Credit: Jonny Goldstein
Peter Hiddema, a visiting professor at INSEAD (France and Singapore) teaches negotiation skills to MBA students. Globally known as an expert in strategic negotiation, conflict resolution and leadership development, Peter has taught students and corporate leaders at several universities in addition to INSEAD, including Queens University (in Canada and the UK), HEC at LUniversite de Montreal, and Harvard University. Peter has also taught negotiations to executives of Fortune 500 companies globally and according to information available with INSEAD, in the past 2 years alone, Peter has been an advisor on transactions totalling more than USD 2 billion.
PaGaLGuY met Peter Hiddema to learn more about his skills and his work.
Peter Hiddema
When did you start studying negotiations?
I was a corporate banker in Canada during the recession of 1991-1993. During that time, we had many clients losing money in their businesses and some clients going out of business. We were engaged in an incredible number of negotiations with them we had to restructure their loans, get them to restructure their businesses, and in some cases, even force companies into bankruptcy. Needless to say, there was a lot of conflict, and most of the time, the way we handled the conflict was actually not serving anybody. One Monday morning, a colleague walked into the office with a book called Getting to Yes by Roger Fisher, William Ury and Bruce Patton, a book that had come from the Harvard Negotiation Project and had some very useful approaches to negotiations and conflict. Ironically, I had actually read that book during my MBA, but had forgotten all about it. We used the ideas that book and made some fundamental shifts in our approach, like putting ourselves in the shoes of the clients. We also began discussing the problems as if they were meant for both parties to solve together, instead of just telling our struggling clients that they had a big problem to sort out. It was very, very rewarding, it really helped, and we had unbelievable success. Thats when I realised the importance of negotiations.
Are negotiations the most important factor in any deal?
A very important factor; difficult to say whether it is the most important factor though. I say this because we define negotiations as any time we try to influence or persuade, so in essence, we use negotiations to make our way in the world and get what we want. With negotiations, we get people to work with us, to find a spouse, to raise children to find jobs. And theres nothing like it if we do it in a way that works well for both parties involved. I think you can see it is definitely an important factor for both business and personal issues.
Can one learn to negotiate? Can it be taught in a classroom, like it is being taught in b-schools these days?
Yes, you can learn to negotiate, and it can be taught in classrooms, as long as it is experiential learning and as long as it includes testing your beliefs and assumptions. Some people may be born with a gift; it depends on their personality style. An outgoing personality, one that is oriented towards people, comfortable with people, with some level of charisma such people are more likely the ones who have a talent to negotiate. However it does not mean they are better negotiators. It simply means they have traits that will serve them well while negotiating. In essence, negotiation is like sports where some people are born with a greater natural ability, but they also have to practise to build their skills and to truly become great.
Have you seen gender differences while doing research on this subject?
Yes, there are clear differences which have been studied. It is important to say, however, that the information I will share is a generalization. Of course there are individual variations, cultural differences, and situational factors that will affect the way a man or a woman will negotiate. Having said that, below are some of the main differences I have found:
Men are generally more focused on the substance of the negotiation over the relationship dynamics between or among the parties. In many cultures men are raised to play competitive games, where the focus is on beating the opponent and where pushing for what you want is an important factor in success. Competition is encouraged, as is standing up for what you want. Research done in the 1990s by Deborah Tannen in the United States showed that young boys and young girls played together very differently. Young boys tended to play competitive games and even had competitive dialogue, where they tried to show how one of them was better than the other. Their discussions tended to emphasise differences among them. Even when discussing a subject, men will often engage in what is referred to as Ritual Opposition. That is, they will oppose an idea for the purpose of bouncing it around and seeing how good it is. If it withstands the ritual opposition, it must be a good idea. And when it comes to making requests for what one wants, men tend to make requests that do not contain caveats. For example, they will tend to say, I would like x. They dont make excuses for it, they dont qualify the request, they just make it simply and directly.
In general, women place a greater emphasis on the relationship dynamics of a negotiation than men do. Of course the substance of the negotiation still matters, but they are more likely to make trade-offs on the substance for the sake of the relationship. This is congruent with how women are raised in many cultures: they are supposed be the peacemakers, the community builders, the ones who keep the family together, etc. Deborah Tannens research found that young girls tended to focus on finding similarities in each other when playing games, and will even play games that demonstrate their similarities rather than differences.
When discussing a subject or idea, women tend not to engage in ritual opposition. If they have a concern, they are reasonably likely to raise it in the meeting, but only for the purpose of solving the problem at hand. When faced with ritual opposition from men, women tend to shut down their idea generation. As far as making requests is concerned, women are more likely to make a request with caveats in place. This sounds like, If its not too much trouble, could you or I would really like to take a week off, as long as it doesnt cause any extra workload for you
Do negotiation patterns change culturally?
Needless to say this has an impact. The primary differences are in the areas of relationships, and communication styles. Lets just take two broad cultural groupings as an example: East and West. In the East, people generally place more emphasis on the relationship than in the West. They will invest considerable time in getting to know someone before doing business with them. In the West, people tend to get to the substance more quickly. In terms of communication styles, the East will tend to be more indirect in the communication style, talking around the subject or using metaphors, while the West will tend to be more direct. Another interesting difference regarding communication is something I refer to as communication patterns. If one considers India and the US as examples, in India it is common and accepted for people to talk over one another and for more than one person to be talking simultaneously. In the US, that is generally considered rude. People tend to speak sequentially: that is, one person speaks, then another person speaks, then the first person speaks again. In arguments, of course people talk over each other and interrupt each other, but in this instance I am referring to normal dialogue.
What is a successful negotiation? Can all parties ever be happy?
All parties should be happy, though they dont necessarily have to be exactly equally happy for it to be a success. A successful negotiation is one in which all the core needs of all key parties are met. And it should be better than any walk away alternatives that is, better than what any party could have done on their own or with a third party.
Are there people you can brand as famous negotiators in the world?
Yes, to begin with, Mahatma Gandhi is possibly one of the best negotiators the world has seen. He accomplished many incredible things in his own way and managed to rally people together for a cause. Nelson Mandela would also be very high on the list. Despite having spent many years in jail, Mandela was not searching for revenge, but instead, reconciliation and a better future once he was free. He developed himself to a high level of emotional intelligence. He accomplished what was believed to be impossible.
John F Kennedy was a terrific negotiator. He brought people of different viewpoints together and found commonality which he managed to bring to the surface. He was also very skilled at inspiring people to reach for high achievements. Not to forget Simon Bolivar, the Latin American revolutionary. He did significant work in South America and helped people gain independence. Martin Luther King Jr is another name who comes to mind. He rallied people around a cause, inspired them to take action, and helped usher in some remarkable changes. Mother Teresa is yet another, who on a moral high road accomplished so much for so many.
Which are the usual negotiation mistakes that people make?
To list a few:
* Treating negotiation like a battle to win against an opponent, instead of as a puzzle to solve with a colleague
* Placing too much emphasis on areas of conflict, instead of seeking to leverage areas of commonality and making low-cost, high-gain trades in areas where wants and capabilities differ
* Acting on untested or worst-case assumptions about behaviour
* Addressing a partys request or demand (position) instead of their underlying interests
* Asking too few questions and not doing enough listening
To elaborate, we tend to make worst-case assumptions about why people do things. We dont test these assumptions instead, we treat these assumptions as the truth, and we thereby put ourselves into our own prisons. We create trouble for ourselves. We tend to believe that the pie is fixed and that resources, time and money are limited. In any situation we can always destroy value, benefits, or resources, which means the pie is not fixed. If the pie is not fixed because we can destroy value, then we must also be able to create value, benefit, resources. Another classic mistake: if our walk-away alternative is bad, we believe the other party must have a great walk-away alternative. In other words, we assume that if we are in a weak position, the other party must be in a strong position. This is not necessarily true.
The above could also serve as secrets for good negotiations?
Yes. To reframe some of the above points as advice:
* Expand the pie. We walk into negotiations believing there is scarcity and that there is only so much to go around. But in fact, we can create scarcity by our choices and approach, or we can create abundance. It is better to divide large pie. Again, the difference between scarcity and abundance is mostly determined by our approach.
* Treat negotiation as a puzzle which needs to be solved rather than a battle to be won. Treat your counterpart as a joint problem-solver rather than an enemy or opponent.
* We make many worst-case assumptions based on survival instinct. We often believe others are ill-intentioned, when in fact, they are generally simply trying to meet their interests, just like we are. Most people do not have ill intent.
* Focus on interests and not positions. We define interests as underlying motivators for the negotiations. A Position is one way to meet your interest but not the only way. Positions
are what you say you want, and interests are why you want it.
* Always know your BATNA (Best Alternative To a Negotiated Agreement) and consider the other persons BATNA. If you dont know what your walk away alternatives are like, how can you fully determine whether the solution you are working toward is one you should say yes to?
* Make negotiations win-win. If it is not good for both parties, it will not be durable.
* Be respectful of the people you are negotiating with.
* Do not cave in on your own interest, but do be flexible on how you get your interests met.
Doesnt negotiating really just mean marketing an idea or point of view?
If we talk about the sales context for a moment, no matter what industry youre in, you have some set of products and/or services to sell. But heres what too many salespeople overlook: these products or services were created to address a need or want, and the only reason the prospect is talking to you is because they have an unmet need or want. So if you want to sell the product, make sure you know what their need is before you talk about your products wonders. It may be the most intriguing creation on the planet, but if it doesnt meet the prospects need, good luck selling it! Focus first on their needs, and build your bridge from there. And by the way, if you discover that you cant fill that need, move on. Trying to force a mismatch is a waste of everyones time and it could come back to haunt you.
Too few questions and not enough listening are flaws too?
Many salespeople are extroverts and love to talk. I understand Im an extrovert too! But heres the problem: when were talking, were not learning. But Im not here to learn; Im here to sell! is what most salespeople say. Fair enough, but as you probably know from experience, its hard to sell if you dont know why someones buying. So ask. Ask short, open-ended questions like: Whats your concern? Can you tell me more about that? Can you help me understand that better? Then be quiet and listen! By the way, this does not mean Use the time to plan your next brilliant line. Get curious. Hear them out. Summarise what you think they said to make sure you heard it right. Ask clarifying questions. Then make the sale. To draw the link back to negotiating in any context, negotiating can be like marketing an idea or a point of view. But as we discussed earlier, everyone tends to be better off if you if you treat it like an exercise in figuring out a great outcome for all key parties. In an interdependent world, treating it like a competition will often get you a poor result.
Peter Hiddema, in addition to his experience cited at the beginning of this article, has also advised regional government bodies in the US, the federal government and First Nations communities in Canada, the World Health Organization in Geneva and Africa, and international non-governmental organizations (NGOs) such as Mercy Corps. Peter began his career as an investment advisor with a Canadian-based investment firm. After completing his MBA, Peter became a corporate and institutional banker with Royal Bank of Canada in Toronto, Canada and London, England, before entering his current field in 1996. He speaks four languages, has lived in six countries on four continents, and travelled through over 50 countries. He is curious by nature and considers himself a perpetual student in the school of life.