(for a different view, see The Method to Their Madness at the New York Times)

To assess the wisdom of a strategy to fail, I asked arbitrator and mediator Joshua Javits to weigh in on our series concerning the negotiated resolution of the current federal budget crisis.

In June, I appeared on Minnesota Public Radio with Javits to discuss options for breaking impasse in the Minnesota state legislature over similar budget issues. Javits, the former chairman of the National Mediation Board and current chair of the Grievance Committee of the International Monetary Fund agreed to share his experience and wisdom on the national budget crisis negotiations here with our readers today.

I asked Javits to first suggest an optimal negotiation strategy where one party – here, the GOP – is willing to risk catastrophe in the hope (or fervent belief) that the small government revolution they seek will be worth the short term damage to the economy if the debt ceiling is not raised.  Javits surprised me by mentioning the history of the rise of communism in Russia.

continue »

As the federal budget deadline nears, I am seeking the advice and analysis of some of the country’s most prominent negotiation gurus to illuminate the motivations driving the on-again, off-again bargaining sessions between the Democrats and the GOP.

As Harvard professors Max Bazerman and Deepak Malhotra advise in their must-read Negotiation Genius, before concluding that our negotiation partners (or elected representatives) are crazy or evil, we should be asking ourselves whether they have unknown interests, are operating under hidden constraints, or are ignorant of facts of which we are aware.

These are the issues I’ve asked Adam Galinsky, Professor of Ethics and Decision in Management at the Kellogg School of Management, Northwestern University, to address.

What are the interests driving the federal budget negotiations?

Professor Galinsky: The parties’ interests exist at three levels: principle, prosperity, and politics.

Continue reading here.

The Defense Procurement and Acquisition Policy Department Negotiation Preparation flow chart, suggests that negotiators

• tailor the negotiation team to the situation
• identify negotiation issues and objects
• identify your bargaining partners’ history and probable approach
• assess bargaining strengths and weaknesses
• identify negotiation priorities and potential tradeoffs
• determine an overall negotiation approach
• prepare a negotiation plan
• present the negotiation plan
• preparare a negotiation agenda

This is as good a list of negotiation preparation steps as I have seen anywhere and it would be well to have it by your side whenever you negotiate anything more important than who should cook dinner and who puts out the garbage tonight.

Continue reading here

In case you do not personally know someone who is dependent upon Medicare and whose circumstances could be severely impacted by the current federal budget negotiations, now you do.

Is there any chance your story will end where Joel’s does? Do you believe you’ll be able to afford Blue Cross premiums forever? Or that Blue Cross, or another health insurance provider will pay for skilled nursing facilities as long as you need them?

If you are a woman nearing retirement, the possibility that you will age in comfort is far less likely than the chance you will live out your final years in poverty. Presently, the U.S. poverty rate for people 65 and over is 9.7 percent — that’s 3.5 million people who, if they are single, are living on less than $10,289 a year. Two-thirds of women over age 65 rely on Social Security as their primary source of income. Consequently, women are twice as likely as men to live out their golden years at or below poverty levels.

So, yes, this story is about negotiating with health care bureaucracies, but it is also about the way in which the richest country in the world treats the weakest members of the human family, family members who could well be us.

Continue reading here (which is also where all the links are)

Back from our fourth of July weekend, I leaned over to click the “play” button on our answering machine.

In Russian-accented English, the news everyone fears to hear rose from the machine. “My name is Oksana at Cedars-Sinai. I’m calling to talk about Joel. Please call me back.”

I’ve been here before and many of you have too. A loved one has been in an accident, is suddenly felled by a stroke or heart attack, or is in the final stages of a long decline. The last time the machinery of the American end-of-life bureaucracy ground into motion on my behalf was when my father began to die of Parkinson’s disease, a heart-breaking series of events I chronicled in “real time” here.

But no prior end-of-life experience prepares you for the next. Dad was in his 80s, remarried, living in a low-slung suburban Southern California ranch-style house attended by a 24-hour caregiver who had for years been his aid and companion. He had Blue Cross, retirement pay and a stream of income from rental property he’d amassed in the San Fernando Valley in the ’60s and ’70s.

Joel is my ex-husband. We were divorcing just as George H.W. Bush was beginning his Presidency in 1989. During those years, I met and married my new husband, changed jobs, pursued a new career, made new friends, and lived a busy privileged life.

Continue reading here.

As sociologist Charles Tilly explained in his book, Why? we fail to persuade when we’re talking past each other and we talk past each other when we’re using a type of reasoning different from that of our bargaining partner. I first heard of Tilly’s work from that great popularizer of social science research, Malcolm Gladwell (Here’s Why) after which I never argued my case or negotiated a deal in the same way again.

But First, Why Reason Giving is a Critical Negotiation Skill

In experiments on reason giving, researchers have found that we are far more likely to persuade people to accommodate us if we give them a reason to do so even if the reason makes no sense whatsoever. In one experiment, students were asked to cut in line at Kinkos. One group was instructed to give no reason. Another was told to give a good reason (I’m late for class). The last was directed to give an irrational reason (because I want to).

Continue reading here.

A mistake that lawyers sometimes make is failing to ask for what they want.  If they do want an evaluation they can ask for it when they hire the neutral. There are processes variously known as neutral evaluation, non-binding arbitration, or early case assessment which are designed specifically for this purpose.  They can be used independently or they can be combined with mediation.
 
I was once hired to give a neutral evaluation in a commercial real estate case.  The parties told me at the outset that while they were interested in exploring settlement they were really interested in my opinion on the merits.  So we conducted a mediation that included a neutral evaluation.  Not only did this meet their needs, the evaluation was given in a confidential setting and could not be used as evidence if they did not settle.
 
The point is that both parties wanted the process to be evaluative.  It was not a situation where one party was expecting the mediator to be evaluative and the other party wanted the mediator to refrain from doing so.
 
When parties hire a mediator, they need to be of the same mind about the process. Otherwise the result will be like splitting a steak with your partner when one of you likes it rare and the other likes it well done. Somebody is going to get indigestion!

Naivete and Cynicism in Negotiations and Other Competitive Contexts by Chia-Jung Tsay, Lisa L. Shu and the great Max H. Bazerman. Executive Summary from Harvard Working Knowledge below:

In business and in life, it's important to strike a smart balance between naïveté and cynicism. Act too naïvely, and someone is bound to take advantage of you. Skew cynical, and you may miss out on new opportunities with good people. This paper discusses the decision errors inherent in leaning too far in either direction. Research was conducted by Chia-Jung Tsay, Lisa. L. Shu, and Max H. Bazerman of Harvard Business School. Key concepts include:

Naïveté is more than a glut of trust. More broadly, naïve behavior refers to a failure to make the best decision, due to a lack of consideration of other people's strategic and behavioral perspectives. We are likely to make naïve decisions when we don't think through the likely future decisions of other parties. A cynic, on the other hand, may avoid a business transaction due to an assumption that the seller's self-interested motives will be harmful to him or her-even if logic shows that the deal would likely benefit both parties. When people withhold from trusting others, they usually lack opportunities to learn whether their trust would have reaped rewards. But when they offer their trust and are subsequently burned, they learn hard lessons about trust. This unbalanced feedback breeds cynicism.

In laboratory studies, the best negotiators were those who had a tendency to think about the perspectives of others. However, most people lack sufficient perspective-taking ability. The researchers suggest that training mechanisms should be developed to increase that ability.

Full working paper available for download at the link above.

The Davos World Economic Forum

The paucity of women at the Davos Economic Forum despite how rich the ones who attended are as described in this post by Forbes staff writer Louisa Kroll, The Richest Women at Davos.

Women's Davos Wardrobe Dilemmas covered by Moira Forbes as an unfortunate but still critical factor for the display of power necessary to be a player at the World Economic Forum.

A photo gallery of the executive conferences women CEOs love best.

The Continued Assault on the Glass Ceiling

Aman Singh's post on Why So Many Top Women Don't Make it to Executive Leadership.

Jenna Goudreau's Jobs Outlook:Careers Headed for the Trash Pile

Five Reasons Your Boss Wants to Give You a Raise This Year (Gender Neutral)

Negotiating with Mattie Ross of True Grit (Gender Neutral)

Sponsorship, Not Mentorship, Can Greatly Narrow the Wage Gap

Kucinich and the Olive Pit in a World of Injustice (gender neutral)

First You Wake Up, Then You Negotiate (gender neutral)

Jealousy's Underhanded Contribution to the Wage Gap by our Gen-Y blogger Katie Phillips.

Provocative Posts and Articles

Bad Career Advice:Nice Guys (and Girls) Finish Last by Christine Scivicque

Study says Dads Should be Less Involved in Parenting by Forbes Staff Writer Meghan Casserly as well as her terrific article on Sexy News Anchors' Distracting Effect on Viewers who can't seem to recall the news disseminated by these attractive women!

There's lots more over at ForbesWoman but those are the articles and blog posts that caught my own attention this week. Put ForbesWoman on your newsreader whether you're male or female, because it's pretty clear that women's economic power is growing and attention must be paid. 

Excerpt below - thanks to Stephanie West Allen for the link:

Practicing a piece of music for four hours requires focused attention, but it is nowhere near as cognitively demanding as a sleepover with 14-year-old girls. Managing status rivalries, negotiating group dynamics, understanding social norms, navigating the distinction between self and group — these and other social tests impose cognitive demands that blow away any intense tutoring session or a class at Yale.

Yet mastering these arduous skills is at the very essence of achievement. Most people work in groups. We do this because groups are much more efficient at solving problems than individuals (swimmers are often motivated to have their best times as part of relay teams, not in individual events). Moreover, the performance of a group does not correlate well with the average I.Q. of the group or even with the I.Q.’s of the smartest members.

Researchers at the Massachusetts Institute of Technology and Carnegie Mellon have found that groups have a high collective intelligence when members of a group are good at reading each others’ emotions — when they take turns speaking, when the inputs from each member are managed fluidly, when they detect each others’ inclinations and strengths.

Participating in a well-functioning group is really hard. It requires the ability to trust people outside your kinship circle, read intonations and moods, understand how the psychological pieces each person brings to the room can and cannot fit together.

Post-recession, we're even deeper in debt and searching for last minute solutions.

One thing's for sure. Most of us will not be retiring at 65 - the age 10,000 boomers a day will benchmark in 2011.

For those of our age-mates who are unemployed, I penned a New Year's post over at ForbesWoman entitled 10,000 Boomers a Day . . . Getting Back to Where We Once Belonged containing some much needed advice on negotiating your way back into the workforce.

Below an excerpt.  Further advice at the link.

Brentwood Executive Search strategist  Marcia Basichis suggests that job hunters do what any good negotiator would – learn your potential employers’ interests and tailor your resume to match them. “All job candidates,” says Basichis “should  research companies they would like to work for, thoroughly going over their websites to understand the business.”

Instead of focusing on the past – the  dead-weight contained in most resumes -Basichis recommends looking to the future by writing potential employers letters explaining  how your existing skills, education and experience can benefit the company you wish to join.

Dont overstate,” says Basichis, “but craft your resume in a manner that makes your experience most closely match the specific job you seek.”

Canadian attorney Michael Webster adds to my post on interest-based negotiation, there are only two questions you need to ask yourself to radically increase your chances of winning the coveted job you seek. First, ask what you would do if you and your potential employer were one person instead of two. Second, ask how you might credibly signal what both parties would need to do to achieve that goal.

Check out these related articles as well:

Bad News for Gen-Y:  Older Workers Clinging to Jobs

Five Ways for Older Workers to Cope with Job Hunting

Great Job Sites for Older Workers

5 Strategies for 55+ Job Hunters

79 Million Boomers Begin Retiring Now

Starting Over at 55

Retire? Forget About It!

Readers!  Please add your resources for unemployed boomers as your first act of random kindness for 2011.

Thanks to @NeilDenny of Lawyer 1point9  for the head's up.

Over at Harvard Business School's Working Knowledge site there's an excellent article entitled Valuation When Cash Flow Forecasts are Biased.  Executive Summary below.

The valuation of forecasted cash flows can be an inaccurate process, especially when the forecasts are created by optimists who neglect to consider worst-case scenarios. In this paper, Harvard Business School professor Richard S. Ruback has developed methods of valuating forecasted cash flow when the predictions are biased upward. Key concepts include:

Managers often recognize that their cash flow forecasts are too optimistic and boost their discount rates to account for that bias. But that only works if the optimism masks a potential permanent downside.

The common practice of increasing the discount rate to account for optimistic cash flow forecasts can lead to significant valuation errors that increase with the length of the project, the cost of the capital, and the chance of a downside.

When the optimistic cash flow forecasts omit a temporary downside, valuators should adjust the forecast by deflating it and then setting the discount rate equal to the cost of the capital. In other words, the common heuristic of boosting the discount rate to account for optimistic cash flow can lead to a substantial valuation error when the omitted downside isn't permanent.

When the optimistic cash flow forecasts omit a potential permanent downside so that, if it occurs, there is no chance of recovery, valuators should deflate the cash flow forecast and increase the discount rate so that it includes the cost of capital as well as the probability of a downside.

Priming Legal Negotiations is the winner of this week's Golden Asshole Award. /*  

Thanks to the Legal Writing Prof Blog for the head's up.

As I left for work one crisp, sunny April morning, I spotted a five-by-seven printed form on my car’s front windshield. The form’s message proclaimed, in large, bold letters, “youparklikeanasshole.” The form had a checklist of infractions like “two spots, one car,” “that’s a compact?” and “over the painted lines.”The bottom of the printed form said,

Parking is far too limited in our overcrowded streets and parking lots, and you happened to park like an asshole. Go to the above web site to see why someone else thought you parked like an asshole. Don’t be too offended, we all do it one time or another—it just so happens you got caught.

My next-door neighbor, who evidently put the note on my car, listed my infraction as “other” with a follow-up explanation written by hand: “You are parking too close to my garage. It’s hard for me to pull my truck in.” I studied the note for a few moments. I felt my heart start to pound and my whole body became uncomfortably warm. I wadded the note and tossed it. I was angry. When I arrived at work twenty minutes later, I was still angry. I told my co-workers about the note.

They all agreed with me; it was rude and inappropriate.

When I returned home that evening, I visited with neighbors who were not complaining about my parking. I showed them the note, now crumpled and dirty. They, too, became angry. One neighbor suggested exacting revenge on the note’s author by letting the air out of his tires. Another neighbor excitedly suggested something involving Crisco. Although I am a trained mediator, I became giddy about the prospect of getting even.

Perhaps it was a moment of self reflection that led me to question why I was even thinking of revenge. But that written demand evoked intense emotions in me and in my neighbors. We did not care about investigating appropriate responses or attempting to resolve the problem; we wanted to make my neighbor pay for his rude behavior. Instead of encouraging me to change my behavior in the way my neighbor requested, the note had an entirely different effect. The written demand prompted me to make my neighbor regret placing that note on my windshield.

This incident led me to question the legal demand letters lawyers write. I wondered if demand letters often evoke similar negative emotional reactions in their recipients. And, if so, do those emotions influence the recipients’ behaviors in ways that hinder settlement?

I'll be providing a template for a negotiation request letter later today.

And all kidding aside, this article should be required reading for every legal writing class in every law school in the country!

Cross-posted at The ABCs of Conflict Resolution Blog.

__________________

*/  The Golden Asshole Award is given once a month to the individual making the greatest contribution to reducing assholishness in the profession.

I have to tell you that I believe every one of our She Negotiates graduates understands and knows how to use the bullet point takeaways from Extreme Negotiations below.  Let me also say it's not enough to read about these techniques ~ you must practice practice practice practice.

Get the Big Picture

• avoid assuming you have all the facts
• avoid assuming the other side is biased but you're not
• avoid assuming the other side's motivations and intentions are obvious and nefarious
• instead, be curious ("help me understand"); humble ("what do I do wrong?") and open-minded ("is there another way to explain this?")

Uncover and Collaborate

• avoid making open-ended offers ("what do you want")
• avoid making unilateral offers ("I'd be willing to . . . "
• avoid simply agreeing to or refusing the other side's demands
• instead ask "why is that important to you?"
• proposed solutions for critique ("here's a possibility - what might be wrong with it?")

Elicit Genuine Buy-in

• avoid threats ("you'd better agree, or else . . . "
• avoid arbitrariness ("I want it because I want it."
• avoid close-mindedness ("under no circumstances will I agree to - or even consider - that proposal"
• instead appeal to fairness ("what should we do?")
• appeal to logic and legitimacy ("I think this makes sense because . . . ")
• consider constituent perspectives ("how can each of us explain this agreement to colleagues?"

Build Trust

• avoid trying to "buy" a good relationship
• avoid offering concessions to repair actual or perceived breaches of trust
• instead explore how a breakdown in trust may have occurred and how to remedy it
• make concessions only if they are a legitimate way to compensate for losses owing to your nonperformance or broken commitments
• treat counterparts with respect, and act in ways that will command theirs.

Focus on process

• avoid acting without gauging how your actions will be perceived and what the response will be
• ignoring the consequences of a given action for future as well as current negotiations
• instead talk about the process ("we seem to be at an impasse; perhaps we should send some more time exploring our respective objectives and constraints."_
• slow down the pace:  ("I'm not ready to agree, but I'd prefer not to walk away either.  I think this warrants further exploration.")
• issue warnings without making threats:  ("unless you're willing to work with me toward a mutually acceptable outcome, I can't afford to spend more time negotiating")

I'll be blogging on each one of these steps in the negotiation process for the next two weeks so stay tuned.

Cross posted at She Negotiates and the ABCs of Conflict Resolution.

• THE ASK - name your price first and to make your first number aggressive but not outlandish
  • you need at least three numbers to negotiate with - high, medium and bottom line
  • start with your high number
  • consider linking your high number to performance contingencies, i.e., if I do X and Y as I've promised, then my total compensation for 2011 will be Q; these performance contingencies can also be tied to the company's performance in 2011.
  • don't give all your reasons for your raise at the same time; you need a good reason for each of your high, medium and bottom line numbers - each round of negotiation requires "a number and a reason"
  • when making concessions, consider trading items of high value to you and low value to your employer, i.e., it doesn't cost your employer anything to let you work from home one or two days a week but it may well save you significant monies over the course of the year in transportation and incidental costs (this is called "log rolling")
  • go to your medium number reluctantly and stress that you are making a concession and expect reciprocity
  • go to your bottom line number only when you've completely run out of options

• PRETEND YOU ARE NEGOTIATING FOR SOMEONE ELSE
  • we women have a particular challenge in negotiating for ourselves because asking for ourselves contravenes gender norms
  • the research shows that we negotiate as effectively as men when we're negotiating for another but not when doing so for ourselves - so make yourself your own client and go out there and get the best deal for her

I believe my first public speaking engagement was in the elementary school auditorium in December of1962, narrating the school Christmas pageant. When I spoke in public as a child (and later acted in La Mesa's "Little Theater" ~ a pre-teen farce called "Mudpack Madness") I did so with unmixed motives. I wasn't proving myself or selling patent medicine. My childhood public performances were not part of a "branding" effort or marketing campaign. I wrote and spoke and acted from the purest of motives. I was in love with the English language and with the printed and spoken word. I believed in my voice without question then. I was the obvious choice. I could deliver the message more powerfully and authentically than anyone else.

The next time I looked up, I was standing in the wings of the High School production ofMy Fair Lady ("Mrs. Higgins" thank you very much).  An odd feeling overtook me.  I looked down at my hands and they were damp and trembling. Everyone and everything, sets, student actors, the high school orchestra and the audience of wowed parents, looked brighter and more vivid than they ever had before.  Simultaneously dazzling but oddly blurry.

And so I entered adolescence with what would one day be described as a "panic disorder."  I mustered on through speech team (dramatic and humorous interp and oratorical analysis); took one drama class in college and gave up.

When I made my first court appearance fifteen years later, I recalled My Fair Lady as my vision narrowed just before I stopped myself from passing out.

Getting it back (and avoiding the loss) would consume my thirties and forties.  

Now, when I teach young lawyers deposition skills ~ particularly that of defending a witness, I instruct them to raise an objection, any objection, within their first few minutes in the conference room just to hear their own voice and occupy, if not yet rule, the room.

That's why speaking is negotiating.  Because negotiating requires us to find our voices and the confidence to raise them, asserting our market value, explaining our politics, and expressing the passion we have for our occupation ~ our calling; our purpose.

The first few voices I tried on as a lawyer (we're gonna cut 'em a few more a**holes) fit poorly, like a suit from Mr. Big & Tall hanging on the slender 20-something frame of a girl tottering into meetings in hose and heels, wearing her early '80s bow tie like a talisman against the cowboy mentality that dominated trial practice in Sacramento, California.

More than a decade would pass before I found my own voice again and was able to raise it clear and strong and true.

When we speak, we say that attention must be paid.  That we have something of value to say.  That our audience should pry their fingers from their blackberries and their eyes from their iPhones.  We must be natural, compelling, prepared and deeply honest.  We must be poised to accept rejection, even ridicule. We must know we are right while being flexible enough to acknowledge the places where we may have been wrong.  We must be professional and gracious.  We must be modest enough to learn.

In fact, the only difference between public speaking and negotiation is that we do most of the talking when we speak and nearly all the listening when we negotiate.  

We're not in middle school any longer, nor law or graduate school for that matter.  

I matter.  You matter.  We matter.  If we want the world to change or simply to get our kids to do their homework, we must be willing to raise our voices and speak our minds in the only language we can speak ~ the language that is particular to each of us.  Brave.  And true.

(Cross-posted at She Negotiates)

Click on the ForbesWoman link for the newest "She Negotiates" columnist, Roxana Popescu who here not only learns the lessons of street haggling, but who "outs" herself as the Daily Asker!

Nothing, and I mean nothing makes me happier than watching this new generation of women grow. Please drop by the Daily Asker and ForbesWoman to meet the brilliant and inspirational Roxana!