When teams hit the negotiating table, it’s a bad time for improv

Simple steps to resolve internal conflicts and pitfalls early can help prevent a team from sabotaging its own efforts during negotiations, according to research published in the Harvard Business Review.

“When you sit down at the table, it’s a bad time to do improv,” said co-author Ray Friedman, the Brownlee O. Currey Professor of Management at Vanderbilt Owen Graduate School of Management.
Co-authors with Friedman for “How to Manage Your Negotiating Team” were Jeanne M. Brett, the DeWitt W. Buchanan Jr. Distinguished Professor of Dispute Resolution and Organizations at Northwestern University’s Kellogg School of Management, and Kristin Behfar, an assistant professor of organization and management at the Paul Merage School of Business at the University of California, Irvine.

The article, published in the September 2009 issue of the Harvard Business Review, outlines a series of steps honed in real-life scenarios to mesh differing priorities, align team members’ interests and uncover conflicts before they can undermine the discussion.

Previous research focused mainly on one-to-one negotiations, and what research has been done on team-based negotiations focused only on the overall impact of negotiating as a team, rather than how to effectively run a team during negotiations, said Friedman, author of Front Stage, Backstage: The Dramatic Structure of Labor Negotiations (Cambridge: MIT Press).

“When you look at the reality of most important negotiations, they are all team based,” he said. Yet there are few studies involving real-world teams.

“The reason you bring a team together is the same reason you have trouble,” Friedman said. Team members can provide different strengths, represent different constituents and have different ideas about how a deal should be struck. Those very differences make it hard to manage a negotiating team effectively. “You can spend half the time trying to agree on what the team wants to achieve.”

To complicate matters, a CEO in London may be working with a colleague in Brazil to negotiate with a distributor in London. “What is already a very tricky problem can be made worse by the fact that many of them are distance-based teams," Friedman said.

The researchers gathered data by surveying Executive MBA alumni from Vanderbilt and Northwestern. Those involved in team-based negotiations were singled out and the researchers followed up with 45-minute taped interviews.

The researchers examined the challenges of team negotiations and the real-world solutions identified by the study participants. Among the solutions: Assign roles to capitalize on team members’ strengths and interests.

“During the process of having to figure out your own priorities internally, there are all kinds of power struggles and differences,” Friedman said. “People come into and out of the negotiations. Sometimes there isn’t a clear leader. You think you have your plan figured out and then in the heat of the battle, some individuals start doing strange things. You have different extremes. Sometimes one of the team members becomes so cooperative he is giving away the farm. Or someone else may become out of control, angry and aggressive to the point of ruining the relationship.”

On the basis of the research, Friedman and colleagues recommended techniques for managing conflicts of interest within a team, such as plotting out the priorities of each team member and creating a matrix of issues that need to be addressed.

In addition, providing hard data can help explain a position. “In one of our cases, some doctors who were in a negotiation wanted a certain piece of equipment,” Friedman said. “But the doctors themselves had no idea of the cost implications of the thing they were asking for. In that case, the internal hospital administration and the doctors weren’t on the same page before they went to the negotiating table to purchase the equipment.”

Conflicts can be productive. “It’s not a bad thing to have disputes,” he suggested. “Teams that work through conflict more overtly seem to do better at managing other challenges. Teams who get caught up in personality conflicts tend to be distracted from finding appropriate solutions.”

Leaders who can draw team members away from personal interests and persuade them to adhere to the larger interest of the group will experience greater success. “Those teams tend to have perspective,” Friedman added.

Teams don’t always have the advantage of coming to the table with a clear leader or team members who plays well with others. In that case, prior exercises such as role-playing or mediation may tease out potential problems before they become manifest in negotiations. Team members can then make trade-offs, align interests and ultimately go to the bargaining table with a disciplined strategy.

Published May 3, 2010 in Vanderbilt Business Intelligence
Contact: vbintelligence@owen.vanderbilt.edu
Copyright 2010 Vanderbilt Owen Graduate School of Management