John Caddell's blog

Am I a good negotiator? I’ve negotiated several dozen contracts, from short-term consulting agreements to broad, highly-complex strategic alliances. I’ve done deals in the US, Europe, Latin America and Asia. I feature negotiation on my resume.

But hold on a second. According to Deepak Malhotra and Max Bazerman of Harvard Business School, authors of the book “Negotiation Genius,” experience does not equal expertise in negotiation. Through many quirks of human nature, we are capable of making the same mistakes over and over again, even in terribly important efforts. (Click here if you’d like to hear about one of my poorest negotiating efforts.)

If practice doesn’t make perfect, what is someone who wants to be a better negotiator to do? Well, read “Negotiation Genius,” for one, and apply its lessons. Despite that awkward title, it’s a fantastic book on a subject that too rarely gets serious treatment in the business press.

The authors use countless examples and are not afraid to get complicated. As enlightening as it was to read through once, I think “Negotiation Genius” will be a valuable reference that I’ll use again and again, whether contemplating, preparing for, or engaging in a business negotiation.

The book covers:

• Getting more than your fair share of the negotiating pie
• Increasing the size of the pie
• How to respond when you’d like to immediately agree to an offer
• How to bargain when you have little power
• How to deal with lying or deception
• etc.

In other words, “Negotiation Genius” has everything a quick-read, how-to negotiation book has plus an exhaustive explanation of the underlying psychological factors (referencing specific research, especially the behavioral economics work of Daniel Kahneman and others). Finally, there are so many relevant examples, including experiences of the authors, that every assertion in the book feels grounded and reasonable.

And there is humor, too, including how the most difficult negotiating counterpart can be one’s own spouse (my Vice President of Common Sense would attest to that).

Here’s an excerpt on how our emotions can harm us in negotiations:

If you are angry with a negotiating counterpart, you may want to do or say something that you know will harm you in the long run…. Still, in the heat of the moment, it can be difficult to resist the urge to lash out or to retaliate. Similarly, if the other side makes you an attractive offer, you may be so excited that you are tempted to accept right away, though you know it would be smart to try to negotiate a better deal…. Note that you would not advise a friend to act rashly in either of these two situations–yet, at the same time, you might find it hard to do otherwise. (P. 127)

Wise words. “Negotiation Genius” is full of them. Read it if you want to be a better negotiator. There’s no other book on the subject I can recommend more highly.

Further Information:

Here is a Shop Talk Podcast on one of the concepts Malhotra and Bazerman discuss, the BATNA, or Best Alternative To A Negotiated Agreement.

negotiation, psychology, dealmaking, reading list

After last week’s look at “The Future of Management,” it seemed appropriate to look back at one of my favorite HBR articles, “In Praise of Hierarchy,” by the late Dr. Elliott Jaques (link – $$). In this article, published in 1990, Dr. Jaques asserts that “35 years of research have convinced me that managerial hierarchy is the most efficient, the hardiest, and in fact the most natural structure ever devised for large organizations.”

Despite appearances, “In Praise of Hierarchy” is not diametrically opposed to “The Future of Management.” Dr. Jaques is open and candid about hierarchical organizations’ many failures. He blames poor implementation of hierarchy and states for years we’ve been attacking the wrong problem:

…One of the most widespread illusions in business [is] that a company’s managerial leadership can be significantly improved solely by doing psychotherapeutic work on the personalities and attitudes of its managers…. The problem is that our managerial hierarchies are so badly designed as to defeat the best efforts even of psychologically insightful individuals.

Dr. Jaques’ goes on to state that responsibility is best determined by looking at the time span of an employees’ longest task, program or project, and that “the boundaries between successive managerial layers [should] occur at specific time-span increments.”

Meaning that an engineer who’s working on a module that is due in two months has a time span of two months. The project manager who is in charge of the new version that is six months out has a six-month span. The product manager who is planning the two year roadmap has a two-year span. And so on.

Dr. Jaques solution for improving hierarchy is simply this:

1. assure that managers have “just enough authority to ensure that their subordinates can do the work assigned to them”
2. create a quantum time-span difference between managerial levels (Dr. Jaques suggests examples of three months, 1 year, 2 years, 5 years, 10 years and 20 years)

The above always felt right to me when I was a manager. When conflicts arose it was typically because my manager and I (or I and my subordinate) were managing roughly the same time span. The layers got too crowded–typically on the short end. Everyone was worrying about the next six months!

One would imagine that in the seventeen years since this article was published, there would have been progress. Instead, I think things are worse. I’ve read about CEOs who want to sit up high and assess at some times, and dig into the details at other times. Or we get so enamored with terms like “self-organizing systems” that we want to throw the baby out with the bathwater.

Instead of fixing our hierarchies, we’re patching them or trying to discard them. Maybe we should take a new look at Dr. Jaques’ old idea.

organizational behavior, hierarchies, leadership, management, Harvard Business Review