Minding Your Negotiations
Friday, March 8, 2019
LES Keynote Address by Deepak Malhotra
By Renee McMullen
Members of LES attending the LES Annual Meeting in Boston were addressed by Harvard University's Eli Goldston Professor of Business Administration and Author Deepak Malhotra on the topic of negotiations. Having participated in deals across many industries and for various purposes, Professor Malhotra has a breadth of experience in the practice of negotiating agreements.
Using several stories from a presidential election, to the NFL and the Cuban Missile crisis, Malhotra shared his thoughts on the mindset and approach to negotiating in all types of situations. He began by iterating that negotiations are about human interaction, and as such the process involves engaging people. The objective is to "engage people in such a way as to reach a better understanding and better agreements, whether or not that agreement can be written down on a piece of paper." The process of such understanding stems from what Malhotra discussed as a needed mindset of negotiators, a learning mindset.
The professor asserted that one must go into a negotiation with the objective to understand and learn as much as you can about all the parties involved. The knowledge should also include who influences, or will be influenced by, the negotiation. There are four aspects of the people to consider: interests, constraints, alternatives, and perspectives. Questions to ask related to the interests of those "across the table" include: What do they care about; Why are they here; How are their interests changing over time; and Why is the deal taking place now versus 6 months ago? The constraints reflect the level of flexibility of those in the negotiation and what is a "deal-breaker" for them. Alternatives center around "What happens to them if there is no deal?," "Are their alternatives strengthening or weakening as time passes?," and "Who else are they talking to?" Their perspective speaks to their mindset, is this a "big deal" for them or not? It also addresses whether they are coming to the negotiation in anger and considering the other party in the deal an opponent or partner. Perspective also notes whether those with whom you are negotiating are thinking strategically or transactionally. Mr. Malhotra stated that by keeping these four considerations in mind "you can hopefully structure a deal that works for you and solves your problem but hopefully respects the needs and the interests of the other party as well." As a negotiator, you therefore cannot be too much in your own head as you approach the negotiation.
While considering your mindset, you also have to think through other aspects of the negotiation, such as the consequences of not reaching a deal. Malhotra suggested that "your greatest source of leverage is your ability to create value for other people." He iterated that by thinking through carefully what the consequences of not reaching a deal are, one can eliminate being consumed by that circumstance and instead focus on what the other party might experience if you walk away. This shifts the emphasis to the value you bring to the table. In addition to your value as a negotiator, one should ponder "writing the other party's victory speech" and thinking through how this person will say yes to what is being proposed and how they will communicate that to their audience (or constituents). Malhotra cautions that negotiators shouldn't "make people choose between what is smart and what makes them look good."
The luncheon keynote concluded with a few additional aspects on the mindset of being a negotiator, one in particular called the "Curse of Knowledge," which asserts that once we know something, we lose the capacity to understand what it must be like not to know it. Professor Malhotra used this concept to highlight the fact that negotiators "must not only prepare your arguments, but also prepare your audience for those arguments." Negotiators must ask: What does the audience need to have experienced, know, lived through, accepted, etc. as a basic premise before they are even open to the merits of the argument that is being shared? Final comments surrounded the changing nature of the negotiation variables, reminding attendees that what is not negotiable today may be tomorrow. Because of this, negotiators should make negotiating the process before negotiating substance a habit. He said that "Process is everything that gets us from where we are today to closing the deal."
By Annemarie Mieke, Edited by Tanya Moore
Negotiating The Impossible
Author: Deepak Malhotra
Publisher: Berrett-Koehler Publishers;
Reprint edition (June 19, 2018)
Negotiating the Impossible—How to break deadlocks and resolve ugly conflicts (without money or muscle) is a compelling read. The author, Dr. Deepak Malhotra, the Harvard Business School professor and negotiation advisor, takes a big picture approach, selecting and comparing historical and modern examples of difficult or seemingly impossible situations to illustrate his three core principles of negotiation. These principles of Framing, Process and Empathy, come from a central premise, stated early on in the book, that "However simple or complex the issues, however well-intentioned or malicious the parties, however familiar or unprecedented the challenges, the question we are always trying to answer in negotiation is this: How might we engage with other human beings in a way that leads to better understandings and agreements?"
Malhotra takes the long view of negotiation, treating it more like a navigation, or finding one's way on a journey than a means to a single endpoint. In fact, he emphasizes, in several parts of the book, how different aspects of the negotiation continue after the agreement; for example, the importance of each party to frame the deal as a win for their side.
The notional awareness of this perspective and principles are most useful to beginners and non-practitioners. In addition, the themes may be a bit repetitive for experienced negotiators, who are aware of the need to avoid tightening knotty situations (deadlocks and ugly conflicts) and who use many of the approaches described in this book. However, we submit that the context and the stories that demonstrate Malhotra's principles are worth a read for even the most seasoned professional. In addition to an aptly curated group of history lessons as examples, its a great reminder of the tools at our disposal, and the benefit of a long view of a deal.