About 15 years ago I was involved in a strategic negotiation between a supplier and their customer, where the contracted product development was running several years late with major technical challenges and there were grounds to at least consider the possibility that the product may never meet the requirements. The situation was tense, with significant commercial losses being incurred by the supplier (approaching 100% of the contract price), and there were real challenges to settle the damages now liable for schedule delay on top of that loss and collaboratively replan program execution to completion. The supplier’s senior leaders were now the third generation in place, as their company had a habit of unceremoniously firing managers if the program didn't perform, and the reputational stakes for both parties could not have been higher as nobody could abandon the product.
The negotiations had been conducted intensively at the supplier premises over several weeks with a steadily growing sense that the parties were unreconcilably far apart and cordiality was being tested by spats and unwelcome behaviours during the negotiations and even in the private team sessions. To address the lack of progress, the tempo of negotiations set by the hosts was simply increased. Negotiations routinely dragged on well into the evenings, meals were being skipped as we were locked deep in a secure complex and one night (morning!) at about 2:30am, a particularly difficult topic had pushed the teams to the brink of a heated and general disagreement.
Our team leader wisely called a break, and in our retreat room we discussed our very options to adjust the deal and reaffirmed what we absolutely needed from the agreement. As I sat listening to the team discussing the issues, I was struck by the observation nobody was talking about the condition and behaviour of any of the folks from either team involved. I realised both parties were genuinely fatigued but still viscerally engaged in the issues and couldn't see how frayed and irritable we were collectively and especially how that was hampering any progress on the deal. The risk of a fundamental breakdown in relations was very real. When I shared this observation, there was a long moments silence and then the leader turned talk back to the issues without any reflection on my point. Later that morning negotiations broke down with significant displays of anger from both parties and the customer team returned to Australia with no date agreed to continue the negotiations. Thinking back to that epic encounter in later years, I’m always staggered by how close the program came to failure at that point, given the scale of the risks and issues, and how the negotiation teams really failed to account for and manage anger in the negotiations.
Negotiation is the preferred approach to resolving a wide range of complex problems, and our expectation is usually that it will bridge gulfs between parties and yield ‘win-win’ outcomes. In practice, for all the fact it is often still the best course of action in difficult circumstances, negotiation is sometimes incredibly challenging and it doesn’t always result in success. Most complex negotiations bring a degree of risk and uncertainty as to what the eventual outcome will be, and the participants are often invested professionally or personally in getting the ‘right’ outcome. Where expectations aren’t being met, anger is the most common and instinctive human response. Some senior leaders will offer the view that if we haven’t made our negotiation counterparts angry, we haven’t taken all that could be had in the negotiations, and we are clearly being ‘too soft’.
There is a simple counter view, prevalent in most scholarly writing on human decision making that is also intuitively reasonable: we are the first victims of our own anger and the quality of outcomes in any difficult situation will usually be harmed by over-reliance on anger as a tool. Small and very controlled displays of displeasure are an important signalling tool in negotiations but need to be used sparingly as they can trigger response in kind and general escalation. Genuine displays of anger also usually trigger cycles of harsh response which typically destroys trust, a vital ingredient in negotiations.
Anger is a powerful emotion, often triggered as a rousing response within a person based upon their perception of how the circumstances affect them or their values personally. In the case of these negotiations, the precedent was clear, and the supplier leadership were undoubtedly contemplating being fired in disgrace, and the career long reputational damage they would incur. On the customer side, training in preparation for the new system was being deferred, transition workforce of about 120 people to introduce the new system was disbanded for a year and the end users were bitterly disappointed at the continuing delays. The project had become a matter of public speculation and spectacle, and while cancellation was unthinkable, criticisms of the project leadership team from more senior internal stakeholders were mounting by the day and becoming unreasonably personal.
Anger drains our reserves of patience and robs us of cognitive capacity, lowering our defences against biases and leading us to irrational judgements. Bouts of anger can surface during negotiations as a range of counter-productive behaviours from disengagement, evident fatigue, poor decisions, irritability or unprofessional outbursts. Ultimately, all these things will bleed momentum from negotiations and reduce the likelihood of a successful conclusion for both parties. Our negotiations had failed in large part because we had allowed displays of anger to dominate the proceedings, and constructive work on the agreement had suffered. Managing anger isn’t important only to protect people and relationships, anger can obscure the potential for a negotiated solution and ultimately cause a worthwhile deal to be missed.
There are many potential causes of anger in the context of negotiations:
• Unrealistic expectations on the issues
• Personal loss apprehension, including accountability for organisational or reputational damage
• Loss of personal ‘face’
• Perceived personal slights or breaches of personal or business etiquette
• Misunderstandings on key issues, often fuelled by untested assumptions and poor comprehension
There are also some common complicating factors which heighten the risk of anger de-stabilising negotiations:
• Historical grievances between individuals or organisations
• Fatigue, illness or loss of personal resilience
• Loss and the grief cycle, in a personal or professional context
• Dehydration or low blood glucose levels, reducing our ability to withstand and manage stress
• Differences in personal styles and organisational cultures
Avoiding and reducing the impacts of anger in negotiations needs careful consideration over the negotiation life cycle. In the planning and analysis phase, ensure a robust and constructively contested strategy and goals setting phase to ensure that your expectations are realistic. If the negotiation is significant enough, consider a dedicated ‘red team’ or non-advocate review to confirm this point and adjust if needed. Give serious thought to the positions and needs of the other parties in the negotiation, and especially where they are longer term partners consider what value can be created for them through the process. Throughout the preparation and formation of your team, keep the tone professional and signal that any shading or personal attacks on the counterpart will be unwelcome.
During the framing of the negotiation with the counterpart(s), when you are agreeing where and when to negotiate, consider discussing behavioural expectations and establishing a ‘leaders dialogue’ to manage the negotiations constructively while they are on foot. Canvass your team for any historical grievances with any of the expected counterpart team, and discretely ‘check-in’ with your own team to ensure they are ready to participate to the required level and intensity. Plan up front for longer and intense sessions if they are likely to be needed, thinking about reasonable daily limits, taking into account the cumulative effects of fatigue over a longer negotiation and including structured time for team deliberations and reporting on the negotiation progress to the owner / sponsor or any off-site specialists. Introduce regular rest breaks and refreshments to keep individuals at peak performance.
During the course of negotiations, make sure that you respect the value of positive leadership in setting tone and avoiding problems. Monitor proceedings carefully to ensure that your team members are setting a professional example through their language, actions and conduct. Acknowledge frustrations during your team side sessions but keep the behavioural expectations clear. Make sure that the team understands that anger reduces our ability to discern, leading to potentially flawed and unhelpful understanding. Where your counterparts are visibly stressed, appear to be introducing irrelevant material or simply blustering, have a think about their personal stake and at least strive not to be disrespectful about their personal circumstances and efforts. You may need to give them space to explain their stakes, even if you have absolutely no intention of making material changes to the deal on that basis. Where you are at all uncertain about the position of the parties on key issues, ask constructively framed questions and do not lightly rely on assumptions, especially negative ones. Where possible, be candid and share information where it frames the negotiation and signals your needs. In framing your proposals, communicate them respectfully and positively, limiting reliance on ultimatums or brinkmanship.
Should there be an outbreak of unprofessional anger from one of the participants, seize the opportunity for the leaders of the parties to engage in partnership to take control of the situation early, seeking to demonstrate your shared commitment to constructive behaviour while de-escalating the cycle of conversation that triggered the outburst. Consider the opportunity for a break and if necessary, a cool down period. If it is a member of your team, take the time to engage with them in private and check in to see if they understand the basis of their anger and appear likely to contain it going forward in the negotiation. You may need to modify their participation in the negotiations.
In our case, the supplier finally and unexpectedly responded to our inquiries, reaching out to initiate a resumption of negotiations. After long thought about the previous negotiation cycle, we insisted that they come to Australia, and we set out to re-frame the negotiations for a better result. We setup an appropriate venue and ensured that the tempo of planned negotiations allowed both teams the opportunity to engage ‘higher up’ as needed and practical given the time zones being crossed. On the issues, there was little more that could be done, but we sought to re-package some difficult items and limit future penalties as well as re-investment of more of the current penalties into external technical expertise to assist the supplier. During the negotiations, we limited the overall duration of the sessions and ensured that food and coffee was available in quantity. Above all, we sought to recognise the potential for anger and to set a better example as counterparts by not engaging in it. The negotiations were robust, and still veered close to collapse at times, but the difference was that with cordial conduct, real options were generated and explored openly between the parties. Our shared need to complete the program framed the process, not a shared dread that we were on the brink of a humiliating failure. The eventual agreement was recognisably close to the positions of the parties on that fateful night of the breakdown, but a number of small and clever adjustments on a few key issues gave grounds for each party to represent it as a least worst option available to complete the program, and a good faith basis for continuing together. While that program still faced a host of challenges, our agreement marked a change of direction between the parties leaders and the constructive approach was never again under threat. When the program finally delivered a few years later, it established a new high watermark in products of its class, instantly giving market segment leadership to the supplier and a fantastic capability to the launch customer.
In summary, the example highlights the need to approach negotiations with a positive mindset, maintain the conviction that allowing anger to flourish will harm both the parties. Anger can only result in weaker outcomes, loss of organisational trust and creation of future personal enmity. People accustomed to anger in negotiations will find their way to it more quickly, and often aren’t creative problem solvers. The Scotwork Advancing Negotiation Skills course provides the foundations in professional technique to keep your negotiations on track and be as creative as possible. Scotwork’s trained and highly experienced negotiators can help your organisation devise optimum negotiation strategies and then help manage the ebb and flow of negotiations at all scales. Happy negotiating (seriously!)