Negotiation Mastery Blog

Is Your Negotiating Counterparty Acting Crazy?

(4 more lessons from the U.S. Debt Deal)

So, before being rudely interrupted by Christmas and the New Year, I was writing about the U.S. debt deal and the lessons we can draw from it with respect to our divorce (or, of course, any negotiation because hopefully we aren’t actually getting divorced).

Why did the debt deal fail?

In fact, I predicted it would fail. Admittedly, I have no proof in writing, it was down the pub with my friends.

But my thinking was that, yes, it had a very clever structure (if no deal is reached, it automatically triggers an alternative that neither side wants). However, this would only work if both parties were rational. But what if one side is a bit crazy and likes a bit of danger? What if one side is a bit like Major T.J. “King” Kong in Dr Strangelove, riding his nuclear bomb to the ground. Mutually Assured Destruction? Yeah, baby, bring it on!

Now we are talking about U.S. politics here and that hasn’t been rational for a while.

In fact, some of the newer Republican members, Tea Party advocates, I thought relished the idea of governmental collapse. Given that their basic premise is the removal of government, anything that put government in a bad light would be good from their point of view.

So my view was that these Tea Party members would be so crazy as to scupper the deal, even at their own expense.

Lessons for your divorce

Firstly, the “crazy” negotiation tactic is not a good one. If anybody is tempted to spice up their discussions by unpredictably irrational behaviour – don’t.

Look at North Korea. They have spent several decades following this strategy and look where it has got them. One of the poorest countries in their region and far poorer than their cousins south of the border. Let’s be blunt: their negotiation tactics are not working.

Studies have shown that, surprisingly, predictability is good in a negotiation. Other parties are more likely to be trustable themselves, if they know they can trust (or predict) your behaviour. Makes sense really.

But what if they are acting crazy?

Most negotiation best practice works on the other party behaving rationally. Unfortunately, many people don’t. Not through maliciousness or too much drug use, but simple stupidity or forgetfulness. So the second lesson to draw is: don’t expect them to be rational. You frequently have to do the thinking for them and make sure they see the pro’s and cons of different strategies and make sure they make the right deductions.

But the third lesson is that, if you are dealing with a crazy, logic and common sense just may not wash. Don’t expect them to be persuaded by the “Let’s avoid legal fees” argument. Don’t expect them to be persuaded by any “But its common sense” argument. You may have to plan for the court-room (or the bunny in the saucepan).

Can we just blame the crazies?

Actually, there was another reason the debt deal failed: the Democrats wanted it to fail too.

With the guillotine in place, they had the Republican’s finessed: either they choose a tax rise (to bring down the deficit), or they choose a big reduction in U.S. military spending. With an election coming up, that’s a rock and a hard place kind of thing. There’s going to be some real squirming going on.

One last lesson for the GOP, divorcees and negotiators in general

So, going back to the debt deal: superficially the deal looked preferable to everyone. However, given the real agendas of the different parties, both sides were actually perfectly happy without a deal. It was never going to happen.

So last lesson to learn: make sure what you are offering really is better than the alternative from their point of view, in particular given their real agenda.