The Naked Negotiator

Colorado Surgeon Michael Woods found himself being sued for malpractice when a medical student accidentally punctured an artery during an appendectomy. In the end, the appendix was successfully removed, but there were complications and the patient became upset.

Woods took advice from his lawyer who recommended - no response and no interaction between him and the patient.

In court, when the patient was asked why she had chosen to sue she said, “I sued because he acted like what happened to me was no big deal. He just didn’t care.”

Woods realized it wasn’t the injury or the outcome that had led to the lawsuit — it was her perception that he didn’t care. It was his failure to offer a sincere apology that caused the suit.

In his insightful book Healing Words: The Power of Apology in Medicine Woods says,

“The business world has internalized a truth that medicine has yet to discover and embrace. Apology isn’t about money, or being right or wrong - for either the buyer (patient) or the vendor (doctor). It’s about the provider showing respect, empathy, and a commitment to patient satisfaction; and then about those receiving the apology having the grace to see the provider as human and fallible — and worthy of forgiveness.”

Since 2002, hospitals in the University of Michigan Health System have been pushing their doctors to apologize. Their attorney legal fees have dropped by two-thirds and the number of malpractice suits have halved.

Sincere apologies lower emotional temperatures and establish the foundations for a positive, constructive re-engagement.

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You may not be able to “fight city hall,” but you can negotiate with government - if you know how.

The first ‘Don’t’ when negotiating with government officials is, don’t use the word “negotiation” writes Jeswald Salacuse in Seven Secrets for Negotiating with Government (Amazom, 2008).

Government officials would much prefer you call your negotiations, “discussions,” “conversations,” “requests” or “interactions.”

Government officials don’t like talking about compromises and tradeoffs. Government officials view their role as enforcing the law, implementing regulations and pursuing policy. “Negotiated decisions” make officials uncomfortable.

Before you negotiate with government, you need to appreciate government’s power base. Salacuse identifies four sources of power that governments leverage at the bargaining table.

1. Monopoly. Governments are, for the most part, monopolies. As a negotiator in the private sector you usually have the fallback of talking to a competitor. If you’re negotiating approval with a government agency e.g. to sell a drug, you can’t get the approval from anyone else.
2. Privilege and Immunity. Governments pass laws, set regulations that private citizens and private companies cannot. In many countries, governments can’t be sued. These privileges can force you to make additional concessions.
3. Protocol. Government is much more likely to use protocols that dictate how you will interact with government departments and officials.
4. The Public Interest. At any time, governments can play the public interest card. You may be legally in the right, but it’s hard to beat a government player who claims public opinion is preventing them from going along with the terms you originally negotiated. Governments find it much easier than private players to renegotiate deals.

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The best deals are the ones you have the courage to walk away from. Bad deals entrap you, destroy rather than add value, and suck up vast amounts of management fix-up time. The best deal makers go into a deal with a clear list of non-negotiable must haves.

Frank Borelli, the former chief financial officer of financial services from Marsh and McLennan won’t buy a firm unless it meets his non-negotiable list of must-haves. Borelli’s three must haves are:

1. The acquired company must earn at least the company’s cost of capital
2. The expenses of acquiring the company must not be so high they decrease his firm’s earnings
3. The target company’s growth rate has to be greater than Marsh and McLennan’s own.

Between 1992 and 1996 Borelli turned down the chance to buy 3 companies before he found Johnson & Higgins, a firm that met all three of his must haves. The acquisition proved of great value.

Patience, discipline and clear priorities are signs of great dealmaking.

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Our assumptions often act as barriers that stop us coming up with creative solutions.

Dairy farmers have long believed that twice-a-day milking is a must, in order to maximize output and productivity. But farmers who have tried once-a-day milking have put a lie to this assumption.

Cows are much happier when they are only milked once a day. Being milked in a cramped shed is high stress if you are a cow. Cows give almost the same milk in once-a-day milking as they would in two. Being more content, they spend more time sitting and don’t eat as much grass. That means more cows can be put on the farm, ensuring overall milk production doesn’t fall. With less, the cows health has improved.

Once-a-day, farmers are also much happier. Staff love the change. Once-a-day milking has resulted in an improved life style for most dairy farmers and their staff.

The once-a-day milking story reminds us we need to take time to question our most basic assumptions about the way we work and create value.

When a negotiator on the other side challenges your basic premises, be prepared to listen and question deeply.

Think “cows and once-a-day milking.”

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Between 1969 and 1973 Henry Kissinger conducted secret negotiations with North Vietnamese diplomats in an effort to negotiate a face-saving end to the Vietnam War for President Nixon.

Kissinger was undoubtedly very bright, he had three degrees from Harvard and had written a raft of papers and books on international diplomacy and arms control. Kissinger also rated himself as a formidable negotiator. When a journalist asked him what personal qualities it took to be a diplomat Henry replied,

“Knowledge of what I am trying to do. Knowledge of the subject. Knowledge of the history and psychology of the people I am dealing with. And some human rapport…To have some human relations with the people I am negotiating with. This takes some rough edges off. They will make concessions they wouldn’t otherwise make.”

In his first secret meeting with North Vietnamese diplomats in Paris he believed he had made progress. He reported back to Nixon the North Vietnamese had signaled possible concession.

Later Kissinger had to admit, the North Vietnamese had agreed to “nothing more than a willingness to hold future secret discussions at unspecified future dates.”

Xuan Thuy Hanois’s representative “had no authority to negotiate. His job was psychological warfare,” Kissinger later concluded.

Kissinger had made the elementary error of confusing “the monkey with the organgrinder.”

The dangers of negotiating with someone who has no authority is something we all need to guard against.

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