Negotiations never come down to price

In courses we frequently get questions along the lines of “What do you do in negotiations where it just comes down to price?”

The answer is that negotiations never come down to price.

Today’s blog is available at INSEAD Knowledge.

Crisis negotiation, deadlines and complexity

The field of crisis negotiation has developed rapidly since the poorly managed Munich Olympics hostage crisis in 1972. A general trend has been towards seeking better understanding of human behaviour. This understanding often allows negotiators to resolve crisis events in ways that carry much lower risk than the traditional approach of forceful intervention.

One of the key techniques involves intentional and informed management of time to facilitate a weakening of perpetrators’ resolve. What seemed like a good idea on day one of a siege may not seem equally appealing after days or weeks of uneventful inactivity and lack of progress. With the passing of time, the initial heightened emotions and inflated expectations of success de-escalate and tend to get replaced with fatigue, exhaustion, boredom, hunger and despair.

It is then interesting to read the article on BBC today where Ukraine’s interior minister proposed to resolve the present hostage crisis by establishing a 48h deadline for resolving the crisis with “either talk or force”. This strategy would seem at odds with recent thinking in crisis negotiation, and actually opens up a wide range of undesirable risks, including:

  • While stalling for time serves to defuse emotions and increase rationality, the introduction of deadlines instead increases stress and emotions, which in turn increases the risk of rushed, impulsive and unpredictable decisions.
  • Imposing a deadline is an overt display of power, and the hope is to motivate submission. But more often than not the use of power instead motivates resentment, resistance, revenge, escalation and even mutual destruction. Power is often an element in crisis negotiations, but due to the negative by-products it creates, power is often introduced gradually by negotiators and primarily for the purpose of motivating a continuation of negotiations. In contrast an ultimatum introduces maximum power in one hit, and is more likely to result in a fight or flight response.
  • Note that in this case Ukraine has effectively imposed the deadline on itself – not just on the activists. And Ukraine has in the process reduced the number of available options for resolution by locking itself into one course of action. This is a legitimate strategy from a game theory perspective. But from a negotiation perspective there is now a risk that the pro-Russian activists will test the deadline. If the deadline passes, and Ukraine doesn’t use force, then the Ukraine’s power of any similar threats in the future, even in unrelated negotiations, will be severely reduced. Thus by imposing the ultimatum Ukraine has significantly increased the likelihood of a forceful resolution to the crisis. And use of force may be particularly undesirable given the current political context in Ukraine.

Of course, we have to be careful to not assume that we know Ukraine’s motivation behind the strategy. If the goal is to resolve the situation with minimum risk of losing lives then we might question the strategy as above. But if the goal different, e.g. to end the siege swiftly for political reasons in order to better manage local and international constituents, then there is of course more rationale for the strategy.

International crises are very complex. Here we focused on one small piece, and that is the impact of deadlines and ultimatums on the likelihood of peaceful resolutions with barricaded perpetrators.

Let’s see how it pans out!

Stop talking to improve communication

Sometimes we talk too much and communicate too little. This is particularly the case in heated exchanges that are fuelled by high emotions, risks, stakes or high levels of uncertainty. Parties become so focused on telling their story that they forget that the purpose of communication is to improve understanding.

So next time you find yourself in a heated dispute with a close friend, family member, loved, business partner or your enemy – see if you can try the following, somewhat different, but very powerful technique:

  1. Sit next to each other, side-by-side.
  2. Open a new document in the word processor on your computer or tablet.
  3. Then let the other person write everything they want to say.
  4. Then… and only then do you go through and make your comments… in writing.
  5. Rinse and repeat steps 3 and 4 until you find agreement.

I used this approach in a very difficult and heated conversation in the last week. After just two cycles both parties agreed and the emotions completely dissipated? How is this possible?

Here’s are a few explanations:

  • First of all, how often do we – in arguments – get to finish everything we want to say before interrupted? Rarely? Never? Much of the escalation in conflict is directly related to the frustration of not feeling understood. So letting the other party finish talking will go a long way to preventing conflict.
  • Do our words ever come out wrong and we just wish we could stop them mid-air? But by that time it is already too late and we unintentionally created or fuelled the conflict further? Letting the each party carefully choose his or her words on the computer means we remove this unnecessary pollution before it can cause any damage.
  • And who can relate to the urge to interrupt and correct the other party when they say something you disagree with? Our urgency is driven by our fear that a failure to argue now might signal agreement! By instead leaving the words there on the screen in front of you means you have all the time in the world to go back to, and counter each point – if you so desire.
  • And how hard is it to clarify misunderstandings in the heat of battle? “What I meant to say was…” It’s difficult! But on the screen you just have to write “Aha, I see you understood this as X. What I really meant was Y!”
  • And in the argument our main focus is the point(s) of disagreement, so 100% of our focus is on disagreement. What we fail to acknowledge is that we actually do agree on a lot! By instead highlighting all the words in the document that are in agreement we realise just how much agreement there is, and just how small the disagreement is in contrast.
  • Similarly in arguments we often repeat ourselves because we don’t feel understood. On the document we can simplify the interaction by agreeing to delete duplicates. Nothing will be ignored, as everything will be commented on.
  • And of course, in very heated interactions we occasionally 🙂 say things that we know are not true, e.g. exaggerations like “You always do this!”. Again, on the screen it is easy to comment “Hmm… would you agree that sometimes be more fair and accurate than always
  • Finally, when the other person tells you the words, then he or she is the problem. But when you sit side-by-side, looking at the screen together you are collaborators working on a problem; to clean up the words on screen and find agreement. It is now longer “you vs. me” but rather “us vs. the limitations of communication”.

Using this process we successfully removed all pollution, reframed all unconstructive language to be constructive, clarified all assumptions/emotions/perceptions, removed all lies/exaggerations, marked all areas of agreement, removed repetition, and in the end there was simply nothing left to disagree on.

Which is consistent with the negotiation premise that over 90% of all disagreement is merely caused by a lack of understanding due to inadequate communication.

Afterwards I asked the other party how they felt about this process. They smiled, nodded and said: “I liked it! And I really felt that I could be more honest this way.”