Scotwork Negotiation Consultants

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• alans 11:11 am on May 25, 2012 Permalink | Reply  

  Get inside the other sides head. 

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  The psychological profile has been a weapon of war, espionage, diplomacy and negotiation since time began.  Can we get inside the other side’s head and use that information to defeat him. Sun Tzu, the Chinese military strategist, believed that a firm understanding of the other side’s mental make up was a prerequisite for victory: “If you know your enemies and know yourself, you will not be imperiled in a hundred battles”.

  Modern intelligence services have used “psycho-biographies” to understand hostile leaders in an attempt to gain insight on which direction they might jump in response to internal and/or external pressures they may face.

  These at-a-distance profiles in the main come from speeches, writings and media interviews, revealed secrets and of course observed behaviour.

  Sometimes these profiles are hideously wrong or are exaggerated to absurdity. A psychological profile of Hitler commissioned in the 2^nd World War suggested Hitler had “oedipal tendencies”, hysteria, fear of women, impotence, masochism and infinite self-abasement. Indeed it seemed there was little he did not suffer from. This helped to heap even more distain on the Nazi Leader, but had no real value in the war effort.

  For the negotiator a clear understanding of the other party – trying to figure out what is driving their needs, priorities, concerns and how they see success – can be a crucial tool to help create a solution that both parties can live with. Some of the work to understand this can be done by talking to others who have had relationships with these people before, from reading about the company they work for and listening to the way they ask for or deliver information.

  Many years ago a client refused to pay our contractually agreed cancellation fee when a training event was cancelled by them. “If you send me a cancellation charge then we will never do business again” was the aggressive threat.

  After several conversations, including with various members of the buyer’s team, it became apparent that previous cancellations for other types of work had been very badly viewed by the internal management. By rewording the cancellation charge into a consultancy and assessment invoice the bill was paid and the client relatively happy.

  An understanding of the true picture behind an issue may need a greater degree of understanding as to the motivations of the other party. Take time to see how they see things and it very much could work in your favour.

  Alan Smith

   

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• alans 11:54 am on May 18, 2012 Permalink | Reply  

  Jaw, jaw not war,war. 

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  There are interesting changes afoot in the relationship between France and the USA now that President Sarkozy – more of a Bush man than an Obama fan – has been replaced by President Hollande.  He and Obama have much in common, including their centre-left persuasion and their shared background as university teachers.  That said, one is American and the other is French so culturally there is much that separates them.

  Hollande was elected on a left-wing agenda that included an earlier than planned withdrawal from Afghanistan and some new thinking on “growing” France out of the Euro-crisis.  This has put him in direct conflict with his right-wing allies, David Cameron in the UK and Angela Merkel in Germany.  It was informative that he made an immediate bee-line for Merkel in an attempt to shore up the Franco-German Euro axis – the Germans have it clear that they are unhappy with some of the policies that Hollande espoused during his campaign and it was right that he tried to make his peace.  There was no hiding the awkward pauses and stilted body language between the two leaders.  It is never easy to have your every word translated – that doesn’t help things – but nonetheless what you saw were two leaders dancing around each other, desperately trying to “spin” each other’s words for the benefit of their own constituents.

  What is clear is that all of the rhetoric in the world will stand for nought if they attempt to persuade each other of the “rightness” of their individual policies.  Hollande may eventually have to give way; the French signed a binding agreement when they agreed to the austerity measures and a change in leadership counts for nought in a treaty.  If the French persist though, the Germans may use a negotiating ploy called putting a price on demands.  It is designed as a blocking tactic and if it becomes clear that the French are adamant, the Germans may put a very high price indeed on their demands.  I imagine that a new trade treaty may be negotiated, for example, tying France into purchasing German products over a long period of time.  Any loans between the two countries – France’s economy is struggling – will come with higher than average interest rates attached.

  They need to tread with care, mind you.  The Allies applied the technique after the First World War – it was called the Treaty of Versailles.  It was so penal that it led to a resumption of hostilities 19 years later.

  Already too, the language of negotiation is being used when it comes to the Franco-American spat over the early French troop withdrawals from Afghanistan.  I read in the Guardian today (17 May 2012) that “it would be wrong to think that the social-democrat, consensus-style pragmatist Hollande marks a return of cheese eating surrender monkeys out to make trouble for Washington”.  The article continues, “there could be a compromise on the wording, substance and staggered timings of a withdrawal, not as a capitulation to pressure from the US and other unhappy NATO partners but to deal with the tricky logistics of a fast exit”.

  Let’s put that another way.  Hollande’s original proposal caused a bit of a problem for the USA.  All it needed was a bit of tweaking – some word-changes here and re-timing there.  USA inhibitions have been addressed and the subtle re-packaging of the original proposal ensued.  Hollande’s constituents are happy that he has brought the withdrawal forward and the USA can quietly accept that its issues have been met as well.

  If Monsieur Hollande had only thought to pick up the phone to my French colleague, Hans Petersen, he could have saved himself some time, some trouble and maybe even a mid-air lightning strike!

  Robin Copland

  Partner

  Scotwork Negotiating Skills

   

   

• alans 2:09 pm on May 11, 2012 Permalink | Reply  

  Ode to Joy 

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  Can’t imagine there is much singing and dancing in the hallowed halls of the EU head office in Brussels at the moment. (Beethoven’s Ode to Joy is the theme tune, if that is the right phrase, for the European Union).

  The recent elections in France and Greece have thrown the Euro again into a crisis that may cause joy in many UK households as they plan their escape from rainy Britain, but seems to have riled the German nation, and particularly their sour faced leader Angela Merkel.

  The stunning victory of the French Socialists and wipe-out of mainstream parties in Greece has sent shock waves crashing throughout the continent of Europe. The economic doctrine of austerity, to cut the burden of state spending to free up the economy, has ruled supreme with the support of all of the past leaders. But many old and new political leaders were on Sunday night conceding the previous deal may have been shattered beyond repair.

  I am not in this BLOG going to argue the case for or against austerity as a way out of the mess Europe is in. For one I have always spent a bit more than I receive. Like most baby boomers. I thought I was doing my bit to keep the economy moving.

  Nor am I going to get to hung up on the integrity of either party trying to change a deal, they clearly agreed to. I am not a fan of people who say one thing and do another. Trust is the most valuable of all things in my view.

  However I am interested to watch how this plays out. Often we agree to things (and there is no doubt that both France and Greece did agree to the plan) and then change our mind, or find that the other side change their mind, or that circumstances change, what do we do next?

  Conditionality is good news. Ensuring that any proposal you make or adjust is conditional on getting something in return is a key definer in negotiation. Many times however even though the link is clear, the EU agreement was agreed with a stipulation that no changes in government would impact on the deal, they, or you, may have no choice but to break it.

  The powerful negotiator recognises the chance to make new proposals that repackage what has been previously accepted or trade new variables (Scotworker’s will recognise the concept of wish lists and concession lists) to ensure the eventual outcome can work for all sides.

  Fortunately for most of us our negotiations have less complexity than the ones the EU are contemplating, and have fewer players at the table. The principle remains however the same. The majority of conflicts arise because stuff happens. If your agreement is based on set conditions make sure they are met, or that you trade for new conditions if something prevents that from happening.

  Otherwise, and more like Meatloaf that Beethoven, you could be praying for the end of time.

  “Paradise by Dashboard Light”, could be a more fitting anthem if that is the case.

  Alan Smith, Scotwork Negotiating Skills

   

• alans 11:09 am on May 4, 2012 Permalink | Reply  

  RFPing in the wind 

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  Last week two RFPs arrived from international companies looking for our proposals and prices for training courses. Both made me mad as hell. If I had my way there would have been an Act of Parliament banning RFPs for anything more complicated than the purchase of paperclips. Corporations looking for the best creative ideas, because they have a negotiating problem or a need which requires the development of training or coaching, do themselves no favours by making potential suppliers go through the mechanical hoops demanded by an RFP. It is undoubtedly not best practice.

  Rather than moan, I thought it might be more useful to offer those readers in procurement who are users of RFPs some advice based on the mistakes I have seen committed over the years. Here are my Top Eight Improvements for RFPs.

  1.    Tell us more about the problem or the need, and less about how you want us to solve it. We want to know what your objectives are, and what are the outputs you expect if our solution succeeds. In detail. We don’t want to know that (for example) you want a blended solution involving e-learning and face to face training in groups of 14, or for not more than 16 hours delivered by 1 trainer. We are the subject-matter experts; that’s why you ask us for our ideas. Please don’t limit our creativity.

  2.     Meet us face to face much earlier in the process. We have lots of ideas which you will find interesting, and a meeting will give us the opportunity to identify your corporate style and personality, so that we can direct our attention to those ideas most useful for you.

  3.     Set realistic deadlines. You send us the brief on Day 1, you expect our proposal by Day 10. Not long enough.  If you want us to do some serious thinking we need at least 3 weeks.

  4.     If you ask us how we will approach the research process to ensure that our solution meets your need, don’t ask us how much the solution will cost. Because we won’t know how much it will cost until we have done the research, analysed the information, and developed the solution. If you insist on asking, expect a rubbish answer.

  5.   Don’t use spreadsheet answer papers. They may make it easier for you to compare responses, but that is just laziness on your part. They kill our ability to show you our style and personality, surely very important when you are buying a product so reliant on the quality of its people. One RFP recently asked us to describe the qualities we would bring to the project ‘in 300 characters (including spaces) or less’. Almost every RFP spreadsheet we see is riddled with formatting mistakes, drop-down boxes with no choices allowed, and so on. You will get a better view of us if you let us choose the way we present.

  6.     Don’t turn the RFP into an obstacle course. If you ask us to agree complex and highly contentious Ts and Cs as a precondition before submitting our proposal, don’t be surprised if we decide not to submit. An RFP team recently refused to answer our questions because we submitted them on the wrong page in an electronic system, although we told them as soon as we recognised the mistake.

  7.     Be reasonable in your enquiry about our corporate background. Of course you need to know our track record and if we are financially sound. But I don’t think you need to see our accounts for the last 5 years, broken down by region. Nor do you need a hierarchy plan of the management of the company, or who we think our top 3 competitors are.

  8.     Stick to your own time frame. If we miss the deadline for submission, we are disqualified. The next deadline is yours. You are invariably late. Get a grip.

  We assume you ask us to respond to your RFP because you value our input and you think we might be able to help your organisation do better. We are delighted to have the opportunity to respond and demonstrate our wares. Let’s at least make it an efficient process, not the nightmare it usually is now.

  Stephen White, Scotwork

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• alans 1:30 pm on April 27, 2012 Permalink  

  Home or away? 

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  Manchester City play Manchester United next Monday (30^th April) in a match that should identify the team that will win the Championship. Both teams come to the end of a grueling and competitive season and both teams have 3 games left to play. Whichever team wins on Monday will be in pole position to bring the league home to Manchester. Manchester being the winner in both cases.

  United are predicted to squeeze it by many commentators. They are just in front going in to the match. They know how to win tough games. Stress will play a factor and United have faced down their demons year after year, whilst City are in relatively unchartered territory.

  But the match will take place at City and the home team does usually get an advantage. In sport your team often plays better when on home turf. In practically every sport, other things being equal, the home team tends to have the edge over visitors.

  If that is true of sport, what about business?

  In a study recently published in the journal Organizational Behaviour and Human Decision Process, researchers set out to discover if location had a bearing on the outcome of negotiations. To do this the researchers Graham Brown and Markus Baer recruited businesspeople to take part in a classic buyer/seller negotiation.

  Teams were selected to be buyers or sellers and the conflict was set up. Buyers and sellers both wanted to maximize their profitability.

  One of the teams was ascribed ‘home’ status. They could personalize the meeting room, control the layout, set up the whiteboard etc, etc. The visitor had to wait to be invited into their opponents office.

  Consistent to the sports analogy the home team consistently outperformed regardless of whether they were buyers or sellers.

  But why?  The researchers were careful to be utterly random and to select equally skilled negotiators. No screaming fans could influence the referee.

  The research suggests that the setting of the negotiation will influence the negotiations outcome. Relative to a neutral location negotiating in a familiar place will boost confidence and in an opponents territory reduce it.

  So next time you are invited to negotiate in an opponent’s location, it could make sense to suggest a neutral location. Even better, ask them to come to you. If they do it might just be that there is a better chance of the home team going wild.

  Come on Manchester

  Alan Smith, Scotwork

   

• alans 11:03 am on April 20, 2012 Permalink  

  Smells a bit fishy to me! 

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  The actress Goldie Hawn declared this week that her long-term relationship (they have so far not married) to Kurt Russell is based on the fact that they love the smell of each other. She claims it is the basis of their desire to be together.

  I know, I know, but before you dismiss it as another freakie deakie Hollywood attempt to create a bit of noise about nothing, think about it.

  A famous so called T-shirt study conducted in the 90’s asked a group of volunteers to continuously wear a bland white T-shirt for 3 days to capture as much of their natural odor as possible. Another group were then given the shirts to smell and asked to rank (deliberate choice of word) the attractiveness of the owner of the garment. Note for clarity the tests were totally blind.

  Conclusive evidence highlighted that the attractiveness of the scent was utterly dependent on the two individuals’ MHC (major histocompatibility locus) genes. The evidence suggests that people preferred the smell of others with diametrically opposed genes. Evolution has somehow provided humans with a transmitter and receiver for genetic information that has influence over mate choice.

  And all this even before the first date!

  And your point is?

  Glad you asked. I guess that for me as a negotiating skills developer I am fascinated by what it is that makes some people more effective as a negotiator. At the core the ‘good’ negotiator has an appropriate understanding of what is going on in the apparently chaotic negotiation process and has a broad skill portfolio to navigate that process.

  Clearly this is one major part of the picture. What the above mentioned ‘smell’ experiment and lots of other consciousness and behavioral theories show is that we are often influenced by factors beyond the obvious. Recognise that you are, and that is a start to being in greater control of your behaviour.

  The Thomas Kilman measure of conflict mode is one of many models that helps individuals recognise how they tend to react when put under pressure in stressful situations. Some tend to get competitive, others may capitulate, and some will run away. Reading yourself and your co-negotiators can help you to direct your skills in a way that most effectively reaches your organisations objectives.

  I am not suggesting that the other side can smell your fear or state of mind, but I am certain that if you are ill prepared or unsure there may be ‘tells’ that the other side pick up and may use against you.

  Negotiations at their source are conducted with what psychologists call ‘messy variables’, you and me.

  The good thing is that messy doesn’t have to be smelly.

  Alan Smith, Scotwork

   

• alans 12:10 pm on April 13, 2012 Permalink  

  Racing to disaster. 

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  Bernie Ecclestone’s views promoting the Bahrain Formula One Grand Prix are quietly spoken, articulate, and morally reprehensible. There will always be a suspicion that his attitude is driven by money. Although the £25 million fee for the right to stage the race has already been paid by Bahrain to F1 and would be forfeit anyway if the race could not take place, the possibility of interminable and expensive legal action following a cancellation, together with the loss of all the ancillary revenue, must somehow be a factor.

  But the central plank of his current pronouncement focuses on other issues. On the one hand that F1 is a sport and should have nothing to do with politics, but at the same time that different countries have different standards (in terms of China’s and Bahrain’s human rights standards, for example,) and visitors must modify their own standards as a result.

  This is a view he should be ashamed of. Imagine that the venue was Damascus, rather than Manama. Imagine even that there was a secure compound inside which the race track lay, and that safety was not an issue. Would the Ecclestone philosophy still hold?

  In 1936 the Austrian National Women’s Swimming Team mainly comprised members of the Vienna Maccabi Swimming Club, a Jewish sports club (formed because the Jewish members were blacklisted from belonging to gentile swimming clubs). Several refused to swim for their country at the Olympic Games in Berlin because they objected to the way Jews were being treated in Germany. They were stripped of their status and their national medals by the Austrian authorities, who did not apologise for this appalling behaviour until 1995.

  Of course there are matters of relativity, and there has to be a pragmatic acceptance that we cannot protest every infraction everywhere, but the sustainable moral line is that we are true to our own beliefs, and that we do not allow our beliefs to be manipulated by the behaviour of others.

  So we should be with our negotiating partners. There is a school of negotiating thought which suggests that negotiators whose stance is based on concepts like fairness and Win/Win end up with poor deals in the face of an amoral manipulative negotiating opponent. Their behaviour is ‘soft’ and needs toughening up. The solution, according to this school of thought, is that to behave responsively (aggressively) in ways which are unnatural, and which would be judged reprehensible in others; fight fire with fire. The theory is that this teaches the counterparty that their manipulation isn’t working, and moves them to take a more cooperative stance.

  The real world suggests a different outcome. Has the Syrian government become more amenable in the face of ‘fire with fire’ tactics from the opposition? Have Tesco’s aggressive procurement practices been modified by the increasingly aggressive responsive behaviour by their suppliers? On the contrary; their response is either more of the same, or to look for even more devious, cleverer, opportunities to manipulate. This is ultimately disastrous and counter productive; regime change in Syria is only a matter of time, and Tesco’s stalled performance in recent months, compared for example with Waitrose, is in part a reflection of the store wars that have been raging for several years between some retailers and their suppliers.

  The best negotiators universally display two traits. Firstly, they learn and practice the skills which will give them self control and power in negotiating situations. Secondly, they never behave in a way contrary to their moral values. Being true to one’s beliefs is not a matter of naivety; it gives strength to persuasion, encourages creativity in trading, and conviction when implementing a walk-away stance.

   

  Stephen White

   

• alans 11:17 am on April 6, 2012 Permalink  

  DAMNED IF YOU DO, DAMNED IF YOU DON’T. 

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  The recently released movie Margin Call tells the story of a seminal moment in the general financial collapse of 2008. A fictional investment bank, probably a thinly disguised Lehman Brothers, discovers that its huge holdings of subprime mortgage bonds are worthless. If they are liquidated, even at virtually any price, the damage caused to the bank’s reputation by doing so will be irreparable. If the bank do nothing they will be bankrupt in days. The Board of the bank convene, in the dead of night, to decide a course of action for the following trading day.

  The dilemma is simple. If they offload the junk bonds, every buyer they sell to, in many cases contacts with whom they have done business and developed long term relationships over the years, will unknowingly be buying worthless poo, and the effect will be a catastrophic end of these relationships and a fatal blow to the reputation of the bank. If they hold off, they will drown in their own worthless assets anyway.

  The decision is made and the young team of brokers in the bank are instructed to sell, sell, sell the bank’s holding of junk bonds during that trading day, which they successfully achieve. In the film, the longer term outcome is unreported. In real life, Lehman Brothers is no more.

  Similar instances of ‘damned if you do, damned if you don’t’ are common in business. For example, Bernie Madoff must have been as aware as the rest of us that no Ponzi scheme has ever proved to be viable in the long term. When he continued to accept investment money from his friends and family, amongst others, even after the writing was clearly on the wall that the pyramid was collapsing, the ethical option still escaped him.

  Recently some grocery suppliers have been placed in a similar position by their retailer customers who use their buying power misanthropically. The current vogue for ‘preconditioning’ is a case in point. Letters go out from the retailer to their suppliers ‘requesting’ a retrospective discount, not previously negotiated, to ‘encourage greater volume’ or ‘offset marketing costs’. No threat is made, but the implication is that failure by the supplier to comply will have a damaging effect on the relationship. From the supplier’s perspective, acceding to the demand for more discount might turn a barely profitable contract into a loss making one, but refusing might mean the loss of  the  contract altogether. As a result the ensuing negotiation, with the supplier on the back foot because of the pressure created by the preconditioning letter, has been manipulated in favour of the retailer.

  Far be it from me to call ‘foul’ in terms of the retailers’ behaviour – all is fair in love, war and business. My advice is for the supplier. Don’t allow yourself to be a victim. If you believe your business will not survive the loss of the contract, and as a result you give in to the demand, you will just be taken for more and more. Readjust your view. Think about how you might survive and prosper, even without them and their contract. Negotiate resolutely with your bottom line position clearly set and in mind. Be prepared to walk away.

   

  Stephen White, Scotwork.

   

• Robin Copland 11:34 pm on March 29, 2012 Permalink  

  Digging underground towards London 2012 

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  London 2012 has negotiators flexing their muscles all over the capital as we approach the final run-up to the Games.

  In The Times of Friday 23 March, I read that the head of the RMT union, Bob Crow, has broken off talks with the London Underground management team at the UK conciliation service ACAS. The RMT is the union that represents tube workers’ interests. The union is threatening strike action as a result of the latest proposals from the management team.

  His complaint is that the current offer, which gives tube drivers a one-off payment of £1000 and other tube workers £850 if they agree to work during the three week period of the Games comes with other strings attached. Crow’s complaint is that these new conditions mean that staff will have to be prepared “to work any time, any place, anywhere at the drop of a hat”.

  Ominously, he continues, “We don’t know if there has been political interference from behind the scenes but attempting to impose a whole raft of new conditions on a Tube Olympics agreement at this stage, smacks of an attempt from somewhere to sabotage these talks.” Another union official added later that strike action was definitely an option, though he was not specific as to when or where – presumably not during the Olympics, which would be an unpopular move amongst their members.

  Meanwhile Howard Collins, London Underground’s chief operating officer said, “the RMT’s leadership demanded payments to all grades of staff regardless of whether they will be asked to work flexibly during the Games and rejected temporary changes to working arrangements which would enable us to achieve a flexible workforce.”

  Some observations from a negotiating standpoint.

  • Crow has a limited timeframe to use the extra power he has and is trying not only to extract short-term concessions, but at the same time avoid giving long-term concessions to management.
  • Management is trying to exploit the short-term payments concession to get their ultimate goal – a more flexible workforce. It has attempted to give the union what it wants, but on its terms. This is good negotiating behaviour, as the union well knows.
  • In order to distract attention from management’s use of negotiating leverage, Crow has resorted to complaining about “political interference”.
  • Finally, I worry that both the leaders of their respective organisations have taken such a public stance in these negotiations. This has happened before, most recently in the very public fall-out between BA and the UNITE union – what happened there? It took a change in senior personnel before a deal was finally put through that satisfied both parties.

  Is there time, I wonder to change personnel before the Games? I think not. These chaps need to tread with care.

  Robin Copland
  Partner
  Scotwork UK LLP

   

• alans 12:14 pm on March 23, 2012 Permalink  

  It’s a negotiation Jim, but not as we know it. 

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  Many of us can recall with fondness the original television series of ‘Star Trek’.

  Captain James T Kirk of the ‘Enterprise’ navigated his ship and all aboard her through many episodes threatened by belligerent aliens and inhospitable far-off worlds. To boldly go. Not a bad ambition for those of us sent out to get better deals.

  Kirk always had by his side his two close confidants and advisers: Commander Spock, a Vulcan committed to a philosophy of logic, and Dr. Leonard McCoy, a human driven by compassion and scientific curiosity. Both Spock and McCoy are frequently at odds with each other, recommending different courses of action and bringing very different types of arguments to bear in defence of those points of view. Kirk sometimes goes with one, or the other, and sometimes takes their advice as a springboard to developing an entirely different course of action.

  However, the very fact that Kirk has advisers who have a different worldview not only from each other, but also from himself, is a clear demonstration of Kirk’s self confidence. So it is with negotiators – less effective negotiators are prone to surrounding themselves with ‘yes men’ who are afraid to argue. That fosters an organisational culture that stifles creativity and innovation, especially when we are preparing for the negotiation, and leaves members of the organisation afraid to speak up. That can leave the organisation with insufficient reserves when a change in course of action may be needed and certainly means that it will never consider in full all the options which may be available both to itself and the other party due to the narrowness of its world view.

  Organisations that allow for differences of opinion are better at developing innovation, better at solving problems, and better at avoiding groupthink – they are inherently better at fostering positive negotiating behaviour.

  We all need a McCoy and a Spock in our lives and organisations. I wouldn’t mind a transporter too!

  David Bannister, Scotwork Associate.