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  • Archive for December, 2015

    Negotiating with Powerful Parties: 5 Strategies

    December 23rd, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    The recent and original Star Wars trilogies involve an epic clash between good and evil. Within the context of the Star Wars story line, a small rebel alliance was pitted against a seemingly much larger galactic Empire (The First Order, in the recent plot line of The Force Awakens).
    Such epic clash may appear like the concoction of science fiction rather than a real world scenario. But this is not exactly true.
    Switch the Empire/First Order with a larger competitor/superpower. Then switch the Rebellion/Resistance with a smaller start-up/organization/non-superpower. Now things become all the more real with very real and practical implications.
    This then raises the question: What is the best negotiation strategy for dealing with a seemingly larger and more powerful counterparty?
    Below are five (5) strategies supported by practitioner perspectives, but also academic studies:
    Your foe may seemingly appear larger and thus more powerful. But it’s important to note that larger is not more powerful in every contextual situation.
    The benefit of being a larger entity is often a general association with more resources–along with greater scale and scope (i.e., domestic or global footprint/presence). But in certain situations, being large can have its distinct disadvantages. Such disadvantages can at times outweigh the advantages of being a larger entity. For example, a behemoth company may be overly diversified, with its resources spread out overly thin, domestically and globally.
    Think: The Roman Empire. The reason for the Roman Empire’s implosion—seemingly at the very pinnacle of its power–was ironically due to its string of prior successes (of conquering people, land, and resources). The Roman Empire was simply too large to succeed. In the current era where technology and being nimble is a strategic advantage, being too large is arguably now a sine quo non to stress-testing, collateral damage, or outright collapse of a larger entity or foe.
    Much like the Roman Empire, the Empire (First Order) appears like a foe that can easily defeat the Rebellion (Resistance). But as we see in the Star Wars mythology, a smaller often ill-equipped band of unlikely heroes can prevail over a larger more organized and well-equipped foe.
    A key strategic question is will your counterparty understand and actually use its power? First, does your foe understand its actual power? You may believe this is to be a given. But it is worthwhile to stress-test this working assumption. For example, even just prior to the U.S.’s delayed entry into World War II, it was arguably uncertain from not just America’s perspective, but its other Allies as well as its enemies, just how powerful America’s entry would impact the outcome of the war. In hindsight, it was a game changer. At the time, it was not so certain.
    Second, is your negotiation counterparty actually willing to use its power against you? It’s important to note that the question to ask is definitively stated one, without the ambiguous “may” or “could” wording that clouds a clear strategic analysis. The answer should be a definitive and categorical yes or no, based on the best available imperfect information attainable (at the time, and of course, given the circumstances).
    For example, regarding the Korean peninsula, a key question would be: Is North Korea actually willing to use its nuclear weapons against its enemies (above and beyond mere saber rattling)?
    In the lighter context of the Star Wars trilogies, the key question would be: Is Darth Vader willing to use the Death Star to destroy planets (and stars)? The answer in A New Hope (Episode IV) was an emphatic yes, as demonstrated when the Death Star used its laser weapons capability to destroy Alderaan, the home planet of Princess Leia (who was then being held captive by the Empire to solicit information about the whereabouts and plans of the Rebel Alliance). Similarly, in The Force Awakens, the First Order Star Destroyer’s “Catapult” superweapon was in fact used to destroy many lives (above and beyond the mere appearance of having such power).
    Take strategic steps to maximize the likelihood of your success. As Sun Tzu claimed, “Every battle is won before it is ever fought.”
    If you’re the smaller party, fighting a battle in the traditional sense is a game that will often be geared against you than in support of you (i.e., pivoted towards a loss than a gain). Thus, strategically, you should seek to delay, divert, or dispense of the need for battle with your larger counterparty.
    Strategically, understand what is your GPS (Game rules, Payouts/Penalties, Strategy) vis-à-vis your opponent. Next, step into the shoes of your foe to calculate the other side’s GPS. In doing this, assign a person to play the role of your adversary foe. This will help clarify and extend the relative perspectives of both sides in terms of positions (what you/foe want) and interests (why you/foe want such positions). This in turn will help clarify your negotiation strategy analysis.
    Next map out a “decision tree” of possible best next steps, with assigned probabilities. For example, let’s say you are a small Silicon Valley start-up about to negotiate with Google (a tech titan). Further along in this simplified hypothetical, let’s say you then consider, calculate, and then ultimately conclude that the possible decision tree possible outcomes could be (1) majority buy-out (30% probability); (2) minority investment (35% probability); and (3) no agreement (35% probability). As before, this is calculated on the best available imperfect information at the time.
    In Star Wars: A New Hope and The Force Awakens, the smaller renegade group of rebel fighters determine that their GPS would be to counter-attack the Death Star (Star Destroyer).
    Negotiation is an “information game.” If you have a competitive advantage in information, the game pivots more towards a win for you (or your team/organization/country).
    But where do you get information about your negotiation counterpart? First, seek information from publicly available information (Google, public filings, the press, news articles, etc.). Second, seek information from your foe’s other counterparties, enemies, and even friends. Specifically, find out who they are, then reach out and make strategic contact with them. You can be honest and say that you are making contact merely to get information on how to best work with a particular entity with which the person who has been contacted has had prior dealings. Third, for all remaining data, seek information directly from your counterparty (through a separate but related negotiation communication strategy).
    In The Empire Strikes Back (Episode V), Han Solo (Harrison Ford) and Princess Leia (Carrie Fisher) could have solicited information about the Empire from Lando Calrissian (Billy Dee Williams). Lando, as mayor of Cloud City, had prior dealings with the Empire, who stayed strategically neutral until Han and Leia’s unexpected arrival to Cloud City sufficiently incentivized Lando to betray Han and Leia (however, Lando then later betrays the Empire by subsequently helping Leia, Luke, Chewbacca, C-3PO, and R2-D2 to escape along with Han Solo in frozen carbonate form).
    What is your “walkaway point”? This is your negotiation decision matrix anchor—based on your personal metrics (i.e., money, emotion, pride, nationalism, etc.). Knowing this information, you will know the general limits and boundaries of your “yesable” negotiation range. Without knowing this information, you will conversely not know the general limits and boundaries of your “yesable” negotiation range. This in turn will increase the likelihood of you not knowing what you ultimately don’t want (as well as what you do want in your dealings with your counterparty opponent). This is a very dangerous position to put yourself or your organization–especially when such risk can be mitigated through this suggested strategic approach.
    For example, in the 1990s, when Microsoft was being investigated by the Department of Justice for alleged antitrust behavior at the time, Microsoft’s management team should have considered whether it would allow Microsoft to be broken up into smaller independent entities onshore if legally compelled to do so, similar to the case of the Baby Bells previously. Or alternatively, would this be beyond its walkaway point, compelling Microsoft to consider other alternatives, such as moving some or all of its offices offshore to other countries? Knowing such valuable walkaway points is not just useful, it is absolutely critical.
    In Star Wars: A New Hope (Episode IV), Obi-Wan Kenobi (Alec Guinness) determined that his walkaway point for an impending and epic light saber duel with Darth Vader would be the ultimate sacrifice of his own physical body (although he would continue to exist in non-physical form through the Power of the Force).
    In summary, these are five (5) concise strategies (of many more that can be utilized), which are easy to implement and extremely value-added.
    These strategies have proven to be the difference maker when it comes to negotiating with larger and seemingly more powerful counterparties.
    Sources: Kim, Jasper (2015); Adler, R. S. & Silverstein, E. M. (2000).

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