Sunday Scribblings

“The Art of the Negotiation”

Ever since the 1970s, when I first got involved in labour relations, one thing that has always interested me is the dynamics of negotiations. In engaging with another party, with whom you may share some interests in common, but with whom you also have conflicting interests, how do you achieve an outcome that allows both of you to stand up from the table, shake hands, and be happy with what they have agreed?

During the past week, I came across two articles that touched on Donald Trump’s approach to deal-making, one in Time magazine, the other in the Financial Times. You can read the Time piece here and the Financial Times piece here.

They got me thinking. Is there a difference between deal-making and negotiations? I think there is. And that difference can be summed up in one word. Relationships. Or, to be more accurate, three words. Long-term relationships.

Here’s a cut from the Time piece:

Your trade adviser, Peter Navarro, says 90 deals in 90 days is possible. We're now 13 days into the point from when you lifted the reciprocal, the discounted reciprocal tariffs. There's zero deals so far. Why is that?

No, there’s many deals.

When are they going to be announced?

You have to understand, I'm dealing with all the companies, very friendly countries. We're meeting with China. We're doing fine with everybody. But ultimately, I've made all the deals.

Not one has been announced yet. When are you going to announce them?

I’ve made 200 deals.

You’ve made 200 deals?

100%

The UN says that there are 195 countries in the world. Plus another 2 if you count Palestine and the Vatican. And in about 20 days Trump has made deals with all of them? Ten deals a day? The new version of speed dating.

It would seem he must have made two deals with some of them if you are to count from 195 to 200. Has he made a deal with the Vatican to save his soul in return for lower tariffs, though I am not sure what the Vatican exports. Holy water and divine grace? A stairway to heaven or the highway to hell?

Put your hands up all those countries that have made deals with Trump in the past 20 or 30 days. What, no hands going up? But President Trump says he has done deals with you all. How else could he have done 200 deals? Someone here is not telling the truth, and I suspect it is not 195 countries.

Here are two quotes from the Financial Times article headed “Trump and the art of ‘dealism’”:

“I never get too attached to one deal or one approach ... For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first.”

“My style of dealmaking is quite simple and straightforward ... I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”

Trump does deals. He does not negotiate. What’s the difference?

You do a “deal” when you buy a car or a house. You go to auto dealers with your existing car, have a look at what is on offer, decide what you want and see what “deal” you can do if the price is right. It does not much bother you whether the auto dealer likes you or not. Once the deal is done you are never going to see him or her again. It is a one-off transaction.

The same with buying and selling a house. You just want the best price you can get if you are selling, the lowest if you are buying. The feelings of those on the other side of the deal do not matter to you, nor do the feelings of any agents involved. Like buying a car, once the deal is done, you will never see them again. You won't have to deal with them again. Unless there was some fraud involved in the transaction and legal action follows. But that does not happen in 99% of house or car sales.

Trump is a real estate guy. Buy a property here, sell a property there. Stiff those involved if you can. Find a reason not to pay your bills. There is always someone else out there willing to work for your dollar. Suckers come along every minute.

In other words, “deals” do not involve long-term relationships. Once a car or property deal is done, the book is closed. The people on the other side of the deal will no longer feature in your life. Their concerns are no longer your concern.

Diplomatic and labour negotiations are not “deals” no matter how often the media might use headlines like “UK look to seal new deal with the EU” or “IG Metall reaches deal with Volkswagen”. Why are negotiations not “deals”? Because you have to live with the consequences, and you have to continue to live with the people involved.

You buy a car, pay the money, drive it away. That, normally, is the end of the matter. There was just you and the auto dealer involved. Deal done, move on.

On the other hand, when you sign off on a labour relations agreement, you have to implement it, which takes time, and you have to work with the people who were involved in reaching the agreement to make sure it is implemented properly.

And I don’t just mean the people on the other side of the table. You also have to work with your own people, your stakeholders, to make sure they understand what has been agreed and how it is to be implemented.

Of course, they should have been kept fully in the loop all along. The outcome of a negotiation should never be a surprise to your own people. If it is, there has been a breakdown somewhere. Secrecy about what you are negotiating is never a good tactic.

British ministers are fond of saying that they are not going to “give a running commentary” on what they are talking about with the EU. They would be better off if they did. Because the EU gives a running commentary to its 27 Member States about discussions with the UK. How else does it keep them on board? In today’s social media world, there is very little that is secret or confidential. Openness is a virtue.

So here’s the difference between “deals” and “negotiations”. Deals do not involve long-term relationships. Negotiations always do. Deals just involve haggling. As in a Provence Sunday market. “How much for the blue pot? €60 euro! I’ll give you €20. I could not let it go for less than €45. €35 and it’s a deal. Done”. You walk away with the pot, never to see the stall holder again.

In doing a “deal”, outside of the immediate transaction, the interests and concerns of the other party do not matter to you. You have no investment in them.

When you negotiate a labour agreement, or a diplomatic one, you need to focus on the relationship you have, and will have, with the other party, as much as on the substance of the agreement. You must be able to work with them to make the agreement work. Relationship management is fundamental to the “Art of the Negotiation”.

Of course, there is a lot more to the “Art of the Negotiation” than just relationships. But that is for another day. Perhaps I’ll run a workshop on this sometime or other.

In deals, all that matters is what you get for the price you pay. In negotiations, people matter. “Stiff them”, and you will regret it.