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Negotiation Strategies and Techniques

Negotiation Strategies and TechniquesPRO:BRR:EN:000 ver. 1.0

© Copyright Barry N. SmithJanuary 2014All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, inany form or by any means, electronic, mechanical, photocopying, recording, or otherwise,without the prior written permission of Barry N. Smith.

All material from A Guide to the Project Management Body of Knowledge (PMBOK®) isreprinted with permission of the Project Management Institute, Four Campus Boulevard,Newtown Square, Pennsylvania 19073-3299, USA, a worldwide organization of advancingthe state-of-the-art in project management. Phone: (610)356-4600, Fax: (610)356-4647.

PMI® is a service mark and trademark of the Project Management Institute, Inc., and isregistered in the United States and other nations.

PMBOK® is a trademark of the Project Management Institute, Inc., and is registered in theUnited States and other nations.

PMP® is a certification mark of the Project Management Institute, Inc., and is registered in theUnited States and other nations.

Barry N. Smith12021 Popes Head RoadFairfax, VA 22030(703) 691-4784Fax: (703) [email protected]

ESI InternationalArlington, VA USA

Contents

Page

Module 1: Introduction to Negotiation Strategies and Techniques........................................................................................................................1

Introduction to Negotiation Strategies and Techniques..............................1Introduction to Negotiation Strategies and Techniques.........................1Objectives..............................................................................................1Human Growth and Development ........................................................2Overview................................................................................................2

Module 2: Preparing for Negotiation...........................................................3Preparing for Negotiation...........................................................................3

Preparing for Negotiation.......................................................................3Objectives..............................................................................................3Preparation Process..............................................................................4Issue Types...........................................................................................4Negotiation Issues.................................................................................5Negotiation Positions.............................................................................5Conflict Range.......................................................................................6Area of Potential Agreement..................................................................6Prioritizing Issues and Setting Positions................................................7Benefits of Prioritizing............................................................................7Methods of Prioritizing...........................................................................8Agenda Types........................................................................................8Debriefing Guidelines............................................................................9Preparation Worksheet..........................................................................9

Module 3: Influencing the Other Party......................................................11Influencing the Other Party.......................................................................11

Influencing the Other Party..................................................................11Objectives............................................................................................11Causality of Technique........................................................................12Technique vs. Strategy........................................................................12The 3 Collections of Negotiation Techniques......................................13Reasoning Techniques........................................................................13Four Most Commonly Used Reasoning Techniques...........................14The “Select Five”.................................................................................14The Characteristics of the “Select Five” Techniques...........................15Power Techniques...............................................................................15Criteria to Consider When Using Carrot and Big Stick........................16The “Oblique Four”..............................................................................16Rapport Techniques............................................................................17The Relationship Between Frustration and Performance....................17

v

Tension Managers...............................................................................18Power Mechanics................................................................................18Observation Worksheet.......................................................................19Negotiation Techniques Observation Summary Sheet........................19

Module 4: Conducting the Negotiation.....................................................21Conducting the Negotiation......................................................................21

Conducting the Negotiation.................................................................21Objectives............................................................................................21Stages of Negotiation..........................................................................22The Work of Each Stage......................................................................22Rapport-Setting....................................................................................23Exploratory...........................................................................................23Active Listening Skills..........................................................................24Hard-Core Bargaining..........................................................................24Closure and Agreement.......................................................................25Structural Intervention: Monitor the Behaviors in Each Stage.............25Strategies.............................................................................................26Four Levels of Negotiation (Optional)..................................................26Negotiation Stages Observation Guide...............................................27

Module 5: Applying Individual Style to the Negotiation Process......................................................................................................................29

Applying Individual Style to the Negotiation Process...............................29Applying Individual Style to the Negotiation Process...........................29Objectives............................................................................................29Strength Deployment Inventory®.........................................................30Characteristics of an Assertive-Directing Individual (RED)..................30Characteristics of an Analytic-Autonomizing Individual(GREEN)..............................................................................................31Characteristics of an Altruistic-Nurturing Individual (BLUE)................31Characteristics of a Flexible-Cohering Individual (RED/GREEN/BLUE)..................................................................................................32Scoring the SDI®.................................................................................32Setting and Style..................................................................................33Establishing the Negotiator Profile.......................................................33Managing the Negotiator Profile..........................................................34Managing the Negotiator Profile (continued).......................................34The AB Company Organizational Chart..............................................35Blue-Green Exercise (Optional)...........................................................35Behavioral Congruence.......................................................................36

Appendix..............................................................................................Case Study Supplements.................................................................

Case Study: The Truck Case—Information Available to BothParties..........................................................................................Case Study: The Truck Case—Seller Confidential......................Case Study: The Truck Case—Buyer Confidential......................Case Study: The House Case—Information Available to BothParties..........................................................................................

vi

Case Study: The House Case—Seller Confidential....................Case Study: The House Case—Buyer Confidential....................Case Study: The Publication Services Corporation Case—Information Available to Both Parties...........................................Case Study: The Publication Services Corporation Case—PSC(Seller) Confidential.....................................................................Case Study: The Publication Services Corporation Case—Government (Buyer) Confidential................................................

Action Plan Supplements.................................................................Action Plan...................................................................................

Appendix Supplements....................................................................Appendix A: How We Deploy Our Strengths in the Face ofConflict and Opposition................................................................Appendix B: Analysis and Implications of the Blue-GreenExercise.......................................................................................

Tool Supplements............................................................................Tool: Observation Worksheet......................................................Tool: Preparation Worksheet.......................................................Tool: Negotiation Stages Observation Guide..............................Tool: Negotiation Techniques Observation Summary Sheet.......

vii

© Dr. Barry N. Smith PRO:BRR:EN:000 ver. 1.1

Module 1

1-1

Introduction to Negotiation Strategies andTechniques


Module 1

1-2

Objectives

By the end of this course, you will be able to—Identify individual competencies and incompetenciesOutline an action plan for improving identified incompetencies


Module 1

1-3

Human Growth and Development

Competent IncompetentConsciously III IIUnconsciously IV I


Module 1

1-4

Overview


Module 2

2-1

Preparing for Negotiation


Module 2

2-2

Objectives

By the end of this module, you will be able to—Identify issuesCompare and contrast primary and secondary issuesIdentify primary and secondary issues in a negotiation caseSet minimum, target, and maximum positions on primary issues in anegotiation casePrioritize issues in a negotiation caseExecute with focus—determine agenda order and write a plan forinfluencing the other party


Module 2

2-3

Preparation Process

Identify issuesSeparate primary from secondary issuesSet positions on each primary issue

MinimumTargetMaximum

Use a priority systemExecute with focus


Module 2

2-4

Issue Types

PrimaryControllable by one or moreparties at the tableForms a contract line itemSomething over which we haveagreementLeads to a successfulperformance period

SecondaryNot controllableForms awareness of thenegotiation contextSomething over which we musthave awareness (facts,conditions, forces, andpressures)Leads to understanding ofpositions and techniques


Module 2

2-5

Negotiation Issues

Separate primary from secondary issuesAsk the following questions:

Can this issue be changed as a result of negotiation?Is this issue dependent on or independent of the negotiation?


Module 2

2-6

Negotiation Positions

Minimum Position = Least DesirableTarget Position = Acceptable

Maximum Position = Most Desirable


Module 2

2-7

Conflict Range


Module 2

2-8

Area of Potential Agreement


Module 2

2-9

Prioritizing Issues and Setting Positions

Issues Minimum Target Maximum Priority


Module 2

2-10

Benefits of Prioritizing

Trade off issuesBreak up bundlesManage the time spent negotiatingManage concessionsCoordinate your efforts with your organization’s prioritiesGet in sync with members of your teamEncourage members of the requirements group to clarify their focus


Module 2

2-11

Methods of Prioritizing

Priority is the relative importance of each issue.

Methods:Rank order—An ordinal method ofreflecting importance, such as 1, 2, 3. . .N

Works best with less than 10 issuesWorks best when the issues can be“stair stepped”

Tier system—A method that clusters issuesaccording to their priority, such as As, Bs,Cs with further breakdown


Module 2

2-12

Agenda Types

SlopeUpwardDownward

SandwichShowstopperPrimrose Path


Module 2

2-13

Debriefing Guidelines

1. Share with the Other Party (OP)Confidential SheetPreparation Sheet

2. What went well3. What did not go as well4. Name at least 1 strength of the OP5. List strengths named by OP about you


Module 2

2-14

Preparation Worksheet


Module 3

3-1

Influencing the Other Party


Module 3

3-2

Objectives

By the end of this module, you will be able to—Define technique as it applies to negotiationCompare and contrast the 3 collections of techniquesCompare and contrast the 65 techniquesIdentify the individual techniques used in both videotapes and livenegotiation settingsIdentify and demonstrate the 2 principles of technique application


Module 3

3-3

Causality of Technique


Module 3

3-4

Technique vs. Strategy

TechniqueAn influence attemptSynonyms: tactic, ploy, gambit, maneuver, argumentation

StrategyTwo or more techniques used together


Module 3

3-5

The 3 Collections of Negotiation Techniques

ReasoningPowerRapport

Reference: Reference Manual Module 3, pp. 14-26


Module 3

3-6

Reasoning Techniques

Agreement/RebuttalBlizzardingBrowsingBudget Bogey**Change the Formof MoneyDisclaimer**Fair andReasonableGaining and UsingInfo.High Balling

IncherLittle Professor**Low BallingMeet ObjectionsMilerNibblingOffer/Counteroffer*One in the WingsPatiencePro/Con AnalysisPuffing**

Quid Pro Quo*Raise ObjectionsRepetitionSilenceSplit theDifference*StallballStandard IndustryPracticeStraw IssueThresholdingTrading Down*Trading Up*

* “Select Five” Techniques ** Four Most Commonly Used Techniques


Module 3

3-7

Four Most Commonly Used ReasoningTechniques

Budget BogeyDisclaimerLittle ProfessorPuffing


Module 3

3-8

The “Select Five”

Offer/CounterofferQuid Pro QuoSplit the DifferenceTrading DownTrading Up


Module 3

3-9

The Characteristics of the “Select Five”Techniques

Create movement through movement, not argumentRequire a sense of timing and context for successful useCreate a climate of reciprocity (a give and take), not competitionDeal makersMove the Other Party (OP) to a less competitive mode


Module 3

3-10

Power Techniques

Back PedalingBig PartnerBig StickBlame the Third Party*BulldozingCarrotDeadliningEntrenchingEscalation Approval*Limited Authority*Make the Other Party AppearUnreasonable

Missing Person*NonnegotiablePhysical WalkoutPsychological WalkoutPut the Other Party on theDefensiveSpeed UpStretch OutSurprise

Not recommended:BluffingDiscountingOutright LiesUproar

*The “Oblique Four”


Module 3

3-11

Criteria to Consider When Using Carrot and BigStick

Know what the other party needs or fearsDo not use yourself as a reference point

Follow throughFollow through within a reasonable period of timeEnsure that what you ask for is a reasonable request or concession


Module 3

3-12

The “Oblique Four”

Blame the Third PartyEscalation ApprovalLimited AuthorityMissing Person

The “oblique four” techniques are generally easier and morecomfortable for nonpower players to acquire.


Module 3

3-13

Rapport Techniques

Techniques Type of RapportAssociatesDisassociatesLong-Lost FriendVisiting

Conformity

BrinkmanshipLittle PartnerPoor MeSentimental JourneyWooden Leg

Sympathy

FlatteryIngratiation

Disarmament


Module 3

3-14

The Relationship Between Frustration andPerformance


Module 3

3-15

Tension Managers

Use humorLay issues aside and return to them laterTake a breakTake a side tripChange locationIntroduce foodIndicate flexibilityGive a small concessionBring in a third partyChange negotiatorsSummarize progress to dateEmphasize potential for reaching agreementEstablish common goals


Module 3

3-16

Power Mechanics

Parsimony—use of one technique at a timePlacement—give the other party time to think


Module 3

3-17

Observation Worksheet


Module 3

3-18

Negotiation Techniques Observation SummarySheet


Module 4

4-1

Conducting the Negotiation


Module 4

4-2

Objectives

By the end of this module, you will be able to—Compare and contrast the 4 stages of negotiationList the different interventions possible in each stage of thenegotiation processIdentify those interventions in both videotapes and live negotiationsettingsIdentify the different interventions you do and do not use in order todetermine areas for developmentIdentify the 2 strategies: competing and reciprocating


Module 4

4-3

Stages of Negotiation

A stage is a type of work that takes any of 4 possible forms:Rapport-SettingExploratoryHard-Core BargainingClosure and Agreement

It is recommended that stages be followed in the above (invariantsequential) order.


Module 4

4-4

The Work of Each Stage

Rapport-Setting—manage tension; establish and maintain theworking relationshipExploratory—establish the conflict range(s); know and understandeach others’ needs and positionsHard-Core Bargaining—resolve the conflict range; persuade andinfluence each otherClosure and Agreement—summarize the resolution of each conflictrange; ensure success


Module 4

4-5

Rapport-Setting

Makes introductionsEases tensionsEstablishes communicationConsists of—

Four conformity techniquesAny of the tension managers


Module 4

4-6

Exploratory

Aids data flowShares informationExplores positionEstablishes the conflict rangeVoid of influence


Module 4

4-7

Active Listening Skills

Confirm speakerAsk questionsParaphrase meaningReflect feelingsShow empathy


Module 4

4-8

Hard-Core Bargaining

Exerts influenceResolves conflict rangeSettles disagreementsConsists of 2 substages

RitualismExists when persons use techniques other than the“select five”Adds length to the negotiation and may cause anadversarial climate

RealExists when persons use the “select five” techniquesShortens the negotiationCreates reciprocity


Module 4

4-9

Closure and Agreement

Summarizes resultsStates expectationsDefines new roles and responsibilitiesReduces tacit agreements


Module 4

4-10

Structural Intervention: Monitor the Behaviorsin Each Stage

I. Rapport-SettingManages tension level

II. ExploratoryIntroduces primaryissuesIntroduces secondaryissuesStates position onprimary issueProbes for position onprimary issueAsks for informationGives informationStates the conflict range

III. Hard-Core BargainingApplies techniqueAsks for concessionsGives concessions

IV. Closure and AgreementSummarizes


Module 4

4-11

Strategies

Competing—use of techniques other than the “select five”Reciprocating—use of the “select five”


Module 4

4-12

Four Levels of Negotiation (Optional)

FactsMethodologyValuesGoals


Module 4

4-13

Negotiation Stages Observation Guide


Module 5

5-1

Applying Individual Style to the NegotiationProcess


Module 5

5-2

Objectives

By the end of this module, you will be able to—Define negotiation style as a function of both technique and stageselectionList both stages and techniques preferred and generally ignored byeach styleIdentify your own negotiation style through the Strength DeploymentInventory® (SDI®)Analyze your own and others’ negotiation style by observingtechniques employed and stages chosen in a videotapednegotiation settingDemonstrate a pattern deployment strategy in managing the otherparty’s negotiation style

1 Excerpted from the Leader’s Guide to Relationship Awareness Training, copyright 1978, by special permission from the publisher, Personal StrengthsPublishing, Inc., Carlsbad, Ca., USA, (800) 624-7347, www.PersonalStrength.com. Further adaptation is prohibited without the prior written consent of thepublisher.


Module 5

5-3

Strength Deployment Inventory®

Assertive-Directing (RED)Analytical-Autonomizing (GREEN)Altruistic-Nurturing (BLUE)Flexible-Cohering (RED/GREEN/BLUE)1



Module 5

5-4

Characteristics of an Assertive-DirectingIndividual (RED)

Doer, focuses on performance periodFighter, comfortable with bargainingPushes for authority, responsibility, and leadershipUses persuasion; uses more techniquesChallenges others, comfortable with conflictTakes risks in positions and technique choicesAlert to opportunity when a weakness is exposed1



Module 5

5-5

Characteristics of an Analytic-AutonomizingIndividual (GREEN)

Thinker, relies on informationPlanner, prepares in advanceSearches for meaningful order, organizedControls emotionsConcerned that things have been properly thought throughCautious and thorough, deliberate paceFair and principled1



Module 5

5-6

Characteristics of an Altruistic-NurturingIndividual (BLUE)

Friendly helper, assists OP in achieving needsOpen and responsive to othersAvoids being a burden to others; avoids extreme positionsPromotes harmony; is uncomfortable with conflictMakes life easier for othersSupportive of OP’s goalsWarm-hearted1



Module 5

5-7

Characteristics of a Flexible-Cohering Individual(RED/GREEN/BLUE)

Shows concern for feelings of othersThoroughSupportiveOpen and responsive to the ideas of othersStrong at times for own ideasTask-orientedFlexaholics1

1 Excerpted from the Leader’s Guide to Relationship Awareness Training, copyright 1978, by special permission from the publisher, Personal StrengthsPublishing, Inc., Carlsbad, Ca., USA, (800) 624-7347, www.PersonalStrength.com. Further adaptation is prohibited without the prior written consent of thepublisher


Module 5

5-8

Scoring the SDI®

1


Module 5

5-9

Setting and Style

Depending on the setting and context, your style may changecompletely.Examples of settings: career, financial, social, familial, recreational,and spiritualKeep in mind --

What style works best for you? For the other party (OP)?What are the expectations of other parties as to your style?Which style will be the most functional in that setting?


Module 5

5-10

Establishing the Negotiator Profile

Identify the techniques used by the Other Party (OP)Preferred techniquesPreferred technique collectionsTechnique collection shiftsComfort/discomfort level with some techniques

Identify the stages used by the Other Party (OP)First stage observed in useStage order preferenceStages

Most observedLeast observedNot observed

Comfort/discomfort level with some stages


Module 5

5-11

Managing the Negotiator Profile

Increase Your Ability to Adjust to the Other Party (OP) by—Utilizing technique collections used by the OP

Match same techniqueUse a technique out of the same collection

Avoiding excessive time in ritualismTry a bridge technique such as a member of the “select five”Shift the discussion to another issue

Correcting out-of-process OPs by shifting OP to a more appropriatestage


Module 5

5-12

Managing the Negotiator Profile (continued)

Increase Your Ability to Adjust to the Other Party (OP) by—Growing your profileOvercoming your own discomfort level with OP’s stage choicesIncreasing your skill

Acquire proficiency in all 3 collections of techniquesDevelop mastery of all 4 stages


Module 5

5-13

The AB Company Organizational Chart


Module 5

5-14

Blue-Green Exercise (Optional)

The purpose of the Blue-Green Exercise is accumulation of positivepoints.


Module 5

5-15

Behavioral Congruence

Behavioral congruence is consistency between what you perceiveyourself as doing and what you are doing.

Appendix Supplements

Appendix A: How We Deploy Our Strengths in the Face of Conflictand Opposition

Appendix B: Analysis and Implications of the Blue-Green Exercise

Appendix A: How We Deploy Our Strengths in the Face of Conflict andOpposition

Things I Need to Be on Guard Against

ALTRUISTIC-NURTURING (BLUE) ASSERTIVE-DIRECTING (RED) ANALYTIC-AUTONOMIZING(GREEN)

Wanting so much to maintain harmonythat I do not push for what I want

Wanting so much to win that I step onothers to get my own way

Wanting so much to be certain that Idelay in reaching decisions

Being so quick to believe in others thatI do not use good judgment

Being in such a hurry to get thingsdone that I disregard how others feelabout things

Being so concerned with what is rightand/or wrong that I pay little attentionto people’s feelings

Being so loyal to others that I let themtake advantage of me

Being so sure I am right that I do notlisten to other people

Being so cautious that I find it hard toplace trust in others

Expecting that everyone is going to beas concerned about how other peoplefeel as I am

Expecting that everyone is going toenjoy competing with me and pushingfor what they want

Expecting that everyone is going to beas concerned as I am with details,logic, and matters of principle

Wanting to help others so much that Ipush my help on them and get in theirway

Wanting others to do things my way somuch I become dictatorial

Wanting to be so self-dependent that Icut myself off from people who reallylike me and can be helpful

Being quick to blame myself first foranything that goes wrong

Being quick to blame anything thatgoes wrong on the failure of others tocooperate

Being quick to blame anything thatgoes wrong on my not having beencautious enough


Sharing my thoughts and feelings withpeople I should not trust with them

Sharing only those thoughts andfeelings that help me get my own way

Keeping my thoughts and feelingsabout myself to myself so others donot get to know me

Fearing that if I said what I really feelabout others, they would be hurt andnot helped

Fearing that if I said what I really feel,others would know how to takeadvantage of me

Fearing that if I said what I really feel,others would see me as illogical andemotional

Struggling to maintain harmony at theexpense of facing issues or of facingthe facts

Struggling to win an issue regardlessof what the facts are or what otherpeople might feel

Struggling with the facts and issueswith such determination that others’feelings are disregarded

Acting to please others just to belikeable

Acting to direct others just to exert myauthority

Acting to turn others away just toassert my self-dependence

Adapted from the Strength Deployment Inventory, copyright 1973, 1998, by special permission from the publisher, PersonalStrengths Publishing, Inc., Carlsbad, Ca., USA, (800) 624-7347, www.PersonalStrengths.com. Further adaptation isprohibited without the prior written consent of the publisher.

PRO:BRR:EN:000 ver. 1.1 © Dr. Barry N. Smith

Behind the Weaknesses Are Strengths

ALTRUISTIC-NURTURING (BLUE) ASSERTIVE-DIRECTING (RED) ANALYTIC-AUTONOMIZING(GREEN)

CharacteristicStrengths:

Risks BeingSeen As—





Trusting Gullible Self-confident Arrogant Cautious Suspicious

Optimistic Impractical Enterprising Opportunistic Practical Unimaginative

Loyal Slavish Ambitious Ruthless Economical Stingy

Idealistic Wishful Organizing Controlling Reserved Cold

Helpful Self-denying Persuasive Pressuring Methodical Rigid

Modest Self-effacing Forceful Dictatorial Analytical Nit-picking

Devoted Self-sacrificing Quick to act Rash Principled Unbending

Caring Smothering Imaginative Dreamer Orderly Compulsive

Supportive Submissive Competitive Combative Fair Unfeeling

Accepting Passive Proud Conceited Persevering Stubborn

Polite Deferential Bold Brash Conserving Possessive

Risk taking Gambler Thorough Obsessive

Adapted with permission from the Strength Deployment Inventory, © Personal Strengths Publishing, Inc.


You are inviting mutually productive and mutually gratifying relationships with others when you follow these rules for being:

NURTURANT DIRECTIVE AUTONOMOUS HUB

When you genuinely want tohelp others and are able todo so

When what you want toaccomplish has genuinerewards for others in termsof their values

When your pursuit of yourinterests is of real value toothers

When your pursuit ofoptions is beneficial to thegroup

When others’ needs are realand they genuinely needyour help

When others genuinelyagree with what you want toaccomplish

When others genuinelyapprove of yourindependent pursuit of yourinterests

When others enjoy yourefforts to get peopletogether

When others genuinely wantyour help

When others look to you toset the goals and to givedirections

When others agree to liveby the rules of principle andlogical analysis

When others look to you asa problem solver to seeseveral perspectives


You will frequently abuse your orientation if you consistently expect others to—


Value friendship andharmony first and foremost

Value competition andrivalry first and foremost

Value facts and principlesfirst and foremost

Want the group to betogether and act inconsensus

Want your help Want to follow you Be logical and keep feelingsunder control

Continue to seek optionswhen the deadline is past

Be guided by feelings andconcern for feelings

Trust your judgment withoutquestioning it

Want your logical analysisand judgment

Understand your differentand unpredictable behavior

Treat you with warmth andaffection

Treat you with admirationand envy

Treat you with reason andrespect

Treat you as a valuableresource person

Make your decisions for you Make rapid and incisivedecisions

Make only considereddecisions

Make decisions that aregoing to satisfy everyone


©Dr. Barry N. Smith PRO:BRR:EN:000 ver. 1.1

You are imposing your values (laying your trip) on others when—


You press your help onothers who do not needyour help

You tell only part of thestory in order to get yourown way

You withdraw from otherswithout any explanation

You stick your nose inwhere it is not wanted

You press your help onothers who do not want yourhelp

You press your answers onothers who do not want todo it your way

You insist that others beindependent of you, andthey do not want to be

You insist on looking at onemore option

Your mission is to help theneedy no matter at whatpersonal sacrifice

Your mission is to get thejob accomplished at anycost

Your mission is to thinkthings through and let thechips fall where they may

Your mission is ideageneration, not commitment

Maintaining harmony ismore important than facingissues or facing facts

Winning is more importantthan others’ feelings or thanaccepting facts

Facts and principles aremore important than howothers feel or what theywant to do

Group cohesiveness ismore important than thegroup objective or goal

You act to please others justto be likeable

You act to direct others justto exert your authority

You act to turn others awayjust to assert yourindependence

You act to bring otherstogether because you wantcompany



Appendix B: Analysis and Implications of the Blue-GreenExerciseThe Blue-Green Exercise is one of many forms of the nonzero-sum game. The term “nonzero-sum” implies that more choices are available than just those that result in players zeroing eachother out. Nonzero-sum players believe that they can win and they can also allow the otherparty to win. Although the Blue-Green Exercise is a nonzero-sum game, many people play as ifit were a zero-sum game; that is, I can only win if you lose. The term “zero-sum” indicates thatthe sum of the payoffs always results in zero. The choice for many is simple. I will go “green”because it maximizes my payoff and minimizes the other player’s payoff and my risk. In thecontext of the Blue-Green Exercise, few of us see the goal as the company’s accumulation ofpoints. Our vision is generally limited to accumulating points for our own team, not the company.Given a choice in the game between working together or acting in our own interest, wegenerally chose the latter.

When asked about his successes in the office, George tells us about “those people,” Sallycomplains about her best friend who betrayed her, Jim about some of his “strange” familymembers, and Susan about that “awful” married man. Bill tells about the negotiation that neverhappened because the other side made those unreasonable demands. All of us have heardabout those awful people. You know them; they are the ones who always get the boom loweredwhen asked about the quality of our lives, jobs, relationships, and so on. Where is the zero-sum? George feels good (gains points) about his experiences in the office only if he puts othersdown (takes points from them), and Sally feels good (gains points) only by complaining aboutothers (takes points from them). When questioned about the Blue-Green experience, teamleaders often talk about the other team leaders and how their choices ruined the opportunity towork together. “I would have gone blue but they. . .” is often proclaimed loudly by each side.

We make choices that neatly hinge on whether to cooperate with the other party or to simply actin our own individual interest. It is sobering to see how often our choices favor our individualinterests, as we often find in the Blue-Green Exercise. Real-life negotiations often parallel thisgaming experience. We can choose whether to work together or not. We can refuse to see theother party’s issues and positions and simply stick to our own issues, or open up the processand accept the idea that we may allow the other party to “win” as well. It is often an ideologicalchoice for many of us. It should be a pragmatic choice.

Criteria for Strategy SelectionAt the negotiation table, each party faces the choice of whether or not to work together. TheBlue-Green Exercise dramatically illustrates the long-term consequences of acting in ourindividual interests. Playing “green” is a frequent choice that is short term in perspective. Yourteam’s motive in playing “green” will be perceived by the other team as a signal that you areconcerned with your interests and not the interests of the company. What seems rational for theshort term has disastrous consequences for the long term. Whether to cooperate is not aneither/or choice made under static conditions, but it is a dynamic choice of when and under whatcircumstances. If you decided to buy a car, it might be useful to be able to pick your strategybefore you approach the car dealer. In addition, if the strategy does not seem to be working, youmight find it useful to have some criteria to help you decide whether to adjust your strategy. Thefollowing criteria suggest some ways of looking at the negotiation experience to help guide the“cooperate/compete” decision.

The nature of the two parties’ goals


The length of the relationshipThe present here-and-now dynamicsThe existence of a stalemate

The Nature of the Two Parties’ GoalsIf the vision of the parties involved in a negotiation overlaps, a strong possibility exists that theparties will collaborate. Similar goals generally indicate a need for collaboration. Dissimilar goalstend to suggest that competition is a better strategy due to the need to influence the other party.

The congruence or divergence of each party’s goals is one real indicator of whethercollaborative or competitive systems should be used.

The Length of the RelationshipThe length of a relationship is another determinant of whether to be competitive or collaborative.The need for more interaction and information sharing increases with the length of therelationship. Short-term relationships lend themselves to competitive processes. Long-termrelationships seem more suited to collaborative processes. The Blue-Green Exercise clearlyillustrates the need for a longer time perspective. A team leader’s choice to go back on thenegotiator’s decision to play all blue seems great for the short term. When the two teams mustcontinue to play together, it becomes obvious that this self-interest choice was a real mistakebecause of the need for more interaction in the relationship. Acting in your own interest is a finestrategy for the short term, but in the long term it can damage the relationship.

Buying a new car is a one-time interaction, and competitive processes seem more suited.Building a new facility or signing a long-term building lease is more long term and better suitedto collaborative processes.

The Here-and-Now Dynamics of the SituationDeciding to use a collaborative or competitive strategy is not a one-time choice. Rarely do weadopt a strategy that remains static and unchanging. The winds of change necessitate that weadapt to what is occurring in the situation at the moment. This responsiveness to the momenthas often been referred to as the “here-and-now.” What is happening right here and now is afrequent question for the negotiator. What techniques are being used and into which strategy dothese techniques fall? Trying to collaborate with a highly competitive negotiator is, at best, anuphill struggle. Most current research indicates that a tit-for-tat strategy works best; becompetitive with a competitor and collaborative with a collaborator. (The exception to this rule-of-thumb is the stalemate situation, which will be treated in the following section.) Peoplegenerally respond best to personalities similar to their own; therefore, the best approach is tomatch what the other party is doing. By responding in kind you are, in effect, mirroring the otherparty.

The Blue-Green Exercise illustrates that giving a blue to a green player is generallyunsuccessful because it rewards that player for acting in his or her own interest, which iscounterproductive to a nonzero-sum game. A better strategy would be to anticipate the otherplayer’s move at the negotiation table based on your past experiences with him or her. Eventhough playing green is counterproductive in the long run, it will gain the other party’s attentionand demonstrate the consequences of such a long-term strategy. During the Blue-GreenExercise, participants frequently adopt a blue or green choice and stick to it regardless of theconsequences. Such rigidity is generally counterproductive and unnecessary. Keeping in touchwith the vagaries and whims of the other party is a necessary skill and requires a reliance on theparticipant-observer role. The participant-observer role requires that we participate in the


situation and yet be removed from it. This duality ensures our participation and guaranteessome success at remaining objective and at a distance from the process.

The Existence of a StalemateStalemates are discussed in the chapter on techniques in the section on collaborative strategy.Although it is not necessary to repeat that discussion here, it might be helpful to stress theimportance of understanding the basic differences between competition and collaboration asstrategies. Competition is necessarily a persuasive activity; collaboration tends to be moreproblem-solving in nature. Stalemates generally call for a collaborative strategy. For example, ifyou are negotiating with a strong competitor, common sense suggests that neither of you willgive in to the other. Persisting in competitive strategies tends to be counterproductive.Competitive strategies actually tend to promote stalemates. Current thinking indicates thatstalemates are best overcome with collaborative strategies, which tend to be more problem-solving and information-based in nature. This thinking emanates from the idea that stalematesshould be resolved on the basis of problem solving and not persuasiveness. Althoughpersuasiveness is useful in many areas of negotiation, it can create a stalemate when bothparties use the technique.

SummaryYour decision to use either a competitive or collaborative strategy is best reached after carefulconsideration of four criteria: the nature of the parties’ goals, the length of the relationship, thepresent here-and-now dynamics, and the existence of a stalemate. The following tablesummarizes the major points.

Competitive Strategy Collaborative Strategy

Divergent goals Convergent/similar goals

Short-time perspective Long-time perspective

Existence of competitive techniques Existence of collaborative techniques

No stalemate Stalemated discussion

The idea behind the development of these criteria for strategy selection is the realization thatmany negotiators tend to prefer using only one strategy, be it collaboration or competition, for allnegotiation situations. It is suggested that negotiators be pragmatic, remain open to bothstrategies, and select the one that best matches the requirements of the situation at hand.

Characteristics of Competitive and Collaborative BehaviorBoth competitors and collaborators have certain identifiable characteristics. Many peoplebelieve that competitive behavior is bad and collaborative behavior is good. In fact, bothbehaviors are acceptable in any situation, given certain conditions or criteria. It might be helpfulto know the norms and behaviors that accompany each strategy to ensure behavioralcongruence within yourself as a negotiator. The following bipolar pairs capture some of thecurrent thinking about each strategy.


Effective Competitive Behavior Effective Collaborative Behavior

1. Win-lose attitude 1. Win-win attitude

2. Adversarial relationship 2. Problem-solving relationship

3. Make no concessions 3. Make concessions in turn

4. Push own position 4. Explore other’s position

5. Interested in own needs 5. Interested in own plus other’s needs

6. Secrecy 6. Openness

7. Threats and bluffs 7. Rewards and expertise

8. Stereotypes of the other party 8. Dropping of stereotypes of the other party

9. “We” versus “Them” mentality 9. An attitude that we are all in this together

10. Emotional tactics 10. Analytic skills

11. Irrationality 11. Creative, innovative responses

12. Persuasive 12. Accepting

Competitors seem likely to view all negotiation opportunities as zero-sum, whereascollaborators view these same opportunities as nonzero-sum.

The Emotionality Aspect of the Blue-Green ExerciseGiven the time pressure, the division of the community into teams, the secrecy of the decision-making process within each team, the ultimate veto power of the team leader, and the limitedcommunication opportunities in relation to the negotiation process, it is no wonder that thenonzero-sum game is frequently seen as zero-sum. These characteristics of the gameeffectively induce competitive behavior. Because competitors view the negotiation process aszero-sum, the table is set for highly competitive behavior.The exercise induces competitive behavior for the sole purpose of enabling the participants toview the competitor as out of control. As the tension level increases within the scope of theexercise, the following physiological processes can be expected to occur within the more activeplayers:

Increased respiration rateIncreased pulse rateHeightened blood pressureRigid musculature

These physiological responses “take over” the Blue-Green player and serve to heighten thecompetitive response. Many players persist in the competitive response and continue to viewthe game as a zero-sum activity. The average player starts to play “green” continually, thusensuring a lose-lose outcome for both parties and blocking any possibility of the gamebecoming nonzero-sum. It is hypothesized that collaboration is a much more relaxed activity,which emphasizes thought and problem solving, not action and force.


Practical Implications for Negotiation Strategy

Need to Avoid Goal TransformationMost team leaders and their followers undergo goal transformation. Typical statementsvideotaped by team leaders during mid- or post-game interviews are shown below.

Interviewer: “How are you doing in the game?”

Team Leader: “Fine!”

Interviewer: “You say that you’re fine, but I notice that you have minus 185points. If the goal is to accumulate points, how can a minus scorebe fine?”

The following responses are typical:

First Leader: “You must realize that even though we have minus 185 points, theyhave minus 195. We have 10 fewer negative points than they do!We’re beating them.”

Second Leader: “We’re excited because we just brought the other team below thepositive level to minus 25! We’ll show them what happens whenthey promise a blue and deliver a green.”

Instead of trying to accumulate positive points for the company, their goal becomesaccumulating fewer negative points or repaying their opponents for their treachery in playing thegame. This irrationality is one of the characteristics of competitive behavior and underlies thedanger in competitive behavior that becomes emotional and out of control. Too often negotiatorsshort-circuit the negotiation processes because they want to get even for a past wrongdoing ora transgression at the table.

Need for Setting and Sticking to Positions on IssuesNegotiators need to have a vision of what they are trying to achieve. Without goals, all action isdirectionless. If minimum positions are unacceptable to the negotiator, they should be revised.All decisions to accept the other party’s proposal should be based on whether the minimumpositions on all goals are met. Too often negotiators become distracted and do not work withintheir established guidelines. They frequently achieve their target and push too hard for theirmaximum positions. There is no need to walk away from a negotiation when the minimumpositions have been achieved. We all want to achieve our maximum positions or at least ourtargets, but if our minimums are not truly satisfactory to us, we need to reappraise our thinking.A constant escalation of needs is detrimental to the negotiation process. Stick to your positionson your issues.

Need to Revise Strategies When They No Longer WorkAlthough the Blue-Green player is not achieving his or her goals, he or she usually has a strongreluctance to change strategies from competition to collaboration. The frustration that ariseswhen strategies do not work often leads to rigidity. Players at the formal table of negotiationoften experience this “digging in” of strategy and position and do not take the time to rethink theappropriateness of the current strategy. A general rule-of-thumb seems to be that if it is notworking, change it.

©Dr. Barry N. Smith PRO:BRR:EN:000 ver. 1.1

Need to Understand the Role of Emotion in NegotiatingBlue-Green players often become so emotional that they fail to achieve an unemotional distancefrom the process at hand. They need to understand that strong emotions trigger the competitiveresponse in most of us. It is important to realize that the competitive response is not alwaysappropriate to the needs of the situation. Competition may satisfy your personal requirements,but the acid test for any strategy is whether it satisfied those of the negotiation table.

Need to Become Rational CompetitorsOnce you begin to exhibit the physiological processes, it is difficult to change strategies. It isone thing to say quite abstractly and analytically that you will adjust your strategy as needed; itis quite another to go against the natural processes that keep the competitive mode in place.Competition is not a rational choice; it is a phenomenological reality that is difficult to change.

ConclusionsThe Blue-Green Exercise is often a frustrating experience for its players. Without opportunity forreflection, many players come directly out of the experience with a sense that they missedsomething and a feeling that they somehow misbehaved. The following general observationssupport the above points:1. Emotions may distort our view of ourselves and our purposes at the negotiation table.2. Most of us seem to have a natural tendency to compete.3. Competition is not just a rational choice. It may become a pervasive determiner of our

actions and, once selected, can be difficult to change.4. It might be helpful to appraise situations using criteria to pick strategies in a rational manner.5. Both competition and collaboration are appropriate strategies given certain conditions within

the negotiation situation.6. It might be useful for the negotiator to remain at arm’s length from the process.


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