Every negotiation is a mental game for which we must prepare.
To see and seize negotiation opportunities, we should survey our work, our social and our personal lives at least once a week.Every negotiation is a small conflict story. The academics define conflict as a perceived divergence of aspirations in which my desires and yours apparently cannot be met at the same time.STORY: My last case: $250 million antitrust action. I represent one of 15 insurance company defendants charged with conspiring to drive a chain of pain clinics out of business. My client is the last client standing. It is 6 months before trial. Unbknownst to me, the client is in merger talks and cannot afford to lose the case. The client is willing to settle the case for any amount of money. The client hires a trial firm to partner with ours. The two trial teams meet for lunch at the California Club. It is all very convivial. We return to my office where the two lead defenses attorneys meet. I am from the old firm and “Joe” is from the new firm. Joe says to me. “This is how I work. I make all decisions. You take notes. Then you implement the decisions I make. My team does what I tell them to. Your team does what you tell them I tell you to do. MAKE NO MISTAKE, AT THE END OF THE DAY, THIS CLIENT IS MY CLIENT NOT YOURS.” “We should have lunch.”“Why?”“Because I carry half the case in my head and you’ll want to be able to get along with me for ease of access.”What did Joe do wrong? He made assumptions about my INTERESTS – my needs, my desires, my preferences, my fears, my priorities and my preferences.And he made me his enemy.Joe wanted my compliance with his new regime. He assumed I would resist his take-over. To convince me to do something he assumed I didn’t want to do, he used one of the most powerful but also most risky CR tactics: threats.The series of negotiation scenes you’re about to see, Terrence, who owns a talent agency with Ari of Entourage, returns from an 8-year sabbatical with a plan to take the agency back. The first scene is about the mental game.
Surprise: to put your negotiation partner off-balanceFear: the show of which will limit your bargaining effectivenessSupport: “remember who you are”Assertion of authority and ownership: I’m the boss and you’re the employeeDiminishment: my Sloan is always rightTonight is the night I want to meet and woo your primary clientIngratiation: “do an old man a favor” – also referred to as trading power for sympathyGamesmanship: pushing the limits of appropriate behavior in manipulative way: $50,000 for Ari’s daughter is outsized; asserts Terrence’s ability to “buy” Ari, which is what he is poised to do.
As you’ll see in the upcoming scene, Terrence immediately moves in to assert his power and authorityWho are the stakeholders in any negotiation? Is it just Ari and Terrence? Who else would be affected by Terrence’s return?Clients, of course, and Terrence has already made that move.Agents. Terrence immediately assumes control of the agents; he is being ingratiating with themHe becomes the rule enforcer and he shames Ari.All we know of Terrence’s strategy is that he’s pushing Ari aside to take over control.Ari should be devising a long term strategy to counter these moves.Distributive – dividing a fixed pie of benefits: here, the pie looks like control of the agency, but it might also include outright ownership of the agency.Interest-based – what are Terrence’s REAL interests? Is he just bored? Does he want control or something more.Here is where negotiators’ paths diverge – will Ari counter without attempting to learn Terrence’s true motives? Or will he ask “what’s really up Terrence”Rules of influence: Authority, similarity, likeability, reciprocity, commitment and consistency, social proof, scarcity
At this point Ari’s stock is lowHe is negotiating from a position of weaknessHe needs to reassert his powerWhat you’ll see coming up is Ari “rehearsing” with an agent Demanding an apology (though passively)Demanding a meeting on his turbBut settling for neutral territory – which is Terrence’s first concession
We haven’t seen Ari do any preparation whatsoever for this first “at the table” negotiation sessionIt shouldn’t surprise you that Ari will lose this round to Terrence. In the absence of a long-term strategy, research, and a chance to learn the interests of your negotiation partner, your table tactics will not avail you.Ari continues to negotiate from a position of weakness.He is pleading with Terrence to be “fair.”Terrence, in turn, relies upon “rules” and “precedent” to defeat Ari’s requests for concrete assurances that his place at the agency will continue.In this scene, he is continuing to concede power to Terrence to whom he remains a supplicant.
We’re about to see the wages of the insulting first offerTerrence had Ari on the rope and could have offered Ari an extension of his existing contract with little loss to himself – in other words, he could have traded something of low value to him with high value to Ari; could have continued to pursue his goal of taking over control of the agency without having to worry about opposition from AriTerrence has now created a monster
No one is asking either negotiator WHAT HE REALLY WANTS and “the agency” is being treated as a “fixed pie” to distribute between Ari and Terrence.This “fixed pie” mentality limits negotiation opportunities.What are Terrence’s interests here: control, take Ari’s primary source of income – Vincent Chase – away from himWhat are Ari’s interests: to continue in control of the agency and retain his client listThese appear to be aspirations that cannot be simultaneously met.But an agency has many more working parts than this. A little brainstorming: shared control figure head status compensation – minimal guarantee and percent of own book of business titles (more important than we think) the “corner office” leadership of “the troops” leadership in the community of agencies ways in which Terrence’s return can be “spun” in the industry as new muscle in town – wooing clients Terrence’s own history/book of business to increase business of the firmThis is where we’re at: Ari is losing; he needs to re-set the table; he needs to assert his own power; he needs to “frame” the deal favorably to himself; he needs to “anchor” the bargaining range; and, he needs to assert his ability to walk away if Terrence does not comply.Keep these principles in mind as we move to the next scene, in which Ari finally recovers himself and his power “at the table”
What we’re turning to now is the identification of “shadow” stakeholders in Terrence’s ploy to regain the losses he experienced at the table with Ari. De Mesquita operates from a single principle: people will follow their own interests no matter what – in the face of pressure; retaliation, even violence, people will persist in pursuing their own interests. Therefore, the only sensible way to negotiate is to serve their interests at the same time as we are serving our own. Along with party interests, negotiation masters consider constraints operating on the parties. These constraints are usually hidden. who are the hidden stakeholders here? Mrs. Ari Vincent Chase Ari’s invaluable assistant – who by this time has deserted him the demands of the agents Ari wishes to steal from Terrence to populate his own new agency Ari’s inability to fund the new venture
We now see Ari’s “master plan” – a plan Terrence forecast because he brought the “5 families” of the world of talent together to defeat AriAri successfully trumped Terrence’s plan by appealing to group loyalties and making promises that destroyed the value of Terrence’s coalitionAAri is ready to move but lacks one necessary element : moneyHe needs a new stakeholder and that new stakeholder is about to appear. Watch
Ari’s new stakeholders have own interests that must be met and he is unable to meet them The new stakeholder here is sometimes called a “writer cop out” or more formally “deus ex machina” – it is an outside force that solves a seemingly unsolvable problem in an unlikely way. A quick internet search reveals this to be a common writer’s cop out _ if a producer has just lost funding, a millionaire suddenly arrives, announces an interest in their movie, and offers all the finances they need to make it. Here we have a woman who readily reveals her interests – something most male negotiators do not do. Distributive negotiators reveal as little information about themselves as possible while seeking as much information as they can Interest-based negotiators share as much information about their interests, desires, limitations, needs, fears, preferences and priorities as they can in an effort to see whether items of low value to them might be traded for items of low value to the other. Here, Barbara wanted a new venture and she had plenty of money to fund it but no resources to start her own agency. Ari had the resources but now money. The bargaining is over TITLE and PERCENTAGE share in the agency (which translates to power). Ari “wins” by getting 51% and Barbara “wins” by having her name first on the agency name – Miller Gold
To recap: Every negotiation is a conflict story If you bargain too hard, the relationship suffers and the deal is more likely than not to collapse Frame and anchor – as fair, reasonable, in the price range you set, highlights the benefits of the deal and diminishes the down side Fairness – is hard wired into us. Even monkeys rebel if they are not treated fairly in regard to their fellows Interest-based strategies and tactics are most successful Knowing and managing stakeholders is key.END OF MY STORY: Joe and I did go out to dinner. I suggested that we not talk business until desert so we could get to know one another. Joe drank. I did not. A lesson from David Geffen. Although meals release the bio-chemical oxytocin which increases bonding, affection and loyalty, it can be overridden by personality traits that fiercely resist such effects. Food did not help but alcohol did loosen him up a little. I told him. I couldn’t care less about keeping the client. In fact, I’m leaving the firm to join another firm. I do not need to bring the case with me. It’s yours. You can have it and you can have the client.PERIOD.Silence is golden.Now the shoe was on the other foot. Joe needed me and he needed me badly. I had totally thrown him. Surprise and fear, just as Air felt in the first scene we saw today.The solution? I would serve as a consultant at my full fee and continue to use the resources of my old firm to prepare the case for trial and if necessary try it. The firm I was moving to presented a conflict of interest (it had previously represented a defendant who had settled out. So I took an office and paid “rent” and paid hourly for any secretarial or paralegal services I used. I was billing about 200 hours/month x $300 = $60,000/month for six months = $360,000. This is the money I used to leave practice, return to school to earn my LL.M and begin a career in ADR.
Transcript of "Warner Brothers Negotiation Presentation"
Anatomy of a Negotiation<br />Warner Brothers In-house Training<br />April 21, 2010<br />Victoria Pynchon, Esq.<br /><ul><li>ADR Services, Inc.
Bargaining from position of strength<br />Identify stakeholders<br />Gather & gain their loyalty<br />Make a long term plan (strategy)<br />Distributive<br />Interest-based<br />Engage tactics<br />Rules of influence<br />Contentious vs. Collaborative<br />Assess & Capture Field of Play<br />
Reason giving<br />Predict future<br />Demand for Concession<br />Empty Assurances<br />Repeated demand<br />Appeal to “the way we’ve always done things”<br />Appeal to fairness<br />Insulting first offer<br />Ari is So Defeated He Isn’t Even Bargaining<br />
Changing the other guy’s mind<br />Fairness<br />Exchanging power for sympathy<br />Framing the “deal”<br />Anchoring<br />Contentious Distributive Strategy and Tactics<br />
A Man with a Negotiation Strategy and the Tactics to Carry it Out<br />Posturing<br />Framing<br />Anchoring<br />“Countering”<br />Claiming Value<br />Argument<br />Threats<br />Bluffing<br />Re-Anchoring<br />Bargaining<br />Closing<br />
In the foreboding world of rational choice, everyone is a raging Dirt-Bag. Political Scientist Bruce Bueno de Mesquita<br />What are their interests?<br />needs, preferences, desires, fears, risk-courting or risk-averse<br />today and in the future<br />What are their constraints?<br />Hidden stakeholders<br />Precedent<br />Rules<br />Institutional demands<br />Personal ambitions<br />Where are their loyalties?<br />Building and Deploying Coalitions<br />
Building, Using and Breaking Coalitions<br />value of surprise<br />choice of coalition partners<br />name calling<br />threats<br />breaking coalitions<br />appealing to group loyalties<br />bonding<br />re-aligning coalition<br />promises<br />breach of promise<br />threat of litigation<br />stealing the clients<br />
Ready to move<br />Deploy stakeholders<br />Stakeholders’ Interests<br />Appeal to the future<br />Revolt<br />Strategic partners<br />Set up & timing<br />Diagnostic questions<br />Bargaining<br />Closing<br />
Contentious tactics<br />Ingratiation, gamesmanship, shaming, persuasive arguments, promises, threats, force<br />Framing and anchoring<br />Appeal to authority & rules<br />Fairness<br />Interest based tactics<br />Needs, desires, preferences, fears<br />Diagnostic questions<br />Managing stakeholders<br />Set-up and Timing<br />Bargaining<br />Closing<br />Every Negotiation is a Conflict Story and You are its Producer, Writer, Director and Actor<br />