Thursday, January 24, 2019

Positional vs interest-based bargaining: application to the current government shutdown

From Art of the deal: In politics, Trump finds negotiations a different ballgame, Christian Science Monitor, January 22, 2019:

Art of the deal: In politics, Trump finds negotiations a different ballgame
JANUARY 22, 2019

Linda Feldmann, Staff writer

A zero-sum negotiating posture – one side wins, the other loses – is counterproductive in Washington, where the two parties ultimately have to work with one another. Experts say probing underlying interests could reveal ways to satisfy both sides.

To gain insight into President Trump – and the government shutdown – read Chapter 2 of “The Art of the Deal.”

Many of the steps businessman Trump and his coauthor lay out in their 1987 bestseller reflect the president’s aggressive approach to negotiation today: Think big. Use your leverage. Get the word out. Fight back.

“My style of deal-making is quite simple and straightforward,” the chapter begins. “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”

Over the weekend, Mr. Trump got a taste of just how difficult negotiating can be in Washington. As the partial government shutdown over border-wall funding entered its fifth week, Trump offered what he called a “common-sense compromise”: temporary protections for “dreamers” and certain other immigrants in exchange for $5.7 billion for the wall.

The offer seemed a departure from Trump’s aggressive style. But “The Art of the Deal” also preaches flexibility. “I never get too attached to one deal or one approach,” he writes. Last week, top Trump aides crafted the proposal with the Senate Republican leader.

Satisfying all constituencies in Washington, however, can be extraordinarily difficult – and with the House now in Democratic hands, enacting major legislation just got a lot harder. House Speaker Nancy Pelosi called Trump’s proposal a nonstarter before it was even announced, knowing that it would still contain $5.7 billion for the wall; high-profile conservatives slammed the immigration provisions as “amnesty.”

For Trump, now two years in office, it’s all part of the education of a still-novice politician.

“The complexity, the number of issues, and the number of parties at the table is exponentially more difficult in a presidential environment than dealing with some zero-sum, ‘one dollar more for you is one dollar less for me’ calculation in buying or selling a building,” says Marty Latz, a negotiations trainer and author of the book “The Real Trump Deal: An Eye-Opening Look at How He Really Negotiates.”

Another difference is that in business, when one deal falls apart, there may well be another opportunity elsewhere, with different people. As a businessman, Trump “really didn’t care about future relationships with his counterparts,” says Mr. Latz.

In Washington, there’s one Congress and one president. Unless Trump declares a national emergency and tries to do an end-run around Congress to fund the wall, he and the Democrats will have to come to terms to reopen the government, and, in general, learn to deal with one another.

The ‘School of Roy’ approach

Trump biographers point to other aspects of the president’s prior business practices as emblematic of how he operates today.

“It’s all about what you can get away with,” says Gwenda Blair, author of a 2000 biography called “The Trumps: Three Generations That Built an Empire.”

e ‘School of Roy’ approach,” she says, referring to early Trump lawyer Roy Cohn, infamous for representing the red-baiting Sen. Joe McCarthy in the 1950s. “Never concede, never back down, double down, any accusation that comes your way, heave it right back.”

Keeping a quarter of the government unfunded for over a month – and 800,000 federal workers going without pay – might have seemed impossible, Ms. Blair notes. But that’s where things stand today.

On Tuesday, a glimmer of hope emerged when the parties’ Senate leaders, Republican Mitch McConnell and Democrat Chuck Schumer, announced two procedural votes on Thursday – one on the president’s plan, the other to reopen the government through Feb. 8. The first measure looks sure to fail, while the fate of the second isn’t clear.

Through it all, Trump seems undaunted, despite polls that show more than half the country blaming him for the shutdown and his job approval in decline, including among his base.

Speaker Pelosi’s negotiating stance has also faced criticism. She insists the wall is “immoral” and offers just one dollar in funding. The moral framing, in particular, doesn’t leave wiggle room for compromise.

The Trump-Pelosi relationship was, until recently, respectful. “I like her,” the president said after the midterms. “She’s tough and she’s smart.” Notably, he has refrained from tagging her with a derogatory nickname.

Last week, their impasse over the border wall descended into tit-for-tat. Pelosi suggested Trump not deliver his State of the Union address from the Capitol, scheduled for Jan. 29, until the government reopened. The next day, Trump effectively canceled a Pelosi trip to Afghanistan. Over the weekend, Trump called Pelosi a “Radical Democrat” on Twitter.

This is not to say that Trump and Pelosi can’t make deals in the future. But for now, they’re both dug in, and both working their respective points of leverage.

Trump’s declining job approval – and growing share of the blame for the shutdown – have given Pelosi and her wingman, Senate minority leader Schumer, political leverage. The president didn’t help his cause when he told Pelosi and Schumer, in a televised Oval Office meeting on Dec. 11, that he’d be “proud” to shut down the government over the border wall. 

Still, overall support for the wall has grown, especially among Republicans. Today, 42 percent of Americans support the wall, up from 34 percent last January, according to a Washington Post/ABC News poll.

Despite reports of a frustrated Trump lashing out at aides behind the scenes, his public posture remains defiant.

“He takes a broad-shouldered approach,” says Darren Frame, a businessman who now teaches negotiation at Baylor University in Waco, Texas.

“Trump is really good at being the bad guy for a while,” says Mr. Frame, who uses “The Art of the Deal” as a teaching tool. “He’s pretty ego-driven, of course, which gives him a huge advantage in that he doesn’t worry so much about what people think of him, unless he thinks he’s wrongly accused of things. That’s when you see him fight back.”

A possible way out?

If the current standoff represents a classic case of “positional bargaining” – one side wins, the other side loses – experts say there’s an alternative approach, called interest-based negotiation.

“The basic idea here is, let’s not focus on positions, or what each side says they want: ‘I want a wall;’ ‘Well, we’re not going to give it to you,’ ” says Daniel Shapiro, director of the Harvard International Negotiation Program.

In this negotiation technique, the starting point is to look at the underlying interests.

“Why do you want a wall? Why do you not want a wall?” says Professor Shapiro, author of the book “Negotiating the Nonnegotiable.” “Is it the expenditure of funds, or is it differences in belief around security needs at the border? Is it precedents that you’re nervous about setting?”

Once the underlying interests are understood, then the negotiators can start to craft an agreement that works for everybody.

Shapiro pushes back on the idea that in the business world, Trump-style “positional bargaining” works better. Research shows that in most circumstances, interest-based negotiators do better, whether it’s in business, government, or the family, he says.

“President Trump is accustomed to positional bargaining, and I’d imagine at points it probably has done him well in business,” Shapiro says. “But in the Washington context, he estranges more and more people – and estranges those with whom he actually needs to work.”

Shapiro doesn’t let Pelosi and Schumer off the hook, either. In the Dec. 11 Oval Office meeting, everyone was posturing, he says, not engaging in productive dialogue.

The solution, he and others suggest, is to let subordinates work behind the scenes on a deal, away from the spotlight. The Trump proposal announced Saturday was crafted last Thursday by Vice President Mike Pence, senior adviser/son-in-law Jared Kushner, and Senate majority leader McConnell, and hailed by Republicans as an effort to break the stalemate. But there were no Democrats at the table.

Trump Senate ally Lindsey Graham (R) of South Carolina proposed reopening the government for a stretch, allowing workers to be paid and negotiators to work out a deal. Trump responded, No, let’s make a deal, then open up the government. Democrats insist on opening the government first, then negotiating a solution on immigration.

Senator Graham has supported the notion of Trump declaring a national emergency and repurposing federal money for the wall – a gambit that would certainly land in court. But at least Trump could tell his supporters he did everything he could. Trump has swung from saying he would almost definitely declare an emergency, to backing off the idea.

“In negotiation lingo, Trump calling a national emergency is his BATNA – his Best Alternative to a Negotiated Agreement,” says Shapiro. “But you know it’s clearly not attractive enough for him to, as yet, walk away from the negotiation table.”

Semantics can also play a role in conflict resolution, and allow both sides to save face. In any final resolution that involves money for the border, Trump can say he got his “wall,” Democrats can say they got “border security,” and each can declare victory to their respective political bases.

Blair, the Trump biographer, sees the border wall as more than just the fulfilling of a core campaign promise. It goes to the essence of what Trump is about.

“He has spent decades building up his brand – on buildings, on television,” she says. “His gut instinct, I suspect, is that the wall is part of the brand of being president.”

© The Christian Science Monitor. All Rights Reserved.

Tuesday, January 22, 2019

Why Negotiations Fail - from Harvard Law School Program on Negotiation

Why Negotiations Fail 



When we think of failed business negotiations, most of us picture negotiators walking away from the table in disappointment. But that’s only one type of disappointing negotiation. Failed business negotiations also include those that parties come to regret over time and those that fall apart during implementation. The following three types of negotiation failures are ones we can all learn to avoid when negotiating business deals.

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.

1. We walk away from a good deal.

It’s common for a business negotiator to reach an impasse even when her best alternative to a negotiated agreement, or BATNA, is worse (or projected to be worse) than the deal that’s on the table. Threats, strong emotions, and overconfidence are all common contributors to such mistakes.
Here’s an example from the 2016 U.S. presidential campaign. Back in January, when President-elect Donald Trump was one of 12 Republican candidates, he threatened to boycott a scheduled January 28 debate in Des Moines, Iowa, unless Fox, which was hosting the debate, agreed to replace Fox News anchor Megyn Kelly with another moderator. For many months, Trump had criticized Kelly for her questioning of him during her moderation of the first Republican debate in August 2015.
Trump may have thought that Fox would back down and replace Kelly. Instead, the network refused to meet his demand and also mocked him on Twitter. An angered Trump boycotted the debate and went on to finish second in the Iowa caucuses, a disappointment that he conceded could have been due to his absence from the Des Moines debate, as reported by CNN.
When we issue a threat in business negotiations, we need to be sure that we will feel comfortable turning to our BATNA in the event that the other side refuses to meet our demands. Before issuing a threat, carefully analyze your BATNA, compare it to the deal on the table, and then make the most rational choice—as painful as that sometimes can be.

2. We make a deal that we later regret.

The flip side of rejecting a deal that’s better than your BATNA, of course, is accepting a deal that’s worse than your BATNA in business negotiations. We’re often unaware that we’ve left value on the table until later, if ever. For example, car buyers often think they got a bargain at the dealership, even if they failed to research the lowest price they could get, comparison-shop, or search for the best loan terms.
At other times, we experience buyer’s or seller’s remorse. Take the case of Abbott Laboratories, which agreed to buy diagnostic-device provider Alere for $56 per share, or about $5.8 billion, in January 2016. The M&A negotiation was set to make Abbott the largest provider of rapid medical tests, according to Abbott CEO Miles White.
But Abbott began regretting the deal in mid-March, after reportedly learning that the U.S. government was investigating Alere in an overseas bribery probe. Abbott offered to pay Alere the $50 million termination fee stipulated in their contract to back out of the deal, but Alere refused to accept it.
Then Abbott announced a deal to acquire St. Jude Medical, another medical-device manufacturer, for $25 billion. Credit-rating agency Moody’s threatened to downgrade Abbott’s credit rating if it closed both mergers as planned. Making matters worse, the news broke in July that Alere was facing a federal criminal investigation over its Medicare and Medicaid billing practices.
In August, Alere sued Abbott and asked a judge to force the merger to close. In its legal response, Abbott accused Alere of withholding information about its finances and federal probes.
Beyond M&A negotiation, in all types of business negotiations, it’s tempting to cut corners on due diligence when goodwill and enthusiasm are running high. The wise business negotiator considers the potential risks and downsides of a deal as thoroughly as possible.

3. We negotiate a deal that’s too weak to last.

A related type of failure in business negotiations is an agreement that reaches the finish line but quickly falls apart during the implementation phase. Such deals often collapse due to a failure to confront conflict during negotiations or to give the deal a sound structure.
Returning to the 2016 U.S. presidential race, consider the temporary pact reached by Senator Ted Cruz and Ohio governor John Kasich when they were both trailing Trump for the Republican nomination this spring.
In March, Kasich’s team approached the Cruz campaign with a plan aimed at stopping Trump from gaining the delegates he’d need to win the party’s nomination at its July convention. On April 25, Cruz and Kasich reached a pact: The Cruz campaign would “focus its time and resources in Indiana and, in turn, clear the path for Governor Kasich to compete in Oregon and New Mexico,” the New York Timesreports. The campaigns said they expected their allies and third-party donors to follow their lead.
But the same day the Cruz-Kasich deal was announced, it already seemed to be on shaky ground. When reporters asked Kasich how Indiana residents should vote, he said they “ought to vote for me.” Meanwhile, Cruz didn’t ask his supporters in Oregon and New Mexico to switch their allegiance to Kasich. The pact collapsed, and Trump won Indiana’s Republican primary. That night, Cruz dropped out of the race; Kasich followed suit the next day.
The mistrust that built up over months of campaigning likely spoiled Cruz and Kasich’s deal. The best negotiators in business build rapport and trust throughout the negotiation process and negotiate the terms of implementation thoroughly.
Why do you think most negotiations fail? Let us know your thoughts in the comments below.

Positional vs interest-based bargaining: application to the current government shutdown

From  Art of the deal: In politics, Trump finds negotiations a different ballgame , Christian Science Monitor, January 22, 2019: Art of th...