Negotiation #1

[samvara]

Holy Crap. This was very practical and good fun.

The pre-work was to come up with a couple of negotiations you'd been involved with (good and bad) and to reflect on your negotiation style. I had come up with a couple and was reflecting initially that my style depended a lot of the situation. After a bit more thought that shifted and I think I'm pretty consistent in how I approach negotiations.

Some questions you might want to ask if analysing a negotiation were given and I found them helpful in trying to understand my own negotiations.

• Who was involved?
• What were the key issues?
• Why did the parties need to settle their differences?
• How were solutions found?

Critical Incidents: moments where everything seems to fit together and you can see a way to go forward.

We talked about some of the theoretical and practical framework around negotiation

• Diplomacy - subtle meanings and long time frames (more of a 'don't fix today' attitude)
• Industrial Relations - unsubtle power plays and ongoing relationships
• Economists and Game Theory - all about purity of outcome (and unrealistic assumptions)
• Social psychologists and experimental research - avoidance of conflict + pursuit of cooperation (making the world a better place) - games and processes of interactive decision making - game theory and processes of communication - conflict resolution (making the world a better place)

See Negotiating in a Complex World by Michael Watkins

What do we know about negotiation?

• Deutsch's crude law of social relations (crude because results are not instant)
  • 'what you do is what you will get back'
  • reciprocity (conflict often comes from own behaviour)
• Cooperation rather than conflict
  • dominant theme in relation to both processes and outcomes
  • but negotiation is both cooperation and conflict
  • NB: discussion about what exactly cooperation is: someone posed that it was when someone agrees with you. Myself, I think someone is cooperating when they are available to negotiate, they don't have to agree with me, but if we have a process on common that we might be able to use to achieve and agreement/outcome then I think of that as cooperation
• What tactics lead to better outcomes?
  • better than the other negotiator? Better joint outcome?
• Practical recommendations
  • deal with our interests and yours, head-on
  • know thyself

Discussion on what I am like as a negotiator - more important to know than to be a particular way. Understand your own style!

•  Point made that it's not actually the agreement that finally matters it's the implementation. As in, did you both then go do what you said you would do.

Reflection on what we're like as negotiators... in a scale of 1-5 where do you see yourself?

• conflict avoidance <-----------------------> excessive involvement in conflict - I get involved, I hope not too much
• hard, unyielding stance <-----------------------> reluctant to fully express stance - I think I'm towards the flexible side
• rigid and controlling <-----------------------> flexible, seemingly unprepared - I like structure, but only enough to get things moving and I like to be able to move outside it
• intellectual <-----------------------> emotional - both, I love puzzles but I try to remember we're all people with feelings
• escalating (response!) <-----------------------> minimising (not serious) - escalating, I worry about being taken seriously
• revealing <-----------------------> concealing - revealing, I like to give people information, I want informed decisions

Yay!

What is Negotiation?:

• two parties with differences which give rise to competitiveness
• which they need to resolve which is the basis of cooperation
• are trying to reach agreement which means a lot of hard work (if it was easy you probably didn't ask for enough)
• through exploring options which requires cooperation and creativity
• and exchanging offers which is generally competitive

Six unhelpful habits

• Neglect the other side's problem (understand your contribution to their supply chain) - we all do it, even when we think we're not
• Let price bulldoze other interests (shakeholders - who can 'shake' this deal?)
• Let positions drive out interests (true, but what's your interests?)
• Search for common ground (cooperate by pushing your differences)
• Neglect your Best Alternative To Negotiated Agreement (BATNA) (don't neglect theirs either)
• Failed to correct for skewed vision

Yay!

Exercise in practical negotiating.

Divide into teams of 2. Half the teams get the Arak negotiation profile, the other half get Barkan. You get 30 mins to negotiate a treaty or to start a war (no points for war).

*g* I think I spent equal time negotiating with my teammate about what negotiation style to adopt as what we did negotiating our treaty. He was very keen on demanding EVERYTHING and revealing NOTHING and taking a very aggressive stance. I wanted to do a trickle-feed information exchange to build trust and build up to exchanging as much information as possible. We ended up going for a trickle-feed and I held back some information until I felt he was comfortable with me exchanging almost all of our information. Then our negotiation changed into nutting out the finer details because we agreed on the broad picture quite quickly.

• One thing we were negotiating for we could both broker a mutual 'win' IF we traded information
• The other thing we were both going to 'lose' because no-one had leverage - once that became obvious we just split the territory 50/50

Lunch! I grabbed one of my opposing treaty negotiators and we went off to trade experiences and get kebabs.

Exercise playing 'tit for tat' game theory

We played a game where you had to set a price without knowing what your competitors price was going to be and wait to see what they did.

• If you both go high you both make $1200
• If one goes high and the other goes low then high gets $400 and low gets $1600
• If you both go low you both get $800

The idea is to maximise profit based on reacting to and planning for the other person's price and we were told we would play 10 rounds.

I went for a leadership / high trust approach on round 1 on the theory that if I signaled a willingness to go high and risk B. going low I could maybe pull him up to my price. I figured if he didn't match me in round 2 I would just have to go low in round 3 and 'punish him' *grins* He went low.

1. High/Low Profit: $400, $1600
2. High/High Profit: $1600, $2800
3. High/High Profit: $2800, $4000
4. High/High Profit: $4000, $5200 (by now there were giggles and good humoured curses being heard)
5. High/High Profit: $5200, $6400
   • R, gave us a chance to collude at this point and offered to pass on a note of no more than 20 words. I wrote "Nice weather we're having huh?' and B. drew me a smiley face.
6. High/High Profit: $6400, $7600
7. High/High Profit: $7600, $8800
   • R. told us we're selling up and leaving the business. I chose to go low in order to 'recoup' what I'd lost on the first round.
8. Low/High Profit: $9200, $9200
   • R. told us the sale was delayed and we'd have to play the next two rounds, I went straight back to my previous 'High' behaviour and hoped B. would do the same.
9. High/High Profit: $10400, $10400
10. High/High Profit: $11600, $11600

Our team maximised joint profit compared to other teams and this was partly because we'd both done Economics together, partly because B. chose to trust me after our first round and chose to keep trusting me after round 8. Some teams went low a lot and one team, one person made LOTS by going low every now and then when their opponent consistently went high.

Later discussion was about trust, how to build it, how to lose it, how 'trust' sometimes means 'I trust you to consistently be a bastard' and how hard it is to trust someone even if you've passed each other a note - some teams didn't mutually maximise and even after note-passing they still undercut each other erratically for the last 4 rounds.

Point was also made that you can't 'recoup' and that behaviour kills long term business relationships. Bad me!

Developing skills in negotiations: reciprocity, trust and 'tit for tat'

• Be friendly
• Be firm
• Be forgiving
• Be facilitating
• ...Be fair?

Do more stuff!

Exercise on our attitude to Negotiation

25 statements like "Get the other party to think that you like him/her personally despite the fact that you don't really." which you rank from 1 (Not at all appropriate) to 5 (Very appropriate). TBH this read like a guide to creepy intimidation tactics to me but one of the people I was discussing it with was very keen on things I shrink from. Like pretending to be angry to gain advantage in a negotiation. Ugh.

The DNA of Negotiation (some biases)

• Overconfident - we tend to think our position is stronger than it really is
• Fixed pie perceptions - win/lose view
• Anchoring - getting fixated - tunnel vision
• Extremism - those other people, they are so extreme! (why can't they be reasonable - like me!)
• Illusions of transparency - we think we are more transparent than we are
• Knowledge of other - we think we know more about them than we really do

Do we think being emotional in negotiation is a good idea?
Have our experiences of people being emotional in negotiations been good ones?
How do you deal with it?
How have you seen other people deal with it?

Understanding Negotiations; Negotiation is messy and two-sided. It has the issue being negotiated over and the process by which an outcome is achieved.

1. What is this really about? The Issue
2. What is going on here? The Process
3. What do I need to do next? The Action

Things wot I have learned about myself.

1. Honesty in negotiation is key, I'm sticking with this principle. I think it's very important.
2. I'm values driven, how I do things and whether that's in accordance with my values is very important to me.
3. The course tells me I should probably make sure I don't trust blindly. This is a difficult path to walk as if you don't offer trust you don't tend to receive it - I am OK to offer trust first, but I do have bail points if I'm not being met.
4. Things I want to learn more about include sustainable ways to maintain long term relationships in partnerships where trust is an issue

We also formed teams to write our Negotiating Profile, my team grabbed Japan and we're off sifting for information this week to bring to the next class and start putting our presentation together. I have some comments on team forming after doing a bunch of profiling exercises but I'll be locking them :p