Paul Eckstein, one of the best litigators I know, told me years ago that his firm would sometimes assign a separate lawyer to try to negotiate and settle a big case in addition to its trial counsel.
They would have a “Department of War and a Department of Peace,” he said. Of course, we in the U.S. government have exactly this – a Department of Defense and a Department of State.
Similarly, investment bankers and those selling companies often negotiate – at the same time – with multiple possible purchasers. And they would tell their counterparts this.
Why do we do this, as it seems this would send mutually inconsistent signals that could easily lead to misperceptions and miscommunications about the parties’ intentions?
Three reasons, which are crucial to evaluate as you weigh the advantages and disadvantages of using this and related strategies in your negotiations.
One, it’s not inconsistent to pursue multiple alternatives simultaneously if you are unsure what path to take. By improving any one of your alternatives vis-à-vis the others, you strengthen your leverage with the others.
And even if you know the one you will ultimately select (your Plan A), it still increases the likelihood you can get a better deal from it if you have developed a better alternative/Plan B.
President Trump is now sending two seemingly inconsistent signals to Iran – we want to negotiate a deal that prevents you from developing nuclear weapons and we might join Israel’s war against you and destroy your main nuclear enrichment facility.
While I strongly disagree with how Trump is communicating these messages, via threats by tweet and not through diplomatic channels by seasoned Middle East negotiators, it’s smart to let Iran know both alternatives are on the table.
Two, an important reason to send these messages through different parties is because expert negotiators’ skillsets may not translate well to a knife fight.
What do I mean? Negotiation and war require different skillsets. Some excellent lawyer negotiators would crash and burn in front of a jury. And some fantastic trial lawyers can’t effectively negotiate. Of course, these skills are not mutually exclusive. But they do differ.
Plus, it’s often more effective to have different parties communicate disparate messages. There’s a reason law enforcement officers choose a separate “good cop” and “bad cop” when interrogating suspects.
Three, consider how much you care about a future relationship with your counterpart before using these and related strategies. If you clearly intend to go with your Plan A based on your goals and interests and a future relationship with your Plan A counterpart, don’t individually or through others send aggressive messages about your Plan B(s).
I would not set up an auction – which is an effort to create stronger Plan Bs – if I wanted to transfer or sell my business to my kids. It sends the wrong signal and would be counterproductive to my goals and interests.
Of course, I might explore how others might independently value my business through an expert appraisal to determine its fair market value. But I would not seriously explore other alternatives – or send any signals that I would go with anyone else.
Latz’s Lesson: Pursuing war or peace may require sending different and seemingly inconsistent signals at the same time. Your goals and interests should drive how you make and implement this strategic decision.
* Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.