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If you want someone to agree to do something that seems on the face of it to be against their interests then you need to talk to them. You may be able to require them to do what you want temporarily through force or the application of the law, or some other exertion of bargaining power, but the exercise of power does not win over people’s hearts and minds, so they will have no commitment to your desired outcome.

A better way for the process to have worked in relation to public sector cuts might have been for the government to have talked to the relevant Unions before it published its targets for cuts. That way it could have effectively had the Unions own the problem too. It would also have enabled the Government to have listened to Union needs and perhaps found elegant ways of achieving cuts whilst meeting Union concerns.

In publishing its targets first the Government was well-intentioned, and no doubt its perceived tough handling of the need for cuts has impressed financial institutions and avoided a Greece-style melt-down. However, dealing with the issue this way round has effectively foreclosed negotiations, and soured the climate because the Unions feel disenfranchised from the process and under-valued. Hence the wave of strikes.

Instead of criticising the Unions, one sensible way to deal with this would be for the Government to signal an attempt to re-set the climate by saying that whilst it remains generally committed to its goals of reducing public expenditure it is open to collaboration with Public sector representatives as to how this is addressed, and welcomes their input. Showing the Unions that they are valued in the process would reduce the temperature […]

It’s all very well politicians posturing in public about the positions they wish to take in the US debt reduction talks. But maybe all sides should be focusing more on what could happen if no deal is struck.

What’s the worst case? If the markets turn against the dollar because of fears that US debt is unsustainable, then the problems for the US would be enormous. Could the scenes in Greece, Ireland and Portugal as those countries grapple with impossible debt bail out deals be repeated in the US? Who would bail out the US – there is no equivalent of the Eurozone Central Bank to do it. If the US was a domestic family or a small business facing a similar debt crisis there would be no messing about – it would be a question of cut costs, increase income, or go to the wall.

It would be better for all sides to focus on this common peril rather than just re-stating their political positions. Such positioning statements may make good headlines for constituents but they prevent each party from progressing the negotiation. This requires stepping into the shoes of the other side and trying to find ways to meet their emotional needs in return for getting what you want from a deal – if you are just broadcasting your own position you are not going to be able to do that.

I wonder what would happen if as part of the negotiation meetings there was agreement to run an exercise, where the Republicans were required to argue the Democrat position, and vice versa. What a great way that would be of learning to truly appreciate the needs of the other side.

If you set a deadline for doing a deal, and the deadline passes without a deal being done then you have to walk away. If you don’t then you risk losing all your negotiating authority. So, Corinthians have done the right thing by pulling their offer as it became apparent that the deal would not get done in time.

Now, when and if the deal is revived in the January window, Man City know that when Corinthians negotiate they mean what they say.

The danger for Corinthians is that Tevez gets sold in the meantime during the remainder of the European window. Certainly he is going to be one unhappy hombre back at Eastlands. But where else could he go? He has stated publicly that he wants to go back to South America. So, is a move to another European club likely? Even if he changes his mind on that score there can’t be many clubs who could afford the fee and the wages – Inter Milan? It sounds unlikely. Barcelona? They don’t need him. Real Madrid? Possibly, though they already have a surfeit of expensive attacking players.

So, maybe Corinthians have played this about right. If it gets to the January window, Man City will take what Corinthians say more seriously next time.

For Man City, a good short-term “fix” might be to loan Tevez out to someone until January (say Inter) with a view to a potential transfer in the next window. That would keep him away from the club until the next tranfer window – something that is surely desirable for Tevez. It would be desirable for City too, who get an unhappy player and a huge wage bill off their books, and […]

I’m not sure that all this public positioning around the Fabregas transfer deal by Barcelona and Arsenal really helps to get a deal done. Wenger calls Barcelona disrespectful; Barcelona speak publicly of their desire to bring home a player who is under contract to someone else.

This kind of positioning stops each party seeing the other side’s point of view, which is normally an essential component in negotiating a successful outcome. If the roles were reversed and Arsenal were chasing the signature of an established Barcelona player who was English and yearned to return to England, then Wenger would have no hesitation about pursuing the player in public to try and improve his team. Equally, Barcelona would be just as outraged as Wenger is now about the “disrespectful” public pursuit of one their own key players.

If they could put themselves in the other side’s shoes, then it would be easier for the clubs to find a price which reflects Arsenal’s need for respect, Barcelona’s need to continue achieving ground-breaking success, and the player’s need to feel that he is back where he belongs.

As it is the public posturing prevents this kind of constructive negotiating, sours the climate, and means the deal takes longer to do. None of this is anybody’s interest – especially Arsenal, who are running out of time to negotiate for replacements before the season starts…

It was interesting to read this article (hollywoodreporter.com) about the plans for MySpace, now it has been taken over by Specific Media. They are right that effectively a “re-negotiation” needs to take place between MySpace and its audience (both past and present) in order to gain back their attention.

Like most negotiations, the outcome is largely dependent on the “state” or attitude of mind in which the negotiation is approached by the participants.

Prior to the purchase, MySpace’s state must have been a very anxious one, with the organisation being very conscious of its ever growing losses, and aware that it was running out of time to turn the tide. MySpace users will have been in a state where they felt increasingly negative with the service, were very conscious that other users were deserting the service (thus providing social proof that the service was not worth their attention). Users would also have been pre-disposed to judge modifications to the service harshly – MySpace in fact carried out a major overhaul of the service some months before the sale but this didn’t seem to make any difference.

The sale has created the opportunity for a “pattern interrupt” – a chance to modify the state at MySpace and among users. The early signs are good. Tim Vanderhook, Specific Media’s CEO, sounds positive and confident as he sets out MySpace’s approach. This kind of attitude in any “negotiation” is infectious and strongly favours a positive outcome.

Moreover, MySpace has some interesting things to say about the service going forward – repositioning it as an entertainment platform with the involvement of Justin Timberlake. This is potentially a very clever step as he brings a lot of authority to the new offering […]

The account of the Music 4.5 Conference here (themusicvoid.com) on Collection Societies reveals just how hostile the climate has become between users, Collection Societies, and their members.

In any negotiation climate-setting is a crucial stage. It determines the atmosphere in which the negotiation takes place, and that atmosphere has a great bearing on the parties’ behaviours and the outcome.

There are normally 4 choices. You can have a warm climate which very open and friendly, a cool climate which is very objective and process driven, a hostile climate which is very confrontational or a wacky climate which is very fun and off the wall. Different climates suit different deals, but as between a Collection Society and its own members one would hope that the climate would be a warm and open one – they are after all on the same side, aren’t they? In fact, depending on the Society, the atmosphere often seems to be mistrustful on both sides, with a climate that veers between cool and hostile. That is why members are sometimes tempted to withdraw rights from Societies and Societies use practices such as NDA’s to ensure that only they have a clear picture of what is going on.

Meanwhile users reap the rewards of this climate schism between Societies and their members, with the result that negotiations mirror the same degree of hostility or coolness. It’s small wonder that so many users in the audience kept quiet when this issue was being discussed at Music 4.5.

An unhelpful climate creates negative thinking on all sides, and means that parties are intent on protecting their own positions rather than (for example) growing the legitimate market to the benefit of all participants in the value chain.

When climate […]

It can be a useful source of bargaining power to use experts on your side in a negotiation. Clearly they are there for their expertise, not to make decisions for you but I would query whether it is always best to take them out of the negotiation at critical points.

Some people, such as Mark Suster in this article (businessinsider.com) express the view that using 3rd parties to negotiate on your behalf should be restricted to a minimum so that you can keep control of your deals. It is true that often we as the decision-maker will have more at stake than the expert does. It is also true that for that same reason we might handle the negotiation differently than they would. However, their detachment can actually be an advantage. Often when our personal interests are at stake we invest the deal-making process with too much emotion. This can cause us to get anxious or aggressive or inhibit us from making decisions. As a result we might end up over playing or under playing our hand.

When we use experts their lack of emotional involvement can be an advantage. It can cause them to view matters more calmly and dispassionately in the heat of the negotiation, enabling us to make better decisions when they refer matters to us for instruction.

Although it’s early days, it looks as though Apple might be eyeing up the purchase of US online video service Hulu. If this deal does eventually happen, it might be a good way for Hulu to side-step the negotiating problems with UK rights owners which have bedeviled their launch in the UK.

By selling out to Apple they would pass that problem on to someone else – a giant with great negotiating strength that is used to securing worldwide clearances on good terms, even from major content owners.

There may be a price for Hulu to pay, though. For Hulu, the absence of such clearances presumably reduces the valuation of the company somewhat, because it reduces the scope of their existing offering. Of course if the deal actually happens, the position changes, because for Apple the ability to procure UK clearance is effectively negotiating “coinage”. It’s easy for Apple to bring to the table, like loose change. Apple then benefits from the increased valuation of Hulu once the clearances have been obtained, so they potentially benefits from the UK position both before and after the deal. I believe this is called having your cake and eating it….

It is very difficult to see a deal not being struck between Republicans and Democrats over the US debt.

The consequences of failure to reach agreement (the US will default on its financial obligations on Tuesday if the debt ceiling is not raised) are just too great for both sides and the country. Public spending would apparently come to a halt, the US would find the dollar and its credit rating status under great pressure on the financial markets, and interest rates in the US would almost certainly rise.

Set against this scenario (sometimes referred by negotiation academics as a WATNA, or Worst Alternative to a Negotiated Agreement) almost any kind of deal would be better. So, expect some kind of deal to be cobbled together. It may be a fudge, it may be short-term, it may not do enough to satisfy the financial markets that the US has the answer to its crippling debt burden, but it will buy the US some time. As the successive fudged deals on the Euro have shown, that is a result in itself. Compared to the chaos of no deal being done that will ultimately seem a more attractive option to both the Republicans and Democrats.

I read last week in the Telegraph online (here) that PayPal has agreed to act against Russian and Ukrainian websites offering unlicensed downloads, by cutting off their flow of payments from visitors. This got me thinking about the methods which the IFPI and the record labels have so far used to clampdown on piracy within the music industry.

There are two ways of motivating people to do what you want. One is to move them away from actions or beliefs and the other is to move them towards what you want.

When you try to move people away from a certain course of action then inevitably you find yourself focusing on more negative approaches – using pressures, or threats, or denying them access to something. This is the approach which IFPI and the record labels have used in their anti-piracy campaigns against illegal downloaders. Litigation against peer to peer services, litigation against consumers, campaigns to get ISP’s to shut down access to illegal sites, and now getting payment providers to withdraw their services to illegal sites.

This is I suppose understandable in the face of the wholesale piracy the Industry has had to face, but only if it is also part of a larger and greater campaign to incentivise consumers towards the kind of legal behaviour which IFPI and record companies want to bring about. There are still less than 500 legitimate licensed services worldwide, which is not enough to tip the balance of consumers’ behaviour in their favour. Seemingly, record companies do not spend enough time strategising on how to deliver to consumers what they really want and talking directly with them about what would incentivise them to behave differently.

The result of […]