What if everything was a negotiation?

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This Youtube video (thanks to Andre Bello) illustrates beautifully the many questionable arguments we use in "serious" business negotiations to claim value:



http://www.youtube.com/watch?v=R2a8TRSgzZY

















It is true that, as per Dr. Karass, we don't get what we deserve, we get what we negotiate, However, a world where every small purhcase becomes a tiresome negotiation game is not efficient, nor fun. This is why bazaar-style haggling has not become the norm in retail shops.

Solid reputation and a two-faced Madoff

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Madoff fooled his investors, who lost their money. Before his spectacular fall, Madoff generally enjoyed a good reputation among his clients and was also not singled out by regulators for more detailed review.

Can we really trust that a Government regulator approval stamp on e.g. financial institution guarantees true trustworthiness? Not really, you should do your homework regardless. It is a data point regardless, however, and better than no stamp at all.

Long-term track record is important. If an institution has been going on for 100 years, it lowers the counterparty risk, but then again you can get a rogue trader like Nick Leeson in the ranks who brings down the institution (in this case Barings) overnight.

Personal reputation is maybe easier to gauge. I have used the metaphor of coloured pool balls to illustrate this.

If one holds a two-coloured pool ball in a hand so that you can only see part of the face, the observer can't really tell whether the ball is "solid" colour or a two-faced one.

However, when the ball is released from the grip, if you look at the side angle, you spot the two-facedness instantly.

This is what reputation does, it gives you are side glance on your negotiation partner. Somebody else can tell you if your negotiation partner is "solid" or not, when you cannot make that judgment with your own observations alone (since you have been drip-fed only the spotless facade).

Once you get your own observations married with the reputation feedback from your network, you got "their number"!

Separating individual reputation from institutional reputation is difficult and another matter. However, I believe these correlate. If you have a good personal reputation, you don't want to work for shady firms. So I would recommend trusting individuals more than organisations as a loose rule. Just don't go too much along with your "blink intuition"!

Analytical Lauri Lyly to lead SAK labour union

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Lauri Lyly was deservedly elected as the new head of the leading Finnish labour union, SAK. He follows Lauri Ihalainen. Juhana Torkki interviewed Lauri in Neuvotteluvalta. The interview, including our observations, was included as the concluding case in the chapter describing analytical skills in negotiations.

I was particularly impressed by Lyly's views on the benefits of building a long term negotiation relationship:

Picture: Lauri Lyly, SAK

"Constructing the appropriate negotiation subgroups is almost an art form. If there are lots of negotiations around, the negotiation leaders may judge which personalities should negotiate with each other. One needs to think person by person, who gets along, and who has previously negotiated with with each other", Lyly says. Negotiations shape their participants. According to Lyly it is a "epiphany", if tough participants possibly initially poles apart from each other can find each other accross the table. "Such pairing will be worth its weigh in gold in later negotiations."

Lyly's description is a good illustration of how to build a trust balance in negotiations though common respect. Great negotiators respect their negotiation partners and will humbly strive to earn respect for themselves. This will be rewarded in the long run.

Juror at Old Bailey and Sheriff of London

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I received a Jury Summons from the Central Criminal Court of England, Old Bailey in London. Unfortunately I could not accept this honor due to my move back to Helsinki, Finland.

I was disappointed. Luckily my friend Roger Gifford suggested a visit for me and my colleague Leon Johnson to his offices at Old Bailey. Roger is Sheriff of London. Old Bailey is an impressive place, handling complex criminal cases. At the time, they were processing e.g. several murder cases.

Picture: Roger Gifford, Sheriff of London and Sami Miettinen

It would have been educational to be a juror in an English court proceedings, as up to now I have been somewhat sceptical of the ability of non-expert jurors to fairly judge the right and the wrong. Especially American court dramas are colouring my perspective, with images of great speeches turning the heads of juries for example in "small person's fair fight against an evil corporate". This decision will in addition form a case, which will be used as a reference point in similar future situations.

In criminal law, the stakes can be very high for an individual person. Like in negotiations, one would wish the result to be fair and based on facts. Innocent persons should not suffer for crimes they did not commit.... beyond reasonable doubt.

I remain skeptical for case law and using jurors and prefer the Finnish law system, which puts emphasis on the professional judges who must interpret the facts as they apply to the written law. Still, it would have been interesting..

PS. Over 10,000 visitors to http://www.neuvotteluvalta.com/. Many thanks!

Fair Apprentice

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My wife Reetta Miettinen, the Managing Director of Taskukirja Loisto Oy recruited me to help the Loisto book stand during the Turku International Book Fair. Taskukirja Loisto is the leading Finnish pocket book company, for example at the moment the top 16 pocket books in the Finnish top 20 best seller list are from LOISTO.

I enjoyed the challenge to be a salesman immensely. We gave away hundreds of pocket book catalogues and sold scores of books, utilising "three for the price of two" special to shift the volumes.Picture: Kaisa Tenhunen, Leena Lehtolainen ja Sami Miettinen

The situation was very much exactly like from the hit TV-series The Apprentice. A book fair would be a great episode for the programme, and it would be cool to see either Alan Sugar or Donald Trump to recreate this. I tried several approaches to lock in to customers. The most effective style for me appeared to be the use of even slightly over the top humor as well as spelling out the 3-for-2 special discount (the members of Team Prometheus should remember my "literary candy"-routine for some time :-)

The seller should take the use of humour seriously. A good-humoured customer who enjoys their time with you is much more likely to buy than one that is gloomy. This applies in negotiations in general.

I also met a number of interesting people during the book fair, including the best selling author above, Leena Lehtolainen. Her book Luonas en ollutkaan was the No. 1 best-seller in Finland during the book fair. I also discussed with the member of European Parliament, Sirpa Pietikäinen, who had recently inherited the place held by the Finnish Foreign Minister Alexander Stubb (also an interviewee) in Brussels.

Picture: Sirpa Pietikäinen and Sami Miettinen

All in all, the weekend was extremely interesting, and the team spirit was excellent. The attendance in the 2008 Turku International Book fair also broke the record with 23,450 visitors, so recession-mentality was not yet present in the event.

Nobel Peace Price to Martti Ahtisaari

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Martti Ahtisaari, a former president of Finland has today been awarded the 2008 Nobel Peace Prize for his efforts to build a lasting peace from Africa and Asia to Europe and the Middle East.

I repeat an excerpt of my blog entry Principles in Political Negotiations from May 2008, which commented what a honor it was to interview Martti Ahtisaari for Neuvotteluvalta book:

Martti Ahtisaari, the former President of Finland and an international elite negotiator, emphasizes principles in international negotiations. He has been a key negotiator in Namibia, Aceh and Kosovo. In these situations achieving the autonomy or independence of the region has been right in principle.

Ahtisaari emphasizes that before national sovereignty “the people of the world want two things: that both the police and the juridical system would treat everybody equally. If these two things are in place, the development towards something better is possible. But quite often that is not the case.” Equality is one of the key principles. A good negotiator puts emphasis on principles, equality, on a reputation of being just and having a long-term credibility.

Apologies for the low production values of my photograph with Martti Ahtisaari, which was taken earlier in 2008 at the Heathrow Airport. I am not particularly proud of that Toilets-sign or my holiday clothes!

Picture: Martti Ahtisaari and Sami Miettinen

Sources:

Interview with Martti Ahtisaari on 12 July 2007 by Sami Miettinen and Juhana Torkki for Neuvotteluvalta.

Principles in Political Negotiation blog entry

Markus Niemela wins

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Congratulations to Markus Niemelä for winning the Formula Atlantic series with a dramatic win in the last race. The championship victory will give Markus a very useful booster for the 2009 contract negotiations!

http://www.markusniemela.com/

http://www.champcaratlantic.com/News/Article.asp?ID=5447