Monthly Archives: December 2010

The negotiations preceding the Fifa World Cup venue vote show how difficult it is to negotiate when you don’t understand or appreciate the other side’s needs.

The FA has been complaining long and loud about the way the vote was handled. Certainly if you judge the vote by the organisational requirements that Fifa put forward, Then England should have achieved a lot more than 2 votes. After all they got the best marks for their technical report on infrastructure, organisation and stadia. However, there’s no point complaining about the process of the negotiation and then participating in it. If you think the process is unfair and win/lose then don’t take part. If you are going to take part then you have to play by the rules of the competition you have entered.

Having elected to take part in the bid process, England should have realised that the, organisational requirements in a negotiation (like the number of stadia and infrastructure requirements) are one thing, and the personal requirements of the negotiators on the other side are something else. These personal needs always drive any negotiation, even if they are not made explicit. So, what the England bid team had to do was to identify the individual needs of the Fifa vote-holders and meet those needs.

It is no use complaining darkly, as the FA and the notorious Panorama programme did, that some of the 22 members of the Fifa panel required and took bribes. In my experience when people say they need money, there is normally some other requirement under-pinning that need which can be met another way. People may say they need money because it makes them feel respected, or because it gives them a sense […]

The ongoing Wikileaks concerning international relations have a fascinating impact on diplomatic negotiations.

Revelations as to Saudi Arabia’s real views about Iran and the USA’s true views about the leaders of a range of allies including Britain and Italy have to a certain extent rocked the normally genteel world of international diplomacy. Diplomacy has often been referred to as “lying in State”, so in some ways the revelations of hypocrisy in the conduct of international relations could scarcely be regarded as surprising. And yet there is still something a little shocking in hearing explicitly that nations and governments which pretend to be cordial or neutral in fact loathe each other.

From a negotiation point of view this kind of exposure makes deals a bit harder to do going forward. Effective negotiation depends on trust for two reasons. Firstly a lack of trust tends to create a “hostile” or “cool” negotiating climate in which it may be more difficult to make progress. Furthermore, this loss of trust often takes a long time to recover. Secondly, effective negotiation requires that each side believes that the other means what it says. If the other side’s statements are not believed, then any proposals based on those statements will carry no credibility. Lack of conviction or credibility in making proposals means they are unlikely to be accepted, which in turn makes deals harder to conclude.

Politicians are often thought of as a cynical bunch and to a certain extent this may help them discount the impact of the leaks. Nonetheless, the next time affected parties such as Iran sits down to negotiate with Saudi Arabia, or the US sits down to negotiate with any number of its allies, (or […]

Once again this week’s Apprentice revealed some hard and fundamental lessons about negotiating.

This week the theme of the whole programme was negotiating, as the teams were sent out to source and then negotiate to buy ten items on Lord Sugar’s shopping list.

The girls’ team found all 10 items and the boys only found 7, and so incurred financial penalties. Yet it was the boys who won, by paying the least for their items overall. So, what does that result and the way in which it was achieved tell us about negotiating?

The girls did a much better job of preparation, in the sense that they planned where to source all the items at the start of the day, and knew exactly what the definition of each item was. However, crucially they had no negotiating strategy for each item. Jamie for the boys at least instructed his team to start each negotiation by asking for a 70% discount from the quoted price. As most effective negotiators will tell you, normally the less you offer the less you end up having to pay. So, having this kind of hard bargaining approach at the outset was always going to stand the boys in good stead.

And so it proved, with the girls negotiating weakly for a singer sewing machine – “We were hoping to start off at £50 and work our way upwards”. They ended up at £57, whereas the boys ended up paying only £35. Similarly the girls started their bidding for the required Tartan at £50 and quickly went up to £69, whereas the boys did their deal at only £23. Finally the girls started their bidding for the truffle at a whopping £200, at least £100 […]

This is the last day of the Climate talks in Cancun and it doesn’t look as if a deal is likely to get done. The complexity of striking a deal among so many participants with differing points of view is defeating the process and a simpler approach will need to be adopted if progress is to be made in future.

This may be the last chance to put a new climate change deal in place before the Kyoto Climate agreement expires at the end of 2012. But, when that deal was structured in 1997, it was easier to arrive at consensus.

Then, the industrialised countries clearly accounted for the bulk of the world’s CO2 pollution. The US accounted for 25% on its own, and the OECD countries of Europe accounted for a further 20%. The industrialised world as a whole was responsible for three quarters of emissions. So, it was not difficult to sign up to an agreement that everybody should act in accordance with their “common differentiated responsibilities”. This meant that the Industrialised countries agreed to take on legally binding commitments to reduce their emission of greenhouse gasses, and the developing countries agreed that although this was an important topic, they would not have to make any commitments at all.

The story of the failure at the Copenhagen summit last year and the Cancun summit so far, is the story of the developing countries wanting this agreement to be renewed, and the industrialised countries saying that the world has changed, and the developing countries now have to sign up to pledges of their own. The reason for this hardening of attitude amongst the industrialised countries is that now the developing countries are contributing far more to […]

There is a perfectly positioned fruit stall just outside Holborn tube station. Anyone walking along High Holborn has to go straight past it and it is always beautifully arranged first thing in the morning. People frequently stop there and buy fruit for the day or for the office.

It has a lot going for it in terms of bargaining power as there is no other fresh fruit stall nearby, and the trader who runs it seems to have plenty of expertise. There’s only one problem, which is that the stall owner bellows out his offers in a way that is attention-grabbing but impossible to understand. He sounds like an Evening Standard newspaper seller bawling out the name of his paper incomprehensibly – just like the famous Morecambe and Wise sketch where Eric is selling the “Eening Stannit”.

The issue with this is that when negotiating, if you are making a bid, the other side does actually need to understand what you mean. If you are impossible to understand, then it’s less likely that people will accept your offer. I’m sure this fruit stall does pretty well, but how much better might he do if passers by actually understood the offers he was making? Then he really could be top banana…

The internal negotiations over the lifting of the cap on University tuition fees among the coalition partners have been fascinating to watch.

Both David Cameron and Nick Clegg are natural “pullers” in the way they behave as negotiators. They are usually prepared to focus on the needs of the other side in order to get a deal done – listening, exploring, disclosing – that is how the coalition deal got done in the first place.

However, in this instance they have needed to “push” their MP’s in order to win the vote permitting a substantial increase in tuition fees. This has been less of a problem for David Cameron (only 6 Tory MP’s voted against the Government yesterday), but it has been a real headache for Nick Clegg, whose party had pledged not to increase tuition fees at the election, and he has had to work extremely hard to get enough of his MP’s to vote in favour of the proposal.

What “push” tactics has Clegg had to use in order to overcome a natural reluctance among Lib Dem MP’s to avoid being seen to renege on their promise to the electorate?

He has used deadline pressure, culminating in a make-or break vote in the Commons on Thursday. This kind of pressure can force people into making decisions they would rather not make.

He has also used “budget buster” tactics, making the argument that he really would love to accommodate his reluctant MP’s, but the public purse just won’t stretch to keeping the tuition fees cap in place. This kind of pressure tactic is very frequent in business deals – how often do you hear the phrase – “We’d love to accept your proposal but unfortunately we just can’t […]

They have tried to dress it up as a big win, but scrutinise the detail of the Climate Change “deal” announced at the last minute in Cancun (or rather, the lack of detail) and it looks as though the only real deal is a fudge to keep the process going.

Whilst everyone has agreed that further commitments on reduced emissions are necessary, there are no legal commitments from any participants (unlike Kyoto in 1997, where at least the industrialised countries undertook to make binding reductions in emissions).

There is apparently a plan to provide developing countries with cash to encourage them to adopt measures which would reduce their emissions, but we don’t know which countries are involved, or how much they would be paid, or who would pay for this initiative.

The industrialised countries are to provide clean-tech expertise to the developing countries, but we don’t know who will provide what to whom or when this would happen.

Significantly, the US and China, the world’s two biggest polluters by far, have not made any commitments to reduce their emissions, and the world remains on course for a temperature change of well in excess of the 2% maximum rise required to avoid global catastrophe.

No wonder Andy Atkins of Friends of the Earth was describing this as “A very weak deal”.

The problem, as outlined in my blog of December 9th, is that the process for agreeing Climate Change is just too complicated for meaningful progress to be agreed. With 200 nations and 15,000 delegates involved, and a clear split in how to proceed between the industrialised nations and the developing nations, some sort of bland outcome was the only way that complete failure could be […]

It is interesting to see how the bad weather has disrupted the climate of ongoing dealings between BA and its customers during the height of the snow – mainly for the worse, but occasionally for the best.

I was due to fly down to Lyon University a couple of weeks ago with my stepdaughter, when the snow first kicked in. We turned up at Heathrow Terminal 5 in plenty of time for check-in. There was a massive queue and clearly not enough check-in staff – down to the weather or bad planning or ongoing staff cuts?

It took so long to get to the front of the queue we were only 20 minutes from our scheduled departure time when we got there. We needn’t have worried. We were then told that our flight had been cancelled. Like hundreds of other people standing in that queue we had been waiting for over an hour to check in for a flight that didn’t exist. Shame nobody had told us earlier.

We were directed to another counter to deal with re-booking our flights. We went over there and of course there was another massive queue. Again, we needn’t have worried. A BA lady standing by the counter told us that the counter was about to close anyway and so we had no option but to fend for ourselves for the evening.

The problem with this kind of customer service is that, whatever the cause of the disruption, the impression is given that BA doesn’t care about its passengers. This is a very win/lose attitude and doesn’t encourage passengers to travel with BA again as nobody likes to feel like a loser.

To give BA credit, the next day I had a great […]