Key Highlights Class #7 (10/28/06)

Paraphrase, Listen and Ask Questions
The groups of three felt like a group negotiation except with a referee - the mediator - in the middle. During the first round, the mediator tried talking to both sides separately regarding the dry cleaning/damages dispute and asked leading questions which suggested certain solutions to the problem. Ultimately the owner of the dry cleaner agreed to pay a small amount and offered free dry cleaning going forward. When I was the mediator in the role-play, the hardest thing to do was to not suggest solutions but simply ask probing questions to both parties. Jumping into the role play was hard for the mediator because the opponents had their own way of framing the disagreement. The mediator had to take control of the situation and find out what was going on in the dispute in an unbiased manner. I found it interesting and a little surprising how little the mediator actually knows about the situation before starting the meeting. In addition to being neutral, the Mediator is responsible for setting the Ground Rules in terms of not interrupting and the goals of the meeting (i.e, to find an agreement). The Mediator’s biggest challenge was in asking the right questions and trying to discover as much information as possible. By asking each party for their point of view and practicing active listening by summarizing both sides, the Mediator should focus on the important facts to facilitate an agreement.

Techniques
Because the opponents were adversarial during the role plan, the Mediator decided to pull us separately out of the room for a private one on one conversation pretty soon after the conversation began. Overall, the Mediator should ask each party for their point of view and practice active listening by summarizing both sides of the story. As a Mediator, it is most important not to take sides and use non-threatening language to encourage active participation by both parties.

Key Highlights Class #6 (10/21/06)

Areas of Common Interests are Challenging to Discover in Multiple Groups Cases: The Deeport Case (I was fighting for Environmental Interests)

The Deeport case started out with the Company man posturing for the dominant position and provide the first offer - the offer was Medium Industry Mix which was unacceptable from my point of view as the environmentalist; Maintain and Repair Ecological Impact which also not my first choice but I could live with, No Union Preference which was not relevant in my eyes nor were Federal Loan and No compensation. Having put this offer on the table was a chance to see where the other parties stood with regard to their own positions and right away everyone voted No to this particular proposal. When the first offer made by the company failed, I attempted to get the Union and the Governor into an Alliance along side with me thinking they could help by voting to improve the environment. After discussing, we collectively agreed on only one area where we could all to accept 2:1 Union quotas. It was challenging to find common ground with varied interests such as the Company, the Governor and the Union and in the end the conversation did not help my cause. We successfully whittled the list of demands within our little alliance but hit a road block when the Governor was unwilling to accept “Improve Ecological Impact.” At that point, I decided we would not find a common area of interest and moved onto working with the Other Ports. My rationale was that if Deeport could get a bigger loan than we could pay out a bigger sum to the Other Ports and by agreeing to voting for that, I figured the Other Ports would vote to improve the Environment. Asking questions was the key to getting the conversation moving and trying to move the conversation towards solving the problem so there would not be an impasse.
After much discussion among mini-alliances and individuals posturing for power, we collective came to a satisfactory agreement of Medium Industry Mix, Improve the Ecological Impact, Union quota if 2:1 and a $2 billion loan and Post settlement – making adjustments after the agreement. By asking lots of probing questions and creating Alliances, the two weakest parties (Other Ports and Environmental) appeared to have more leverage and power with their vote. The tone of the negotiation was tense initially but turned friendly when the Governor tried to include everyone in the decisions. It was surprising how long it took to figure out how to get the Deeport Deal done.

Key Highlights Class #5 (10/14/06)

Skills in Dealing with Ambiguity

During the Glazer Case (Local 55) I played the role of the company, and dealing with the Union during wage negotiations and related issues. Although, we wrote out a plan ahead of time, we spent most of the first hour defining the issues and the various viewpoints. There were trust issues and highly emotional issues such as wages (or lack thereof). It was hard to find common areas of interest at first because the company is very concerned with keeping an untarnished image whereas the workers only cared about making more money. The case did not describe how workers felt with regard to felt about their work situation and level of supervision. We were able to reach an agreement because we had a lot of time discuss the issues on the table. The Company was willing to give the workers a raise in return for a no-strike pledge and also changed the pay structure so that it was tied to productivity. This was acceptable for the company because it meant the increased productivity would offset much of the productivity costs. The skills that were developed in dealing with ambiguity were to ask a lot of questions and prepare a plan so that it would be easy to feel satisfied with an agreement without giving in. It was also important to talk about the long-term goals of the company (i.e., whether to build a new plant in or outside of Medina and share the productivity cost increase issues).

Successful Group Negotiation Techniques
In planning for the actual negotiation, there were three members of management (Tory, Christine, myself) and we each specialized in an area of the agreement (Worker Autonomy, Escalator Clause, Group Incentive System, Location of the New Plant). This worked well because we could learn from one another. Teamwork was critical and we actually had group meetings to show autonomy along the way as each part of the agreement was negotiated and decided upon. This strategy gave everyone an opportunity to run part of the meeting. Finally, when we did come to an impasse in discussing the issues with the irate Union members, we collectively agreed to table the issue temporarily and move onto the next point of contention in order to ensure good progress.
Using Interesting Tactics to Gain Leverage

The Union Team threatened illuminating “bad press” towards the company, to persuade the Company to give in to the Union Demands. This leverage came into play during round #2 while we were renegotiating regarding wages. We had to start over only two years into the seven year contract, because the industry dramatically changed and the Union workers were irate. We were unable to reach an agreement. The Local Union dug in their heels as did the management mostly because we knew they did not have any leverage and we would be able to dig negotiate. The reason we could not agree is because the workers had no leverage because market workers were willing to step in and do the same job when they were not represented.

Key Highlights Class #4 (10/7/06)

Key Highlights Class #4 (10/7/06)

Framing Encounters– Arguing Different Viewpoints (Wright Airplane Case)

We started out with two groups of three negotiating for the best price for a damaged airplane. I was in the sellers group and we had a couple key things going in our favor in selling the damaged airplane. First, we came into the negotiations from a personal standpoint with mortgage, harmonious home, etc. in mind rather than trying to make a profit on the plane. The buyers had a little more at stake coming into the negotiations in that their livelihood could depend on the deal because the buyers were embarking on a new business venture and needed to make money. Similar to the Sally Soprano Case, we ultimately devised a way to share the risk by swapping out the engine and putting in a damaged engine to sell to someone else. The buyers also had to agree to a very short time frame and well as providing services and help scrapping the plane. The concessions each side had to make seemed minimal and both sides left happy, for the most part.
Challenges in Group Negotiations
In the group negotiations, I felt uncomfortable sharing a lot of information after the buyers made an extremely low-ball offer to buy the plane. It was not up to me since we had a spokesperson (Anne) who handled most of the negotiations. I did not want to share information right off the bat because I was trying to get a good deal and by telling the opponent how much we needed to sell the plane, that would cost leverage power in the negotiations. I found that negotiating with a group is challenging. In our case, one person acted as the spokesperson.. This was effective in this case because we got the cash and the time frame worked out after the bluffing failed. The negotiation probably would not have come to an agreement had it been only one person negotiated with another.
Negotiations and Common Interests - Stay Flexible

In our case, we (the sellers) tried to bluff by asking for a very high price for the damaged plane and the buyers did not believe that the plane was worth that amount because it was not believable. They were not buying into the manner in which the value was explained to back up the offer prices and so in order to continue, we ended up throwing other things into the negotiations. For example, since the sellers owned a newspaper, we offered free marketing for their business hence turning the negotiations integrative. It was challenging to figure out what the other side needs and in this case, the buyer’s needs were dramatically different than the sellers so it was hard to find common areas of benefit besides money making the negotiations distributive. The buyer’s interests were to get their business up and running and the sellers wanted to sell the plane for personal reasons. An important lesson learned in this negotiation was to stay open and try to shift distributive negotiations to integrative. Acting stubborn or bluffing makes it more difficult to find common areas of interest. It is important to remain flexible. Upon coming to an agreement, we changed the negotiations and used unique talents on each side as a bargaining point. The buyers came up with a complicated algorithm to help sell the plane by swapping engines.

Strategies for Future Group Negotiations
I think a good strategy in group negotiations is to convince the other side that your frame is the best way and bring the others in the group on board. Although negotiating in a group can be a bit tricky, I think the trade-off is that you may have more leverage. Trusting and sharing information we were able to cull opportunities for joint gain.

Key Highlights Class #3 (9/30/06)

Key Highlights Class #3 - 9/30/06

Role Play Reflection – Sally Soprano (I was the Agent)
In reflecting on the negotiations that I embarked in during the role-play of the Sally Soprano case, I went into it with the background information that Sally Soprano was the desperate one based on the fact that she was. I was surprised during the course of the negotiations with how Mike (Higgins), as the role of Lyric Opera’s business manager, was even-keeled and rational and willing to make compromises.

He seemed willing to make compromises from the very beginning so I pushed for more than I thought I could get. The maximum compensation I got Soprano was $78,500 (28,500 for this lead role and if 80% ticket sales a guaranteed role at $30,000 for the next one). I do not think there was any money left on the table. I accomplished this by trying to talk to the Lyric Opera Business Manager rationally and knew they were in a bind after finding out that their lead was ill and Mike basically told me how much he was going to pay her. He also said that the Opera was very committed to making a deal. My opponent made an excellent point when he said I showed no empathy.

Since I was playing the role of a “Agent”, I thought it was important to be as cut throat as possible. With this mindset, I felt I was more focused on uncovering his BATNA and showing less empathy/trust as I have in other role-play negotiation. Because of past lessons I have learned, my number #1 goal was to figuring out his BATNA and discover the ZOPA. In the end, there was a small ZOPA and I thought it was hard to agree upon a salary because the Lyric Opera was a non-profit company. The best was to create a deal was to increase the stakes and share the risk (both the Lyric Opera and Sally Soprano.

In the course of this role-play, I learned that in order to survive you have to “frame desperation” as something other than desperation. Survival is almost impossible without framing a disadvantage as an advantage. For example, Sally Soprano was a “has been” in the Opera world yet, I framed her as being “experienced” in our negotiations.

Sharing Risk
In looking at different sides, seeking each other’s interests may help come to an agreement. In looking at this case, the Lyric Opera felt they were better off in paying a low base salary and sharing possible profits with her based on ticket sales. This is beneficial for both sides because the Lyric Opera’s interests were to sell tickets and Sally Soprano just wanted to make money. If she was a hit, than they would both make money in this arrangement and have successfully shared the risk.
In debriefing with Mike, he seemed to think I was a little hard on him during the negotiation process and was digging in making it difficult to get anything accomplished. I took that as a compliment since my prior role plays, I felt like I got walked all over.

Key Highlights Class #2 (9/23/06)

Class # 2 Key Highlights 9/23/06

First Role Play Negotiation:

Planning For the Law Books Negotiation

As the buyer if the books for the first one-one role play, I read the case, put together a well-thought plan and did not stick to it. I believe the flow of the conversation and the first few minutes of questions and answers was the decisive factor in abandoning the original plan. We had a nice conversation and we were able to enter into the negotiation openly and honestly thus shifting perceptions to integrative vs. distributive. Since I was the buyer, I felt, immediately, at a disadvantage because the purchasing law firm needed the books more than the selling law firm needed the money. Throughout the negotiations, Obei used an effective technique of being quiet and letting me talk. At times, I got myself into a corner and was not effectively negotiating a good deal.

After debriefing with Obei, it turned out that neither of us stuck to our original Negotiation plan. In addition, I paid too much and Obei had set a much lower walkawya than I thought. The lesson learned was that it was clear that we both wanted to implement mutual gain by throwing other things into the pot such as office space in DC and client sharing. I went into it not thinking the little things mattered. For example, I was not concerned about shipping and handling mattered but Obei threw those in unexpectedly so I accepted it as part of the deal. I guess in this small concession that he made, I did get a good deal.

If I were to do this again, I would have negotiated a better deal (i.e., paid less for the books) by talking less. Although I felt like both sides were able to get some good advantages, I left money on the table. I should have asked additional probing questions and not have been afraid to take a coldhearted look at whether this deal makes sense money-wise for the overall firm.

Experiencing Intimidation
In going through the “Law Books” role-play, I discovered that I was intimidated by low-ball offers. I found it was difficult to recover and get back to negotiating a good deal. The reason I was intimidated is that I created the foundation for trust in the beginning and felt like I did not want to low-ball (gouge) because of the relationship. I think if I had kept my BATNA in mind than I would not have been nervous about responding to the low-ball offer with a high counter-offer. Somehow, I felt forced into doing business with him because of building trust and not doing a deal was not an option.

In summary, in shifting negotiations from distributive to integrative, you need to build trust and be creative but should not let one leave money on the table. Also, setting ambitious targets would help identify eachother’s walkaway as well as aid in discovering the ZOPA. Also important to keep in mind discovering your opponent’s BATNA (and always keep your own BATNA in mind as well).

Key Highlights Class # 1 (9/9/06)

Class journal....


The first day we started out in Negotiations class talking about a case study involving a non-profit company thinking about selling (Elm Tree) to a big real estate developer in Somerville. My immediate thought was that Elm Tree had no chance of coming away from the deal whole because they were up against savvy negotiators/business people. It was my takeaway from class that in every negotiation we should think about profit and the viewpoint of the other side but at the same time Maximize profit or minimize the other person’s profit

I was struck by our conversation pertaining to Integrative negotiations. The idea here is that we want the other person to feel as though they have won and more important, that you feel as though you have won. Doing well for yourself is always the name of the game in negotiations but it is also important to care about the relationship.

Integrative Negotiations
I hope to use this in most of our upcoming role plays. In reflecting upon my own personal preferences I much prefer integrative relationships but I also feel like I can be taken advantage of. What I like about it is that you can think outside of the box and be creative with what is considered valuable. I like the idea that one is not stuck with a certain pre-determined solution.

Distributive Negotiations
The idea of somebody losing out on a deal just does not sit well with me, Win/Lose: Want to do well for ourselves but we do not care about the other person. Person who makes the most profit. Person tends to be mostly closed. Withhold information. The benefit is that we won’t be taken advantage. Fail to identify creative solutions.

Lessons Learned:

World runs on Relationships. This seems true in many areas not just negotiations – work, social life, family

Key Lessons Learned: Cooperate or compete - working with people and keeping a positive attitude is critical

Pressure and reciprocity...huge concessions vs. small concessions.

Rule of Reciprocity – etiquette norms violated if one person offers a fair price and the other person high-balls.....huge psychological impact

After setting an anchor and going back and forth when the gaps between bids get smaller, it could mean that the other person is closer to their walkaway. If this is the case, tread lightly and take another coldhearted look at situation and decide on your walkaway. Am I better off compared to the alternative?