Congressional negotiations about the federal budget and debt ceiling ended poorly, with neither Democrats nor Republicans feeling satisfied, let alone victorious. The contentious debt ceiling talks that ended in an 11th-hour agreement in early August did produce some constructive lessons that can be applied to high-stakes negotiations in the workplace.
Before getting down to business in a negotiation, “Know your starting point, target and threshold of pain,” says Keld Jensen, chairman of the Centre for Negotiation at Copenhagen Business School in Denmark. “One of the biggest barriers to cooperation in the debt ceiling deal was the lack of specific budgetary numbers. Stressing rhetoric over substance, it’s no surprise it was difficult to find a suitable agreement.
“In business, if you want something – a raise, vacation time, a new client, a sale – you need to come prepared with a number offer, a clear target in your head and a specific limit to compromise when things don’t go as planned,” Jensen says.
Keep in mind what the other party wants so you can structure your proposal in a way that won’t automatically be rejected.
Ironically, “The more variables available for negotiation, the easier it is to reach an agreement,” Jensen says. “As witnessed in the negotiations at Capitol Hill, it’s hard for parties to come to any agreement when there are only a few items to discuss. In this case, the variables were primarily limited to spending cuts, tax increases and a timetable.”
In contract negotiations, people get stuck on salary, Jensen says, “but if your employer can’t offer you the amount you want, look to see if there’s bargaining room on other aspects, such as flexible working arrangements, additional vacation time, bonus pay for high performance and education. In the end, what is valuable to one person may be a throwaway compromise for someone else.”
Don’t publicly insist on positions that the other side won’t agree to. This “forces them to resist not only those proposals but others that they might otherwise agree to in order not to look like they are giving in to your threats,” says Lee E. Miller, co-author of “A Woman’s Guide to Successful Negotiating, Second Edition” (McGraw-Hill, 2010). “If you really want to cut a deal, do it in private.”
With the public hungry for information, President Obama might have been on to something when he solicited input from the American people. “When President Obama went on TV and talked about what he was trying to do, there was a groundswell of support from people who wanted a balanced solution” to address the deficit, says Jim Camp, president and CEO, Camp Negotiation Systems, Vero Beach, Fla. “Then he got sidetracked when he believed he had to compromise. If the president had said he would veto everything that wasn’t balanced, which he had the power to do, he would have had public support.”
Contrary to popular belief, “The whole idea that compromise is necessary for negotiating is wrong,” Camp says. “People don’t realize that creating a vision is the key ingredient, not compromise for compromise’s sake.”
Building a vision instead of tit-for-tat bargaining is more effective because decision-making is an emotional process, Camp explains. A vision for the future is more compelling than the chips on the table. The “vision” can be a worst-case scenario to avoid, such as the U.S. government defaulting on its loans. The problem with that vision is that not every politician believed that default would spell disaster for the U.S. and the global economy.
And as it turned out, forging an agreement just in time to avoid defaulting did not protect the nation’s credit rating. Procrastination was partly to blame for the last-minute agreement that shook people’s confidence in the nation’s stability, says Bill Corbett Jr., Corbett Public Relations Inc., New York City.
“Negotiations and attacking this problem should have happened months ago,” he says.
The lesson for organizations: “Take action now to resolve issues that may impact operations. Procrastination can kill a business or damage its reputation,” Corbett says.
In contrast to what took place in Washington, negotiators should not try to make the other party look bad. Rather, “You should let the other party agree to terms in a face-saving way,” Miller says.
In case the other party does not abide by the same principle, be prepared to do damage control, says Corbett: “Members of Congress and the president were attacked in the media and by other elected officials. Businesspeople can take away from this that creating a message, sticking to the message, and using social media and the mass media to communicate is essential.”
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