Turning the tables in negotiations

PUBLISHED : Sunday, 15 January, 1995, 12:00am
UPDATED : Sunday, 15 January, 1995, 12:00am

I AM puzzled when I hear business people refer to the 'negotiating table'. Things will improve if they can just get the other side to 'sit down at the table'.

I don't know about you, but negotiations in which I have been successful have rarely been conducted around a table. More likely, the nuts-and-bolts have been hammered out on the telephone, over a friendly meal, through letters and faxes, or by middlemen (agents, brokers, attorneys, etc).

As far as I can tell, only diplomats and labour leaders like deal-making around a table. I'm not sure if they do this as a public relations stunt (so they can be seen to be doing something), but the futility of most of these negotiations - they rarely satisfy both sides and take weeks, months, sometimes years to resolve - just may be related to the presence of a table.

Almost any negotiation will go more smoothly without a table. Putting people on opposite sides of a table creates a divisive barrier. It formalises the proceedings and, if it's a big table, draws extra people into the negotiations - and additional people tend to complicate rather than simplify the process.

I think you can accomplish much more outside the traditional business environment, which is why I've always liked restaurants, sports events and other hospitable settings for my negotiations. The social environment seems to put people at ease and makes them more agreeable.

For example, a few years ago I went to a jewellery shop on New York's Fifth Avenue with a friend who was much wealthier and more interested in fine jewellery than I will ever be. Let's call him the Mogul.

The Mogul wanted an emerald necklace for his wife. The store manager must have recognised him as a serious buyer because we were instantly ushered out of the main salon, down a series of wood-panelled corridors and into a private room with white and beige decor. In this cool, hushed, virtually colour-free setting, the emeralds and rubies in the display cases sparkled like klieg lights.

As the manager presented emeralds of increasing value for the Mogul's examination, it seemed like all sense of reality had been vacuum-swept from the room. There were no distractions from the outside world and there was no sense of the relative value of money. All that remained were emeralds being compared against other emeralds.

The Mogul liked the most expensive one. It was classic bump-the-customer-up salesmanship - or it would have been if the Mogul had bought on the spot.

Instead, he whispered to me: 'I like them, but I'm not going to buy them in this room. Let's get out of here.' The next day he phoned the manager and offered to buy the necklace for US$125,000 (HK$968,750) less. The manager made some vain protests, but ultimately the Mogul got the necklace at his price.

In hindsight, the manager had lost the negotiation the moment he let the Mogul out of the room.

The Mogul knew the setting in the store was conspiring against him. As long as he was inside the room, the manager could deflect his reduced offer by referring him to jewels in a lower price range.

Outside the store and on the phone, the manager couldn't do that and the Mogul could be more objective and disciplined. The necklace wouldn't be there beguiling him with its beauty.

I mention this incident as an example of the seductive and possibly negative power of setting in a negotiation. The absence of a formal negotiating table can move things along. Of course, this may not always work to your advantage, particularly if the other side totally controls the environment.

An example of the positive effects of environment is that of a Swiss entrepreneur who once asked me to help set up a round of golf outside Paris. My friend had sold merchandise to the French Government, but was deadlocked in negotiations with a top official.

He thought if he could get the official outside his office environment, the negotiations might improve. So he enlisted my help. I brought along a golf client whom the official admired, which made the outing special.

It was an interesting round of golf, largely because the French official and my Swiss friend both played abysmally. As the day wore on, this seemed to bond them. The protocol in 'transaction golf' is to be very subtle about bringing up business, if you do it at all. But by the 10th hole, the two men were having such a bad day they were ready to talk about anything but golf.

My friend handled this beautifully, assembling his argument with a sound bite or two on every remaining hole. By the time we reached the clubhouse, the two men had ironed out their differences and scribbled an agreement on a cocktail napkin.

I'll never know if it was the beauty of the day that made them so agreeable or their poor play. But I do know that getting people out of the usual business setting and placing them in a congenial environment for four or five hours will improve almost any negotiation.

If you press the issue, you'll find most people don't want to spend their time haggling and bickering with the other side. It's not that they don't like negotiating. Most people like the friendly competition and manoeuvring involved in negotiation, but more than anything, they like reaching an agreement. The less time, hassle and confrontation the better.

That's why people brag about the deals they've negotiated over casual drinks or a meal or a round of golf. The deal on a cocktail napkin is a testament to their negotiating skill. Actually, it's a testament to negotiating in a casual, quasi-social setting. It's proof positive of the wisdom of getting away from the 'negotiating table'.