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Brexit has brought the importance of negotiation skills into crisp focus in recent months. The UK’s vote to leave the EU will require years of complex negotiations over hundreds of trade deals and treaties and some have questioned whether enough people have the skills and expertise.
Such skills have of course long been important in business. But what is good negotiation, whether between governments or businesses, and how do you teach it to executive MBA students?
Effective negotiation, say a number of specialist business school professors, is rooted in the ability to put yourself in someone else’s shoes and understand the context in which you are negotiating. This applies to a government trade deal, a business contract or a sales agreement. To negotiate well also requires that you communicate clearly and be patient.
In business, especially at the often-senior executive MBA level, negotiation skills are seen as critical. “It is more than a technical skill,” says Catherine Tanneau, adjunct professor and EMBA leadership course leader at HEC Paris. “It is a core component of leadership.”
This is reflected in the fact that negotiation is often compulsory on EMBA programmes. It may be taught in classes dedicated to the subject, such as the power, politics and persuasion course at the National University of Singapore (NUS) Business School, or weaved into other classes throughout a programme, such as at HEC.
Jesse Otis, director and assistant general manager at TaylorMade-adidas Golf Company, has just completed the negotiation class for his EMBA at the University of Chicago Booth School of Business. He signed up for the programme not only to hone his financial credentials, but also his leadership style. For him, learning how to negotiate was a top priority and the thing “I was most excited about”.
The structure of the course involves six simulations, role-play scenarios designed to help students learn to be more effective negotiators, that become gradually more complex as you move along. The first, he says, involves negotiating the price of something. By the time students get to the sixth simulation, “you are dealing with multiple variables, where six parties are trying to come to an agreement”.
There is then a chance to reconvene, reflect and go through potential techniques that people had not considered.
“The course gives you a safe place to practise, to learn the processes to follow and what tactics you can try and then apply,” Otis says. “I learnt that preparation is one of the most important things — learning about your own interests and those of the other parties.”
Professor Ayelet Fishbach, a professor of behavioural science and marketing at Booth, says that she tries to create in the classroom an opportunity to get feedback. “Quite often people don’t know if they are a good negotiator or not,” she says.
“I have 80 people in a class, 40 buyers and 40 sellers. That kind of feedback is not available in real life.”
In this environment Prof Fishbach says students can understand what they do well and what they do not. Then the course covers the theory and strategies of good negotiation. “In some situations, for example, you want to be the first to make an offer,” she says. “But in others you don’t. It’s all about learning to understand these strategies.”
Otis learnt, for example, that he was often too accommodating. “I would give up a lot to make the other party happy,” he adds. “I had to get away from this.”
At NUS Business School, different parts of the course are taught across the region and include time in Singapore, Tokyo, Shanghai, Delhi and Jakarta. Participants on its power, politics and persuasion course are sent onto the streets of Delhi to learn to negotiate in an unfamiliar environment.
Prem Shamdasani, academic director of the NUS EMBA, says that a group of students might be sent out with a paperclip and set the challenge of negotiating for something more valuable. “They come back with fabric and other interesting things,” he says. Students will negotiate alongside people from different backgrounds and cultures while also trying to find their way around a busy Indian city. “Delhi is not easy to navigate,” Prof Shamdasani adds.
Teaching EMBA participants is quite different from teaching MBAs. The former are usually older, more experienced and keen to explore complicated concepts.
Prof Tanneau of HEC Paris notes that her EMBA participants tend to be aged between 38 and 45 (the average age of an MBA student is usually late twenties or early thirties). Prof Fishbach highlights that at Booth, “EMBAs are very quickly jumping into complex situations, rather than covering the basics”.
Mark De Rond, professor of organisational ethnography at Cambridge Judge Business School in the UK says that from his experience, EMBAs are less opportunistic and more laidback than MBAs as they are not necessarily looking to change career, but to advance within it.
They also bring more experience to the classroom, he adds. “One student in my class had worked for the UN and was able to talk about what it was like to manage different factions in Libya.”
Another was from Kazakhstan and had experience of negotiating with the Chinese about building a pipeline, while others had been hostage negotiators.
Prof Shamdasani adds that the EMBAs at NUS already have 15 to 20 years experience and want to be taught concepts that they can immediately apply to their work.
EMBA cohorts are also often very diverse, with participants from many countries. These differences enhance the teaching of negotiation.
Prof Tanneau says her classes can consist of students of 50 nationalities and people from different sectors and types of companies.
“This creates a very rich environment. We make them work in peer-to-peer groups between modules. This means they mix together and learn from each other,” she says, adding that they then improve their listening skills and ability to empathise.
Prof De Rond stresses that cultural differences cannot be ignored, “so you own up to these in the first session”. The simulations used in his classes are quite focused on North America, so there might be disagreements due to cultural differences, “but we are not quiet about these,” he adds. “In fact you can use those limitations to learn.”
For example he believes more simulations should be written in the context of Southeast Asia. “But there is no perfect solution,” he says.
Top tips for good negotiation
- Learn to empathise and put yourself in someone else’s shoes
- Thorough preparation is essential. Make sure you do the necessary research on those parties with which you will be negotiating
- Do not get too caught up in internal negotiations — negotiating among yourselves rather than with the party across the table
- Learn to read your opponent
- Communicate effectively. Never lie or exaggerate
- Be patient and learn to listen
- If both parties reach an impasse, bring other issues to the table
- Learn to deal with difficult situations without being aggressive
- Conduct a fair and respectful process
- Know your bottom line and what your alternative is if your bottom line cannot be met