Owners and managers of private companies are often faced with the challenge of re-opening negotiations which have stalled. Whether they are trying to complete a contract or transaction, or resolve an ongoing business dispute, their frustration with being unable to get a deal will likely lead to their search for ways to break the deadlock. While not every strategy or technique they might consider will be available to them, or will work if tried, there are at least a number to choose from. This blog post will explore the options.
It’s helpful for those owners and managers considering the options to first reflect upon the possible causes of the deadlock. If a conflict between the negotiating companies has escalated and become more difficult to resolve, has the group psychology changed? Since such negotiations are often conducted by their respective teams of company employees, have some members of each team become more competitive or dominant, or have members with more moderate views been pressured into more extreme positions, or have cohesiveness and solidarity become the team’s overriding goal?
Or has the individual psychology changed? Have individual members become more inclined to blame those on the other team, or even those on their own team? Have the members of both teams lost respect and empathy for the others, or concluded that the negotiation is necessarily a zero-sum game with no prospect for a “win-win” outcome?
While the psychology at play may seem to be an obstacle, the team members may eventually come to accept that continuing the conflict is more unpleasant than settling it, and that they should attempt to re-open the negotiations by using some of the methods described below.
One of the first avenues they might choose to explore is the appointment of an intermediary to intervene, preferably someone perceived by both sides as being impartial and objective, and perhaps regarded as wise, with at least some moral authority. Often used in dispute mediation prior to embarking on arbitration or litigation, such a “neutral” shuttles back and forth between the parties in search of a resolution, acting as a facilitator to encourage the parties to brainstorm and generate various problem-solving ideas. Even if the intermediary is not impartial when intervening and personally desires a certain negotiated result, his behind-the-scenes conversations may be enough to loosen hardened positions if he has the respect of both sides.
Another approach, somewhat related to the appointment of a neutral mediator and useful when the parties recognize the problem causing the deadlock, is the appointment of a team of experts who will study the problem and recommend ways of solving it. Providing a “cooling-off period” and allowing those involved in the negotiations to step aside for a while, the experts bring a fresh perspective and the potential to learn new information and come up with creative solutions. Even if the recommendations of the experts are eventually rejected by the negotiating parties, they will provide a focus for the re-opening of the negotiations with possibly different dynamics. Whether the expert teams consist of tax accountants, software programmers, environmental engineers, business valuators or other specialists, the compromise solution they arrive at may well be enough to get the negotiations back on track, especially if it is regarded as an objective, commonly held benchmark.
While engaging outsiders to come up with a solution to break a negotiation logjam may be an acceptable course to take for some negotiating parties, others will not want any third parties to be involved at all. Whether they are concerned about possible loss of privacy and confidentiality of their affairs or loss of control of the process, or they are afraid of having an imperfect solution imposed upon them, or are wary of the expense and delay incurred by involving an outsider to obtain an uncertain result, they may prefer to keep the negotiations to themselves and exercise more “self-help” in overcoming the deadlock.
Either side might then simply try to “break the ice” by engaging in acts of kindness or making polite gestures to the other side, perhaps by way of a small gift or an apology, indicating their willingness to the other side to be more co-operative. They might even admit that their communication style could be better.
Or if the other side does something helpful, they might express thanks or be helpful in return. This promotes repetition of co-operative acts, sending conciliatory signals without conveying any message of weakness.
Often negotiations can be re-opened by a proposal to discuss procedural matters or rules, such as suggesting a neutral location for a meeting, the agenda for such a meeting, the time limits for discussion, or the method for keeping records.
Following procedural suggestions with suggestions as to which issues should be given priority whenever the parties resume their discussion may provide an incentive to return to the negotiating table. While this option requires the parties to acknowledge their deadlock, it at least forces them to list the various issues from those most important to those least important from their perspective, and encourages them to return with their list of priorities in the hope that there might be enough trade-offs to eventually arrive at a bargain. Creating the list allows each party to clarify what it is asking for and why, and reminds each party that it will seldom achieve everything it wants and that it must give up a few things to be realistic.
If setting such priorities does not seem possible for the parties, they may instead be able to identify a few things they each have in common. Despite their many differences, they may both share a couple of overriding goals, or have a mutuality of interest in certain things, such as their reputation among customers and suppliers within their industry, or the need for them to work together in the future. Reminding each other of these may be sufficient to get the parties to resume their negotiations.
If finding something in common between them is difficult, it may still be possible for each party to generate one or more acceptable solutions as a means of indicating their flexibility in the process even though their original demand will remain entrenched and unsatisfied. For example, instead of continuing to insist upon a specific dollar amount, one of the parties might suggest a generally accepted range of dollar amounts appropriate for the issue being addressed.
One technique often used to restart negotiations is for one party to acknowledge the other’s interests, demonstrating that those interests have been heard. By listening and re-stating what the other party has said, a willingness to understand the other’s interests and feelings is indicated. Any ambiguity may be clarified as well.
When each party states its own interests, it allows that party to move off its initial, perhaps hardened, position so long as whatever solution the parties may arrive at, their solution will incorporate those interests. While one party may oppose the initial position taken by the other, it will be difficult to oppose the interests of the other. The parties may then be prepared to carry on with their negotiations by surrendering their initial positions without surrendering their interests.
For a party that has always insisted that its solution towards arriving at an agreement is the only solution, and that it will not unilaterally make any concessions, it is difficult to get that party to move off that position. It may be necessary for the other party to offer something in return, asking whether they have something of value they might exchange. This approach is often called “tit for tat” negotiating, or even “haggling”, although it not normally regarded as an acceptable alternative to other methods which reflect the view that negotiation is essentially an exercise in problem solving, or at least an exercise in focusing on party interests, not positions.
But the tit for tat method may work when other methods have failed in getting a party to budge from its initial position. When a conflict is quite entrenched or longstanding, a minor unilateral concession by one party may motivate a positive response from the other, possibly encouraging a series of small, trust-building exchanges. The smaller concessions may lead to concessions on the bigger issues so long as trust between the parties is maintained.
Depending upon the group psychology mentioned above, another strategy which a party may use to break the stalemate involves identifying the division within its own negotiating team between “hawks” and “doves” and the need to satisfy both of them before a solution can be proposed. That party may say that it has to please its whole team, including those who vehemently oppose giving up on the initial position, namely the hawks, as well as those who are prepared to explore a number of possible solutions, namely the doves. The intention here is to convey a message that the team is not being belligerent, but is just divided, and the other party should understand that division and help to jointly find a way to placate the hawks.
Sometimes the refusal of the parties to talk about solutions proposed in the past makes them more receptive to talk about other things, softening their resistance to further negotiations. By rejecting past proposals as being totally unacceptable and possibly inflammatory, they may then invite each other to search for answers among the alternative solutions which are available. While expressing their frustration caused by recycling rejected solutions, they display some flexibility towards generating new ideas.
While many of the foregoing techniques often succeed in breaking negotiation logjams, there are times when they fail, and tougher measures may have to be tried instead.
Sometimes it may be necessary for one of the parties to threaten unpleasant consequences for both parties in order to get them to work harder to find a solution. While this approach can make things worse if it simply repeats threats that have been made in the past, it can cause the parties to get serious if the threat is presented without hostility and expresses a concern of mutual harm that might be painful though not catastrophic. By suggesting that the harm is inevitable and systemic, rather than chosen and intended, it removes any inference that the threat is vindictive or malicious.
If threatening an undesirable consequence fails to get a reaction, it may be necessary to resort to litigation. Preparing and filing a claim with a court against a party refusing to negotiate tends to get the attention of the refusing party. Often the purpose of such an action is not to ultimately obtain a decision of the court but to impose a process upon the parties to deal with their differences.
The various procedures flowing from a court claim offer a number of advantages in getting the parties to engage each other. Ordinarily the imposition of specific deadlines for exchanging information is enough to get the parties to act. Having to complete court forms requiring clear statements of positions, alleged facts and evidence generally causes the parties to rethink the approach they have previously taken. The time, cost and inconvenience they will incur in following along the court mandated path may provide a sufficient deterrent from proceeding further and instill an earnest want to settle.
The relatively slow pace and inevitable delays frequently associated with court actions tend to provide the parties a significant cooling-off period and afford ample time to reflect upon the costs and benefits of proceeding. The rules of court procedure require a certain level of integrity and civility, and the involvement of lawyers can offer the parties a different perspective on how disputes can be resolved.
But resorting to litigation as a means of breaking a stalemate in negotiations can backfire. Filing and serving a claim can be interpreted as not just confrontational but the “last straw” in an already difficult relationship which quickly becomes poisonous, turning the parties into sworn enemies bent on destroying each other.
Although litigation may not have such dire consequences, there is always looming the ultimate deadline on the courtroom steps when the procrastination stops, the negotiations conclude, and the court then takes over in steering the parties. If the court takes an aggressive case management approach, the parties lose control over the timing of their negotiations and may find themselves facing an actual hearing. Their conflict is then resolved by a judge or other third party.
Given these negatives, each party is likely to regard litigation as a last resort, to be initiated only when all of the other strategies to remove the negotiation deadlock fail.
While there is no guarantee that the strategies discussed above will work in any particular situation to get disputing parties back to the negotiation table, they are at least worth trying, either alone or in combination, to motivate the parties to try again to find a solution.
But there will be times when the parties cannot find merit in completing their contract or transaction, or in resolving their differences, and it may be better for each of them to recognize their own opportunity costs and pursue other arrangements with the potential for even greater reward. They may have to admit that the time and emotional energy they have spent arguing with each other hasn’t been worth it and decide to just simply move on.