in their interactions with others. For purposes of negotiation, we define empathy as the process of demonstrating an accurate, nonjudgmental understanding of the other side’s needs, interests, and perspective.1 There are two components to this definition. The first involves a skill which psychologists call perspective-taking—trying to see the world through the other negotiator’s eyes. The second is the nonjudgmental expression of the other person’s viewpoint in a way that is open to correction.2
Box 6
Defined in this way, empathy requires neither sympathy nor agreement. Sympathy is feeling for someone—it is an emotional response to the other person’s predicament. Empathy does not require people to have sympathy for another’s plight—to “feel their pain.” Nor is empathy about being nice. Instead, we see empathy as a “value-neutral mode of observation,” a journey in which you explore and describe another’s perceptual world without commitment.3 Empathizing with someone, therefore, does not mean agreeing with or even necessarily liking the other side. Although it may entail being civil, it is not primarily about civility. Instead, it simply requires the expression of how the world looks to the other person.
By assertiveness, we mean the ability to express and advocate one’s own needs, interests, and perspective.4 Assertiveness is distinct from both belligerent behavior that transgresses the rights of others and submissive behavior that demonstrates a lack of self-respect. An assertive negotiator begins with the assumption that his interests are valid and that having them satisfied is legitimate.5 (That’s why assertiveness training involves developing self-confidence as well as rhetorical skills.)6 Assertiveness, however, does not necessarily mean dominating the conversation or the other negotiator. Instead, it means identifying one’s own interests, explaining them clearly to the other side, making arguments if necessary, and having the confidence to probe subjects that the other side may prefer to leave untouched.
Three main points about empathy and assertiveness are central:
• Problem-solving negotiations go better for everyone when each side has well-honed empathy and assertiveness skills
• Problem-solving negotiations go better for an individual negotiator if she both empathizes and asserts, even if the other side does not follow her lead
• Empathy and assertiveness make problem-solving easier in both the value-creation and the value-distribution aspects of negotiation
The first point needs little elaboration. Empathy and assertiveness are aspects of good communication. When people communicate well with each other, problem-solving is easier. But as we’ve seen, sometimes the other side doesn’t want to reciprocate and is reluctant to listen. Susan seems to be all assertiveness and no empathy. What should Martin do? In our view, Martin is better off combining assertiveness with empathy, even if he has to empathize alone, for a number of reasons.
First, regardless of how Susan is behaving, Martin really does need to understand her point of view. She may be annoying, but she has interests and viewpoints—and he’d better know what they are. This will help him both when he’s trying to create value from the deal and when he faces any dispute over how that value should be distributed. Although Susan has no problem being highly assertive, her opening statements don’t give Martin much to work with. By inviting her to say more, Martin learns that Susan thinks it’s premature to sell to a third party and that she’d like to expand the catering business. To the extent that Martin can clarify for himself what Susan’s motives and goals are, he will be better equipped to find value-creating trades. Indeed, research confirms that negotiators with higher perspective-taking ability negotiate agreements of higher value than those with lower perspective-taking ability.7
Such perspective-taking on Martin’s part may also facilitate distributive moves. Perhaps Martin will end up running the restaurant, Susan will expand the catering operation, and they will divide these into two separate businesses. The better Martin understands Susan’s thinking, the better he will be able to anticipate the strategic problems and opportunities that may crop up in the negotiation—and to prepare for them.
A second benefit of empathy is that it allows Martin to correct any misperceptions he may have about Susan’s thinking. It would be easy, in this emotionally charged situation, for Martin to start making unfounded assumptions about Susan’s agenda. He needs to keep checking in with her, to make sure that he’s not getting off on the wrong track. Indeed, regardless of the emotional content of a negotiation, research has shown that negotiators routinely jump to mistaken conclusions about their counterparts’ motivations, usually because their information is limited.8 Such mistakes are a major reason why negotiations and relationships break down. For example, negotiators often make attributional errors—they attribute to their counterparts incorrect or exaggerated intentions or characteristics. If a counterpart is late to a meeting, we might assume either that he intended to make us wait or that he is chronically tardy, even though we may be meeting him for the first time. In either case, we have formed a judgment that may prove counterproductive—particularly if we decide to keep him waiting the next time or seek other ways to even the score.
A third benefit of combining assertion with empathy is that Martin may be able to loosen Susan up—and gain her trust. Negotiation is a dynamic process. Most people have a need to tell their story and to feel that it has been understood. Meeting this need can dramatically shift the tone of a relationship. The literature on interpersonal communication constantly emphasizes this point.9 Even if you are not interested in sharing a deeply soulful moment with your counterpart, remember that empathizing has highly practical benefits. It conveys concern and respect, which tend to defuse anger and mistrust, especially where these emotions stem from feeling unappreciated or exploited.
Finally, your empathy may inspire openness in others and may make you more persuasive. Two-sided messages, in which the speaker describes the other person’s viewpoint before stating her own, are more persuasive than one-sided messages.10
It is not surprising to most people that assertiveness can confer benefits in the distributive phase of a negotiation. Assertive negotiators tend to get more of what they want, and negotiators with high aspirations do better than those with low aspirations. But assertiveness can also contribute to value creation; only when each party takes the opportunity to directly express h
is own interests can joint gains be discovered.
There are other benefits to being assertive, however, that have nothing to do with value creation and distribution. Assertiveness may facilitate successful working relationships. The assertive negotiator confronts interpersonal difficulties as they occur, rather than permitting them to fester, and thus makes long-term cooperation possible. Assertive behavior may also promote self-respect, as the assertiveness-training literature emphasizes. Finally, to the extent that an assertive negotiator feels satisfied not just with the substance of an agreement but with the way she negotiated it, the agreement itself is likely to prove more durable.
Viewing Martin and Susan’s negotiation through this lens, we see that Martin in some ways is fortunate to have a partner who is so “up-front” about her views and desires. By demonstrating his understanding of Susan’s perspective, but also asserting his own, Martin can lead the way toward a solution that leaves both parties better off.
As we saw in Chapter 1, differences are most often the source of value-creating trades. Martin has just discovered that Susan is concerned about timing—and that she has certain forecasts about the future success of the business. Any deal they reach should incorporate this information. Perhaps Martin’s forecast is different: maybe he doesn’t expect much change in the business in the next few years. Whether he buys out Susan’s share or vice versa, they can incorporate their different views into the structure of their transaction. But Martin discovered this difference only by listening carefully to Susan’s assertions.
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