Consider our class presentations on Crucial Conversations. Please identify and define the key elements of a crucial conversation. What makes these conversations difficult for people and what can you do to enhance your ability to have an effective crucial conversation? On that note, what makes for an “effective” conversation?
A crucial conversation is a discussion between two or more people where stakes are high, opinions vary, and emotions run strong. When we face crucial conversations, we can do one of three things: We can avoid them, we can face them and handle them poorly, or we can face them and handle them well. Ironically, the more crucial the conversation, the less likely we are to handle it well. We often hold things inside by going silent until we can take it no longer-and then we drop a bomb. In short, we move between silence and violence-we either don’t handle the conversation, or don’t handle it well. We may not become physically violent, but we do attack others’ ideas and feelings. When we fail a crucial conversation, every aspect of our lives can be affected-from our careers, to our communities, to our relationships, to our personal health.
When a conversation turns crucial, we either miss or misinterpret the early warning signs. The sooner we notice we’re not in dialogue, the quicker we can get back to dialogue and the lower the cost. As you pull out of the content of a conversation and learn to look for the conditions of dialogue, pay attention to early warning signs. Learn to look for when a conversation becomes crucial. A large part of this is watching your actions and emotions, as well as the actions and emotions of the other person. Paying attention to both the content of the discussion and how people are acting and feeling is no easy task. But it’s an essential part of dialogue. As long as your intent is pure and you learn how to make it safe for others, you can talk to almost anyone about almost anything. The key is to make the other person feel safe. To do this, there are two things the person needs to know:
First, they need to know that you care about their best interests and goals. This is called mutual purpose.
Second, they need to know that you care about them. This is called mutual respect.
When people believe both of these things, they relax and can absorb what you’re saying; they feel safe. The instant they don’t believe them, safety breaks down and silence or violence follows. To restore safety in the face of silence or violence, you must restore mutual purpose and respect. When we become upset, our most common reaction is to defend ourselves and place the blame on someone else. As convenient as it is to blame others for pushing our buttons and causing us to become upset, it’s not exactly true. The key to how we feel lies in the stories we tell. These stories consist of our guess as to why people do what they do. As we become emotional, our story seems to be “What is the worst and most hurtful way I can take this?” This negative spin escalates our emotions and causes us to do the worst when it matters the most. To break away from your volatile emotions, you must rethink the conclusions you drew and the judgments you made. That requires you to tell the rest of the story. New stories create new feelings and support new and healthier actions. Better still, new stories often encourage you to return to dialogue.
You have to know how to speak without offending and how to be persuasive without being abrasive. The five skills help us do just that – to confidently state our opinions and humbly and sincerely invite others to do the same. The five skills that help us share our tough messages are called STATE:
Share your facts
Tell your story
Ask for others’ paths
Talk tentatively Encourage testing
As we see others moving to silence or violence-sharing mostly stories or very little at all-it helps us stay in dialogue if we can encourage them to share their entire Path to Action, or the explanation of how emotions, thoughts, and experiences lead to our actions. We have to find a way to move others back to their facts. We typically join them at the end of their Path to Action. They show us their feelings and share their stories, but we may not know what they actually observed. We know what they think, but we don’t know what we or others may have done. When others go to silence or violence, actively explore their path. Exploring helps others move away from harsh feelings and knee-jerk reactions and toward the root causes of those feelings and reactions. It also helps curb our own defensive response. Rather than ask, “What’s the worst and most personal way I can take this?” (leading to defensiveness), we should ask, “Why would a reasonable, rational, and decent person think or feel this way?” (leading to curiosity). It’s hard to feel defensive and curious at the same time. Finally, it takes us to the only place where the feelings can be resolved: The source (the facts and story behind the emotions).
If you don’t take action, all crucial conversation is for nothing and will eventually lead to disappointment and hard feelings. Always agree on when and how follow-up will occur. It could be a simple e-mail confirming action by a certain date. It could be a full report in a team meeting. It could be just one report upon completion, or it could be progress checks along the way. Regardless of the method or frequency, follow-up is critical in creating action. There is no accountability if there is not an opportunity to account for action. Document your work: Effective teams and healthy relationships are supported by records of the important decisions made after difficult dialogues, and the assignments agreed upon. Good teams revisit these documents to follow up on both the decisions and the commitments. When someone fails to keep a commitment, candidly and directly discuss the issue with him or her.
Please respond to FOUR of the questions below:
3. Consider mediation as a form of alternative dispute resolution (ADR). What are the advantages of mediation relative to other forms of dispute resolution such as courts and arbitration? What are the key attributes of an effective mediator? In Prosando, the mediator attempted to move the parties from a rights-based approach to an interests-based approach. What does this mean? How did he do this? Why did he do this? (Be sure to use the Prosando video as an example to support your points as well as other course info).
Mediation is a process in which a neutral third party (the mediator) assists the parties in resolving their dispute by facilitating negotiation. The mediator has no authority to impose a settlement, and the parties are under no obligation to reach agreement. Mediation proceedings are generally private and confidential. Benefits of successful mediation vary, depending on the parties’ needs and interests. The following are some common advantages of mediation:
Parties are directly engaged in negotiating the settlement: Parties in mediation have the opportunity to directly air their views and positions, in the presence of their adversaries. The process can thus provide a catharsis for the parties that can engender a willingness to resolve the differences between them. Moreover, since parties are heard in the presence of neutral authority figures, the parties often feel that they have had “their day in court.” In the entertainment industry, there are lots of egos at stake. Clients that have suffered may want an opportunity to tell their story, and clear up any misrepresentations that are exploited to the public.
Parties enhance the possibility of continuing their business relationship after resolving the dispute: Litigation process can be very stressful, time consuming, costly and often personally painful. At the end of litigation, the parties are often unable to continue or restart a relationship. In contrast, mediation disputes can be resolved in a manner that saves a business or personal relationship that; ultimately, the parties would prefer to preserve. Many relationships in the entertainment industry are of a collaborative nature, and it is pretty common for the parties in dispute to have had some success in prior artistic collaborations. If the creative parties are able to overcome the hurdle of the dispute through mediation, there is the potential that the parties can continue producing successful artistic endeavors.
Creative Thinking and Problem Solving. Litigation can never resolve both parties’ issues in a way that is simultaneously favorable to both parties. In a mediation, all parties involved can brainstorm together to find solutions that address most, if not all, of the issues that are presented in the mediation. As stated earlier, people in the entertainment industry are creative by nature, and are known to think outside of the box. Mediation should be the least foreign process to anyone involved in any aspect of the entertainment industry.
Mediation saves money through reduced legal costs and staff time: By resolving disputes earlier in mediation rather than later in litigation, parties can save tremendous sums in attorney’s fees, court costs and other related expenses.
Mediation Helps in Complicated Cases: When the facts and/or legal issues are particularly complicated, it can be difficult to sort them out through direct negotiations, or during trial. By contrast, mediation provides an opportunity to break down the facts and issues into smaller components, thereby enabling the parties to separate the matters that they agree upon, and those that they do not yet agree upon. The mediator can be indispensable to this process by separating, organizing, simplifying and addressing relevant issues.
Mediator is an important role in Mediation. In the Prosando case, the mediator’s goal is to help the parties settle their difference in a manner that meets their needs and is preferable to the litigation alternative. An experienced mediator can serve as a sounding board, help identify and frame the relevant interests and issues of the parties, help the parties test their case and quantify the risk/reward of pursuing the matter, and, if asked, provide a helpful and objective analysis of the merits to each of the parties, foster and even suggest creative solutions, and identify and assist in solving impediments to settlement. This is often accomplished by meeting with the parties separately in private caucuses, as well as in a group, so that all participants can speak with total candor during the mediation process. The mediator can also provide the persistence that is often necessary to help parties reach a resolution. To obtain interests, determine priorities and develop trust, the mediator in Prosando case used various questioning techniques. Since parties may be reluctant to disclose information that weakens their own insistence on positions, the mediator must dig for information and will typically start such inquiry with open-ended questions. Important open-ended questions used by mediator were: What do I need to know to understand this matter? Narrower or focused clarification questioning will come later during the mediation. As part to bring out hidden concerns and interests, mediator carefully listens to responses and pursues critically important follow-up questions. Follow-up is particularly important when the speaker reveals a goal or interest without specifying the reasons. Follow questions assure the revelation of the speaker’s priorities rather than ones the mediator might assume or gather. For example, after Prosando’s president said “We have to move quickly”, the mediator asked, “Why is time so important?” The mediator builds trust and assures the participants that he accurately understands the concerns and interests by using the active listening techniques. Active listening empathetically acknowledges what a party has said by reflecting back the essence of the statement with understanding but without evaluation. Active listening assures speakers that they have been understood, an important component of trust.
Another effective technique that the mediator in the Prosando case uses was reframing. When mediators believe a party’s interest or priority would be totally unacceptable to the opponent and couldn’t form the basis of an agreement, he might try to reframe the interest into acceptable terms that could become part of a settlement.
4. Based on Professor Cialdini’s six approaches to influence and persuasion, please identify and describe 3 of those and how and why they should work. How you can apply them in your work life?
As humans, we generally aim to return favors, pay back debts, and treat others as they treat us. According to the idea of reciprocity, this can lead us to feel obliged to offer concessions or discounts to others if they have offered them to us. This is because we’re uncomfortable with feeling indebted to them. For example, if a colleague helps you when you’re busy with a project, you might feel obliged to support her ideas for improving team processes. You might decide to buy more from a supplier if they have offered you an aggressive discount. Or, you might give money to a charity fundraiser who has given you a flower in the street. One of the reasons reciprocation can be used so effectively as a device for gaining another’s compliance is its power. The rule possessed awesome strength, often producing a “yes” response to a request that except for an existing feeling of indebtedness would have surely been refused.
“People prefer to say ‘yes’ to those they know and like,” Cialdini says. Physical attractiveness, similarity, and familiarity are three levers that can be employed to increase this “liking” factor. When looks are not a significant issue, we like people that are similar to us, whether it’s similar opinions, personality traits, background, or life-style. So, smart persuaders dress like their targets, claim to have (or actually develop) similar backgrounds, lifestyles, attitudes, and beliefs.
When we are convinced that an opportunity or thing is limited in its availability, we are more easily persuaded to want it, and to take the actions necessary to get it. This principle says that things are more attractive when their availability is limited, or when we stand to lose the opportunity to acquire them on favorable terms. For instance, we might buy something immediately if we’re told that it’s the last one, or that a special offer will soon expire. Moreover, a sudden increase in scarcity is more persuasive that constant scarcity, and, if the sudden increase is due to demand for the item from others, it is more persuasive still.
5. Identify and explain when contingent contracts or contingent provisions in a contract, might be useful to get a deal done. Referring to the article: “Betting on the future: The virtues of contingent contracts”: Harvard Business Review, Sep/Oct99, Vol. 77 Issue 5, p155-160, identify the benefits and issues to be aware of when considering contingent provisions or contracts.
When contingent contracts or contingent provisions in a contract is useful to get a deal done:
Bypassing Biases: Contingent contracts offer a different approach to solving the bias problem. By enabling each side to bet on its bias, the contracts remove the biases as sources of contention and ultimately have the effect of canceling them out altogether.
Consider, for example, one of the most common biases affecting negotiators: overconfidence. Companies, like individuals, tend to have an irrational degree of confidence in their own abilities and, as a result, they tend to overestimate the likelihood of achieving positive outcomes. In a contingent contract, each side translates its overconfident assumptions into a wager on the future. The outcome of the wager tends to fall between the two extreme positions, creating a rational result without requiring either party to sacrifice its firmly held bias. Another bias common in negotiations is egocentrism, which occurs when negotiators hold self-serving perceptions about the fairness of their position. Here, too, contingent contracts can defuse the tension and create a rational outcome. Contingent contracts counter biases by, in essence, indulging them. They establish two contrasting future scenarios, each reflecting one party’s biases. Because each side anticipates that its scenario will be the one that plays out, each has a strong incentive to accept the contract. In effect, contingent contracts allow negotiators to be flexible without feeling that they’ve compromised.
Diagnosing Deceit: What makes information asymmetry so discomforting to companies is that it raises the possibility of deceit. Indeed, the fear of deceit can be a major impediment to all sorts of business agreements. Contingent contracts are a powerful means of uncovering deceit and neutralizing its consequences.
Reduce Risk: Using a contingent contract to share risk often has an important additional benefit: it creates enormous goodwill. On the one hand, the contract provides a safety net, limiting each company’s losses should an agreement go unexpectedly awry. On the other hand, it reduces the possibility of one company earning a windfall at the other’s expense. A contingent contract thus tends to enhance the trust between the parties, setting the stage for mutually beneficial negotiations in the future. Companies can also use contingent contracts to reduce the risk their customers assume when they purchase a new and untested product.
Motivation: Another the benefits offered by contingent contracts is that they motivate parties to perform at or above contractually specified levels. That’s the driving force behind the use of contingent contracts in all kinds of compensation arrangements, from sales commissions to stock options. Sports teams and entertainment companies routinely use contingent contracts to motivate athletes and artists, particularly those who have shown a lack of motivation in the past. Contingent contracts are useful not just for motivating individuals, they can also motivate companies.
While we believe that contingent contracts are valuable in many kinds of business negotiations, they’re not right in every situation. Managers should keep three points in mind:
First, contingent contracts require continuing interaction between the parties. After all, the final outcome of the contract will not be determined until sometime after the initial agreement is signed. Therefore, negotiators need to consider the nature of their future relationship with the other party. If the parties are seeking a spot transaction, or if there’s outright ill will between the two, they should probably not enter into a contingent contract.
Second, negotiators need to think about the enforceability of a contract. Under a contingent contract, it is probable that one or more of the parties will not receive its full value up front. In some cases, the deferred value may represent a significant portion of the overall value. What if the loser of the bet refuses to pay up? What should the winner do? There are many ways to solve such issues-placing money in escrow, for instance. Our main message is, don’t bet if you can’t collect.
Third, contingent contracts require transparency. The future event the parties bet on must be one that both sides can observe and measure and that neither side can covertly manipulate. Vague bets set the stage for different interpretations later. The terms of the bet should be clearly delineated in the contract.
6. Consider the article “The Chinese Negotiation” Harvard Business Review, Oct. 2003, Vol. 81 Issue 10, p. 82-91. Based on that article, identify and describe 3 concepts you should be aware of in order to negotiate effectively in China.
The first concept in Chinese Negotiaitons is Guanxi (Personal Connections): In fact,” personal connections” doesn’t do justice to the fundamental, and complex, concept of guanxi. While Americans put a premium on networking, information, and institutions, the Chinese place a premium on individuals’ social capital within their group of friends, relatives, and close associates. Though the role of guanxi is fading a bit against the backdrop of population mobility and the Wetsernization of some Chinese business practices, it remains an important social force. More often than not, the person with the best guanxi wins.
Here’s an example of how guanxi works. Upon learning that China Post Savings Bureau planned to modernize its computer network, C.T Teng, the general manager of Honeywell-Bull’s Greater China Region, asked his Beijing sales director and the China Post executive were old university friends, they has guanxi. That connection enabled Teng to invite the China Post executive to a partner’s forum at Honeywell-Bull headquarters in Boston. He also invited the CEO of Taiwan’s Institute of Information Industry to the event. Over the course of the meeting, Teng proposed a banking system using Honeywell-Bull hardware and Taiwan Institute software to China Post’s CEO, and the deal was accepted.
Good Guanxi also depends on a strict system of reciprocity, or what the Chinese call hui bao. This does not mean immediate, American-style reciprocity: “I made a concession, and I expect one in return at the table that day.” In China, there’s no hurry; agrarian rhythms run long. Favors are almost always remembered and returned, though not right away. This long-term reciprocity is a cornerstone of enduring personal relationships. Ignoring reciprocity in China is not just bad manners; it’s immoral. If someone is labeled wang’ en fuyi (one who forgets favors and fails on righteousness and loyalty), it poisons the well for all future business.
The second concept we should be aware of is Zhongjian Ren (The Intermediary): Business deals for Americans in China don’t have a chance without the zhongjian ren, the intermediary. In the US, we tend to trust others until or unless we’re given reason not to. In China, suspicion and distrust characterize all meetings with strangers. In business, trust can’t be earned because business relationships can’t even be formed without it. Instead, trust must be transmitted via guanxi. That is, a trusted business associate of yours must pass you along to his trusted business associates. In China, the crucial first step in this phase of negotiation, called “nontask sounding”, is finding the personal links to your target organizations or executive.
Those links can be hometown, family, school or previous business ties. What’s crucial is that the links be based on personal experience. For example, you call your former classmate and ask him to set up a dinner meeting with his friend. Expensive meals at nice places are key. If things go well, his friend accepts the role of zhongjian ren and in turn sets up a meeting with your potential client or business partner, whom he knows quite well.
A talented Chinese go-between in indispensable even after the initial meeting takes place. Consider what happens during a typical Sino-Western negotiation session. Rather than just saying no outright, Chinese businesspeople are more likely to change the subject, turn silent, ask another question, or respond by using ambiguous and vaguely positive expressions with subtle negative implications, such as hai bu cuo (seems not wrong), hai hao (seems fairly all right), and hai xing or hai key i (appears fairly passable).
Only a native Chinese speaker can read and explain the moods, intonation, facial expressions and body language Chinese negotiators exhibit during a formal negotiation session. Frequently, only the zhongjian ren can determine what’s going on. When an impatient Westerner asks what the Chinese think of a proposal, the respondents will invariably offer to kan kan or yanjiu yanjiu, which means, “Let us take a look” or “Let us study it” – even if they think the proposal stinks. This is where the zhongjian ren can step in because he is an interpreter not so much or words as of cultures. Often, the two parties can say frankly to the intermediary what they cannot say to each other. In China, the intermediary – not the negotiator – first brings up the business issue to be discussed. And the intermediary often settles differences. Indeed, we have seen more than one zhongjian ren successfully deal with divisive disagreements. The following is one such case:
A VP of a New York-based software company went to Beijing to negotiate a distribution contract with a Chinese research institute. Having attended meetings arranged by the intermediary – a former senior executive with the institute – the VP was pleased with the progress during the first two days. But on the third day, the two sides became embroiled in a fruitless debate over intellectual property rights. Feeling they were losing face, the Chinese ended the meeting. That night, the VP and the China country manager met with the intermediary. The following day, the intermediary called the head of the institute and worked his magic. In the end, both sides agreed that the intellectual property rights were to be jointly owned, and the contract was signed.
Another important concept in Chinese Negotiation is Jiejan (Thrift): China’s long history of economic and political instability has taught its people to sae their money, a practice known as jiejan. According to market research firm Euromonitor International, mainland Chinese save nearly four times as much of their household income as Americans do. The focus on savings results, in business negotiation, in a lot of bargaining over price usually though haggling.
Chinese negotiators will pad their offers with more room to maneuver than most Americans are used to, and they will make concessions on price with great reluctance and only after lengthy discussions. In fact, we have often seen Americans laugh at the Chinese base price or get angry at “unreasonable” Chinese counteroffers. To make matters worse, the Chinese are adept at using silence as a negotiation tactic. This leaves Americans in the awkward position of negotiating by asking questions, directly or through the intermediary. In defending price positions, the Chinese use patience and silence as formidable weapons against American impatience and volubility. Westerners should not be put off by aggressive first offers by the Chinese; they expect both sides to make concessions eventually, particularly on prices.