clive

The stalemate in the OPEC talks shows how important it is to address the negotiating needs of all the members of the team on the other side and not just one of them.

At one level OPEC negotiations are strictly between the member states. But of course there is another unspoken, political, negotiation going on with OPEC’s customers at the same time. Countries in the West are also very dependent on the outcome of this ongoing negotiation.

Much attention is spent by the West on trying to influence the largest supplier, Saudi Arabia. Yet OPEC appears to be a democracy where every member has an equal vote. Looking at the 7 countries who opposed an increase in production we have Iraq (previously invaded by the West), Libya (currently being assaulted by the West), and Iran (the subject of a hostile attitude from the West in relation to its nuclear programme). It’s not difficult to see why those countries would oppose an increase in output on political grounds. As for Ecuador, Venezuela, Algeria and Angola, I don’t know how much time we spend trying to influence them but I suspect they don’t come very high up the agenda of our International Diplomacy efforts.

If you want to negotiate a deal with a team on the other side and they all seem to have a stake in the outcome, then it’s important to identify the negotiation needs of all the members of that team and address those needs – otherwise they may see no requirement to address your needs in return…

There are some very good tips in this article (nytimes.com) about salary negotiation: the importance of preparation, making sure you ask for more than what you want in a deal, and not bluffing about walking away unless you mean it. However, I would question two of the points made:

1. It’s not always a good idea to take the lazy option and “meet in the middle” on price. There’s an old story about two sisters negotiating over who gets the last orange in the bowl. They ended up splitting it in half, but they could have ended up doing a much more creative deal if they had explored each other’s needs, as one of them wanted the rind of the orange to bake a cake, and the other wanted the juice to make a drink.

Next time someone says to you “let’s just split the difference” try saying “let’s not”! They will have given away half of the difference between your two positions without getting anything back, putting you firmly on the front foot in the negotiation.

2. I would also ask whether it is important to “seem fair” when trying to negotiate a compromise. The problem with this can be that there is no objective standard of fairness, so everyone usually thinks they are being “fair” in a negotiation, whatever their position is.

If I say “let’s agree this outcome because it’s fair” this implies that I think that you are being “unfair”. You are unlikely to agree with that judgment and it may irritate you to hear me make that inference. So, sometimes it’s better to avoid references to what is “fair” or “reasonable” when you support your position, as the other side […]

It is true that if you are feeling anxious about a negotiation you are unlikely to achieve your best outcome. Our behaviours are the product of our internal “state” of mind. This state of mind is usually the result of pre-programmed filters which determine how we experience the world. We know for example that if a fire is coming towards us then that represents danger and we should run away. If someone extends their hand by way of greeting we know we should reciprocate in order to shake hands.

These filters can be very helpful, as in the above examples, but they are also capable of giving us a distorted vision of reality which is not helpful at all. So, if we are running a programme which tells us that “negotiation is always difficult and I always do badly. I want it to be over as soon as possible”, then that anxious state will create problems for us. Our bidding will be tentative, our manner uncertain, we may stammer and sweat. The other side will pick up this “anxious” state (consciously or otherwise) and start to push us around. It’s all downhill from there.

If there is a “Nervous Nellie”, as the third article here puts it (knowledge@wharton) in the team then that can affect the attitude of everybody in the team. It depends who has the strongest state. If the Nervous Nellie has the strongest state then they will influence everyone around them. So it’s important to pair such people with those who have a stronger, more assured state of mind…

The good thing is that we can choose to change our state. This is because the brain doesn’t recognise the difference between a “real” programme […]

If you want to negotiate, it’s always important to “close the deal” when there is an opportunity to do so.

If you don’t you risk the possibility that you may lose the deal or receive less value than was initially on the table. There may be an element of this going on in the Fabregas transfer saga. If a deal drags on the other side can suffer buyer’s remorse, or come to value the asset they are negotiating for differently. Or economic factors may come to influence the other side’s thinking differently, or they may develop other deal priorities (Sanchez? Rossi?). Judging by the public statements coming from Barcelona it may be that they do now value the player differently than they did last year, when there was clearly an opportunity to close the deal which Arsenal rejected.

Of course last year Arsenal didn’t want to negotiate, but you have to think these stances through to the end. If a player really doesn’t want to stay at a club then that will be reflected in his performances, and arguably that happened with Fabregas last season. Now when it sounds like they might be prepared to consider a deal, Arsenal find that the ground has shifted and it may not be so easy to close the deal at a price that they want. Closure is a fluid moment – it’s generally best to bottle that moment and get the best deal done whilst you can.

Having read the article ‘They Don’t Negotiate’: Why Young Women College Graduates Are Still Paid Less Than Men (huffingtonpost.com) I still maintain the view that essentially women have as much potential as men to be good at negotiation.

As a negotiation trainer I encounter lots of women who are good at the “soft skills” of negotiation – listening, exploring and focusing on common ground. But I also see some women who are great at so-called “push behaviour”, which you use in negotiating to pursue your own agenda.

It may be that some women are held back as negotiators by perceived barriers as to how they should behave or what jobs they should aspire to. However, we are all capable of influencing our “state” in a positive manner in preparation for a negotiation. We can break up our normal patterns of thought and (for example) introduce a more positive and ambitious mindset. And if women are able to do that then they have no less potential than any man to negotiate successfully.

Will a further bail-out for Greece change the negotiation dynamics with the financial markets over the Euro? Only if it results in the financial markets feeling that Greece can pay its debts and that the EU can afford to sustain its current levels of support until Greece does. An absolutely critical part of this would be for existing Banks who are debtors to agree to the “voluntary” re-scheduling of their debts, to give Greece some breathing space. Without this any further bailout package will not seem credible.

It will be interesting to see if Banks are prepared to step up in this way on a voluntary basis. Generally, asking someone if they would like to give you what you want is not an effective way of bidding. It’s like the difference between saying “I want x” and “Would you mind giving me x?”. The former has much more impact. The problem for the Eurozone of course is that it can’t force debtors to participate – any such compulsory re-scheduling would itself be deemed to constitute an event of default.

In any event, all of this only becomes relevant if the Greek Parliament votes to pass the latest austerity package. Is that certain? One problem may be that local Greeks are very conscious that there doesn’t seem to be much of a “win” for them in complying with the austerity programme demanded by the Eurozone countries as the price for further bail-out assistance. Often if people feel there is no prospect of a “win” in a negotiation, they start to play lose-lose, saying to themselves “if I can’t win I’m going to make sure that you lose too”.

If it was up to the man-on the […]

I see Shazam has completed advertising deals with a whole host of different companies such as Starbucks and Honda. It seems the app is going from strength to strength.

From a negotiating point of view, effective brand campaigns are based around the emotional negotiating needs of the parties – normally it is “belonging” needs that are addressed. Each party wants a connection with the brand values of the other so that users will associate it with those positive values.

In this case Shazam gets to associate itself with the mainstream market values of all of these larger brands which helps it extend its reach.

For the brands themselves they get to make an association with a cool emerging brand (Shazam) and also a connection with the music that is featured. Music is normally used in ads to create positive emotional connections which reflect well on the brand concerned – the Brand imports some of the emotional associations of the music and so we think more positively of the brand. In this case, by tying up with Shazam, the depth and range of that connection with the music is emphasised.

Alec Gores, Warners and Universal Music are all believed to be considering bids for EMI. Is this good news for the troubled major? Well, it certainly helps to have more than one suitor in any negotiation. The likelihood of impending scarcity tends to make something more attractive to buyers, and so they may be more likely to pay more for it than if they had a clear field and they were the only buyer.

In this case it will be interesting to see who emerges as potential purchasers. If this article (businessweek.com) is right about the identity of the potential bidders, then Warners and Universal may have one disadvantage compared to Alec Gores, which is that both of them would have regulatory hurdles to clear (probably a substantial one in the case of Universal). This would not apply in the case of the Gores bid. Having “law” or “regulations” on your side is an important source of bargaining power and it could work particularly well in this case, if Citigroup want and need a speedy sale. If that’s true then Gores would be like an unencumbered purchaser competing for a house sale, with less process and approvals to get through – always an attractive option for a vendor.

Whether that means Gores could make a success of EMI is another question. Warners and Universal could both release instant savings from merging EMI with their own companies, so they would be able to buy themselves some time before they were judged on their expertise in running the combined companies. Gores might not have that luxury. Could he run a company like EMI successfully on its own, given his expertise in leveraged buyouts? We all know what […]

I read an interesting article here (wired.com) suggesting a theory that it is bandwidth issues which will prevent iCloud tracks from being available in streamed format. Whether or not Apple do indeed have an agreement in place with AT&T and Verizon is unclear, but this would certainly make sense, as an Apple streaming service would undoubtedly devalue price plans which limit mobile data usage. The hunger for mobile users to access more and more streamed content is already putting a strain on the networks (hence the data limits imposed) and such a service from Apple may not be sustainable given the current limitations.

How will people react to the iCloud service knowing that streaming is not currently on offer? Well, no new technology system is ever perfect and whether people think that a new technology represents a “good deal” has as much to do with the patterns or filters through which they interpret the world, as it does with reality. Certain people have a filter which predisposes them to look for “what’s there” in a picture, whilst others look for what’s “missing”.

People on either side of that divide are going to have different views on whether it matters that tracks cannot be streamed via iCloud. Equally, some people like to defer to authority in making up their minds about the quality of a product – they will be quite happy to accept at face value all the positive aspects of the iCloud service that Apple emphasises. Other people are more sceptical of authority and prefer to make up their own minds – these are people who might notice that iCloud lacks the streaming feature and factor it into their judgement.

We all […]

Two separate stories I read about recently highlight some important basic fundamental points about negotiation.

LESSON 1: Having a unified negotiating team is very important for success

The reconciliation of Hamas and Fatah back in May, discussed in this article (worldpress.org) makes it more likely that together they can achieve a constructive result in the Palestinian-Israeli dispute. Individuals are often more intent on picking holes in their opponents on the same team, rather than focusing on the deal with the other side but a divided negotiating team rarely achieves anything.

LESSON 2: Both sides in a negotiation must want a negotiated outcome

There are a number of positive suggestions advanced in that same article which could help move negotiations between Palestine and Israel forward at some point, especially the so-called IPI which puts economic co-operation at its heart and the Parallel States project (two states occupying one country). However, the key, as it has always been, is to get both parties in a state where their key decision makers want peace more than war. Until that point is reached nothing further will be achieved.

LESSON 3: All stakeholders need to be present or represented with their consent for a negotiation to work

I read here (washingtonpost.com) that talks collapsed at the end of June between Armenia and Azerbaijan over the disputed region of Nagorno-Karabakh when both sides failed to accept the “Basic Priniciples” for a peace deal proposed by the ‘Minsk Group’ mediators.

Interestingly, Nagorno-Karabakh itself had not actually been involved in any of the discussions regarding its future. It’s a fairly extraordinary thought that a party which is the subject of a negotiation plays no part in its process. All parties with a vested interest need to […]