By Bhaskar Pant

People from different parts of the world often bring very different expectations to the bargaining table.

Cross-cultural negotiations hinge more on differing views of time, communication, and trust than on strategy. Here, Bhaskar Pant compares and contrasts high-context, relationship-driven cultures with those that are low-context and outcome-driven, and considers how to approach negotiations that aim to span the divide between them.

I’ve spent my career working and negotiating across cultures—in media and now in education—and I’ve learned that timelines don’t carry the same weight in every room. Today’s trade negotiations show it clearly: one side pushes hard deadlines and penalties, while the other waits for trust to form. I first learned that lesson decades ago.

When I was the president of Turner Broadcasting in South Asia in the 1990s, the company scheduled talks for a partnership that would bring CNN’s international coverage and domestic news in India to a single television channel.

Executives flew in from the network’s headquarters in Atlanta, and from the company’s Asia-Pacific headquarters in Hong Kong. But when they arrived for their meetings in India, they discovered that their counterparts had very different ideas about how this negotiation should go.

The Turner executives brought three lawyers with them, hoping to pin down the deal as soon as possible so they could announce what promised to be a groundbreaking partnership in a press release; for them, the ticking clock was the most important thing. But the Indian officials, who hadn’t brought a single lawyer into the room with them, weren’t in any hurry. This would have been the first time a foreign partner had ever had an ownership stake in a local news channel, and the officials felt they were taking a significant risk. For them, the important thing was not to hammer out a deal quickly, but rather to get to know their prospective partners and establish a solid, trustworthy relationship first.

In the end, the partnership never materialized—not because the opportunity wasn’t there, but because the two sides couldn’t bridge their very different cultural approaches to negotiation and results.

To successfully negotiate across cultures, each side must understand the other’s different conceptions of communication, time, and negotiation itself.

Although this happened over 30 years ago, cross-cultural negotiation is perhaps more relevant than ever. For the past several months, international trade policy has dominated the news, with the U.S. repeatedly threatening consequences for missing hard deadlines. But, as we can see from these ongoing trade talks—and from other international policy decisions and corporate negotiations—various cultures tend to look at deadlines and other negotiation elements very differently from one another.

To successfully negotiate across cultures, each side must understand the other’s different conceptions of communication, time, and negotiation itself.

High-Context vs. Low-Context Cultures

When we talk about the world, we often divide it into Eastern and Western cultures, or sometimes “developed” and “developing” countries. But, for the purposes of negotiation, there is a much more helpful lens: high-context and low-context cultures.

In a high-context culture, much of the meaning comes from implicit clues and understanding. Nonverbal signals, social bonds, and established trust can carry as much weight as what is spoken aloud. In Japan, for example, a direct “no” is often seen as impolite, or even confrontational, and so speakers use softer phrasing (such as “very difficult”), pauses, or facial gestures, and it is up to the negotiator to interpret the refusal from that context.

In low-context cultures, by contrast, clarity comes from making things explicit. People tend to prioritize direct speech, clear rules, and detailed agreements, which, in their view, minimizes the chance of misinterpretation and ensures accountability across participants.

High-context cultures are more prevalent in Latin America, the Middle East, and much of Asia, but geography isn’t everything here. Within Europe, for example, Germany and the Scandinavian countries are generally considered low-context cultures, while Italy and France are much higher-context cultures where communication and negotiation styles are markedly different from their northern counterparts. Even within the U.S. (often viewed as low-context overall), people notice contrasts. It is sometimes said that Midwesterners are “nice but not kind” and Northeasterners are “kind but not nice.” That’s essentially just a casual, joking manner of pointing to higher- and lower-context tendencies.

The differences go beyond conversation style, however. High-context cultures often emphasize collective identity and continuity of relationships, whereas low-context cultures often highlight individual responsibility and task efficiency.

While both perspectives bring strengths, when these different priorities meet, even something as simple as a deadline can become a fault line. To see why, it helps to look at how different cultures conceive of time.

Different Views of Time

Time is such a fundamental part of our lives that, for many of us, it seems unimaginable that anyone might view it differently from the way we see it. But consider this: when you picture yourself moving through time, which way do you see yourself facing? If you’re European or American, you likely answered that you see yourself facing toward the future. However, in some cultures, it is the past that is conceptualized as “in front” of a person (since it is already known), while the mysterious future is pictured as something behind us.

Edward T. Hall, the American anthropologist who first introduced the concepts of high-context and low-context cultures in the late 1950s, also noted that many high-context cultures tend to have a more fluid conception of time. In these cultures, time is often seen as something flexible and elastic; meetings might start late and then stretch on as long as needed to push a project forward, with minimum regard to clock time. It’s worth noting that many of these cultures, especially those in Asia, are thousands of years old, which may contribute to the sense that time is abundant, if not infinite. For people from cultures that measure time in millennia, the prospect of shaving three or four days off an important negotiation process can seem relatively trivial.

Low-context cultures, by contrast, think of time as linear and limited, and people from these cultures tend to prioritize punctuality and efficiency. Consider something as simple as start time. For people from low-context cultures, 3 p.m. means 3 p.m., and showing up even a few minutes late may seem rude, unprofessional, and perhaps even disrespectful. In high-context cultures, however, time is often treated more flexibly—less a fixed point and more as a guideline—because relationships or unfolding circumstances may take precedence over the clock. Here again, these cultural differences can easily cause misunderstandings and rocky starts.

It’s possible to get everyone on the same page, but only if each side is empathetic and considers the other’s point of view. People from high-context cultures may not always value deadlines for their own sake (especially if they view them as more arbitrary), but they are much more likely to take deadlines seriously if they see them as important for maintaining long-term relationships. And while people from low-context cultures do tend to value deadlines, they are often willing to be flexible if a logical reason for an extension is communicated in advance.

From Win-Lose to Win-Win

In lower-context cultures like large parts of the U.S. and Europe, negotiation is often framed in terms of clearly defined outcomes where the emphasis is more on “task” rather than “relationship”. This approach aims at measurable results and clear accountability, but it can also project an adversarial posture to a side that is driven more by achieving a harmonious relationship.

Think of a merger negotiation. One company aims to achieve greater market share and enhanced revenues through a fast-paced merger, and the other is looking to build cultural bridges first to achieve a successful merger in the long run. In relationship-oriented approaches, negotiation is viewed as a way to build trust and strengthen ties, with the details of the agreement fitting into that broader purpose. For instance, what may feel slow or drawn-out to an American or German counterpart can appear deliberate, careful, and responsible to a Japanese negotiator.

Both approaches have value. Outcome-driven styles offer clarity and efficiency; relationship-driven styles foster longevity and resilience. The challenge—and the opportunity—comes when negotiators recognize these differences and work toward agreements that deliver both measurable results and durable partnerships.

Lessons That Last

Business tips are often framed in terms of fads. When I bring up high- and low-context cultures, people want to know if the research was published in the past year or two. When I tell them the concept dates to a book published in 1959, they’re sometimes skeptical of such an “old” finding—even though the concept is new to them and largely aligns with their lived experience.

While business cycles are short, culture is slow to move; its movement is generally measured in decade terms, contrasted with business results that are measured quarterly. That’s good news for people who seriously want to learn about how culture affects complex interpersonal business processes like negotiation. If you take a course on how to use AI tools, some of the tools might be outdated in six months or less, but any time you spend learning about how to communicate across cultures will likely pay off for the rest of your career.

A century ago, international air travel made it possible for more government and business leaders from different countries to communicate with one another face-to-face. Over the past several years, the rise of internet-based communication tools like Zoom has meant that it’s even easier to get people from all over the world in the same “place.” In fact, it is likely that there are more people negotiating across cultures than at any other point in history.

Those negotiations are more likely to be successful when both sides take the time to understand the cultural expectations of the party across the table.

About the Author

Bhaskar Pant is the Executive Director of MIT Professional Education, where he oversees a large portfolio of MIT-developed education programs designed for working professionals around the world. He is also a globally experienced lecturer in intercultural communication for professionals. For over two decades, he has taught courses and seminars on intercultural communication that include engineering students and staff at MIT, as well as graduate management students and professionals attending Harvard University’s Extension School. Bhaskar Pant is the lead instructor of the MIT Professional Education online course “Cultural Awareness for Global Business”. He previously served in senior management positions globally for media, media technology, and education organizations such as Time Warner /CNN (in India), Tektronix (in the Netherlands), Sony Corporation (in Japan and the US), and the Educational Testing Service (in Singapore).

The post Negotiating Across Cultures: How Global Differences Shape Expectations at the Bargaining Table appeared first on The European Business Review.

By Paul Grant

Effective negotiation is about both tactical and people skills. This article from Paul Grant explores how personality styles shape negotiation dynamics and introduces practical tools such as the E-Colours framework and Personal Intervention. By understanding behavioural tendencies and managing your own reactions, you can adapt with intention, build stronger connections, and secure more successful outcomes.

Negotiation is more than just strategy and persuasion – it’s fundamentally about people. And people are different. They communicate differently, value different things, and respond to different approaches. To become a truly effective negotiator, you must learn to navigate these personality differences with intention. Tools such as the E-Colours framework and Personal Intervention offer powerful ways to do just that. 

Understanding the Role of Personality in Negotiations

At the core of every negotiation are human behaviours and preferences. Some people are driven by results, others by relationships. Some want all the facts before deciding, while others trust their gut. If you approach every negotiation with a one-size-fits-all style, you risk losing connection, trust, and ultimately, the deal.

This is where understanding personality styles becomes a game-changer. The E-Colours framework breaks down personality into four main styles, represented by different E-Colours:

• Red (Doer) – Results-oriented, action-driven, decisive
• Yellow (Socialiser) – Social, enthusiastic, persuasive
• Green (Thinker) – Analytical, detailed, cautious
• Blue (Relator) – Empathetic, thoughtful, supportive

We have all four personality styles within us, just in different percentages. Most people are a combination of two dominant E-Colours styles that show their natural tendencies – strengths and potential limiters. Recognising these E-Colours in yourself – and in others – can help you tailor your negotiation approach to be more effective.

How to Negotiate with Each E-Colour Style

1. Red (Doer – Direct, Results-Focused)

What They Value: Efficiency, action, control, outcomes

How to Negotiate with Them:

• Be direct and to the point – avoid small talk
• Focus on results and benefits
• Don’t waste their time with excessive detail
• Be confident and decisive 

Watch Out: Red (Doer) can appear aggressive or impatient. Stay calm and stand your ground respectfully.

2. Yellow (Socialiser – Expressive, Optimistic)

What They Value: Recognition, relationships, excitement

How to Negotiate with Them:

• Build rapport and connect on a personal level
• Use stories and big-picture thinking
• Keep the tone positive and dynamic
• Be open to brainstorming or creative ideas 

Watch Out: The Yellow (Socialiser) may lose focus or avoid conflict. Keep the conversation structured without dampening their enthusiasm.

3. Green (Thinker – Analytical, Precise)

What They Value: Logic, accuracy, data, preparation

How to Negotiate with Them:

• Come prepared with facts and figures
• Give them time to process and evaluate
• Be patient – don’t pressure for quick decisions
• Clearly outline risks and benefits 

Watch Out: The Green (Thinker) may appear sceptical or overly cautious. Respect their need for certainty.

4. Blue (Relator – Supportive, Empathetic) 

What They Value: Harmony, trust, collaboration

How to Negotiate with Them:

• Be warm, respectful, and sincere
• Emphasise win-win solutions
• Avoid high-pressure tactics
• Take time to listen and address concerns 

Watch Out: The Blue (Relator) may hesitate to express disagreement. Create a safe space for them to share openly.

The Power of Personal Intervention in Negotiation

Even with personality knowledge, negotiations can still trigger emotional reactions -frustration, impatience, defensiveness. That’s where Personal Intervention comes in. 

Personal Intervention is the ability to pause and reflect before making an intentional response instead of a natural reaction. It allows you to interrupt your automatic behaviours – especially under stress – and choose a more effective response. 

For Example:

• A Red (Doer) negotiator may feel the urge to dominate a slow-moving conversation. A moment of personal intervention can help them pause, allow space, and listen more effectively.
• A Green (Thinker) negotiator might get lost in analysis. With intervention, they can recognize when to let go of perfection and move toward a decision.
• A Blue (Relator) negotiator may shy away from expressing a firm position. Through personal intervention, they can summon the courage to assert their needs.
• A Yellow (Socialiser) negotiator might speak impulsively or gloss over details. By pausing, they can consider whether they’re truly addressing the other party’s priorities.

By using Personal Intervention, you stay aligned with your negotiation goals while adapting your approach to suit the personality on the other side of the table.

Putting It All Together

Great negotiators don’t just wing it – they prepare, observe, and adapt. Using the E-Colours framework, you can quickly identify key personality tendencies and allow you to adapt your approach. With Personal Intervention, you can overcome your own reactive habits and stay intentional in every moment.

Here are a few final tips:

• Know yourself: Self-awareness is the foundation of adaptability.
• Look for cues: Speech patterns, body language, and decision-making styles often reveal a person’s dominant personality style.
• Adapt but stay authentic: Flex your style without pretending to be someone you’re not.
• Practice Intervention: The more you pause, the more control you gain over the outcome.

About the Author

Paul Grant is a serial entrepreneur, a leading expert on personality diversity and co-author of Personalities Remixed.

The post How to Negotiate with Different Personality Styles appeared first on The European Business Review.

By Prof. Guido Stein, Salva Badillo and Lucía Zelaya

Conflict negotiation saves lives and businesses. In crises, your most powerful weapon isn’t force. Instead, it’s mastering the psychological strategies that unlock cooperation and strike successful deals.

Negotiation in high-stakes situations—such as kidnappings or hostage crises—has evolved significantly. What was once a confrontation driven by physical force has shifted to a terrain where language, psychology, and strategy have emerged as the most powerful tools. In this delicate balance of wills, the motto of the NYPD’s¹ Crisis Negotiation Unit rings clear: Pax per conloquium (“Resolution through dialogue”).

This transformation did not happen by chance, but is the result of an increasingly profound understanding of human nature and how people react under pressure. The approach adopted in police negotiation has extended beyond law enforcement, influencing fields as varied as business and international diplomacy. And while these arenas may appear different on the surface, they share a critical common denominator: the constant presence of risk and urgency.

At such times, negotiation becomes a struggle not only between interests but also between emotions that threaten to overflow, regardless of the context. The same obstacles emerge time and again, allowing us to identify a recurring pattern in situations of conflict. The first challenge lies in deciphering the other person, cutting through the layers of their discourse to uncover their true motivations. Drawing on the principles of police intelligence, this article explores strategies aimed at surfacing what is implicit, anticipating what remains unsaid, and transforming uncertainty into strategic insight.

Teachings from Neuroscience

Neuroscience research has shown that exposure to opposing viewpoints activates the same areas of the brain as exposure to physical danger.² This biological response reduces our ability to listen, creating a barrier that hinders understanding. The negotiator often perceives the counterpart as irrational—even criminal—and unworthy of time, compassion, or any gesture of vulnerability.

In this context, a negotiator in extremis tends to adopt an individualistic stance. Their perception hardens into an instinctive resistance to embracing the other party’s perspective, reinforcing an attitude of rejection and entrenching a unilateral position, ultimately hindering the ability to understand alternative points of view. When this barrier is not broken down, negotiations devolve into a battle of wills: a clash of positions in which each side seeks to impose its own terms, leaving no room for compromise.

The danger of remaining trapped in our own perception is that it prevents us from accurately interpreting what we see or hear. Perspective then emerges as a conscious effort to see the situation from someone else’s point of view. This ability—known as external awareness or empathy—enables us to recognize, understand, and validate another person’s emotion (em-pathos). In essence, this means transforming negotiation into a space of shared vulnerability. While this shared vulnerability does not excuse criminal behavior, it allows us to see the counterpart as a person shaped by a particular environment.

Hostile or irrational behavior is often rooted in legitimate concerns, and only by understanding the factors driving conflict escalation can we broaden the range of strategies we employ to more effectively address the underlying issues. The need to understand opposing points of view is not an act of compassion, nor does it arise from an intention or interest in supporting the counterpart’s position; rather, it is a pragmatic strategy aimed at achieving better outcomes.

This idea aligns with philosophical views that emphasize human fallibility, which can be used to argue in favor of forbearance or understanding in complex situations. For example, in regions with limited resources and ongoing conflicts, people may resort to illicit actions as a means of survival. Recognizing human imperfections in this context can help us make sense of actions taken under duress or out of necessity.

Action-oriented listening

The empathic perspective recognizes that, from the other party’s point of view, their feelings are valid. However, accepting this premise is only the first step toward the ultimate goal: eliciting valuable information that can lead to a mutually beneficial agreement. In negotiations—whether in business, diplomatic, or law enforcement settings—the key lies in the ability to elicit disclosure without the other party perceiving the exchange as coercive or confrontational.

In negotiations—whether in business, diplomatic, or law enforcement settings—the key lies in the ability to elicit disclosure without the other party perceiving the exchange as coercive or confrontational.

Within this framework, listening can take two forms: negative and positive. The former stems from an impulsive desire to reduce uncertainty, seeking quick answers without thoughtfully processing the information we receive. The second, by contrast, is grounded in a genuine interest in understanding and exploring the other person’s reality. Positive listening not only promotes learning but also fosters an open mindset that is conducive to negotiation and the transformation of complex situations.

What is the real challenge to achieving positive listening? Overcoming mental distraction. On average, our minds wander 24% of the time during a conversation, which undermines both understanding and connection between speakers. In negotiation, maintaining attention is a constant challenge. In addition to focusing on the information they are receiving, the most effective negotiators actively work to make the interaction interesting for both themselves and the other person.

Within this framework of listening and action, the following tactical questioning strategies allow us to gather information subtly yet effectively—without triggering resistance:

• Projection questions. These prompt the other party to engage and share information, whether openly or in a more guarded manner.

Example: “If I told you my decision-maker was open to discussing delivery timelines, would you hear me out?”

• Confirmation questions. These check whether a key point has been accurately understood.

Example: “So, you want to make sure the police don’t get involved, right?”

• Controlled diversion questions. These redirect the hostage taker’s attention to prevent escalation or shift their focus.

Example: “When you woke up this morning, did you imagine you might end up here?”

• Collaborative questions. These encourage the hostage taker to participate in finding a solution.

Example: “How do you think I could do that without my boss replacing me?”

• Suggestive questions. These offer a solution without imposing it, prompting the counterpart to adopt it as their own.

Example: “If I brought in someone you trust to speak with you right now, would you be willing to talk?”

• Indirect questions. These allow the speaker to reframe or clarify a thought.

Example: “If I’ve understood you correctly, you’re saying that…” 

• Reframing questions. These help steer the conversation back to a relevant point when the speaker veers off topic.

Example: “What were we talking about?”

• Clarification questions. These aim to confirm a point or decision to ensure mutual understanding.

Example: “Do we agree on that?”

Elicitation techniques complement tactical questioning by helping confirm assumptions, relying on trust and the strategic exploitation of psychological biases.

• Presumptive statements. These are assertions delivered with such confidence that they lead the interlocutor to believe the questioner already knows the truth, prompting them to confirm or correct the stated information. This technique draws on a deep psychological bias: the impulse to correct inaccurate statements.

Example: Asking “What medication have you taken?” instead of “Have you taken any medication?” increases the likelihood of receiving a truthful answer, as the interlocutor assumes the truth is already known and only needs to be clarified.

• Feigned disbelief. This strategy encourages the interlocutor to offer additional details to support a statement, often producing a wealth of valuable information.

Example: “You only have two hostages? That’s hard to believe—reports suggest more movement.”

• Erroneous attribution. This technique involves attributing unusual skills or knowledge to the other person, prompting them to correct or qualify the information, often revealing details that would otherwise remain hidden.

Example: “Someone with your experience surely had help planning this.”

• Reference to reported facts. This technique takes advantage of the human tendency to correct inaccurate information. It involves presenting partial data or suspicions as if they were established facts in order to provoke a clarifying response.

Example: “I read online that you’re having issues with the union.” Faced with such statements, the person being questioned often feels compelled to clarify, correct, or expand on the information, sometimes revealing details the questioner didn’t previously know.

• False alignment. This technique involves making the hostage taker feel that the negotiator is on their side or that they share a common enemy.

Example: “What we want is to make sure no one else complicates things, especially the press or certain officers.”

From Profiling to Persuasion

The goal of profiling, therefore, is to uncover the motivations behind the actions taken and to identify the most effective way to influence the individual’s behavior. This is a cognitive discipline that goes beyond simple data gathering, delving into the deeper recesses of the human psyche. All human behavior, to a greater or lesser extent, is driven by the need to satisfy fundamental needs, which can be summarized by the acronym VACA: validation, acceptance, control, and authority. Identifying which of these dimensions predominates in a given situation enables us to tailor communication precisely, paving the way for mutual understanding.

Throughout history, intelligence agencies have developed methods to uncover human motivations. One of the earliest models, developed by the British Secret Intelligence Service (MI6), is known as MICE and identifies four key motivators: money, ideology, coercion, and ego. The CIA later reformulated the framework under the acronym RICE: reward, ideology, coercion, and ego.³  The order of importance and effectiveness of the key motivators is: ideology, ego, reward, and coercion.

• Ideology. Among all the forces that drive human behavior, ideology is perhaps the most profound and deeply rooted. The beliefs, values, and principles that define a person can lead them to act with unwavering determination. While other forms of persuasion may result in only temporary change, ideology shapes and transforms in enduring ways. Understanding an individual’s convictions is essential to aligning their goals with those of the negotiator.
• Ego. In extreme situations—such as negotiating with a hostage taker or hostile actor—appealing to their ego by acknowledging their experience or reinforcing their sense of competence often fosters a more cooperative attitude. Self-discrepancy theory posits that individuals hold three representations of the self: the actual self, the ideal self (who they want to be), and the ought self (who they believe they should be). Appealing to someone’s ego by offering help—even if only so they perceive it that way—in reaching their ideal self can be a powerful motivational tactic.
• Reward. Throughout history, incentives have played a fundamental role in shaping human behavior, guiding people toward certain actions by aligning their individual desires with expected outcomes.
  

Loss aversion is a cognitive bias that explains how people tend to fear loss more than they value gain.

• Coercion. Although effective in certain scenarios, coercion is a double-edged sword. Excessive pressure can trigger a phenomenon known as psychological reactance—the instinctive drive to reassert autonomy when one’s personal freedom is perceived to be under threat. However, coercion is not always overt. Subtle strategies, say, creating a sense of scarcity or urgency around a limited or time-sensitive offer, can prompt action without provoking overt resistance.

When we talk about ego, we are referring to how a person wants to be seen. If we can understand how a hostile actor wants to be perceived, we can apply psychological strategies to influence their behavior and willingness to engage in dialogue. One such strategy is to leverage cognitive dissonance—the discomfort a person experiences when their actions conflict with their beliefs. Suppose someone sees themselves as fair but is acting cruelly; highlighting that inconsistency may prompt them to reevaluate their position. Another tactic involves elevating or reducing status. Acknowledging someone’s expertise or leadership can predispose them to act in ways consistent with that positive image, while suggesting a lack of control may cause them to reassert themselves with a more receptive attitude.

Likewise, priming is a way to activate certain ideas or emotions before an interaction, influencing how a person processes information. For example, mentioning instances of peaceful resolution before entering into a negotiation can predispose someone to see that option as viable.

Profiling should not be confused with manipulation. While the latter aims to override the other party’s will, profiling is grounded in understanding, empathy, and respect for the individual’s autonomy.

Deepak Malhotra, professor at Harvard Business School, emphasizes the importance of allowing people to make rational decisions without feeling cornered or forced into a single option. The key lies in identifying the counterpart’s predominant need and offering them a path where cooperation is not only possible but also appealing.

Human beings—even in their most irrational or desperate moments—respond to stimuli that can be understood, redirected, and ultimately transformed. Mastering profiling and persuasion is not about bending the counterpart’s will or imposing external realities, but about finding the point of connection where resistance gives way to understanding and mistrust yields to influence. Effective negotiation entails moving beyond the immediacy of the demand and into the complexity of human desire, setting aside judgment to see in the counterpart not an obstacle, but a reflection of our own motivations—the door to deals.

About the Authors

Prof. Guido Stein – Professor of Managing People in Organizations and Director of the Negotiation Unit at IESE. PhD in Philosophy (Management), MBA from IESE. Partner at Inicia Corporate, specialized in M&A and Corporate Finance.

Salva Badillo – Professional negotiator in crisis situations. Certified HERMIONE® trainer in High-Intensity Negotiation. Director of The Trusted Agency in Spain, Latin America, and Eastern Europe.

Lucía Zelaya – Bachelor’s in business administration and MSc in Big Data Science from the University of Navarra. Researcher in the Managing People in Organizations Department at IESE Business School.

References

1. New York City Police Department (commonly known as the NYPD).

2. Kate Murphy (2020). You’re Not Listening: What You’re Missing and Why It Matters (New York: Celadon Books).

3. Nii Codjoe, “Ex-CIA Spy Reveals a Brilliant Framework for Understanding Why People Do What They Do,” Inc., September 4, 2024, https://www.inc.com/nii-codjoe/ex-cia-spy-reveals-a-brilliant-framework-for-understanding-why-people-do-what-they-do.html.

The post From Persuasion to Deal: Negotiating Conflicts appeared first on The European Business Review.

By Katie Shonk

Cultural mismatches, especially between “tight” and “loose” organizational norms,  can derail even the most promising business partnerships. Here, Katie Shonk explores the importance of addressing these cultural differences early in the negotiation process and offers a practical framework for navigating cultural divides and building more resilient, successful collaborations.

When negotiating a new business partnership, from a product collaboration to a sales agreement to a corporate merger, organizations often approach negotiations with optimism about their strategic complementarity. Enthusiasm about the prospect of creating synergy through combined strengths spurs the belief that each side will overcome its weaknesses and begin anew.

Unfortunately, this focus on strategy often completely overlooks the importance of assessing cultural complementarity—that is, how well the organizations’ cultures are likely to mesh. That’s a significant oversight, as a culture clash—specifically, between “tight” and “loose” organizational cultures—is often to blame for partnerships that fall apart during the implementation stage, Stanford professor Michele Gelfand and her colleagues have found in their research. Recent negotiation case studies illustrate why cross-cultural partnerships are often bumpy and offer clues on how to avoid such pitfalls.

Troubled from the start

In 2022, online game engine Unity Technologies announced it had negotiated to purchase Israeli app-monetization platform IronSource for $4.4 billion. San Francisco-based Unity is known for democratizing game development—giving game designers at all levels, including beginners, the tools to bring their creative vision to (virtual) life. IronSource, by contrast, works to ensure that companies like Unity succeed financially through analytics, monetization, and other tools. By teaming up with IronSource, Unity aimed to grow and offer users new opportunities to market and profit from their games.

The tie-up remained troubled as reports of a debilitating culture clash emerged.

That might sound like a recipe for a win-win agreement, but many longtime Unity customers were upset by the news. They were suspicious of IronSource’s past ties to malicious adware and accused Unity of moving in a more corporate, bottom-line direction that betrayed its core audience. Shares of Unity fell 18 percent ¹ at the announcement.

Two years later, the tie-up remained troubled as reports of a debilitating culture clash emerged. “Unity’s working culture is slower and messier than the fast, aggressive way IronSource staff do business,” mobilegamer.biz reported.² Some Unity personnel perceived IronSource managers as bullies who didn’t tolerate disagreement.

Attempting to course-correct, Unity cut ties³ with IronSource’s founders in early 2024. Unity was “moving to a flatter, more functional structure,” but the change was also “cultural,” interim president and CEO Jim Whitehurst wrote in an email to his team: “Across the entire organization, we will need to come together and intentionally think through what type of team we want to be in order to reach our full potential.”

Though significant, the changes and soul-searching may have been insufficient. Many months later, IronSource middle managers were still clashing with Unity staffers, and morale remained low, sources told mobilegamer.biz.²

The Tight–Loose Divide

While there were doubtless numerous reasons for which the merger struggled, inattention to obvious cultural differences between Unity and IronSource during the negotiation phase and early days of the partnership stand out.

In their work, Gelfand and her colleagues have identified a cultural difference that helps to explain the misunderstandings and conflict so often found in cross-cultural partnerships and other interactions: the relative “tightness” or “looseness” of cultures’ social norms.

Social norms are the behaviors that a culture—whether a nation, a company, or a family—prescribes to be acceptable. Is jaywalking common or a punishable offense? Do meetings begin on time or start 10 minutes late? Are you expected to get straight As or to simply do your best? From childhood, we passively absorb the social norms of the cultures we belong to and often adhere to these norms unthinkingly throughout our lives.

In a survey of about 7,000 people from 33 countries,⁴ Gelfand and her team found national variation in the relative tightness of social norms. Some cultures, such as Japan, India, and Turkey, lean tight. In these countries, people are expected to adhere closely to laws, rules, and norms, and punishment for norm violations can be severe. Other cultures, including the United States, Brazil, and the Netherlands, fall on the loose end of the spectrum. In these countries, people face fewer constraints on their behavior. Still other countries fall in different points on the spectrum between tight and loose.

These cultural differences appear to have evolved over centuries in response to the level of threat in the environment. Countries and regions that have faced repeated threats to their survival, such as disease outbreaks, invasions, and natural disasters, developed strong social norms that promoted collaboration and an efficient response, writes Gelfand. By contrast, regions that have faced few threats have had less need for strong social norms and thus evolved to be looser.

These norm expectations shape the thoughts, preferences, and behaviors of a culture’s members. Generally speaking, people from tight cultures tend to be rule followers. They are often organized, self-controlled, resistant to new ideas and experiences, and rigid. By comparison, people from loose cultures tend to be more comfortable breaking rules. They are more likely to be disorganized, impulsive, open to new ideas, and creative.

Differences in Organizational Culture

Just as nations evolve to be relatively tight or loose, so do organizations, as well as industries and professions. Organizations such as hospitals, nuclear power plants, airlines, police departments, construction, and the military are usually tight; they are rule driven, formal, and hierarchical. Because mistakes within these organizations can cost lives, there’s little room for error, and a need for tight social norms that promote safety.

By contrast, organizations that thrive on creative thinking, flexibility, and innovation, including technology, design, and entertainment firms, tend to lean loose. In these organizations, risks can lead to big payoffs, and mistakes are often useful learning opportunities rather than devastating disasters.

More subtle tight–loose variations can be found within fields. While Unity and IronSource are both tech firms, Unity developed a loose culture in keeping with its mission of promoting creativity and innovation; by contrast, IronSource, with its focus on efficiency and the bottom line, established a tighter, more disciplined, and more hierarchical culture.

Big Differences, Big Problems

In a study⁵ of nearly 4,700 international $10 million-plus M&A deals from 1989 to 2013, Gelfand and colleague Chengguang Li found that companies with significant cultural differences experienced poorer long-term financial performance than those with more similar cultures. Mergers between companies with very different cultures “took longer to negotiate and finalize, had lower stock prices following the deal, and yielded much lower returns for the buyer in the deal,” writes Gelfand in her book Rule Makers, Rule Breakers.⁶ For typical deals, such cultural gaps were associated with the equivalent of $245 million in reduced net income over three years.

One prime example is the $36 billion merger in 1998 between automakers Daimler-Benz and Chrysler. Strategically, the DaimlerChrysler match seemed heaven-sent, enabling Germany-based Daimler to enter the lower-priced car market and U.S.-based Chrysler to make headway in Europe. The combined company’s share price soared on its debut.

But when staff came together at their shared headquarters in Stuttgart, Daimler’s tight, hierarchical German culture and Chrysler’s loose, egalitarian American culture didn’t mix well, explains Gelfand. To take one example, the Germans engaged in intensive prep work for team meetings and followed a strict agenda, while the Americans showed up expecting loose brainstorming sessions. As problems and conflict mounted, Daimler responded by taking over U.S. operations and laying off thousands of Chrysler employees. After years of low morale and stock price declines, the companies admitted defeat in 2007 and divorced.

Now consider the merger of two American companies from different industries: Amazon’s 2017 $13.7 billion acquisition of Whole Foods. Hopes were high⁷ that it would enable Amazon to expand beyond its online business and Whole Foods to lower prices and correct a sales slump.

But combining the loose, value-oriented culture of teamwork at Whole Foods and Amazon’s culture of tight, efficient business practices hasn’t been easy. Whole Foods employees were demoralized by Amazon practices they deemed heavy-handed, such as compliance scorecards that could lead to punishment and termination. Amazon has failed to capture a significant portion of the grocery market, and in January 2025, a Philadelphia store became the first in the grocery chain to unionize. In June, an Amazon reorganization plan leaked⁸ that included a new leadership team for Whole Foods and closer oversight of its corporate staff.

Negotiate Effectively Across Cultural Divides

As we have seen, partnerships between organizations with very different social norms are unlikely to succeed without a thorough consideration of their cultures. Here are four steps you and your organization can take to avoid a tight–loose culture clash and make the most of your contrasting strengths.

1. Identify differences

“Culture is like an iceberg,” writes Gelfand in Rule Makers, Rule Breakers. “Because organizational norms aren’t always visible, diagnosing a company’s relative tightness or looseness requires a deep dive to understand its practices, its people, and above all, its leaders.”

When negotiating a new business partnership, we often become so focused on negotiating financial terms and business goals that we neglect to carry out this kind of cultural comparison. Yet it’s an essential step in setting the deal up for long-term success.

Partnerships between organizations with very different social norms are unlikely to succeed without a thorough consideration of their cultures.

You might start by taking note of seemingly small differences in negotiating style. A negotiator from a tight culture might prefer to build trust gradually before getting down to business, whereas someone from a loose culture may be more open from the start—and less patient with trust-building niceties such as small talk and shared meals. When behavior seems puzzling, think about whether it might reflect unfamiliar but adaptive social norms.

2. Discuss preferences and values

Once you’ve identified cross-cultural differences, it’s time to address them directly. Gelfand recommends a “cultural assessment to understand how people, practices, and management reflect tightness or looseness in both companies.”

The aim should be to discuss not only the possible synergies of a cross-cultural partnership but also core values and potential challenges. For example, in its merger talks with IronSource, Unity leadership might have emphasized the value it places on inspiring creative thinking among its staff and users, as well as how its looser style manifests day to day in the organization. How were employees accustomed to being managed? How were they likely to respond to a more hierarchical management style?

IronSource negotiators, in turn, could have shared what management practices worked best for them and how they expected to lead. This information exchange could open up a frank consideration of what might go wrong and how culture clashes could be avoided and addressed.

3. Plan for success

After you have identified differences and complementarities between cultures, it’s time to come up with a plan to integrate them. Discuss whether this will be an equal partnership or whether one organization will take control. What areas of the combined business might benefit from greater tightness? Greater looseness?

Consider enshrining your core values and expectations in writing. When Disney purchased animation studio Pixar in 2006, Disney CEO Robert Iger agreed to ground rules aimed at protecting Pixar’s looser culture, according to Gelfand. Deal terms ranged from not requiring Pixar staff to sign Disney employment contracts to continuing Pixar’s annual paper airplane contest.

4. Address the disconnect

When cultures clash during the deal implantation stage, one side will often try to wrest control and impose its culture unilaterally. As we have seen, such power plays can exacerbate problems.

DaimlerChrysler was conceived as a “merger of equals”; when Daimler executives instead fell back on a tighter, unilateral decision-making style, they lost the trust of Chrysler employees. At Unity, replacing IronSource leadership didn’t address the underlying cultural disconnect. As Amazon imposes stronger managerial control on Whole Foods, it risks further employee backlash.

What works better? The careful, deliberate work of integrating the best of both cultures into the partnership. That might mean making projects more collaborative while adopting the efficient practices of the tighter culture. Above all, business partners should strive to address conflict head-on and try to appreciate what each side brings to the table.

About the Author

Katie Shonk writes articles on negotiation and dispute resolution for the Program on Negotiation at Harvard Law School, a university consortium comprising Harvard, MIT, and Tufts that conducts research and offers executive education programs in negotiation. The former editor of Negotiation Briefings, she is also a research associate at Harvard Business School and the Harvard Kennedy School. Shonk received her BS from the University of Illinois at Urbana-Champaign and her MA in creative writing from the University of Texas at Austin. She has published articles in the Harvard Business Review and other management journals. She is also the author of a novel, Happy Now?, and a short story collection, The Red Passport.

References

1. Why did Unity Software stock crash today? IronSource merger, lowered guidance hit shares. July 13, 2022. Seeking Alpha. https://seekingalpha.com/news/3856539-why-did-unity-software-stock-crash-today-ironsource-merger-lowered-guidance-hit-shares.

2. Inside Unity’s troubled $4.4bn IronSource merger. October 29, 2024. mobilegamer.biz. https://mobilegamer.biz/inside-unitys-troubled-4-4bn-ironsource-merger/.

3. IronSource founders out at Unity in major exec reshuffle. January 10, 2024. mobilegamer.biz. https://mobilegamer.biz/ironsource-founders-out-at-unity-in-major-exec-reshuffle/.

4. Differences Between Tight and Loose Cultures: A 33-Nation Study. May 27, 2011. Science. https://www.science.org/doi/10.1126/science.1197754.

5. The influence of cultural tightness-looseness on cross-border acquisition performance. March 2022. ScienceDirect. https://www.sciencedirect.com/science/article/abs/pii/S0167268122000105.

6. https://www.simonandschuster.com/books/Rule-Makers-Rule-Breakers/Michele-Gelfand/9781501152948.

7. One Reason Mergers Fail: The Two Cultures Aren’t Compatible. October 02, 2018. Harvard Business Review. https://hbr.org/2018/10/one-reason-mergers-fail-the-two-cultures-arent-compatible.

8. Leaked memo reveals new leaders reorganizing Amazon’s grocery business and integrating Whole Foods. January 12, 2025. Business Insider. https://www.businessinsider.com/amazon-grocery-leaders-reorganizating-whole-foods-2025-6?utm_source=chatgpt.com.

The post In Cross-Cultural Negotiations, Prepare for “Tight–Loose” Clashes appeared first on The European Business Review.

By Karin Mugnaini

Negotiation is a strategic business driver with impact on value creation and performance. This article explores how companies can achieve consistent success by developing a negotiation mindset. It highlights key levers—training, alignment, role clarity, and structured frameworks—that enable organizations to negotiate effectively across all levels and functions.

Winning a negotiation is of course a great feat. However, one win may not always assure the next. How important really is negotiation today in business? And why is it critical to hone your and your company’s skills as much as possible to make your negotiations consistently successful?

Besides contributing qualitatively to business, negotiation offers quantitative advantages– value creation, cost savings, enhanced revenue, and risk mitigation. Although often difficult to measure, one commonly cited statistic is that companies that invest in improving their team’s skill sets can improve overall EBIT by 5 to 7%. Consequently, company negotiation training programs can yield strong returns for you and your firm. The learnings from such programs can help to uplift revenues through higher close rates and better pricing strategies; achieve improved terms and reduced discounting, yielding margin growth; give you the confidence to close more quickly with better-prepared teams, thus delivering efficiency gains; reduce your opportunity costs by speeding up cycles so you can consider additional deals, and deliver strategic benefits including enhanced customer lifetime value, more resilient partnerships, and sustained long-term growth.

Key here is the reference to both you the negotiator, and your organization. Mastering negotiation depends on the individual, the team and the company. It is important that the individual negotiator, the broader team and overall organization be skilled and aligned in negotiation. Set up in this way, strategic consistency becomes achievable, preparation and intelligence can be more easily shared, and both trust and confidence can be built– all of which lead to repeatedly better outcomes.

Many top negotiation consulting firms emphasize that individual “brilliance” of say, one top negotiator or one high performance negotiation team cannot substitute for organizational readiness. This readiness requires company-wide negotiation frameworks, aligned go/no-go criteria, and role clarity (who leads, who escalates, who approves). Such preparedness separates the good from the great, the transactional negotiators from the strategic negotiators. This organizational readiness is what we will herein refer to as the negotiation mindset.

Moving your organization towards a negotiation mindset is a smart step to future-proof your business. By instilling your company with a new negotiation mindset, you can avoid painful and costly misalignment or skill gaps—ones that can lead to inconsistent objectives, internal undermining, missed leverage and post-deal execution problems. No company can afford such outcomes in today’s challenging environment.

If we define mindset as set of beliefs, attitudes, and perspective that shapes how a company interprets situations, makes decisions, and responds to challenges, we can better understand how, even in today’s VUCA (volatility, uncertainty, complexity and ambiguity) world, we can proactively shift towards growth and progress. American psychologist and Stanford Professor Carol Dweck’s research and writings on fixed versus growth mindsets is useful here. She explains that a fixed mindset is the belief that abilities are static and avoids challenges, in contrast to a growth mindset which represents the belief that abilities can develop and embraces learning. Dweck’s work has had major influence in education, leadership, coaching, and personal development worldwide and is also highly relevant to the push for a negotiation mindset transformation. Why? Because through repeated learning, companies can develop their abilities to negotiate—and this drives growth in business.

Achieving a real negotiation mindset switch in a company—shifting from reactive, transactional, or siloed behavior to proactive, strategic, integrated and value-driven negotiation—requires a deep cultural and structural transformation, not just training (NB: culture will not be covered in depth in this article, as it warrants a much deeper discussion).

So what does it take to start a negotiation mindset transformation? Some evident answers include seeing the negotiation as a relationship-building opportunity, not a battle; preparing thoroughly, not improvising; seeking understanding, not arguing; and looking for value-creating trade-offs, not rigid dig-ins. Negotiation mindset champions negotiate for results, embrace discomfort and negotiate to win.

One recommendation is to begin with the entire organization—from board, C-suite or executive leadership levels, senior management or operational leadership, to middle management, frontline or supervisory management and individual contributors or staff. Include all levels in the transformation so the company is aligned. Make sure the strategy set is understood by all, and the negotiation requirements and goals are clear throughout all hierarchical levels.

Next, assure that the right negotiation teams are created and that roles are clearly defined. Who is part of the team? Who is the ultimate decision-maker on the team? Who authorizes the negotiator to negotiate? Who supports the negotiator during the negotiation? What are the communication and reporting channels between these actors, and how and when are they to be used?

Now, as a company, build a disciplined roadmap and consistent framework that takes into account the strategy, the tactics, and even ways for overcoming power imbalances and difficult stakeholders. Elements of an effective framework that supports negotiation mindset transformation include executive sponsorship and role modeling; shared language; scheduled company-wide training and application; internal alignment on goals and negotiation mandates; embedding the appropriate technology, processes and metrics; a negotiation culture.

To succeed in today’s complex business environment, negotiations must be conducted in a coordinated and strategic way—across every level of your organization. This unified, company-wide approach to negotiation ensures that everyone speaks the same negotiation language – from preparation, to opening, with leadership and through deadlock.

About the Author

Karin Mugnaini is Associate in Negotiation Excellence at the world renowned Schranner Negotiation Institute. Karin was the former Head of the International Alumni Association at IMD and President & COO of the Lorange Network. She has held positions in Europe, Asia and the US across diverse sectors, in business development, marketing and communications.

The post Negotiation Mindset Transformation: Driving Growth in the Business Landscape appeared first on The European Business Review.

By Prof. Guido Stein, Salva Badillo, and Lucía Zelaya

The key to a successful negotiation is not embedded in knowledge or reasoning ability but in applying emotional intelligence. This essay explains the role of emotions in negotiations.

Emotion is not the enemy of negotiation, but an inseparable part of it.

Emotional intelligence—the ability to perceive, understand, and regulate both our own emotions and those of others—has proven to be a more decisive factor in achieving success in high-pressure situations than IQ. Contrary to what many believe, however, emotional intelligence is not an innate gift, but a skill that can be cultivated through introspection, practice, and self-observation.

Those who dare to master their inner world will not only make more effective agreements but will also gain a deeper knowledge of themselves.

1. The biology of emotions in negotiations

Decision-making is not a purely logical exercise, but a dynamic influenced by neural structures whose function is to process emotions, evaluate risks, and anticipate consequences. In the field of high-stakes negotiations, understanding these mechanisms is essential to optimize decision-making and achieve more effective and balanced results:

The amygdala. In crisis, the human mind reverts to a primitive state in which reasoning is weakened and instinctive response prevails. This response is triggered by physical threats—such as hostage-taking or a suicide attempt—and also occurs in the business environment, where high-pressure situations can trigger similar survival mechanisms.

The illusion of control and the inevitable role of the subconscious. Multiple studies have shown that the brain makes decisions before the conscious mind becomes aware of them. Benjamin Libet revealed a phenomenon known as readiness potential—an electrical signal in the brain that occurs up to 500 milliseconds before a person becomes aware of their intention to move. This finding suggests that the decision to act begins at an unconscious neural level and only later reaches conscious awareness.

The ventromedial prefrontal cortex (VMPFC). While these individuals retain their reasoning abilities, they struggle to make decisions because they cannot assign emotional value to different options.

This brain region plays a crucial role in evaluating alternatives by connecting past experiences to future options. According to the somatic marker hypothesis, emotions act as filters that attribute significance to each alternative, thereby facilitating decision-making. For example, a hostage-taker may make an explicit demand. However, to resolve the conflict a negotiator needs to identify the underlying interest driving their action, a need that may be conscious or unconscious. If the negotiation fails to align the concession with the dominant emotion, an agreement will remain out of reach.

In face-to-face negotiations, the VMPFC plays a key role in interpreting microexpressions—brief, involuntary facial reactions that reveal genuine emotional states. A negotiator who presents multiple options can assess their counterpart’s visceral reaction to each one.

The dorsolateral prefrontal cortex (DLPFC). The DLPFC is responsible for evaluating options in a rational and deliberate manner; it cannot make decisions independently and relies on emotional input from the VMPFC. The primary function of the DLPFC is to justify decisions that the brain has already processed at an unconscious level.

A barricaded individual may surrender based on an intuitive sense that continued resistance will have serious consequences, but rationalize their decision with statements such as, “After all, I’m a better person than my hostage, and it’s not worth it.”

The nucleus accumbens. This brain region is linked to the anticipation of pleasure in decision-making. It plays a key role in biases such as loss aversion and impulsivity in financial decision-making.

In a ransom negotiation, a kidnapper may initially demand €3 million—an amount that could take months to obtain and carries the inherent risk of being tracked down by authorities. However, when presented with the opportunity to receive €500,000 immediately, the kidnapper’s nucleus accumbens drives them to accept the more tangible and immediate offer.

2. Self-knowledge

A negotiator must recognize that emotions are an inherent part of the human condition; however, this does not mean they should exert absolute control over our decisions. Neuroscience has shown that while certain stimuli can automatically trigger emotions, the brain has the ability to rewire itself through neuroplasticity. This means that individuals can develop the ability to respond in a more balanced way, neutralizing impulses that might otherwise cloud their judgment in critical situations.

A negotiator must recognize that emotions are an inherent part of the human condition; however, this does not mean they should exert absolute control over our decisions.

In high-stakes negotiations, where the margin for error is minimal, emotional detachment is an invaluable asset. The goal is not to suppress or deny emotions but to acknowledge them and manage their influence with prudence and timeliness. Balance is maintained by consciously separating emotions from the surrounding chaos.

Several tools can help transform negotiations from a purely transactional exchange to a collaborative dialogue in which mental clarity and strategy take precedence over impulsiveness.

2.1. Identifying emotional triggers. Psycholo-gical research has shown that each individual has emotional “buttons” that are activated by past experiences or deeply ingrained beliefs. These triggers can provoke disproportionate reactions to certain situations. Reflecting on past episodes where our reaction was disproportionate can help identify the root of these impulses and progressively diminish their impact.

2.2. Metamorphosis map. Creating a timeline of significant events provides a clear visualization of our personal evolution. This self-reflection tool helps us identify lessons learned over time and set milestones for future growth, strengthening both our identity and our decision-making confidence.

2.3. Detachment journal. Keeping a record of daily situations where emotional detachment would have been beneficial offers valuable insight into how emotions influence our decision-making. Noting the situation, our emotional response, and an alternative approach grounded in detachment helps us to cultivate a more strategic mindset, making us less prone to impulsive reactions.

3. Cognitive biases

Heightened emotions can easily lead negotiators to fall prey to cognitive biases. These biases, which stem from automatic thinking, hinder an objective understanding of facts and can compromise the success of a negotiation. To identify biases and mitigate their impact, it is essential to understand their nature and mechanisms.

Daniel Kahneman, recipient of the 2002 Nobel Prize in Economic Sciences for his contributions to behavioral economics and psychology, posits the existence of two systems of mental processing:

• System 1: Fast, intuitive, emotional, and automatic.
• System 2: Slow, deliberate, logical, and conscious.

Cognitive biases arise when System 1 responds without the analytical intervention of System 2, leading to automatic decisions that may result in flawed judgments. These biases often manifest in subtle ways but can have critical consequences.

• Availability bias. This occurs when people assess the likelihood of an event based on how easily they recall recent or striking instances. The human mind tends to give greater weight to vivid or emotionally impactful events, even when they are not statistically representative.

Case:  In a hostage negotiation, an inexperienced negotiator who has recently been exposed to a high-profile case in which a hostage-taking ended in tragedy overestimates the likelihood that the current situation will escalate into violence. Driven by fear, the negotiator hastily agrees to the hostage-taker’s demands without considering alternative strategies.

• Anchoring effect. This occurs when the first number or piece of information presented in a negotiation establishes a reference point that shapes all subsequent assessments, even if the initial value lacks a rational basis.

Case: A hostage-taker demands €1 million for the release of a hostage. An inexperienced negotiator is anchored to this disproportionate figure and bases their strategy on it without considering objective data. An experienced negotiator, on the other hand, understands that hostage-takers typically set initial demands well above what they are willing to accept and uses this knowledge to structure the negotiation in a more realistic way.

• Confirmation bias. This is the tendency of individuals to seek out and prioritize information that reinforces their preexisting beliefs, while dismissing data that contradicts those beliefs. This distortion can result in biased interpretations of reality and poorly founded decisions.

Case: A negotiator who firmly believes that hostage-takers never yield if they perceive weakness ignores subtle signs of fatigue or hesitation in the captor. By failing to recognize these opportunities for persuasion, the negotiator misses a strategic window for achieving a peaceful resolution.

• Illusion of validity. This occurs when a person overestimates the accuracy of their own predictions, even in the absence of solid evidence. Excessive confidence in personal judgment can result in poor decisions and unnecessary risks.

Case: A negotiator, convinced that they can anticipate a hostage-taker’s reactions without relying on historical data or behavioral analysis, misinterprets the situation and makes counterproductive decisions.

• Halo effect. This occurs when a positive or striking characteristic of a person is generalized to other areas, creating a biased overall perception.

Case: A hostage-taker who speaks politely and dresses neatly may be perceived as reasonable and less dangerous. This bias leads the negotiator to underestimate the actual threat that the hostage-taker poses, compromising the safety of the hostages.

• Optimism bias. This refers to the tendency to underestimate risks and overestimate our own abilities. In crisis situations, this bias can create a false sense of control and lead to inadequate preparation.

Case: A negotiator who is overconfident in their ability to persuade assumes that they can convince the hostage-taker without a structured plan. This overconfidence diminishes the effectiveness of the negotiator’s intervention and makes the situation more dangerous.

• Hindsight bias. Once the outcome of an event is known, people tend to perceive it as having been predictable from the outset. This cognitive distortion can influence how past decisions are assessed and foster a fatalistic perspective on circumstances.

Case: If a hostage negotiation ends in violence, some observers might say that the outcome was inevitable. However, this view does not take into account an analysis of factors that could have influenced the course of events.

• Representativeness bias. This bias involves estimating the likelihood of an event based on stereotypes or past patterns rather than relying on objective statistical data.

Case: A negotiator who assumes that a juvenile hostage-taker is less experienced and therefore easier to manipulate develops flawed strategies that underestimate the captor’s abilities.

• Loss aversion. People tend to fear potential losses more than they derive satisfaction from equivalent gains. This bias can result in hasty and disadvantageous decisions.

Case: A negotiator who, for fear of losing hostages, quickly agrees to the hostage-taker’s demands without considering the long-term consequences weakens their position and increases the likelihood of similar crises in the future.

• Illusion of control. This bias occurs when individuals overestimate their ability to control random events, leading to excessive confidence in their ability to influence outcomes.

Case: A negotiator who assumes that their personal skill alone can guarantee the success of the negotiation—without accounting for external factors such as the emotional state of the hostage-taker or police pressure—makes reckless decisions that jeopardize the operation.

Being aware of these biases and actively working to mitigate them can significantly improve the quality of our judgments and reduce the risks associated with rash or uninformed decisions.

4. From anxiety to confidence

Anxiety is defined as distress or uneasiness about what is about to happen or what we fear may occur. It is not merely inner turmoil but a force that reminds us of both our vulnerability and our ability to anticipate future events. Those who enter a negotiation in the grip of fear tend to underestimate their own power, make low initial offers, concede too quickly to others’ demands, and sometimes leave the negotiation table prematurely. As a result, their deals tend to be less advantageous. In terms of how it applies to executives, several studies reveal that anxious negotiators close deals that are, on average, 12% less financially attractive than those negotiated by individuals who approach the process from a neutral emotional state.

The perception of negotiation as an anxiety-inducing activity stems from three key psychological factors:

• Lack of control. Negotiation arises from the need to obtain something that cannot be achieved unilaterally. The sense that success depends on the will of others generates tension and unease.
• Unpredictability. It is impossible to predict with certainty how cooperative or aggressive the other party will be, or to anticipate their reactions and strategies with complete accuracy.
• Lack of clear feedback. Even after reaching an agreement, uncertainty lingers. Doubts about whether the best possible outcome was achieved, whether too many concessions were made, or whether excessive pressure was applied fuel insecurity and self-criticism.

However, anxiety is not inevitable. Effective strategies exist to instill confidence and enhance negotiation skills. There are three key ways to mitigate the impact of anxiety and strengthen a negotiator’s position.

• Preparation. A lack of information intensifies the inherent uncertainty of negotiations, adding to the negotiator’s psychological tension. Understanding the counterpart—their interests, constraints, and alternatives—is essential before entering a negotiation. Defining clear objectives reduces uncertainty and strengthens self-confidence. However, many people rely too much on intuition and overlook preparation, improvising and merely hoping for the best outcome. This phenomenon is known as the myth of natural talent: When someone exhibits strong conversational skills, it is often assumed that they possess exceptional innate intuition.

The most skilled negotiators prepare in advance but also cultivate the ability to improvise in a natural way.

However, research suggests that this strategy is not the most effective. The most skilled negotiators prepare in advance but also cultivate the ability to improvise in a natural way. What is often overlooked is the time they dedicate to refining their communication skills, the attentiveness with which they listen, the way they connect ideas, and their ongoing efforts to improve their skills.

Flexibility. Adaptability is a natural consequence of thorough preparation. A flexible negotiator adjusts their strategy without losing sight of core objectives, enabling them to respond intelligently to unexpected developments. Maintaining an openness to alternative solutions helps reduce anxiety and expands the possibilities for reaching satisfactory agreements.

Flexibility is not at odds with preparation; on the contrary, the more prepared a negotiator is, the greater their confidence and ability to improvise effectively. A well-prepared negotiator does not rigidly adhere to a plan but instead adapts to circumstances without losing sight of the goal.

Practice. Anxiety thrives on the unknown. Regular exposure to negotiation scenarios reduces the emotional impact of engaging in this process, making it more familiar and manageable. In psychology, exposure therapy is used to treat phobias because repeated exposure to the situations that cause fear helps to reduce this feeling. Similarly, the more we negotiate, the more comfortable and confident we become.

Practical experience is one of the most effective ways to internalize learning. In education, the gap between knowledge and action—often referred to as the “knowing-doing gap”—is widely discussed: Understanding something intellectually is only the first step.

5. From anger to calmness

Anger, like anxiety, is an inherently human emotion—an expression of our survival instinct that, in its original form, helped us confront threats and adversity. However, while anxiety stems from fear of the future and personal uncertainty, anger is directed at our counterpart, creating a barrier that impedes understanding and communication. It is an expansive emotion that, when unchecked, clouds our judgment and fuels a vicious cycle of blame, defensiveness, and confrontation. Often, those who experience anger justify their outburst as a legitimate response to provocation, unaware that their own reaction fuels the escalation of the conflict.

In negotiations, anger often distorts our perception of reality, leading to a combative approach that reflects the so-called fixed-pie bias. This bias stems from the mistaken belief that any gain for the counterpart translates into a direct loss for us, reinforcing a zero-sum mindset that hinders productive dialogue. In addition to making collaboration difficult, anger leads to impulsive and often self-defeating decisions. It is no coincidence that people are more likely to lie to an angry opponent than to a calm one. Anger dehumanizes the other, leading us to reduce them to a mere threat rather than recognizing them as individuals with legitimate aspirations.

When we recognize that we have the capacity to voluntarily free ourselves from anger, we make a conscious decision to abandon self-pity and emotional stagnation. This does not mean ignoring perceived injustices or relinquishing our position in a negotiation, but rather understanding that anger is not a fixed state—it is a choice.

6. Handling the counterpart

In high-stakes negotiations, beyond irrational behavior, the captor or hostage-taker is often in a state of extreme impulsivity. They are like a reckless boxer throwing rapid, chaotic punches—not to land a blow, but to disorient, create turmoil in the dialogue, and erode the negotiator’s mental clarity. The first question is: How do we break through this wall of hostility and desperation? And the answer to that question is to offer security. In a state of unconscious vulnerability, people crave stability and certainty. However, offering security requires more than words and active listening; it demands mastery of strategic tools that, when applied effectively, can play a pivotal role.

Roger Fisher and Daniel Shapiro outlined five emotional concerns that influence negotiations and can serve as key tools for managing an emotionally agitated counterpart:

Appreciation. Everyone wants to feel that their thoughts and actions are acknowledged and valued. In addition to strengthening cooperation, appreciation reduces resistance and distrust. In a hostage situation, for instance, a negotiator who acknowledges the hostage taker’s suffering or desperation creates an avenue for empathy that can help ease initial tension.

Affiliation. Rather than confronting the other party, a negotiator can build connections that foster a sense of belonging. This approach is often observed in police negotiations, where officers, rather than making threats, emphasize shared experiences or common ground with the hostage-taker to reduce their perception of hostility.

Autonomy. Respecting the other party’s decision-making ability is crucial. Imposing a solution often triggers resistance and hostility. In a negotiation with an armed robber, for example, allowing them to make controlled choices—such as deciding whom they want to speak with or whether they receive food—reinforces their sense of control and helps prevent escalation to violence.

Status. Recognizing each person’s role in the negotiation is essential. If a negotiator disregards the other party’s need for recognition, the latter may react with disdain or defiance.

Role. When a counterpart feels that their role is being ignored or minimized, negotiations become even more complicated. A clear example is when a hostage-taker acts as a group spokesperson. Instead of discrediting them, the negotiator allows them to express themselves in that capacity, reinforcing their sense of significance. This, in turn, makes the individual more receptive to proposed resolutions.

Being aware of these emotional concerns and creating a more favorable terrain for negotiation lays the groundwork for the following:

Identifying the counterpart’s dominant emotions. Recognizing our counterpart’s emotional baseline—whether they are prone to anxiety, anger, or fear—helps us anticipate the thresholds beyond which they will react irrationally and avoid triggers that could escalate the crisis. Establishing this reference point also helps us avoid actions that may be contrary to their interests, needs, and goals. It is not uncommon to see individuals make decisions that clearly work against their own interests, raising the question of why they fail to recognize this.

Emotional payments. These symbolic concessions do not necessarily require giving up anything tangible; rather, they involve offering elements that provide reassurance and gradually guide our counterpart toward a more rational state. When a hostage-taker demands justice for a personal cause, giving them the opportunity to be heard—whether through the media or by a figure of authority—can be a turning point that allows the negotiation to move toward a peaceful resolution.

Reflection: the first victory

From a personal perspective, what truly influences a negotiation is the struggle between instinct and reason, between the visceral nature of emotion and the lucidity of thought. The first victory lies in not allowing ourselves to be overwhelmed by internal noise that amplifies the noise around us. If we become paralyzed by fear of what might happen, we will be unable to do anything sensible. A skilled negotiator does not blindly push forward but stays grounded in self-awareness and reflection. Each day is an opportunity to learn, adapt, and refine our approach.

About the Authors

Prof. Guido Stein – Professor of Managing People in Organizations and Director of the Negotiation Unit at IESE. PhD in Philosophy (Management), MBA from IESE. Partner at Inicia Corporate, specialized in M&A and Corporate Finance.

Salva Badillo – Professional negotiator in crisis situations. Certified HERMIONE® trainer in High-Intensity Negotiation. Director of The Trusted Agency in Spain, Latin America, and Eastern Europe.
.

Lucía Zelaya – Bachelor’s in business administration and MSc in Big Data Science from the University of Navarra. Researcher in Managing People in Organizations Department at IESE Business School.

The post Feel to Deal: The Power of Emotions in Negotiations appeared first on The European Business Review.

Repetitive strain: Consistency bias can blind decision-makers to key factors when making similar choices.

Practice makes perfect, or so the saying goes. However, that is not necessarily true when it comes to making complex decisions with unpredictable outcomes.

Behavioural science has revealed many patterns that guide human decision-making. This includes common biases and ‘mental shortcuts’ that can lead to poor choices.

Understanding these patterns can be highly valuable for business leaders. It can help them to identify those patterns in the decisions they make on a daily basis and make better choices as a result.

Business owners and managers typically have to make a wide range of choices. Many of these involve a certain level of uncertainty.

These include important decisions that might result in significant financial gains or losses for their business.

Understanding how these unpredictable outcomes affect the decisions we make can help leaders to recognise and avoid potential bias.

Many managers assume that the more risky and important decisions they make, the better they get at making them.

Empirical evidence, however, suggests that this is not necessarily the case.

Groundhog day for decision-makers

We found that when people repeatedly make decisions in similar scenarios, they tend to be guided by consistency rather than rationale.

This creates a significant risk for business as it could prevent managers from weighing all the available options.

Instead it could lead them to prefer certain options, simply because they closely resemble the choices they have made in the past.

We asked a group of participants to repeatedly choose between two options.

One of these options was risky, as it entailed either a sizeable financial gain or a financial loss.

The other was safe, as participants were certain to receive a smaller pay-out.

We asked participants to complete the test again one week later. This allowed us to examine their choices over time, unveiling patterns in their decision-making.

The key objective was to determine whether people make consistent choices, improve over time, or pick things randomly.

Interestingly, we found that participants who were asked to make choices in risky scenarios time and time again became increasingly consistent.

Do decision-makers favour repetition over reason?

Our findings suggest that when people start choosing a risky option over a safe one, they typically make risky choices in the future.

Similarly, if they choose the safe option, they will be more likely to select safer options in the future.

This trend was apparent in the behaviour of participants in our study.

Most participants did not follow a rational approach of considering the outcome of previous trials and balancing their risk. Instead, they remained consistent with the choices they had made before.

Previous studies had found that the order in which choices are presented to people affect the decisions they make.

If participants select a few risky options in a row, they are likely to reverse their strategy to balance the risk by picking a few safer choices.

Surprisingly, we did not observe this balancing behaviour at all.

Instead, our findings suggest that in risk-associated situations that they already encountered in the past, people tend to make the exact same choices they made before.

Implications of the consistency trap for business decisions

Our results could have valuable implications for business leaders making decisions with uncertain outcomes.

Many people assume that the more choices they make, the better they become at making choices in similar situations. Typically, this is not the case.

The tendency to consistently make the same choices might prevent managers from adequately assessing the available information and calculating the risks when faced with similar decisions to those they have made previously.

This can hinder their growth, preventing them from learning from situations and truly improving their ability to make difficult decisions.

Rather than becoming better at making specific types of decisions, managers are far more likely to become increasingly consistent.

This means making exactly the same choices they made previously, especially if those decisions happened to have a positive outcome.

They might select the same vendor or manufacturing partner to fabricate their products without weighing other options.

Alternatively, they might follow the same procedures for prolonged periods of time, employ the same systems, and renew the same contracts without considering different approaches.

How to avoid the consistency trap

In many cases, managers can feel that they evaluated these options carefully, when in fact they simply selected the same options as before.

Becoming aware of this tendency could help them to re-evaluate the unique risks and conditions of each new situation they face.

So, how can one avoid falling into this consistency trap?

A useful strategy to avoid inadvertently making the same decisions as before is to step out of the situation you are in.

Try to adopt an ‘outside’ view, rather than an ‘inside’ view.

This involves re-evaluating what thought processes led to a specific choice from an external viewpoint, to exit the ‘tunnel vision’ that people commonly adopt when making decisions.

For instance, managers could ask themselves, “If I was someone else and I was evaluating how I made this decision, what would I think? Would I think that I carefully considered options and deliberated or does my decision seem more like a knee-jerk reaction?”

Using behavioural science to make more rational decisions

By pulling back from a situation and observing it from the outside, people can re-orient themselves and take the time to reflect on the thought processes behind their actions. This can help them to recognise the cognitive biases involved, rather than just going through the motions.

Business leaders can use this to make better informed decisions by evaluating the risks and potential benefits of each option, whatever their previous choices.

Overall, behavioural science studies suggest that people tend to be overconfident in their ability to make decisions.

Taking the time to step back and re-assess situations, irrespective of whether you have encountered them before, is a highly useful practice to improve the decision-making process.

About the Author

Dr. Tim Mullett teaches on the Executive Diploma in Behavioural Science at WBS London at The Shard. Find out more about how our Behavioural Science programmes can provide you with a deeper understanding of Behavioural Science here: The Warwick Executive Diploma in Behavioural Science | The Warwick Executive Diplomas | Warwick Business School (wbs.ac.uk)

The post The Consistency Trap: How to Make Better Decisions appeared first on The European Business Review.

By David Liddle 

Political discourse and debate across Europe – indeed across the world – has become increasingly entrenched, divisive and disrespectful thanks, in part, to a rise in populism.

As views have become increasingly polarised, where rhetoric and hyperbole have replaced healthy discourse, the political landscape has become volatile and unstable.

But it’s not just in politics where we are seeing entrenched opinions and an unwillingness to listen to opposing views. This inability to disagree well on the political stage is leaking into the workplace too, and is having a detrimental impact on organisations’ ability to perform at peak.

Just how bad is the problem and what are the risks to organisations? How can we stop this behaviour becoming normalised and create workplace climates where dignity and respect rule and where people can resolve their differences collaboratively and compassionately?

A rising tide of conflict 

Workplace conflict is an inevitable part of working life. Relationships break down between managers and their direct reports, often because of miscommunication and misunderstandings. Teams become fractured because of disagreements over how projects should be managed or resources allocated. Employees are increasingly voicing their personal views and beliefs at work and often find themselves on a collision course with leaders or colleagues who might not share the same convictions.

The extent of the problem is highlighted by the 2024 CIPD Good Work Index, which showed a quarter of UK employees (an estimated 8 million people) have experienced workplace conflict in the last year.

When workplace conflict is left unaddressed, it festers underneath the surface.  Warring factions take up intractable positions, dialogue becomes combative and incivility sets in. I refer to this as the ZONC. The zone of negative conflict. In the ZONC, there is a direct impact on employee engagement, wellbeing and job satisfaction. The CIPD survey found that only half of those who reported conflict are satisfied with their job, and that it is twice as common for employees who have experienced conflict to say they are likely to leave their job in the next 12 months.

If organisations want to create happy, healthy, harmonious and productive workplaces where everyone can perform to the best of their ability, they need to pay attention to three key areas. They need to lead people to the ZOPA. The zone of possible agreement.

Leading for cohesion 

Leaders need to take a deep dive into the state of workplace conflict in their organisation. What are the key causes of dissent and division? How are conflicts, complaints and concerns being managed when they arise? And how much is the resulting disruption and distraction costing the business?

Leaders also need to take a close look in the mirror and examine their own approach to managing division. Are they inadvertently leaning into ‘populist’ styles of communication, which over time will create toxic ‘blame, shame and punish’ cultures? The language of populism is the language of division and fragmentation. What we need to be speaking instead is the language of resolution and restoration – focusing on  people-centred, values-driven approaches where the emphasis is on restoring harmony and rebuilding relationships.

Leaders need to work closely with their people and culture (HR) function to develop strategies for resolving conflict quickly and effectively, and for building fair, just, transformational cultures where employees can thrive. And they need to role model the behaviours they want to encourage – acting with transparency and authenticity, keeping their promises, listening to their people, engaging in dialogue and creating the cohesion organisations desperately need.

The management effect 

Front-line managers have a critical role to play in creating healthy workplace climates.

The actions, interactions and reactions (AIR) that managers breathe out becomes the AIR that others breathe in. This defines the nature of our relationships, and shapes our experience of the workplace. It sets the tone for workplace behaviours and provides a script or licence for the way people act, interact and react.

Managers often don’t have the skills to manage conflict in their teams effectively.  They need training in active listening, coaching, mediation and giving and receiving feedback. The World Health Organisation has recognised the importance of this, recently asking me to run a series of workshops to help their global staff learn how to disagree well.

Providing ongoing support and resources for managers who are dealing with conflict in their teams is also vital. Without help, they are likely to resort to extensive inaction (hoping the conflict will go away), or expensive over-reaction (unnecessarily taking the issue into some kind of formal, punitive process).

Luxury fashion house Burberry has recently set up a Resolution Hub, giving managers access to checklists, videos and coaching that they can draw on whenever they need to.

Reframing formal policies 

Many organisations are still wedded to traditional, formal processes for dealing with workplace conflict – namely the ubiquitous disciplinary and grievance, performance management, and bullying and harassment policies that often form the backbone of the employee handbook.

But these formal processes are no longer fit for purpose in the modern workplace.  They are damaging and destructive, encourage a binary, right/wrong, win/lose mindset and pit people against each other in drawn out, stressful procedures, where ultimately no-one wins.

HR leaders in forward-looking organisations such as Nationwide, Aviva and the BBC have moved away from this outdated approach in favour of Resolution Frameworks. These frameworks emphasise early resolution of conflict through restorative approaches such as informal dialogue, facilitated conversations and mediation, while retaining the ability to take more serious action in the rare cases where this is necessary.

Anthony Fitzpatrick, Head of Colleague Experience and Employment Policy at Aviva, says the introduction of a resolution framework “changed the whole concept and dynamic of managing conflicts and complaints within the workplace. We aren’t focusing on being aggrieved, we are focusing on resolution, and that is a fundamental difference,” he said.

An imperative to act 

With the cost of workplace conflict estimated at £28.5 billion every year, not to mention declining employee engagement across Europe and a crisis in productivity, it is clear that there is an imperative to tackle the issue.

I am concerned at the growing number of attempts by organisations, well documented in the press, to stifle employee voice. Attempting to suppress discussion of ‘taboo’ topics at work will only result in further fragmentation. Instead, we should be creating spaces for big, powerful conversations, which encourage people to engage in civil, courteous and dignified dialogue and to respect each other’s differences. Our workplaces are microcosms of our society – and if we can learn to disagree well at work, this will filter down into our communities too.

Organisations can also no longer afford to take a laissez faire attitude. If managing conflict is not treated as a strategic priority, and the structures for people to disagree well are not in place, disputes that could be nipped in the bud and resolved quickly will turn into crisis situations. When a situation becomes a crisis, it is much harder to manage and becomes costly, time consuming and carries the risk of reputational damage.

Businesses cannot create profit if their workforce is divided, and at the same time they are attempting to sell products and services to a community that is divided.  There is a direct relationship between disagreeing well, and a profitable business. It’s good for people, and it’s good for the bottom line.

About the Author 

David Liddle is a globally renowned authority in the fields of conflict management, HR transformation, culture change, people & culture, leadership and organisation development.    

In 2024, David was recognised as one of HR’s most influential thought leaders. He has won numerous awards including the HR impact award for his work transforming the HR policy framework at Burberry and mediation consultancy of the year for his work embedding a mediation programme into Aviva.  

He is author of two highly acclaimed books. His first book, Managing Conflict, transformed the landscape of dispute resolution.  The 2nd edition was published in October 2023.Transformational Culture was published in October 2021 to rave reviews including from Dave Ulrich who described it as ‘remarkable’. David has also contributed to several texts published by Thinkers50. His next two books are due to be published in 2025. ‘How to Disagree Well’ and ‘People and Culture – a practical guide for HR and leaders.

The post Why We Need to Learn to Disagree Well in the Workplace?  appeared first on The European Business Review.

The idea of cold and hard-nosed business leaders is not exactly en vogue in today’s landscape. Rather, executives and managers across the globe are starting to recognize that emotional intelligence can be a game-changer on multiple levels. This shift in attitudes recognizes that emotions and how we navigate them are an important part of running a business, rather than necessarily a hindrance to it. 

Among the primary benefits of emotional intelligence is how you can handle negotiations and resolve conflicts. Situations in which you have to navigate disagreements or seal a deal can involve a lot of pressure and a range of psychological and emotional influences. The better you can understand and work with emotions, the more effectively you can navigate tough circumstances. So, let’s take a closer look at what emotional intelligence is in these kinds of situations and how to develop the relevant traits. 

What Is Emotional Intelligence? 

There are multiple types of intelligence for business leaders to cultivate in order to achieve success. You may already be familiar with attributes like interpersonal intelligence that helps your professional relationships or the collaborative intelligence that is essential to leading teams. Emotional intelligence, though, is one of the most important for negotiations and conflict resolution. Put simply, it’s your ability to navigate emotions; both your own and those of people around you. 

Let’s break this down a little further to highlight its relevance here. Having a solid sense of your own emotional state empowers you to manage your feelings and behavior. Difficult circumstances, such as disagreements with colleagues or high-pressure negotiations can take a psychological and emotional toll. Your ability to spot early signs of this and the trigger points for the emotions allows you to take effective management measures. 

Similarly, your awareness of others’ emotions makes for more considerate, respectful, and effective interactions. Having the ability to recognize what emotions may be driving conflicts can give you insights into how to manage the situation to a mutually positive outcome. By the same token, understanding the emotional perspectives of negotiation partners can enable you to mirror their emotions to boost your connections or provide reassurances to uncertain partners. 

This makes it essential to develop your skills in emotional intelligence across a range of areas. We’re going to take some time to explore some of the most pertinent of these for negotiation and conflict resolution. 

Self-Awareness and Self-Regulation 

As we’ve already touched upon, self-knowledge is one of the key aspects of emotional intelligence. When you’re developing this ability, you should focus on the twin traits of self-awareness and self-regulation. What this means is that you can more effectively identify and understand your emotional state during challenging situations. You can then manage your emotions to the benefit of the immediate circumstances and your long-term relationships. 

Self-awareness 

Developing your emotional self-awareness is really a process of getting to know yourself better. Make a habit of checking in with yourself throughout the day to note what experiences you’ve had, the emotions you felt from them, and how this influenced your physical and psychological responses. In particular, pay attention to your emotions before and during both conflicts and negotiations. It can help to keep a daily journal so you can notice consistent effects and become more adept at identifying and managing them. 

Self-regulation 

Self-regulation is often harder to achieve than self-awareness. It’s about managing the behaviors and thoughts that can feel like perfectly natural outcomes to certain emotions. Unfortunately, it’s these instinctive behaviors that can affect your sense of control, agility, and positivity during situations like negotiations and conflicts.   

There are several practices you can start implementing, including: 

• Cognitive reappraisal: Cognitive reappraisal involves recognizing tough emotions and taking a mental step back from them. You can then examine how helpful or accurate the emotion is. Challenging inaccurate emotions can also give you a greater sense of agency over your feelings. 
• Positive self-talk: One of the issues with emotionally difficult circumstances is it can be easy to talk yourself down. This can trigger further negative emotions, leading to a spiral that isn’t helpful in conflicts or negotiations. Start to identify positive attributes and feelings about yourself. Learning to focus on the positive in conflicts and negotiations can help you feel more engaged and effective. 

It can be challenging to develop both emotional self-awareness and self-regulation. If you find you’re struggling with these elements, spending time with a therapist can be a good way to better understand and manage your emotional states. 

Empathy and Social Awareness 

The people you’re engaging in negotiations or resolving conflicts with are humans with complex emotions. Just as you need to recognize your own feelings, emotional intelligence is about ensuring that you can respect and navigate others’ emotions too. Of course, people’s responses to emotions vary, so the main skills to develop when interacting with others are empathy and social awareness. 

Empathy and social awareness are closely tied concepts. Effectively, they describe the ability to consider, understand, and respect the emotional perspectives of others. In particular, appreciating the emotions of a diverse range of people with lived experiences different to your own. In essence, you’re putting yourself in their shoes to imagine what the situation is like for them, the feelings they’re confronted with, and the challenges this may create. In conflicts, this is key to experiencing others’ sides of the disagreement and finding a way to work together toward a conclusion. In negotiations, it shows you’ve considered partners’ needs, allowing you to work toward mutually beneficial outcomes.  

While empathy is often considered a natural trait, you can learn and develop it. Begin by simply reaching out and asking people how they’re feeling in different situations. This is particularly important with regard to social awareness, as the aim is to meaningfully interact with people from various backgrounds. These diverse interactions not only develop your emotional intelligence but can also give you a better understanding of the multitude of challenges people face.  

Training yourself in active listening skills is also key to being able to spot verbal and body-language signs of emotions. Importantly, be willing to open yourself up regularly to imagining yourself in different emotional and social positions and experiencing the feelings that come with these. 

Keeping All Parties Meaningfully Involved 

In conflicts and negotiations alike, it’s very easy as a leader to approach the process from an individual perspective. You may want to control the situation and direct it toward what you feel is the best outcome. Nevertheless, the emotionally intelligent approach is to remember that all of these situations involve multiple people. Whatever your goals are for the situation, it’s wise to help everyone feel as though they have a certain amount of agency in achieving its outcome. This makes the process more of a collaboration that suits everyone’s needs, rather than a battle. 

One solid area of focus is your own employees and colleagues. Securing team buy-in is vital because it gives everyone a sense of ownership of projects and the business, which tends to make them more emotionally and practically engaged in achieving positive outcomes. You can gain buy-in by being transparent about goals and objectives, which aids clarity and builds trust.  

Another tactic is to regularly recognize the contributions of your team, which helps them feel valued. These emotionally intelligent steps minimize the potential for conflicts. Your efforts also build trust, which can make navigating conflicts easier if they arise.  

When it comes to negotiating with external parties, keeping them involved tends to mean encouraging them to be vocal about their needs and interests. This not only shows them you’re considerate of their perspectives, but also gives you information you can make informed decisions about. When all parties commit to being meaningfully engaged and communicative, you can boost your emotional connections with one another and set a positive atmosphere. 

Conclusion 

Developing your emotional intelligence can empower you to be an effective leader throughout negotiations and conflicts. There are various traits to focus on here, from greater empathy to emotional self-regulation practices.   

Remember, though, that building your emotional intelligence isn’t just a way to become a more agile, competent, and relevant businessperson. Pursuing greater emotional sensitivity and perceptiveness is also an exercise in being a more well-rounded human, which may improve your personal life as well as your professional goals.

About the Author

Indiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle. 

The post Enhancing Negotiation and Conflict Resolution with Emotional Intelligence  appeared first on The European Business Review.

In a globally connected world characterised by diversity, there exist different approaches towards negotiation, which are dependent on people’s respective culture. In this article, the authors discuss the significant impact of culture to negotiation processes as expounded on three culture types – Dignity Culture, Face Culture and Honour Culture – with the aim of helping us understand one another better.

Executives in our negotiation programs quite often ask: “How should I negotiate with people from a very different culture?” Most negotiations in today’s globally connected world take place in a multinational context. While this has brought us all closer, at the same time it has added to the anxiety of business executives when they are dealing with cultures with which they are not very familiar. Most of the executives with whom we interact highlight culture as a very important factor as far as negotiations are concerned.

Why do cultures have a strong impact on negotiations? Before answering this question, let us try to understand what happens in a negotiation. A negotiation is primarily an interaction that someone has with one or more counterparts to satisfy a particular need and thereby gain an advantage or claim something. Negotiating is basically a relationship between an individual’s style of negotiation and that individual’s interpretation of the situation. Culture influences both the individual’s style of negotiation and the way negotiators interpret situations and their counterparts’ behaviour.

Negotiation Situations and Style

Negotiation literature identifies two paradigms to define very distinct negotiation situations and styles – namely, (1) distributive or competitive negotiations and (2) integrative or collaborative negotiations.

As the diagrams above suggest, a competitive situation is one where the negotiator has to get the best outcome at the cost of the counterpart’s position. For example, in a typical traditional vegetable market in rural India when you buy potatoes or onions, you bargain for a better price with the vendor. You will get a lower price only if the vendor reduces his or her price expectations. Competitive negotiations are also known as positional bargaining because of the excessive focus on positions during such negotiations. On the other hand, collaborative negotiations are also known as interest-based negotiations or integrative negotiations because the focus is not really on asking the counterpart to reduce his or her expectations but, rather, the focus is on finding the best solution that will actually improve the payoff of both parties.

[ms-protect-content id=”9932″]

Cultures influence the way we behave and also the way we assess other people’s behaviour. Hence, culture has a strong impact on negotiations. Each culture has a cognitive component and a normative component. A culture’s cognitive component deals primarily with the different values that the culture espouses. These values affect our understanding and judgment of what is acceptable and what is not, what is right and what is wrong and so on. On the other hand, the normative component of a culture outlines common rules of behaviour: how to sit, how to greet people, how to eat, what to say, what not to say, etc. Rules and norms are outlined by culture. Let us try to understand in detail why and how culture influences negotiators.

Cultures influence negotiation strategies in two ways. Culture influences the way the negotiator prioritises his or her interests, and culture also dictates how the negotiator asks for what he or she is seeking. When negotiators are involved in the process of exchanging information, a range of behaviours is possible. However, these behaviours are deeply influenced by culture. For example, confrontation is a typical negotiation behaviour but, while in some cultures direct verbal confrontation is considered to be a normal part of negotiation behaviour, in others verbal confrontation is not an option. Similarly, some cultures influence the negotiator’s interests and priorities. For example, individualist cultures might inspire the negotiator to seek self-interest, while more collectivist cultures could inspire the negotiator to seek objectives that would satisfy the interests of not just the individual but also of the community as a whole.

The following table sets out different cultural prototypes and their impact: 

East vs. West and Beyond

Traditionally the world was seen as East vs. West. The Western hemisphere had a uniform concept of the East and vice versa. However, in the 20^th century this prototype was replaced by a more East-middle-West cultural prototype. Cultural psychologists divide the world into three prototypes and each one has a strong bearing on negotiations. These culture types are dignity culture (Western culture), face culture (East Asian culture) and honour culture (Middle Eastern, Southeast Asian and Latin American cultures). Jeanne M. Brett in her seminal work Negotiating Globally (2001; third edition, 2014) argues that these culture types can be described:

“in terms of six sets of characteristics: self-worth, power and status, sensitivity and response to insults, confrontation style, trust and mindset. […] Self-worth refers to a person’s sense of his or her own value in society. Power refers to a person’s ability to influence an outcome. Status refers to a person’s position in a social hierarchy. Sensitivity and response to insults refers to the way a person is affected by and responds to another’s offensive behaviour. Confrontation style refers to how a person responds when faced with defiance, opposition, or hostility. Trust is the willingness to make oneself vulnerable to another person. Mindset refers to the way people reason and process information.”

What are the dignity, face and honour cultures? Let us look at each one in turn.

Dignity Culture

Dignity culture is the cultural prototype of the Western hemisphere. Dignity culture societies are more egalitarian and hence the self-worth of an individual is self-determined. Since self-worth is independent of social status and does not depend on social opinion, it is also possible that negotiations will focus more on individual welfare. In such cultures, retaliation is less common because of the lower dependence on others for self-worth. At the same time, greater importance is attached to trust and reciprocity. In addition, due to the influence of Greek philosophy and especially Aristotelian logic, a highly-analytical approach can be seen in negotiations.

Face Culture

Face culture is the prototype of East Asian societies. The main feature of these societies is collectivism. Self-worth is socially conferred and depends on a person’s relative position in a stable social hierarchy. The atomistic unit of society in a face culture is the family. Hierarchies and social relationships are very important in face culture. As a result, there is less confrontation in negotiations, while interactions are more indirect and impersonal. Interpersonal trust is important in face culture but this trust does not merely emanate from interpersonal interaction – rather, it also depends to a great degree on institutional approval. Some scholars even argue that forms of institutional surveillance (e.g., surveillance by the family, community, Church, etc.) serve as reliable external guarantors of individual behaviour. Another interesting characteristic that has a huge influence on negotiations is the holistic mindset of individuals in face culture. When negotiators analyse a situation, they focus both on the problem and on the context in which it is embedded. Many executives tell us that almost every negotiation in a face culture becomes a multi-issue negotiation.

Honour Culture

Honor culture societies are probably the most diverse, which is why it is more difficult to identify the precise prototype of honour culture. Self-worth has been seen as a combination of an individual’s assessment of his or her value in society and socially-conferred value. In other words, it is important to have social approval of individually determined self-worth. In honour cultures, societies tend to be hierarchical but these hierarchies are not always stable and so they need to be established. For negotiation, this is a very important issue. In a negotiation in honour cultures, there is an increased possibility of a confrontational approach. According to Brett:

“in honour cultures, trusting means putting your self-worth in the hands of others. If you trust and your trust is reciprocated, then you gain honour because your self-worth is ratified. But there is the huge risk associated with trusting. If your trust is not reciprocated, there is both a social loss of social face and also a personal loss of self-worth.”

Hence negotiations in honour cultures at times rely more on the argumentative brilliance of negotiators and not only on their trustworthiness.

Final Advice: Do Not Overlook the Individual

Having gained an understanding of these three cultural paradigms, we must also understand that culture is not a static and stable construct. So many countries in the world today have education systems that are highly influenced by European education systems. Many young men and women relocate to different parts of the world to pursue higher education, develop their careers or simply to benefit from new experiences. As a result, across the world there has been a great degree of cultural exchange. The framework that has been shown in this teaching note aims to help us understand one another better. Scholars of cross-cultural research have been working very hard to separate cultural stereotypes from cultural knowledge. This is why we strongly advise all negotiators not only to make an effort to understand the cultural nuances of their counterparts but never to undermine the importance of the individual with whom they are dealing. Negotiations are strongly influenced by individual needs and insecurities. Culture influences the way these needs are expressed and prioritised but this does not mean the basic needs of negotiators are absent. After all, across the world, a smile is always sweet and tears are always salty.

[/ms-protect-content]

This article was originally published on 20 January 2018.

About the Authors

Guido Stein is Academic Director of the Executive MBA of Madrid, Professor at IESE Business School in the Department of Managing People in Organizations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance).

Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepre-neurship Department at IESE since October 2009. His research has focussed on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity.

The post How to Negotiate Effectively in Different Cultures appeared first on The European Business Review.

Understanding Your Counterpart

Knowing Your Opponent: Successful negotiation starts with understanding the party on the other side of the table. Research their background, interests, and objectives. This knowledge allows you to tailor your approach and find areas of common interest.

Empathy and Active Listening: Practice empathy and active listening. Understanding the concerns and needs of the other party can provide valuable insights into what they value most in the deal.

Preparation and Strategy

Setting Clear Objectives: Before entering any negotiation, be clear about your goals and limits. Know what you are willing to compromise on and what is non-negotiable.

Anticipating Challenges: Anticipate potential objections and challenges. Preparing responses and alternatives in advance can keep the negotiation smooth and under control.

Communication Skills

Clarity and Conciseness: Be clear and concise in your communication. Avoid misunderstandings by articulating your points and understanding theirs accurately.

Non-Verbal Communication: Pay attention to non-verbal cues. Body language, eye contact, and tone can often tell you more than words.

Leverage and Persuasion Techniques

Understanding Leverage: Recognize the power dynamics in any negotiation. Leverage can come from various sources – information, position, or timing.

Effective Persuasion: Employ persuasion techniques judiciously. This includes building rapport, using data and logic, and appealing to emotional aspects where appropriate.

Negotiation in Different Cultures

Cultural Sensitivity: Business is global, and so is negotiation. Be aware of cultural differences and nuances in communication styles. For instance, what is considered assertive in one culture might be seen as aggressive in another.

Adapting Your Style: Adapt your negotiation style to suit the cultural context. This flexibility can be critical in building trust and respect.

The Role of Ethics in Negotiation

Maintaining Integrity: Ethical negotiation is paramount. It’s about finding mutually beneficial solutions, not about winning at any cost.

Long-term Relationship Building: Ethical practices in negotiation pave the way for long-term business relationships and a good reputation in the industry.

Creative Solutions and Win-Win Outcomes

Thinking Outside the Box: Sometimes, the best solution isn’t obvious. Be open to creative problem-solving.

Win-Win Scenarios: Aim for outcomes where both parties feel like they’ve gained something. This could mean a more collaborative approach and thinking beyond the immediate deal.

Case Studies and Real-World Examples

Learning from Others: Study real-world negotiation case studies. Analyze both successful and unsuccessful negotiations to understand what worked and what didn’t.

From the Boardroom to the Caribbean Cruise: For example, consider the famous negotiation between two major companies that were deadlocked until they decided to continue their discussions in a less formal setting during a Caribbean cruise. This change of scenery broke the impasse and led to a successful deal.

Harnessing Technology in Negotiations

The Digital Edge: In the modern business landscape, technology plays a pivotal role in negotiations. Utilizing digital tools can give you an edge, from video conferencing platforms that enable negotiations across continents to data analytics tools that provide insights into market trends and negotiation patterns. Virtual reality (VR) and augmented reality (AR) technologies are emerging as game-changers, allowing for immersive and interactive product demonstrations even when parties are miles apart. Moreover, digital contracts and e-signatures facilitate seamless, efficient finalization of agreements. Embracing these technological advancements can not only streamline the negotiation process but also open up new possibilities for creative deal-making. With the right blend of traditional negotiation skills and cutting-edge technology, you can navigate complex business deals with greater precision and effectiveness.

Conclusion

Negotiation is a vital skill in the world of business. It requires preparation, understanding, effective communication, and ethical conduct. By employing these strategies, you can turn negotiations into opportunities for creating value and building lasting relationships. Remember, negotiation is not just about getting what you want but finding the best possible solution for all parties involved.

The post The Art of Negotiation in Business Deals appeared first on The European Business Review.

Contrary to common assumptions, negotiation is so much more than conflict resolution; and to get the most from your negotiations you have to both understand human nature and then harness it to deliver the results you are seeking from your negotiations.

Most people understand negotiation to be something international diplomats, executives, sales managers or professional buyers do; a chess match between rivals that one will win, and one will lose. They might think of it as an isolated step in the process of sales or buying, and when it does happen, it’s seen as an event – infrequent at best – rather than an ongoing process.

The truth is very different. The Latin root of the word negotiation, negotiatus, literally means “to carry on business.” From that origin, you can see that negotiation encompasses every part of your business interactions, including management, sales, legal, marketing, purchasing, and even human resources.

Missing Out On The Bigger Picture

As the conventional understanding of negotiation is becoming narrower and more marginalised, we see organisations of all sizes relegating negotiation to an activity confined to the sales team. The notion that any act of doing business, or indeed anything that is not leisure, is a form of negotiation has been clouded over by our need to make sense of the highly complex nature of the large organisations that are so typical of the modern world.

Even seasoned leaders and executives fall into the trap of thinking that negotiation is something that only takes place when it comes to the time to agree on a price or sign a contract. The opportunities missed to both create and claim value through negotiation in the larger sense are profound.

Like most executives and managers, you have probably made two key mistakes:

1. Event Mindset: You’ve been focused on upcoming negotiations as events. you’ve been thinking almost exclusively about how you will present your case during the formal meetings when exploring potential transactions, alliances, and partnerships.

2. Failure To Measure: You have not been measuring your own performance and/or your team’s success at negotiating. How can you improve the way that you negotiate if you have no idea how you stack up against best and leading practices? As famously stated by W. Edwards Deming, “You can’t manage what you don’t measure.”

This leads to a pivotal question.

Do you think of yourself as a professional negotiator?

Your answer to this question will go a long way to shaping both your expectations and results.

My definition of a professional negotiator (according to the Latin root of the word) is “anyone who is in any way involved in doing business, or for that matter, anything outside of their leisure time.” Does that cover what you do?

The professional negotiation community is made up of those who negotiate to do business, plain and simple. Transactions are negotiated between people and between organisations daily. Agreements are negotiated within organisations internally by the hour, during every meeting, and even in every conversation that takes place between colleagues and business partners. Wherever these two activities take place you will find professional business negotiators in action!

Although you may not consider yourself to be a professional negotiator, the fact is that you should be one. Most of those in the corporate world don’t even realise they are negotiating all day, every day.

How does that understanding change the game for you? If you were consciously aware that almost every interaction with your colleagues and counterparts represented a negotiation opportunity, would you be convinced to apply negotiation best practices to ensure that you get the best possible results?

Are you starting to see the opportunity for competitive differentiation?

It’s Not What You Might Be Thinking

One of the things that surprises me about the negotiation training industry is that so many negotiation trainers advocate that almost all negotiations are similar, and that the point of departure is the assumption that there is some kind of conflict present between the respective positions assumed by the parties.

This kickstarts the negotiation preparation process off on an entirely negative footing.

What you focus on in life is what you’ll get more of, and if your basic assumption is that negotiation is centered on resolving conflict (rather than the action of simply doing business), then I suspect that you will find your life rather full of conflict.

Suggesting that all negotiations are the same is like saying that all sports are the same. Following that logic, a great competitive sailor is also a great marathon runner. While you certainly will share many characteristics with other athletes – eating healthily, thinking competitively, displaying a high degree of training discipline –your particular code of sport will require you to master vastly different techniques and tactics in order for you to be successful.

It is no different in the world of doing business. As a successful and professional business negotiator, you will share many of the characteristics of successful negotiators in areas like conflict resolution or hostage negotiations, but you will also need to master many business-specific negotiation strategies, tactics, and techniques.

All Change, No Change?

If you have been in the business world for any length of time, you have likely observed that our collective culture has completely transformed from what was the norm as little as fifty years ago:

• We work more on our own and less in task-driven, collegial, industrial settings.
• We obtain and consume food in ways that might have confused our parents and grandparents.
• Our populations are congregating in urban centres more than at any time in history.
• We spend our leisure time in ways that would have been unfamiliar to previous generations.
• We structure organisations and governments more democratically than ever before.
• We interact with others using communication platforms almost unrecognisable from the way the world operated even as recently as 2000.

By contrast, the way that negotiation skills development has been taught has largely remained unchanged. So much has changed in how we communicate (using email, phones, social media and video conferencing in addition to face to face meetings) and with whom we communicate (people from all over the world rather than only people from our own cultural background), that it has rendered obsolete much of what has been traditionally taught in the negotiation classroom.

So much of what was advocated as negotiation best practice was (and still is) founded on a flawed, linear assumption that largely discounts human nature, and revolves around a mono-cultural mode of interaction rooted in a North American, British, or European perspective.

You see, while the world is changing around us due to the runaway train of globalisation, anthropologists and psychologists largely agree that human nature itself has not changed much over thousands of years.

Against this backdrop, I find it astonishing that so much of what continues to be taught by many apparent ‘negotiation experts’ has its roots in:

• Research conducted mainly among groups of undergraduate students
• The specific context of conflict resolution scenarios (e.g., labor relations, peace treaties, big corporate disasters, etc.).

Let me clarify: while there is useful learning to be gleaned from the research studies done by the academic institutions, the premise for that research is too narrow and, to a large extent, discounts the lowest common denominator that ties people together. This research has largely ignored human nature and has narrowed the focus of what is deemed to be ‘negotiation’ to such a niche definition that it mostly revolves around finding ways to reach an agreement around a set of so-called ‘conflicting interests’.

So Much More Than Conflict Resolution

Don’t get me wrong, there often will be a conflict of interests present between parties to a negotiation. But to start with the assumption that negotiation is only a means of conflict resolution or closing formal transactions is to completely ignore the original roots of the word (negotiatus: to do business), and creates an expectation that does not best serve the objective of reaching lasting and mutually-beneficial agreements.

I like how Merriam Webster’s Dictionary defines the term ‘human nature’: “The ways of thinking, feeling, and acting that are common to most people and the nature of humans; especially: the fundamental dispositions and traits of humans.”

If we can agree that human nature is common to all humans and that (for the moment, at least) we negotiate with humans, then why would we choose to put the focus of negotiation on finding solutions to conflicting interests, when the reality is that, at a root level, we all share the same set of interests?

Wouldn’t it make more sense to tap into that which is shared and common amongst all people and peoples – irrespective of gender, culture, or age – to move toward reaching an agreement?

A Novel Approach

To get the most from your negotiations, you have to both understand and harness human nature to achieve the results you are seeking from your negotiations.

If you can understand the opportunities offered by human nature for optimising your negotiation results, you will be able to apply fantastically powerful negotiation strategies, techniques, and tactics across cultures (the last time I checked all cultures were made up of humans), over all forms of communication, and across gender and generation gaps. You will be surprised at how easily you will be able to move your own approach to negotiation from one of default, to one of design.

Approaching negotiation by design rather than by default will forever change the results you will achieve from your interactions with others. A simple fact of life is that your results in business and in relationships are a direct reflection of your ability to negotiate and connect with people. Yet, most people lack skills in handling relationships with co-workers, clients, vendors and other stakeholders.

What would you say are the biggest causes of stress, frustration, and problems in your life? Could it be relationships with people, money, and health (or some combination of these)?

Almost all of our frustrations and anxieties in life stem from one of these three areas. While money and health problems are outside the scope of this article, it’s my guess that dealing with people is one of the biggest, if not the biggest challenge in your life. If so, you’re not alone. This is true in the lives of everyone I know.

Isn’t it interesting that, even though these three areas are at the root of almost all of the challenges we face in life, little time is spent on developing our skills in any of these areas during our formal education years.

By the time you add up the years spent in grade school, high school, college, and on the job, most people will have participated in anywhere from twelve to twenty years in formal education, without having spent a single day learning about people!

No wonder, then, that the negotiation results obtained by business people across the world are so consistently mediocre. What little skill they have typically revolves around finding manipulative means to get their own way.

There is a profound opportunity awaiting negotiators who will equip themselves with the tools to approach their negotiations by design rather than just reacting by default to the negotiation scenarios that play out around them every day.

The complexity that has been added to our world because of globalisation and the rapid improvement of communication technologies (our connectedness) mean that those who understand and apply the best practices (and indeed the leading practices that support negotiating in a business context) will get an unfair share of the spoils that are up for grabs.

Becoming aware that you are constantly negotiating will increase your earnings, enhance your relationships, reduce conflict, and maximise your time. As you learn to communicate accurately and convincingly, you will reduce the time you sacrifice on the altar of miscommunication, which inevitably leads to escalation, delays, frustrations, and frayed tempers.

This article was originally published on 22 September 2019.

About the Author

Jan Potgieter is the Managing Director of Imperium Global Negotiation Solutions. Jan has significant experience in high value, cross-industry and cross-cultural negotiations gained on assignment with leading global organisations including Vodafone, Telefonica, Pfizer, IBM, Adidas, Nokia, Macquaire Bank, RBS, Network Rail, TRL, The NHS, Schlumberger, Motorola, Altana AG, The Hilton Group and many others. 

The post A New Way to Look at Negotiation appeared first on The European Business Review.

When negotiations take place between business organisations, it’s clear that those involved in the discussions will be intensely focused on the content of their exchanges. What is, perhaps, not so evident is the role and influence of the precise media of communication that may be employed in this digital age. As this enlightening article explains, we would be well advised to choose our weapons carefully in the duel of modern business negotiation.

1. New environment

The procurement manager of a pharmaceutical company, a young MBA who has only held their position for a year, is called on by the Director of Research and Development to source a new material within a week. The company has its existing suppliers, and the price negotiations nearly always follow a very predictable course. However, this time, the situation is different. The pressure to find a supplier is high and the only option is one located in another country. The negotiation is conducted via email and the price demanded by the supplier is very high. The procurement manager sticks to the normal policy and asks for a discount, but receives subsequent counter-offers to no avail. The limited time available means this is the only supplier that can serve the company’s needs. Fortunately, an interesting opportunity arises: the following week there is a convention attended by both the Director of Research and Development and this particular supplier. At the end of the event, the director, after face-to-face negotiation, returns after coming to an agreement, in under twenty-four hours, at the preferred price and with a long-term contract. After the successful conclusion of the negotiation, the procurement manager asks what went wrong with the negotiation by email so that it failed to reach an agreement to the satisfaction of both parties.

Negotiations can be very different in nature; for example, face-to-face, in a team, multilateral, incorporating significant multicultural elements, and also those in which the new communication technologies play an important part. In companies and other organisations, negotiations are increasingly conducted online¹. In this technical note, we analyse the types of online communication within the context of that pairing that permeates our lives: space and time. We discuss what effects the use of technological tools have on negotiators and what principal biases prevail when using them, as well as the strategies that should be employed in online negotiation processes so as to achieve greater success.

2. How do space and time influence negotiations?

The classic negotiation process takes place in a single venue and in a simultaneous manner, with communication between the parties playing an essential role, amplified by the opportunity to interpret the non-verbal signals, such as, for example, body language. With the latest technological tools, which are driving an unstoppable wave of digitalisation, these two dimensions have been transformed, and even overlap on a single plane. See Figure 1 for a summary chart.

The information transmission and communication process is not just verbal; it also includes the abovementioned body language, which always transmits signals which can be deciphered in a competitive or a collaborative way. Successful negotiators are crack communicators that adapt to the tools at their disposal and to the environment in which they find themselves.

Online communication mechanisms can be organised according to the level of expressivity that the language reaches in them, which depends on the capacity of the medium to communicate with a greater or lesser degree of detail, based on the signals that it includes. Face-to-face negotiation is the transmission method with the highest level of signals (since it includes both verbal and non-verbal communication), while emails are more limited in this regard. On the temporal plane, a second dimension is in the interactivity of the medium, which captures the level of synchronicity of the interactions or the extent to which the individuals work on the same activity at the same time. In face-to-face negotiation, phone calls, video conferences and chats, the interaction is synchronised, since the communication between the two parties is synchronous. Conversely, in negotiation via email, the communication is asynchronous, since you can reply later or whenever you find it convenient.

Bearing in mind the binomial of the space and time dimensions in which the communication between the parties takes place, four situations are identified:

Same time, same place: traditional negotiation takes place in a shared space and in a simultaneous manner. The parties involved rely on direct and immediate communication and a wide variety of signals that offer the possibility of interpreting information quickly, identifying interests and addressing the offers put forward. The uncertainty involved in all negotiations can be better managed than in other settings, as the designated strategy can be implemented with greater efficiency, taking the reactions of both parties into account. Another essential element, which has a greater chance of developing, is the basic level of trust necessary for a negotiation to progress, which frequently depends more on nuance than on data alone. Lastly, interpretations may be more accurate, so the chances of a misunderstanding, which can introduce so much noise into a relationship, are reduced.

Same time, different place: the negotiation process is synchronised, but the parties involved are in different places. Calls or video conferences allow the creation of a feeling of proximity with the other party, though freshness and richness are lost compared to the preceding situation. However, if the parties already know each other and the process is on track, it allows for faster progress. Nevertheless, it is not the best way to start, nor is it advisable for closing a negotiation, particularly if there is a degree of distrust and uncertainty that physical presence would help to manage better. Nevertheless, the use of these channels is increasing and the styles are becoming more adaptable.

Different time, same place: the negotiators interact in an asynchronous manner, though they have access to the same document or share the same physical space at consecutive times. An example could be the tendering of a public project that requires the participation of several companies, presenting their proposals in successive rounds, till the project is awarded to one of them. Another case is that of two or more collaborators working on the same electronic document, negotiating and agreeing on their contributions depending on the successive versions. It is an appropriate environment for contributing to the shared understanding phase of what is being negotiated, the production of packages, the consideration of equivalent offers simultaneously and the final drafting of the agreement, providing that special care is taken and there is recourse to a physical meeting if required by the degree of uncertainty or confrontation.

Different time, different place: response time to emails is becoming ever more rapid, and email is becoming a more synchronous tool. The proliferation of the smartphone has made it the most commonly used device for accessing the internet, currently used by 94.6% of Europeans. Already, in 2016, more than 49% of all emails worldwide were read on mobile devices and tablets (IBM Marketing Cloud, 2016)². The asynchronous nature of the medium can be turned into an advantage when it comes to negotiating, if it is used with logical and deductive rigour to construct proposals, identify back-up points, elaborate reference-based arguments and present the facts and data that support them. Time and the sequencing level of the information exchanged allow us to understand the messages of the other party more accurately.

3. The Social Distance Model

A third dimension that it is necessary to bear in mind when choosing the medium is social distance. As mentioned, if the distance is minimal or close, such as in a face-to-face negotiation, the language used will be more expressive. Conversely, if the distance is great, such as it is with shared files, the degree of communication will be much lower. Figure 2 shows the ascending model of this distance.

In one typical case of multilateral negotiation, numerous calls had to be made during the preparation phase, and communications by email and chat had to be made use of so as to obtain more information on the interests of the counterparts. Once they sat down to negotiate, they conducted the process face-to-face, but, during one phase of the negotiation, they kept in contact with a department located in another city by video conference. When the time came to close the deal, they created a shared document reflecting all the points reached, editing successive versions that had to be revised until a final proposal acceptable to all was reached. It can certainly be said that the chosen means of communication and interaction influence the quality of the process and also, therefore, its result. The success of the negotiations is ever more closely linked to the technology, and therefore, to the impact of digitalisation it produces.

4. The Online Negotiation Process

On average, an executive receives more than one hundred and fifty emails a day³, covering everything from the most trivial to the most important issues. This constant updating in the face of a major data flow makes many feel that their emails are not read carefully and they initially attribute less trust to the counterpart. Trust, therefore, in comparison with face-to-face negotiations, is lower both in the preparation phase of the negotiation and in the post-negotiation period, which means that long-term relations are less probable (Ebner, 2013). These lower expectations of collaboration are mainly due to the lack of non-verbal communication signals, characterised, according to the METTA model, by movement, environment, touch, tone of voice and appearance (Thompson, 2015), which naturalise the relationship in the negotiation (see Figure 3).

In communication by email, with shared files, the contextual signals disappear. In calls, the only category from this model is tone of voice, though in the video call option, movement, environment and appearance are relatively visible. With instant messaging, the written communication does not retain any of the signals, but a few added functions, such as inserting an audio clip, a video or an image, allow us to increase the non-verbal communication in a selective and, in certain cases, manipulative manner, since only the part that we want to show is seen. In a video conference, all the signals except touch are retained, though they are significantly different from those of face-to-face negotiations, depending on the quality of the software and the medium used.

The greater the social distance, the less the reach of the communication and the greater the complexity in building a fluid relationship based on mutual trust. In the same way, the shorter the social distance from the counterpart with whom we are negotiating, the more easily information can flow with all its subtleties, increasing the probability of generating personal trust, an irreplaceable element in any type of negotiation. Below, the different phases of a negotiating process are reviewed in the light of the impact of digitalisation and online tools in their broadest sense.

4.1. Approach

During the information exchange phase, when efforts are made to understand the interests driving the other party and to reduce uncertainty, more and more negotiators are tending to make telephone calls, have video conferences or use email or WhatsApp for shorter information exchanges, with the aim of streamlining the process. However, with an email, the information is distributed in an asynchronous manner, providing more time for its analysis.

Those who write the message or make the calls have a greater or lesser degree of power and maintain a more or less balanced relationship, depending on the type of negotiation in which they are involved. Some studies on group dynamics in face-to-face negotiations have shown that, between two groups of negotiators, it was only a few who conducted 75% of the process. For example, in a group made up of four people, it was two of them who conducted 62% of the conversation; in a group of six, three conducted more than 70%; and in a group of eight, three conducted more than 70%. Even when the success of the negotiation depended on the contributions, participation was not equal (Thompson and Nadler, 2002).

In communication by email, however, by using technological media to communicate, the party that in principle has more power reduces its capacity to express itself in a non-verbal manner as a leader. There is no direct visual contact, and the impact that relaxed and natural body language can have on an audience is lost.

On the other hand, the virtual and digitalised relationship, with appropriate preparation, offers negotiators representing what is, in principle, a weaker position the chance to participate, since they can tilt the power, express themselves appropriately and write in a clear and concise manner with brief, striking messages. The physical distance balances out the analytical and the persuasive.

If one expresses oneself in an abrupt manner or is perceived to have done so, it tends to provoke a much greater negative impact in the other party (Brett et al., 2007), so opportunities to display warmth and the potential for collaboration in the negotiation are reduced, without necessarily increasing competitive tension, since there are fewer signals that are interpreted in a negative manner.

Depending on the strategy that they want to use, the negotiator must choose the most suitable communication media and the one which, in turn, best suits the phase of the process. If the aim is to show greater cordiality and seek the trust of the counterpart, it is advisable to prioritise face-to-face or video conference negotiation, where social distance is minimum. If, on the other hand, a competitive negotiation is proposed, by using email, negotiators tend to apply eminently logical reasoning in the presentation of the facts, rather than arguments based on appeals to emotions; in this way attention is focused on the message, there is a better management of the responses and a greater tendency to make ambitious offers is recorded. When there is no personal contact, there is a certain degree of anonymity, and differences in power and status are reduced.

4.2. Beginning the Process: Contact

In any negotiation, it is important to make the most of the opportunities offered by the different communication channels. If, for example, email is going to be used repeatedly, it may be useful beforehand to have a first meeting face-to-face or by video conference.

If a call is made, it is important to identify when the negotiation should properly begin, for which reason it is essential to know where the other party is going to be at the time of the call. If we do not ask for or obtain prior information, we do not know where they may be, which works against us.

4.3. Exploratory Phase

In this phase, questions are asked so as to obtain the relevant information that is missing, or for comparison with what is available. The objective is to reduce uncertainty and lay the foundations for the personal relationship upon which the rest of the negotiation edifice will largely be constructed. In the case of email, this phase is usually omitted and it is common to start with the launch of the opening offers directly, introducing levels of risk that are difficult to control. Thus, it is advisable not to reject the opportunity to examine the interests of the counterpart. The advantage of the spatio-temporal distance is that it facilitates the comparison of the information and the reviewing of the calculations and weightings. It also relaxes the conflicts, since it brings with it the “down times” that have to carefully managed in face-to-face negotiations, so that they do not cause strange or unwanted effects, such as mistrust or a misreading with respect to the flow of power (“If they ask for down time, it is because we are cornering them, or they are unsure, or …”).

4.4. Options and Concessions

During this phase, when the counterpart is not visible and there are no social norms regulating the conversation, some aspects of common courtesy are perhaps disregarded and responses given in a blunt manner, so special attention must be given to how the message is interpreted. It must be emphasised that the medium bears almost as much weight as the content.

Another aspect that must be considered is the degree of privacy required during the negotiation. When one writes in a document, for example, one does not know who is receiving the message, or to whom it may immediately be forwarded, or whether the message could be subsequently used for future negotiations, or even if there is a possibility that it might be published. All these considerations seem self-evident, but they are not always sufficiently noticed.

Furthermore, if, in any negotiation, the element of “saving the face of the other party” (how the other ends up personally) has an influence, it is more easily forgotten in a situation where you do not see their face.

4.5. Closing

Once the closing of the negotiation is reached, the satisfaction with the result and the performance is lower among online negotiators (Thompson and Nadler, 2002), with experience indicating that the quality of the result and the possibilities of maximising the benefits tend to be less than in a face-to-face negotiation.

In addition, the potential for a long-term relationship is reduced, since the use of email or the telephone strengthens individual positioning, which promotes a more competitive nature. The shadow of the future, which facilitates the relaxation of the most competitive approaches and encourages inclusive exchanges, is diluted by the virtualisation of the relationship. It is not difficult to counteract this factor; it would be enough to celebrate the closure of the agreement physically or for one of the parties to visit the other.

Since the use of electronic devices, such as tablet or smartphone, eliminates non-verbal communication signals and reduces trust between the parties during the process, this will be even more accentuated at the end, which is generally in itself an eminently competitive phase. So, we must increase the levels of self-control of the parties, at the same time as agreeing ways of reducing the competitive tension when the time comes.

5. Strategies for Successful Online Negotiation

Below, we will examine some guidelines for action that favour a more collaborative approach and the creation of mutual trust.

5.1. Preparation

This is the phase for identifying expectations, analysing interests, assessing power, collating and ordering information and assessing the type of relationship, depending on whether one is faced with a competitive or potentially collaborative context. Using email or the telephone emphasises the importance of knowing who is on the other end, what they need, what they want, what their ambitions are (starting with the personal) and what alternatives are open to them.

It would be advisable to consider an initial approach, striking up a conversation without the explicit purpose of negotiating. As a result of this, information can be shared and obtained, while, at the same time, the perception of distance is reduced. A virtual relationship has to be created.

In an experiment conducted into negotiation by email, half the students who participated had the opportunity to make a five-minute call beforehand, with the limitation of not being able to discuss the issues to be negotiated. The students that made the call behaved in a more collaborative manner and reached better agreements than those that had not had the option of doing so (Thompson y Nadler, 2002).

If it is not possible to make this initial contact, it can be substituted with a video conference or a particularly friendly call, permitting the establishment of more informal contact. One of the possible ways to engender trust is to talk about something you have in common; a quick internet search should suffice to find topics of conversation. Another way of engendering trust is to display a profile photo in the email; it has been shown that replies to email requests to take part in a survey increase when a photograph of the sender is included, making the person more identifiable (Gueguen, Legoherel and Jacob, 2003).

Before initiating the contact, a great help in fostering a good relationship is to enquire about the most suitable time to call or make a video call; there are situations that can cause distractions to the other party or force them to interrupt the call. Politeness always helps to create a pleasant atmosphere, even in virtual relationships. So, it is a good idea to encourage good digitalised manners.

5.2. Contact

Once the two parties have been introduced, they start to establish the negotiation bases. In the event that a strategy has a clearly competitive orientation, the emphasis should be placed on examining the requirements and actual power of the other party, while trying not to show one’s own requirements. However, if the strategy has collaborative potential, the first interactions can be an opportunity to persuade the other party of the common interests. If the interaction is conducted over the telephone, it is necessary to listen actively to the other party, even remaining silent so as to allow them to reveal new information; given the awkwardness of remaining silent, the other party will be more ready to talk. In writing, on the other hand, the negotiator must rely on formality and good manners.

If you have prepared well for the negotiation, making the first call can place one party in an advantageous position if the other has not had time to prepare the process in the desired manner. If, on the other hand, the other party calls first and you do not feel prepared, you shouldn’t hesitate to tell them that you are busy at that moment. However, you shouldn’t wait long before returning the call, once you have prepared yourself.

In video conferences, it is a good idea to maintain visual contact with your counterpart, looking at the camera and trying to avoid missing visual elements of non-verbal communication. Another possibility is to configure the screen so as to have both features. As for the surroundings, the most appropriate is a room equipped for meetings or video calls and free from elements that could distract attention. On a personal level, one should dress in keeping with the situation. One should pay special attention to not misinterpreting the pauses of the counterpart and talking over them. One should also bear in mind that free and low-cost video conference tools often have problems with the audio, reducing the resolution and quality of the call.

5.3. Approach

In this phase, the creation of value continues for the parties involved in the negotiation. If a competitive strategy is adopted, value is demanded at the expense of the other party. If, on the other hand, a collaborative strategy is proposed, value is created together, which will subsequently be distributed. Steps should be taken to avoid attribution bias whereby negative intentions are identified in the counterpart.

In a collaborative negotiation, increasing the exchange of emails will help to collate the information, helping to satisfy common interests. This measure allows the sending of well-reasoned information that can be processed carefully by the other party. Time is fundamental in this case, so as to understand the interests and the options of the other party. Strategies that are usually effective include being sparing with the information, being brief and concise, using language that displays an interest and an intention to collaborate with the other party, defending the proposals and motives, and, in a multilateral negotiation in which one of the parties is dominating the conversation, inviting other parties or potential allies to participate to a greater extent.

Remember not to fall into time synchronisation bias, which involves negotiating as if in real time, making offers and counteroffers, with hardly any of the argumentations and clarifications that help to reach an agreement.

During the online interaction, there are instances where it may be advisable to imitate the other party. In a study conducted in two different geographical areas, a group of negotiators imitated their opponent during an email negotiation: “When the other person uses emoticons in their message, such as ;), the other party should also do so. If they use a certain vocabulary, metaphors, grammar, specific words or abbreviations, such as “y’know” (you know), you should do the same. Both in the experiment conducted in Thailand and in the one conducted in the United States, the imitators that applied online mimicry during the first ten minutes reached more profitable agreements in their negotiations than those that applied them in the last ten minutes of negotiation” (Swaab, Maddux and Sinaceur, 2011). However, sending emoticons and abbreviated language seems a little unprofessional in certain negotiations, and it depends on the cultural context in which the negotiation is taking place.

One must pay special attention not to fall into the snowballing effect. This consists of sending large quantities of information in justification of one of the underlying interests, since the other party may succumb to the temptation of not reading it particularly carefully and responding with the same quantity of information, which could cause a block. A study into this issue states that 70% of emails received by executives receive less than a minute’s attention (Thomas et al., 2006). Additionally, the recipient may interpret it as an “aggression”, such that the emails build up and it becomes impossible to reply to them appropriately. So, it is a good idea to set out a clear argument that can be followed when read quickly, always respecting the message chain as it happens.

The appropriate course of action is to reply to the messages received during the process within a maximum period of twenty-four hours, so as to avoid showing a lack of interest, unless this is precisely the intention. Numerous studies have demonstrated that emails have the highest probability of being opened during the first hour of the day; subsequently, the opening ratio reduces by 5% and, after twenty-four hours, to 1%⁴. However, the asynchronous nature of this particular tool can be turned to your advantage by reading the message carefully several times and checking the information. It has also been demonstrated how, in synchronous negotiation simulations, there was a greater competitive tendency than in asynchronous negotiations, principally due to the time available, which allowed the exchange of a greater quantity of information more relevant to the process (Pesendorfer and Koeszigi, 2006).

If they make a call, impatient negotiators can transmit a great quantity of information in a limited period, so that the process progresses more rapidly. In this situation, they make the mistake of assuming a “reactive devaluation”, by transmitting that the information is manipulative and serves only their own interests. However, it is also true that it serves to reduce uncertainty and to understand interests. In this context, brevity and clarity work in your favour.

5.4. Generation of Options

In this phase, in a negotiation by email, if there is no trust between the parties and the uncertainty is high, it is more likely that the bargaining will intensify than in a face-to-face negotiation. In order to reduce this competitive tension and not fall into a confrontation bias, the different offers must be proposed in an ordered manner and in separate paragraphs, using multimedia tools such as charts, tables, presentations and reports that elaborate on the argumentation. Secondly, it is a good idea to present offers in packages, rather than variable by variable, with the aim of obtaining more information on the priorities of the counterpart and clearer responses, while at the same time showing flexibility.

Every email written must have its spelling and grammar checked and be edited before being sent to the recipient. When writing it, you should include a greeting at the beginning and a farewell, or simply the signature footer, at the end, except when it is part of a chain of instant messages. To avoid mistakes in the addressees of the message, whose possible recipients should have been reviewed beforehand, it is a good idea to complete the “To” field after finishing writing the email and adding the attachments. Finally, it is advisable to complete the message subject field in an eye-catching manner, so that the most important details stand out. Instead of “Today’s meeting”, it is better to use “Next Meeting, Monday 11/5 at 12:00 hrs”; rather than “Agenda for the negotiation process”, it is better to use “Agenda for the [name] negotiation process for May: principal and secondary points”.

It is essential to respond in accordance with the urgency of the situation and in no more than one day. A delay in the response generates a certain anxiety and a subsequent negative attribution. In a negotiation of a collaborative nature, if more time is required for a response, simply send a quick email requesting this time and create an alert that says when you will be in a position to respond. However, if the other party takes a long time to respond, two suppositions emerge:

The offer is being studied and considered, in expectation of other movements that may influence the negotiation.

They want to foster an image of power: “If I take longer to respond, it is because I have the power to do so”.

In a chain of sent and received messages, it is important to create an experience of uninterrupted contact that fosters a collaborative relationship, writing, for example, “As discussed earlier…”, or copying a fragment of a previous message and, above all, maintaining a similar response time, so as not to desynchronise the conversation. However, it is better not to send emails over the weekend, since most people are annoyed by having their free time invaded by others. In this sense, waiting is moving forward.

In intercultural negotiations conducted by email, since the other person is not present, it is easy to forget certain markers, such as an accent or features that remind us of their origin and, as a consequence, we may make the mistake of employing certain cultural references specific to our own society. This is a further reason why it is advisable to read the message several times before sending it.

5.5. Creating the Agreement

Once the parties have defined the topics to be addressed and the underlying interests, and they have suggested certain options, the distributive phase begins, in which the aim is to realise the created or integrative value and reach an agreement that satisfies both parties. In this phase, it is advisable to propose a previously prepared concession strategy and construct a specific and precise agreement.

There are two crucial elements to an agreement that it is necessary to bear in mind. Firstly, the feasibility of the agreement, for which it helps to be clear about how the solution we have arrived at will be implemented. Secondly, the agreement must be measurable over time; for example, saying “Let’s meet in a week” is preferable to “See you soon”. Precise closures help to avoid future conflict and confusion.

If you are negotiating by email, it is important to sort out any misunderstanding or request clarifications. It also helps to be brief and concise when it comes to writing and to end by summarising, so as to highlight the main points. Also, it is advisable to use the message subject field in a purposeful manner in the final phases.

Once the message is sent, we accept the vulnerability that it may be read by strangers. Word documents that we send contain hidden saved data, such as comments, names of the people who have worked on the document, modification and revision dates, with the client’s confidential or privileged information. For this reason, Word has the option to delete all hidden data⁵.

This lack of privacy can be used in an advantageous and lawful manner, by recording interactions or resending messages when any information is not clear, or the offer and interests of the other party are inconsistent with the new messages.

If, on the other hand, this situation arises over the telephone, staying silent is a powerful tactic during the concession phase. When one of the parties proposes a change to their position, if the counterpart does not say anything, they may be induced to make another concession. Furthermore, when the other party seems to have finished responding to one of the questions with respect to their interests and objectives in the negotiation, a prolonged silence may make them share more things and reveal more information.

Likewise, there are a considerable number of non-verbal communication signals that can be picked up during a telephone conversation, such as the rhythm, speed, inflexion and volume of the voice of the speaker.

• Most people find it easier to say “no” on the telephone or by email than face-to-face, thanks to the feeling of distance. In this case, it is a good idea to propose alternative tools that provide a greater impression of closeness.
• Inflexion of the voice demonstrates a higher level of agitation, such that, although the counterpart may reject the offer, it can be evident that their level of satisfaction is greater. To avoid this situation, it is useful to prepare and modulate your voice so as to sound professional at all times and not show yourself to be anxious to reach an agreement.
• An initial pause before rejecting the proposal on the table suggests that the person has entered into the realms of acceptability or must articulate their reasoning for rejecting the proposal.
• A significant pause may indicate that an offer is being seriously considered by somebody that did not hesitate to decline previous offers.

5.6. Closing and Follow-up

The moment that a possible agreement is reached, the closing phase begins. However, it is necessary to maintain confidence and avoid consecutively changing positions that are matched by the counterpart, since this could block the negotiation.

The action of “withdrawing from the negotiating table” is much easier in a negotiation by email or over the telephone, so the agreements that have been reached during the process must be respected at all times.

Once the negotiators believe they have reached a resolution, they should take the time to review all the operational terms of the negotiation so as to avoid misunderstandings. Once confirmed, all points of the agreement reached between the two parties should be confirmed by email. One of the most common biases in this situation is that of negotiation exit, that is, taking the negotiation as finished when there are still points to be agreed.

The application of different strategies to the negotiation will help us to reduce the psychological distance from the counterpart. Depending on the phase and the device used, we can better develop our interests, achieve greater power without it becoming a competitive relationship, improve the relationship and reduce uncertainty, with the aim of obtaining valuable information, helping us to meet our expectations.

Biases are especially delicate during closure. Figure 4 summarises some of the main ones.

6. Final Remarks

Negotiation is a way to solve problems by creating value for the negotiating parties; it is not a zero-sum game. The parties decide to give and receive, to demand and to grant via a process in which they influence, convince and counteract each other, proposing solutions and agreeing how to implement them together. It makes sense to negotiate when, after having done so, the parties come out better off than before the negotiation. This means changing the mentality of demanding more from the other for that of exchanging more, since the counterparts can solve their own problems only to the extent that they resolve those of the others. Managed with expertise and common sense, technology can contribute effectively to this change.

This article was originally published on 19 June 2020.

About the Authors

Guido Stein is Professor in the Department of Managing People in Organisations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance). Prof. Stein is a consultant to owners and management committees of companies. Member of The International Academy of Management and the International Advisory Board MCC (Budapest) and is a collaborator with People and Strategy Journal, Corporate Ownership & Control , Harvard Deusto Business Review, The European Business Review and Expansion. Prof. Stein’s books in English include “Managing People and Organisations: Peter Drucker’s Legacy”, “Now What? Leadership and Taking Charge” and co-author of “Keys to Leadership Success”. He is now working on a book, “Ambidextrous Negotiator” with Kandarp Mehta.

Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepreneurship Department at IESE since October 2009. His research has focused on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity. His doctoral thesis was about the process of creativity in the context of motion picture industry. He has conducted several Negotiation and Creativity Workshops for corporate executives and management students in Europe, USA and India. Before coming to Spain, he was at ICFAI Business School in India where he taught Corporate Finance. He is also actively involved with Creative Industries. He has been actively involved with theatre, as a director, script writer as well as a performer. Several movies and short films where he participated during his PhD dissertation have been exhibited at prestigious film festivals.

References
• AMES, D. and J. Parlamis (22 May 2010), “Face-to-Face and Email Negotiations: A Comparison of Emotions, Perceptions and Outcomes”. Available at papers.ssrn.com/sol3/papers.cfm?abstract_id=1612871.
• BERNAD, J. (February 2018), “Escribiendo emails”, Manual de escritura eficiente, p. 24.
• BRETT, J. (2007) “Negotiating Globally: How to Negotiate Deals, Resolve Disputes, and Make Decisions Across Cultural Boundaries”. Available at https://zodml.org/sites/default/files/Negotiating_Globally_How_to_Negotiate_Deals%2C_Resolve_Disputes%2C_and_Make_Decisions_Across_Cultural_Boundaries_%28Jossey-Bass_Business_%26_Management%29.pdf
• BÜLOW, A. M. (1 August 2011), “The Double Monologue Principle: Argumentation in Email Negotiation”. Available at papers.ssrn.com/sol3/papers.cfm?abstract_id=1899225.
• BÜLOW, A. M. (13 December 2010), “Email Negotiation: Argument, Cognition and Deadlock in Email Negotiation”. Available at research.cbs.dk/en/publications/email-negotiation-argument-cognition-and-deadlock-in-email-negoti.
• CRAVER, C. B. (7 October 2015), “How to Conduct Effective Telephone and E-Mail Negotiations”. Available at papers.ssrn.com/sol3/papers.cfm?abstract_id=2670011.
• COOPER, C. (2018) “Current Issues in Work and Organizational Psychology”. Available at https://books.google.es/books?id=kT9sDwAAQBAJ&pg=PT104&lpg=PT104&dq=thomas+2006+70%25+email+less+one+minute&source=bl&ots=X1sbaijic1&sig=ACfU3U38lDBrSgtkcaBiXwKTGK4klUb5NQ&hl=en&sa=X&ved= 2ahUKEwjJ69qup9fiAhUU7eAKHdhyD0sQ6AEwAHoECAgQAQ#v = onepage&q = thomas % 202006 % 2070 % 25 % 20email % 20less % 20one % 20minute& f=false
• DITRENDIA (2018), “Todas las estadísticas sobre móviles que deberías conocer #MWC18”. Available at mktefa.ditrendia.es / blog / todas-las-estadísticas-sobre-móviles-que-deberías-conocer-mwc18.
• EBNER, N. (5 September 2017), “Negotiation via Videoconferencing”. Available at papers.ssrn.com / sol3 / papers.cfm?abstract_id=3029020.
• EBNER, N. (2 November 2013), “Negotiation via Email”. Available at papers.ssrn.com /sol3 / papers.cfm?abstract_id=2348111.
• EBNER, N. (9 December 2010), “Trust-Building in E-Negotiation”. Available at papers.ssrn.com /sol3 / papers.cfm?abstract_id=1722065.
• EBNER, N. et al. (24 April 2009), “You’ve Got Agreement: Negoti@ting Via Email”. Available at papers.ssrn.com /sol3 /papers.cfm?abstract_id=1392474.
• FROST, A. (1 April 2019), “The Best Way to Reach Out to a Prospect for the First Time, According to 20 Sales Experts”. Available at blog.hubspot.com /sales / the-best-way-to-reach-out-to-a-prospect-for-the-first-time.
• GUÉGUEN, N., P. Legoherel, C. Jacob, (2003) “Solicitation of participation in an investigation by e-mail: Effects of the social presence of the physical attraction of the petitioner on the response rate”. Available at https://books.google.es/books?id=1pGkEmri1JEC&pg=PA70&lpg=PA70&dq=Gueguen,+Legoherel+y+Jacob,+2003&source=bl&ots=HcuNki5BJJ&sig=ACfU3U3fhvetsJotej1JO40414E7vUhBfQ&hl=es&sa=X&ved=2ahUKEwjoobbyq8HiAhWt3OAKHctHBs0Q6AEwCnoECAcQAQ#v=onepage&q=Gueguen%2C%20Legoherel%20y%20Jacob%2C%202003&f=false
• HAIM, G. et al. (2015), “Learning Human Negotiation Behavior Across Cultures”. Available at www.ise.bgu.ac.il/faculty/kobi/Papers/HaimEtal10.pdf.
• HARROCH, R. (2 March 2017), “15 Tactics for Successful Business Negotiations”. Available at www.forbes.com/sites/allbusiness/2016/09/16/15-tactics-for-successful-business-negotiations/#5778f0f42528.
• IBM, Marketing Cloud (13 January 2016) “2016 Email Marketing Metrics Benchmark Study”. Available at https://www.ibm.com/downloads/cas/PVKXPKNG
• LYNETT, M. (12 October 2016), “The Advantages and Disadvantages of Shared Documents”. Available at blog.mesltd.ca/the – advantages – and – disadvantages – of – shared – documents.
• MCGINN, K. L., and E. Wilson (1 March 2004), “How to Negotiate Successfully Online”. Available at www.hbs.edu/faculty/Pages/item.aspx?num=16493.
• NADLER, J., and D. Shestowsky (1 January 1970), “Negotiation, Information Technology, and the Problem of the Faceless Other”. Available at https://www.scholars.northwestern.edu/en/publications/negotiation-information-technology-and-the-problem-of-the-faceles.
• NAQUIN, C. E., and G. D. Paulson (February 2003), “Online Bargaining and Interpersonal Trust”. Available at www.ncbi.nlm.nih.gov/pubmed/12675399.
• NAST, D. (26 July 2018), “Negotiating for the Future”. Available at www.raconteur.net/business-innovation/negotiating-for-the-future.
• PASCUAL, J. A. (2 April 2018), “Cómo limpiar los datos ocultos de un documento de Word”. Available at computerhoy.com/noticias/software/como -limpiar – datos – ocultos – documento – word – 78409.
• PESENDORFER, E.-M., and S. T. Koeszegi (2006), “Hot versus cool behavioural styles in electronic negotiations: The impact of communication mode”, Group Decision and Negotiation, 15.
• STUHLMACHER, A. F., and M. Citera (September 2005), “Hostile Behavior and Profit in Virtual Negotiation: A Meta-Analysis”. Available at link.springer.com/article/10.1007/s10869-005-6984-y.
• SWAAB, R. I., W. W. Maddux, and M. Sinaceur (2011), “Early Words that Work: When and How Virtual Linguistic Mimicry Facilitates Negotiation Outcomes”. Available at www.sciencedirect.com/science/article/pii/S0022103111000060.
• THOMPSON, L., and J. Nadler (2002), “Negotiating Via Information Technology: Theory and Application”. Available at pdfs.semanticscholar.org/4f5c/0a263a62f051ae5d3b67c365ad5b387b4c37.pdf.
• THOMPSON, J. (2015) “Non-Verbal Communication and the Skills of Effective Mediators: Developing Rapport, Building Trust, and Displaying Professionalism”. Available at https://www120.secure.griffith.edu.au/institutions.do
• WRÓBEL, P. (2017), “The Use of Electronic Communication Tools in the Office Workplace”. Available at www.wzr.ug.edu.pl/.zif/1_10.pdf.
• ZHOU, H. (9 February 2009), “Body Language in Business Negotiation”. Available at www.ccsenet.org/journal/index.php/ijbm/article/view/1680.

References on video
• DIAMOND, S. (15 December 2014), “Getting More | Negotiating Over Email, Phone, etc.”. Available at www.youtube.com/watch?reload=9&v=90u0e5ScFHY.
• EBNER, N. (12 February 2015), “Negotiating via the New Email – Ignacio Mayoral interviewing Noam Ebner”. Available at www.youtube.com/watch?v=ZLpVm6iZfq8.
• SMITH, D. A. (28 February 2013), “10 Steps to Powerful Telephone Negotiations”. Available at www.youtube.com/watch?reload=9&v=U7a0tzL3vmg.
• WEISS, J. (10 January 2019), “The Wired Negotiator | Joshua Weiss | TEDxSpringfield”. Available at www.youtube.com/watch?v=8uC_-SLW6YM.

The post Negotiating in a Digitalised Era appeared first on The European Business Review.

AI is becoming smarter and being utilised in our daily lives, whether we realise it or not. You may be wondering at what stage AI will be able to do your job or if you can use AI to manage the menial parts of your day-to-day. If negotiation is part of your role, you may have even thought about AI negotiating for you. If AI can make multiple calculations and project scenarios in a fraction of a second, can it negotiate for me?

I expect that you will have encountered or seen a version of artificial intelligence (AI) at some point. You may have asked Siri or Alexa what the weather will be tomorrow, used Chat GPT to summarise an article, or even watched Terminator or Tron. Internet chatter would suggest that the introduction of AI into our daily lives means that our day-to-day will never quite be the same again. As we speak, organisations are starting to invest heavily into AI, and as someone with a focus on negotiation training, I’ve been wondering how far AI will be implemented when it comes to negotiations. Is the expectation that, in the future, negotiations will be an automated transaction, correct? Is it likely that instead of two people negotiating, two AI will be a crucial part of dealmaking? If AI can make multiple calculations and project scenarios in a fraction of a second, can it negotiate for me?

From my experience with AI so far, there are obvious benefits to ensuring better productivity and making the best use of your time and resources. The ultimate question at this point, is trying to assess how far AI can take us when it comes to handing over the reins of our negotiations. Let’s talk about the long-term implications of AI in negotiations and the risks that come with placing our faith in it.

Limited Practical Impact

A huge benefit of AI is its ability to quickly gather and organise data. There is undoubtedly the potential to use it to help us better prepare for our negotiations. However, its practical impact on negotiations may be limited and not the silver bullet we hope it will be. If we’re considering how important the relationship element is in our long-term negotiations, there is an argument that the complexity of human interactions, the subtleties of negotiation strategies, and the importance of emotional intelligence are too challenging for AI to replicate effectively. Yes, AI can make quick decisions, but will it make the right ones for your business if it’s just thinking about the short term?

Resistance from Human Negotiators

Negotiations are unpredictable, but we can use AI to help predict any possible responses we may get and test our arguments in advance. On the other hand, some negotiators might be hesitant to trust AI completely, particularly when dealing with sensitive or highly nuanced negotiations that require a deep understanding of human emotions and cultural nuances. If we do start to replace people with AI entirely, how will someone respond if they figure out they are negotiating with an AI? Reliance on AI could result in a breakdown of trust and rapport, essential components in successful negotiations that hinge on the ability to connect on a human level.

AI’s Lack of Adaptive Creativity

Simulating scenarios and role-playing strategies is a useful advantage of AI; being able to assess and test out your strategies in real time before you even step into a negotiation. While AI can analyse data and propose strategies based on patterns, it may struggle to respond to unexpected or unprecedented situations effectively. Negotiations often require dynamic thinking, adaptability, and creativity, qualities that AI may lack, especially if decisions need to be made with detailed knowledge of business history, internal processes, etc. needing to be considered.

Dependency Risks

There is a lot to benefit from utilising AI in general, but will organisations ever become too dependent on AI in their negotiations? It could be argued that overreliance on AI tools may diminish the development of essential negotiation skills among human negotiators, leading to a potential loss of expertise in the long run. Once a business relies on an AI model to do the heavy lifting, is that business now more open to a data breach, a hack or at the mercy of AI model price increases? The future is quite uncertain in this regard. If the market expands and becomes more competitive, can a competitor get a ‘‘better’’ AI and have an advantage over your chosen investment?

Costs and Accessibility

There are costs associated with integrating AI into a business, the question is whether the costs are worth the results. Beyond the financial costs, there is also the need for training and expertise to utilise AI effectively and get the most out of it. Will the constant upgrading of AI tools become a never-ending ‘‘money pit’’? The accessibility gap in AI technology may also widen existing inequalities in negotiation capabilities. If the skills of your negotiators don’t align with the AI, then real-world results could be less than desired.

The potential transformation of the traditional negotiation mentality could be on the horizon. As organisations increasingly invest in AI technologies, the future of negotiations raises intriguing questions. Will negotiations become automated transactions? Is it possible that AI will replace human negotiators altogether? While AI offers undeniable benefits, it’s clear that there are significant limitations and implications to consider.

Relationship-based negotiations require a human element, something an AI cannot replace. AI has no common sense, wisdom or empathy which is sometimes needed in negotiations. Using AI as a productivity tool instead of a replacement to aid you in your negotiations is more of a realistic prospect. This depends on how creative you are with it; it can’t replicate you and how you think, but it can help you with exploring ideas, giving you a starting point and saving you time with preparation and contracts.

The advantages of incorporating AI in negotiations are clear, but it’s less clear how far we should let AI off the leash when it comes to the responsibility it should have. It seems likely that AI will continue to grow and play a more significant role in future business negotiations, but striking the right balance between AI and human capabilities will be the key to its successful integration and the preservation of the art of negotiation as we know it.

Just remember, anything you utilise AI for, it uses to learn and grow. So think about what company data you choose to share with it…

About the Author

Daniel Freeman is a Senior Consultant for Scotwork International in Ireland, providing negotiation training and consultancy to executives and organisations across multiple sectors. He has trained a wide range of global and local organisations, assessing their internal negotiation capabilities and developing strategies to roll out negotiation initiatives throughout various business infrastructures. Daniel’s negotiation experience was shaped by working in the optics industry for 8 years, holding key managerial positions at Hoya Vision Care tasked with negotiating new contracts, business expansion and acquisition, and creating new channels of distribution across Ireland.

The post Artificial Intelligence and Negotiations: Should You Go All in? appeared first on The European Business Review.

As human beings, we are programmed to respond to conflict with retaliation and retribution. It’s a pattern as old as humanity but, as David Liddle of mediation experts The TCM Group affirms, it needn’t be that way – as long as we keep talking. Here, he explains the philosophy and raison d’être of his company.

Thank you for sparing the time to talk to us, Mr Liddle! Could we begin with a few words on what made you pursue a career in conflict resolution?

Following my first degree in Race Relations in the late 1980s and early 90s, I worked in a large UK city and I saw first-hand the levels of violence and community conflicts and the woefully poor attempts to resolve them (if indeed there were any). Inspired by the principles of mediation and restorative justice – something I hadn’t really seen elsewhere in the UK – I decided to set up Leicestershire Mediation Service to help resolve community disputes and to tackle offending and anti-social behaviour. It was one of the first community mediation and restorative justice schemes in the UK. This was when I realised that mediation and dialogue are powerful tools for resolving complex issues. I believe in the enormous capacity for people to do good at times of conflict, change or crisis – when the conditions enable them to do so. It is that passionate desire to create those conditions that has driven me throughout my career.

There are those who shy away from confrontation, arguing that it can get messy very quickly. But you persisted and even founded a company in recognition of it. Would you mind telling us why?

Confrontation is a choice that we make as human beings. Every day, we can choose how we react, how we behave and how we speak to others. And when there’s a choice, there’s always an alternative. I don’t believe that confrontation is an inevitable outcome of conflict – we’re just hardwired as humans to make wrong choices. Witnessing the healing power of mediation, I wanted to enable us to make the right choices. In conflict, we can choose to respond rather than react, and collaborate rather than confront. Really, through mediation, we just help people to understand the impact of their choices and to make new choices – choices which build bridges, not walls.

Since 2001, The TCM Group (TCM) has been mediating workplace conflicts and advocating for more person-centred management practices. You now have an unrivalled track record of working with names such as HSBC and Tesco. What were the initial values you founded the company on?

TCM’s founding principle is to help people move from destructive conflict to constructive dialogue. This is a pragmatic and sensible approach to conflict resolution, culture change and people management. In the past few years, my team and I have been helping business leaders to create high-performing organisations by dealing with issues more effectively. I wanted to show people that conflict doesn’t have to be detrimental or disruptive – if they incorporate the values of dialogue, empathy and cooperation. I believe that dialogue is the key that opens the treasure chest of innovation, creativity, and productivity – which, after all, are the drivers of a succesful business. 

Do you recall any significant obstacles that you and the company encountered when you first started?

Yes, quite a few! The consensus was a complete misunderstanding of mediation. I’d hear: “Is it meditation?” “Is it medication?” “Are you an old hippy preaching peace and love?” This misunderstanding still exists now on many levels. There’s eye-rolling from people wondering whether mediation can genuinely solve problems. Our society believes that justice is served by retribution. It’s an ongoing task of overcoming that ingrained belief and recalibrating the human mind towards restorative justice. 

As the founder of an award-winning conflict resolution company that has been operating for nearly 20 years, what have you found are the best ways to prevent disputes before they arise?

Simply, it’s dialogue – really talking and really listening. We also need to understand that there’s a life cycle to conflict; the more that we can understand this, the better our managers will be at proactively spotting and resolving the issue effectively. These managers need to be confident, competent and courageous in dealing with disputes. Inaction or overreaction don’t work; we need to encourage structural and strategic action. By first understanding the conflict, and then having the ability to talk it through, we turn the conflict into something constructive. It’s important to recognise that conflict should never be designed out of business; good conflict is marked by respectful dialogue, disagreeing well, and listening empathically. In diverse and high-performing teams, we need divergent thought. It’s threefold: accept, understand, and listen to conflict. 

You have spoken elsewhere about compassion as one of the key traits in transitioning back to the office. How do you see a value-based approach to leadership affecting business recovery in these times?

It’s absolutely central. The combination of COVID-19 and the challenges of social justice movements over the last couple of years have brought into sharp relief the need for society to re-evaluate itself. We can do this through the prism of our core values as a society, and on a micro-level through our organisations. I think that we can take the climb to business recovery as a once-in-a-lifetime opportunity for organisations to rethink their values and use them as a golden thread for their performance processes, HR systems, management and leadership capabilities, and organisational strategy. There is so much evidence to suggest that organisations that do this are the ones that thrive. Values of compassion, kindness, active listening, inclusivity, respect – these aren’t just “nice to haves”; they matter to people. This is the single biggest shake-up as a generation to what it means to be “in work”. COVID was traumatic, so let’s meet in the middle with compassion and flexibility. As a leader, go to the worker – don’t expect the worker to come to you – and do so with compassion, empathy and a deep desire to understand their needs. 

Social justice and employee activism have picked up pace in recent months, placing transparency and honesty at the forefront of corporate communication. How would you advise leaders to respond to these issues and apply this effectively to their management approach?

As a mediator, there’s an emerging “anti-leadership” tendency as a result of recent tragic events. Whilst understood, it’s adversarial and polarising; there’s a dividing line and many are digging trenches. We absolutely must hold people to account but, if we’re going to have these discussions, we can’t do it to the drumbeat of lynch mobs on social media. We need to engage in meaningful, productive dialogue. Much like in mediation, we must dissect to reconstruct. In other words, get all parties around the table and talk about what went wrong and why. What were the conditions that allowed these events to happen? How can we change those systems and processes to bring about a safer environment for all? I call on all leaders to give voices to their employees in a calm-headed and sensible manner, listen to what is said, and work together to provide strategic steps to drive change. The powerful system in organisations and wider society protects destructive behaviours, but we mustn’t be drowned out by voices of hostility and confrontation. We need to allow our people to speak out, and for our leaders and managers to listen up and to act. 

What are the primary benefits that a transformational culture can offer in a post-pandemic setting?

A transformational culture is a culture which is fair, just, inclusive, sustainable, and high-performing. It delivers the core values of an organisation through an evidence-based approach and by reframing the systems and processes of the organisation and making them fit for the challenges of the 21^st century. As I mentioned earlier, the most successful businesses are those aligned with clear embedded values; a transformational culture does just that.

The combination of enablers and cultures delivers tangible benefits by creating a cultural flow, delivered by a cross-functional team known as the Transformational Culture Hub. The outcomes of a transformational culture include what I call the “7Cs” of transformationalism:  courage, connection, collaboration, common purpose, communication, compassion, and curiosity. These outcomes are reinvested back into the culture, combining with each other to turbocharge the cultural transformation and to raise the organisation to new heights.

The concept of culture presents itself differently to different people. What do you believe are the important attributes of corporate culture and how do you ensure that the culture of an organisation and the climate experienced by employees are aligned?

Culture has millions of definitions – it’s quite personal. But ultimately, culture is the unwritten rules that bind all of us and our beliefs, values, behaviours and interactions. They can also be written in our policies and procedures that guide our systems. It’s a combination of these visible and invisible forces acting collectively on all of us, creating a climate, or a felt experience, that is lived by everyone. Culture lived and climate experienced can be streamlined by creating an overseeing hub that develops the systems and processes to integrate and sustain the culture-climate intersection. This is what we call the Transformational Culture Hub. It’s essentially a cross-functional team comprising executives, HR, unions, leaders, managers, employee groups, and so on.

In your book Transformational Culture, you mention that a psychologically safe work environment is one that welcomes all opinions without fear of ridicule or retribution. What are some ways a company can foster this open culture of dialogue?

Education! The ability of training managers to confidently, competently and courageously facilitate dialogue is key. Leadership must understand the importance of the psychological contract, acting as an example to others by embodying values of trust, mutual respect, and open and transparent communication. It lies in the duty of management to promote a speak-up-and-speak-out culture that empowers their employees. 

What specific leadership characteristics do you see as being the most needed in the new future of work?

The most important act as a leader is to balance the needs of people with the need for a business to be profitable. In the modern workplace, profit isn’t the only driver for success. Leadership should be guided by people-oriented, transformational principles: championing emotional intelligence and empathy, celebrating inclusivity and diversity, and welcoming difference and divergent thought as a sign of strength. These characteristics will shape and build wider processes and systems. Previously thought of as soft skills, these are now vital skills for the 21^st century. 

TCM also holds special workshops that aid in corporate resolution, such as investigation skills and negotiation courses, to name but a few. How do these contribute to your goal of transforming the culture of the modern workplace?

These smaller workshops sit within our whole systems model for culture change. Skills and training courses are the processing chip that powers the systems that drive culture, fitting together to create a cohesive and aligned total system. We ensure that everything connects – through our FAIR Model – to make values intrinsic across all suites and services. 

Generally speaking, what are some effective communication tools or services that you think companies should utilise more today?

In my Transformational Culture Model, dialogue has primacy. When there’s a problem, we talk about it. Talking is facilitated where necessary and exhausted until a formal route is the last resort. TCM’s entire package of tools and services build on this: from transactional services of quality conversations, facilitated conversations, mediation and team facilitation; to wider transformational services like our Resolution Framework and Transformational Trailblazers. It’s a combination of smaller services and wider processes to ultimately shape culture and promote compassion, collaboration and communication. Dialogue is the most effective tool and service to drive individual, team and collective performance and success. 

To err is human, as Alexander Pope said. Would you consider this the heart of The TCM Group’s brand ethos?

Err…! I think it’s more than that. Humans and all their complexities, wonderfulness and brilliance is what we’re about. Failure is inevitably and naturally a part of that; we need to reframe how we deal with wrongdoing in order to release that inner brilliance. If we destroy people because they make mistakes, then we’re just perpetuating a system of negativity; and if we’re in a destructive conflict, then we can’t be brilliant. Let’s reframe one of the F-words that cause so much harm – “failure” – so that we can move past it, we can learn from it, and we can let people be as wonderful and successful as they can be. 

What can we expect to see from the company in the next decade?

There’s great opportunity for us to grow and develop in terms of what we offer. At a modest level, I envision that what we do and say as a company becomes mainstream and popularised in the workplace. I want dialogue, compassion and transformational culture to be a major part of the debate about the future of work. But aside from modesty, there’s certainly a palpable atmosphere of ambition within The TCM Group. We want our Transformational Culture Model to be implemented in far more organisations, and we have an objective to get our Resolution Framework embedded in every HR department by the end of 2022. We’re excited about the opening of our New York office and the opportunities it’s given us for international expansion into Europe and Asia. 

One thing is for certain: the old cultural orthodoxies of retribution, of “power over” rather than “power with”, command-and-control structures, and a perception of “one rule for them and another for us” are no longer tolerable nor tenable. Surely, as we are all straining every sinew to build a workplace fit for the 21^st century, we can no longer leave culture to chance. It’s time to get to work – good luck!

I would like to thank everyone at TCM – employees and consultants – for their unbelievable commitment throughout and (hopefully) post-COVID-19. I am inspired every day by their tenacity and their professionalism and by their unflinching commitment to the purpose and values of our business. You are the catalysts for change and the drivers of innovation and excellence. Thank you! 

This article was originally published on November 19, 2021.

Executive Profile

David Liddle, Top 20 HR Most Influential Thinker and author of Transformational Culture, develop a people centred organization for improved performance (Kogan Page). David is CEO of culture change experts The TCM Group and the president of a new think tank, The Institute of Organizational Dynamics.

The post Conflict in the Workplace: We Need to Talk appeared first on The European Business Review.

Successful international negotiations is what helped Itransition grow from only 50 employees to 2,000+ IT experts. In this post I’m looking at how to efficiently conduct international negotiations based on our own experience as a company. While some of our negotiations were successful from the start, in some we had to fine-tune our offers to win projects, which taught us valuable lessons we are happy to share today.

1. Do your homework

We learned this simple yet valuable lesson when competing for a contract with PayPal. We knew that in order to conduct successful negotiations, we needed to gather data about all the participants we were going to meet and draw a meeting agenda detailing the negotiations minute by minute. By the end of the meeting, we made sure that all the parties reached a mutual understanding of the goals and discussion points.

Note that if your business representative doesn’t speak the language of negotiations at the native-speaker level, consider inviting a professional translator and brief him or her regarding the meeting agenda.

2. Find insiders and make them your spokesperson

We perfected this skill when negotiating with Shell Oil. We understood that in order to get more intelligence about our future client, we should look for an interested party within the client’s company and try to detect their personal interest, drivers and motivations, like promotions, bonuses, etc. This makes it possible to help the insider meet their needs while closing the deal.

If you intend to use this technique, invest in the insider’s training. This way, when they participate in the board discussions and represent your offer, they will pitch commercial offers as skillfully and knowledgeably as you would.

3. Don’t save on personal meetings

A lot of companies try to save time and budget on personal meetings, which may work on smaller deals, but can sink big deals in no time. We invested generously in our meetings with Phillips that helped us win that deal. Our experience demonstrated that negotiating for large contracts was more successful when parties were able to meet face to face, feel each other’s energy, and connect on a more personal level. Consequently, the more money the contract is worth, the more you should expect to spend in terms of time, effort, and budget.

When it comes to compensations, large meetups may imply expense coverage by the client. If such an offer isn’t on the table, you may consider asking a potential client for compensation in case you win the project. In such a situation, you will cover all the expenses initially, but once the deal is closed, you may include certain presales expenses in the first invoice. That’s a win-win situation for everybody.

4. Invite clients to your premises

The importance of having clients meet your team in your own environment is underrated. If your client is from a different country, it is a great idea to show them what your local and corporate culture is like and how it may influence the project positively. One visit can easily bust quite a few myths about offshoring.

When inviting clients over, you have a unique opportunity to provide a 360-degree view of your business. You can introduce them to the whole team, including top management, and show them how the company is organized. A first-hand assessment of the company is a great confidence booster for big long-term projects.

5. Prepare a team of leaders

Personal interests or staff availability are not eligible criteria for choosing a negotiation team. An available employee or one with the necessary visa may not be the right candidate.

Luckily, we followed a different route when vying for a deal with Toyota and chose participants who could bring maximum business value. We knew that there would be important business, technical and legal points of discussion, so we brought a business expert, a legal representative, and a tech guru who were all well-versed and coached on all the agenda points.

The levels of representatives from both sides should be the same, so consider arranging it in advance. It’s also a good practice to rehearse the ‘script’ on your territory until all the participants are fully confident in their ability to deliver the pitch.

6. Involve a reliable partner

When working on a contract with a large international e-learning provider, we discovered that it would be impossible to cover 100% of the project scope on our own. One of the solutions was to find a partner and involve them in the project to cover those missing parts.

Thinking ahead and proactively developing a partner network regionally and in overlapping spheres can become a winning point of negotiations and bring you closer to signing a contract. You can also involve partners in niche areas and be sure that they will carry out their duties expertly.

7. Make your presentation stand out

In order to win the project, you need to prepare a memorable presentation. When getting ready for the negotiations with Transfer Pricing Associates, we made sure our presentation could make a big impact. We kept it short, to the point, and focused on the client’s interests, and shaped content around the solutions we were going to offer.

It’s a good practice to demonstrate your expertise by using product samples or short product specifications. Images can be more powerful than words, so accompany your presentation with visuals and provide your potential clients with high-quality promotional materials. Plus, to make your products and services more attractive, you can include analytics, such as an ROI analysis or value forecasts based on implementing the solutions from your presentation.

Don’t leave without receiving feedback and making sure both parties are on the same page and understand what the next steps are going to be.

8. Be careful with contracts

Make sure you’re not losing more money on the contract than you can make on it. Analyze contracts as early as the RFP (Request for Proposal) stage from every angle, involving legal professionals, production leaders, and sales reps.

Understanding which contract points are negotiable and which are fixed will help you avoid misunderstanding and running into legal issues further down the road. Before you sign the agreement, you have to carefully calculate profitability as well as consider contractual expenses to know exactly what the deal is worth.

9. Support the project from the start

After you sign the contract, don’t hurry to relax. When we started our cooperation with adidas, we knew that the first month was a critical period for making a strong connection and laying the foundation for long-term collaboration.

You have to ensure the high communication quality by checking with the client whether the plan is being mutually followed and reacting to their feedback. All project members should know each other well and communicate efficiently to solve issues together. For better results, systematically monitor the degree of customer satisfaction and ask clients to fill out a satisfaction questionnaire. If necessary, make improvements and compare the performance at different stages of the project.

Are you ready to negotiate?

International negotiations require a great degree of patience, attention to detail, and an ability to understand a foreign culture as well as your own. Vendors need to thoroughly prepare for each stage of project negotiations, actively communicate with their clients, and closely follow up the project’s progress once the deal is closed.

This article was originally published on February 25, 2021.

About the Author

The post How to Conduct International Negotiations appeared first on The European Business Review.

“Improve our negotiation skills” may not appear near the top of every CEO’s to-do list. But that’s a mistake. A huge chunk of what a company does – selling to customers, buying from suppliers, striking deals and alliances, and resolving legal disputes – depends on effective negotiation. Crush that, and you’ll make better and more profitable deals; mess it up, and your margins will suffer. Not only that, you’re at risk for losing key customers, missing out on crucial relationships and on priority access to innovation and supply. Simply put, a lack of negotiation savvy undermines the execution of your strategy.

Skeptical? In our 2021 McKinsey survey of more than 125 CEOs and CFOs of companies with revenues topping $1 billion, 96% of the executives said that world-class negotiators in their companies would add at least 3% to their EBIT performance. These business leaders see the bottom-line impact clearly. They understand the value of proactively setting up the organization to negotiate successfully.

Surprisingly, despite this level of potential impact, only 22% of those surveyed strongly agree that their organizations are currently capable of capturing this value. Why is this the case? Many organizations haven’t appropriately invested in their operating model, infrastructure, and skill building to make an impact on complex negotiations.  

Here is what a CEO can do to make a difference. Start with these five strategies.

1. Set a cultural norm and mindset that negotiation creates value, so it is a core skill for company leaders.

Just as with any cultural value that a company wants to make a priority, the CEO’s commitment to negotiation excellence must be consistently visible at all levels of the company. This commitment may have its greatest impact in deals with the company’s biggest customers and its most strategic suppliers, but it’s also crucial in negotiating acquisitions, divestitures, joint ventures, and alliances. In a typical manufacturing company with $1 billion in revenues, the total annual value subject to negotiation could easily exceed $1.6 billion, since it includes sales deals with customers, purchase agreements with suppliers, potential claims from suppliers based on market change, performance related penalties with suppliers, various litigation with external parties, and M&A activity.

The CEO can set the tone by checking in bimonthly or quarterly on the status of key negotiated relationships, particularly agreements coming up for renewal. Not only should chief executives require negotiation strategy briefs regarding key customers or suppliers, but to drive home the importance of adhering to these principles, CEOs should encourage – and even participate in – a targeted amount of scenario analysis and role-playing simulations with their negotiating teams.

Since a CEO’s time is a precious resource, these efforts should consume no more than a few days annually. Such a commitment will generate multiple benefits. A team where the CEO attends negotiation dry-runs will recognize that their activities are in the spotlight. Based on our experience, such teams prepare with great rigor if they know that the CEO will be at the negotiation rehearsal – and some even request the CEO’s participation in their high stakes role plays. This level of preparation pays off when there’s an actual counterparty across the table. Just as the best sports teams hone their skills with intramural scrimmages, the best negotiation teams road-test their story lines, argumentation, robustness of their analysis, and actual language in real-as-possible mock negotiations.

2. Invest in negotiation infrastructure, including training and digital tools across the organization

When it comes to sales, companies often make major investments to improve skills. Training is a significant line item in sales budgets, and there are a variety of sales training providers who include negotiation skills as part of their programs. Sales also gets the lion’s share of the negotiation technology investments. CRM systems from vendors — when properly used — can track all the interactions with a given customer. This means any negotiation starts with a full history, even if the sales staff has turned over.

Despite the stakes, it’s rare to see the same investment on the procurement side. Based on our surveys, investments in negotiation training and infrastructure for procurement is typically less than 20% of what’s invested for sales teams. Many companies that spend half a billion dollars with suppliers may spend zero on procurement training and lack the most basic digital tools for tracking supplier interactions.  

Many top executives are starting to recognize the value they could be adding by investing in negotiation. In McKinsey’s 2021 survey of large companies, 84% of CEOs and CFOs said they would be setting aside at least $100,000 for negotiation training, infrastructure, digital tools, and assets intended to improve corporate negotiation capability. Many are investing far more, with some investments exceeding $1 million.

Companies should expose all major negotiators – those who negotiate sales and procurement deals as well as M&A dealmakers, legal negotiators, and technology buyers – to negotiation capability building. Both our experience and research confirm that negotiation is a skill that has a very high return on investment, for the time spent. As one tenured CEO postulated, “There is always more to learn and apply relating to business negotiations, I’m much better today than 5 years ago, and I expect to further enhance my negotiation aptitude going forward.”

Companies should also track procurement supplier negotiation interactions with the same rigor that they apply to sales relationships. We’ve observed several companies that recognized the need and then built such tools from scratch.

3. Participate directly in the company’s highest-value negotiations

CEOs should identify the company’s top ten to fifteen customers and suppliers, and work with respective sales and procurement teams to participate in some capacity in those negotiations, either directly with the counterparty or behind the scenes helping to craft the strategies.

When the CEO makes an appearance in those actual negotiations, it signals to the counterparty that this is a key relationship. Two-thirds of the respondents in our 2021 McKinsey survey of $1 billion+ revenue companies agreed that even if the CEO said exactly the same thing as the sales or procurement team during a negotiation, the resulting increase in credibility was a major source of value creation.

CEOs can also help by just saying “no.” When a customer or supplier hears a chief executive reinforce that “this is our best price, it’s not getting any better,” they know that there’s no option to go over their sales or procurement staffer’s head.

In the wake of Covid-19 supply-chain disruptions, CEOs are spending more time on supplier relationships. In last year’s version of our annual CEO/CFO survey, CEOs were spending 43% of their negotiating hours with suppliers; by 2021, that had shifted to 49%. For example, you can bet that automotive CEOs are now [if not already] attempting to strike and revise deals with chipmakers to restore supply and enable manufacturing to continue normally amid the semiconductor shortage. Those deals where the CEO had confirmed priority access last year are in a far better position right now. Similar CEO-led negotiations are happening in every industry where supply continuity has been threatened, from retail to media to energy.

4. Designate a Chief Negotiations Officer

We know there’s a fad for proposing new C-level staff these days. So maybe you think it’s a bit over the top for a company to be designating a Chief Negotiations Officer, responsible for maximizing the organization’s skill and execution in key negotiations, and ultimately capturing those several EBIT points.

But don’t just take it from us. In our 2021 survey, 94% of the CEOs and CFOs think an even chance or better that they’ll have a CNO within three years. And 96% expect the value of such an officer to be very high. Over half expect a 5% improvement in EBIT. Such value starts with improved margins, but continues with risk mitigation, securing higher quality and service levels from suppliers, guaranteeing continuity of supply, and earlier access to innovation. This level of commitment from senior executives is far beyond what we’ve observed in past years. The more complicated world of volatile supply chains, complex contract terms, and rapidly shifting technology is raising the stakes.

The CNO role would include defining negotiation standard processes and policies, designing and developing the negotiation capability building curriculum, developing technology to drive analytical insights, and participating in key negotiations. Because of their impact on the company’s finances and operations, such an officer would typically report directly to the CEO, CFO, or COO.

They may not have the actual title “Chief Negotiation Officer.” Their business card might say “SVP strategic relationships” or “EVP, Business Development.” But within the company, they would represent the corporate officer attempting to up-level the company’s negotiation skills and infrastructure to drive business results.

5. Build and measure key negotiation objectives for members of the leadership team

You can’t manage it if you can’t measure it. So how do you measure progress on negotiation capability?

We recommend including negotiation metrics in regular reporting. For example, the head of procurement needs to be able to articulate a strategy for deals with critical suppliers a few times annually – so the CEO can be sure every possible resource is being applied to those deals and negotiations. Potential metrics include what proportion of the top 30 suppliers have a comprehensive negotiation playbook and strategy, what proportion have had a structured role-play simulation, and what percent had an internal follow-up and port-mortem evaluation after a recent negotiation.

There are financial metrics as well, such as the total cost savings, enhanced quality, and even new revenue generated from these renegotiated deals.

Similar standards should apply to the head of sales when it comes to key customers, the chief counsel for legal negotiations, the CIO for major technology suppliers, and the head of strategy or M&A for corporate deals.

CEOs must also be ready to publicize efforts internally when things go right. A negotiator who’s secured an excellent deal should be held up as an example – perhaps conducting a “lunch and learn” session to share how they were able to secure a desired outcome. This will socialize the best negotiation practices across the enterprise.

For negotiation to become a strategic advantage, the CEO must make it visible

There’s a commonality to all of these suggestions. They raise the visibility of negotiation in the enterprise and standardize it as a required skill.

Just as organizations invest in capability building for key staff and executives around leadership, innovation, communications, and analytics, they must continuously stress the value and importance of negotiation skills.

That’s the only way to make excellence in negotiation part of the culture. And that is the most powerful way that a CEO can invest in better negotiation capability to drive actual bottom-line results.

This article is originally published on September 27, 2021.

About the Author

Milan Prilepok is Partner and Global Leader of the Negotiation Service Line at McKinsey. He provides coaching on negotiations strategy to a wide range of clients from C-suite executives and board directors to procurement professionals, sales executives, chief counsels, and more. Milan is a former lecturer at The Wharton School and has taught at industry conferences and roundtables on negotiations at Harvard Business School, London School of Economics, Women in Negotiations (WIN), and the Conference Board, among others. He has delivered negotiation workshops to more than 16,000 participants across 270 companies in 35+ countries around the world. Milan has an MBA from the London Business School. 

The post Five Ways CEOs Can Boost The Bottom Line By Improving How Their Companies Negotiate appeared first on The European Business Review.

Why are Industry Salary Benchmarks Important?

Industry salary benchmarks are important because they provide a reference point for what other people in your industry are earning. This information can help you understand where you stand in terms of compensation and whether you are being paid fairly for your skills and experience. Without this information, it can be challenging to know whether the salary you are being offered is reasonable or not.

Additionally, understanding industry salary benchmarks can help you negotiate a better salary. If you know that others in your industry are earning more than you are, you can use this information to make a case for a higher salary. Employers are often willing to pay more to attract and retain top talent, so having data to support your request can be powerful.

How to Research Industry Salary Benchmarks

There are several ways to research industry salary benchmarks. Here are a few methods to consider:

1. Online Resources

There are many online resources that provide information about industry salary benchmarks. Some of the most popular include Glassdoor, PayScale, and Salary.com. These websites allow you to search for salaries by job title, location, and other factors. They also provide additional information about benefits, bonuses, and other compensation-related topics.

2. Professional Associations

Professional associations are another great resource for industry salary benchmarks. These organizations often conduct salary surveys among their members and publish the results. You can typically find this information on their websites or by contacting them directly.

3. Recruitment Agencies

Recruitment agencies can also provide information about industry salary benchmarks. These agencies work with a wide range of employers and job seekers, so they have a good understanding of what salaries are typical in different industries and locations.

4. Networking

Networking with other professionals in your industry can also provide valuable information about industry salary benchmarks. You can ask colleagues, mentors, or other contacts about their salary history and use this information to inform your negotiation strategy. 

How to Use Industry Salary Benchmarks to Negotiate a Better Salary

Once you have gathered information about industry salary benchmarks, it’s time to use this data to negotiate a better salary. Here are some tips to keep in mind:

1. Be Confident

Approach the negotiation with confidence. Remember that you are bringing value to the organization, and your compensation should reflect that. Be prepared to make a case for why you deserve a higher salary based on your skills, experience, and the industry salary benchmarks you have researched.

2. Know Your Worth

Understand your value in the marketplace. If you have unique skills or experience that are in high demand, you may be able to command a higher salary than someone with less experience. Be prepared to articulate why you are worth a higher salary than someone else with similar qualifications.

3. Consider Other Forms of Compensation

Remember that salary is just one component of your compensation package. There may be other benefits, such as health insurance, retirement savings plans, or stock options that are also valuable. If the employer is unable to meet your salary expectations, consider negotiating for additional benefits or perks that can help offset this.

4. Be Flexible

Be prepared to negotiate. While it’s essential to have a clear idea of what you want in terms of compensation, it’s also important to be flexible. There may be other factors, such as the company’s budget constraints or location of the job.

Once you have a good understanding of industry benchmarks and factors that can influence salary negotiations, it’s important to prepare for the actual negotiation process. One key step is to determine your own value as a candidate, based on your skills, experience, and qualifications. This can involve researching salaries for similar positions, considering your own achievements and contributions in past roles, and identifying any unique skills or experiences that set you apart from other candidates.

It’s also important to be prepared to articulate your value and make a persuasive case for why you deserve the salary you are requesting. This may involve creating a list of specific accomplishments or examples of how you have added value in past roles, as well as practicing your negotiation skills so that you can confidently and persuasively communicate your value.

During the negotiation process, it’s important to keep in mind that salary is just one aspect of your compensation package. Other factors, such as benefits, vacation time, and opportunities for professional development, can also be negotiable and can have a significant impact on your overall job satisfaction and long-term career success.

Finally, it’s important to approach salary negotiations with a positive attitude and a willingness to find a mutually beneficial solution. Employers are often willing to negotiate and find creative solutions that meet both the needs of the company and the needs of the employee. By doing your research, preparing your case, and approaching negotiations with a positive and flexible mindset, you can ensure that you are able to negotiate a salary that is both competitive and fair.

Disclaimer: This article was written solely by ChatGPT under the prompt “Write me an article about Negotiating salary: understand industry salary benchmarks and ensure that your compensation is competitive”. The information provided in this article should not be considered as professional advice and should be used for informational purposes only. It is always recommended to seek professional guidance before making any decisions based on the content provided in this article.

The post Maximizing Your Earning Potential: Understanding Industry Salary Benchmarks for Effective Salary Negotiation appeared first on The European Business Review.

It is surprising that even now, negotiation processes are of paramount importance for the management and functioning of a company. How can this be improved with the available methods? The negotiation processes for any occasion become much more effective if you use different solutions, like a virtual data room. That’s what we’re going to talk about today in the data room review.

A cutting-edge solution for your security

The virtual data room is a cutting-edge solution for modern enterprises that comprises a plethora of features. Previously, when virtual data teams were not popular, most entrepreneurs utilized disparate tools that clashed and disagreed. This created a terrible security precedent, which is why electronic data room vendors became so popular once the pandemic coronavirus arrived. At that moment, the requirement for remote operation and business continuity became apparent.

Digital data rooms also help to consolidate the entire system. This is the first time that this form of software has been able to encompass a large firm in its operations. VDR performs the following in general:

• Power is centralized inside the corporation. If you have a loss of authority due to dispersed departments, this will assist you in restoring it and getting your personnel working for you in the appropriate way.
• Expands organizational work. This is the second most significant aspect of reducing time spent on meaningless chores.
• Allows you to immediately solve difficulties. If your consumers are dissatisfied with something, they will submit their comments to a location that cannot be disguised. You will receive each complaint immediately and track its outcome.
• You will be able to track employee behavior at work. Who is the least productive? VDR can help you find out.

As you can see, it does more than merely store files. By the way, check out the available options on the mnacommunity.com site. And also don’t forget to compare virtual data rooms.

A modern approach to negotiating deals

The negotiation process is one of the basic processes of most companies that work with clients or with other large companies with whom it is necessary to negotiate for certain services. In general, all business is a process of negotiation. How can this be improved? Data room software is the answer to this complex question. It is what improves the entire process of negotiation, with the following features:

• You will be provided with automation programs that allow you to improve communication both between departments and within departments. Communication is quite a complex phenomenon in today’s business world. Modern technology simply can’t keep up with the level of communication between people that used to be there. Everything is now tied to modern technology. An electronic data room is designed to fix that with the same technology, and that will work to increase communication between departments and the employees themselves.
• Virtual data rooms support third-party conferencing applications, although conferencing is not a core feature of the software. You won’t be provided with the exceptional capabilities that other special applications provide, but you will be provided with technology that will enhance the entire negotiation process. We are referring to the integration of modern free and paid software solutions for video conferencing. Keep in mind the fact that the security of data rooms does not extend to a third-party application. The virtual data room providers, in any case, have their own developments for communicating with employees or customers.
• The negotiation process is also improved with proper document management, which will be set up in the right order and indexed in the right way. This cannot be achieved with conventional cloud storage because there is no auto-optimization or artificial intelligence.

If you want to communicate with your sponsors in the most beneficial way possible, the data room services contain a large number of lessons that allow you to do so. If you want to communicate with a third company in the most active way and give them your sensitive data, then you do not have to worry about possible data leakage because the developers of the data room tools have provided the possibility to protect your information. As a result, the negotiation process has been improved and made more efficient.

Can virtual data rooms really reward you?

You may be surprised in a number of ways by data room software. You will be provided with a ton of possibilities that you wouldn’t get from any other corporate solutions program. For instance, online data rooms will provide you with the following:

• Productive paperwork that will save you money on unneeded waste. Your whole business system will transition to paperless operations, saving you money on both paper and related expenses. You will also be astonished by the time optimization offered by the absence of paperwork.
• A wide range of automation technologies will be made available to you, aiding you not only in the merger and acquisition or due diligence process but also in your daily tasks. The majority of virtual data room usage occurs in routine, quick commercial operations. Ingenious file organizing or improved report generation are two examples of automation technologies. It is the best use of time in any case.
• Both internal and exterior security will be provided for you. The safety of the cloud servers that the online data room software runs on defines external security. The goal of internal security is to protect all official data currently kept in the company. This can include private information about users as well as business secrets. Every business avoids losing these assets at all costs since doing so increases the likelihood of lawsuits and reputational problems.
• Some examples of an electronic data room will also provide you with access to cutting-edge technology, such as support for intelligent accounting systems or artificial intelligence. All of this enables you to automate your tasks while also enhancing the security of your company’s entire network.

All of this has a profound and significant impact on business operations. You may either modify things drastically or gradually. It all depends on you and how capable and flexible your people are.

The post M&A Community – A Modern Approach to Negotiating Deals that Gives Both Parties an Equal Chance appeared first on The European Business Review.

In our everyday life, we are constantly faced with different situations that require drastic critical thinking and decision-making skills, especially in the business sector.

Decision-making can be described as the process of making important decisions both in your private, everyday life and in business.

Decision-making refers to the process of selecting an option from among a set of alternatives according to its probability of leading to the best outcomes in terms of the survival chances of the organism.

According to the Oxford Advanced Learner’s Dictionary,² the term “decision-making” means the process of deciding about something important, especially in a group of people or with an organisation or a company.

It follows from the above that in their everyday duties and activities, bosses, managers, and leaders continually make decisions on various topics and issues.

Moreover, we have to state that it is not only businessmen who are faced with the challenge of taking decisions in a timely manner, but also engineers, doctors, educators, lawyers, etc.

Here, it is also important to note that decisions do not always come that easy. And, although for some people they might be easy-peasy, they may later regret this or that decision that they met and made spontaneously in an ad hoc manner. Yet it is noteworthy that decisions are almost always influenced by a number of accompanying factors, such as emotional background memory, former interpersonal relations, and former positive and/or negative emotions connected with a certain person intertwined with a certain decision, etc.³

All of these factors can sometimes be considered as “noise” that has a huge impact on the final decision over and above mere facts and pure data analysis. Yet they convey very important information to the decision maker as well, which pure data may sometimes lack.

Among the factors influencing decisions are emotions and intuition, which are often neglected in business. Nevertheless, these are tiny little instincts guiding us in handling life that evolution has instilled in us, according to Edward Murray (1964),¹ and the business field is no exception.

In this connection, we can speak about the Ted Talk speech of Tracia Wang back in September 2016 entitled “The human insights missing from big data”.⁸ During her interesting speech, Mrs Wang spoke about the differences between “big data” and “thick data”. Big data is pure data retrieved through analytics, while thick data includes such subtle things as intuition and emotions, likes and dislikes, motivations and intentions, and feelings and desires, which can be gathered through qualitative research.

In her speech, Mrs Wang also raised the example of the (at that time) big telecommunications company Nokia, which she formerly worked for. The company did not take in to consideration her research on the preferences of people in connection with mobile phones, in which she found out through qualitative research that consumers had begun to prefer more sensory touchscreen phones. The company ignored this information and some years later they faced collapse with the introduction of sensory phones to the market. So conducting only purely data-driven analysis based merely on big data is not enough in order to come up with an effective decision that all the parties will eventually benefit from.

As can be seen, the people’s intuition and emotions also have a great impact on the decisions they make, including which phone to own, which car to drive, which dress to wear, and even which partner to sign a contract with.

Although it is primarily believed that emotions may have a negative impact on decision-making processes and, indeed, our overall behaviour, in some cases they have intrinsic meaning and add extra value to the overall decision made, for example based on our former experiences, including emotional ones.³

We have conducted an online survey on whether men or women tend to rely more on their intuition and emotions while taking decisions. The results were obvious, since women are more often inclined towards taking decisions based on their intuition and, as they say, when a woman asks you a question, they most probably already intuitively know the answer.

The results of the above diagram can be explained by the fact that we women tend to make decisions based more on our intuition and gut instinct (though there may be exceptions and differences, since we also differ in the nature of our personality) as the right side of our brains, which is responsible for creativity, emotions, intuition, and feelings, is more developed than that of males. Men are more rational beings in essence and mostly make decisions based on pure facts and rational reasoning, since their left side of the brain, which is responsible for rationality, logic, reason, de-factoring, etc., is more developed than others, according to psychology.

Nonetheless, we should note that in her works on the emotions, Dr Anna Rostomyan argues that emotionality and rationality go hand in hand and should not be viewed in contrast, but rather in comparison. By continually cooperating with one another, emotionality and rationality complement each other and provide essential information to one another, forming the basis of the harmonious interflow of our higher cognitive processes.⁶

The author clarifies in her PhD dissertation that the rational mind and the emotional mind together make up the basis of our higher cognitive processes and cannot be viewed separately. Of course, the emotional and rational minds sometimes overlap and the emotional mind can come to the forefront and overrule the rational part of our brain in a heated emotional moment.⁵ Nonetheless, the cooperation of these two minds gives the ultimate chance of gaining insights into the situation at hand, benefiting from the information retrieved from both of them. It is also noteworthy that, in the heat of an emotional moment, we can lose control over the rational part of our brain and the emotions may very explicitly be displayed on the outside through verbal and non-verbal expressions, which are thoroughly discussed in Dr Anna Rostomyan’s book The Ultimate Force of Emotions in Communication, published in Germany in 2022.⁴

Here, when dealing with a decision, we can speak about the importance of conducting a “diagnostic” analysis while striving towards finding a solution.

According to the authors D. Swanson and J. Dearborn (2017), there are four stages of analytics.⁷

These include the following interrelated stages (Figure 3). It follows from the above that, if Nokia had conducted such an analysis, it would most probably have helped the managers and engineers to deduce the reasons for which people began to prefer sensory phones and, after the prescriptive stage of analysis, to take actions towards finding the best way for the company to approach matching the demands of the market.

In discussing effective decision-making and noting that emotions do play a vital role here, it is also essential to state that “emotion management” comes to the forefront. Even if you come up with the best decision, if you are unable to conduct emotion management at the workplace with your employees, you will most probably not succeed in implementing the decision at hand.

By “emotion management”, we mean managing, in a healthy manner, your emotions as well as the emotions of those with whom you interact, on both the verbal and non-verbal levels.⁶ When we communicate with one another, we exchange ideas and thoughts not only on the verbal level through linguistic markers, but also on the non-verbal level through gestures, facial expressions, bodily movements, postures, etc.4 And here, EQ skills can be of great help to us.

Truly, when it comes to making decisions, EQ skills can help you see how your decisions are affected by your emotions, and to manage these accordingly. EQ skills can also assist in recognising emotions in others and detecting how your emotions, as well as those of your co-workers, affect their actual decisions and, in particular, their actions.

See below a couple of suggestions on how to excel in better decision-making through EQ skills:

• Delay the decision: time will settle things down and you will have a better and clearer perspective on things.
• Recognise your emotions, and emotions in those with whom you interact: recognising the emotions present in the process of decision-making will help you identify them and understand why you or the other person thinks in this way or another.
• Identify the emotional side of the decision: this will help you detach from the emotional side and rethink whether emotions intermingling with rationality help, foster, and/or hinder effective decision-making.
• Reappraise the feelings which are hindering your rational decision-making: in this way you will analyse whether emotions are supportive or get in your way in making an effective decision.
• Look for substitute or alternative decisions: this action will keep you safe in the event of failure. However, it should be mentioned that here we can be faced with FOBO (fear of a better option) and, to overcome this, it can be advisable to rely on your intuition.

Here, it is noteworthy that if we are attentive to the emotions of our co-workers and employees in the business field and pay more attention to creating a healthy and supportive working atmosphere, we will stand a better chance of having better performance. Empowered employees make better decisions and resolve problems more effectively, because if they feel secure in their “home” corporation or company, they will perform at their best, which will help them meet decisions and take actions more effectively with a clear mind.

To sum up, when making decisions, it is highly advisable to rely not only on the pure facts, but also to take into account intuition and gut instinct, which have the potential to provide you with additional information, guiding you and protecting you from consequent failure or resultant miscommunication. Hence, if we approach decisions as multifold actions that include very different processes, we will surely succeed and achieve effective results in our company.

About the Author

Dr Anna Rostomyan is a professor, EQ coach, international author, and PhD mentor at the Swiss School of Business Research (SSBR). She defended her PhD excellently in collaboration with the University of Fribourg (Switzerland) and Yerevan State University (Armenia). She is the author of five books and 30 publications worldwide, with readers of around 100 nationalities.
Contact email: annarostom@yahoo.com, anna.rostomyan@ssbr-edu.ch

References

1. Murray, E.J. (1964). Motivation and Emotion. New Jersey: Prentice-Hall Inc.
2. Oxford Learner’s Dictionary (1997). Oxford: Oxford University Press.
3. Rostomyan, Anna (2012). The Impact of Emotional Background Memory at Court. Berlin: DeGruyter.
4. Rostomyan, Anna (2013). “Management Techniques of Emotions for Communicative Conflict Reduction”. In Communication: Breakdowns and Breakthrough. Eds. Anabel Ternès. Oxford: Oxford Publications, pp. 141-51.
5. Rostomyan, Anna (2020). Business Communication Management: The Key to Emotional Intelligence. Hamburg: Tredition.
6. Rostomyan, Anna (2022). “The Ultimate Force of Emotions in Our Lives: A Linguo-cognitive Analysis of Verbal and Non-verbal Expressions of Emotions (on the material of English)” (dissertation). Dȕren, Germany.
7. Swanson, David & Dearborn, Jenny (2017). The Data Driven Leader: A Powerful Approach to Delivering Measurable Business Impact Through People Analytics. New York: Wiley.
8. Ted Talk by Tracia Wang on “The Human Insights Missing from Big Data” (September 2016, online: accessed December 2021).

The post Efficient Decision-Making with EQ Skills in Business appeared first on The European Business Review.

Being a great communicator can help you get what you want in life. For example, if you are looking for a promotion at work, salary rise, or even getting the dish you want in a restaurant, persuasion can help you. In fact, a psychology of persuasion is the greatest tool you can use to get what you want.

5 techniques you can use to persuade anyone: 

• Be confident

Confidence is your number one step to take if you want to convince anyone. You sound more convincing and powerful when you are confident, even when you chat online with your friends on Talkliv. Even if you are shy, know that confidence is not hard to fake. And the best part is that no one can tell if you are faking it! You just need to act confident enough while passing your message.

Confidence tells the other person you are communicating with that you know what you want and is ready to take it. The other party will be convinced to give you what you want if you exhibit enough confidence. 

Whether it is an interview or a normal conversation, the tips provided in the Guardian article can help you learn how to boost your confidence. Confidence should not be projected from your voice alone — your breathing, movement, and posture will tell the other party how confident you feel. Don’t utter powerful words while your face shows you are scared, or your hands are shaking.

• Learn to introduce a logical argument in a conversation

If you are a logical person, persuading people will not be such a hard thing to do. According to the Consortium of the University of Colorado states, persuasion can be defined as the process of convincing your opponent to change their behavior or beliefs through a logical argument, and without force.

When you persuade someone to do something, they will do it because they have come to believe it is a proper thing to do. For instance, let’s assume you are trying to persuade your colleague at work to help you complete a challenging project you are working on together. At first, they may resist, but you can apply a logical argument and explain that they are better placed at handling the remaining section of the project and doing it faster and more efficiently. You can also tell them that the success of the project will be a career step-up for both of you and a great contribution to the company.

• Make an idea appear beneficial

When you make your requests seem more valuable to the other person, you are more likely to persuade them to fulfill the request for you. It can be hard to show that your request will also benefit the other person, but it can become a final line in your persuasion. For instance, let’s look at a situation where you are trying to convince your neighbor to let you use their oven. Obviously, they may not be willing to do it at first, but you can talk about how fun it will be to teach them a new baking recipe or how you will share some cakes with them afterwards. 

• Compliment but don’t cross the line

Complimenting is one of the most effective tricks on the list. However, you should be careful with compliments not to sound cheesy and unfair. So instead of fully flattering your subject with too “nice” words, you can use short phrases or remarks to complement them objectively. For instance, while starting a chat with someone on Talkliv, you can say “Hey, that’s a really nice shirt you are wearing in your profile picture! Could you please tell where you bought it?” or “I see you are in crypto for 5 years, that’s such an experience! Could we chat more about crypto investments so I can learn more?”

In any conversation, some words tend to have a higher value than others. For example, a word like “lucrative” has more value than “good”, and “reasonable” sounds more convincing than “alright”.

You don’t have to start using big vocabulary to sound convincing in your sentences, instead, your goal is to organize your sentences to ensure that what you meant is well captured by the subject. By doing this, you will show yourself as a better communicator, and even appear more thoughtful, intelligent, and trustworthy.

• Patience and persistence matters

It is important to understand that you are not always going to convince everyone. Sometimes you are going to be disappointed. But even when that happens, you are not supposed to plead, argue or beg. The best reaction to the situation is to let go, you can recollect and try again next time.

Your argument will always stay in the subconscious mind of the other person, and if you try bringing the argument in your next conversion, you will have another opportunity to seem more reasonable and persuasive. Don’t give up, but give yourself time between attempts.

Can you practice the art of persuasion with Talkliv?

Communication is solely a practical skill. To be better at delivering your messages and persuading people, chat with them! Talkliv is a convenient space, open to anyone wanting to upgrade their social skills. Starting to practice techniques you can use to show confidence and convince anyone you are having a conversation with online may be much easier too.

Keep in mind that persuasion, just like any other important skill, takes time to improve. You may not be successful at the beginning, but if you apply the above tactics and keep working on them, you may become more confident with yourself, and convincing people will come naturally. Be careful not to bully anyone, your main goal should be to make your counterpart see things from a different perspective.

The post This Is How To Persuade Anyone: 5 Techniques from Talkliv appeared first on The European Business Review.

This post will discuss five marketing strategies that businesses can learn from political campaigns. We’ll also provide tips on applying these lessons to your own business. So, without further ado, let’s get started!

Define Your Target Audience

Companies often make the mistake of trying to attract as large an audience as possible, which frequently results in ad campaigns that fail to bring in the expected ROI.

However, campaign strategist Lynton Crosby recommends a narrow focus. He knows better than anyone that no political figure has universal appeal. 

So, political campaigns typically double down on marketing to their target audience, with converting a new demographic regarded as a secondary goal.

That’s what companies should do – instead of diluting the message, double down on the market that you know already aligns with your messaging. 

Focus On Your Customer

Without understanding buyer personas, you cannot determine who the buyers are already aligning with your message.

Think of voter demographics. Politician campaigns are planned according to the demographics they appeal to most – their voter base. Instead of changing the campaign midway to attract new voters, politicians adjust to the political demands, opinions, and trends of those at least somewhat likely to vote.

A persona is a fictionalized version of a customer. They are very much like a potential voter if you please. You craft them to determine how to communicate your values to that specific persona best and convince them that you can meet their pain points.

Keep Your Message Simple

Most effective campaign slogans are those that keep their point straight and memorable. Think of campaign slogans as a company tagline.

The most enduring company taglines are also the simplest.

Keeping your messaging simple could be the key to drawing customers to your brand in the current era of instant gratification. If you overcomplicate it, chances are people will get bored halfway through and run to those who can provide a more effortless experience.

Create A Strong Narrative

Audiences love an engaging story. There’s a reason why most political campaigners try to paint an underdog, patriot, hero, etc. However, most candidates come from well-connected and privileged backgrounds. 

Personalize your business. Share the hardships you had to go through for the company to become what it is today. Customers don’t want to give their hard-earned money to an anonymous giant conglomerate. They want something to root for.

Incorporate storytelling when developing your marketing strategies. Give people a narrative that makes them feel good about supporting you. 

Engage with Your Audience

Engaging and interacting with the voter base directly is a must on every political level, be it local elections or the white house.

Marketing isn’t all that different: capturing leads becomes more complicated without personalized engagement. Instead of an impersonal business transaction, your target audience wants to feel like you have a partnership. Get personal with your prospects.

In Conclusion

Businesses can learn a lot from political campaigns, especially when it comes to storytelling and engagement. By taking the time to plan your narrative and create engaging content, you’ll be able to connect with more customers and drive sales. What lessons have you learned from watching political campaigns? Are there any techniques you would like to apply to your own business?

The post Lessons Business Owners Can Learn from Political Campaigns   appeared first on The European Business Review.

The truth is, virtual methods of deal-making are convenient – and they have been, for quite some time. Whether you’re utilizing video tools, teleconferencing, or even just email, you have everything you need to plan and then successfully negotiate.

However, when you’re negotiating virtually, it’s important not to approach the situation exactly as you would if it were occurring face-to-face. In actuality, the experience of digital negotiation comes with a number of its own unique quirks, which you may not have previously needed to concentrate on.

If you’re looking for evidence of the difference between virtual and face-to-face negotiation, research has actually been done on the topic. For instance: remember that, whilst you’re negotiating virtually, it’s more likely that your counterpart will believe you to be less warm or trustworthy, which can lead to fewer objective results. This is according to a 2005 article published in the Journal of Business and Psychology.

Whenever you fail to take this into consideration, it’s possible that your negotiation strategy could backfire on you, and ultimately fail at creating value — even if the same technique would have been perfectly effective, during face-to-face negotiations. Creating trust is a key component of successfully negotiating, and it’s important that you work to create this sort of connection.

Further, you might be tempted to resort to email negotiations, if the discussion is high-conflict. Before taking this route, there are some factors worth considering. Through email, it’s more likely that negotiators will be less cooperative and willing to collaborate. If you or your negotiation partner are unhappy during email negotiations, you’re less likely to tactfully disclose this, or work to compromise — instead, you might feel less inhibited, allowing you to boldly express these negative emotions. The same thing applies to the party you’re negotiating with.

Through email, there’s also a higher risk of miscommunication, compared to if you were negotiating in person. Even if you believe that you’re being clear within your emails, this might not truly be the case. For instance, if you’re looking to interpret your negotiation partner’s emotions through email, you’re going to find it considerably more difficult than if you were directly communicating in person. Whenever emotions are misinterpreted, it’s possible that your attempts at negotiation will fail, especially if your partner believes you to be hostile — whether or not this is the tone you were intending to use.

So, if you’re seeking gains during virtual communications (no matter the form), it’s critical that you appropriately prepare. If you dive in without a plan of action, it’s far more likely that you’ll make avoidable mistakes, when it comes to leading effective virtual negotiations. To thoroughly plan for virtual negotiations, make sure to complete the following steps:

1. Ensure That Everyone in Your Team Has Been Assigned a Role

This is especially relevant if you’re undergoing a video call with more than three parties. The more individuals involved in a digital negotiation, the easier it is for the discussion to grow muddled and be thrown off track. This can be avoided by simply assigning each of your team members a specific role, prior to the start of the call.

For example, determine who you would like to open the discussion, as well as who is tasked with explaining your proposal. Also, you should decide upon which party will answer any questions introduced by your negotiation partner. Whatever roles are necessary to the discussion you’re having, make sure to have someone at the ready, prepared to tackle them.

2. Decide on the Mode of Offline Communications — But Keep It Concise

Not only should you determine a method of chatting with your teammates, but you should also practice using this method before negotiations begin. Try to use a different platform and software to perform offline communications with teammates — if the negotiations are occurring on your computer over Zoom, then consider chatting on your phone, using a different application. However, keep this communication brief. The more you multitask during negotiations, the less professional you’ll seem to your counterparts. You can also expect lower payoffs.

Also, once negotiations begin, keep the following in mind:

• Connect and spark a more collaborative interaction by opening with small talk.
• Clarify the purpose of the meeting, including any assumptions or constraints.
• Consider turning off self-view if you’re worried it might make you feel self-conscious (and thus unfocused).

As virtual negotiations become more common, it’s important that negotiators hone their skills. Remember, negotiating through video call or email doesn’t require the exact same skillset as face-to-face discussions — take these differences into consideration, and then develop your very own virtual negotiation strategy.

The post A Guide to Negotiating Virtually appeared first on The European Business Review.

This valuable information is rarely shared in books, but it can be found in other sources, and that’s what we want to share with you. 

The practical part of negotiation learning is usually provided at training and coaching sessions. So if you really need to master this art and do it fast, pick a training provider at https://cosmitto.com.au/ and start your education today. 

What to pay attention to while honing the practical skills of negotiation? There’s a list of tips to follow since they will constitute a big part of any real negotiation process. 

1. Leave adversarial thinking at the door. Start on a neutral note, this mood will help you keep calm and remain clear-minded.
2. Know why you engage in negotiations and believe in your goal firmly. You should feel that you deserve what you negotiate for – whether it’s a pay raise, a leave, or better terms of the merger and acquisition process.
3. Learn to manage yourself – emotions and words. Know what can make your blood boil and control your reactions during the talks. Keep your language polite and neutral. A careless wording or a slur can ruin everything.
4. Learn to eliminate fear from your approach. If you engage in negotiations with fear of losing, you have almost lost. You do not need to be overconfident or daring; you need to be calm about the outcome. Play in your mind the worst possible outcome, decide how you will deal with it, and tell yourself that no matter what you’ll be fine. Such a stoic approach will keep your spirits afloat during the toughest of negotiations.
5. Know the powers of people who came to negotiate with you. Yes, preparation is key. Try to find out in advance what decision-making capacities the other party has, and don’t be shy to ask directly during the negotiations who has the final word on their team.
6. Find out their interests. Namely, what their real interests are. It may take a little more work to research the time and conditions they enter negotiation in, but it pays off. If you appeal to their real interests, you can reach your negotiation goal faster.
7. Start negotiations with a high ball and see where it will take you. Like, ask for more and move to a reasonable level. That’s almost a tradition in negotiations.
8. Keep it framed as a conversation, not an argument. Do not get aggressive or rude. It can end the negotiations faster than you expect, and not with the outcome you strive for.
9. Don’t take anything as a personal insult. Yes, it’s business, and the other party may refer to dirty tactics to throw you off balance. Don’t let them do it. It’s not about you or your company; it’s about business matters only.
10. Know from the very start what you can and cannot lose in negotiations. When you have these two points sorted, you know what you can give up and what is unacceptable. In the latter case, you will just walk away from the table nicely, without wasting your time and resources. 

Remember our tips, master their implementation during trainings under the supervision of weathered negotiators, and become a pro yourself.

The post 10 Practical Steps to Polishing your Negotiation Skills to Perfection appeared first on The European Business Review.

You’re thinking of using threats in a negotiation? Well, if you stick out your gun, you’d better be ready to shoot, otherwise you’re just an idiot with a gun in your hand! Here are the reasons why threats can be a dangerous game and why avoiding them will help you become a better negotiator

There is an abundance of literature on negotiation. This is not surprising at all; negotiation is everywhere. People negotiate salaries with their employers, the price of a house, the sale of a company, peace, a political alliance, agreements with unions and all sorts of other deals, regardless of their nature. A lot of content can be found on multiple topics: dispute resolution, win-win negotiation frameworks, communication skills, reservation price, cross-cultural negotiation, negotiation dynamics, interpersonal relationships and many other topics.

Interestingly, resources on the value of threats in negotiations are rarer. The psychology of threats is sometimes mentioned but as a secondary element, which is all the more surprising as it seems to be disconnected from what’s actually happening in real life. In most negotiations, tension is indeed frequently translated into verbal threats. Whilst tension is inevitable and even healthy, threats are very often counterproductive. People making threats rarely evaluate the consequences of their threats, not only for the other party but also for themselves. One could think that such a behaviour only applies to inexperienced negotiators, but it’s not the case. In fact, although they know it’s something to be avoided, even the most talented negotiators often make threats at some point when they conduct negotiations.

Whether you negotiate a multibillion-dollar agreement, a deal with your kids or the outcome of Brexit, here are four reasons why threatening your counterpart is probably a bad idea.

1. Don’t destroy your credibility

I’ll always remember the scene. I had just told my four-year-old daughter she would be punished if she didn’t listen to me – whatever unwritten family rules she had breached. Without panicking or even looking at me, she calmly replied that she was not worried about it. Because it was not the first time that I was threatening to punish her, and not once had I actually done it. Result: Daughter: 1 – Dad’s ego: 0.

And she was right! There is no point threatening someone – without even considering the ethical aspect of a threat – if you’re not prepared to execute that threat. Whatever you negotiate, whoever you negotiate with, you should always remember this principle: If you stick out your gun with tactical gear, you’d better be ready to shoot; otherwise, you’re just an idiot with a gun in your hand!

An extreme illustration of this principle is the negotiation between Ronald Reagan and the 13,000 air traffic controllers who went on strike in the US in 1981. The former president stated that this strike was illegal and he threatened to fire any employee who did not return to work within 48 hours. To the surprise of many observers, he indeed executed his threat by letting go more than 11,000 people. Had he not carried out his threat, he would have lost all credibility as a leader and a negotiator, and his political mandate would have been severely impacted.

This case remains an exception because, most of the time, threats are pronounced in a moment of emotional exhaustion, in the middle of endless and painful negotiations where frustration is getting the best of the negotiating teams. But the credibility of people uttering them becomes eroded and the outcome ends up being totally counterproductive.

2. Avoid the “Bozo Zone”

In the various negotiations I have conducted, I have noticed that threats are often attached to a big ask. Some negotiators have the quite irrational belief that, in order to make their ask believable, it has to be linked to a threat. The bigger the ask, the stronger the threat. If you don’t accept “this”, “that” will happen. One of the negotiations I led, several years ago, strictly followed this framework. At the very beginning of the kick-off meeting, the other negotiation team looked at us in a very dramatic way (imagine a scene from Once Upon a Time in the West, with the harmonica theme in the background) and told us: “This is what we want, and if we don’t have it we will stop working with you.” As brutal, confrontational and threatening as this message was, it turned out to be useless. Due to their lack of preparation, the threat they had come up with was totally unrealistic. We knew it; they didn’t. It was a meaningless threat without any common sense, disconnected from reality. We instantly knew that what they were asking would simply never happen, whether they worked with us or our competitors. Their ask was so ridiculous, it had a red nose like Bozo the Clown. In this case, they not only lost any kind of credibility, but this episode shaped the following stages of the negotiation to our advantage. If a threat is not credible, whether it’s real or not, it will have no impact on the negotiation.

3. Educate, rather than threaten

As politically incorrect as it may sound, there are situations where pronouncing a threat is not completely irrelevant. Because a given party has a strong BATNA*, it can theoretically afford to make a threat. This is what happened with the air traffic controllers’ strike in the US. Ronald Reagan had a plan B: using military controllers, supervisors and non-strikers. In other words, he was so confident that his alternative option would work, he didn’t need to negotiate any longer and could afford to make a threat.

However, if we focus on more traditional and less confrontational negotiations, how you articulate your message is more important than ever. Rather than making a threat, which can often be emotionally toxic and make your counterpart both defensive and aggressive, you may want to explain and educate. Why not be transparent and tell the other party that, whilst you’d be delighted to have the opportunity to reach an agreement, you have a very satisfying alternative option. And unless the negotiated agreement gets better than this option, you’d have no interest in pursuing the discussion. Another illustration of this approach is given by Margaret A. Neale, Professor of Management at Stanford. In her book Getting More of What You Want, Neale shares the true story of one of her colleagues who received a better offer from another business school. He then decided to go and see the Dean with a threat: either match the offer, or I will leave. It turned out that the Dean rejected the threat because the cost of complying with it would have been way too high (there was actually a spillover risk that other professors would behave the same way). On the other hand, Neale explains that another faculty member shared her competing offer with the Dean, simply asking him what her compensation would be the following year. Because the ask was not articulated as a threat, the Dean didn’t have to worry about having a reputation of saying yes to threats. In parallel, for the faculty member, it took the pressure away from having to accept the outside offer, as well as the risk of losing face.

The key here is to convey your message calmly and respectfully without giving your counterpart the impression that you are twisting their arm. You present your options; they decide.

4. It’s a small world…

We live in a world where reputation is more critical than ever. Whether you’re a lawyer, an entrepreneur, a corporate, political or non-profit leader, the multiple negotiations you’re going to lead will define your personal brand as a negotiator; because the habits we develop and the behavioural patterns we deploy when negotiating contribute to shaping our reputation. Whatever your field is, if you become the person who keeps making threats but never executes them or who continuously makes irrelevant threats, then you’re losing all credibility for future negotiations, in your market, industry or ecosystem.

Think about the Brexit deal. How many times have the respected parties declared they were ready to have a no-deal, threatening the other party publicly with stopping all the discussions?

In an interview published in the French newspaper Le Figaro**, Vincent Eurieult, Professor of Negotiation at ESCP Business School and Sciences Po Paris, explains why Boris Johnson has never been entirely credible when making threats in the Brexit negotiations. Unlike some negotiators, who remain unpredictable until the last moment, suggesting they’re able to make any kind of unexpected extreme decisions, including a no-deal in this case, Boris Johnson’s primary intent has always simply consisted of staying prime minister as long as possible and remaining in charge. His reputation, identity and personal brand attributes have stopped him from being credible when conducting extreme and mad threats. The reality is that, despite those forceful statements, negotiations never stopped.

As the UK begins to negotiate bilateral agreements with other countries in the world, how credible will its negotiators be when they start making threats again?

About the Author

Philippe Roy is a global corporate executive specialised in strategic partnerships management, influence strategies and international negotiations. He has gained his experience working in global leadership roles for tech start-ups as well as Fortune 100 companies (IBM, Motorola, American Express). His views and opinions are personal.

LinkedIn: http://www.linkedin.com/in/profilephilipperoy/

Notes:

*In their popular book Getting to Yes, Roger Fisher, William Ury and Bruce Patton introduced the concept of Best Alternative to a Negotiated Agreement (BATNA) as being the option left when parties are unable to come to an agreement.

**Article written by Alexis Feertchak and published in Le Figaro on Oct 9th, 2019, “Boris Johnson est-il un bon négociateur?” (Is Boris Johnson a good negotiator?) https://www.lefigaro.fr/international/boris-johnson-est-il-un-bon-negociateur-20191009

The post Threats and Negotiations: Don’t Be an Idiot with a Gun in Your Hand appeared first on The European Business Review.

The most successful sales associates refine their techniques through trial and error throughout their careers. However, there are two primary sales techniques that every entrepreneur needs to grasp early on to be successful.

Effective Cold Calling

Meaning to solicit to prospects who haven’t expressed any interest in buying from you, cold calling is an important approach for entrepreneurs. When launching your business, very few people know your company, products, or services. It makes sense, then, that cold calling will most likely be the first technique you will use to build up your customer base.

Pitching to a stranger who has never heard of your company or is blind to your products/services is one of the toughest challenges an entrepreneur may ever have to face in their journey. Yet, cold calling has stood the test of time as one of the most successful sales techniques. Most sales training online will include at least one module focused on cold calling.

Unfortunately for the sales rep, potential customers tend to hate unsolicited intrusions. To increase your chances of success in cold calling:

• Focus on building rapport rather than making an immediate sale.
• Use questions to paint a picture, matching your offers with the prospects’ needs.
• Follow sales scripts and slides like someone who cares. Using your scripts as a basis but focusing on being engaging and personable is a more effective approach for keeping potential customers interested. Personality is often more important than being word-perfect.
• Schedule your calls to times when prospects are more likely to speak with you. For instance, Monday mornings may not be the best time as people are busy setting up their weekly schedules. Wednesday and Thursday mornings work better since people have settled into their work week and the rush for the weekend is yet to begin.
• Don’t waste anyone’s time, including your own. Train yourself and your staff to qualify and disqualify leads early.

Overcoming Objections

There’s a story about Donald, a farmer whose tractor broke down during the busy farming season. Immediately, he decided to walk three miles to his neighbor, Jackson, to borrow their tractor for a few hours.

After the first mile, Donald started worrying about whether Jackson’s tractor will be available. “Maybe Jackson won’t be willing to lend it to me if he needs it himself,” he mused.

After the second mile, Donald worried even more about how Jackson’s tractor is worth lots of money. “He may not trust me with it, especially since I crashed my own,” ran his thoughts. On the third mile, Donald now worried whether Jackson even liked him. “I bumped into him in the market last week and he barely acknowledged me. I doubt he likes me, and he surely won’t lend me that tractor.”

So when he rang the bell and Jackson opened, Donald blurted out, with eyes bulging, “You can take your damn tractor and drive yourself off a cliff!”

The lesson for sales associates is that while it’s important to anticipate objections, don’t let self-doubt lose you an opportunity. Instead, envision how you will overcome any client objections that arise. What new entrepreneurs quickly learn is that people can often be cynics. Many prospects will express doubts and will question your accuracy, legitimacy, and motivations.

An effective online sales training technique is to anticipate and prepare for your prospects’ objections. Plan how you will ease your prospect’s fears and ward off their cynicism before they get in the way of your sale. Don’t give in to your own cynicism.

Reframing Objections

With experience, you learn that objections can signal a prospect is connected, but far from persuaded. If a prospect indicates they’re not ready to buy, don’t be discouraged. Instead:

• Be all ears and listen fully to the objection. Avoid making assumptions and do not react defensively.
• Understand the underlying issues. Ask questions to clarify and restate the prospect’s response to confirm that you’re on the same page.
• Address the most important objection first and do your best to resolve the prospect’s issues fast.
• After addressing objections, check with the prospect that you’ve satisfied all their concerns.

In Closing

The two sales techniques of cold calling and overcoming objections work hand in hand, especially during the early stages of your entrepreneurial journey. While online sales training can equip you with the right knowledge, experience will be the ultimate determinant of whether you succeed or fail.

The post Sales Techniques that Every Entrepreneur Needs to Know appeared first on The European Business Review.

If you are in this situation then it is always best to first get some legal advice. When it comes to family lawyers Sydney has a wealth of talent, speak with them and find out exactly what to do in your individual situation. If we look at this generally, here is what we often see happen in these types of cases.

Business Owner

When it comes to the court taking decisions, they very rarely look to break up the business, this will only be done if the two partners have decided that this is the best way going forward. What the court will generally look to do with the assets of the business such as the property, it is to give all ownership to the person who legally owns the business. In such a situation, if one partner is the legal owner, the other partner will be sufficiently compensated to the value of the business’ assets.  

Split Ownership

If there is a straight up 50:50 ownership split between the two partners then the first thing which will happen here, is that the business will be locked. What this means is that neither partner is allowed to make any decisions in the business, without the agreement of the other. The business, and any property owned by it, will remain like this until a decision has been made with regards to what the future of the business will look like.

Disputes 

If there are any disputes regarding who will take over ownership of the company, and therefore who will get the property in its name, the courts will step in. The court has the power to transfer ownership if it so wishes. If neither of the couple are in a financial position to buy out the other, then the courts will work with both parties to put in place rules of business responsibilities, which would enable the business and the spot ownership to continue, without the two parties having to work together. Ultimately this is something which neither spouse wishes to do, and it usually results in one party exiting the company. Should this happen, then we go back to point one which is that the owner keeps any property and the exiting partner is recompensed according to the valuation of the company and its assets.

Being in business together when going through a divorce certainly adds a layer of difficulty to the splitting up of assets, always seek legal advice to find out what the best approach is in your specific situation.

The post How To Deal With Business Property Settlement After Separation appeared first on The European Business Review.

However, the human resource is also the most difficult to maintain. It requires constant encouragement and motivation, with a focus on happiness and fulfillment. Otherwise, they are free to look for greener pastures (usually, with the competition).

Furthermore, things get more complicated when one of the managers decides to leave. Managers are usually deep-rooted in the organization and take care of lots of difficult tasks, which makes them hard and costly to replace. 

Luckily, there are a few ways you can prevent valuable employees (especially managers) from leaving without warning (as you can read below).

Show Them Your Appreciation

Employees (regardless of rank) must feel they matter to the organization. If they’re easily replaceable, there won’t be any loyalty towards the brand or the company, and the results will showcase this lack of interest. 

The easiest way to show appreciation is with a raise or bonuses, but money doesn’t always solve the problem. In fact, while financial rewards are important, there is a threshold after which money is no longer effective for motivation. 

People need to be seen and understood as individuals. This requires a bit more attention to detail from your part, as the employer. It means learning about their personalities, favorite things, hobbies, family life, and more. 

As such, while it may not look like much, corporate gift box, custom gifts are a fantastic way to show your appreciation. For instance, any of these gifts are great for managers, as long as you select the right one for the right person. 

Be Considerate of Their Background

As the generations change, companies must adapt to a new type of worker – the millennial. Sadly, these young adults don’t have a great reputation when it comes to their work ethic or loyalty towards the company, but it’s all a matter of approach. 

Millennials and younger generations are loyal to their principles and see the world differently due to their relationship with technology. As such, it’s less likely to see them invest time and energy in a brand that’s not aligned to their beliefs.

Companies must understand this aspect and create a work environment that’s in tune with the new world order. For instance, if the manager is interested in a more flexible work environment, use collaborative technologies to make it possible. You won’t gain anything by forcing everyone to be present in the office every day when people may feel more comfortable working from home or a remote location. 

Adapt to Change

Is your company capable of offering people a modern environment? 

The current situation and any future prediction show clear tendencies to a more flexible office. However, this can’t happen unless companies embrace the change and use the available technologies. 

The long commute from and to work, the stuffy office environment, the business-casual apparel, and useless meetings are about to become a thing of the past. People love being able to choose their work environment and enjoy having more time to spend with their families. 

In addition, new technologies bring usher in a new era focused on goals and not on hours spent in the office.

Wrap Up

In short, the new worker wants to know his/her efforts are appreciated and that they can truly make a change in their organization. They also want a modern work environment that supports productivity and discourages micromanaging and the workaholic trope. 

As long as your company can keep up with these few trends, the loss of talent will be at a minimum. Still, there are other factors to take under advisement, so keep an open mind!

The post How To Deal With A Manager Who Is Leaving: Last Attempts To Regain Him/Her appeared first on The European Business Review.

It takes time, effort, and persistence to secure high-value customers. However, companies who know how to nurture customers could achieve impressive performance. According to the best negotiating courses, the following points can help you secure high-value customers.

Understand the customer’s pain points

Attracting a high-value customer is much easier when you understand their pain points. A pain point is a specific issue that has become persistent or recurring. When you know your customers’ issues, you can better position your product or service as a solution to their problems. Remember, the need for a solution is what prompts a customer to buy a product or service.

To find customer pain points, negotiation courses recommend asking probing questions. It also pays to put time into conducting research. Here’s why. Some prospects may have an idea of the problem but struggle to explain the problem well. Other prospects may not understand the true nature of their issue.

When you conduct your own research, you can avoid valuable information falling through the cracks. With all the facts in hand, you can present a cohesive solution that addresses the pain points.

Be well prepared

High-value customers know their worth and expect more for their dollar and their time. As such, you are unlikely to secure business with a run-of-the-mill strategy.

Preparation allows you to clearly express the value of your products or services. You’re also more likely to come across as confident when you rehearse your pitch ahead of time. Confidence can have a positive impact on the outcome of your conversation.

All negotiators come to the table with a set of interests. Often, the most successful conversations are those where people can achieve a meeting of the minds. The best time to think about how to create mutual gain is before the meeting, when you can prepare your strategy.

Effective communication

Knowing how to communicate can make or break a negotiation. When you struggle to express your message, you may find it difficult to build relationships. Building relationships is key to learning your customers’ needs. Remember, the better your offering meets the needs of your most valuable customers, the more your business can grow.

Effective communication involves strong speaking and listening skills. As Peter Drucker, a world-famous business management consultant, said: “The most important thing in communication is to hear what isn’t being said.” Strong listening skills help improve customer loyalty, which in turn often boosts customer retention. Retaining high-value customers helps increase revenue.

Establish your credibility

Would you spend money with a company that doesn’t stick to their promises? How about a company that lacks knowledge and resources? You would be hard-pressed to find customers who would agree – especially high-value ones. For this reason, negotiating courses stress the importance of being credible.

High-value customers tend to be more loyal to their brands. However, discerning customers can also be quite critical. So, to earn loyalty, businesses need to be able to walk the talk. One way to show that you’re credible is to support your discussions with well-researched facts.

Taking a negotiation course

In a competitive marketplace, negotiation skills are necessary to stand out and find creative ways to get more wins. contributions of high-value customers can play a powerful role in the success of your business. Persuasion is key to securing business from your “high rollers” or “big spenders.” So, it makes sense to perfect your negotiation skills.

Taking a negotiating course can teach you effective persuasion tactics and strategies. Use what you learn to create and maximize value for valuable customers. Customers want to feel wanted and valued – typically more so if they are big spenders.

Today’s customers have many options. If customers are not satisfied with your approach, there’s often no hesitation in going elsewhere. So, make every contact count.

The post The Best Business Negotiation Skills You Need to Secure High-Value Customers appeared first on The European Business Review.

Having a clear understanding of your injury case can help you get a higher settlement. Here are some helpful tips that can help you maximize your compensation in a personal injury case.

Collect Enough Evidence

When it comes to personal injury cases, the evidence you present plays a significant role. The jury is going to offer you a fair settlement depending on the strength of your case. The more evidence you preserve, the better your chances of winning the case.

Take photos of the accident scene, as well as, your immediate injuries, if possible. It’s also important to try and collect names plus the contact details of various witnesses. And if there’s a police report, get a copy of it as soon as possible. This information will make it easier for your attorney to collect detailed witness statements and follow up on your case.

Seek Medical Help

Don’t hesitate to get medical treatment. We spoke to John McCarthy, a Dublin based personal injury lawyer, and he advised that “even if you aren’t sure about the extent of your injuries, go ahead and ask your doctor to document your injuries. If he or she recommends a treatment plan, be sure to follow it. This documentation can encourage the other party to offer you a higher settlement”.

You may want to consider seeking physical therapy, as well as, treatment for flashbacks and post-traumatic stress.

Assess the Level Of Damage

There are several types of injuries you might experience due to an accident. In fact, you may not easily determine all the injuries and damages that you have.

For instance, you can claim compensation for emotional damages and loss of regular bodily functions. You also want to make sure that you recover your out-of-pocket losses. If you’re wondering how to go about this, you can always contact an experienced personal injury lawyer to help you out. 

Make a Counteroffer

It’s normal for insurance adjusters to start negotiations by offering a low amount. They often do this to try and find out if you truly understand what your claim is worth.

So, if the first offer sounds reasonable but too low, don’t hesitate to make a counteroffer that’s quite lower than your demand amount. That will convince the adjuster that you’re are also being considerate. While making these negotiations, don’t bother going through the facts again. All you need is to simply emphasize the strongest points in your favor. This will prove to the jury that you’re committed to getting the compensation you truly deserve.

Consider Future Damages

A personal injury doesn’t just bring instant losses- it can also have long-lasting effects. You may not fully recover from the injuries before your case goes to court. That’s why you need to make considerations about your future recovery when negotiating a compensation amount. Furthermore, if you are involved in a traffic related accident, you can always contact a Tampa Bay Pedestrian Accident Attorney.

Conclusion

When it comes to filing a personal injury case, there are several aspects you should take into consideration. Otherwise, you might not get maximum compensation for your injuries. The above guide highlights some practical tips that can help you maximize your compensation. Remember to hire an experienced New Jersey personal injury attorney to help you.  Good luck!

The post How To Get The Best Personal Injury Settlements appeared first on The European Business Review.

Knowledge of the legal process

It can be quite hard to understand the legal processes, especially if you don’t have a legal background. Therefore, when you hire a legal firm, such as The Sawaya Law Firm, you are assured that you will have experienced and well-trained attorneys at your disposal. 

A top law firm will recommend the ideal lawyer that has an understanding or experience in handling similar injury accidents. This is the only way you can feel assured of receiving compensation because such lawyers can handle unexpected situations that might arise.

If you hire a car accident attorney, they likely have the required legal resources to use in tough cases. Aside from this, they are renowned for having the right confidence and connections for them to take your case in courts.

The good news is that most of the personal lawyers or car accident attorneys have experience handling similar cases in the past. As a result, there are good chances that they can handle your case. Whether it’s a car accident, workers’ compensation, personal injury, or commercial trucking injury, you can have a lawyer to represent you. They can use their experience and legal knowledge to get a full settlement on your behalf.

Compensation on your injuries

Auto accidents can cause serious injuries which might take a long time to recover. Hence, you should consider hiring a car accident attorney, especially if you have serious brain injuries. You see, with brain injuries, you might find it difficult to communicate with the insurance company on your own. Mind you, an insurance company might need you to provide statements that can be self-incriminating due to your injuries. 

The worst part is that it can be difficult for you to handle all the paperwork. But if you hire an automobile injury attorney, they can handle all the necessary paperwork and deal with the insurance company.

Other injuries like broken bones and spinal cord are considered serious because they can take you a long time to recover. You also need medication to manage the pain, but this medication can have an impact on your mind, which can be hard for you to communicate rightly with an insurance company. 

For this reason, you need to have an experienced injury attorney to determine the correct amount of compensation that you deserve for pain and suffering and medical bills. 

Besides, they can calculate the correct amount of compensation for lost wages. As you can see, lawyers have options to optimize your injury compensation so that you can get a fair amount for your injuries.

For more information on employment-related legal matters, you can also contact Gordon Turner Employment Lawyers.

The post The Benefits of Hiring a Top-Rated Law Firm appeared first on The European Business Review.

Unfortunately, for most people, negotiating techniques don’t come naturally. These skills are something both employers and employees alike have to learn. In this article, we’ll discuss how important the art of negotiation is in a business and how a negotiation program can help you.

The Art of Negotiation

The focus of a good negotiation is to reach a mutual agreement between two parties. Sounds simple, right? But when each person has a firm stance in what they want or need, and there’s no overlap, negotiations can be tricky. The art of negotiation takes each stance into consideration, but breaks down each party’s wants and needs to a level where common ground exists.

How does this relate to business? Well, proper negotiation techniques are useful for situations like negotiating a contract between an employer and an employee or leasing a fleet of trucks. Excellent negotiations will allow you to keep your business in mind while keeping your contacts happy, and that helps you build good relationships that pay off.

Learning How to Negotiate

As we said, learning how to negotiate is art. It takes education, experience, trial, and error to hone your skills. In addition to real-life practice, you can enhance your negotiation skills by taking a course like this strategic negotiation online course.

Taking a course can give you key skills you need to practice your negotiation techniques, read others during negotiations, and teach you how to manage conflict successfully.

How to Negotiate Effectively

You might think negotiating is about persuading someone else to see things your way and influence them to agree with whatever your goal is, but it’s more complicated than that. Negotiating isn’t about getting your own way, but coming to a mutual place of understanding and agreement so everyone walks away feeling satisfied with the outcome.

Here are four strategies to think about while perfecting your negotiating techniques.

1. Take out the emotional factor

When you have a point of view or feel passionate about a position, proper negotiation is nearly impossible. Focusing on the emotions behind your wants and needs and reacting based on those emotions is a quick way to lose not only your negotiation edge but also the respect of whoever you’re negotiating with.

So, the first rule in effective negotiation is to remove the emotional factor and only focus on the issue at hand. Having an objective perspective reveals more options to consider for both parties.

2. Hone your focus

Effective negotiations focus on solutions that will please both sides. Problems arise when each party focuses on what they want. If there’s no happy medium, one party will walk away feeling like he’s lost. And that’s not good for the future of your business.

Instead of focusing on the apparent wants of both parties, dig deeper. Is there an underlying interest-driven demand? What is motivating each person in this negotiation?

If you drill down to the core reason or reasons for each position, there may be a creative solution that will satisfy their underlying need. That way, you can both walk away, feeling satisfied with your agreed-upon solution.

3. Create win-wins

Once you’ve taken out the emotional factor and you highlight what each side really wants or needs, creating win-win solutions is far easier. Brainstorm solutions together that will give each party what they really want, underneath the surface demand. Don’t be afraid to think outside the box. Remember, a good negotiator thinks about a positive outcome for both parties because negotiation isn’t about winning; it’s about satisfying everyone as much as possible.

So, listen to and contribute ideas to the discussion. You might find that the solution ends in a different area than where it began.

4. Impartiality is key

You might be passionate about your stance, and likely the other party is too, but as we said in tip number one, leave your emotions at the door. Look at the problem as if you’re a judge, or a disinterested party looking at the issue unbiasedly. That goes one step beyond taking your emotion out and allows you to look at the issue from a third party perspective. When you have a position, it’s hard to be impartial, but an effective negotiator must practice this skill to be successful.

Plan B

Before you walk into any negotiation, it’s good business practice to have a backup plan. Every time you enter a negotiation with someone, there’s a chance you won’t come to a reasonable solution that works for everyone. That doesn’t mean you’re not an effective negotiator. It means that nothing is perfect.

If you absolutely cannot come out of a negotiation feeling like both parties win, prepare to walk away from the table. Have a backup solution to your problem in mind before you negotiate, so if you have to walk away, you can still solve your problem.

Practice Makes Effective

The more you practice effective negotiation skills, the better you’ll be at negotiating. Does that mean you’ll always succeed? No. But it does mean that you’ll become more creative and confident in your negotiations, and that will probably give you more success. Also, you might consider taking courses to practice and sharpen your negotiation skills.

Always remember the lessons you learn in each negotiation both inside and outside the classroom because each one is unique. Use that knowledge in future negotiations, and over time you’ll grow to be an effective negotiator every time you walk up to that table.

The post Negotiation is Pivotal Between an Employer and an Employee: Here is How a Negotiation Program Can Help You appeared first on The European Business Review.

Soft skills, like negotiating, have become increasingly important in creating personal relationships and fostering opportunities for your business’ long-term success. While it is easier to formulate agreements between parties, diffusing differences and managing cooperation from multiple parties are far more complex, yet the most common in today’s business world, even in the daily transaction of our lives. In this article, the authors discuss the techniques on managing and leading multiparty negotiations.

Two sisters are fighting over an orange. Their mother intervenes and discovers that one sister wants to have juice while the other needs the peel to make a pie. The mother appropriately shares the two parts of the orange between the two sisters and both are very happy. You have read this kind of story in many negotiation books. However, to this scenario add another sister who wants the peel for cosmetic use, a grandmother who thinks that the orange is rotten and should be thrown away, a toddler who thinks that the orange is a ball and wants to play with it, and an elder brother who wants the orange simply so that nobody else can have it. That’s a multiparty negotiation for you. It is frequently difficult to identify who wants what and how to get what we want in such a dynamic situation. Let’s try to understand what some of the biggest challenges are in multiparty negotiations. 

One of the reasons why we need to understand multiparty negotiations well is that they are lot more frequent than we realise. In our negotiation programmes, we frequently ask participants what kind of negotiations they participate in the most: individual, team, or multiparty negotiations? Rarely do we find a negotiator who mentions multiparty negotiations as a frequent negotiation exercise. However, when we conduct the negotiation simulations, quite often the same negotiators confess that they had not realised how often they engaged in multiparty negotiation situations. Many internal negotiations are varieties of multiparty negotiations: for example, departmental meetings, family meetings to discuss property issues, business or interpersonal conflicts, meetings of neighbours to sort out neighbourhood problems, or even a meeting between a group of friends to discuss where should they go on vacation together.

[ms-protect-content id=”9932″]

Identifying Other People’s Interests

One of the biggest challenges in a multiparty negotiation is to ascertain the interests of everyone at the negotiation table. At the same time, it is important to be able to convey our own interests to everyone else. Quite often in our negotiation workshops, when we organise multiparty negotiation exercises, participants complain that their voices were drowned out or that they were not able to convey their point of view properly. It is very important to manage the negotiation proc ess in such a way that everyone in the negotiation gets an opportunity to take part in the conversation. One of the ways to identify other people’s interests in a multiparty negotiation is preparation. It is very important in this case to identify what we know for sure and what we assume that we know. Look at   1 below. You can use this to identify clearly what you know for sure and what you think you know. There are two reasons for this. The first is to identify what information we have in concrete terms. This will help us work out what questions we will have to ask when we negotiate. The other goal is to prevent us from acting on the basis of sheer prejudice. Quite often in a negotiation, we make assumptions on the basis of our biases about what others want, but these turn out to be false. Figure 1 shows how the needs of others can be analysed before a negotiation. 

As we identify needs in this fashion, we can actually frame questions that we will need to ask when we enter the multiparty negotiation.

Power and Alliances

Another important factor that influences a negotiator’s expectations in a negotiation is power. In the case of a multiparty negotiation, power plays a very crucial role. In a dyadic or two-party negotiation, it is easier to identify the needs of each side because comparing the situations and alternatives of only two sides is less difficult. In a multiparty negotiation scenario, it is difficult to assess the situations of everyone else compared to our own. Also, it is important to note the relationships between multiple parties in order to work out what kind of alliances they might be forming. 

Forming an alliance before and during a multiparty negotiation is one of a negotiator’s most important tasks.

1. Creating a formidable alliance.

2. Protecting yourself against a hostile alliance.

Strategies for Forming an Alliance

Affinity Map

Generally during negotiations, you have to both create an alliance and protect against hostile alliances. How can a negotiator do both effectively? Once again, preparation is key. As the saying goes, “the more you sweat in peace, the less you bleed in war”: a negotiator needs to be ready for both situations. The tool we recommend for use in preparing for alliances is a so-called affinity map. This is essentially a visual representation of the proximity of interests of the different parties involved in a negotiation. The aim is to show what kinds of alliances are likely to emerge.

Let’s assume a company’s top management people are getting together for a meeting to decide on the new production budget. The key decision is whether the company should invest in expanding the plant facility. The various executives have different concerns, as follows: 

1. The chief executive officer wants to do what is best for the company in the long run.

2. The chief financial officer wants to reduce overinvestment in the plant facility because of higher interest rates.

3. The chief marketing officer believes that increased production will mean more stock and this could lead to higher sales figures.

4. The chief operating officer is of the view that increased production will mean a higher-scale and more efficient production and better management of the facility.

5. The human resources director is concerned that a bigger plant facility will result in increased pressure on existing staff, overtime costs and pressure on immediate recruitment.

On the basis of the information above, what would each individual’s position be? Obviously the chief marketing officer and the chief operating officer would be in favour of the investment, while the chief financial officer and the human resources director would not be in favour. The chief executive officer has a neutral position and would probably take one side or the other only after more detailed analysis. 

If we draw an affinity map about who supports or opposes the facility, the following emerges.

As you can see, we can easily identify who is likely to form an alliance with whom. The example given here is rather crude but explains the concep t of an affinity map very well. Let’s think about the eventual meeting of these five leaders. While the CEO is taking stock of the situation, both the CFO and the HR director will try to convince the CEO about the disadvantages of the investment, while the CMO and the COO will try to persuade the CEO to go ahead with it.  

With a tool such as an affinity map, the CFO will realise that she or he has to create an alliance with the HR director, and then collectively, they can put forward strong arguments against the expansion. The CFO also has to make sure that the HR director continues to back that position. Finally, because the other executives are probably more inclined to favour the expansion, the CFO has to make sure somehow that their alliance does not persist.

Listening to Others and Showing You Listen

In a multiparty scenario, in order to understand what people really need, it is very important to listen to them. To listen well, it is important to make sure that the negotiators at the table get enough space and time to express their needs. The best way to ensure that this happens is by taking the initiative in asking questions.

Making Suggestions About the Process

It is important to have control over the negotiation process. One way to achieve that is to come up with a recommendation regarding the process. If other negotiators have not really thought about the negotiation process, then everyone will likely agree to your recommendation. That will give you better control over the negotiation process. 

Reaching an Agreement and Making Alliances

Reaching an agreement in a multiparty negotiation is not only complex but also vulnerable to biases and difficulties. Let’s look at an example.

Cunning Dad and the Marquis de Condorcet

A particular household has three members: the father, the mother, and a teenage daughter. As winter begins, they decide to spend a weekend at a ski resort. They arrive at the resort on a Friday evening and the father is the first one to switch on the TV. To his dismay, he finds that there are only three channels. One channel is showing a movie that he loves, another is showing a live tennis match, and the last one is broadcasting news. The father wants to watch the movie, with his second choice being the tennis match. He is in no mood to watch the news right now. The father knows that his daughter would love to watch the tennis match as she is a very good player. If she cannot watch the match, she would prefer the news. However, she would never watch the movie being shown, as it is a typical romantic comedy, a genre that she hates. The mother does not like tennis. Although she might like the movie that is on, her first choice definitely would be to watch the news.

The father wants to ensure that his choice will eventually win out, but he still wants everyone’s opinion. What should he do? Well, this cunning dad does something unethical. He says to his wife and daughter: “Sweethearts, there is a movie or a tennis match on TV. Which should we watch?” The daughter says: “Tennis!” The wife says: “No! I don’t want to watch tennis at all. I’d prefer something else.” The father tells his daughter: “Well, dear, I’d also prefer the movie to the tennis. And your mom agrees. So why don’t we watch the movie?” They all watch the movie. 

If they all knew about all the options from the very beginning, there would be no solution because the father would want to watch the movie, the mother would prefer the news, and the daughter would prefer the tennis. This is known as a Condorcet cycle, named after the 18th-century French philosopher Nicolas de Condorcet, the marquis de Condorcet. In a Condorcet cycle, choices are cyclical in nature (A > B > C > A), so there is no clear winner. To take advantage of such a situation, some negotiators sometimes present the situation in a way that limits the choices available, putting others in a position where they may be unable to make the choice they would actually prefer. You should always be very careful not to fall victim to such a trick (like the cunning dad’s trick) in a multiparty negotiation.

Setting the Agenda and Presenting the Choice 

Other important elements in a multiparty negotiation are setting the agenda and presenting choices. Given that there are multiple parties at the negotiation table, it is extremely important to have a say in setting the agenda and also in presenting alternatives. In other words, for a more effective multiparty negotiation, greater control over the process is definitely required. Another reason why it is important to present options is because a negotiator develops a limited perspective when there are multiple options on the table. In a study conducted by Leigh Thompson, participants in a multiparty negotiation were asked, upon finishing the negotiation, how many potential solutions they thought were possible. The negotiation dealt with five different issues and each issue had four or five clearly identified alternatives. The participants’ response was one! On average, people estimated that there were about four alternative solutions possible.  In reality, the exercise offered about 50 potential solutions. We call this problem a problem of bounded negotiability. Bounded negotiability refers to our ability to see a limited range of issues as “negotiable.” It is largely influenced by our preparation and how issues are presented in a negotiation. That is why it is important to understand all the issues beforehand and to try to get the complete picture before the negotiation begins.

We often recommend that our participants and students use the VIA framework for analysing the needs of different parties at the table. In the VIA framework, participants are encouraged to classify the needs at hand as vital (V), important (I) and additional (A). This classification helps a negotiator manage the time available properly and it helps the negotiator focus on issues that are more important than others.

Let’s look at an example. An executive once told us about a multiparty negotiation in which he had taken part. Imagine that, in a pharmaceutical company, an important negotiation is taking place to decide how much of a budget should be allocated to a new cosmetic product. The issues to be decided are the budget allocation, the allocation of human capital, the purchase of new equipment and the lead time for launching the product in the market. Which issue is likely to generate the most debate in this case? Generally, when we ask this question, the answer we receive is: “The budget allocation of course!” However, the executive who was sharing the story with us drew a VIA chart for all the issues and all the parties present. The following negotiators were present at the meeting: the CEO, the chief financial officer, the chief operating officer, the chief research and development officer, the chief marketing officer, and the chief human resources manager. In this scenario, the allocation of human capital is a vital decision for the CEO, COO, and CHRO. The budget allocation is an essential decision for the CEO, CFO, and chief R&D officer. Below is a complete list of how each individual ranked each issue.

What do we see in this chart? Well, apparently the decision about whether to buy new equipment for the research project was a vital issue for most of the negotiators (four out of six), while the budget allocation was a vital decision for only three of them. Eventually, as the executive predicted, it was the decision about the equipment that occupied most of the time at the meeting. One reason why it created a little bit of conflict was because almost everyone had assumed that it might not be a very important issue for the rest of the negotiators. Hence, they all broached the subject slightly later in the conversation and eventually, this created a significant amount of chaos and conflict in the team. Along with the affinity map, a VIA matrix for the negotiating parties helps to identify potential allies very quickly.

Establishing the Core

The owner of a family enterprise once shared an interesting story with us. The eldest brother in the family ran the business operated across Central America and the enterprise. This brother – let’s call him Ramón – was almost 70 and wanted to delegate more responsibilities to his two younger brothers and their six sons. (Each of the three brothers had two sons.) Ramón was the president and CEO of the company while his two brothers were vice presidents. Ramón’s two sons and four nephews were all involved in the business and looked after different operations. However, Ramón wanted to restructure the business into different autonomous business units and allow each son and nephew to take on more of a leadership role in those units. He also wanted his two brothers to take over his role gradually, with one brother becoming the company president and the other brother the CEO. For a few months, Ramón talked to everyone individually, but without revealing his plans, in order to find out what everyone really wanted both personally and professionally. Finally, he came up with a plan. At one of the quarterly meetings for the performance review, Ramón called a meeting of his brothers, sons, and nephews and unveiled his plan for restructuring the business. Everyone welcomed the idea of change in the organisation and also showed willingness to take on greater responsibility. However, as Ramón told them what he thought everyone should be doing, the enthusiasm started to wane. In fact, the meeting came to no conclusion, and Ramón had to stop talking about restructuring because he feared that tensions might increase and he did not want a rift in the family. He was puzzled that his idea had been received so coldly, since he had thought everything through in such detail and had tried to do what was in everyone’s best interest. After a few months, everyone got together again at the wedding of an employee’s daughter. Ramón felt it was safe to mention restructuring because, even if someone got angry, no one would want to make a scene at the wedding. This time, though, Ramón could not talk to everyone at the same time. At his table, he was seated with his wife, his two brothers and their wives. Ramón started talking to his brothers about his plan, and then their wives also got involved in the conversation. Ramón’s wife was very dear to both of his brothers, who treated her like an older sister. By the end of lunch, Ramón had convinced his brothers and secured a commitment from them and their wives that they would do everything possible to persuade their children. Slowly, over the next two months, Ramón convinced his sons to back the restructuring plan and eventually he had a commitment from everyone. He had made some tweaks to his plans as well. “I wanted to make everyone happy at the same time but I was wrong,” he said. “I learned a very important lesson of leadership, just as I was about to leave the leadership position. No matter how much you wish others well, eventually you have to build consensus slowly. You can’t win all of them over at once.”

Generally, it is difficult to form a coalition of everyone all at once because of a lack of trust among group members. It is important for the negotiator first to win the trust of a few important members (the ones closest in the affinity map) and to establish a core. Having a core makes it easier to gain the trust of new members, and it also makes it easier to expand the coalition without much disruption.

Circular Logrolling

Another advantage of establishing a core is circular logrolling. This means having trade-offs with other members. Think of a three-party situation where A and B have established an alliance already and they want C to enter the alliance as well. However, to achieve this, A needs C to back down on a particular issue X, where A and C have contradictory positions. In other words, A needs C to back down in favor of A. However, there is another issue Y, on which B can back down in favor of C. In this case, A can convince C to give up on X in return for Y, where B will back down. Such circular logrolling or trading off is possible when a negotiator has already established a basic alliance and is trying to expand it.

Understanding Others

In order to establish a formidable coalition, it is very important to understand who is at the table. A quick analysis using a uniform structure can be helpful in getting to know one’s counterparts at the table in advance. Pictured above is an example of a card that can be used for a quick analysis of a negotiator at the table.

One of the objectives in doing such an analysis is to identify de facto allies at the table. De facto alliances emerge beyond the negotiation table. They may not be alliances in the context of the negotiation, instead influencing the negotiation indirectly. An executive in one of the programs told us an interesting anecdote. He was going to take part in a negotiation at which a bank and a country’s government were going to be represented. On the day of the negotiation, the executive negotiator was surprised to see that the government negotiator was an old classmate of his and they had even gone on vacation together during their university years. Due to work, the negotiator had left the country and lost touch with many of his old friends. However, seeing an old friend reminded him of the great times they had had together, and this created a different dynamic in the negotiation. Quite often, such de facto alliances escape our analysis, and they can turn out to be counterproductive even when we try our best to build an alliance.

Fighting Hostile Alliances

Another important duty of a negotiator is to fight any hostile alliances. It is very important for the negotiator to attempt to prevent any hostile alliance from forming during a negotiation and to be ready to fight any such alliance that does form. Hostile alliances can be fought in two ways.

If the hostile alliance has been formed already, then it is important for the negotiator to somehow make it less relevant for the negotiation or to negate its impact. One way in which this can be done is by setting the agenda of the negotiation in such a manner that the hostile alliance is rendered less relevant or everyone is given an equal opportunity. An alternative is to see to it that the hostile alliance is broken up before the negotiation itself. This can be done by organising personal meetings with some or all of those in the hostile alliance. Generally, such one-on-one meetings are helpful for understanding different alliance partners, and they give the negotiator more flexibility to fight the alliance. If the hostile alliance is built during the negotiation process, then it is important to disrupt the process. The process of negotiation can be disrupted by raising issues that are not so important or by demanding that attention be paid to issues that can shift the other negotiators’ focus. Another way of distracting the others is by setting out goals that stretch beyond what is being discussed. Appealing to a higher morality or a higher-level goal can also help break a hostile alliance.

In the end, if we go back to the entire discussion on building an alliance or fighting a hostile alliance, one common factor that emerges clearly is that of control over the negotiation process. In general, in a multiparty and multi-issue negotiation setting, it is very important to control the negotiation process. One of the surest ways of controlling the negotiation process is to prepare and design the process before the negotiation. After all, negotiation is a skill and, as with any skill, it is better to prepare for the execution rather than the result. In any sport, a professional athlete does not prepare for the result but for the game. 

[/ms-protect-content]

About the Authors

Guido Stein is Academic Director of the Executive MBA of Madrid, Professor at IESE Business School in the Department of Managing People in Organisations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance).

Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepreneurship Department at IESE since October 2009. His research has focussed on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity.

The post How to Negotiate Effectively with Multiple Parties? appeared first on The European Business Review.

We all know the statistics. Most start-up businesses fail. While many experts attribute the high failure rate to the risks associated with innovation, we have found that an equally significant cause is the mismanagement of key relationships, and more specifically, the way that founders and entrepreneurs negotiate.

Being the leader of a start-up company entails a range of negotiations with partners, potential partners, investors, and others at various stages of the growth process – from the “seed” stage when the business is just an idea to later stages when the company is generating revenue and facing expansion challenges. Through the research and interviews for our book Entrepreneurial Negotiation: Understanding And Managing The Relationships That Determine Your Entrepreneurial Success (Palgrave Macmillan, 2019), we have discovered that successful entrepreneurs are those who, although they make mistakes when negotiating, are able to recover and learn from their errors.  

[ms-protect-content id=”9932″]

Our research also revealed that there are four factors that make entrepreneurial negotiation particularly treacherous. These are: emotions, relationships, uncertainty, and complexity. 

Emotions – Entrepreneurs must overcome the strong emotional reactions that arise when they feel their egos or their inventions are being threatened. This happens when they are expected to give up some control over their creations in exchange for someone else’s money or support.

Relationships – Relationships are key in entrepreneurial dealings, and many of them are long-term despite being forged very quickly.

Uncertainty – Innovations in technology or disruptive business models are hard to understand and very difficult to forecast, and so are some of the fast-moving markets they operate in.

Complexity – Complexity introduces significant barriers to communication between parties, and to reaching negotiated agreements.

The most common negotiation mistakes that entrepreneurs make when trying to come to grips with the challenges of emotions, relationships, uncertainty, and complexity are:

1. Entrepreneurs Deny Their Emotions  

Entrepreneurs, being human, have a strong sense of what is fair and what is not. Whether they are overtaken with excitement when things go well, or are facing anxiety when they feel mistreated, negotiators are influenced by what psychologists call cognitive biases – non-rational biases that dominate logic. An emotional flood, caused by one or more triggers, is often behind many negotiation mistakes. Some entrepreneurs see themselves as highly capable scientists, engineers, lawyers, or managers who focus on logic and facts. When they lean too heavily in this direction, though, and deny the importance of emotion (and ego), they get into trouble. Discounting relational skills can cause them to misread what the other side is thinking. If they fail to acknowledge the powerful impact emotions can have, they will prepare incorrectly for important negotiations and fall victim to the self-fulfilling nature of cognitive biases (i.e. we see what we want to see and hear what we expect to hear). 

2. Entrepreneurs Rely Too Heavily on Their Intuition

Entrepreneurial negotiation involves many moving parts and multiple factors must be considered simultaneously, which can create surprises. 

When entrepreneurs are required to respond suddenly to these surprises, many rely on their intuition – and the instincts that made them successful. But often they don’t know why or how their intuition worked in the past. Because of this, they are shooting in the dark. Thus, they find new kinds of interactions (or old kinds of negotiations with new people) extremely frustrating: what worked before isn’t working this time. When negotiations don’t go as expected, many entrepreneurs blame the difficulty on the other side. To make matters worse, these same problems can keep occurring because they don’t learn from their mistakes. This is because they have not taken the time to develop a clear-cut personal theory of practice based on what works, instead of relying on intuition alone. 

3. Entrepreneurs Haggle

Unfortunately, bad examples of negotiation abound in pop culture and news media. First and foremost is the notion of haggling – focusing on a single issue such as price under the assumption that more for one side always means less for the other. Such “zero-sum” bargaining often leaves both sides worse off than if they had explored other issues that could lead to mutually advantageous outcomes. 

Entrepreneurs believe strongly in the uniqueness and value of their company, product or idea. They develop convictions about non-negotiable items that cause them to fall prey to “tunnel-vision.” Demands from the other side that are perceived as unreasonable may trigger strong emotional reactions, and cause escalation in rhetoric, positional posturing, and self-defeating lock-in.  These are all traps that can be avoided.

4. Entrepreneurs Work Alone 

A lean start-up can accomplish what many larger competitors cannot, and some founders are true visionaries who can single-handedly transform an entire industry. But when leaders assume that they are the only ones with sufficient insight to understand what is really at stake, and they prepare alone and try to negotiate solo, they are often their own worst enemy. Acting alone can cause them to misread signals (cognitive biases again), react unreasonably, or vent at the wrong time. A trusted advisor or partner can provide balance.  Negotiation should be seen as an organisational task. 

5. Entrepreneurs Are Too Quick to Compromise

Entrepreneurs must “get thing done” under serious time pressures and multi-tasking challenges. They often feel pressured to make quick decisions so they can get back to the more interesting parts of building a great product or service. But quick compromises may be bad for everyone, and leave significant joint gains unexplored. 

When the stakes are very high, the pressure to compromise builds.  There may be fear of undermining an important relationship or risk losing the entire unique deal opportunity. Entrepreneurial negotiators who are afraid to invest in the exploration of possible value creating options don’t do themselves any favours.  

6. Entrepreneurs Need to Win – Now.

Many business leaders are highly competitive individuals. Their objective is to win every encounter. Overly competitive entrepreneurs, however, may be inappropriately concerned about doing better than (i.e. beating) their counterpart than about maximising their own results. They may be too focused on the outcome of one interaction, instead of considering the impact on long-term relationships that depends on the other side feeling good about today’s deal (such that they will want to come back for more in the future). 

7. Entrepreneurs Are Overly Optimistic and Overconfident 

Innovative endeavours are often wrapped up in significant technical, engineering, and scientific uncertainty. Trying to modify markets and reshape customer behaviour in a changing regulatory landscape and an unpredictable economic environment causes increasing risk. But many entrepreneurs are supremely confident in their predictions, and believe their past successes are predictors of their ability to beat-the-odds. Thus, they may fail to formulate contingent plans, assuming that negotiations will go well. Or, they may put too much trust in their ability to deal with whatever problems arise. In the agreements they reach, they may fail to include contingent clauses or dispute resolution provisions.

8. Entrepreneurs are Self-Centred 

Entrepreneurs are very focused on their own actions and interests. To an extent, this is beneficial in a start-up situation. But, it may come at the expense of considering the needs and priorities of others. If they stay in a self-centred mind-set, entrepreneurs can misinterpret their counterpart’s underlying interests. They may also ignore the interests of their partners or parties who are not at the table. Such a mind-set may cause them to over-react or attribute bad intentions to others whose positions are in conflict with their own ego-centred desires. Entrepreneur who is assertive can serve their own interests, but if they do not listen empathetically to the concerns of the other side, they may cause negotiating partners to reciprocate, incurring unnecessary costs for both. 

In our interviews, we began to see these eight mistakes occur over and over again as entrepreneurs engage with a range of internal and external players: external backers (such as investors), internals (such as the co-founders and the employees who form the backbone of the company), front-liners (individuals, agents or partners that represent the company to the outside world) and outsiders (people who have little or no current knowledge of the company, but who may become future customers, employees, investors or partners).

Successful entrepreneurs manage all these negotiations in a manner that is consistent with their own values, priorities, and preferences, but they also have a self-awareness that enables them to make adjustments and switch directions. They know when to seek help from colleagues and advisors. They carefully prepare for each negotiation, and pay close attention during face-to-face interactions, finding ways to both create and distribute value that both sides can judge to be fair. They are disciplined about following through on their commitments and tending to relationships. They also reflect carefully on what is happening in order to further refine their personal theory of practice. 

If entrepreneurs treat negotiation as one of their most important responsibilities, they can prevent serious mistakes, detect errors as soon as they make them, and respond effectively when they do occur. Effective entrepreneurial negotiators develop a life-long commitment to reflection on their past negotiations and commit to acquiring the skills needed to adjust in a fast-changing world. 

[/ms-protect-content]

Related website: Vienna School of Negotiation

About the Authors

Samuel Dinnar, co-author of Entrepreneurial Negotiation, is an instructor at the Program on Negotiation at Harvard Law School and the Massachusetts Institute of Technology in Cambridge, Massachusetts. As founder and President of Meedance, he provides global consulting services and serves as a mediator specialising in business conflicts that involve founders, executives, investors, and board members. To learn more, visit: www.EntrepreneurialNegotiation.com or www.meedance.com

Lawrence Susskind, co-author of Entrepreneurial Negotiation, is a professor of urban and environmental planning at the Massachusetts Institute of Technology, co-founder of the Program on Negotiation at Harvard Law School, and the founder of the Consensus Building Institute in Cambridge, Massachusetts. To learn more, visit www.EntrepreneurialNegotiation.com

The post The Eight Common Mistakes That Entrepreneurs Make When Negotiating appeared first on The European Business Review.

Whether you’re negotiating solo or with a team, it is crucial to have a smart approach to get the best deal in every situation. In this article, the authors focus on the significance of team negotiation toward value creation as well as the imperatives to making collaborative effort yield desired outcomes.

A participant in a negotiation course once confessed that he hated to negotiate in front of his wife. When asked why, he said he found it difficult to close the negotiation. For example, once he was negotiating to buy a used car. Both he and his wife had agreed that €15,000 was a fair price for the car. However, the seller did not want to go below €16,500. “If I were negotiating alone, I would have agreed on 16,500. But I generally find it difficult to concede in the presence of a family member. I couldn’t concede in that negotiation and we ended up abandoning it. Whenever I am with my father, my brother or my wife I become a bit adamant. Maybe I don’t want to look weak in front of them,” the participant said. Negotiating in a team involves more complexities due to the special interpersonal nature of teamwork. Some of us are more comfortable negotiating as part of a team while some of us are more comfortable negotiating solo.

Impact of Team Negotiations on Outcomes

In a collaborative negotiation situation, teams actually help increase the joint gain. In a nutshell, teams should achieve better results overall in negotiations.

Let us try to understand a team as a negotiating unit by answering two questions: 1)What happens when an individual negotiates as part of a team? 2) What happens when an individual negotiates opposite a team? In a study led by Leigh Thompson from Northwestern University in Illinois, it was found that teams negotiate better in almost all situations. Not only that but teams were also a better counterpart than a solo negotiator. When teams negotiate with individuals in competitive or distributive scenarios, teams generally create greater value. However, individuals are still better off negotiating opposite a team than negotiating opposite another individual. In other words, in a competitive scenario, teams help not only to get a better result than their counterpart but they also help their counterpart get a better result. On the other hand, in a collaborative negotiation situation, teams actually help increase the joint gain. In a nutshell, teams should achieve better results overall in negotiations.

There are two main reasons why teams could create greater joint profits: better information and better control. When teams negotiate, they have the advantage of a better network, better information and better analysis. With more members on the team, teams can come up with better ideas because they have a greater perspective. Another reason why teams create greater joint profits is their control over the negotiation process. Teams can theoretically have better control over the process because teams have more tactics available to them. Teams can use tactics such as good cop / bad cop, which is generally difficult in a solo negotiation.

Challenges in a Team Negotiation

However, team negotiations do have several challenges. Below are some challenges and strategies to overcome them.

Lack of Coordination

One of the biggest problems with negotiating in a team is a lack of coordination. Teams may lack coordination for various reasons but the major reason is generally internal conflict. That is why it is extremely important to avoid internal conflict in a team by carefully studying sources of potential conflict even before the team is formed. There are mainly two types of conflicts that affect teamwork: 1) interpersonal and 2) task-related. It is very important to make sure that a negotiating team is a cohesive unit. Interpersonal conflicts are difficult to foresee and hence difficult to avoid. Most interpersonal conflicts are the result of strong emotions. The best way to avoid emotional hiccups in a team is to choose the team members well. It is also important for negotiating teams to spend some time together before the members start negotiating as a team. Some organisations overlook the impact of teams on negotiation performance and so fail to give the team members sufficient warm-up time together to develop a sense of camaraderie.

If team members negotiate with conflicting goals in mind, this will not only harm the unity of the team but also result in poor team performance.

Task-related conflict can be avoided in two ways. First, by having a high degree of functional homogeneity on the team. If the team is homogeneous in terms of the functions and expertise of its members then the members understand each other’s perspectives much better. However, this may work only if the negotiation is limited in terms of functions. In many complex negotiation situations, a team needs experts from different fields. On a negotiating team, it is very common to see representatives of finance, marketing, operations and human resources negotiating together, representing the organisation. To avoid task-related conflict on a multifunctional team, it is important to give the team some grooming time. This is essential for team members to understand each other’s objectives as well as priorities. It is also important to use this mutual understanding to create common ground for negotiation. If team members negotiate with conflicting goals in mind, this will not only harm the unity of the team but also result in poor team performance.

Poor Control of the Process

Another problem with team negotiations is that they tend to get a bit off-track and eventually teams end up spending too much time at the negotiating table. The two graphs on the right show how information sharing is spread across the period of negotiation between team negotiations and individual negotiations.

As shown in the graphs, it is difficult to share information in team negotiations. There are phases with sudden increases in information shared. As a result, it is very important to keep track of the information shared. In information sharing during a team negotiation, we observe kinks such as the ones we have seen above because, when teams negotiate, a lot of time is spent simply warming up. Later on, almost all the team members start chipping in with information and a lot of information is shared. Quite often it is difficult to keep track of all the information that is shared. The best way to avoid such an information overload is to manage the process through role assignment.

Role Assignment to Manage Information

To have better control over the negotiation process, it is important to assign roles for negotiation. Assigning roles will help the negotiating team achieve two objectives:

1) managing the information and 2) managing the process. In a way, managing the information and managing the process are interrelated. Poor management of the sharing and receiving of information leads to poor management of the negotiation process, which eventually results in a bad deal. Ideally, roles should be assigned in two ways: 1) functional assignment and 2) process assignment.

Functional assignment is very important in a multifunctional negotiating team. In a joint-venture negotiation where issues related to human capital, the valuation of the company and the product portfolio need to be decided, it is advisable to have an expert on each area at the negotiating table. This will ensure that every important aspect that needs to be shared or explored is taken care of.

Process assignment means assigning each and every team member his or her role at each step of the negotiating process. For example, assigning someone to establish the contact, somebody to frame the negotiation or somebody to manage offers and concessions. Process assignment has two important advantages. First, no single member of the negotiating team has the pressure of taking the initiative at each and every step of the negotiation. Second, it makes everyone better synchronised with the negotiation process. It is very important for each member of the negotiating team to know his or her role in the negotiation. Clarification of each person’s role in the negotiation process involves clarity on two aspects: 1) What information do I need to explore or collect? 2) What is my role at each step of the negotiation process?

Collective Preparation

From the previous paragraph it should be clear that a negotiating team needs a great deal of synchronisation. To address the issues related to the assignment of roles, it is absolutely essential that teams prepare together. Preparation for a team negotiation should ideally be managed over two phases: 1) individual preparation and 2) team preparation. During the individual preparation phase, an individual must understand his or her particular objective and needs in the negotiation. It is important to understand how the negotiation is likely to affect the individual’s personal objectives. Once individual preparation is done, every individual should get together and prepare for the negotiation together as a team. Prior work on individual preparation will help the team focus on issues that need greater clarification.

Caucus

In a complex negotiation, quite often the team members confront a situation where, all of a sudden, they need to deal with information or issues they had not foreseen.

Another important part of a team negotiation is the caucus. The caucus is when a team takes a private break from a negotiation in order to assess the negotiation’s progress and check its effectiveness. Caucuses are important. Many teams, however, do not request caucuses because they assume that this would be seen as a sign of weakness. That is why it is important to convey in advance that the team will use caucuses to assess information and the negotiation’s progress. Caucuses are also used to deal with unforeseen situations. In a complex negotiation, quite often the team members confront a situation where, all of a sudden, they need to deal with information or issues they had not foreseen. During a caucus, it is absolutely important to maintain strict discipline and not get distracted. It is also important to summarise all the important issues discussed before returning to the negotiating table. It is not just important to manage your own caucuses – it is equally important to manage your counterpart’s caucus. Imagine you have been doing very well in the negotiation and you have a great feeling about it. Suddenly your counterpart asks for a caucus. The biggest risk in this situation is to lose all the hard work done so far. That is why, before the counterpart’s caucus request is granted, it is important to reach a consensus over what has already been agreed upon. It is equally important to decide the time limit for the caucus. If the time limit is not set properly, there is a big risk of losing focus.

Conflict During the Negotiation

Caucuses also help deal with any conflict that arises during the process of negotiation. At times negotiators disagree on a certain issue during the process and this may lead to conflict. To resolve a conflict that arises, the following steps should be taken.

1. Caucus: if possible, it is always better to avoid continuing the negotiation if members of the same team are in conflict with each other. The first measure to resolve the conflict should be to take a caucus and resolve the internal conflict. An internal conflict in the team not only affects the team’s focus on the negotiation but may also have a disastrous effect on an employee’s commitment to the negotiation.
2. Conflict resolution system: to avoid conflict, it is important to prepare as a team and also set up a system to resolve conflicts that may arise in a negotiating team.

Leader

Last but not least, every negotiating team should have a leader. As we have established in previous chapters, negotiation is a skill and, in a team negotiation, it is important to make sure that each member’s skill is put to the best possible use. However, it is possible that, in a team negotiation, each member might get overwhelmed by a few particular issues and so it is important to have someone in charge of keeping the overall picture in focus all the time. It is also important to make sure that there is an approving authority whenever crucial decisions are to be made. That is why each negotiating team should appoint a leader – a leader who can keep the team intact, who can take control whenever needed and who can make decisions about the negotiation.

About the Authors

Guido Stein is Academic Director of the Executive MBA of Madrid, Professor at IESE Business School in the Department of Managing People in Organisations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance).

Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepre-neurship Department at IESE since October 2009. His research has focussed on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity.

The post High Performing Negotiations in a Team appeared first on The European Business Review.

In every professional’s journey, there are those defining moments which can change one’s entire career. In this article, the authors elaborate not only the strategies involved in job offer negotiations, but more importantly, how the art of negotiation can significantly jumpstart your entire professional life.

An Approach to Driving Negotiations

Experience and research teach us that there tends to be a lot of room for improvement when it comes to approaching the negotiations that take place during the hiring process. Numerous studies have demonstrated that successfully negotiating for a first job has very significant consequences later on in the candidate’s career – for example, in economic terms or in terms of speed of promotion. Research has shown that candidates who try to negotiate their first job offer can potentially add an additional $1,000,000 of value to their overall career during the next 25 years.¹ Likewise, companies could get what they need more effectively if they took into account the relevant factors in this type of negotiation and if they took suitable advantage of the different phases the processes go through. Although every situation is different, the idea is to create a win-win situation, so everyone’s needs are met, without necessarily implying a loss for the other party. There lies the art of negotiation, since people tend to walk away with less than they could have received.

No one doubts that a job is much more than the salary that can be earned in it or paid for it. However, people’s actions are not always in line with this obvious fact. The reason is that what is obvious is not, in fact, the first thing that catches our attention. More than money is at stake for the potential employee and employer. The former brings to the table a significant portion of his or her life; the latter offers up part of the company’s ability to compete and survive – in short, whether the company is able to fulfil the purpose for which it exists. For the candidate, the necessary condition is to be wanted, to convince the company he or she is the best choice. The rest will come later.

If one of the parties or both make a mistake in the selection and, later, in putting that selection into effect, from that moment on there is not much that can be done. The first principle is not to waste time – your own or other people’s: if the offer does not meet the candidate’s basic demands or the candidate does not have the key characteristics of the profile the company is looking for, it is better to be realistic and to avoid settling for half measures.

On the other hand, once the decision has been made to move on with the process, a negotiation phase begins that may (or may not) be a source for the mutual creation of value and opportunities, with the associated consequences. We must accept that any negotiation implies certain risk. Negotiating a job offer is mainly a chance for the parties to get to know one another, while laying the groundwork for a relationship that will continue over time – in some cases for many years. Experience and research both show that around 90% of companies expect candidates to be prepared to negotiate, whereas in reality only 25% of them actually do so and only about 15% of employees who are hired then renegotiate their employment conditions after some time has passed. That means there is a high probability that employees who remain loyal to their companies will end up being below the market average in terms of salary.

The personal image transmitted by a candidate who negotiates is better than that of one who does not negotiate, so long as this behaviour is not a deterrent for the employer because it leads to the employer no longer liking the candidate or being put off. The best negotiations originate in a shared knowledge of what is important to both parties, who overcome their ostensible differences and thus work toward the harmonisation of interests and capabilities. This involves not only or mainly the role of negotiator but also the role of fellow explorer travelling through unknown territory. It is worth investing in revamping the stereotypical model of a classic job-offer negotiation. In that sense, it is enough for the parties to put a bit of effort into replacing haggling with intelligent exploration.

It is a good idea to avoid the bias that leads negotiators to draw conclusions about the other party’s future behaviour based on their own fears or uncertainties.

First impressions leave a near-permanent mark, since the candidate uses them to glean information about how he or she will be treated during a regular workday at the company. Negative experiences are often created (inconsiderate or high-handed treatment, pressure regarding salary terms, slowness in providing information, etc.), which could have been avoided without harming in the least the company’s position in the negotiations.

Being an effective negotiator does not boil down only to knowing how to negotiate but also when to do so. In some situations, negotiating may not be the best option: for example, when the best alternative to continuing negotiations is unfavourable and obvious, or when it is much better than the best offer the other party might propose;² when negotiating sends a message that would be misinterpreted or misunderstood by the other party; when the harm caused to the relationship by negotiating is worse than the supposed advantages and, as such, it endangers future negotiations; when the other party does not expect negotiations to continue, etc.

As such, sometimes it is better to accept the financial offer without any further negotiation. The idea is that, after a certain time, a more favourable atmosphere will be created for discussing improvements, which will be supported by actions that confirm the candidate’s value and by greater receptiveness on the part of the employer. Knowing when to wait is an effective negotiating tool.

[ms-protect-content id=”9932″]

The Question of Salary During Negotiations

Often, employers will ask candidates about their current salary, or what they earned in their last job. Why is that? For a number of reasons: finding out what kind of salary they should offer the candidate if he or she is selected, seeing the discrepancies between what they are offering and what other candidates are earning, etc. The truth is that people on higher salaries tend to be perceived as performing better and, inversely, people who have lower salaries are usually assumed to be less good at their jobs. However, that does not account for the explanation for this difference: for example, if two professionals begin working at the same time at the same company and one of them negotiates a salary deal but the other does not, the difference persists due to inertia.

If a professional wants something an employer is not offering, he or she needs to think about the most effective way to let the employer know. What people earn tends to depend on what they contribute, their professional value and how well they negotiate based on that value.

When should the salary be discussed? From the candidate’s point of view, in general, later is better than sooner. The more time a candidate invests in a company, in theory, the more committed he or she will feel. The best bet is to wait for an offer, since it is preferable for the employer to be the one to name the first number, given that this effectively serves as the foundation to build up from. Likewise, it gives the candidate an idea of what the company is willing to pay and thus limits the risk of going above or below that mark in the case of the candidate naming the first figure.

Experience has shown that, sometimes, when MBA students are having their first job interviews and are faced with the question about their salary expectations, they tend to make two fundamental mistakes: they either lie or they try to avoid the question. A job interview is a conversation, and any conversation has to be fluid if the participants are to achieve their goals. Bypassing a question cuts off the flow and, in turn, the desired effects of the conversation. So, rather than avoiding the question, it is better to understand it. To gauge the scope of the question, there are two important things to be aware of: 1) How will the possible answers affect my position in the negotiation? and 2) Why is the interviewer interested in this information? Often, thinking about these two aspects on the spur of the moment can be hard. That is why it is useful to prepare your responses to these questions ahead of time. In the Exhibit, a preparation guide for salary negotiations is suggested.

In some cases, instead of providing a rough salary range, the company representatives, especially people from the Human Resource Department, may ask candidates what they hope to earn or what they are currently earning. If that happens, it may make sense to respond with statements such as: “Money isn’t the most important factor in my decision”; “I’d like to know more about the job’s requirements and the company’s priorities so I can think about what contributions I can make”; “In principle, I’ll accept any reasonable offer”; or “What would you normally pay someone in a similar position?” Ultimately, the goal is to gather more information in order to come up with an appropriate number.

If the company insists that the candidates give a precise answer, they must be able to provide a number that is supported by objective arguments, such as what the market offers, on average, for a similar profile; what is paid at the company as far as they are aware; and what they feel they are worth based on what they can contribute to the company and on their level of experience. It is a good idea to leave open the possibility of discussing this factor in more detail along with other aspects of the job, such as just what the position entails, the level of responsibility, the possibilities for advancement, the flexibility of work schedules and vacation time, training, etc.

Beth, one of our MBA students once had an interesting experience. Her potential employer asked her what her salary expectations were and she did not give a precise number. In turn, the company made an offer that was extremely low, not just compared to her expectations but also by normal salary standards of fresh MBA students from our institution. She was upset and was thinking of writing a very angry email to the company. However, we took a different approach. We asked her to explain to the organisation that the salary was very low and support her arguments with different statistical information. She wrote a very polite email where she showed the average salary of MBA students from premier institutions as well as average salaries offered to students with her profile. The company responded back with a very positive response, stating that they were creating a new position and they had never hired an MBA from a premier institution with her kind of background, and promised to revise their offer. Eventually Beth received an offer that was almost 60% percent higher than her original offer and the company was also happy to have received a bright and happy employee.

How Should You Approach a Job Interview?

Help Them Help You

If we look at the example of Beth we can realise that what really helped her was her initiative to help the organisation. Following, in part, the ideas of Deepak Malhotra,³ the main goal of a job interview is for the company to want to meet with the candidate again because they liked him or her, they were pleasantly surprised or because he or she is a good fit. The better the impression left by the candidate, the stronger his or her negotiating position will be. It is enough for the candidate to avoid anything that the other party might not like, such as having an untimely, unjustified or excessive interest in the economic component, being petty about small details, or being needlessly impatient.

Arrogance is lethal, although it is possible to temper it and change it into healthy ambition through justification, based on objective references, of why you deserve what you are going to end up asking for further on in the process. The reason why any candidates are asking for more must be based on them truly deserving it, which will not make them disagreeable. If this foundation is lacking, it can be prudent to wait before expressing this kind of demand.

Understanding the Other Parties: Sharing Their Criteria and Constraints

Let’s think for a moment of the example of Beth again. Her potential employer took pains to understand what Beth wanted to express. Negotiating is an activity between people who do not always behave as they should or as we would expect. The employer in this case tried to understand the point of view of the candidate and it helped them create a very positive dialogue. On the other hand candidates do not face the same situation if, instead of negotiating with the person who will be their boss, they do so with a representative of the Human Resources Department, as has been noted already, since they do not use the same criteria 100%, (the feeling of urgency may be different for the boss than for the head of human resources) nor do they attach the same priority to those criteria that they do share (for the boss, the question of remuneration tends to be less of a limiting factor than for human resources).

All negotiators have two types of interest: those of the company or the department they represent, and personal interests, something that candidates must bear in mind according to the change of interlocutor, which will make their expectations more realistic and expand the negotiating options, as well as the possibilities of dealing with obstacles that may arise.

Once the firm likes and wants to hire the candidate, it is possible that the company will be unable to offer what he or she asks for. The candidate has to find out, before beginning the process or during the first conversations, what the real limitations of the interlocutors are in the matters that interest him or her (fixed and variable compensation, nature of the position, reporting level, promotion options, flexible working hours, training, relocation, insurance, allowances, etc.). The more that these factors are known, the better a position the candidate will be in to deal with them to the satisfaction of both parties.

To do this, it is useful to draw up a list of the needs of both parties (whether these have been made explicit or not; in the latter case, the list would be based on approximations and plausible hypotheses that should then be verified through conversations and research) and to put these in order of priority (using the same tools mentioned) in order, finally, to reconcile them as far as possible.

The VIA (vital, important and additional) framework enables the needs to be put in order and packaged to be prepared for the purpose of carrying out exchanges through value creation for both parties. The parties rarely have two vital needs in confrontation but, in such a case, an obstacle would emerge.

The Trees Are Not the Whole Forest

Negotiating a job offer goes far beyond money, since life is not about material things alone. For this reason, it is necessary not to lose sight of the fact that it is a multifactorial negotiation, not just for today but with consequences for the future – that is, not only is there more than one “what” but, in addition, the “how” and the “when” can be essential sources of value creation for both parties.

Not losing sight of all the pieces of the puzzle regarding what both parties can get from the negotiation enables a flexible attitude and prevents one from being blinded – that is, being trapped by one or several matters that might involve conflicted interests. It is also advisable to deal with them at the same time and not successively, one by one, since in this way packages can be prepared for deals that will add up to a positive result for the employer and for the candidate and avoid one gaining at the cost of the other losing out.

Continually haggling for a little bit more will end up annoying the other party, which will not help make them generous with whatever the candidate might ask for in the future, just the reverse: it will limit that party’s desire to negotiate and to create value together. A workplace relationship can be expected to have a future, unless the relationship ends in a break-up, which can be caused by a negotiation whose result is very unbalanced for one of the parties.

Anchoring in the Negotiation

Furthermore, it should be noted that whoever speaks first, if they do it well, anchors the process in their favour. Academic research into the impact of anchoring has confirmed time and again that, in negotiations, it plays a decisive role. A negotiator who sets out a more ambitious first offer than other negotiators always ends up getting more than the others. Nevertheless, being determined to declare yourself first entails two risks: first, the counterparty will lose interest in continuing to negotiate, simply because the base or lower limit seems unachievable to them and, second, that the offer, because it is ambitious, will not seem credible. In salary negotiations, it is always necessary to be prudent when answering the question “What are your salary expectations?” One strategy for tackling this question consists of answering in ranges. Research in experimental psychology has shown that negotiating in ranges leads to a stronger anchor. For example, instead of answering “my salary expectation is €40,000 a year,” it is preferable to opt for “applicants of my profile in the market, from what I have observed, make between €40,000 and €42,000 a year”. So, negotiating in ranges brings a series of advantages, such as that of establishing a double anchor⁴ that will make it more likely that the counterparty will end up coming closer to our expectation. Another advantage would be that of keeping the dialogue open. Talking in ranges and justifying the range not only protects interviewees from the risks of unjustifiable offers but also invites the other party to explore the reasons for this range and therefore this provides interviewees with an opportunity to explain their expectations better.

It’s Not Personal – It’s Negotiation

There is a series of direct questions that increase the competitive temperature in a negotiating process, such as “What is your current salary?” “Have you had other offers?” “Where are you looking?” “How long have you been looking?” “Are you changing companies because of the money?” and “Could you start right away?”

The same thing happens with pressure or ultimatums along the lines of “take it or leave it,” “we can’t go beyond this limit,” “you have to answer within 24 hours or you’re out” and similar. In these contexts, it is essential to react calmly and professionally. Fundamentally, they are providing information that should be decoded correctly and, to do this, it is necessary to understand the constraints, concerns and needs of the speakers: Why are they doing this? What do they really want?

Generally, these constraints indicate that the company is still interested in the candidate and how he or she reacts. They also demonstrate how the employer processes the uncertainty typical of the negotiating process and that it wants to clear up doubts or gain negotiating power in order to enjoy a more comfortable position. There is rarely an underlying personal issue or desire to annoy. The negotiation is taking place in all its splendour: the best thing to do is focus on the details, keep calm and enjoy the challenge.

When faced with a threat or ultimatum, the most sensible reaction is to attach no great significance to it and not insist that they confirm what was said. This way, whoever issued the statement will be less disposed to act on it or will be more able or willing to withdraw it. Helping out the interlocutor can provide a foundation for value creation, conflict resolution and the overcoming of obstacles. The key lies, once again, in investigating what is behind the threat because, if it is real, it will come up again.

In short, negotiating effectively requires managing expectations wisely in conditions of uncertainty, by way of an inquisitive approach focused on the underlying interests of both parties.

[/ms-protect-content]

About the Authors

Guido Stein is Academic Director of the Executive MBA of Madrid, Professor at IESE Business School in the Department of Managing People in Organizations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance).

Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepre-neurship Department at IESE since October 2009. His research has focussed on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity.

References

1. Thompson, Leigh, 2014, THE MIND AND HEART OF NEGOTIATOR
2. When there is no zone of possible agreement (ZOPA), the best alternative to a negotiated agreement (BATNA) should be put into play.
3. Malhotra, D., “15 Rules for Negotiating a Job Offer,” Harvard Business Review, 92(4) (April 2014), pp. 117–120.
4. Ames, D., and M. Mason, “Tandem Anchoring: Informational and Politeness Effects of Range Offers in Social Exchange,” Journal of Personality and Social Psychology, 108(2) (February 2015), pp. 254–274.

The post The Art and Science of Negotiating a Job Offer appeared first on The European Business Review.

IT and software industries appear to be collaborative in projects in house and among organisations as they plan and negotiate for mutual benefit. How can skilled, aware negotiators better match up their thinking to avoid communication and process failures?

Collaboration is a fact of life throughout the IT industry especially in the development of large scale communication systems and software applications. Collaboration arises through successful negotiations that clarify the path for close work among employees, freelancers, outsourced services and other parties in completing projects and satisfying stakeholders.

The importance of negotiation to the well being of the IT industry led the authors to investigate the expectations and approaches that negotiators in this industry have in mind as they negotiate. The literature on the IT industry shows how important negotiation is, but has not looked into the thinking that might impact communication and the success or failure of a negotiation. To what extent is it possible for negotiators’ thinking about negotiation to match or conflict?

We chose to investigate negotiation thinking in two different cultures in order to help highlight differences and similarities and identify a range of styles. We can assume that practices of negotiation participants vary in different cultures because cultures are demonstrably different and because previous research has shown that negotiation styles are associated with cultures. Further, research on negotiation has shown that successful and smooth communication leads to better results for the parties.

The cultures we chose are geographically distant: Finland in Northern Europe and Japan in North East Asia. Finland and Japan differ in their philosophical backgrounds, one Protestant and Rationalist and the other steeped Confucian and Buddhist traditions. Additionally they have various differences described in the literature such as attitudes towards power, gender equality, and individualism.¹ At the same time, the two countries have similarly aging populations, reputations for advanced use and implementation of technology, and high ethnic homogeneity.

But how to look into what people are thinking? The study of Cognitive Psychology provides a way to do that. Humans think in terms of associations, categorisations and expectations.² A cluster of such thoughts is referred to as a schema. People have schemata for things as well as processes. A schema for a thing like a table might be simple: the first thoughts to mind might include “flat top, legs, work, meals…”. A more complex schema may exist for an idea like “my parents’ kitchen table” which might include a flood of childhood memories. A simple process schema might be the script you expect when answering your phone during the work day: you check who is calling and answer in a familiar or formal way as appropriate. Negotiating a deal with a business partner is a more complicated process and numerous schemata are possible.

The complex of processes and expectations around creating a business agreement varies among people. To identify the possible schemata, we searched literature about negotiation and interviewed IT business managers. In the end we identified eleven schemata for negotiation from literature and interviews.³ Some are mutually exclusive, some can exist together, some are more about the start of the process or more about the final goals. (see Table 1 below)

Our survey targeted IT managers as those most likely to engage in some kind of negotiations and deal making. We asked their years of experience, their management level in the company, how frequently they are involved in negotiations, and the position they take in negotiations. The position refers to how they participate in negotiations, for example as team members, leaders, decision makers, or observers.

Some interesting findings came out of this survey. Remarkably, the two most competitive schemata, Win/Lose and Play to Win, were not selected even once by the survey participants. This result appears to confirm that in both cultures this industry leans towards collaboration and away from competitiveness.

Finnish and Japanese IT managers were also roughly in agreement about four schemata that they did mostly use. These common approaches include employing a multistep process to get satisfying results, making a pitch to a decision maker who was not present, determining end to end business logic, and exploring information to find win/win solutions.

The multistep process for satisfaction does not identify the specific process, but shows that these negotiators are interested in satisfying counterparties and stakeholders, rather than in making one sided gains. Negotiators of this sort are likely to take a thorough approach to communicating and discovering information.

The thinking behind comprehensive understanding of the business logic in a deal suggests caution about strategic alliances and how they add up over the long term. These negotiators seem to care about the position of their business and organisation in the broader value network. They may be very sensitive to relationships with other suppliers and clients beyond those parties represented at the negotiating table.

Exploring information for win/win patterns speaks for itself, these negotiators are not employing quick hacks to gain value. Their willingness to explore information also suggests flexibility and opportunism that may help to complete deals.

The fourth commonly selected schema, pitching to a superior who is not in the conversation, shows sensitivity to how decisions are made and how the final decision makers must be addressed and handled.

In addition to the four approaches mentioned above, about half of the managers from each background preferred to show fairness in the process of negotiation. Fairness is a culturally inflected practice, what is fair in one place, may not seem fair to other people. These negotiators should communicate not only that they want to show fairness, they should also discuss how to show it. In the end, the survey identified much common thinking among negotiators from these backgrounds to support cooperation and communication.

Two schemata were very common among Finns but absent or almost absent among the Japanese. No Japanese participants chose trading incremental concessions, or quid pro quo, whereas more than half the Finns chose this. Even if not all Finns chose it as a business negotiation approach, perhaps most Europeans would recognise this as a default bargaining behaviour, incremental compromise. Similarly lopsided was the choice of getting the deal and moving on which almost half the Finns seemed to like but only one Japanese negotiator selected.

It seems from the research that there is a lot of potential for thinking to match up in this industry even across distant borders, but also some for opportunities for mismatch. Having some idea about which approaches might or might not be in play, business negotiators can look carefully when interacting to see if they are on the same page or not. Similar thinking does not mean it will be recognised automatically by all sides. Negotiators must discuss and look for signals from counterparts in order to react appropriately. 

But what kind of negotiators seem to have the most flexibility and the most tools at hand? The research suggests that it is not age that makes a broadly skilled negotiator. Instead the individual’s rank in the workplace correlates mildly with an increased number of schemata.  Additionally, the frequency with which a person engages in negotiation correlates somewhat with having more schemata at hand. However the strongest connection appears between schemata and a person’s position in negotiation; team leaders and final decision makers have more schemata available to them than team members or support staff. It may be that practice and decision making authority build up choices or that those with more choices available to them rise higher in decision making position.

In this day and age, technology dominates the issues of business management but IT business people must constantly refine and develop their person to person skills for interacting, communicating and negotiating. Identifying and using approaches that allow better communication and interaction with the existing and potential partners may lead to better outcomes, greater satisfaction in deal making, and lower transaction cost in the long term as successes lead to new beneficial deals. The IT communities investigated here show a fairly sophisticated, though not always overlapping comprehension of how to build value and alliances and work together. Smart managers in the IT world will seek to understand their own thinking and that of their counterparts.

For more detail, see the authors’ academic writing on this topic: Baber, W. W., & Ojala, A. (2015). Cognitive Negotiation Schemata in the IT Industries of Japan and Finland. Journal of International Technology and Information Management, 24(3), 6.

About the Authors

Will Baber has combined education with business throughout his career. His work has included economic development in the State of Maryland, language services in the Washington, DC area, supporting business starters in Japan, and teaching business students in Japan and Europe. Currently he is at Kyoto University teaching and researching negotiation and other topics as an Associate Professor in the Graduate School of Management. He is lead author of the 2015 textbook Practical Business Negotiation.

Arto Ojala is working as a University Lecturer in the Department of Computer Science and Information Systems at the University ofJyväskylä, Finland. He is also Adjunct Professor in Software Business at the Tampere University of Technology. His articles have been published in Information Systems Journal, Journal of Systems and Software, IEEE Software, IT Professional among others. Ojala has a PhD in economics from the University of Jyväskylä.

References
1. G. Hofstede, J. G. Hofstede, and M. Minkov, Cultures and Organizations: Software of the mind, 2nd ed. New York , NY: McGraw-Hill, 2005.
2. M. Kamppinen, “The Cognitive Schema,” in Consciousness, Cognitive Schemata, and Relativism: Multidisciplinary Explorations in Cognitive Science, M. Kamppinen, Ed. Dordrecht: Springer Netherlands, 1993, pp. 143–162.
3. W. W. Baber and A. Ojala, “Cognitive Negotiation Schemata in the IT Industries of Japan and Finland,” J. Int. Technol. Inf. Manag., vol. 24, no. 3, pp. 87–104, 2015.

The post IT Negotiators: What’s Your Approach? appeared first on The European Business Review.

Rothbard tells executives in High-Potential Leaders: Accelerating Your Impact and Women’s Executive Leadership: Business Strategies for Success to consider changing this negative mindset — negotiation as confrontation — to one that is positive. “Think instead about negotiations as problem-solving conversations. This switch helps you engage with and practice them. There are so many negotiation opportunities around us — many more so than we are aware of when we view them negatively.”

But these problem-solving conversations, says Rothbard, shouldn’t be approached haphazardly. “Preparation is key,” she says. “First, determine what you want, what you need (your bottom line), and what your alternatives are.

“Once you understand yourself, you can then take the perspective of the other party. What do they want? What do they need, and what are their alternatives?” Rothbard notes that active perspective-taking involves systematically thinking about and researching what they have done in the past, what kinds of industry information could shed light on their alternatives, and what their competitors have done.

“Above all, you need to avoid a fallacy it’s so easy to fall into: projecting your desires on someone else and assuming what you want is what they want. If you do that, you start the conversation believing there is a conflict: ‘we all want the same thing, so there is a fixed pie that has to be divided.’ They may in fact have very different priorities.”

Job negotiations are a good example. You and your employer both care about salary, but your employer may care more about potential vacation days or other benefits that are invisible to you. You may care more about a start date or bonus. When your priorities differ, you have tradeable interests, and there is a greater possibility that you can both get something you want.

Shared interests, says Rothbard, can also be challenging to see. “Both parties can be so busy hiding what they want that they don’t realize they both want the same thing. In a problem-solving conversation, you need to create an atmosphere of trust in which you can reciprocally get information on the table.”

Women and Negotiation

For women, the challenges can be more complex. Women tend to be more apprehensive about negotiating in general, says Rothbard. “When we talk about this in my session in Women’s Executive Leadership, we discuss how men and women use very different metaphors for negotiations. Men describe them as a ball game or a wrestling match, whereas women say it’s like going to the dentist. Reframing negotiations as problem-solving conversations helps. Instead of expecting them to be confrontational, they can approach negotiating as a collaborative effort.”

Citing research by Linda Babcock of Carnegie Mellon and Hannah Riley Bowles of Harvard, Rothbard explains that when women do negotiate, they may be negatively perceived as not relational or warm, and that can result in a backlash. Rothbard tells participants in Women’s Executive Leadership, though, that the result is not inevitable. She shares three techniques Bowles and Babcock have identified that can lead to more positive perceptions:

• Invoke relationship: use “we and us” language instead of “I and me,” and link your request to a sponsor or another person of higher status to provide legitimacy.

• Frame things as a question: seek advice rather than make a demand (“how would you suggest I go about this?”)

• Frame the negotiation as a skill-based contribution: emphasize that what you are negotiating for is beneficial to the organization and that you are a positive contributor.

“Problem-solving conversations take work,” notes Rothbard. “Before they begin, research and preparation are important. And, for women, the language you use and the frame you put around the conversation can help you get what you want. You can’t always avoid conflict in negotiations, but it’s not mandatory. Your mindset can make an enormous difference.”

Wharton’s Women’s Executive Leadership program runs April 4–8, 2016. For more information please contact +1.215.898.1776 (worldwide) or execed@wharton.upenn.edu, or visit: www.WhartonWomensLeadership.com

The post Negotiating Advice for Women: The Problem-Solving Conversation appeared first on The European Business Review.