by Deepak Malhotra (Author)
Negotiating the Impossible: How to Break Deadlocks and Resolve Ugly Conflicts (without Money or Muscle)
In the complex art of negotiations, there are some scenarios that appear to be impossible to resolve. These situations can lead to conflicts, increased aggression, and an apparent lack of room for compromise. However, Professor Deepak Malhotra’s book, “Negotiating the Impossible,” offers valuable guidance on how to transform such situations into opportunities for success. Through engaging real-life negotiation examples, ranging from the drafting of the U.S. Constitution to resolving disputes in professional sports, Professor Malhotra provides actionable lessons drawn from captivating real-life negotiations, ranging from the drafting of the U.S. Constitution to defusing the Cuban Missile Crisis, resolving disputes in professional sports, and triumphing in complex business situations.
Core Concepts
The book discusses principles and strategies that elevate negotiation beyond a mere transactional exchange. By dissecting effective negotiation, readers gain insights into fostering understanding, building bridges, and achieving mutually beneficial agreements.
Highlights
"Negotiating the Impossible" is a guide for those seeking to enhance their negotiation skills. Professor Malhotra not only imparts knowledge but transforms the seemingly impossible into the achievable. By providing actionable insights, it becomes a guide for individuals navigating corporate deals, managing personal relationships, and overcoming obstacles with newfound confidence.
Key Takeaways
Malhotra suggests three key strategies for successful negotiations: framing, process, and empathy. By restructured proposals, careful decision-making, and methodical examination of parties' interests, we can overcome stalemate and reach agreement.
Disclaimer:Â This book summary is intended as a reference for a targeted audience. It gives credit to the book’s authors and provides a link to purchase the ebook, audiobook, or hard copy of the book from available online sources. Please note that this summary does not guarantee the purchase of the original book.
- The power of framing
Most of us are aware that we should carefully consider the costs and benefits of each choice when making a significant decision. On the other hand, a lot of us frequently start the decision-making process by asking ourselves a straightforward question: What would a person like me do in this circumstance?
Dr. Ehdaie discovered throughout his conversations with Malhotra that we can use effective leadership by presenting our ideas in a unique way to take advantage of people’s propensity to consider the most appropriate course of action. Dr. Ehdaie increased the acceptance of active surveillance among his patients from 60% to an amazing 95% by altering the way he discussed alternatives.
Initially, Dr. Ehdaie made use of the social proof principle, which refers to people’s propensity to base decisions on the actions of others. According to social psychologist Robert Cialdini in his book Influence: Science and Practice (Pearson, 2009), we tend to believe that when we witness agreement developing around a specific conduct, it indicates the proper way to behave. Dr. Ehdaie used to bring up early in his discussions with his low-risk prostate cancer patients that the majority of American men in similar circumstances typically choose treatment over active surveillance (a higher percentage than among MSKCC patients), and he would then attempt to explain why this was not a good idea. The issue was that the patients ignored the remainder of his speech, hearing only the bit about how most American males choose treatment.
He discovered that they were significantly more open to his recommendations after he switched to informing them (truthfully) that most of his patients in similar situations selected active surveillance.
Second, Dr. Ehdaie cited studies demonstrating that decision-makers frequently choose the default option since it frequently necessitates the least amount of thought. The physician was aware that most of his patients considered surgery to be the standard course of treatment for cancer.
Now, Dr. Ehdaie begins by talking about and emphasizing active surveillance, which he believes should be the standard option for men with low-risk prostate cancer as opposed to those with other types of cancer. With this new perspective, the default is effectively shifted away from surgery. Similar to this, a business negotiator might use powerful leadership techniques to establish the norm by providing a counterpart with a draft agreement that centers the conversation around her interpretation of what the agreement ought to contain.
Third, we often assess decisions in relation to a benchmark, in the context of a business transaction, this may be the sum of money paid in the most recent comparable transaction. When Dr. Ehdaie informed his patients that they would undergo prostate screening, he discovered that when he informed his patients that they would be screened for prostate cancer every six months under active surveillance (which is a very safe amount of time), many of his patients became anxious, worrying that the cancer would spread quickly during the six-month interval.
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- The power of process
In 1983, two of Sun Microsystems’ founders, Vinod Khosla and Scott McNealy, began negotiations with a Fortune 100 corporation interested in investing $10 million in Sun to gain access to their technology. Following discussions, the CEO of the company agreed to invest $10 million in Sun in exchange for 10% equity. The parties shook hands on the deal and agreed to meet again the following week to finalize the details.
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During the next meeting, Khosla and McNealy were caught off-guard when they saw the CEO arrive with a group of bankers and lawyers. The negotiations for the deal were restarted from scratch, which left Khosla and McNealy feeling shocked and disappointed.
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In corporate negotiations, it’s common for parties to dive straight into discussing the substance of the deal without first agreeing on the negotiation process. This can result in misunderstandings, conflicts and failed transactions. To negotiate effectively, it’s essential to discuss critical aspects of the process with the other party, obtain their approval on any potential arrangements, and determine who needs to be involved in the talks. You should also agree on a meeting schedule and location, set deadlines, and address any possible administrative or political obstacles. It’s crucial to keep discussing the negotiation process throughout the negotiation, including what has already been decided and how much further needs to be done.
- The power of empathyÂ
Often, a lack of understanding of the other side’s goals and perspectives is the root cause of impasses and conflicts, rather than procedural or framing issues.
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Let’s consider the case of “Sam,” a successful businessman and former student of Malhotra. A large retailer in the United States decided to change its supplier for a specific clothing style from an American supplier to an Asian one. Sam, who had experience in Asian manufacturing, was assigned as the contact person for the retailer’s dealings with the new supplier. If Sam’s business managed the acquisition and sales of the product, it could have earned over $1 million annually.
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However, a few months later, the agreement fell through when Sam, the retailer, and the Asian company were sued for patent infringement by the U.S. supplier that the retailer had previously used. Sam became the main target of the lawsuit for several reasons and ended up paying hundreds of thousands of dollars to the supplier to avoid a costly legal battle, even though he believed he had done nothing wrong. The supplier, however, refused the offer and proceeded with the case. Sam’s business lost in court, resulting in a loss of nearly $2 million. His lawyers presented him with three options: pay the money, challenge the ruling, or try to reach a new agreement outside of court.
Instead of choosing any of these options, Sam decided to examine the supplier and its goals more closely. Although the supplier would receive a short-term windfall of $2 million from him, it would be unable to get its product into the retailer’s stores due to the lawsuit, damaging its relationship with the retailer.
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Sam met with the CEO of the US supplier after conferring with the retailer and suggested acting as its middleman with the retailer. The CEO found the idea interesting and they worked together to reach an agreement. The agreement included two terms: (1) Sam would pay a few hundred thousand dollars to settle the case, and (2) Sam’s company would serve as the exclusive middleman for the retailer, earning a few million dollars.
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Sam demonstrated remarkable leadership abilities and the ability to transform his adversary into a partner. However, according to Malhotra, everyone can think like this by developing empathy for their adversaries and making an effort to understand their goals, interests, and limitations. Empathy, which is distinct from sympathy, enables us to see how working with people we might otherwise see as rivals or enemies can benefit us as well. By considering the other side’s perspective and determining what they stand to gain from our interactions, we may be able to find new ways to add value and resolve conflicts, as Sam did.
Principles to help you get unstuck:
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 Reframe your proposals to make them more compelling to your counterpart. This can help them back down without losing face.
Negotiate the process you will follow before diving into substance. This will help ensure a smoother negotiation process.
Empathize with the other party to identify their interests, constraints, alternatives, and perspective. This can help you find common ground and reach a mutually beneficial agreement.