Social Science

Negoliatiol Strategies for Mutual Gain

The Basic Seminar of the Program on Negotiation at Harvard Law School

Lavinia Hallow.

SAGE Publications international Educational and Professional Publisher Newbury Park London New Delhi

Copyright 1993 by Sage Publications, Inc.

“Style and Effectiveness in Negotiation” © 1993 by Gerald R. Williams

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Library of Congress Cataloging-in-Publication Data

Main entry under title:

Negotiation: strategies for mutual gain: the basic seminar of the Harvard Program on Negotiation / [edited by] Lavinia Hall.

p. cm. Includes bibliographical references and index. ISBN 0-8039-4849-2 (hard).—ISBN 0-8039-4850•6 (pbk.) 1. Negotiation. 2. Conflict management. 3. Interpersonal

conflict. 4. Harvard Law School. Program on Negotiation. I. Hall, Lavinia. BF637.N4N44 1993 93-3044 302.3—dc20

00 01 10 9 8 7 6

Sage Production Editor: Astrid Virding

Contents

Introduction

I. Frameworks for Effective Negotiation

1. Negotiation Power: Ingredients in an Ability to Influence the Other Side Roger Fisher, William Ury, and Bruce Patton 3

2. The Neutral Analyst: Helping Parties to Reach Better Solutions Howard Raiffa 14

3. Facilitated Collaborative Problem Solving and Process Management David Straus 28

II. Applying Mutual Gains to Organizations 41

4. The Courthouse and Alternative Dispute Resolution Frank E. A. Sander 43

5. Resolving Public Disputes Lawrence Susskind 61

6. Why the Labor Management Scene Is Contentious Robert B. McKersie 77

7. Searching for Mutual Gains in Labor Relations Charles C. Heckscher 86

8. Options and Choice for Conflict Resolution in the Workplace Mary P. Rowe 105

III. Perspectives on Individual Negotiators 121

9. Conflict From a Psychological Perspective Jeffrey Z. Rubin 123

10. Her Place at the Table: Gender and Negotiation Deborah M. Kolb 138

11. Style and Effectiveness in Negotiation Gerald R. Williams 151

IV. Appendices

I. Sample Curriculum on Negotiation and Dispute Resolution 177

II. Case Clearinghouse Materials 185

Bibliography 186

Index 199

About the Authors 206

Introduction

The work of righteousness shall be peace and the effect of righteousness, quietness, and assurance forever.

Isaiah 32:17

We have thought of peace as passive and war as the active way of living. The opposite is true. War is not the most strenuous life. It is a kind of rest cure compared to the task of reconciling our differences. From war to peace is. . . from the futile to the effective, from the strategic to the active, from the destructive to the creative way of life. . . . The world will be regenerated by the people who rise above these passive ways and heroically seek, by whatever hardship, by whatever toil, the methods by which people can agree.

Mary Parker Follett

• This book is for people in all fields who need to deal with conflict and resolve issues on a continual basis. Conflicts, improp- erly managed, within or between organizations or between indi- viduals, are frustrating and waste valuable resources of time, energy,

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viii NEGOTIATION

and finances. The Harvard Program on Negotiation is dedicated to improving the processes of reaching agreements. It assumes that conflicts, managed well, can provide the impetus for growth, constructive change, and mutual benefit. Ideas for settling dis- putes, improving communication, and changing the nature of certain debates are covered in this book.

Negotiation: Strategies for Mutual Gain is about breaking the paradigm of winning and losing and transforming negotiation into a search for improved solutions to problems. While many success- ful businessmen, judges, lawyers, therapists, and other people act on this instinctively, the common wisdom still holds that nice guys finish last and that asking for more than you want or need ensures that you will get your minimum.

An assumption of the Harvard Program on Negotiation is that there is nothing so practical as good theory, and nothing more stimulating to good theory than engaging in practice. While fully developed academic theories are as yet few in this relatively new area of study, the invention of new techniques and their creative application to everyday situations and negotiations is quite produc- tive, as I think this volume attests.

This is a collection of key ideas and process strategies about negotiating and resolving disputes more effectively. All of the authors have been lecturers in the seminar of the Program of Negotiation at Harvard Law School. Each of their lectures is organ- ized around a key idea in their work and expands on their particular approach to dispute resolution and problem solving. In some cases the lectures have simply been edited; in others, it was necessary to construct a separate chapter because of the format of the original lecture. In the case of Roger Fisher’s presentation, we decided that the chapter on power from his 1991 edition of Getting to Yes, co-authored with Bill LTry and Bruce Patton, was the best version.

The book itself is an outgrowth of a popular semester-length seminar that is given each year at Radcliffe by the Harvard Program on Negotiation. It is open to graduate students and professionals. I designed it and was its main instructor during its initial 3 years. The idea for the seminar as the core of the program was the brainchild of Lawrence Susskind, then executive director of the Program on Negotiation, who obtained initial funding from the

Introduction ix

Hewlett and Exxon foundations to help spread the word about the academic work and fieldwork being done in negotiation. He asked me to create a seminar that would be a window on the field of negotiation and dispute resolution ideas developed by faculty and affiliated practitioners. I remain grateful for the chance it provided to work with enthusiastic theorists, practitioners, and students of negotiation and dispute resolution.

Designing and teaching the seminar provided fertile ground for honing my own mediation skills, because the faculty often saw different issues as most worthy of being emphasized and presented a wide range of exciting ideas, case studies, and simulations. To some degree, the pedagogy of the course follows literary critic Kenneth Burke’s idea of developing “perspectives by incongruity.” Rather than reconciling the contradictions and gaps in the lecturers’ approaches vis-a-vis each other, the students and I needed to spend substantial time debating and integrating the ideas presented into their own frameworks of negotiation and dispute resolution prac- tice. It allowed, indeed required, them to synthesize things for themselves in order to develop their own work. Pedagogically speaking, we were learning to learn.

Negotiation (much as the structure of the course does) attempts to present a set of ideas, organized around frameworks for improv- ing negotiation; the challenges to applying these ideas in organiza- tional settings; and some analyses of individual behavior in negoti- ation. It is hoped that the format offers readers the chance to pick and choose among its ideas for integration into their own practice at work, at home and in a variety of negotiations where its ideas prove useful.

In Negotiation, the most compelling and unifying theme is the critical importance of good process. Virtually all of the authors, from Roger Fisher in his analysis of the elements of negotiation power, to Gerry Williams’s description of lawyers’ negotiating, emphasize the need for negotiators to develop awareness and constructive processes. All of the authors are positive in outlook and firmly believe that reframing how we negotiate and problem solve is highly possible; they are also realistic and demonstrate how hard it is at times to change ingrained habits. These brief, bird’s-eye looks at some of the most interesting ideas in negotiation and dispute resolution work today should hearten us all about the

x NEGOTIATION

possibilities of improving outcomes by improving the processes we use to reach them.

For those interested, the full curriculum and pedagogical design of the course itself is presented in Appendix I. It was first given in the fall of 1985 and has been given annually since then. Approxi- mately half of the participants are graduate students and the balance are professionals (lawyers, psychotherapists, planners, managers) seeking ways to incorporate negotiation and dispute resolution techniques and practice into their work. The approach is intention- ally cross-disciplinary; the premise is that negotiation is not a field in itself but rather a set of process and analytic skills that can be applied to good effect in courts, diplomacy, city planning, and inside corporations and government agencies.

I would like to thank all the contributors for their time and work in helping the Program on Negotiation and the National Institute for Dispute Resolution, which will share all proceeds from this book. Thanks also to all those lecturers who have participated over the six years of the program. The National Institute for Dispute Resolution provided funding for the book’s production, and I must thank Michael Lewis and Madeleine Crohn also for their support and patience when it took longer than anticipated. Esther Siskind helped in the early stages of copy editing, and Maria Hortaridis and Meemee Swofford were an enormous help in final typing and production.

Chris Christensen of Harvard Business School taught a seminar about teaching that helped me think about how to present these ideas. Finally, I am grateful to past and present students of the seminar who continue to demonstrate what learning to learn by unfreezing old habits and integrating these techniques into prac- tice really means.

All proceeds from this book will be divided between the Pro- gram on Negotiation at Harvard Law School and the National Institute for Dispute Resolution to further their work.

Lavinia Hall Lincoln, MA

PART 1

Frameworks for Effective Negotiation

Introduction

■ In Part I, the three chapters outline some key aspects of the techniques for which their authors are best known. The authors are united in the primary importance that they attribute to process. Process, here, is used to distinguish the way negotiations are conducted from their substance. Fisher, Ury, and Patton, in their chapter on negotiating power, outline the elements of principled negotiation as the source of real power. Their concept of a BATNA (walk-away alternative) is used by other authors in the book and is a universally useful calculation to make in preparing for any nego- tiation. The principles that they set forth serve as a checklist for the negotiator to take into negotiations.

Raiffa’s approach is highly analytic; it offers a number of creative options for generating potential zones of agreement and criteria for deciding how to divide up those areas. His neutral advice offers ways to avoid inefficiency and waste in negotiations. Raiffa’s examples,

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2 NEGOTIATION

drawn from his experience as a neutral adviser, show that good negotiation theory translates directly into practice.

Straus’s chapter on collaborative problem solving stresses the value of inclusivity in its concern with representative voice, and in its admonition to “go slow to go fast”; in other words, to spend time initially to develop a process for addressing the problems that need to be resolved, rather than jumping to solutions too early. Using a facilitator to manage the process, particularly when there are many participants and many interests at stake, can be the first step toward success.

All of the authors offer coherent techniques and incisive ideas for readers to integrate into their own negotiation frameworks. Being aware that these elements of process design have a major effect on the substance of the outcome, and not merely the tone of the negotiations, can be a revelation for many new students of negotiation, and even for experienced negotiators. All negotiators, I believe, can find techniques to incorporate into their own nego- tiating frameworks from among ideas presented in this first part.

Negotiation Power: Ingredients in an Ability to Influence the Other Side

ROGER FISHER WILLIAM URY BRUCE PATTON

■ How you negotiate (and how you prepare to negotiate) can make an enormous difference, whatever the relative strengths of each party.

Some Things You Can’t Get

Of course, no matter how skilled you are, there are limits to what you can get through negotiation. The best negotiator in the world will not be able to buy the White House. You should not expect

EDITOR’S NOTE: This chapter is a portion of the new material included in the second edition of Getting Co Yes (Fisher, Ury, & Patton, 1991). Copyright C 1981, 1991 by Roger Fisher and William Ury. Reprinted by permission of Houghton Mifflin Co. All rights reserved. It is one of 10 “answers to questions people ask? The second edition of Getting to Yes is recommended both to those who do not know the first edition and to those who do.

3

4 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

success in negotiation unless you are able to make the other side an offer they find more attractive than their BATNA—their Best Alternative To a Negotiated Agreement. If that seems impossible, then negotiation doesn’t make sense. Concentrate instead on im- proving your BATNA and perhaps changing theirs.

How You Negotiate Makes a Big Difference

In a situation where there is a chance for agreement, the way you negotiate can make the difference between coming to terms and not, or between an outcome that you find favorable and one that is merely acceptable. How you negotiate may determine whether the pie is expanded or merely divided, and whether you have a good relationship with the other side or a strained one. When the other side seems to hold all the cards, how you negotiate is absolutely critical. Suppose, for example, that you are negotiating for an exception to a rule or a job offer. Realistically, you may have little recourse if the other side denies your request and little to offer if they grant it. In this situation, your negotiation skill is everything. However small the opportunity for success, the way in which you negotiate will determine whether you are able to take advantage of it.

“Resources” Are Not the Same as “Negotiation Power”

Negotiation power is the ability to persuade someone to do some- thing. The United States is rich and has lots of nuclear bombs, but neither has been of much help in deterring terrorist actions or freeing hostages when they have been held in places like Beirut. Whether your resources give you negotiating power will depend on the context—on who you are trying to persuade and what you want them to do.

Don’t Ask “Who’s More Powerful?”

Trying to estimate whether you or your counterparts are more “powerful” is risky. If you conclude that you are more powerful,

Negotiation Power 5

you may relax and not prepare as well as you should. On the other hand, if you conclude that you are weaker than the other side, there is a risk that you will be discouraged and again not devote sufficient attention to how you might persuade the other side. Whatever you conclude will not help you figure out how best to proceed.

In fact, a great deal can be done to enhance your negotiation power even when the resource balance is one-sided. Of course there will be negotiations where, at least in the short term, the best cards are held by the other side. But in this increasingly interdepen- dent world, there are almost always resources and potential allies that a skilled and persistent negotiator can exploit, at least to move the fulcrum, if not ultimately to tip the balance of power the other way. You won’t find out what’s possible unless you try.

Sometimes people seem to prefer feeling powerless and believ- ing that there is nothing they can do to affect a situation. That belief helps them avoid feeling responsible or guilty about inaction. It also avoids the costs of trying to change the situation—making an effort and risking failure, which might cause the person embarrass- ment. But while this feeling is understandable, it does not affect the reality of what the person might accomplish by effective negotiation. It is a self-defeating and self-fulfilling attitude.

The best rule of thumb is to be optimistic—to let your reach exceed your grasp. Without wasting a lot of resources on hopeless causes, recognize that many things are worth trying for even if you may not succeed. The more you try for, the more you are likely to get. Studies of negotiation consistently show a strong correlation between aspiration and result. Within reason, it pays to think positively.

There Are Many Sources of Negotiation Power

How do you enhance your negotiating power? This whole book is an attempt to answer that question. Negotiation power has many sources. One is having a good BATNA. Provided they believe you, it is persuasive to tell the other side that you have a better alterna- tive. But each of the four elements of the method outlined in Part II of this book—people, interests, options, and objective criteria— is also a source of negotiation power. If the other side is strong in

6 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

one area, you can try to develop strength in another. To these five we would now add a sixth, the power of commitment.

There Is Power in Developing a Good Working Relationship Between the People Negotiating. If you understand the other side and they understand you; if emotions are acknowledged and people are treated with respect even when they disagree; if there is clear, two-way communication with good listening; and if people problems are dealt with directly, not by demanding or offering concessions on substance, negotiations are likely to be smoother and more successful for both parties. In this sense, negotiation power is not a zero-sum phenomenon. More negotiation power for the other side does not necessarily mean less for you. The better your working relationship, the better able each of you is to influence the other.

Contrary to some conventional wisdom, you will often benefit from the other side’s increasing their ability to influence you. Two people with well-deserved reputations for being trustworthy are each better able to influence the other than are two people with reputations for dishonesty. That you can trust the other side in- creases their ability to influence you. But you also benefit. You can safely enter into agreements that will benefit both sides.

Good communication is an especially significant source of nego- tiating power. Crafting your message with punch, listening to the other side, and showing that you have heard can all increase your persuasiveness. John F. Kennedy was justly famous for his skill at the first of these, crafting a forceful message: “Let us never nego- tiate out of fear. But let us never fear to negotiate.”‘

A message does not have to be unequivocal to be clear and effective. In many cases, helping the other side understand your thinking—even when you are of two minds about something—can reduce their fears, clear up misperceptions, and promote joint problem solving. Consider the supplier who makes what she thinks is a competitive bid for a business supply contract. The purchaser likes the bid and the bidder, but is worried that the bidder’s firm, which is new to the market, may not be able to manage the volume needed to meet his peak requirements. If the purchaser says sim- ply, “No, thank you,” and then pays more to hire another firm, the bidder may assume that the purchaser disliked her bid. And the bidder would have no opportunity to persuade the purchaser that

Negotiation Power 7

she could handle the needed volume. It would be better for both if, instead, the purchaser shared both his interest in the bid and his concerns.

Good listening can increase your negotiation power by increas- ing the information you have about the other side’s interests or about possible options. Once you understand the other sides’ feelings and concerns, you can begin to address them, to explore areas of agreement and disagreement, and to develop useful ways to proceed in the future. Consider, for example, the elderly man whose doctors wanted to move him from his current hospital to one with specialized facilities. The doctors repeatedly explained how the specialized hospital would be better for him, but the man refused to budge. Knowing that the man was acting against his own best interests, the doctors dismissed his reasoning as irrational. One intern, however, took the man seriously and listened carefully to why he did not want to move. The patient told of how he had suffered repeated abandonments in his life and his fears that moving might result in another. The intern set about addressing this concern directly, and the man happily agreed to be moved.

Showing that you have heard the other side also increases your ability to persuade them. When the other side feels heard by you, they are more apt to listen to you. It is comparatively easy to listen when the other side is saying something that you agree with. It is harder to listen to things with which you disagree, but that is the very time it is most effective. Listen before you launch into a rebuttal. Make sure you understand their view; and make sure that they know you understand. Once the other side knows that you understand what they have said, they cannot dismiss your disagree- ment as simple lack of understanding.

There Is Power in Understanding Interests. The more clearly you understand the other side’s concerns, the better able you will be to satisfy them at minimum cost to yourself. Look for intangible or hidden interests that may be important. With concrete interests like money, ask what lies behind them. (“For what will the money be used?”) Sometimes even the most firmly stated and unacceptable position reflects an underlying interest that is compatible with your own.

Consider the businessman who was trying to buy a radio station. The majority owner was willing to sell his two-thirds of the station

8 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

for a reasonable figure, but the one-third owner (and current manager of the station) was demanding what seemed an exorbitant price for her third. The businessman had raised his offer several times to no avail, and he was beginning to consider abandoning the deal. Finally, the businessman inquired more deeply into the sec- ond owner’s interests. He learned that the second owner had less interest in money than she did in continuing to manage a radio station of which she was a part owner. The businessman offered to buy only that portion of the owner’s share he needed for tax reasons and to keep her on as manager. The second owner accepted this offer at a price that saved the businessman almost a million dollars. Understanding the seller’s underlying interests had greatly enhanced the buyer’s negotiating power.

There Is Power in Inventing an Elegant Option. Successful brainstorming increases your ability to influence others. Once you understand the interests of each side, it is often possible—as in the radio station example above—to invent a clever way of having those interests dovetail. Sometimes this can be done by devising an ingenious process option.

Consider the sealed-bid stamp auction. The auctioneer would like bidders to offer the most they might conceivably be willing to pay for the stamps in question. Each potential buyer, however, does not want to pay more than necessary. In a regular sealed-bid auction each bidder tries to offer slightly more than their best guess of what others will bid, which is often less than the bidder would be willing to pay. But in a stamp auction the rules are that the highest bidder gets the stamps at the price of the second highest bid. Buyers can safely bid exactly as much as they would be willing to pay to get the stamps, because the auctioneer guarantees that they will have to pay it! No bidder is left wishing that he or she had bid more, and the high bidder is happy to pay less than was offered. The auctioneer is happy knowing that the difference between the highest and second highest bids is usually smaller than the overall increase in the level of bids under this system versus a regular sealed-bid auction. 2

There Is Power in Using External Standards of Legitimacy. You can use standards of legitimacy both as a sword to persuade others,

Negotiation Power 9

and as a shield to help you resist pressure to give in arbitrarily. (“I would like to give you a discount, but this price is firm. It is what General Motors paid for the same item last week; here is the bill of sale.”) Just as, by finding relevant precedent and principles a lawyer enhances his or her ability to persuade a judge, so a nego- tiator can enhance his or her negotiation power by finding prece- dents, principles, and other external criteria of fairness and by thinking of ways to present them forcefully and tellingly: “I am asking for no more and no less than you are paying others for comparable work.” “We will pay what the house is worth if we can afford it. We are offering what the similar house nearby sold for last month. Unless you can give us a good reason why your house is worth more, our offer remains firm and unchanged.” Convincing the other side that you are asking for no more than is fair is one of the most powerful arguments you can make.

There Is Power in Developing a Good BATNA. As we argue in Chapter 6, a fundamental way to increase your negotiation power is by improving your walk-away alternative. An attractive BATNA is a strong argument with which to persuade the other side of the need to offer more. (“The firm across the street has offered me 20 percent above what I am now earning. I would rather stay here. But with the cost of living, unless I can get a good raise soon, I will have to consider moving on. What do you think might be possible?”)

In addition to improving your overall BATNA (what you will do if the negotiations fail to produce an agreement), you should also prepare your “micro-BATNA”—if no agreement is reached at this meeting, what is the best outcome? It helps to draft in advance a good exit line to use if a meeting is inconclusive. (“Thank you for sharing your views and for listening to mine. If I decide to go forward, I will get back to you, perhaps with a fresh proposal.”)

Sometimes it is possible, quite legitimately, to worsen the other side’s BATNA. For example, a father we know was trying to get his young son to mow the lawn. He offered a significant amount of money, but to no avail. Finally, the son inadvertently revealed his BATNA: “But Dad, I don’t need to mow the lawn to get money. You, uh, leave your wallet on the dresser every weekend. . . . ” The father quickly changed his son’s BATNA by not leaving his wallet out and making clear that he disapproved of taking money without

10 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

asking; the son started mowing the lawn. The tactic of worsening the other side’s BATNA can be used to coerce or exploit, but it can also help insure a fair outcome. Efforts to improve one’s own alternatives and to lower the other side’s estimate of theirs are critical ways to enhance our negotiating power.

There Is Power in Making a Carefully Crafted Commitment. One additional source of persuasive power deserves attention: the power of making commitments. You can use a commitment to enhance your negotiating power in three ways: You can commit to what you will do, for example, by making a firm offer. You can, with care, make a negative commitment as to what you will not do. And you can clarify precisely what commitments you would like the other side to make.

Clarify What You Will Do. One way to enhance your negotiating power is to make a firm, well-timed offer. When you make a firm offer, you provide one option that you will accept, making it clear at the same time that you are not foreclosing discussion of other options. If you want to persuade someone to accept a job, don’t just talk about it; make an offer. By making an offer you give up your chance to haggle for better terms. But you gain by simplifying the other side’s choice and making it easier for them to commit. To reach agreement, all they have to say is “yes.”

Making an offer of what you will do if they agree to the terms you are proposing is one way to overcome any fear the other side may have of starting down a slippery slope. Without a clear offer, even a painful situation may seem preferable to accepting “a pig in a poke,” especially if the other side fears that a favorable indication will encourage you to ask for more. In 1990, the U.N. Security Council sought to influence Iraq to withdraw from Kuwait by imposing sanctions. The Council’s resolutions clearly stated that Iraq must withdraw but did not state that upon withdrawal sanc- tions would end. If Saddam Hussein believed that sanctions would continue after Iraq withdrew from Kuwait, then those sanctions, though unpleasant, provided no incentive for Iraq to leave.

The more concrete the offer, the more persuasive. Thus a written offer may be more credible than an oral one. (A real-estate agent we know likes to have a client make an offer by stacking bundles

Negotiation Power 11

of hundred-dollar bills on the table.) You may also want to make your offer a “fading opportunity” by indicating when and how it will expire. For example, President Reagan’s inauguration in 1981 created a fading opportunity in the negotiations for the release of the American diplomatic hostages held in Iran. The Iranians did not want to have to start negotiating all over again with a new U.S. administration.

In some cases, you may also want to clarify what you will do if the other side does not accept your proposal. They may not realize the consequences of your BATNA for them. (“If we can’t get heat in our apartment by this evening, I will have to call the health department’s emergency line. Are you aware that they charge landlords a $250 fine when they respond and find violation of the statute?”)

Consider Committing to What You Will Not Do. Sometimes you can persuade the other side to accept an offer better than their BATNA by convincing them that you cannot or will not offer more (“Take it or leave it”). You not only make an offer; you tie your hands against changing it. . . . Locking into a position has signifi- cant costs; locking in early limits communication and runs the risk of damaging the relationship by making the other side feel ignored or coerced. There is less risk in locking in after you have come to understand the other side’s interests and have explored options for joint gains, and it will do less damage to your relationship with the other side if there are credible reasons independent of your will to explain and justify your rigidity.

At some point, it may be best to put a final offer on the table and mean it. Doing so tends to influence the other side by worsening their micro-BATNA. At this point if they say “no,” they no longer have open the possibility of reaching a better agreement with you.

Clarify What You Want Them to Do. It pays to think through the precise terms of the commitment you want the other side to make. This insures that your demand makes sense. “Susan, promise never to interrupt me again when I am on the telephone” could easily be disastrous if Susan took her promise literally in an emer- gency. You want to avoid a sloppy commitment that is overboard, fails to bind the other side, leaves out crucial information, or is not operational.

12 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

Especially when you want the other side to do something, it makes sense to tell them exactly what it is you want them to do. Otherwise they may do nothing, not wanting to do more than they have to. In the fall of 1990, for example, the ability of the United States to influence Saddam Hussein was undercut by ambiguity about what would satisfy the United States. At different times, the withdrawal of Iraqi troops from Kuwait, the destruction of Iraqi nuclear facilities, the dismantling of Iraq’s military capability, and the overthrow of Saddam Hussein all seemed to be possible U.S. goals.

Make the Most of Your Potential Power

To make the most of your negotiating power, you should use each source of power in harmony with other sources. Negotiators some- times look for their strongest source of power and try to use it alone. For example, if a negotiator has a strong BATNA, he or she may confront the other side with it, threatening to walk away unless the last offer is accepted. This is likely to detract from the persuasive power of the negotiator’s arguments about why the offer is fair. If you are going to communicate your BATNA, it would be better to do so in ways that respect the relationship, leave open the possibility of two-way communication, underscore the legiti- macy of your last offer, suggest how that offer meets the other side’s interests, and so forth. The total impact of such negotiation power as you have will be greater if each element is used in ways that reinforce the others.

You will also be more effective as a negotiator if you believe in what you are saying and doing. Whatever use you are able to make of the ideas in this book, don’t wear them as though you were wearing someone else’s clothes. Cut and fit what we say until you find an approach that both makes sense and is comfortable for you. This may require experimentation and a period of adjustment that is not so comfortable, but in the end, you are likely to maximize your negotiation power if you believe what you say and say what you believe.

Negotiation Power 13

Notes

1. Inaugural Address, January 20, 1961. 2. A process similar to this can be used in all kinds of allocation decisions, even

when the issue is as volatile as where to site a hazardous waste facility. See Howard Raiffa, A Hypothetical Speech to a Hypothetical Audience About a Very Real Problem (1985), Program on Negotiation Working Paper No. 85-8, available from the Program on Negotiation at Harvard Law School, Pound Hall 513, Harvard Law School.

The Neutral Analyst: Helping Parties to Reach Better Solutions

HOWARD R A IFFA

■ In this chapter, I want to consider how an outside, third-party intervener can use analysis to help parties resolve a conflict in a better fashion. I come to this problem with the bias or observation that a lot of discord is settled in inefficient ways. I contend that very often people come to much less than optimal outcomes and joint gains are left on the table that could have been exploited.

There are several types of third-party interventions that can help parties to reach agreements and more efficient agreements. A facilitator helps with the logistics in the proceedings of meetings. A mediator guides or helps people come to a voluntary agreement. An arbitrator tries to understand the issues on all sides and then imposes an agreement, as a judge.

When I describe what I do as a neutral analyst most people do not know if I am a mediator or an arbitrator. To me, there are no hard-and-fast rules for everything that each does, and I am not going to dwell on the distinctions between mediation, arbitration, and other forms of third-party intervention. Rather, I want to

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The Neutral Analyst 15

describe some methods that an intervener might use based some- what on some of my experiences as an intervener in real conflicts, on laboratory experiments, and on my reflections of what could have been done in many real-world settings.

Third-Party Methods

The first category of intervention activities is those ordinarily undertaken by a facilitator: convening meetings, leading discus- sions, preparing neutral minutes, and attesting to the good faith of the bargaining procedure. The biggest contribution of third parties in an intervention may be getting the parties together, taking minutes, and telling people what they have agreed to unwittingly.

The second category is those activities that set the ambience: maintaining the rules of civilized debate, diffusing personality conflicts, and helping reticent speakers. At the heart of many disputes are personality problems. If I were to train mediators to mediate in small claims court and labor disputes, I would empha- size the importance of dealing with personality problems.

The third category is the third party’s role in the exchange of information. In distributive bargaining you divide up a fixed-size pie. In integrative bargaining, you can make that pie grow through the exchange of information. The third party is most important in integrative bargaining problems. Some feel that all problems are integrative, but I believe that there are some problems that are not. There are situations in which there is a seller and a buyer, each is only concerned about price, and neither will budge.

Distributive Bargaining Problems

An example of a distributive bargaining problem is a situation in which there is a buyer and a seller, each has a reservation price in mind, but each is willing to bargain. The seller quotes a high price and the buyer says, “Nonsense, I’m only willing to offer you this.” The seller and the buyer talk about the good and bad aspects of the item and they each make new offers. This keeps on going until they eventually get stuck. The seller says that he or she will not go below

16 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

a certain price and the buyer says that he or she will not go over a certain price. It may be that there is no zone of agreement. How- ever, it may be that there is a zone of agreement but the buyer and the seller are not willing to divulge their rock-bottom prices be- cause they fear that they will be taken advantage of if they do.

Now let us bring in a third party. Confidential information could be disclosed to the third party. If the third party can get the parties to disclose confidentially their bottom line or reservation prices, the third party can determine whether there really is a possibility for agreement. If there is, the third party can encourage the parties to keep at it. If there is not, he or she can tell the parties to give up because there is no hope.

Integrative Bargaining Problems

A typical situation involves two parties, unimaginatively labeled A and B, who must agree on the resolution of several issues, only one of which might involve money or prices. A and B typically will differ on the importance of the issues; they might differ on their percep- tions of the future and how it will affect any agreement they might arrive at, they might have different trade-offs for money up front versus money in the future, they might have strong differences in their attitudes toward risk, they might have different quasi-legal constraints on what they could do, they might attach different values to certain symbolic acts, they might be used to different processes for negotiating, or they might have different ethical or word standards about what is fair or legitimate or appropriate.

In such integrative negotiating problems the parties often do not reach an agreement when agreements are possible or they might reach an agreement that is jointly inferior. Essentially they do not know how to exploit their differences effectively and end up by splitting a small pie rather than constructively creating and sharing a much larger pie.

Many disputants refuse to go to a third party because they fear that their power might not be recognized by the third party and that they will lose control over the proceedings. Instead, they engage in adversarial, strident bargaining which features and em- phasizes win-lose, rather than win-win, elements. They exaggerate and misrepresent their sides, come to agreements, and sign

The Neutral Analyst 17

contracts that are not Pareto efficient; in other words, they will leave joint gains on the table that could have been divided.

Postsettlements, Rules Manipulation, and Neutral Analysis

There are several intervention mechanisms that an intervener can use to improve these agreements. The first is what! callpostsettlement- settlement Some parties may be willing, if they already have the security of a contract, to try to improve on what they have agreed through a second round of negotiation. In this postsettlement-settle- ment phase they will try to squeeze out more joint gains. This interven- tion is not widely used. I have used it in a limited number of real-life situations and have often used it very effectively in the laboratory.

In another type of intervention, which I call rules manipula- tion, the intervener, rather than play the role of a typical mediator or arbitrator, sets up a dynamic mechanism such as a bidding procedure to resolve a conflict that would ordinarily be resolved in a different fashion. For example, commercial disputes that are settled in this country by competitive bidding, auctions, or market mechanisms, are settled in other countries through negotiation. We have competitive bidding for off-shore oil tracts; in the UK this is negotiated. Different cultures use different mechanisms to resolve disputes and such alternatives could be exploited by the intervener.

Today, in economic theory, there is a burst of activity among mathematical economists and games theorists who are looking at rules manipulation. They are studying the way people behave and misrepresent information in negotiations to determine whether rules can be changed and procedures constructed so that the negotiation process will foster honesty and less strategic postur- ing. Through the use of truth-generating mechanisms, rational people acting in their own interest will divulge the truth.

The following example will illustrate a situation in which rules manipulation can be used:

There is a sealed bid auction on a contraption that is very useful. The highest bidder will win the machine. There are only three or four people that are interested. How do they figure out what their bids should be?

18 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

One woman feels that the machine is worth $150, and this is what she would bid in an open auction. Should she bid $150 on the sealed bid auction, as well? She will do some thinking about the psychologies of the other people and some strategic analysis to figure out what her bid will be. “How many other people are interested in this machine? I think that the other people are not going to pay more than $75, why should I bid $150?”

She finally decides, “I’m going to take a gamble and bid $105.” It turns out that the highest bid is $110, and she loses.

Notice the nature of the woman’s decision making. She had to figure out what the machine is worth to her and what it is worth to the other bidders and then make a decision. She bid an amount that was less than the machine was worth to her, which resulted in her losing the machine.

Let us now contrast this auction with a different kind of auction that is sometimes called the philatelist auction. It is used to auction off rare stamps. In this type of auction, everybody puts in a sealed bid. The highest bidder wins the machine but pays the auctioneer, not the highest bid price, but the second-highest bid price. This new and not very common procedure is currently the darling of the economics community. Let us see why.

Suppose the machine is worth $150 to you. In the first type of auction, you also worry about what it is worth to the other bidders. In the second-highest-bid-price auction, if it is worth $150 to you, you bid $150! You bid exactly what you believe it is worth, and you do not do any strategic thinking about the other bidders. There is no advantage in bidding $130 if you believe it is worth $150. If everybody bids below $130, you are just as well off bidding $150, because you pay the second-highest bid. But if you bid $130 and someone bids $140, you would have been better off if you bid $150. This procedure allows you to be honest about what an item is worth. It generates truth and that’s why it is exciting.

A third type of intervention that I am interested in is neutral analysis. Let us take the example of acid rain in Europe. The countries in Western Europe are disturbed about acid rain and the generation of sulfur dioxide in power plants. Each country has its own particular interest in the problem. There are many scientific uncertainties involved. They would each like to commission their own studies, but most of them do not have the resources to do so.

The Neutral Analyst 19

Neutral analysis could be used in this situation. All the protagonists would work together to build a model showing how sulfur dioxide is created and transported and its effect on lakes, streams, forests, and soil. They would need to decide on an appropriate party to do the neutral modeling, what should and should not be in the model and what flexibilities should be incorporated in the model to suit each party’s particular and possibly confidential needs.

Case Examples

The following is an example of a case in which I was involved. Two brothers were negotiating the price of some shares. One brother, John, was trying to buy out the other brother, Fred.

John said he was willing to buy Fred’s shares for $120 per share. Fred demanded $250 per share. In a pas de deux they danced around, and John moved to $160 and Fred moved down to $240 and they got stuck. The focal point in this dispute was the midpoint $200 a share.

John offered to split the difference. Fred responded, “What?! You were willing to go up to $200 and you stuck to $160? Obviously, $160 was an extreme offer. I will treat $200 as your offer, and now we can begin to bargain.” What they ended up with was $220. The person who suggests splitting the difference in this adversarial win-lose negotiation is at a disadvantage.

Now let us bring in a third party. The third party comes in when the parties are stuck at $160 and $240 a share. The third party says to each party privately that the focal point is $200 a share and asks whether they would accept $200 if the other side were to agree to it. Each party agrees to the price that the third party suggested (that neither was willing to suggest on his own), on the condition that the third party does not let his brother know that he agreed to it. Another method would be for the mediator to announce to both brothers, 1 think that $200 is a fair price. If you both privately tell me it is acceptable it will be a deal.”

Another case that I worked on also involved two brothers, Lawrence and Paul, who received a bequest of an art collection from their recently deceased mother. Her will stated that the brothers should equally share the art collection that she diligently collected over a lifetime. The art collection had sentimental value to both brothers.

20 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

After reading my book, the two of them approached me to help them resolve their dilemma, because they realized that they could not possibly divide this art collection on their own. They wanted to ensure a balanced outcome, balanced audits, and truth telling, yet they could not negotiate. Each of them had a personal motivation, yet each wanted to be fair. There were sparks between them. The two brothers liked each other and saw each other socially, but there was tremendous sibling rivalry whenever it came to anything that involved business or a trade of anything that had any value. One brother recalled that the other always got the best toy; the other brother confided to me that their mother gave the other a better wedding gift.

I told them that I would try to generate an efficient contract that would exploit all the information I received. I decided that in these negotiations I would represent their mother. I told them that I would keep on reminding them about what their mother would have wanted. They were very close to being enemies, and she certainly would not have wanted that. (There is a difference of opinion among mediators on using this mechanism, but it is often used in certain mediation situations. Divorce mediators often represent the children. Mediators of environmental disputes often repre- sent a party that is not adequately represented at the negotiations.)

We began by agreeing on a set of rules that would be used to negotiate the items. I asked them to specify what kind of balances they wanted to strive for. We talked about what could be done with the paintings. They could jointly donate them to museums or they could individually donate them after they received property rights. They felt that there were just a few items that they would jointly donate and they wanted to allocate property rights for the rest. They agreed that if one of them had property rights to a painting and wanted to sell it, the other person would have the right of first refusal at a 10% discount. In dividing the paintings, they did not feel that a more complicated process such as the fair division Steinhaus procedure l would work for them because they were not willing to put dollar values on anything.

There was much anticipated postdecisional regret. For example, they would be very upset if one person got all 20 Macavoy paintings, and Macavoys one day became more valuable, to the benefit of one brother and the distress of the other. In addition, we discussed the possibility that their preference for the paintings might change in the future. This was particularly true because they were in such an emotional state. Someone may really want a particular painting but might lose interest in it 3 months after it was hanging on their wall and feel that they made a mistake. To allay their concerns over postdecisional regrets, they agreed to renegotiate at periodic stages in the future.

It was unclear whether certain pieces should be considered art, jewelry, or furniture; there were stipulations in the will regarding jewelry and

The Neutral Analyst 21

furniture. We decided not to resolve all these issues in the beginning but, rather, to begin by dividing the expensive Macavoy paintings because they wanted to determine their equity as soon as possible. We would then move on to the Lundquist and the Gallo paintings, handling one artist at a time.

Up to this point, we never discussed preference for particular items. When we finally came to the point of dividing up the paintings, I commu- nicated with each of them confidentially in order to get lots of information. I asked each of them to do whatever they found natural; to write long letters telling me how they felt about the pieces and the rationale behind these feelings. I asked that they use any system they wanted to measure the strength of their preferences, including rankings or numbers.

I collected this information to determine whether compatible deals could be arranged that would balance the need for equity across artists and equity in fair market values. Occasionally, I had to get more informa- tion from them. I put all this information into a spreadsheet on a computer. After analyzing all the information they had given me, I made suggestions to them. This is the role of an analytic intervener. I would show them two allocations and ask them which one they preferred and why. I then used this information to come up with a third allocation to which they both agreed on. After it was all over, they invited me to dinner to show me that they were still brothers. They also agreed that in a couple of years they would go through another round of trading. They also awarded me a bonus because their relationship did not deteriorate during the process.

In my book, The Art and Science of Negotiation, I discuss a negotiation that took place between the United States and Panama over the Panama Canal. Ambassador Bunker was given the assign- ment of representing the United States in the negotiations with Panama. In order to determine what the U.S. position should be, Ambassador Bunker interviewed the principal U.S. parties involved in the conflict: the Commerce Department, the Defense Depart- ment, the Army, the Navy, the Air Force, and others. There was a vast difference of opinion. These differences had to somehow be resolved through internal negotiations so that Ambassador Bunker would know how he should negotiate across the table with Panama.

At first glance, President Carter could be thought of as the arbitrator in this internal conflict because he had the power to decide the U.S. position. But if you examine the situation more closely, President Carter could not really impose a decision on the military because they could resign and go political. Therefore, in

22 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

actuality, President Carter’s role was that of a mediator rather than an arbitrator in this internal conflict. But he was a mediator with clout and, therefore, had more power.

President Carter and Ambassador Bunker, after weighing the positions of all the parties involved, believed that they had some- how to convince the military to compromise on their position in order to get an agreement. They could have appealed to them on the grounds that it was in the public’s best interest, but the military clearly believed it was guarding the public’s best interest and that America’s position would be weakened if they compromised their position. One way to appeal to the military in this case would be to link this problem to another problem. The president could give the military a slightly bigger budget to buy an extra aircraft carrier to be placed in the southern Pacific Ocean for added protection. This could allay security concerns regarding the Panama Canal issue.

Similarly, in hierarchical organizations the role of the manager is often that of a mediator with clout. The manager can dictate to his or her subordinates, but this does not work in our society because people can quit or they can sabotage procedures. When there are big disputes within a firm, you want to get people to sit down together and do joint problem solving. The manager is often a built-in mediator because of the structure of the firm.

A manager may also be in a situation in which several people are giving him or her contradictory information. The manager can use his or her own analytic staff or hire a consulting firm to serve as neutral analytic intervener to help resolve the issue. This is done all the time in management. Most people do not think of it as mediation, but I do.

Many years ago, I gave lectures to advanced management people at Harvard Business School; these are middle-aged people who are vice presidents and executives of large corporations. When I talked to them about negotiation and I mentioned the terms mediation and arbitration, they thought immediately of labor mediation or arbitration. They said, “We don’t do mediation or arbitration. We’re in the marketing group.” After much resistance, they agreed to discuss the subject. When we went through a list of what mediators do, they realized that it is exactly what they do all the time as managers. They were practicing mediation, and doing it very well,

The Neutral Analyst 23

but did not realize that they were doing it. Mothers and fathers also practice mediation with their children all the time but they do not think of it that way.

The next example is a merger case that I do in my course on negotiation at Harvard Business School. It illustrates the need for exchange of information, joint problem solving, and neutral anal- ysis in negotiating settlements. I give the following background information to my students: Magnus is a large electronics firm that is terrific at production, marketing, and distribution but does not have a flair for research. They try to get good researchers to work for them, but good researchers do not want to work for a large manufacturing firm. Magnus decides to try to acquire AIL, a small research firm, and they enter negotiations.

The students divide into two groups, Magnus and AIL. Confiden- tial instructions are given to each side and they are told to negoti- ate. The Magnus group is told that their bottom-line offer, or reservation price, is $6.5 million. The AIL group is told that their reservation price, the lowest offer that they would accept from Magnus, is $7.2 million. There is no zone of agreement. A lot of figures went into establishing these reservation prices. Each group is given a technical report prepared by their company’s research staff, which details how their bottom line, or reservation price, was arrived at.

When given this problem, most students find that they cannot agree. Because there is no zone of agreement, the students just go back and forth on price.

The students rarely look at the calculations that went into the establishment of the reservation prices. The prices are based on each company’s perception of what would happen in the future. It turns out that Magnus and AIL arrived at different estimates of the value of AIL because they used different discount rates. While one used a high discount rate, the other used a low one. Differences in the companies’ estimates were also due to uncertainty over the future value of the firm.

In this problem, when each side made separate calculations, there was no zone of agreement. Differences in risk perception and the time value of money must be resolved in order to determine whether there is a zone of agreement and an efficient contract can be reached. What is needed is joint problem solving and for each

24 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

side to divulge information. Once there is agreement on both sides over the figures, the search for an acceptable compromise becomes an analytical problem that could be handed over to an operations analyst.

A mechanism that is often useful in negotiations for which there is uncertainty over the future value of a firm is a contingent contract. In a contingent contract, each party agrees to pay a certain sum, with the stipulation that depending on what happens in the future more or less money will be paid. The contract price is reevaluated each year. Although this problem requires financial analysis and most mediators are not trained to do this, a mediator must learn to ask the following questions: What figures and calcu- lations went into these prices? and How can these differences be resolved so that an agreement can be reached? A zone of agreement does not always exist in contract negotiations. A mediator must, therefore, be prepared to use analysis to determine how figures were calculated.

In the second part of the exercise, after most of the students fail to reach a settlement, I change the numbers so that there is a small zone of agreement. In an ideal situation, there would be a zone of agreement—the reservation prices would overlap. If there is a zone of agreement, the two sides, through negotiation, potentially can get a surplus; they can do better than their reservation prices. This is known as beating your best alternative to a negotiated agreement (BANTA), or your walk-away alternative. Given a zone of agree- ment, most of the students end up settling near their BATNA. Once they get their BATNA, they are satisfied and quit. They are not adventurous about considering alternatives such as the possibilities of risk-sharing plans or contingent contracts.

Scorable Games

Another case that I use as an exercise in my classes is the Associated Metropolitan Police Organization’s (AMPO) labor con- tract negotiations. AMPO wants to negotiate 10 items including starting salary, vacation pay, and the status of the police review board. The students are paired off: One student represents AMPO, the other represents the city.

The Neutral Analyst 25

In this game, a scoring system is used. Each item to be negotiated has a certain value that allows students to determine how much of one item they would be willing to give up to receive another. Scoring imposes an artificiality that distorts the problem in some dimensions but brings out other factors. There are usually great debates among the students about the values of the trade-offs. However, it is not the player’s role (in this simulation exercise!) to question the trade-offs; they are given.

Each side is given confidential instructions and each side is given a different scoring system. The students representing the city are told that they must get a score of 300 (their BATNA) or more. The students representing AMPO are given a different scoring system and are told that they must get a score of 25 or more. They hold negotiations in pairs.

Each pair ends up with different scores and has used different procedures to arrive at their outcomes. The two students in a pair cannot be compared. This is not a zero-sum game; one does not win or lose.

However, all the students representing one side can be compared with each other to a certain extent. If Arnold, who represented the city, received a higher score than all the other students represent- ing the city, you might be tempted to say that he is a better negotiator than the others. However, it may be that Arnold’s part- ner was an easy customer. It may not have been the acumen of Arnold but the weakness of his partner that allowed him to receive such a high score.

In scorable games, when pairs come back with such a range of different outcomes, you can clearly see that there are often joint gains that are not exploited. If pair 1 gets a score of 310, 30 and pair 2 gets a score of 365, 50, one can see that pair 1 could have done better. They could have baked a bigger pie. Most of the time when people negotiate, they are satisfied if they do better than their reservation price (or BATNA). They are not aware that there were joint gains left on the table. Both sides can improve their scores without hurting the other side.

I sometimes vary the dynamics in this game by including a mediator. Then there are three people involved, one representing AMPO, one representing the city, and one mediating. The mediator does not have any of the information or scores that the two sides

26 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

are given. The parties have the option of deciding whether or not they want to use the mediator. Most students find that they do not know what to do with a mediator. The mediator is not highly trained, and they tend not to use him or her. Those who do use the mediator claim that he or she is not very helpful. However, the students who do use the mediator are surprised to find that on average they do a little better. Why do they do better? A mediator is able to generate more truth telling and convey more confidential information than the parties themselves. The mediator who gets to know joint scores can suggest creative alternatives.

I then ask the pairs that did not use a mediator whether they would be willing to go into a second postsettlement-settlement round of negotiations with a mediator to determine whether they could improve their outcomes. They would have to agree to tell the mediator something about their scores, even if they distorted the information, so that the mediator could do some mathematical analysis with a computer program. They would have the option of keeping their original scores if they did not like the outcome they got using a mediator.

Almost all think that they do not have anything to lose by using the mediator to try to embellish this contract in a second postsettlement- settlement phase. However, most people said they would not di- vulge their true scores because they would want to try to figure out how to do better. In the end, most people end up telling the truth because they do not know in this case how to lie or exagger- ate. It is safer to tell the truth. Only through joint problem solving and divulging the truth can you move ahead.

In the laboratory, time and time again, people refuse to use arbitrators and mediators because they think that somebody will gain an advantage. They negotiate, come to a conclusion, and leave. They never think about whether there were joint gains left on the table. The issue of exploiting joint gains is tremendously compli- cated. Let us look at the AMPO versus city negotiations, a complex integrative negotiation involving several issues to be resolved. There are several possible ways the city and AMPO could go about formulating a contract. Each side could come to the negotiation table with a proposed contract it drew up on its own. Each side would spend a lot of time trying to convince the other side that its

The Neutral Analyst 27

contract is better. They may eventually end up revising their contracts and come to a final contract.

Or they can negotiate by building a contract from the bottom up. This is an example of joint problem solving. They would examine one issue at a time and try to compromise. Eventually they would start to trade off among issues. One side would give up something on one issue if the other side gave up something on another issue. What usually happens is that each side pretends that it is giving up a lot and, therefore, expects a lot. It exaggerates what it is giving up and minimizes what it is getting. This distorts the problem. The claiming aspect of the negotiation gets in the way of the creating aspect. Instead of building up the pie, they hide information from each other. In both these scenarios, the final contract most likely will not be efficient and the outcome may be in the Pareto crummy area. With the security of a contract, they might be willing to move on to a second stage of postsettlement-settlement negotiations using a third party with the likely outcome of improved results.

Many of the techniques a third party can do, the parties can do for themselves without the use of an intervener. But it is often the case that the intervener is more knowledgeable about constructive processes of negotiations. Good training for an intervener is good training for the negotiator and vice versa.

These are just some of the techniques that third-party interven- ers can use to help parties resolve conflicts with better results for all. As I noted earlier, my own interest in assisting people is to avoid inefficient, wasteful extremes and to use all the joint gains.

Note

1. See Raiffa (1982, pp. 290-291) for a fuller discussion of this and other procedures.

3

Facilitated Collaborative Problem Solving and Process Management

DAVID STRAUS

■ I am an architect by training. Part of what got me into the field of collaborative problem solving was frustration with education at design school where the creative process was not talked about. Creativity was viewed as something you either had or did not have. However, there were waves of design methodologies sweeping the drafting room that were never discussed. In desperation, I started taking courses in cognitive psychology and began to realize that there were discrete cognitive structures involved in productive thinking. I went to Berkeley to work on a National Institute of Mental Health grant in the area of design methodology; it turned into a study of problem solving.

What is it that is useful to know about how the mind works? What I discovered was that all of problem solving can be viewed as involving a limited set of heuristic strategies: basic concepts of transformation. For example, two of these elemental heuristics are the concepts of working forward and working backward. Both can be very useful whether you are trying to write a book, solve a

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Facilitated Collaborative Problem Solving 29

math problem, or design a collaborative planning process. These strategies are involved in all problem solving but are rarely taught.

What is needed is for students to be given a set of problem-solving tools at the earliest levels of education. This would require a massive retooling of the teachers and educators in our society. The pressure to introduce these tools into the education process is going to start coming from businesses that are finding that the work force simply is not prepared. Businesses are moving toward collaborative consen- sus-based problem solving, and the students that are coming out of the education system have no experience in this area.

Conflict can occur at any level of society. There are interper- sonal, community, group, organizational, and international level conflicts. Eighty percent of my firm’s work is in the private sector, inside large companies that are experiencing all the traditional problems of working with large numbers of stakeholders. We also work with large public-private partnerships.

There is a difference between negotiation and mediation (the predominant focus of the Harvard Program on Negotiation), and collaborative problem solving and facilitation. The first approach sees conflict as fundamentally a negotiation, sometimes requiring third-party mediation. The second approach views conflict as a problem involving many stakeholders, often requiring third-party facilitation. Mediation relies heavily on caucusing with separate parties. Facilitation operates with all the stakeholders meeting face to face in a collaborative setting. Small group conflicts can often be resolved through meeting facilitation. Complex, multiparty conflicts require the design of large-scale collaborative problem solving processes.

What are the different ways our society makes decisions? Our society is based on win-lose decision making. Democracy is based on majority rule where 51% can determine an outcome. In execu- tive and judicial decision making, decisions are deferred to higher authorities, and in these decision-making processes, there is a winner and a loser.

Our experience has been that there is a growing interest in finding alternatives to the win-lose decision-making approach. Negotiation, mediation, facilitation, and collaborative problem solv- ing are all examples of consensus-based win-win approaches.

30 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

Consensus means that everybody in the group is able fundamen- tally to live with and support actively the decision. Everyone must feel that the decision is a win for him or her as well as for everyone else in the group. The proliferating number of different courses offered in some aspect of nonadversarial dispute resolution are evidence of this new consensus building trend. What forces are causing this change to take place?

Forces for Collaboration

One of the major forces for the growing interest in win-win approaches is the lateralization of power. Many of us have a fantasy that when we finally get to head an organization, we will have much power and will be able to make many decisions. However, this is not so. Let us look at the situation of a school superintendent. What groups have the power to block the superintendents, making life very difficult? To name a few: the school board, voters, parents, teachers, the city council, the bus drivers, and the courts.

Similarly, in the private sector, most CEOs do not feel very power- ful. The warfare between divisions in large corporations is as bad as it is in communities. In many companies there are multiple divisions with different responsibilities, each trying to protect itself. Each has the power to make things very difficult for the other.

The lateralization of power is a relatively new phenomenon. About 20 years ago, if you were at the top of an organization or government agency, there were relatively few people below you who had the power to block your decisions. Now many more groups have this power. One reason this has occurred is that the complexity and interrelatedness of issues has increased. Second, there is also a growing dissatisfaction and distrust with leadership in the post-Nixon, post-Watergate era from people who are no longer willing to say, “The guys upstairs must know what they’re doing.” The concept of a leader or manager with complete author- ity has really changed tremendously. A final factor is the growing number of organized advocacy groups. In a city like San Francisco, on any issue there are at least 20 groups that will surface claiming they represent the interests of the community. This advocacy has gone to such an extreme that we are at a standstill on many issues.

Facilitated Collaborative Problem Solving 31

Another force moving us in the direction of consensus based win-win decision making is that experience has shown us that win-lose approaches such as taking disputes to courts, strikes, protests, and riots really produce lose-lose results.

If I have no power and you have all the power, the only thing I can do is to drag you down to a lose-lose situation. I may pay for it by being fired, but at least I pull you down and stop the assembly line. We have gotten very good at figuring out how to stop each other in a variety of ways. Once we recognize that we are only pulling each other down, there will be an interest in moving to a more collaborative win-win approach.

Another force is a dissatisfaction with adversarial processes. People are not very happy after an adversarial divorce or an ad- versarial dispute among partners in a corporation.

And finally there is a growing body of evidence that there are alternatives and that problems and disputes can be handled differ- ently. Much of our challenge in communities and organizations is simply to show that there is an alternative. Consensus-based win- win decisions are possible most of the time. We have developed a mentality that they are not possible and that conflict is a zero-sum game. This attitude is self-fulfilling.

Resistances to Collaboration

I have discussed some of the forces that are driving our society toward consensus based decision making. Now let us look at some of the resistances.

One resistance is the phenomenon of leadership. We know much more about how to design and manage collaborative win-win plan- ning processes than we know about the kind of leadership that is needed to support them. The model of leadership that exists to this day is that leaders should have all the right answers even though they themselves know that they do not. Who could get elected by saying, “I don’t know all the right answers?”

On the one hand, we are interested in building collaborative processes and, on the other, we are still expecting leaders to come charging in on white horses with the right decisions. Many people who are in leadership roles have been rewarded for being bright,

32 FRAMEWORKS FOR EFFECTIVE NEGOTIATION

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