Dan Erwin

The Personal Power of Strategic Dithering

“Hold your fire,” “bumble,” “muddle along,” and “don’t be in a hurry to make that decision” is choice terminology. Or, negatively, as in Maureen Dowd’s commentary, dither: “Amateur hour started when Obama dithered on Syria and failed to explain the stakes there.” Any number of commentators have fired off missiles about Obama’s dithering on Syria and all the trouble it gets us into. Maybe, maybe not.

Of course, knowledgeable readers are well aware that dithering, hesitating and being undecided, drives journalists nuts. They’re paid to get the news out and when a politician is holding his fire, they’ve got no news to write about. So dithering becomes an expletive readily applied to slow decision makers. Take it all with a grain of salt.

Dithering can be a highly useful personal strategy. 

What Is Behavioral Economics? And How Can You Use It Inside the Organization?

(4 Behavioral Economics Strategies)

Behavioral economics is rapidly becoming one of the most useful skill sets for both business and government. But the term, economics, can create serious misunderstanding. Behavioral economics is not conventional economics. Behavioral economics takes human behavior into account, basing its insights on actual human behaviors. Traditional economics assumes that people behave in rational ways, that the choices they make are made in a vacuum, and that the conflicting, messy human factors we social scientists take for granted are largely irrelevant in decision making.

Richard Thaler, the founder of behavioral economics found many examples of what he called the endowment effect, especially for goods that are not regularly traded on the consumer market. For example, suppose you’re in your early thirties and are a dyed-in-the-wool fan of the popular band, “Black Keys.” You’ve been waiting for them to appear in your city for several years and they are coming for a one night only appearance. You get one of the last $200 tickets for a sold-out performance. Now you’ve got your ticket and learn that richer or more desperate fans are offering $2,000 for a single ticket. Would you sell? If you’re like most of the audience at sold-out events, especially if they’re just one-time, you would not sell. A believer in traditional economics would not understand this behavior. Traditional economists believe that the person is focused on building wealth, and so in this instance they would sell their ticket.

Thaler, who was looking for some way to explain puzzles like this found it in psychology, specifically the works of Kahneman and Tversky. Thus, that blend of psychology—the social sciences—and economics became behavioral economics.

Why behavioral economics?
That’s an important question, but it’s related directly to the knowledge economy. Since management processes have gone from top-down to much more bottom-up, making vested power irrelevant, organizations need better ways of managing people. Especially in knowledge-oriented companies, the hierarchy has been flattened and responsibility has been passed down to the troops. Silicon Valley has proven the validity of the behavioral economics approach. When Marissa Mayer, Yahoo’s new CEO, ordered employees to work at headquarters rather than from home, her belief in the need for face-to-face innovation was built upon a behavioral economics strategy.

Four strategies of behavioral economists
There are many possible approaches and strategies to motivate change with employees and their families. As more and more research is carried out in related fields, others will continue to surface.

. . . . Framing—the perspective or lens through which people look at a problem or decision. Is your job 24/7 or 9 – 5? Learning culture or performance culture? Virtual organization or face-to-face bricks and mortar? The way issues and decisions are framed impacts employee motivation.

. . . . Anchoring—a number (or an idea) that is first offered to gain attention and set expectations. In negotiating a salary, it’s found to be best for the most interested party to state specific expectations or limits. (That goes against conventional wisdom.)  Especially when the other party is uncertain about the correct or fair outcome, the other will gravitate toward any number that helps them focus and resolve their uncertainty.

. . . . Choices—provision of a limited number to options to focus attention and encourage decisions. Many cafeteria health plans offered by the smarter companies limit choices to two, three or four, puffing the plan supposed best for the consumer, but often the best for the company. School cafeterias are making choices into a discipline to manage the obesity and diabetes epidemic of children.

Contrary to the assumptions of traditional economics, money isn’t everything. Nor, according to the conventional wisdom, does it buy happiness. Behavioral economics, instead, looks at what really brings happiness, and how to help people, business and governments make smarter choices. What’s frustrating is that business is taking behavioral economics very seriously, but that politicians often ignore empirical data. Ahhhh well, that may be the subject of a future blog.

Flickr photo: by chinadialogue

The Uses and "Dangers" of Authenticity

One of the more insistent cries from MBA faculty and many business gurus has been an emphasis upon “authenticity” in work and team relationships. Being authentic is pretty clear: it’s simply the willingness to be who you are and to tell the truth. It’s appropriate to think of authenticity as a personal characteristic, but it’s also useful to think of it as a “tool.”

Calls for authenticity seem to be cyclical, driven by both culture and context. In the sixties and seventies psychologists continually emphasized and even wrote books about relational honesty. But those discussions and experiences dried up in the ‘eighties and ‘nineties. It’s like the “authenticity grease” finally ran out and we need to go back to the garage and get all the parts lubricated again. Yet, the fact of the matter is that authenticity is a constant need in life and business. You can’t build partners without authenticity.

But authenticity can be a very slippery, even dangerous experience for consultants and especially for organizational managers and employees. What’s being authentic can be personally constructive to one and destructive to another. Indeed, one manager suggested that “many people who pride themselves on their transparency in fact have a mean, aggressive spirit which they excuse as being unusually truthful.  I doubt that they would respond positively to similar bluntness applied to themselves.”

Authenticity is like feedback. It’s a tool, not an innate characteristic that a person is born with. And like feedback, some people are comfortable using it and others are not. Just so, some people move quickly to authenticity while others tend to play their cards fairly close to the chest. Some people become experts in its use and others stumble with the process. Authenticity like feedback is best handled with care by a caring person. 

What authenticity can do
Both consultants and organizational members can find that authenticity is the most powerful tool for building trust and commitment from others. When your authentic communication demonstrates care, honesty and depth, those are qualities that can change the world. Authenticity has the capacity to deliver us from the doubts, reservations and unpredictability between people. It can make work not only great fun, but also very productive and satisfying.

Many people, especially in business, have an economist’s view of the human spirit: they think people can only be counted on to pursue their own narrow self-interest. This “economists’” view of life is so widely shared and frequently used that it has become the way people think about relationships, organizations and even how they design their relationships. This “economic,” suspicious view of life inherently rejects authenticity and full trust. It’s frustrating to realize that even if people do not regularly act in their own self-interest (and they don’t), the research clearly indicates that these same people believe that others do act on that basis. As you can imagine, that seriously limits teamwork, collaboration, and mutuality. It throws an axe into the middle of organizational work and impacts personal relationships negatively, limiting the potential for authenticity.

Building authentic relationships   
One way to understand authenticity is to view it in teamwork and collaborative experiences. In those contexts, building authentic, trusting relationships starts out like a dance with back and forth exchanges of personal background or experience. From there the discussion can move to work relationships. Authentic relationships inevitably flowers in the form of a social contract. In my business, I am very straightforward about building authentic relations (even though I rarely use the term), and I test those waters before we have a financial agreement. Development and coaching don’t work without a contract that either states or implies authenticity. I also don’t think there is such a thing as collaboration or teamwork without a level of authenticity. Clients are often starved for authenticity and revel in the relationship. Authenticity is the grease under all social contracts. I’m certain, also, that authenticity is the reason why clients and colleagues remain friends, long after the end of financial ties.

In team settings where authenticity is profoundly helpful, relationship rules emphasize authenticity. Typically, I recommend that the team begin its work with issues like the following:  

 How will we go about setting mutually shared goals?

• How will we ensure follow-through and completion of agreed-upon tasks?
• How can we best collaborate?
• How will we keep issues open for discussion and disagreement, and manage our conflicts?

If you can get buy-in from all team members on these rules which essentially create a “social contract” there’s a high possibility for authenticity among the members. But you’ll find that the social contract and authenticity will break down. That’s inevitable, so you renegotiate the contract--again and again. The straight-talk renegotiation serves as a real plus—celebrating authentic relationships.

Typically, in my client relationships I’m not aware that our contract has broken down until I walk away from the meeting and sleep on it. My clients are not at all surprised to get an occasional phone call the next morning to get the news that we’ll need to renegotiate. Serendipitously, the act of renegotiating usually results in an even better, more authentic relationship than the initial negotiation. The payoff can be phenomenal.

Flickr photo by tstaires

Fool Me Once, Shame On You. Fool Me Twice, Shame On Me.

"i looked the man in the eye.  I found him to be very straightforward and trustworthy.  I was able to get a sense of his soul."  Despite that seeming warmth between Putin and Russia and President Bush, the men did not go on to have a trusting and productive relationship.  And Bush was widely criticized for reading far too much into a seemingly meaninful exchange of eye contact.

When time is very short and we've had no previous relationships with a person, most of us tend to assume that what is communicated through words is all that matters.  The old proverb may well have been the result of that wrong-headed belief: "Fool me once, shame on you.  But fool me a second time, shame on me."   However, new research shows that like President Bush, it's very easy to fool ourselves--and a lot more than twice.  Studies reported in Harvard's December Negotiation Newsletter, asked how the facial expressions of the other person influences us--especially when we've had little relationship with that person.

Some participants were shown a picture of a smiling opponent, and others were shown a frowning, angry-looking opponent.  (The same person was depicted in both pictures, and unbeknownst to the participants, they were simply playing against a computer.) Some of the participants read a message in which their opponent (either smiling or frowning) stated that he wanted to cooperate in the upcoming game. Other participants read a message in which the same smiling or frowning opponent said he wanted to claim as much as he could for himself. 

The results showed that participants viewed the “happy” opponent to be more honest, reliable, and trustworthy than the “angry” opponent, regardless of his message.  As a result of this trust, the participants relied more on the happy opponent’s message than they did on the angry opponent’s message . . . .  A practice often to our disadvantage. 

As the study shows, it’s easy to misread both smiles and other facial nonverbals.  Happy emotions are an imperfect means of judging someone’s true state—and whether they can be trusted.  Think about the many occasions when a nice, friendly, smiling person ended up taking advantage of both you and the situation, all because you believed the facial nonverbal.  For example, you have a new colleague and initially he/she has a big smile in greeting you and sends all kinds of positive nonverbal.  Or, you’ve invited a vendor or a service person to consider for a project, either at work or home.  Don’t get taken in by the smiles or nice conversation in which he/she demonstrates interest in you.  Ironically, one of the best ways in which we attempt to preserve our self-esteem is to “surrender” to the other person and fail to check out the actions of the other before we make a decision on behalf of the other. 

There are immense research findings about this phenomenon.  Appropriately, it’s called self-handicapping.  We want to be seen as a nice guy and we want to believe the other person is a nice guy—especially when that person is all smiles.  But you may very well get suckered.  So what can you do to limit those failures? 

1. Be very aware of our bias to trust smiling, friendly people.
2. As much as possible when you’re engaged in first interactions with other people, prepare thoroughly for that interaction—and along the way, carefully analyze new information that surfaces.
3. Face-to-face meetings are always preferable to email, phone, or even video.  Often other sensory or nonverbal information can outweigh those personal biases.

One of my most impressive clients, a top executive at Ralston Purina, once told me that he always took his time about deciding whether he could trust a new employee or vendor, in spite of that employee's overt friendliness.  He wanted to be able to assess that person’s actions and performance in more depth.  How much time do you take, I wanted to know.  His response?  Two or three months!  That's great when you're in a situation of continuous interaction.  But sometimes, like when interviewing or negotiating, you only have a few minutes or an hour to decide whether you can trust another person. So be very careful.  Seeing is not necessarily the true test for believing.

 Research Abstract here:  http://onlinelibrary.wiley.com/doi/10.1002/bdm.659/abstract     

6 Steps for Women Who Deserve a Raise

One of the continuing inequities in the American workforce is the paygap between women and men.  Even though women, on average, tend to be better educated than men, those women who work full time only earn about 77 cents for every dollar a man makes.

FYI: To my amusement I've learned that a few women get frustrated by a man writing about this, but I have plenty of reasons, not least, three daughters and a wife, who are professionals.  At different times in their marriage all four made more than their husbands.  (Furthermore, it's important to take truth wherever you can get it.)  Although I've consulted to numerous female execs over the years, a dozen or so years ago, one client from among the top paid executives in America was especially instructive about the issue of male consultants working for female execs.  I asked her why she wanted to work with a man.  Her response?  "The image of me working with a male consultant has much more cachet than working with a woman."  I hope that by now that has changed.  Of course, she tossed me a bone: "Besides, you're more knowledgable than any women I know in the consulting business."  

Saturday's NYTimes has a superb report by Tara Bernard on the research of Hannah Riley Bowles, prof at Harvard's Kennedy School of Government about getting the merit raise you deserve.  My review of the article follows, but with additional personal insights.

Bowles research is not at all quirky since Harvard has a long history of negotiation research in governmental, legal and business settings.  The essential conclusion of Bowles' study is that "if a man and woman both attempt to negotiate for higher pay, people find a woman who does this, compared to one who does not, significantly less attractive.  Whereas with the guy, it doesn't seem to matter." 

What's going on here, and what can women do about it?

Bowles suggests that women should frame their requests in ways that won't undermine their relationship with the boss.  So, you ask, do we succumb to the stereotype, or focus on the ends justifying the means?  Your call.

First, two facts help explain the problem: people associate men with higher pay because men tend to hold higher paying and higher level positions, and women are more likely to leave the workforce to care for children, so they end up with fewer years of experience.  Still, when all of those issues are factored into the difference, about 40% of the gap is unexplained.

Other research on gender and negotiation suggests that part of the issue can be tied to the negotiating process itself.  Bowles and her colleagues suggest six important steps for better pay success:

Get proactive.  When you deserve a raise, don't sit around and wait for someone to notice.  I often counsel both men and women that more than 50% of the time your boss won't know about your contributions unless you tell him.  That means that self-advocacy (get familiar with that skill and learn how to go about it) is an imperative in the 21st century.  That also includes consideration of the best timing to approach your boss.

Do your research.  That will pay, literally.  Know what other people are receiving for a position and task.  Search out the pay websites such as payscale.com and salary.com to uncover salaries for comparable positions in your area.  I've neglected one significant insight from Bowle's research.  When you talk to peers, talk to men in your network, and don't get caught comparing your salary to other women.  I regularly remind clients that solid research shows that the quality of your network is terrifically important.  People with a quality network both within and outside their organizations get promotions earlier, have more opportunities and get higher pay.  (One related blog: Who should be in my work network?)

Anticipate objections.  This can be a difficult one.  Once you start the process the responses are going to be reactive, so identify as many as possible and think through your responses to each of them.  If you have little background in negotiation, now's the time to start adding to your skill base.  Start with Fisher and Ury's bestseller, Getting to Yes.  Once you've gotten that down pat, pick up Negotiation Genius, by Malhotra and Bazerman.  For insight on anticipating objections, focus on chapter 3, Investigative negotiation, and chapter 13, When Not to negotiate.  Anything by Bazerman on negotiation is worth its weight in gold.

Negotiate at home.  This is an intriguing piece of advice by Bowles.  Think about how a raise might affect your life at home.  Women still carry a disproportionate load of household chores.  So, try to re-examine some of those roles, and think through how that might affect each partner's work situation.  Then re-negotiate those work responsibilities and relations.  As one writer says, the big secret in the American culture is that negotiating at home may be more challenging than at work.  Your workplace is probably more gender neutral than your home. 

Negotiate strategically.  Here's where women need to use a different strategy than men.  Bowles' research shows that if women explain why their request is appropriate and that they care about maintaining good relationships at work, and do it in an authentic way, they'll be more successful.  Be very careful about manipulating outside offers to support your request.  They backfire more for women than for men.  I've found that in the better firms, it's rare for an exec to be responsive to an employee who asks for a raise based on outside offers.  They're going to have to be extremely valuable for that to work.  Indeed, I'm aware of some instances in which the person was let go for making an outside offer part of his/her case.

Negotiate creatively.  Although the younger generation of men are more and more factoring family responsibilities into the mix, women, especially, may want such things as more flex time or working from home.  Think through all your needs and your bosses'.  That should be a major piece of the negotiating mix.   

When things get tough, remember that approaching the negotiating process from the perspective of soft skills (the relationship skills) is far more successful than from the hard (the money).  Best wishes.

NYTimes: A Toolkit for Women Seeking a Raise, by Tara Siegel Bernard, Saturday, May 15, 2010.

One of the continuing inequities in the American workforce is the paygap between women and men.  Even though women, on average, tend to be better educated than men, those women who work full time only earn about 77 cents for every dollar a man makes.

FYI: To my amusement I've learned that a few women get frustrated by a man writing about this, but I have plenty of reasons, not least, three daughters and a wife, who are professionals.  At different times in their marriage all four made more than their husbands.  (Furthermore, it's important to take truth wherever you can get it.)  Although I've consulted to numerous female execs over the years, a dozen or so years ago, one client from among the top paid executives in America was especially instructive about the issue of male consultants working for female execs.  I asked her why she wanted to work with a man.  Her response?  "The image of me working with a male consultant has much more cachet than working with a woman."  I hope that by now that has changed.  Of course, she tossed me a bone: "Besides, you're more knowledgable than any women I know in the consulting business."  

Saturday's NYTimes has a superb report by Tara Bernard on the research of Hannah Riley Bowles, prof at Harvard's Kennedy School of Government about getting the merit raise you deserve.  My review of the article follows, but with additional personal insights.

Bowles research is not at all quirky since Harvard has a long history of negotiation research in governmental, legal and business settings.  The essential conclusion of Bowles' study is that "if a man and woman both attempt to negotiate for higher pay, people find a woman who does this, compared to one who does not, significantly less attractive.  Whereas with the guy, it doesn't seem to matter." 

What's going on here, and what can women do about it?

Bowles suggests that women should frame their requests in ways that won't undermine their relationship with the boss.  So, you ask, do we succumb to the stereotype, or focus on the ends justifying the means?  Your call.

First, two facts help explain the problem: people associate men with higher pay because men tend to hold higher paying and higher level positions, and women are more likely to leave the workforce to care for children, so they end up with fewer years of experience.  Still, when all of those issues are factored into the difference, about 40% of the gap is unexplained.

Other research on gender and negotiation suggests that part of the issue can be tied to the negotiating process itself.  Bowles and her colleagues suggest six important steps for better pay success:

Get proactive.  When you deserve a raise, don't sit around and wait for someone to notice.  I often counsel both men and women that more than 50% of the time your boss won't know about your contributions unless you tell him.  That means that self-advocacy (get familiar with that skill and learn how to go about it) is an imperative in the 21st century.  That also includes consideration of the best timing to approach your boss.

Do your research.  That will pay, literally.  Know what other people are receiving for a position and task.  Search out the pay websites such as payscale.com and salary.com to uncover salaries for comparable positions in your area.  I've neglected one significant insight from Bowle's research.  When you talk to peers, talk to men in your network, and don't get caught comparing your salary to other women.  I regularly remind clients that solid research shows that the quality of your network is terrifically important.  People with a quality network both within and outside their organizations get promotions earlier, have more opportunities and get higher pay.  (One related blog: Who should be in my work network?)

Anticipate objections.  This can be a difficult one.  Once you start the process the responses are going to be reactive, so identify as many as possible and think through your responses to each of them.  If you have little background in negotiation, now's the time to start adding to your skill base.  Start with Fisher and Ury's bestseller, Getting to Yes.  Once you've gotten that down pat, pick up Negotiation Genius, by Malhotra and Bazerman.  For insight on anticipating objections, focus on chapter 3, Investigative negotiation, and chapter 13, When Not to negotiate.  Anything by Bazerman on negotiation is worth its weight in gold.

Negotiate at home.  This is an intriguing piece of advice by Bowles.  Think about how a raise might affect your life at home.  Women still carry a disproportionate load of household chores.  So, try to re-examine some of those roles, and think through how that might affect each partner's work situation.  Then re-negotiate those work responsibilities and relations.  As one writer says, the big secret in the American culture is that negotiating at home may be more challenging than at work.  Your workplace is probably more gender neutral than your home. 

Negotiate strategically.  Here's where women need to use a different strategy than men.  Bowles' research shows that if women explain why their request is appropriate and that they care about maintaining good relationships at work, and do it in an authentic way, they'll be more successful.  Be very careful about manipulating outside offers to support your request.  They backfire more for women than for men.  I've found that in the better firms, it's rare for an exec to be responsive to an employee who asks for a raise based on outside offers.  They're going to have to be extremely valuable for that to work.  Indeed, I'm aware of some instances in which the person was let go for making an outside offer part of his/her case.

Negotiate creatively.  Although the younger generation of men are more and more factoring family responsibilities into the mix, women, especially, may want such things as more flex time or working from home.  Think through all your needs and your bosses'.  That should be a major piece of the negotiating mix.   

When things get tough, remember that approaching the negotiating process from the perspective of soft skills (the relationship skills) is far more successful than from the hard (the money).  Best wishes.

NYTimes: A Toolkit for Women Seeking a Raise, by Tara Siegel Bernard, Saturday, May 15, 2010.

Never Let a Crisis Go To Waste

In yesterday's blog I pointed out that the small Israeli blunder during VP Biden's visit was a superb opportunity for the Obama administration.  And though the media had picked up no reports, yesterday, about the Obama administration using the blunder to their advantage, I suggested that it would be stupid not to.  (Of course, I was also pointing out to my readers that politics is much of the game of life.) 

This morning's news shows that my prediction was on target.  Mark Landler's article in the Times said that getting into a serious fight with Israel was risky, but that the payoff might well shore up Mr. Obama's credibility as a Middle East peacemaker.

Eric Cantor of Virginia, the house Republican whip and Sarah Palin issued a statement calling on the president to "push the reset button on our relations with our ally israel."  Hillary Clinton reaffirmed our relationship with Israel as a family member, but kept up the pressure on Netanyahu.  There were also numerous attempts on the Israeli side to calm the waters.

David Makovsky, the senior fellow at the Washington Institute for Near East Policy, whom I referred to yesterday, said, "I don't think this issue should be like a Christmas tree, where you hang all these other ornaments on it.  The whole episode should end where it began:  you had a problem with those units, so you figure out how to fix it."

In contrast to Makovsky, however, some of Israel's staunchest supporters in Congress said that the experience might focus minds on the larger prize.

Mr. Obama had a long, private conversation with Mr. Netanyahu yesterday.  Its contents have not been revealed.  But you know that Obama is taking advantage of the tempest in a teapot to reset his own boundaries with Israel.

Okay.  What can we learn from this?

1. In human relations, as in international relations, never let a crisis (a screwup) go to waste.  Step up to the plate and take advantage of it. If you fail to do that, it's possible that people will respect you less and that will result in a loss of credibility.
2. Take your time to reset the boundaries, but always reset them.
3. Take advantage of the situation to demand relevant changes.

Three Principles Of Career Politics: Netanyahu and the Settlements

There's a great deal, personally and career-wise, to learn from the Israeli failure to watch their p's and q's during the visit of VP Biden to Israel.  Thus, I intend to analogize from that example to comparable personal opportunities in business.

David Makovsky, esteemed specialist of the mideast, respected by both Israelis and Arabs, describes the situation on the CNN site here.  Essentially what happened was that during the visit of VP Biden to Israel, the conservative wing of parliament announced that they would be adding 1600 housing units for ultra-orthodox in East Jerusalem, what both Biden and Clinton identified as an "insult."  In other words, the Israelis overstepped the family boundaries (Israel and US are clearly family).  As of this morning neither Clinton, Obama or Netanyahu have backed down, but there's a lot of face-saving going on by Netanyahu.  He has to keep the support of both the US and his party, the Likud and that really takes a politician.

Some strategic background:  Obama gained the Jewish vote in the election and will certainly keep that vote, but he also intends for movement on the Palestinian/Jewish front.  That issue has been a thorn in America's side for decades and he would like to move the two-state process on. 

Though no one has breathed a word about this, the Israeli announcement is actually a gift to the Obama administration.  The Jewish blunder has put Israel in an embarrassing position, a position that Obama would be a fool to ignore.  The blunder surfaces all kinds of issues over which Obama intends to renegotiate (informally, that is), issues that would be far more difficult for the US to surface and renegotiate.  Of course, there will be all kinds of noise, in which all three sides attempt to reposition themselves, but my perspective is that the blunder once again puts the US clearly in the driver's seat.

How is this personally useful?

Although this is an international case of nations overstepping boundaries, I'd draw your attention to the fact that there are many work situations in which it's very important to guard against others overstepping your personal/organizational boundaries.  I learned this lesson in, of all places, the church.  When I was an associate minister in a Pasadena church, nearly 50 years ago, we had a troublesome and yet very powerful layman who was aligned with an extremist political organization.  He had developed a Sunday church class which he used for his own political purposes and we had been stymied for some time about how to best deal with the situation--a situation which regularly created problems throughout the congregation.  In the Protestant congregation you just can't march in and can the guy's ass like some of my Catholic brethren do.  So the senior minister argued that we needed to keep tabs on what was going on.  Once, he said, that the layman overstepped the bounds and became divisive we could haul him before the board, give him a dressing down, and limit his power.

That is exactly what happened. 

And I learned a great deal from it, not least that we humans are driven by self-interest and quite accustomed to honoring few clear distinctions between our messy, conflicted lives and our obligations to each other.  Actually, we have few two-dimensional (black/white) virtues to jeopardize.  We all want our share of power, and politics in some form is how we both gain and lose that power.

The second thing I learned and which our daughters taught me in spades, is that we are all fundamentally political animals.  What that means is that getting three teen-age daughters to agree on something, unless you choose to use coercion (which I've always viewed as ultimately destructive of relationships), is a highly political activity.  A lot of fun, but also very political. 

Now that our daughters are in their forties, I feel perfectly free to ask them all kinds of questions.  The most hilarious and insightful political issue I ever surfaced with them was the result of a question I asked at a raucous dinner at our lake place, in front of their husbands and children.

"What," I asked, "was the most difficult problem growing up in our family?"  There were knowing looks at each other, and big smiles before our middler answered the question (it's always the middler).  I did not expect the answer to be about politics, but there you go.

"The real issue," she said to much laughter, "was that we could never play you or mom against each other to get what we wanted.  All our friends usually worked their parents that way, but we could never pull it off.  You both were too smart for us."  The issue is totally political, and all about the very human effort to gain cooperation.

The third thing I've learned about politics is that you'll inevitably find yourself in business settings where someone, like the Israeli Likud, is overstepping the boundaries.  Observe them, take notes over two or three missteps, and then have a "come to Jesus party."  Once you've got the data, be sure to use the opportunity to either renegotiate (informally) or can the person's ass.  You can be sure that Obama will be renegotiating the Israeli relationship as a result of this blunder. 

In spite of all his foibles, few American presidents were better at the process than Lyndon B Johnson.  He could marshall data, suck up with promises and gifts, or put the fear of god into legislators to get what he needed.  This is my way of suggesting, as a trained theologian and research scholar, that moral fastidiousness is more about personal weakness than courage.  From a business example, Jack Welch fit the example to a T.  This century will need a different kind of example than Welch, but never forget that politics is at the core of human and career success. 

I allude to the research on negotiation/politics in my blog, How to haggle (part 3).

When Negotiating, Psych Yourself Up to be Creative

Going to buy a new car, or negotiate resource allocations on the job?  Should you focus on problem solving or creativity? 

Most managers understand that generating creative solutions is usually far more successful than systematic problem solving in haggling and negotiating.  So, reflecting the common wisdom that creativity is an innate talent that can’t be taught, they try to find or hire creative people who can generate new ideas in those settings.  You know the conventional wisdom:  creatives are born not grown.

That may be a missed opportunity.  The April issue of Harvard's newsletter, Negotiation, reports on a new study by D.T. Ogilvie of Rutgers and Shalei Simms of Ramapo College who wanted to test traditional wisdom.  The researchers randomly assigned MBA students into small groups. 

Some of the groups received a 30-minute workshop on  traditional decision-making techniques that stressed systematic problem solving, while the other group was given a 30-minute workshop on creative processing.  The creativity focus included instructions such as “have fun,” “refrain from criticizing your ideas,” and “look for new possibilities.”

Then, with each member representing a hospital department, groups negotiated a cost-allocation problem.  The conclusion?  “Negotiators who had received creativity training performed better than did those who had received more traditional training.  The results suggest that by exposing negotiators to creativity training and supporting their bright ideas, organizations may see improvements to their bottom lines.”

 What does this say about career development and skill training?  When stepping into a new situation, always ask the mindset question:  What’s the best approach to this issue?  How should I think about this problem and what mentality should I bring?

Here's my perspective.  Performers always think about their audience and their content.  Once they’ve decided on the best mindset, including their own emotional set, they psych themselves up for the performance. 

Perhaps business people need to learn how to be artists!

5 Rules for Recovering from a Fumble

The January issue of Negotiation laid out a process for recovering from negotiation missteps.  Reading it, I realized that it's quite similar to the model that I use for reworking a relationship breakdown. 

When you're working with clients, you know that your business is on the line, so there are a lot of reasons to renegotiate the relationship.  However, when you're dealing with a work colleague it's a bit easier to let the relationship slide, even though you know eventually you're going to have to work with that person again.  So what do you do to rebuild the relationship?  Here's the mix of my ideas with those from Negotiation.

1. Remember that you only get frustrated with people who are important to you.  I never get angry at people who are irrelevant.  It's always those who have skin in the game, who I need or who can create difficulty for me or my project.

2. Renegotiate the relationship ASAP.  My clients know that if I have any doubts about a misunderstanding they'll get a phone call by the next morning.  The longer you wait the more difficult it gets to rework the relationship.

3. Don't pretend nothing happened.  Ignoring the issue leaves the door open for deepening resentment, both your own and your colleague's.  Accept some responsibility and apologize.

4. If possible, check out the situation with a trusted advisor who can help you regroup, and, preferably, knows your counterpart.

5. Cooperate on a solution.  Enlist your counterpart's help in finding a way to turn your disagreement into an opportunity for connection.

Occasionally I hear the biblical injunction to not let the sun go down on our anger.  Some psychologists preach that.  I think that's a bit too idealistic.  Most of us need at least a little space.  I tend to sleep on my fumble so I'll have to time figure what my counterpart and I want out of the situation.  That will give me some ideas about protocols and scripts so that when I go back to the person, I'll have some comfort about the discussion.  I don't like going into tough conversations without some language to enable me to feel comfortable with any pushback I'm liable to get.

Well, what do you think?

Who Makes the First Offer When Haggling?

You want to get a good price on an item, say a used car.  You've explored all of your alternatives, including the Kelley Blue Book of used car prices.  You know the point to walk away, and you can identify a potential impasse.  You've assessed the best possible deal you might, and set up the stage for success.  Now comes the first offer.  Who should make it?  You or the salesperson?

On occasion, the salesperson may beat you to the punch and make the first offer.  The conventional wisdom is to let the salesperson make the first offer.  However, research into the "anchoring" of a negotiation reveals that how we perceive a particular offer's value is highly influenced by any relevant number that enters the negotiation environment.  Numerical values are considered "anchors."  Anchors affect the judgment of even those who think they are immune to them--and there is plenty of research backing that up.  Adam Galinsky, another expert in negotiation, has found that when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer. 

So if you've done your homework and have decided on a realistic range within the arena of possibility, the buyer will be better off to make the first offer.  All kinds of negotiation experts will rejct this, but the research is overwhelming.  Not only does making the first offer anchor the negotiation in your favor, but it also offers you a bargaining advantage when that offer is rejected.

However, when the seller has a lot more information about the item to be negotiated than you do, then the first offer will not be nearly as successful.  So always do your homework and do it thoroughly if you want to negotiate a price in your favor.  Last year, into the early months of the recession I bought a new car.  I followed through on my homework, checked out new car website and decided that I was after a $1500 discount off the current list.  I didn't make the first offer as I'd anticipated.  Instead, the salesman offered me a $2500 discount and I was so shocked that I forgot to stall, and accepted the price.  I've since realized that it would have been wise to stall since I didn't make the first offer.  I'm convinced I could have done still better.  Ahhhh, well.  Can't win them all.

You've made your offer and usually the seller needs space to think about it, so he/she will start talking.  Rather than responding to your offer, you're liable to get features and benefits, even though they've already been through the list.  Furthermore, experienced negotiators are aware that you will get nervous and perhaps make a better offer if they take their time responding to an offer.  Savvy hagglers wait out their counterpart's stalling tactics--because that's what's going on.  Malhotra and Bazerman say it's a serious mistake to make an "unreciprocated concession." 

If you get no concession from the salesperson, thank him for his time.  Often, the mere fact that you're going to walk away inspires the salesperson to come up with a counteroffer.

Remember:  If you've done your homework, you're usually ahead of the game if you, the buyer, make the first offer.