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When Iranian President, Mahmoud Ahmadinejad appeared in Lebanon recently to bolster the Iranian backed Hezbollah, he spoke to packed and enthusiastic rallies. His rhetoric was, as usual, highly inflammatory. He promised that “the Zionists will disappear” during his speech from the border town of Bint Jbeil.

There was an interesting piece in the Sunday Times by Uzi Mahnaimi this week about why Israel didn’t take this opportunity to assassinate one of its sworn enemies, at a point when he was less than one mile from the Israeli border.

One reason may be that, unpleasant though his views may be, from a deal-making point of view President Ahmadinejad is more useful to Israel alive than dead. Whilst he is President, the West worries about Iran and its potentially nuclear capability. A deal on this issue seems elusive and the consequences for the West rather frightening. What is their “best alternative to a negotiated agreement” with Ahmadinejad on Iran’s nuclear capability? Their best alternative (or BATNA in negotiating speak) is that Israel will provide a bulwark and a deterrent to keep Iran in check. From a negotiating point of view that puts Israel in a powerful position and means Israel is probably cut a little slack in its own dealings with the West on other intractable issues such as the status of Israeli settlements in the occupied territories.

So, maybe that’s why Israel continues to tolerate Ahmadinejad and the continued expression of his extreme views. In a strange way the hostility he arouses is useful to Israel in its dealings with the West. As one Israeli defence source was quoted as saying in the Article “if he did not exist we would have to invent him” […]

Great to hear veteran US negotiator Stuart Diamond on Saturday Live on Radio 4. Diamond has helped resolve numerous intractable issues, including the Hollywood writers’ strike and the strike by Bolivian coffee farmers.

His approach is all about putting yourself in the other guy’s shoes and trying to understand his perceptions. Spot on. Deals just don’t get done unless the needs of each party are met. He also spoke about the need to create a personal rapport at an early stage of the negotiation – a thought echoed on air by former hostage John McCarthy. Yes, yes and yes, this kind of climate setting can be crucial, especially in the early stages of a negotiation.

Great to hear an expert getting the message across so clearly and so well, but, given his background and approach, I suppose that it shouldn’t really surprise us that he was able to build rapport and meet the needs of his listeners!

Interesting to see Judge Jed Rackoff ruling against Terra Firma in its EMI case this week on the question of the maximum level of damages that Terra Firma could win if the Court finds in its favour.

He held that the maximum pay-out could be US$2 billion rather than the US$8 billion of punitive damages claimed by Terra Firma.
Is that encouraging for Citigroup? Maybe. But this dispute is more about each side’s reputation than the money. Moreover, a clearer indication of the Judge’s view may be his aside that he regards this as a “catfight between two rich companies”. That suggests that he may not have vast wells of sympathy for either party.

All of which should point to a settlement being the right answer, rather than the continued enormous expense of litigation. The only problem there is that, as pointed out in my blog of October 22nd, each party needs to feel that its reputation has been saved by virtue of any settlement. As so often in negotiation, face-saving options for the participants are the most critical part of the deal….

How on earth did a deal get done for Wayne Rooney last week when he seemed on the brink of leaving the club? Deals only get done when the personal needs of each side are met, so what were the needs on each side and how were they accommodated?

There were of course 4 sides to this negotiating square. Sir Alex Ferguson, The club’s owners, Rooney, and his agent Paul Stretford.

Sir Alex has already achieved so much in the game that it can only be the possibility of further spectacular achievements that drives him on. Achievers like to be involved in unique ground-breaking or sensational deals. Turning Rooney’s head around when he seemed poised for the exit door must rank as one of Ferguson’s finest achievements as a deal-maker, so you can see how that would have met his needs. Sir Alex is also someone who likes and commands respect. Rooney’s public apology probably went a long way to meeting these needs after
his earlier outspoken criticism of the club.

For the Glazers this is a time when they need some reassurance that everything is going to be ok. Can they continue to run the club successfully against a mountain of debt? One thing for sure is that task is made much easier now Rooney stays than it would have been if one of the club’s major assets had left. So you can see why they were so keen to stump up some extra cash and promises to keep him.

Paul Stretford is someone with a “belonging” need – a need to belong to that club of “super-agents” who can make or break players and deals. His box would have been ticked whether Rooney signed […]

Fail to prepare and you prepare to fail

As the latest episode of the Apprentice comes to our screens tonight, spare a thought for Melissa, last week’s fired contestant.

It’s difficult to pinpoint exactly what she did right as a negotiator, as she was a poor listener and highly confrontational throughout. But one of the things which consistently let her down was a lack of preparation. In the previous week she managed to quote a price for a bread roll which, at £1.82, was quite ridiculously high, and was clearly made-up. Last week she attempted to bludgeon Debenhams into purchasing two products which they don’t even stock. They don’t sell gardening equipment, but this didn’t stop Melissa digging a hole for herself by continuing with a futile pitch for a spade. They also don’t sell bathroom equipment, but it would have taken more than cold water to have stopped Melissa continuing to pitch her other pointless product, a shower head.

All such humiliations could have been avoided if she had only prepared for her pitches in advance. Negotiators who simply dive into the haggle, thinking they can busk it, are doomed to fail…

Let’s see who fails to prepare tonight…

Don’t be fooled by the mass marches in Dublin over the weekend, or the carping comments from the opposition parties, the Irish government simply has no choice but to agree to the current bail-out, regardless of the terms and the Eurozone countries have no choice but to provide it.

Both parties to the negotiation have the same “survival” need. Without the bail-out the Irish economy will sink under the weight of its own debt, pulling the credibility of the Euro with it.

The interesting subject for debate is not this bail-out and its terms, but where this negotiation between the Eurozone and the money-markets goes next. Despite throwing 85 billion Euros at the Irish problem I would say that the Eurozone countries are no further forward in resolving this problem. In any negotiation you can only secure a win if the other side believes you mean what you say. In this case the money markets simply do not believe that the Euro can or will be defended indefinitely. Expect Portugal and Spain to come under an intense spotlight over the next few weeks and months as the money markets test the Eurozone’s resources of willpower and money to defend what the markets regard as indefensible.

The latest spat between North Korea and South Korea. May have raised tensions in the area but it is difficult to believe that it will lead to war.

From the point of view of the West, the stakes involved in confronting the North Koreans appear to be too high. The Worst Alternative to a Negotiated Agreement is some sort of nuclear conflict triggered by threatening an unstable and unpredictable regime. Faced with this WATNA the West is going to continue to pursue a negotiated settlement of the current tensions, however elusive that may be.

And what of the North Koreans? Do they really want to precipitate a war? I think not. Their bombardment of a South Korean Island has all the hallmarks of being aimed at a negotiation with their own population, rather than a genuinely aggressive move against their neighbour. If you were a paranoid one-party dictatorship, going through a leadership transition, wouldn’t it be convenient to create the spectre of a foreign threat? Wouldn’t that perceived threat be helpful in encouraging the local population to rally around the new leadership rather than focusing to carefully on any misgivings they might have about the leasdership transition to the current dictator’s son?

The bombardment and the predictable strong reaction against it by the West gives the North Korean leadership extra authority. “Authority” is an acknowledged source of bargaining power in any negotiation, and the North Korean leadership knows how to create it. This feels like another re-run of their favourite movie….

It’s often the balance of bargaining power in a deal that governs the parties’ attitudes. That is certainly the case in the London transport tube strike.

Where the aces are very evenly poised it means that neither side can browbeat the other into submission by sheer weight of bargaining power.

Sometimes this can be very positive as it encourages each party to pursue a win/win approach in order to get a deal done.

However, in highly ritualised negotiations where win/win is not a traditional approach, the opposite can happen. The two side get frustrated by their inability to force a solution. A deadlock ensues and the parties start to play “lose/lose”, a self- destructive attitude where it’s more important to make sure the other guy loses than to secure a win for yourself.

That’s what’s happening in the London transport dispute, as you can recognise by the rather shrill and negative rhetoric on either side. Certainly both sides seem to have forgotten what the dispute was originally about and the general public has no idea what they are fighting about.

It’s very difficult to break this cycle, and hence the succession of strikes (including today’s), which shows no sign of abating.

This will only stop if one side is able to force the other into submission (which may take some time), or the two parties come to a realisation that they have more to gain from granting a win to each other than by continuing with the present stand-off.

Meanwhile the commuter, who pays for all of them, will continue to suffer. Mind the Gap….

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 […]