You Can’t Script Negotiation. EVER

Cookie-cutter strategies just don’t work in the turbulence of real world negotiation. Yes, preparation is essential. And persistence is often a virtue. But clinging to rigid plans is not. There’s just too much in flux. You have to be ready to make the best of whatever unfolds.

Boston Red Sox general manager Ben Cherington says, “Negotiation is not a linear endeavor. It’s full of twists and turns and requires managing relationships, data, intuition, and alternatives in a way that increases the probability of a good outcome.”

As a consequence, you’ve got to be agile if you want to succeed. That requires crafting robust strategy and being quick on your feet, in order to avoid obstacles and seize unexpected opportunities. You may even have to change your goals.

Here’s an example. As manager of a private investment fund, Jay Sheldon bought a small cable television company in the Midwest some years ago. He didn’t know much about the industry, but the $8 million price seemed right and the purchase would let him test the water.

Jay and his partners quickly got the business into the black. A year later they wanted to expand by acquiring nearby systems. After running the numbers, they figured that they could pay $11 million, maybe twelve tops, to buy a second cable company in a neighboring city.

Jay began an extended series of talks with its owner, but after two months of back-and-forth it became obvious that the parties were far apart on price. “Listen,” the other owner said. “I didn’t post a For Sale sign. You came to me. You’d have to dump $15 million in cash right on my desk to tempt me. And I’d probably kick myself if I took it.”

Sheldon understood that this wasn’t a bluff, but he also felt the demand was unrealistic. By conventional logic, the parties were deadlocked. If a seller’s bottom line is three million higher than the buyer's absolute top dollar, you can’t have a deal.

Or can you?

“Let me ask one last question,” Sheldon said before getting up to leave. “If you think your system is worth $15 million, how about ours?”

“Oh, yours is a bit smaller,” was the answer. “I’d say fourteen or so.”

Sheldon turned the deal upside down. He adroitly became the seller instead of a buyer. In a little more than a year, he flipped his own system for almost twice what his firm had paid for it (and much of that had been leveraged). He was still bullish on cable, but when he encountered this particular owner, who was rabid about the industry, Sheldonhad the agility to transform apparent impasse into a lucrative sale.

His solution was clever. More important, though, was his nimble nimble mindset. In the impediment to his hoped-for acquisition, Sheldon spotted the seed of another deal that would serve him even better. When he let go of his initial plan, the insight arrived in a flash.

Negotiators like Sheldon are great improvisers. They recognize that negotiation is always a two-way street. It’s impossible to script the process. Whoever sits on the other side of the bargaining table may be just as smart, determined, (and fallible) as you are. You can't dictate their agendas, attitudes, or actions any more than you'd let them manipulate you.

What’s odd, though, is that there isn’t much about improvising in standard negotiation books. That’s true both for hard-ball manuals on crushing the other side and for win-win texts that preach joint problem-solving.

In spite of their obvious differences, both approaches rest on the same static foundation. Each starts wtih the premise that you have your given interests and I have mine. The win-win message is that by laying your cards on the table, you can expand the pie by making mutually beneficial trades. The hard-ball line tells you to chest your cards (and maybe slip a couple up your sleeve).

But there’s much more to negotiation than bluffing and trading. The real challenge lies in the fact that preferences, options, and relationships are fluid. Theorists may have side-stepped this reality, but top negotiators understand this very well.

Jay Sheldon was intent on buying the nearby cable system. When it became clear its owner wouldn’t budge on price, however, he didn’t try to beat him down further or cave on his own valuation of that business. Nor did he walk away. Instead, he adapted by crafting asuperior Plan B.

But remember that it was Sheldon’s agility that made it all happen. His counterpart, sitting at the same table, looking at exactly the same facts, didn’t imagine being a buyer until Jay proposed it. In future posts I’ll likely return to this theme of agility in negotiation. And as we’ll see, improvising is not making it up as you go along. In fact, far from it.

Michael Wheeler is the author of The Art of Negotiation: How to Improvise Agreement in a Chaotic World (forthcoming this fall from Simon & Schuster).

Professor Wheeler has been a key figure at the renowned Program on Negotiation (PON) at Harvard Law School since its founding 30 years ago. During the 2013-14 academic year, he will continue to teach in executive programs at PON and the Harvard Business School, but also be a visiting professor at Harvard’s Kennedy School of Government in the fall semester and at MIT in the spring.

Photo: Alexey Kashin / shutterstock


Tony English

Author and Freelance Negotiation Adviser/Analyst

9y

You can start with a loose script to give yourself direction; but expect to change it, over and over again, in unexpected ways.

Michael Toebe

Reputation: Analyst, Consultant, Advisor and Communications

10y

Outstanding content and writing. Negotiation, indeed, is about focusing on possibility, working towards avoiding narrow-mindedness and asking, listening and "feeling" what the other party or parties most want and are willing to pursue or "buy." Excellent anecdote in this article.

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Sharan Raghubir

A Strategic Leader with experience in Biotechnology, Specialty Pharmaceuticals and Medical Devices across several therapeutic areas (Oncology, Urology, Anesthesia, Emergency, Transplant, HIV, Cardiology, Dental).

10y

A great example of how to stay flexible in a negotiation, avoid getting emotionally involved in the outcome and get more than you originally expected.

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Agility is crucial for a good outcome for both sides in any negotiation and the ability to connect to the other party is not less important. Negotiations can go awry fast if the parties cannot connect on some level. The need to make a deal in this case connected both parties to a successful outcome.

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