Negotiations: Solo or Teamwork

JAY DEHEJIA

While many may prefer to handle negotiations solo, the involvement of others can often help add value to talks

The President of the United States has often said that he is the best ‘Deal-Maker-in-Chief’. He proudly repeats that the best advice he gets is when he stands in front of the mirror – getting his own advice! In the last 450 days of his Presidency, the 45th President appears to have failed more often than not in negotiating an acceptable deal for his country. Harley-Davidson, a major manufacturer of motorbikes, announced that it would move a major portion of its production of its highly popular motorbikes out of the United States in order to continue to competitively serve the European market. This move came about as the EU decided to increase import duties on many other items made in the US. In another major decision, President Trump unilaterally decided to cancel joint military exercises with the South Korean military, without consulting the Defence Secretary or the military chiefs of staff. His giveaway to North Korea may have major implications in a joint coordination of the South Korean, Japanese, and US militaries in case such a collaboration becomes necessary. President Trump clearly believes that negotiating solo is the only way. He would have been better off having the backing of a full team comprising his best advisors and technical experts at the negotiating table. Kim Jung Un came prepared with his full team and did not have to give anything away as part of the negotiations – North Korea wins round 1 and the United States loses round 1!

In this complex and fast-moving business world, negotiations are exceedingly complex. Solo negotiators must be careful not to let their ego get in the middle of a successful deal or contract. It is now more than ever essential that negotiators work as a team in order to improve the outcome. Apart for personal egos, it is possible that individual rivalry, or possible animosity in a corporation or institution can come in the way of a successful negotiating team.

It is not always clear when you need a team to negotiate a deal, as opposed to going solo. If the transaction is likely to be one-off, and with no ramifications, like buying a car or renting a flat, it is conceivable that negotiations can be conducted as individuals. I still recommend that two sets of ears are much better than one. In a hurry to conclude a deal, it is possible that you may give away more than you wished you had – after the contract has been signed. Your partner may have noticed something, before or during a negotiation session that you may have not seen or understood. How often have you heard the phrase: “I do not have the authority to lower that price or make that decision?” This is a standard negotiating tactic that allows the other party to go and meet their superior or manager, or for that matter take ‘time out’ and return with a better offer. You need to be prepared with a counter offer if that situation were to arise.

There are many reasons to set up a comprehensive team before starting a complex negotiation. Such situations include:

  • Complex negotiations that require diverse knowledge;
  • Negotiations with great potential for creativity and value creation;
  • Negotiations with multiple constituents who all have a stake in the outcome;
  • International contexts in which team negotiations are the norm; and
  • Negotiations in which there is sufficient time to coordinate a team approach.

North-western professor Leigh Thompson and fellow researchers Erika Peterson and Susan Brodt have found that teams tend to be better than solo negotiators at exchanging information with counterparts and making accurate judgments, and that they tend to reach better outcomes. Teams also tend to feel more powerful, less competitive, and less pressured than individual negotiators, according to research by Cornell professor Kathleen O’Connor. The tendency of teams to outperform solo negotiators has been attributed to several factors, including the high economic goals that teams set for themselves, their heightened sense of competition, and members’ tendency to challenge one another’s views. It may also be important that those participating in a team negotiation monitor one another’s behaviour, while individuals often negotiate unobserved by others in their organisations. Monitoring tends to amplify the social norms, or behavioural expectations, that stand out in a negotiation.

Prior to starting complex negotiations involving several stakeholders, it is imperative to set up a comprehensive team with a team leader who understands the many nuances of the total agreement that needs to be negotiated. The team leader must be able to guide the members, helping them understand the potential trade-offs and possible conflicts between different departments (stakeholders). The team members should be drawn from all departments that are likely to be affected by any new agreement that is signed. These members must keep their constituents appraised of what is being discussed, and be aware of the specific needs or concerns of their departmental staff. It is not always possible to meet everyone’s demands, and that is when the team leader needs to step in for the overall good of the agreement.

Every successful team needs a ‘bridge-builder’. Hal Movius of the Consensus Building Institute, and MIT professor Lawrence Susskind advise you, whenever possible, to include an individual who has a positive relationship with likely team members on the other side or who has some understanding of the goals, metrics, and concerns of the other team. At the table, one individual should be charged with listening carefully to the other side’s perspectives, ideas, and interests and watching their reactions to proposals. Successful negotiations should aspire to increase the pie for all parties, rather than cutting the existing pie.

Lastly, it may be necessary to include technical experts as part of your team.Their detailed knowledge of highly specialised technology, accounting rules and regulations, human resource constraints, and other aspects of the institution will prove valuable.

A team without egos and with complementary strengths will lead to a favourable outcome

The writer used to be a senior corporate executive. Now social entrepreneur. He spends most of his time between Goa and New York. Email: jay@dehejia.net

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