Download the app

Scan. It's in your pocket.

QR Code — Dygest

Open the Camera app and point it at the code. Free to try.

Cover of 'Negotiating the impossible'

Negotiating the impossible

Deepak Malhotra

Overcoming deadlocks and conflicts without leverage

Listen to the podcast excerpt:
0:00 --:--

Description

Negotiation power often comes from overlooked levers, not just money or status. The key levers are controlling the negotiation's frame and process, unearthing new possibilities, and shaping the incentives. Using these together can solve seemingly impossible conflicts. But many still require great effort and luck.

See every negotiation as a chance to find mutual understanding and better deals. The right levers, strategically applied, can bring progress.

Table of contents

01

Lever #1 – the power of reframing .

Highly effective negotiators understand that the way you frame or structure your proposal can significantly impact its attractiveness, regardless of the proposal's actual substance. This principle suggests that deals, which are fundamentally the same, can be perceived differently based on their presentation. Therefore, it is always beneficial to consider how proposals can be reframed to appeal more to the other party and their constituents.

A prime example of the power of framing in negotiation can be observed in the 2005 dispute between the National Football League (NFL) owners and players over the division of the league's projected $10 billion in revenue. The owners proposed a $2 billion "off-the-top" deduction for their investments, offering the players 58% of the remaining revenue. The players, however, rejected this proposal, demanding a straight 50-50 split of the total revenues. The deadlock persisted for months, with both sides resorting to hardball tactics and even appealing to Congress for intervention.

The breakthrough came when the negotiators introduced a novel agreement that categorized the NFL's revenue into three distinct segments, each with its own revenue-sharing formula: 55% of League Media revenue to the players, 45% of NFL Ventures/Post-season revenue to the players, and 40% of Local revenue to the players. This arrangement ensured that the players received between 47% and 48% of the total league revenue, with provisions to adjust the deal if the percentages deviated from this range. By adopting a three-bucket framework, both parties could claim victory: the owners highlighted their larger share of stadium revenues, reflecting their significant investments, while the players celebrated their majority share of the lucrative TV rights revenue.

Download Dygest

for the full experience!

02

Lever #2 – the power of strate­giz­ing .

Negotiating agreements is a complex and nuanced endeavor that extends far beyond the mere content of the deal. It's a common misconception that once the handshake is done, the deal is sealed. However, the reality is often more complicated, as the other party may return with lawyers to renegotiate or claim the need for higher-up approval.

The process of reaching an agreement is just as critical as the substance of the agreement itself. It's essential to pay attention to the journey of negotiation, as it can lead to successful deals that initially seemed out of reach.

The frustration of having extensive negotiations unravel at the last minute is all too familiar. You might reach what seems like a solid agreement, only to find that the other party wants to renegotiate at the next meeting, or they suddenly require their boss's approval before finalizing anything. This highlights a crucial truth: the way in which you reach an agreement requires as much negotiation as the terms of the deal itself.

The process, the strategy for getting from the start to a finished pact, is an area that demands careful planning and strategy.

Deepak Malhotra, a professor at Harvard Business School, emphasizes that even the most well-thought-out negotiation strategies can fail if the process isn't given due attention.

There are several aspects of the negotiation process that you might shape or negotiate. These include the timeline, which defines how long the negotiation will take; the participants, detailing who's involved and their roles; the agenda, outlining what will be discussed and how new items can be added; proposal drafting, determining who will write the first draft and handle revisions; meetings, deciding how many there will be and whether they will be face-to-face or remote; confidentiality, choosing between public or private discussions; and deadlines, setting specific time frames for reaching an agreement.

Download Dygest

for the full experience!

03

Lever #3 – the power of perspective.

In the complex and often high-stakes world of negotiation, it's easy to forget that there are real, living, breathing people on the other side of the table. This oversight can be a critical mistake, as understanding and empathizing with the other party can significantly enhance the chances of achieving one's goals.

Empathy, in its purest form, involves putting oneself in another's shoes, seeing the world from their perspective, and understanding their motivations and concerns. This approach not only expands the options available for resolving conflicts and reaching agreements but also makes finding mutually beneficial solutions more probable.

The importance of empathy in negotiation is vividly illustrated by the 1962 Cuban Missile Crisis, a historical event that brought the world to the brink of nuclear war. On October 18, President John F. Kennedy and his advisors were faced with a dire situation: Soviet missile sites had been discovered in Cuba, capable of launching nuclear strikes on the U.S.

The initial reaction from nearly all of Kennedy's advisors was to favor aggressive actions, including destroying the missile sites and invading Cuba. However, Robert Kennedy, the president's brother, was among the few who argued against such unilateral aggression on moral grounds. Over the ensuing days, the consensus shifted towards a more gradual approach, which later proved to be the wiser course of action.

It was revealed that the Soviets had already stationed nuclear weapons in Cuba, ready to retaliate against any U.S. strike, which would have likely resulted in mutual nuclear annihilation. The United States opted for a naval blockade and diplomatic pressure to compel the Soviets to dismantle the missile sites.

A critical aspect of Kennedy's strategy was his consideration of Soviet Premier Nikita Khrushchev's perspective. From the Soviet viewpoint, the presence of U.S. missiles in Turkey and Italy was a significant threat, and there were also concerns about U.S. plans to overthrow Fidel Castro, who had aligned Cuba with the Soviet Union.

Download Dygest

for the full experience!