The Art of Negotiation: How to Improvise Agreement in a Chaotic World

The Art of Negotiation: How to Improvise Agreement in a Chaotic World Hardcover

by Michael Wheeler  (Author)

A member of the world-renowned Program on Negotiation at Harvard Law School introduces the powerful next-generation approach to negotiation.
For many years, two approaches to negotiation have prevailed: the “win-win” method exemplified inGetting to Yes by Roger Fisher, William Ury, and Bruce Patton; and the hard-bargaining style of Herb Cohen’s You Can Negotiate Anything. Now award-winning Harvard Business School professor Michael Wheeler provides a dynamic alternative to one-size-fits-all strategies that don’t match real world realities. 
The Art of Negotiation shows how master negotia­tors thrive in the face of chaos and uncertainty. They don’t trap themselves with rigid plans. Instead they understand negotiation as a process of exploration that demands ongoing learning, adapting, and influencing. Their agility enables them to reach agreement when others would be stalemated.
Michael Wheeler illuminates the improvisational nature of negotiation, drawing on his own research and his work with Program on Negotiation colleagues. He explains how the best practices of diplomats such as George J. Mitchell, dealmaker Bruce Wasserstein, and Hollywood producer Jerry Weintraub apply to everyday transactions like selling a house, buying a car, or landing a new contract. Wheeler also draws lessons on agility and creativity from fields like jazz, sports, theater, and even military science.

Editorial Reviews

From Publishers Weekly

Harvard Business School professor Wheeler, a member of the school&’s Negotiation, Markets & Organizations unit, offers a clear-headed, creative approach to negotiation that is on a par with the canonical texts, Getting to Yes and You Can Negotiate Anything. Those titles suggest abandoning hardball tactics and turning every interaction into a negotiation. Wheeler, on the other hand, posits that the most important aspect of negotiation is improvisation and constant flexibility, acknowledging that each party goes into a negotiation without truly understanding the other person&’s position. Often, each party&’s real needs don&’t emerge until the negotiations are in progress. Wheeler discusses strategies for managing uncertainty and understanding the true extent to which preferences, needs, and relationships are constantly changing. He steers readers toward making wise decisions about whether or not to pursue a negotiation in the first place, conducting sufficient research, keeping their cool, and closing the deal. Wheeler&’s lucid, engaging voice is a major asset, and sample scripts help drive home his points. Agent: Jim Levine, Levine Greenberg Literary Agency. (Oct.)

From Booklist

Apart from books that instruct on win-win negotiation techniques and strategies to control negotiations, this book focuses on how to deal with and capitalize on the dynamic nature of negotiations. It shows how opportunities are missed when people are inflexible in their approaches and how roadblocks can be overcome with spontaneity and creative ideas. It points out situations in which the commonly known BATNA (Best alternative to a negotiated agreement) model is not always the best strategy. Wheeler advocates that effective negotiation demands rapid cycles of learning, adapting, and influencing to manage the uncertainty of a negotiation. Wheeler likens this to improv and countering surprises with flexibility. Real-life examples, including the development of the Citibank center in New York, illustrate how applying nine key principles can improve success in a negotiation. Other topics discussed include situational awareness, military techniques, and balancing risk and reward in determining when and how to say yes to a deal. The appendix provides a handy summary of the key points for future reference, and the book is a good basic guide to making the best of a negotiation. –Cindy Kryszak

Review

“Professor Wheeler creatively pulls from vastly different professions such as NASCAR drivers, jazz musicans and improv actors, expanding our awareness of negotiations and equipping us with practical, innovative tools to navigate complex negotiations.”

(Erin Egan, Senior Product Manager, Microsoft)

“The secret to successful negotiation is not just preparation and a good plan, but inspired improvisation. Until now, there has never been a book on this all-important and neglected aspect of negotiation but now, thanks to Mike Wheeler, we have a beautifully written, insightful and practical guide to the “jazz” of negotiation. The Art of Negotiation is a real gem and an essential contribution to the literature!”

(William Ury, author, Getting Past No and The Power of a Positive No)

“This brilliantly readable book is packed with powerful advice for managing the complexity and uncertainty of real-world negotiations with improvisational mastery.”

(Bruce Patton, coauthor of Getting to Yes and Difficult Conversations)

Michael Wheeler has written a new business classic. He presents powerful negotiation strategies and techniques for managers in any industry.”

(Henry McGee, former president, HBO Home Entertainment)

“Whether to build partnerships or to overcome differences, the art of negotiation is crucial to today’s nonprofit organizations. Michael Wheeler’s book is an eye-opening guide, replete with data, metaphors and compelling stories, on how to negotiate creatively, imaginatively and effectively.”

(Peter D. Bell, President Emeritus of CARE)

“Negotiation is not a linear endeavor. It’s full of twists and turns and requires managing relationships, data, intuition, and alternatives in a way that increases the probability of a good outcome. Wheeler knows this subject as well as anyone and shows us how the best negotiators are like great scouts; constantly probing and challenging assumptions to find the value that is beneath the surface.”

(Ben Cherington, General Manager of the Red Sox)

“Getting to Yes meets ‘Round Midnight’ in this highly readable exploration of the twists and turns of real world negotiations. In his new book, ‘The Art of Negotiation’, Michael Wheeler provides terrific practical guidance on dealing with the predictably unpredictable ways negotiations fail to stay on script.”

(Chris Nicastro, Vice President and General Counsel, Bridgestone Americas)

“Wheeler offers a dynamic approach….A fresh approach offering new ways to improve negotiating skills.”

(Kirkus)

“A clear-headed, creative approach to negotiation that is on a par with the canonical texts Getting to Yes and You Can Negotiate Anything…Wheeler’s lucid, engaging voice is a major asset, and sample scripts help drive home his points.”

(Publishers Weekly)

“[T]he book is a good basic guide to making the best of a negotiation.”

(Booklist)

About the Author

Award-winning Harvard Business School Professor Michael Wheeler has taught negotiation to thousands of MBA students, executives, managers, and public officials from companies and organizations around the world. Wheeler is editor of theNegotiation Journal, published by the Program on Negotiation at Harvard Law School, and co-chairs the board of the non-profit Consensus Building Institute. He lives in historic Gloucester, Massachusetts, his hometown.

Excerpt. © Reprinted by permission. All rights reserved.

The Art of Negotiation

[ 1 ] Embracing Chaos

As manager of a private investment firm, Jay Sheldon bought a small cable television company in the Midwest some years ago. He didn’t know much about the industry, but the $8 million price seemed right, and the purchase would let him test the water. Jay and his partners quickly got the business into the black. A year later, they wanted to expand by acquiring nearby systems. After running the numbers, they figured that they could pay $11 million, maybe $12 million tops, to buy a second cable company in a neighboring city.
Jay began an extended series of talks with its owner, but after two months of back-and-forth, it became obvious that the parties were far apart on price. “Listen,” the other owner said. “I didn’t post a For Sale sign. You came to me. You’d have to dump fifteen million in cash right on my desk to tempt me. And I’d probably kick myself if I took it.”
Sheldon understood that this wasn’t a bluff, but he also felt the demand was unrealistic. By conventional logic, the parties were deadlocked. If a seller’s bottom line is three million higher than the buyer’s absolute top dollar, you can’t have a deal.
Or can you?
“Let me ask one last question,” Sheldon said before getting up to leave. “If you think your system is worth fifteen million, how about ours?”
“Oh, yours is a bit smaller,” was the answer. “I’d say fourteen or so.”
Sheldon turned the deal upside down. He adroitly became the seller instead of a buyer. In a little more than a year, he flipped his own system for almost twice what his firm had paid for it (and much of that had been leveraged). He was still bullish on cable, but when he encountered this particular owner, who was rabid about the industry, Sheldon had the agility to transform an apparent impasse into a lucrative sale.
His solution was clever. More important, though, was his nimble mind-set. In the impediment to his hoped-for acquisition, Sheldon spotted the seed of another deal that would serve him even better. When he let go of his initial plan, the insight arrived in a flash.
Sheldon’s agility is the mark of a master negotiator. Yes, preparation is important, but negotiation is a two-way street. We can’t script the process. Whoever sits across the table from us may be just as smart, determined, and fallible as we are. We can’t dictate their agendas, attitudes, or actions any more than we’d let them dominate us. Adaptability is imperative in negotiation from start to finish. Opportunities will pop up. So will obstacles. Power ebbs and flows. Talks that crawl along can race forward or veer off in another direction. Even our own objectives may evolve. We have to make the best of whatever unfolds.
Negotiators like Sheldon are great improvisers. When things aren’t going well, they’ll float a clever proposal, crack a joke, or even challenge the other side. If need be, they’ll also make major changes in strategy. What’s odd, though, is that there isn’t much about improvising in standard negotiation books. That’s true both for the hardball manuals on dominating the other side and for the “win-win” texts that preach joint problem solving. In spite of their obvious differences, both approaches start with the same static premise that you have your given interests and I have mine. The win-win message is that by laying your cards on the table, you can expand the pie by making mutually beneficial trades. The hardball line tells you to chest your cards (and maybe slip a couple up your sleeve).
But there’s much more to negotiation than bluffing and trading. The challenge lies in the fact that preferences, options, and relationships are typically in flux. Theorists may have sidestepped this reality, but top negotiators understand this very well.
I’ve seen this in my own research and also thanks to the work of colleagues at the Program on Negotiation (a cross-disciplinary consortium of negotiation experts at Harvard, Massachusetts Institute of Technology, and Tufts University). In a ten-year project led by Jim Sebenius, we’ve analyzed the work of great negotiators in a wide range of fields. They’ve included diplomats such as George Mitchell, who mediated peace in Northern Ireland; investment banker Bruce Wasserstein; and the visionary artists Christo and Jeanne-Claude.
The contexts in which these virtuosos negotiated differed. Their personalities ran the gamut as well. Some had a certain gravitas, while others were warm and entertaining—even funny. Yet in our workshops with them, they all emphasized the dynamic nature of negotiation and the importance of agility. The late ambassador Richard Holbrooke, who forged the accord ending the bloodshed in the Balkans, described negotiation as being more like jazz than science. “It’s an improvisation on a theme,” he said. “You know where you want to go, but you don’t know how to get there. It’s not linear.”
UN special envoy Lakhdar Brahimi, having mediated in some of the world’s most violent and unpredictable trouble spots, used a nautical metaphor to express the same idea. Negotiators must always “navigate by sight,” he cautioned. No matter how diligently we prepare, we’re bound to encounter surprises, pleasant and otherwise, that warrant course corrections.
Donald Dell, the sports agent-marketer, made his mark by hammering out huge contracts for basketball players Patrick Ewing and Moses Malone and earning millions in endorsement deals for tennis stars Arthur Ashe and Jimmy Connors. He’s orchestrated bidding wars between rival television networks for broadcasting rights to events like the French Open.
Dell has also done very well negotiating on his own behalf. In 1998 he sold his sports management firm ProServ to an entertainment company for what he describes as “the proverbial offer I couldn’t refuse.” A few years later, after buying much of it back for twenty cents on the dollar, he then resold his interest to Lagadère Unlimited, where he is group president in charge of TV deals, events, and tennis.
For all his success, though, Dell is quick to say that things often don’t go according to plan. “I can’t tell you how many times I arrived prepared for a negotiation, only to have someone or something come up that upset or changed the deal I thought I was doing. The only way to protect yourself one hundred percent against this situation is to assume there is something you don’t know. This advice will not only keep your mind up to speed with the deal and force you to consider other parties’ motivations, but it will also keep your ego in check.”

LEARNING, ADAPTING, AND INFLUENCING

Lesser known but highly talented deal makers make the same point. Tom Green is a remarkable negotiator who has worked in both the private and public sectors. Tom was a key figure in the sale of a storied baseball franchise and helped restructure a failing health maintenance organization (HMO) that many thought was headed for bankruptcy.
Tom also served on the public interest team that resolved massive litigation against the tobacco industry. Until that time, Big Tobacco had never lost a case or paid a dime to settle health claims out of court. When Mississippi, Massachusetts, and a few other states filed suit to recover Medicaid costs for smoking-related illnesses, their effort seemed quixotic. Yet one by one, Green and his colleagues enlisted forty other states to join the effort. That momentum brought the tobacco companies to the bargaining table. In 1998 the industry bowed to more stringent regulation and agreed to pay $350 billion in damages.
I wrote a case study about this meganegotiation for my MBA course. Tom visited the class the first time I taught it and listened as students analyzed the deft coalition building and old-fashioned horse trading that led to the unexpected outcome. Near the end of the discussion, I asked Tom for his own conclusions. After complimenting students on their observations, he added something that surprised them. The secret of his success, he said, has been “making chaos my friend in negotiation.”
When Tom speaks about embracing chaos, he’s not talking merely about cases involving scores of parties, thorny issues, and messy politics. Rather, he knows that all negotiations, large and small, are chaotic, since they take place in fluid and often unpredictable environments. But that’s not to say that negotiation is random. The process is propelled by how the parties interact. Understanding how seemingly small moves or gestures can change the course of negotiation can mean the difference between agreement and deadlock.
Saying that negotiators like Tom are agile improvisers doesn’t mean that they make everything up as they go along. Far from it. They’re well prepared, but they don’t hobble themselves with rigid plans. They understand that effective negotiation demands rapid cycles of learning, adapting, and influencing.
Each of those italicized words is critical. Learning, adapting, and influencing take place in most negotiations, of course, but all too often only by happenstance. Instead, I’m talking about deliberate learning. It entails updating your expectations on three levels: (1) the scope of the issues under discussion, (2) the best means for resolving them, and (3) the nature of your relationship with counterparts.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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