Rarely does a day go by that I don’t read in a newspaper about a high-profile negotiation. Perhaps it is a union picketing when talks break down, or a board of directors trying to fend off an unwanted merger. It might even involve the possible settlement of a lawsuit between prominent companies.
When I read about these, I often consider why the negotiation has “gone public.”
My first thought always is to evaluate who initiated the public coverage of the negotiation. Did a party issue a press release or invite the media to cover the negotiation? Or is the media covering it despite the wishes of the parties, who would prefer to negotiate behind closed doors?
If one of the parties “went public,” then it’s likely that party believes playing it out in public has some benefits. (Of course, the public element simply may be just feeding that party’s ego.)
If it’s strategic, though, what might be the advantages and disadvantages of “going public?”
Consider the following in deciding if and when to “go public” in your negotiations.
1. The decision-maker may be influenced. In high-profile legal negotiations, especially those involving alleged criminal acts, the party “going public” may be attempting to influence potential jurors — the ultimate decision-makers if the case goes to trial.
And in some mergers and acquisitions, the ultimate decision-maker may be a public company’s shareholders. One effective way to influence their behavior is through the media.
2. The public may perceive one party as more “fair.” Many companies and individuals place a substantial value on their reputation and how the public and their colleagues perceive them. Winning the public relations battle in a negotiation thus can have a substantial impact on their ability to achieve success not only in the negotiation, but also in other contexts where their reputation matters.
For instance, the National Hockey League’s collective bargaining agreement expires Sept. 15. Both the NHL and the players’ union already are at work trying to influence the public’s — especially hockey fans’ — perception of the fairness of their positions.
Why? Both sides’ success depends in part on their ability to satisfy the public’s interests. If a player has great skills, a good reputation and can put fans in the seats, he has more value to a team. If the team or the league turns off its fan base by seeming to take a greedy stand in the negotiation, it may “win” the negotiation but lose its fans.
Negotiation with governmental entities — such as cities — also involves this element. After all, elected officials constantly worry about how the public perceives them. Evaluate this when you see police and other public employee unions going public.
This element, of course, is the ultimate in peer pressure.
3. It may strengthen their leverage. Parties also may go public to attempt to maximize their leverage. How? By suggesting publicly that their alternative to doing the deal with the other side is perfectly acceptable.
Let’s say a union leader publicly suggests that they have prepared for a strike. Simply making this statement in public may increase the likelihood that their employer will view a strike as a more realistic possibility.
A reasonable evaluation of the leader’s statement is that he would not “go public” and put his credibility on the line if it were not true. Since leverage is based in part on the parties’ perception, the employers’ changed perception of the union’s willingness to strike may strengthen the union’s leverage.
4. It may help to control the agenda. Finally, parties may go public to try to control the agenda. They might do this by highlighting the importance of certain issues, or by raising the stakes in the negotiation.
By publicly commenting on certain issues or publicly committing to certain positions, parties also may limit their ability to backtrack on those issues. Backtracking on issues after publicly committing to them involves lost credibility. Nobody wants to suffer this.
Of course, disadvantages also exist to going public, the most significant of which include: 1) the increased competitiveness often associated with public battles; 2) the decreased flexibility that occurs once positions have been publicly taken; and 3) an inability to control how the media characterizes your position and the possible miscommunication that might thus occur.
So next time you read about a negotiation in the newspaper, consider why the parties are duking it out in public. It just might help you keep the peace in your future negotiations.
Published July 2, 2004 The Business Journal