So Many Negotiations and the “Art of the Deal” – Lessons to Be Learned?
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There are countless books and websites that provide invaluable and varied insights into the art and science of negotiations, with all sorts of thoughts and advice on the pros and cons of different bargaining techniques. Some recommend a competing negotiating style, while others promote compromising or collaborative approaches. There appear to be as many negotiation approaches as there are negotiators, with each negotiator and negotiation having their own unique characteristics.
Regardless of the styles and approaches, certain basic truisms lie at the heart of all successful negotiations, and the current negotiations between North Korea and the United States provide context to determine whether President Trump’s style and his administration’s approach reflect those truisms. Critically analyzing negotiations - failed and successful – offers an invaluable lesson in negotiation strategy allows you to develop and hone your own techniques and philosophy.
My colleague Paul Monicatti believes Trump’s negotiation approach is not “tempered by reason.” No one knows how the final chapter this administration’s negotiations will be written, but the ongoing denuclearization negotiations between North Korea and the United States is a good starting point for our discussion. Some critics and pundits have declared the negotiations dead and a failure; others claim more has been accomplished in the past year than in the previous four decades to contain the nuclear ambitions of North Korea. Regardless of the ultimate outcome, an exploration of the current negotiations by reference to the The Art of the Deal may provide thoughts and raise issues about negotiation strategy.
In Chapter 2 of Art of the Deal President Trump lays out the core of his entrepreneurial and negotiating philosophies in the following subchapters that include:
Think Big;
Protect the Downside and the Upside Will Take Care of Itself;
Maximize Your Options;
Use Your Leverage;
Know Your Market; and
Fight Back.
Regarding “Think Big,” Trump writes:
“I like thinking big…. If you’re going to be thinking anyway, you might as well think big. Most people think small, because most people are afraid of success, afraid of making decisions, afraid of winning.”
Going into the Korean negotiations, President Trump appears to be “thinking big” by seeking far more than previous administrations may have sought in prior discussions with North Korea. Besides the prime objective of dismantling North Korea’s nuclear weapons capabilities, statements from Trump’s top official indicate U.S. goals also include the complete denuclearization of the Korean Peninsula, the potential reunification of North and South Korea, improving the economy in North Korea and fostering mutually beneficial trade between the U.S., Japan, North, South Korea, and possibly Taiwan (creating a potential buffer to the growing economic and military influence of China in the Pacific), not seeking regime change, and reducing the number of American troops stationed on the Korean peninsula.
Whether any of these objectives or related targets are realistically achievable, it does appear the President is taking his own advice of “Thinking Big.” As expressed in the “Thinking Big” approach, there is a willingness to decide without fear of failure in pursuing the ultimate goal (i.e., is this an example of Paul’s suggestion that President Trump’s negotiating style is not tempered by reason). For this particular negotiation, the question arises whether this is a potentially reckless and unrealistic approach (as many of the President’s detractors suggest) or a prudent and thoughtful willingness to break a paradigm that has resulted in decades of past failures in dealing with North Korea. Regardless of the outcome, the “Think Big” concept does contain an essential element that is a precondition for all successful negotiations – having several strategic objectives and options that help to define and shape your BATNA (best alternative to a negotiated agreement) and the creation of negotiation possibilities and options that might otherwise have been ignored.
While achieving all of the objectives may be “nice,” certain objectives that are not critical can be jettisoned during the negotiations. These are sometimes characterized or postured as “giveaways” to encourage movement by the other side toward the key and most important strategic objective – reaching your BATNA.
What are your thoughts on the “Thinking Big” approach to negotiations? Can this concept be beneficially incorporated into your future negotiations or does it risk unnecessarily complicating matters and raise the potential for confusion and a lack of focus? What are the positive and negative implications of “Thinking Big” in your negotiation strategy? Is big-thinking appropriate for all negotiations or does the concept pertain to only certain types of negotiations?
Use Your Leverage is at the core of the President’s negotiation philosophy.
“The worst thing you can do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.”
Leverage is critical to any successful negotiation. The list of leverage points the Administration has brought to the table may include:
U. N. sanctions (implementation of which began before the formal negotiation process);
The apparent unpredictability of the President and his once expressed willingness to use military force if there was a refusal to negotiate (some suggested the threats were reckless or not otherwise tempered by reason);
The President’s ongoing discussions with China to robustly enforce sanctions and giving the perception of a personal relationship with Xi (North Korea’s most important sponsor);
Continued military surveillance and advising Kim in Vietnam the extent of the extensive U.S. intelligence collected on North Korea (President Trump even remarked that Kim was “surprised” by the extensive intelligence that was collected and discussed);
Telegraphing to Kim the United States is not interested in or desirous of fostering regime change; and
Demonstrating President Trump was not “desperate for a deal” – he walked away from the table at the Vietnamese talks.
Since there has been a pause in the talks, it would appear that North Korea and the United States have attempted to increase their respective leverages in any number of ways, such as:
North Korea’s outreach to Russia for economic support and testing Russia’s willingness to ignore the sanction regime (a development that has caused sufficient concerns to induce an emergency meeting between Pompeo and his Russian counterpart);
An uptick in sanctions enforcement including the seizure of North Koreas second largest shipping vessel filled with badly needed coal;
Resumption of limited short range missile testing by Korea;
North Korea’s lack of cooperation in returning the remains of U.S. soldiers killed during the Korean War;
North Korea’s threat to resume missile testing if a deal is not reached by the end of the year;
The demand by North Korea that Secretary of State and National Security Advisor John Bolton not engage in any further negotiations.
How often do you look for ways to increase your leverage during negotiations? Is this a wise strategy to pursue or does it risk scuttling the possibility of any ultimate deal?
While there are those who maintain that North Korea will not under any circumstances agree to eliminate its nuclear arsenal the Administration appears to have taken steps to suggest to Kim that North Korea should be desperate for an agreement and want what the United States is ready to sell (economic vitality and safeguards for Kim’s continuation in power). The question of critical importance is what is Korea’s BATNA – is it simply to obtain a gradual reduction in sanctions without a complete and enforceable dismantling of its nuclear program or is there a true commitment to engage in denuclearization if sufficient concessions are made in achieving its ultimate BATNA (whatever that may be)? How important is it for you to determine your negotiation partner’s BATNA? Before your negotiations commence, what steps do you take to determine the BATNA of your negotiation partner and develop satisfactory options to help your negotiating partner achieve its objectives? Can you induce your negotiating partner to beneficially redefine its BATNA so you can achieve your goals and objectives; if so, how can that be done without raising the leverage stakes?
The literature is replete with examples of consummated deals that utterly failed to achieve the BATNA of at least one party. In many of these instances the lure of “the deal” took precedence over the goals sought to be achieved in making the deal in the first place. In negotiations do you believe it is important to avoid desperation to make a deal (even if the deal will not achieve your predetermined BATNA and strategic objectives)? What safeguards and mechanisms do you put in place during your negotiations to ensure that such a deal will not be made (self-delusion and the “lure of the deal” can be powerful drugs)? Has the United States in your opinion telegraphed it is desperate to “make a deal” with Kim? Has North Korea telegraphed it is desperate? What safeguards and steps would you recommend the United States take to ensure it does not accept a bad deal? What safeguards do you put in place to ensure you do not enter into a bad deal?
In future blogs Paul and I will explore other aspects of the Trumpian negotiation style (pro and con) that we hope will be of assistance in the formulation of your own negotiation approach.