Magazine article Ivey Business Journal Online

Playing with Icebergs: Negotiating Improvisationally

Magazine article Ivey Business Journal Online

Playing with Icebergs: Negotiating Improvisationally

Article excerpt

Imagine the following fictional scenario. Rudolf Wild, a merchandising executive with a Walmart operation in Europe, sits down with a Chinese supplier for contract negotiations. There are difficult issues on the table, including quality problems and logistical arrangements. Wild's main objective, however, is getting the relatively small Asian supplier to open an existing contract and agree to a large price cut for the delivery of promotional items for an upcoming World Cup. If all goes well, Wild hopes to be promoted to global director of sports marketing. And he is confident that he can get the job done because he is prepared and represents an influential company. But being prepared for an anticipated conversation isn't always enough when it comes to negotiation. When the Chinese negotiator casually mentions his production company has just won marketing rights to the Beijing Olympics and is seeking retail partners, Wild fails to see opportunity. "That's nice," he says. "But can we please get back to discussing payment terms on our current invoices?"

This scenario, which we use in business negotiation seminars, illustrates a central challenge facing negotiators: how to quickly and skillfully process new information. Negotiation is a conversation of gradual and tactical revelation, offers, feints, demands and interpretations. As a result, it pays to be both prepared and prepared to listen. But while we teach that systematic preparation is a key factor for success, experience shows negotiators often become ensnared in their own planning.

A facility for empathy is critical for successful negotiators. Under the philosophy of negotiation that we teach, the way to create value for all begins with understanding the interests of the other side. The problem is that negotiation partners do not always tell us what they really want. Real interests may be unclear or submerged in the form of hidden agendas. And so people get stuck arguing about things that don't really matter, never seeing common interests that offer rich value creation potential. Totally focused on their own agenda, they do not even hear vital new information that might further their own interests.

To address this issue, this article proposes viewing negotiation as a paradox: structured spontaneity. This requires seeing the synergies that exist between state-of-the-art thinking on improv, and related games and exercises, with the Harvard approach to negotiation, which usually puts emphasis on strategic preparation rather than flexible response. Simply put, we link Harvard's structural "iceberg" with a new model that incorporates empirical work from cultural and social psychology and goes deeper than the Harvard model. This allows for a better understanding of negotiation practice as something that is both layered, like an iceberg, and intuitional, like an improvised game.

Three fundamental levels of awareness exist in every negotiation:

1. POSITIONS: The tip of the iceberg represents what the other side tells you it wants. It is usually couched in terms of a closed demand to be accepted or rejected. It is often quantified and is always quite specific. It may even come couched in contract language.

2. INTERESTS: As taught by Fisher and Ury, authors of Getting to Yes: Negotiating Agreement Without Giving In, there are hidden motivations underlying the stated positions. These interests are more personal, less clear and often illogical. As the deeper and more inchoate sea of drivers under negotiation demands, they are not always admirable. But they are always present.

3. PERCEPTIONS: Here we go deeper than Getting to Yes, maintaining that perceptions are also grounded in the values, needs, prejudices, emotions and fears of the individual. They are subjective and not easily accessible to others. And it is here that we must start, not by making concessions, but by understanding how our partner sees the world.

This approach is easy to understand, at least on a cognitive level. …

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