Tag: Interests

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The power of empathy

The Harvard Negotiation Project at the Harvard Business School has developed a   Negotiation Method, the principles of which are explained in the best-selling book  Getting to Yes. How to negotiate without giving in, by Robert Fisher and William Ury. Another Harvard professor, Deepak Malhotra, has a book entitled Negotiating the Impossible. How to break deadlocks and resolve ugly conflicts (without money or muscle) , where he analyses how they act in the context of complicated negotiations. 

Below, we will analyse some of Malhotra’s advice in the section of his book on complex negotiations, ‘The Power of Empathy’, from the perspective of the Minerva Strategy Blog.

Empathy expands the set of options you have for resolving the conflict. The better you understand the other side’s perspective, the more likely you are to find a solution.

Empathy is often understood as putting oneself in another’s situation.  The  Golden Rule  maintains that “treat others as you would like to be treated.” A good exercise is to ask yourself: if I were in the other person’s situation, how would I like to be treated and how would I behave? This rule is fine, but it should include safeguards to prevent exploitation. The Silver Rule states: “Do not do unto others what you would not have them do unto you.” This would be a practical application of empathy. However, ultimately, there is the Bronze Rule: “Do unto others as others do unto you.” This would be an extreme form of reciprocity and, at times, the mere possibility of applying this Bronze Rule may have strategic value.

Empathy is needed most with people who seem to deserve it least. The more intolerable their behaviour, the greater the potential benefit of understanding it.

There may be individuals with challenging personalities or who find themselves in complicated situations, or who may behave unusually due to cultural, religious, gender, disability, or other identity factors.

The relevant issue is that, in business contexts, information about the parties’ backgrounds is key. This data can help explain certain behaviours and attitudes, and/or justify each party’s actions and action plan from their point of view. This exercise in understanding the other party can be useful, as it can highlight differences in interests, assessments or perceptions that may be of strategic interest.

There is almost always a trade-off between maintaining strategic flexibility and safeguarding credibility.

The term trade-off is used in economics as a synonym for compromise, referring to a situation in which gains are made on one side, but losses are incurred on the other. 

Credibility is the degree to which others believe that we will follow through on our commitments. From the deontological ethical model, Kant is the ultimate example of credibility, as he maintained that promises must always be kept. Strategic flexibility is the option to change one’s mind if continuing with previous commitments seems unwise. In the Machiavelic ethical model, Machiavelli is the paradigm of strategic flexibility; for example, in chapter XVIII of The Prince, he analyses whether the prince should keep his word. 

Typically, Malhotra asserts, we want as much credibility as possible while maintaining flexibility. However, if we invest more in strategic flexibility, we typically have less credibility, and vice versa. 

Don’t force people to choose between doing what is smart and what save face.

A first rule of negotiation, linked to empathy, is that proposals for agreement and subsequent negotiations should be framed so that one party is trying to “save face” for the other. In other words, consider the specific consequences the proposed deal will have for the other party. But here, Malhotra, in line with the Harvard Negotiation Project, goes further and calls for the other party to be provided with an intelligent solution. This means the other party must also consider it a good agreement. 

Ignore ultimatums. The more attention you give to them, the harder it will be for the other side to back down if the situation changes.

Ultimatums can be seen as threats. A distinction should be made between business threats and real threats. The former plays a strategic role in negotiation, and the key is their credibility in the eyes of the other party. Real threats will entail a specific response, with negative consequences, towards certain behaviours. Malhora’s advice is to ignore ultimatums and threats and reformulate them so they can be incorporated into the broader negotiating framework. 

Think trilaterally: evaluate how third parties influence or alter the interests, constraints, and alternatives of those at the table.

In certain negotiations, the weight and influence of third parties are very present, conditioning the entire negotiating framework, whether in terms of interests, communication between the parties, or perception. A key point from this perspective is the real power of third parties in the framework, development, and agreement of the negotiation, and the type of link that connects the other negotiating party and the third party. If the real power and influence of the third party are strong, there is no doubt that we must think trilaterally; even if they are somewhat weaker, it is worth considering the third party’s power and influence in favour of our cause. 

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The Power of a Positive No

After his work Getting Past No, William Ury wrote another work entitled The Power of a Positive No. In this new original book, he explains how to face one of the most challenging things we must do every day: to say no to people who work with us, who we love, and with whom we have relationships of various kinds. As Ury says: “No is the biggest challenge today”.

The analysis in this book starts from the consideration that: “It may not be the most important word in our vocabulary, but it is the hardest to say well”. The special idiosyncrasy of this term is linked to the inherent tension between exercising your power and tending your relationship. Thus, in certain situations, Ury describes three common ways out:

a) Accommodate: say-yes-when-you-want-to-say-no. This is especially frequent when we want to maintain the personal relationship by making concessions.

b) Attacking: be-passive-aggressive-when-saying-no. It is the opposite of accommodating. It is about using power without any consideration for the relationship. It is linked to anger or rage.

c) Avoidance: we-say-no-absolutely-nothing. In these cases, communication and relationships are suspended. It is a way of coping with problems by avoiding people.

As can be imagined, these three ways out do not lead to success, and Ury’s proposal in this book is to affirm a positive No. Then the author summarises his formula: “A positive No is a Yes! No. Yes? The first Yes expresses your interests, the Noaffirms your power, and the second Yes strengthens your relationship. A positive No balances power and relationship in service of your interests.

The first Yes could be seen as internally focused – the assertion of one’s own interests – and the second Yes is externally focused -an invitation to the other to come to an agreement that satisfies those interests-. In this post, I will focus on the elements that give power to your No.

Saying No is not easy. Ury suggests that positive power must be developed, which is achieved by having a plan B. It is a matter of considering the worst-case scenario and seeing the possibilities one would have to achieve one’s objectives.

Plan B is also called BATNA (Best Alternative to a Negotiated Agreement). It is not an option to an agreement but an alternative to the agreement, a course of action that can be taken independently of the agreement with the other party. A better BATNA gives more bargaining power. A plan B is positive power; it does not mean punishing the other party. It is a strategic element that can condition the negotiation and must be considered.

The key question, then, is how to strengthen your plan B. One element that can help is brainstorming, where you use your imagination to develop various possible solutions without looking at their feasibility. Alternatives to a given situation should be carefully considered. These may include a) Do it yourself: achieve your goals by your own means without going to the other party; b) Run away: sometimes a possible way out is to end the relationship; c) Third party: sometimes the intervention of a third party as an intermediary is positive.

Along with building a powerful No, Ury recommends “building a winning coalition”. In each situation, allies with similar interests should be sought, and a common action plan can be addressed.

The key to the various interactions is information, especially about the interests and opinions of the other party. Ury advises, “anticipate the other’s next move”. Foreseeing likely courses of action and possible responses is strategically relevant. Anticipation gives a strategic advantage to the foresighted.

From this perspective, Ury argues that one should consider the worst-case scenario. It would be to put yourself in the position of checking what you could lose in the negotiation, on the one hand, and what plan B or BATNA is, on the other hand.

In conclusion, Ury reaffirms your decision to decide No in three questions: “Do you have the interest? Do you have the power? Do you have the right?” This point must be complemented with other negotiating elements, allowing you to reach efficient and intelligent agreements, from different interactions, based on building a positive No.

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Julius Caesar, Zone of Possible Agreement (ZOPA) in Civil War

In a book entitled Civil War, Julius Caesar narrates the political and military conflicts with the Roman Senate and especially with his rival Pompey. These led to a veritable civil war between contending groups looking to seize power.

In this post, I will analyse the successive peace proposals made by Julius Caesar and Pompey, through the lens of ZOPA analysis. The Zone of Possible Agreement – known as ZOPA – is a frame of reference that is relevant to any negotiation. It is defined between the parties’ two BATNAs. That is, between each player’s Best Alternatives to a Negotiated Agreement -BATNA-. Another way of expressing this is to define the ZOPA as the margin between the two reserve prices of each party. In other words, the minimum prices that the parties are willing to accept in a negotiation.

In the work Civil War, the author describes how the conflicts for power in Rome arose. He explains that Pompey made Julius Caesar the following proposal: “Caesar should return to Gaul, withdraw from Rimini, discharge his armies; if he met these terms, Pompey would go to Hispania. Until there was assurance that Caesar would do what he had promised, the consuls and Pompey would not cease levying levies” (I.10).

The analysis from ZOPA is that the parties’ BATNAs do not allow for a deal on these terms. The proposed deal is that Julius Caesar must withdraw and disarm while his adversaries continue to arm. Julius Caesar would rather fight with his present forces than disarm. Pompey concedes to go to Hispania but only after he has assembled  the troops. The agreement is unbalanced in terms of the strategic relevance of the concessions between the parties. Therefore, the party that is asked to make a greater effort – to disarm – will easily find a better alternative to the proposed agreement.

Events progressed and it was now Julius Caesar who made a proposal to Pompey for a peace agreement, on the following terms: “that they should cause no more harm to themselves or to the Republic. They themselves were already enough proof, by their own disasters, of how much power fortune has in war. This was the only occasion to treat of peace, so long as both were confident of their strength, and their power was considered equal; if fortune helped only a little to one of the two, he who considered himself superior would not admit of terms for peace, nor consider himself satisfied with a part in which he trusted to possess all.

Since he had not been able to reach an agreement before, the terms for peace had to be requested in Rome from the Senate and the Roman people” (III. 10). (III. 10)

This agreement is based on equality of forces and uses the figure of an arbitration by the Senate. It is interesting the reflection that Julius Caesar makes where equality of forces is more favourable to peace, while if one party is more fortunate in combat, it will seek to defeat the other in battle.

What Julius Caesar means is that agreement is possible if the two sides have similar BATNAs. If one side has a very good BATNA – it has a good chance of winning the war – there is no possibility of agreement. The Zone of Potential Agreement -ZOPA- will expand with the uncertainty of the final outcome from two medium BATNAs.

Turning to a third party to settle a dispute is a legitimate, and widely used, way to do so, as long as its impartiality of judgement is guaranteed.

To Julius Caesar’s proposal of peace, Pompey’s reply was: “What does life or the city matter to me if it is to be believed that I have it for Caesar’s benefit; this belief cannot be erased, since it will be believed that by him I have been restored to Italy, when I came out” (III.18).

Here it is worth remembering Fisher and Ury’s rule “Separate the persons from the problem“. One party does not want to enter into a agreement because any solution will look like a success for the other party. In addition to an issue of hierarchy between the two, what seems to be relevant here are the emotions that stand in the way of any agreement. This always leads to conflict.

Proof of this are the words of an officer of the Pompeian army, named Labienus, who at one point in the negotiations said: “Stop talking about peace, for there can be no peace for us unless Caesar’s head is brought to us” (III.20).

It seems clear that there is an emotional problem and that the declared aim of one side is the death of Julius Caesar. In this case, there is no ZOPA. No agreement is possible if one side only wants Caesar’s death to make peace. The other side’s alternative is to fight and defend Julius Caesar’s life.

Pompey’s end also teaches us about strategy. His armies were defeated by Julius Caesar’s armies and set sail for Syria. There he sought help from Ptolemy, king of Egypt, who was at loggerheads with his sister Cleopatra, who later had a relationship with Julius Caesar that has been mythologised. Out of fear of the threat he posed or out of contempt for misfortune, Ptolemy’s advisors agreed to answer Pompey kindly in public and secretly sent two emissaries to kill him (III.104).

This story between Julius Caesar and Pompey can make us reflect on some aspects: a) On the need to establish a Zone of Possible Agreement (ZOPA) according to the BATNA of the parties, their Best Alternative to a Negotiated Agreement. The key to negotiating power is to have a good BATNA, a good alternative to negotiate; b) Proper management of emotions. They should not be an objective, in themselves, of the negotiation; c) Approach of third parties when their impartiality of judgement is guaranteed.

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The strategy of conflict

In 1960, the economist Thomas Schelling published his work The Strategy of Conflict with a hitherto unusual approach that opened new horizons. His approach was a new analysis of international relations and other areas, applying game theory methods, a part of Economics that carries out simulations of simple games with two or more participants based on the theory of rational choice.

One of the most interesting points of the book is the conceptual material it leaves  to the reader, which allows for multiple applications. Thus, it describes three types of scenarios: pure conflict, pure cooperation, and conflict/cooperation.

Situations of pure conflict would occur if the interests of the antagonists were completely opposed, only “in the case of war, but of a war tending to the total extermination of the enemy.” Situations of pure cooperation are presented as curious exercises in coordination without communication between the parties. For example, where would you meet someone in Madrid – or London or New York- who has received the same instruction, with whom you cannot communicate. Or imagine that you will win 100 euros if you write down on a piece of paper the way to share it out that matches the other party, where communication is impossible.

Schelling’s message is that most scenarios between human beings are ones of cooperation and conflict where there is a common interest and mutual dependence between the parties. Conflict management is sought with mutually acceptable solutions for mutual interests. Hence, the author concludes that most conflict situations are negotiationable scenarios.

The change brought about by this book is its new approach to strategy as applied to international relations and military issues. Thus, strategy does not refer to “the efficient application of force, but to the exploitation of potential force”. This means that the role of armies has an eminently strategic, rather than a purely combative, significance. On another level, this means that victory does not lie in the hand-to-hand combat of the respective forces, but rather in the expectations of the parties and the possibility of respective influence.

From this perspective, Schelling devotes his attention to the notion of “deterrence” as an important element of international relations. He states that an important distinction must be made here between the application of force and the threat of force. Deterrence relates to the exploitation of potential force. Its purpose is to persuade a potential enemy that it is in its own interest to avoid certain courses of action.

The conclusion is that it is not the use of military force, but the threat – serious and credible – of the use of force that would deter the other side from acting. Here would be the paradox that this theory of deterrence is “a theory of the skillful non-use of military force, for which something more than purely military ingenuity is needed”. That is the way to develop strategy as an art and science and to transform some views on international relations and the role of armies. But it would also have applications in business, politics and even everyday life.

In a passage from his book, Schelling offers a definition of strategy based on several elements:

a) it presupposes the existence of a conflict; b) but assumes a common interest of both adversaries; c) it assumes a rational mode of behaviour; d) it focuses on the fact that what appears to each participant as the best course of action depends on what the other does; e) “strategic behaviour” attempts to influence the other’s decisions by acting on their expectations of how the other’s behaviour relates to their own (Thomas Schelling, The Strategy of Conflict).

How to manage conflict? It seems that this is something we must all deal with in the various spheres of life. In The Strategy of Conflict, Schelling offers a view that was innovative for its time, constructing an analytical framework, based on game theory, to deal with international relations, and at one point he proposes various names for this theory, such as precarious association theory or incomplete antagonism theory.  Perhaps the most successful one is what he called interdependent decision theory. This is the key to the strategy of conflict.

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Inventing options for mutual benefit

In the third rule of the Harvard Negotiation Method, Fisher and Ury propose, on the one hand, exploring the various possibilities that may arise and, on the other hand, making the common interests explicit. The authors’ first piece of advice is to “expand the pie before dividing it”.

In the face of this rule that demands “inventing options for mutual benefit,” some obstacles in the form of attitudes or inertia inhibit the creative process of inventing multiple options. The first is premature judgment when negotiators with tunnel vision focus on specific options. The second is the search for a single answer, where it is taken for granted that each situation has only one possible solution. The third is to assume that the pie is fixed and the only variable is to share it when there may be situations where the pie increases to benefit both parties. The fourth is to think that “solving your problem is your problem”, where the issue is that the negotiation is approached from a competitive view between the parties and the cooperative aspects are forgotten. It is possible to increase mutual benefit from the cooperative approach by analysing the various options.

Faced with this scenario, in which the various possibilities of negotiations are not taken advantage of, Fisher and Ury propose multiple solutions. The main approach is to consider that negotiations have a creative component where the act of inventing options has to be separated from the act of judging them. This can be achieved by brainstorming, a process where the parties meet and openly and uninhibitedly put forward all possible options. It is a process where creativity counts and where there is a rule of non-criticism. Afterwards, it is necessary to evaluate and decide whether to incorporate the multiple options into the negotiation.

By following these steps, negotiation is transformed into a creative and cooperative process of finding the best mutually beneficial solutions. Ways must be invented to make the decision easy for both parties. It is sometimes forgotten that negotiations occur because the parties have common interests. Most of the time, these common interests remain implicit. The Harvard Negotiation Method states that these common interests must be made explicit and insists upon as a productive basis for negotiation.

On the other hand, the differences in interests of the parties have great strategic power for the smooth course of negotiations. In particular, there may be situations where an issue is of great interest to you and of little importance to the other party or vice versa. This can lead to a compromise agreement. It is precisely the exploration of differing interests that can be the key to a successful negotiation.

Negotiations occur in scenarios of cooperation and conflict between human beings. One party wants something from the other and vice versa. One way to approach negotiation is as a competition between adversaries who are jockeying for positions. Fisher and Ury propose a method for seeking intelligent agreements through a creative process of inventing multiple options for mutual benefit. Parties may have partly common and partly divergent interests. Insisting on shared interests and creatively managing differing interests is the best way to find an agreement that is best for both parties. Negotiating well also means being creative.

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Focus on interest, not positions

The second rule of the Harvard Negotiation Method states: focus on interests, not positions. We often find ourselves in situations that become endless, where the parties argue hard about one or two variables. Each party sets its positions there, and each concession has been made after hard work. There may be more rigid or flexible negotiators, but Fisher and Ury propose that the approach of these negotiations is not the most appropriate.

The authors of Getting to Yes. How to negotiate without giving in consider that rather than focusing the negotiations on positions, it is smarter to analyse the parties’ interests and look for a solution that satisfies both parties. Human beings have diverse interests that are not usually on the surface of the terms of a negotiation. In addition, the interests of different people are multiple and diverse, which can be especially relevant in negotiations.

The same object can have a very different utility depending on each person’s interests. Although negotiations usually stay on the surface, in the discussion from positions that seem irreconcilable, reluctant to make mutual concessions. The key is to stop and analyse our interests in that negotiation and, especially, what the other party’s interests are. Here, you should pay attention to all the torrents of information we can obtain from issues that are unimportant, such as informal conversations, body language, impartial data checks, etc.

The Harvard method believes that negotiation should focus on interests, and the way to bring them out is to ask the question, “Why?” This forces each side to justify its points of view. This effort can bear fruit if, in this way, the interests underlying the positions held are ultimately appealed to. Moreover, the negotiation must focus on those interests to be an intelligent agreement.

In the second instance, Fisher and Ury propose to ask: “Why not?”. Here, the parties must justify why their choices are better than the other party’s and in what way. They must develop the convincing power of their proposals and try to show their advantages. This question also serves to explore the interests of each party.

Negotiation occurs because of common interests, although there may also be divergent ones. When undertaking a negotiation, it is essential to know the other party’s true interests. It is also relevant when making an offer to analyse what it entails for you and whether it meets your interests. Sometimes, the solution can reasonably meet the interests of both parties. But when making an offer, the need to save face with the other party must always be present. In other words, it helps to justify the final result.

If the agreements are very disproportionate, they may not be stable over time. This would mean they do not reflect to one of the interests of one of the parties.

In this Harvard Method rule, Fisher and Ury advise, “Make a list of interests”. The usual focus of negotiations is often placed on seeking concessions on one variable, usually monetary. But we lose sight of the interests, which may be diverse and may require different accommodations. It would be interesting to explore the underlying interests in the negotiations to make them explicit because, on many occasions, the shared and divergent interests may show that we are facing an interdependent decision: to get something, we need the other party, and the other party needs us to get something, often something different.

Human beings have diverse interests, and we seek to satisfy them through our life plan. Negotiations, which can be professional negotiations that also encompass everyday life, are a way to find cooperative agreements with others, and success can come from knowing how to explore mutual and divergent interests. It is a way to focus negotiations on interests and reach intelligent agreements.