3 things we can learn from the 2 trillion dollar stimulus negotiation

Late last week, the U.S. government successfully negotiated a historic stimulus plan while under great pressure to help mitigate the economic hardship due to the coronavirus pandemic.

A noteworthy outcome for many reasons, it was especially so when considering the dynamic and fast-moving conditions in which two highly adversarial parties had to come together and reach agreement.

Here are three things I believe we can learn from the negotiation:

Create the proper environment

One reason the negotiation was successful is that careful thought was given to who would lead the negotiations for each side.

For example, when negotiations began between the White House and House of Representatives, Treasury Secretary Steven Mnuchin took the lead on behalf of the White House while House leader Nancy Pelosi took the lead for the Democrats.

This was effective for two reasons. First, the post impeachment fallout prevented the possibility of direct negotiations between Nancy Pelosi and President Trump, as the two have not exchanged words since their contentious meeting last October. Second, Nancy Pelosi and Steven Mnuchin have an established track record of success working together on important negotiations, such as the initial coronavirus relief bill, and debt-ceiling negotiations last summer.

The lesson to be taken here is the importance of creating the best environment for our negotiations to thrive. The goal should be to create a face saving environment, where negotiators who’ve proven the ability to stay rational and bring positive versus negative relational baggage into the interaction are the ones sitting across the table.

Be prepared for a rocky ride

Throughout negotiation there were a number of inflection points when new demands were made, dramatic threats were issued, and breakdowns seemed likely.

For example, days after Nancy Pelosi negotiated terms with Secretary Mnuchin on behalf of the House, Senate Republicans revised the legislation with terms that were greatly in their favor. Days later, Senate Democrats successful played hard-ball, creating an impasse to secure concessions on items they considered non-negotiable. And even after the final night of negotiations, a lone representative attempted to prevent the planned vote from happening, throwing Congress into a last minute scramble. Luckily, negotiators from both sides were able to stay focused on the end goal, continuously reverting back to problem solving each time curveballs appeared.

The lesson to be taken is to embrace the process, especially in regards to the posturing and power plays that invariably occur. Likewise, realizing that oftentimes for negotiators to persuade their constituents to accept an outcome – or to accept it themselves – they have to feel like they’ve made a stand. Don’t get rattled by this ritual. Control your emotions, and never be surprised by last minute tactics to bulldoze, they’re often the norm.

Be flexible, yet firm

Finally, both sides were able to come to terms because each took a pragmatic approach, putting down their foot when needed while easing back when they were pushing the limit.

For example, after Republicans tried to renegotiate better terms for their side, Nancy Pelosi conveyed that the new terms were simply unacceptable for the Democrats, vividly and matter of factly telling Republican negotiators, “the two animals couldn’t mate.” Yet in the end, Democrats accepted enough of the newly proposed terms to ensure that a bill that included their priorities would be unanimously passed and swiftly signed by President Trump.

The lesson here is finding the right balance. Many negotiations will call for a more firmness, while some will call for more flexibility. Some will even call for us to walk away, an option that’s far more available in everyday negotiations than it was for Congress. However, as author and researcher Adam Grant pointed out in his recent NY Times article titled “In Negotiations, Givers Are Smarter Than Takers”, collaborative negotiators who use their intelligence more than their toughness tend to create better outcomes for both parties. The key then, perhaps, is to be firm yet intelligently flexible, providing ourselves with the best opportunity to discover whatever it takes for “the animals to mate”.

John F. Kennedy – Negotiating Towards Peace

“Let us never negotiate out of fear. But let us never fear to negotiate.”

When John F. Kennedy took the podium in to deliver his inaugural address in January 1961, he did so in the context of a country on the precipice of its largest direct conflict with the Soviet Union since the beginning of the Cold War.

The dominant position held by the United States during the 1950s, due to uncontested military supremacy afforded by their nuclear advantage was now beginning to decline. Kennedy himself campaigned on the fear that the Soviet Union had reached or surpassed the ability of the United States to decimate its enemy, as well as the growing threat of communism as a political force globally, spreading in countries as large as China and near as Cuba.

However, Kennedy’s prescription was not an escalation of the arms race, nor did he view isolation on the part of the United States as a means to achieve safety. Instead, Kennedy strongly believed that negotiating with the Soviet Union as a means to halt increasingly competitive nuclear weapons tests would be an important first step towards an all important end ultimate goal – keeping additional countries from obtaining nuclear weapons that could destroy humanity.

“You have offered us an apple for an orchard. We don’t do that in this country.”

One of Kennedy’s first challenges as president was managing the long standing and turbulent Berlin crisis.

From the end of the World War II through the beginning of his presidency, Berlin had remained divided among the United States, Britain, France and Soviet Union, with each party refusing to leave out of fear that a unified Germany might irreparably swing the future balance of Europe towards either democracy or communism.

The quote above was stated by Kennedy during an oval office meeting with the Soviet Ambassador to the United States while heated negotiations over the Berlin Crisis continued in the fall of 1961. The “apple” Kennedy was referring to was a guarantee on the part of the Soviet Union and East Germany to continue to allow access to West Berlin, which Soviet Chairman Krushchev was threatening to remove if Kennedy did not meet his “orchard” of demands. These demands included an agreement that would legitimize the communist government in Eastern Germany, as well as a rollback of military forces that kept the Soviet Union from expanding its own presence in Europe.

Little did they know that just one year later they would be thrust in to negotiations over new and potentially more dangerous apples and orchards during the Cuban Missile Crisis, when the world held on for thirteen days in October 1962 as the United States and Soviet Union attempted to avoid the unthinkable.

“So, let us not be blind to our differences–but let us also direct attention to our common interests and to the means by which those differences can be resolved.”

While Kennedy negotiated his way through two perilous sparks in Berlin and Cuban, he continued to stay vigilant in his desire to find agreement with the Soviet Union to prevent continued testing of more powerful and destructive nuclear weapons.

Despite numerous breakdowns during negotiations, a resumption of the testing by the Soviet Union during the Berlin Crisis, as well as subsequent lies about strategic missiles in Cuba, Kennedy continued to maintain dialogue both publicly and privately with Krushchev, in the hopes of swaying him towards a mutually beneficial treaty that could stem their recent atomic accelerations.

But in addition to managing the impressions of the Soviets internally in a way to keep them at the bargaining table, Kennedy needed to press publicly for a test ban treaty without giving his own political rivals an opportunity to attack him for being weak on communism. He was able to manage this balance brilliantly in a commencement address at American University in June 1963 (quoted above).

Just months after what came to be known as the “peace speech”, his lead negotiator in Moscow was able to seal the deal on a historic US-Soviet treaty, prohibiting further harmful nuclear testing in the atmosphere and marking an incredible triumph of President Kennedy’s leadership towards negotiating a safer future.

Shane Ray Martin on Sales, Negotiation, and Leadership

What’s one quick tip or piece of advice you would recommend for someone looking to improve at sales?

Teach, Don’t Sell.

When we SELL, we break rapport. When we TEACH, we build rapport. With more rapport, there often is less resistance.


(From: The Ultimate Sales Machine, by Chet Holmes)

What’s one quick tip or piece of advice you would share with someone looking to improve at negotiation?

Practice infinite empathy.

Maximize your outcomes by doing these 3 things:

  • Let go of judgment – Step into your counterpart’s shoes.
  • Listen actively – Speak less, listen more.
  • Leave people better – Clear next steps to serve your counter-part.


What’s one quick tip or piece of advice you would share with someone looking to improve at leadership?

The more you give to others, the more you’ll get from them.


(From: The Go-Giver, Bob Berg)

For more on Shane Ray Martin please visit his website at https://www.shaneraymartin.com/

On LinkedIn at https://www.linkedin.com/in/shane-ray-martin/

Meghan Markle – Master Negotiator?

Last month, Meghan Markle, along with her husband Prince Harry, served the British royal family with the kind of surprise notice that lawyer Rachel Zane, her past character on the show Suits, would have served her opponents in the cold-blooded world of fictional New York City law firms. This stunning fait accompli prompted the need to negotiate directly with the Queen, a much more powerful party.

Swiftly after Meghan and Harry’s decision to step back as senior members of the royal family was announced, the Queen called an emergency meeting to resolve the crisis. However, Meghan kept herself removed from the encounter by staying in Canada throughout the fallout.

The question for students of negotiation and conflict resolution is: Was this a wise move?

In a recent article on negotiating from INC.com, the author is slightly critical of Meghan for not being present for the actual negotiations. However, I differ with this conclusion.

Personally, I think it was probably a wise move for Meghan remove herself from the situation for a number of reasons. First, although it is good to face conflict head on, it doesn’t always benefit us to meet face to face initially, especially when recently broken trust means the interaction could be highly volatile. Negative reactive emotions can and often times will overwhelm an entire meeting, so much so that we can’t have rational discussions or think of rational compromises.

Further, from a hard-line strategic standpoint, it’s usually better off if the ultimate decision maker is not physically present, instead as far away as possible. For example, no matter what came up during the negotiations, Harry could lean on having to “check with Meghan” to get her approval before making any final agreements. The fact that Meghan didn’t even phone in for a live conversation (originally the plan) was positive in the sense that it created time and space.

Now, outsiders looking in could easily see the Queen as the master dealmaker in this equation. Why is this so? First, she took a firm stance on not allowing the easy breezy half-in half-out status that Harry and Meghan reportedly wanted. Second, she crafted a flexible and creative transition period over the next year, where in the couple will spend half their time in England and half in Canada. Third, another savvy move, she set up a post one-year reappraisal opportunity for both parties to see if they want to reevaluate. Fourth, she downgraded their royal titles without fully and definitely removing their formal association. Finally, she cut off the royal purse strings and secured their agreement to pay back million of dollars spent renovating their home in England.

All of this said, if you look at the outcome intangibles, it’s hard to not see Meghan as her own true winner. First and foremost, Meghan got her freedom, which is truly priceless if she feels she’s in a toxic relationship with her royal in-laws or the British media. Second, she now has immense future financial opportunity that completely outweighs and obliterates any $3 million dollar pay back, or discontinuation of royal funds. For example, according to media reports, Meghan and Harry stand to gain up to $500,000 for speaking engagements, up to $15,000,000 for a memoir, and upwards of $50,000,000 for a potential mega deal with a company such as Netflix. Even if these numbers have been exaggerated, Meghan and Harry are going to be just fine, if not better, as they’ll not only generate more personal assets but have more control over these assets – and their lives.

So while we don’t know everything that happened or was agreed to, the future will tell whether this was truly the win-win negotiation it seemed to be. Importantly in a highly public dispute, Meghan and Harry can move forward after the negotiations without losing much face, as well as having avoided causing the Queen and wider royal family to lose much face of their own. (Even though there are rumors of more sinister reasons for MEXIT, none have yet been hinted at or legitimized by the Duchess of Sussex.)

It is for these reasons that I believe Meghan Markle did extremely well as a negotiator in a difficult situation. I might even go as far to say that Meghan negotiated better than any episode of Suits I’ve ever seen, because after enjoying all seven seasons I can’t remember one when they had to face a Queen.

Dalio and Kissinger on playing the Infinite Game

Earlier this week, Ray Dalio, author the brilliant book Principles, posted on his social media a speech that he gave at an event for the Committee on US-China relations. He also shared another short speech from the event by Henry Kissinger, who famously opened our relations to China in the early 1970s. In addition to some great insights on power, influence, and conflict resolution, I found what I believe is a strong connection to the philosophies and concepts in Simon Sinek’s recent book The Infinite Game.

In addressing the conflicting opinions that many have over the policies over the United States and China, Dalio spoke about the importance of being able to see through the other’s eyes. For example, if looking at the emphasis in the United States on the individual compared to the emphasis in China on the family or collective, we could better understand the actions of the other party.

Next, Dalio presented an incredible chart demonstrating the rise and falls of empires over the course of history. In this visual Infinite Game, we see in stunning context the ups and downs of China throughout history. However, despite having their ups and downs, it’s clear to see their consistency among the leading empires.

Wrapping up his remarks, and lightly addressing the ongoing negotiations between the two countries, Dalio stated:

So when I look at it, I hope that it is done with mutual understanding, that instead of wars which mean lose-lose relationships that we approach this with win-win relationships by seeing each other through each other’s eyes, and not expecting the others to be like us in all respects and as we evolve through time.

Next, Kissinger spoke about US-China relations, also from a wide lens to provide context. Kissinger emphasized his belief that part of the problem between the US and China is that many feel the other party is an adversary. Kissinger recommended – alla Sinek’s The Infinite Game – that they should instead be seen as a rival, and that we should not be focused on competing to win but on coexisting over time, while doing our best to find solutions to the problems we have. In his remarks, he illustrated:

So both countries, used to being exceptional countries, and used to being unique countries, have to get used to the fact that they have a kind of a rival, and that competition is, in a way, permanent. Modern economics and modern technology link the world into one system, and when two great countries encounter each other in this manner it is inevitable that on many issues there may not be a complete agreement. But what is imperative is that both countries understand that a permanent conflict between them cannot be won...

So, what can we take away from all of this? I believe three things:

  1. There is great power in seeing through the other party’s eyes, and accepting that there might always be some level disagreement for the relationship to exist.
  2. That in contentious conflict context is important. When we take a wider lense and see the overall process, we see that we are players in an Infinite Game. Taking this perspective humbles, yet it also something from which we can draw confidence.
  3. As Kissinger so widely believed though his decades of diplomacy and negotiation with China, it is correct to view the other party not as an adversary to beat permanently, but instead as a rival to complete with while we all try to be exceptional playing in the Infinite Game.

A Counter-intuitive Lesson From Two Top Negotiating Experts

Last week, the Schranner Negotiation Institute held their renowned N-Conference in New York City for the first time, assembling an incredibly impressive lineup of experts to speak on the topic of “Decision Making Under Pressure”.

In addition to the tremendous amount of insight provided for making better decisions when negotiating in high pressure situations, one counter-intuitive theme resonated strongly throughout the day: While it might be easy to think of conflict as something to avoid, we should actually embrace it.

Why is this so?

Global Negotiation Expert and CEO Matthias Schranner suggests that forces in business and culture are now moving towards increasingly tougher negotiations. For this reason, he suggests we should begin our negotiations by creating a “conflict playground”. This means starting with high demands, communicating our ability to walk away, and moving to a mode of cooperation only after we’ve respectfully signaled to the other side we are not be taken advantage of. (More on his perspective on embracing conflict can be found here.)

Another masterful speaker who highlighted the importance of embracing conflict was retired NYPD Lieutenant and regarded Hostage Negotiation expert Jack Cambria. After 14 years as the head of the NYPD Hostage Negotiation Team, Lt. Cambra provides an ocean of invaluable wisdom for dealing with high pressure and high stakes encounters.

During his presentation, Lt. Cambria highlighted our most common responses to conflict:

  • Fight
  • Flight
  • Freeze

However, what the accomplished Lt. Cambria recommends instead of the options above is to choose an additional yet ultimately correct fourth response: face the conflict. And to deepen this perspective, he shares a powerful and optimistic learning lesson

“Embrace difficult people because they become our greatest teachers.”

Conclusion:

What we can take from two of the world’s top negotiation experts, who’ve been involved in life threatening situations that make our most challenging business negotiations seem like a walk in the park, is to embrace and even love conflict – because doing so will not only help us be stronger in our negotiations in the short term, but also help strengthen our character in the long.

Before The Duel – What We Can Learn About Conflict Resolution From The Negotiation Between Hamilton and Burr

Before there was the duel, there was the negotiation. And it is hard to find a better example of what not to do when trying to save face and resolve conflict than can be seen in the letters between Alexander Hamilton and Aaron Burr.

The incident begins when words leaks to the press that Hamilton made sharply critical remarks about Burr in front of others at a private dinner. Upon receiving word of this, Aaron Burr – having had it up here with Hamilton’s seemingly personal and malicious comments over the past years – decides to initiate an “affair of honor”, which is an elegant name for the ritual of challenging someone to a duel.

In his first letter to Hamilton beginning the negotiations, Burr starts by proposing that Hamilton make a “prompt and unqualified acknowledgement or denial” of whatever he said on that occasion, especially whatever was implied by the word ‘despicable’, used by a witness to describe the accusations.

If there’s ever an example of how to get a conflict resolution off to the wrong foot, it can be found in Hamilton’s first response. Instead of expressing any regret, Hamilton’s makes a fiery counter-proposal that Burr describe something specific to which he could address, flatly refusing to “enter into an explanation upon a basis so vague as that which you have adopted.” Hamilton ends the letter by telling Burr that he is confident that after more reflection he will come to “see the matter in the same light” as him. And, that if he does not or cannot, Hamilton is prepared to accept the consequences of the occasion – i.e. a duel. 

Burr responds back escalating the exchange and banter, as tends to happen when negative defensive emotions are involved. First, he rejects Hamilton’s proposal to provide more specifics. In Burr’s view, whatever was implied or said that could be taken by others against his honor and character requires restitution. Second, he decides to escalate the negotiation even further, adding a negative concession. Now, because of Hamilton’s tone and his outright refusal, Burr believes he is owed an even bigger apology than was asked for in the first letter, ominously stating, “Your letter has furnished me with new reasons for requiring a definite reply.”

Noticing the dangerous turn of the negotiations, advisers to Hamilton and Burr desperately attempt to find some way for the parties to resolve the conflict and save face. However, the parties soon learn that Burr has taken defensive measures to ensure Hamilton cannot wiggle his way out without a full apology. He increases his demands by having his adviser relay that Hamilton would now need to a make blanket apology for anything he has ever said about Burr and his character, at any time, ever.

While Hamilton’s final letter does not reduce the combative tone, it is worth noting that he does provide Burr with a subtle last minute opening to give them both a way to avoid the coming hostilities, writing, “I have no other answer to give than that which has already been given. If you mean anything different admitting of greater latitude, it is requisite you should explain”.

In his final letter, Burr declines the offer, responding in a firm and formal manner explaining his belief why a duel is warranted and why his original demand for an acknowledgement based on general remarks was requested. In building his case, he also brings backs for consistency Hamilton’s challenging and daring remark that if Burr could not alter his views to match his own then a duel would be inevitable.

As we know, the duel happens, and things go tragically awry. Shortly after being hit by Burr’s fire, Alexander Hamilton, one of our greatest founding fathers is dead. 

What can we learn over 200 years later from this horrible negotiation to resolve their conflict?

First is to recognize that although we thankfully no longer have formal duels, it is very easy for our disagreements, especially when personal, to transform into harmful “affairs of honor”. It is still true that when we feel insulted or disrespected we get defensively emotional, and this defensive emotion tends to create an escalation that guides us into a destructive path of which becomes difficult to reverse.

On top of our escalation-prone defenses is the consistency trap. Often times, we say things and do things that we later regret, yet because of our social desire to maintain a consistent public face or self image we feel compelled to stand by or defend them. Usually, when conflict is resolved and face is saved, parties find a way to avoid this consistency trap with selective listening, empathetic understanding, or creatively adjusting their proposals, something Hamilton and Burr were unable to bring themselves to do.

Finally, in many everyday encounters much less dramatic we also have the tendency to speak to each other in two different languages. For example, in Burr’s letters to Hamilton he is speaking a language of common sense. In his view, it is common sense to know that if Hamilton’s remarks implied Burr had done acts that were considered despicable it is enough to warrant an apology. However, in Hamilton’s letters to Burr he is speaking in a completely different mode both legalistic and abstract. In his view, the remarks do not yet warrant an apology, because despicable could mean any number of things. It could be a soft insult, it could be a hard insult. How is he supposed to offer a genuine apology when he cannot speak to its grade?

While it might be tempting to fault Hamilton for this, how many of us have been through this same experience, where we find ourselves speaking in two different languages and the fight continues and escalates because neither party is willing looking at it from the same frame or perspective as the other person?

Unfortunately, far too often…

In conclusion, if there’s anything we can learn from the negotiations between Hamilton and Burr, I believe it is the following:

  • Because of our ritualistic need to protect face, “affairs of honor” (and pride) still exist, and these encounters spark defensive emotions, which can in turn spark unhelpful escalation.
  • We have a tendency to fall into a consistency trap, when we say or do things we feel we have to rationalize, justify, stand behind, or defend later – even though it might not be in our best interest.
  • We have a tendency to speak past each other in our own personal languages. Languages that suit our view of the situation, languages that make it easy for us to rationalize our behavior, and languages that are convenient for our consciences.

Though we live in far different times, I believe we can learn from Hamilton and Burr’s tragic negotiation to recognize and avoid these tendencies when resolving harmful conflicts in the present and hopefully less often in the future.

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