Dumb and Dumber: Negotiating Lessons from the Federal Government Shutdown

Published: Oct 03 , 2013
Author: Simon Letchford

 

This week’s government shutdown makes both sides of politics look dreadful. A poll this week had Congress less popular than head lice and root-canal surgery. But, channeling Rahm Emmanuel, (“never let a serious crisis go to waste”), here are a few negotiating lessons to take from Washington’s  latest home-cooked fiasco: 

 

 1. Open realistically, move modestly

Last weekend, the Republican-controlled House proposed legislation that made the ongoing funding of government subject to a defunding of “Obama Care, piled on top of a grab-bag of GOP wish-list items including the approval the Keystone pipeline, a commitment to future business-friendly tax reform, repealing a tax on medical devices and more.

Rather than forming the starting point for a negotiation, it was dead on arrival—the Democratic Senate immediately rejected the bill outright. The House Republicans have subsequently had to back-pedal and drop their list of demands back to a 12-month delay in the new health plan, with more unilateral concessions likely in the days ahead as the pressure builds.

 Lesson

Unrealistic proposals encourage the other side to refuse to even enter negotiations, and can cost you credibility when future movements in your position need to be drastic and unilateral. Over time, they become self-defeating, as the other side recognizes that your opening proposals are always “padded.”

 More progress is likely with optimistic, defendable proposals, which allow any future movement to be modest and able to be traded for other variables.

 

 2. Don’t put things out of bounds unless you really mean it.

Both sides have been guilty of claiming too many “non-negotiables,” adopting an all-or-nothing approach. The result so far: they’ve got nothing.

 Democrats have said they’ll only approve a spending bill if it’s free of any policy prescriptions (“a clean resolution”). That’s unnecessarily inflexible – and will, no doubt, extend the shutdown. And at some point, they’ll need to negotiate on what they insist was not negotiable–and there goes their credibility.

 Lesson

If you’re genuinely interested in negotiating a good outcome, rather than grandstanding to your base, (admittedly, that’s a big “if”), try to minimize the variables that you claim are non-negotiable. Even better, when you explain what’s truly not negotiable, indicate the areas where youareprepared to negotiate, to move the discussion to more productive areas rather than toward deadlock.

 

3. Relationships matter

Apart from one awkward game of golf in 2011, President Obama and House Speaker John Boehner have spent almost no time together.

 Back in the “good old days,” Republican President Ronald Reagan and Democratic House speaker Tip O’Neil managed to work together despite having fundamentally different views on policy and the role of government. They even socialized together after hours. When the big deals came, they both fought hard but ultimately traded concessions with each other to get the best deal they could.

 Lesson

Negotiations don’t happen in a vacuum. Time invested in a relationship, prior to major negotiations, allows both sides to build the trust needed so they can disclose areas of potential flexibility and trade concessions.

 Time will tell how long this government shutdown will last. But the good news is that, in the meantime, at least Congressional salaries continue unabated. Phew, that’s a relief!

 

Simon Letchford

 


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About the author:

Simon Letchford
Simon manages Scotwork’s North American business and is a Partner in Scotwork's Australian business. He brings over 20 years of international negotiating and executive leadership experience within the IT, health, retail, defense and professional services markets.

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Muck Shift

Just when is a deal not a deal…? I heard this story from a friend of mine the other week; there are some lessons to be learned! So, my pal is a developer and is building some houses on what is essentially a square site. Two sides of the square can be accessed from the road in a neighboring housing estate and the other two are beside a field owned by another developer. There is a huge pile of muck to shift before the actual building project; this phase is known in the trade – and not unreasonably - as a "muck-shift"! As there will be 80 -100 lorries coming in and out each day for 6 weeks, it was considered more convenient to access the site over the field, so an approach was made to the developer to discuss the terms under which he would allow access. This is a standard arrangement and the deal typically is that the field would be returned to the owner in its original condition. Developer makes a bit of money, where otherwise he wouldn’t; homeowners in the adjoining estate are less inconvenienced; builder does not need to spend money cleaning the streets and getting them back to a usable state at the end of the project. Win-win.

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