Friday, August 26, 2011

Negotiation in Crisis

Verdi had never looked worse.

Tyler Gitou found him cowering in a corner booth of a restaurant hanging onto a cocktail. His hands were shaking.

“Verdi,” Tyler said. “I haven’t seen you in weeks! Where have you been?”

“Washington,” Verdi whispered. “Please, don’t make me live through it again.”

“Oh dear,” Tyler said as he slid into the booth. “You tried to help with the debt crisis didn’t you?”

“Don’t say that word!” Verdi whimpered.

“Which word? Debt? Crisis?”

“No,” Verdi trembled. “’Help’. There was no way to help that group.”

“Verdi you should have called me,” Tyler said, shaking his head. “Any Deal Whisperer could see that was a Hydra; too many heads for one person to manage. You may recall that not even Hercules could kill the Hydra alone. He called in a backup!”

“I see that now,” Verdi said. “Between all the Democrats and Republicans it was hard to keep track of all the parties.”

“Ah, there’s the first challenge,” Tyler said. “That was not a deal between the Democrats and Republicans. They were just a part of the negotiation.”

“What do you mean?” Verdi said. “They were the decision makers. They cut the deal!”

“Oh Verdi, Verdi,” Tyler sighed. “You fell into a classic trap by assuming the only parties in the negotiation were the ones at the table. Let’s go back to our fundamentals and see if we can figure out what went wrong using the seven elements of a negotiation. First, who were the parties?” Tyler pulled a pad out of his bag.

Verdi tried to focus. Then he shrugged. “Like I said, the Democrats and the Republicans.”

“That’s it? Come on, think deeply. Who else had a stake in the outcome? Remember the relevant parties are a combination of who must say ‘yes’; who can say ‘no’; and who is impacted by the outcome. Those are three different groups of people. Let’s focus on the outcome. Who else was influencing the negotiations because of the impact it would have on them?”

“Influencing? Well, certainly the media,” Verdi said.

“Now you’re thinking. Who else?”

“The American public. Financial institutions. China. In fact, just about every other country in the world.”

“Exactly, Tyler said. “This list goes on and on. The reason you create this list is because, at the end of the day, negotiation is what?”

“Negotiation is a label for influence and decision making.”

“Good,” Tyler said. “And this negotiation over the debt ceiling and what spending to cut was all about influence and decision making. There was no easy answer for this so the parties were all going to have to collaborate and brainstorm the best potential outcome. They didn’t do that. Instead, they took firm positions, grandstanded in front of the cameras and finally made a poor compromise in the face of a mutually terrible BATNA.”

Verdi’s eyes lit up. “Tyler,” he said. “Do you know the answer to the debt crisis?”

“No,” Tyler said. “I know the process by which the parties should have negotiated to reach a mutually agreeable outcome instead of a solution that nobody liked. Let’s get some menus and order dinner and we can walk through the fundamentals that a Deal Whisperer would have used. These will be a good refresher for you because they apply to every negotiation you will have.”

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