March 18, 2014

The Art of Negotiation

How to Improvise Agreement
in a Chaotic World
Michael Wheeler

©2013 by Michael Wheeler

Adapted by permission of Simon & Schuster, Inc.
ISBN: 978-1-4516-9042-2

Key Concepts
• Negotiation is a two-way street and although prep-
aration is important, one cannot script the process.
Instead of following rigid plans, the most effective
negotiators understand that negotiation demands
rapid cycles of learning, adapting, and influencing.
• Negotiators need a realistic sense of three key
features of the landscape: a clearheaded view of
where they think they are at present, an estimate of
their counterpart’s circumstances in order to gauge
what might prove to be acceptable, and a realiza-
tion of the factors they do not yet know so they can
be alert for surprises.
• The familiar win-lose bargaining notion ignores
the exploration and discovery that takes place in
everyday transactions. By considering different
paths to reach a deal, the more nimble and creative
people can remain in the thick of negotiation.
• Effective negotiators always keep their eyes out for
exit options and less desirable solutions that may
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be better than none. In deal making and dispute
resolution, discretion is sometimes superior to val-
or.
• Much of the pressure that people feel in negotia-
tion is self-imposed, whether it is a self-defeating
attitude or letting their emotions overreact to per-
ceived slights or setbacks.
• Negotiation is like jazz improvisation—the process
of learning, adapting, and influencing takes place
moment to moment in listening and responding.
• Negotiations are a constantly evolving process,
and in order for individuals to have successful dy-
namic interactions, they must cycle through a loop
of observing, orienting, deciding, and acting.
• The most successful negotiators use opening mo-
ments to engage their counterparts, frame the is-
sues at hand, and establish the tone and pace at
which the process will unfold.
The Art of Negotiation Michael Wheeler
• In every negotiation there comes a time when a
crucial step can help or hurt an individual’s cause.
By learning to recognize what can and cannot be
accomplished at any given moment and learning
to shift power imbalances with an eye toward the
end game, a person can excel in these critical mo-
ments.
Introduction
According to Harvard Business Professor Michael
Wheeler, the two approaches to negotiation that have
prevailed over the years—the “win-win” method and
the hard-bargaining style—are one-size-fits-all strate-
gies that do not match real world realities. In The Art of
Negotiation, Wheeler presents a dynamic alternative
that illustrates how master negotiators make manag-
ing uncertainty, and thriving on it, the cornerstone
of their strategies. Furthermore, effective negotiators
see the process as an exploration that requires agility,
ongoing learning, and adapting rather than one that
is constrained by rigid plans. By remaining flexible,
open, and creative, these negotiators are able to reach
even the most difficult of agreements.
Embracing Chaos
Unfortunately for negotiation theorists, the real world
negotiation process involves a number of unpredict-
able variables. No matter how much individuals
want to script the process, the truth is that whoever
sits across the bargaining table may be just as smart,
determined, and imperfect as they are. Therefore,
master negotiators realize that instead of rigid plans,
effective negotiating calls for rapid cycles of learn-
ing, adapting, and influencing. Wheeler is careful to
point out, however, that this should be an active and
deliberate cycle as opposed to one that occurs by hap-
penstance.
In their book Getting to Yes, Wheeler’s colleagues
Roger Fisher, Bill Ury, and Bruce Patton present an
interest-based approach referred to as “win-win
negotiating.” One of the key mantras, “focus on inter-
ests, not positions,” may sound nice when compared
to traditional hardball tactics, but real world negotia-
tors often do not know their own interests until they
are truly involved in the process. Secondly, a BATNA,
also known as the “best alternative to a negotiated
agreement” or walkaway option, is conceptually
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sound but messy in practice. For instance, subscribers
to this method would accept any offer slightly better
than their walkaway options rather than persisting
and securing a bigger piece of the proverbial pie with
a little creativity.
A Map of the Pyrenees
Successful negotiators draft their strategies with
three key aspects of the bargaining landscape in
mind, regardless of whether or not their experience
suggests a certain path. First, they take stock of their
own needs, priorities, and trade-offs, as well as their
fallback options if necessary. Secondly, they esti-
mate their counterparts’ circumstances in an attempt
to gauge what might prove to be acceptable. Lastly,
they determine the factors that they do not know at
the outset so that they can be alert for surprises as
the process plays out. When mapping such a robust
plan, negotiators can ask themselves three questions
to help prepare their strategies:
1. Should I negotiate?
2. Is now the time?
3. Do I hedge or go all in?
Negotiation is inherently uncertain, and it is hard to
know how much room there is to negotiate or if there
Further Information
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By Steve Gates
The Art of Negotiation Michael Wheeler
is any room at all. Individuals must weigh what they
have to gain from negotiating against the downside
of what can be lost. People’s risk appetites, however,
ultimately depend on their temperaments, resources,
and alternatives. The bottom line is that it is time to
stop negotiating when the risks
of pressing further outweigh the Don’t wish away
marginal gains.
The less certain you are about the odds of reaching agreement,
Likewise, timing is an important the more provisional your strategy must be.
aspect of the negotiating land-
scape, and whether or not time is on a person’s side
depends on the stability of his or her BATNA. Pro-
longing a negotiation only makes sense for people
if there is solid reason to believe that they will be in
a better position tomorrow than they are in today.
However, it only takes one stubborn side to create a
stalemate, and if negotiators are committed to out-
lasting their counterparties, the costs of doing so can
become massive. Wheeler concludes that it is time to
negotiate when people can learn more by being at the
table than by being absorbed in their private prepara-
tions.
The third question is much tougher to answer. Many
negotiations do not require all-in moves and can
instead be hedged by playing one deal off another.
However, there are instances when individuals will
have to dump all their chips—including time, money,
or status—on the table to be seen as serious players.
But with optimism and self-confidence, negotiators
will be able to seize opportunities when things break
About the Author
Award-winning Harvard Business School Pro-
fessor Michael Wheeler has taught negotiation
to thousands of MBA students, executives, man-
agers, and public officials from companies and
organizations around the world. Wheeler is
editor of the Negotiation Journal, published by
the Program on Negotiation at Harvard Law
School, and co-chairs the board of the nonprofit
Consensus Building Institute. He lives in his-
toric Gloucester, Massachusetts, his hometown.
Business Book Summaries® March 18, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved
their way, even if they have to accept that their fate is
never solely in their hands. Some of what happens in
negotiating is either unforeseeable or beyond people’s
control, and their strategies must allow for this unpre-
dictability.
uncertainty. Instead, factor it into your plan.
Prospecting
There is a familiar bargaining notion that depicts
negotiation results in a straight win-or-lose fashion;
however, this idea often ignores the area of poten-
tial agreement reached by trading and tweaking.
In order to conceptualize such a space, negotiators
must construct a deal triangle where the three bound-
aries represent their baselines, their counterparty’s
baselines, and any outside constraints. Rather than
working back and forth across a straight line, a deal
triangle allows negotiators an area of acceptable
outcomes from everyone’s point of view. Accurately
assessing these possibilities is more difficult than
visualizing the triangle, but that is why it can flex,
grow, and vanish throughout the course of negotia-
tion.
In order for individuals to establish their baselines,
they should prepare by identifying sets of different
outcomes than what would be acceptable. The collec-
tion of these marginal deals represents a baseline, or
border that divides “yes” and “no.” Secondly, negoti-
ators must try to identify equivalent packages—better
in some aspects, worse in others—that equate to their
benchmarks. Quite often, any offer received in the
course of bargaining will be a mixed bag, so the task
is to find at least two bundles that roughly balance on
net value. The final step is to anticipate change. Priori-
ties, and perhaps circumstances, may change during
negotiation, and it is best to consider this when giving
thought to one’s baseline.
Anticipating the concerns and values of a counter-
party is another strategic habit to practice, but it is
always risky because they may see things differently.
Still, if somewhat accurate, this can help negotiators
shift the other side’s baseline by influencing its think-
The Art of Negotiation Michael Wheeler
ing accordingly. However, negotiators must take care
to tread lightly as it is easy to misread people at the
bargaining table where they are likely to be careful
about revealing too much.
The final constraint consists of real-world factors
beyond either party’s control. These can range from
economic influences, the law, a ticking clock, or com-
pany policy and procedures. The important thing to
remember is that all three sides of a deal triangle are
fuzzy and each side will be trying to gain a clearer
picture; however, by thoughtfully and creatively
addressing the constraints, the parties can change the
size and nature of the resolution space.
By definition, all deals within the triangle are accept-
able to the relevant parties, but individuals should
always set stretch goals that maximize the space
above their baselines in a reasonable fashion. Nego-
tiators should then consider the odds of reaching their
stretch goals because the less certain they are about
the agreement, the more provisional, nimble, and cre-
ative they will be in the process.
A double standard is a recipe for righteousness and retribution.
When each negotiator sees his own tactics as clever and the oth-
er’s as evil, tensions escalate, confirming everyone’s worst fears.
Plan B
Master negotiators always keep an eye out for exit
options or less desirable solutions that are better than
none. They are careful to avoid falling in love with
their own plans or making rigid, one-size-fits-all
offers because this will prevent them from learning
and adapting throughout the negotiation process.
Furthermore, they must fit their approaches and
strategies with the circumstances and people they are
dealing with, realizing that relationship building is a
form of early probing and learning. By doing so, they
effectively gather information and resources that set
up a successful end game and remain cognizant of
possible exits and fallback alternatives should things
not go as anticipated.
Presence of Mind
Pressure in negotiation is often self-imposed when
individuals let their emotions derail the bargain-
Business Book Summaries® March 18, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved
ing process instead of utilizing these signals to help
them adapt to the situation at hand. Common anxiety
over posturing, deception, miscommunication, and
confrontation can sometimes represent real threats,
but other times it is a self-defeating figment of the
imagination. Worse yet, when one side confirms the
counterparty’s worst fears by perceiving its own tac-
tics as clever and the other’s as evil, a double standard
arises that quickly escalates tensions.
To combat such negative thinking, effective negotia-
tors practice mindfulness, or the process of becoming
aware of their own thoughts and feelings without
prematurely judging them. By being fully present,
they are simultaneously deeply engaged with the
other party and also taking everything in as if they
were a detached observer. This allows individuals
to avoid compounding distraction due to reinforced
self-criticisms by practicing patience and perception
and protecting against overreacting to slights and set-
backs.
The Swing of Things
Negotiation can be likened to jazz
music in that both require learning,
adapting, and influencing by lis-
tening and responding moment to
moment. Furthermore, improvisa-
tion and a special mind-set that blends realism about
the situation with a positive belief that an individual
will get through it are essential. The best improvisers
do three things especially well: they pay close heed,
they know when and how to influence and adapt to
the people they deal with, and they are proactive.
Paying close heed requires all of an individual’s
senses because it means giving his or her full attention
to what others are expressing substantively and emo-
tionally. This includes not only the meaning of their
words, but also their tone of voice, facial expressions,
and body language. From here, effective negotiators
find ways to bring out the best in their counterparts, or
“comp” them, because it is in their best interest to get
the counterparty to disclose their true priorities. And
thirdly, like great jazz musicians, negotiators must
be proactive because the fear of making mistakes is a
great inhibitor to new and creative agreements.
The Art of Negotiation Michael Wheeler
Situational Awareness Master negotiators enter into these moments with an
Wheeler draws on the general model of dynamic eye toward how they want the process to finish, and
interaction formulated by Air Force Colonel John they utilize the openings to engage, frame, and define
Boyd called the OODA loop—or observing, orient- how they would like to see things go. In order to do
ing, deciding, and acting. As Boyd saw it, the success this, they must effectively use nuances like making
of American fighter pilots was related to a bubble small talk to reduce tensions and build relationships,
canopy that allowed the pilots to cycle through the as well as open body language and correct posture
loop faster than the enemy. Such “situational aware- to alleviate stress and build their confidence. Finally,
ness” allowed them to process information and make master negotiators use care to avoid small ego battles
decisions more quickly, and their agility allowed them throughout bargaining because they realize that such
to engage other parties effectively. small setbacks can amount to losing the war and cost-
ing them their ultimate goals.
In negotiations, “observing” is being attentive enough
to connect the dots and construct
a coherent picture. It happens on Openings are opportunities. They are moments in which mood
three levels: substantive, inter- is set, issues are framed, and relationships are established. If
personal, and contextual. Not these moments are recognized and expressed emotionally, they
only do individuals have to be
can be openings to new understandings and possibilities.
deeply engaged in the moment,
but they also have to be simulta-
neously detached enough to have awareness of what Critical Moments
came before and what may ensue. Closely related, Sometimes in negotiation individuals must take a
“orienting” critically recognizes differences between step that could either help or hurt their causes, and
one’s expectations and what is unfolding in the pres- oftentimes there is no easy way to backtrack from
ent. the decisions they make. These critical moments are
Deciding and acting are set up by observing and unavoidable in the bargaining process. It is vital that
orienting, but there will still be a level of ambiguity effective negotiators recognize what can and cannot
because, in truth, individuals always act before all the be accomplished at any given moment. By being con-
facts are in. However, by deciding and acting first, sistent, decisive in the face of risk, and focused on
negotiators gain the edge to frame choices for their the ultimate objective as opposed to the immediate
counterparts as opposed to the other way around. It consequences of a decision, individuals can learn to
may also allow individuals to determine the opposite successfully manage stressful crossroads.
side’s positions and intentions, but this only works if Another key to confronting tough issues at critical
the individuals can make sense of what occurs as a moments is the ability and willingness to say “no”
result of their actions. without ending the discussion. There are times when
Openings a true “no” is required, such as when there is a line
that an individual simply will not cross, but there are
In the early moments of negotiation, three important
other instances where a strategic or pliable “no” is
actions take place:
called for in an attempt to set up a negotiator’s end
1. Engaging is about identity, roles, and relationships; game. Such a move is just one example of a turn or
it defines the “who” of the process. power play that successful negotiators utilize in order
2. Framing then defines the “what” of negotiation in to shift power imbalances within the course of the
terms of how the parties view the task and what bargaining process. Whether correcting, diverting, or
they are ultimately pursuing. interrupting, well-timed moves and turns can redirect
the negotiation and create an environment for con-
3. Norming is the “how” as it relates to the tone and structive problem solving.
pace of the negotiation process established by the
parties.
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The Art of Negotiation Michael Wheeler

Closing contrasts to situations they have encountered in the

Knowing when and how to say “yes,” or how to get
a “yes” from the other side, is vital to negotiation
success. However, because of the fuzzy nature of the
bargaining process, this can often become a gray area.
Usually the only way to know for sure how far an
individual can go without exploding a deal is to go a
little farther than that, which obviously is self-defeat-
ing. Yet, by weighing alternatives that help illustrate
marginal gains versus what negotiators stand to lose,
individuals can more accurately realize when push-
ing the process further is not in their best interest.
Additionally, successful negotiators anticipate poten-
tial last-minute blowups. For instance, the most
effective bargainers confirm from the beginning
that they are dealing with someone who can make
a binding commitment so that they can later avoid
possible bait-and-switch tactics. Furthermore, they
begin negotiations in the manner in which they wish
to conclude them: by focusing on simple gestures and
relationships that promote a smoother process.
past. Furthermore, successful negotiators recognize
that the chances of an idea being accepted improve if
both parties have a hand in developing it. These are
all ways of expanding individual’s mental libraries of
creative solutions, an important resource on the road
to negotiation mastery.
Wicked Learning
Negotiation, by its very nature, presents a “wicked”
learning environment. Results themselves are an
imperfect test of how well individuals have done
because they will never know what the other party
may have, or have not, done given a different pro-
posal or set of circumstances. Additionally, focusing
on only what was obtained versus how well one per-
formed can be a mistake because luck—both good
and bad—can influence what ultimately happens in
the course of a negotiation.
Therefore, master negotiators must perform provi-
sional self-assessments after each process whether or
not a deal was reached. They must be careful not to
be overconfident about what they

Psychological distance opens up the imagination. Instead of fix- discern, and they must realize that
accepting uncertainty is better
ating on what may block our goals, stepping back allows us to than clinging to, and acting on,
see a way around obstacles. mistaken assumptions. Instead,
they can modestly review how
Silk Purses well they prepared for and managed the negotiation
process and if there were any surprises they should
Master negotiators must find ways to make lemonade
have been ready for. This allows the truly successful
from lemons. One way of doing this is creating mutual
bargainers to build upon their strengths and shore
welfare, or joint benefits, from trading on different
up any weaknesses, all while remaining humble and
priorities, expectations, time horizons, or attitudes
accepting the luck factor in negotiation.
toward risk. Because negotiators will weigh these fac-
tors differently, there is often room to create value, Fair Enough
bridge gaps, and break impasses. The message here is quite simple: every time negotia-
In order to stoke the creative furnace, research sug- tors sit down to the table, they must decide what they
gests that psychological distance will open up the owe the other parties (if anything) in regards to fair-
imagination, and rather than individuals fixating on ness, candor, and the negotiation tactics they employ.
what may block their goals, they can step back and con- Individuals must recognize that their counterparts
sider ways to bypass such obstacles. By continuing to may have different expectations and principles than
work their ideas, master negotiators play around with their own, but they can still try to encourage ethical
concepts in order to generate more value. If that does behavior. It is also extremely important to be realis-
not work to create a comprehensive resolution, they tic, but to guard against rationalizing questionable
break the problem down into smaller parts or think conduct just because negotiators suspect their coun-
analogically as to how the issue at hand compares and terparts may not be behaving ethically. In the end,
individuals’ characters are defined by their actions.
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The Art of Negotiation Michael Wheeler
g g g g g g g

Copyright of Business Book Summaries, Business Book

Features of the Book
Estimated Reading Time: 4–5 hours, 267 pages
In The Art of Negotiation, Michael Wheeler devel-
ops a new and practical slant on the bargaining
process aimed at challenging novice and experienced
negotiators alike to rethink traditional habits and
assumptions. Complete with key concepts, notes, and
an index, the book provides ample resources to help
support readers’ understanding of Wheeler’s con-
cepts. The book is best read from cover to cover.
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Contents
1. Embracing Chaos
Part One: A Sense of Direction
2. A Map of the Pyrenees
3. Prospecting
4. Plan B
Part Two: Improvising
5. Presence of Mind
6. The Swing of Things
7. Situational Awareness
Part Three: Managing the Process
8. Openings
9. Critical Moments
10. Closing
Part Four: Mastery
11. Silk Purses
12. Wicked Learning
13. Fair Enough
Appendix: Twenty-five Reasons to Embrace Chaos in
Negotiation—A Strategic Road Map
Acknowledgments
Notes
Index

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Copyright of Art of Negotiation is the property of Great Neck Publishing and its content may
not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's
express written permission. However, users may print, download, or email articles for
individual use.