High Stakes Negotiation

In June 2004, I was appointed as Antigua and Barbuda?s Non-Resident Ambassador to several Latin American countries. Among my assigned portfolio was Brazil. As a congratulatory gift, a colleague commissioned a special lapel pin for me. It consisted of the intertwined flags of the two countries. He was thoughtful and kind enough to give me several pins and suggested that I could use them as gifts.

Fast forward a few years? I was tasked with leading a delegation to Brasilia to renegotiate the terms and conditions for a loan that dated back to 1981. The loan had become delinquent. The renegotiation was part of the thrust by Prime Minister Baldwin Spencer?s Administration to reduce the country?s national debt and rehabilitate the reputation earned by the previous administration for failing to honour its financial commitments.  

My delegation included the country?s Debt Manager and two representatives from a UK-based financial services consulting firm that had been retained by the Ministry of Finance. As part of our preparations for the negotiation, the technicians briefed me on the history of the loan. This included the fact that the former administration had never built the hotel that the loan was intended to finance and had not made a single payment on the loan. As a result, the accrued interest and penalties now exceeded the initial loan amount. 

Yeech - what a disaster!!! We were obviously negotiating from a position of being wrong on multiple fronts. Despite that fact, my job was to secure new terms and conditions that were favourable to my country. As my delegation completed our final preparations ahead of the commencement of negotiations, I presented each member with the lapel pin and instructed them to attach it to their clothing in a way that was clearly visible. I explained that my intention was to provide a visible reminder of the relationship which the two countries shared. I was left with a single pin. The others asked what I was going to do with it. I confessed that I didn?t know but would play it by ear?

When my team of four arrived at the meeting venue, we were met with close to twenty officers representing the other side. Of course, I knew the representatives from the Ministry of Foreign Affairs and enjoyed very cordial working relationships with them. However, everyone else in the room was a stranger.

It soon became apparent who the real power brokers were. The person to whom the entire Brazilian delegation appeared to defer was a young gentleman from the Ministry of Finance. Understandably, he was firm in his position that his job was to recover funds which rightfully belonged to the government and people of Brazil. My problem was that Antigua and Barbuda simply couldn?t afford the terms that he was proposing.

Reframing the Discussion

Realizing that the negotiations were in danger of breaking down, I requested a break. During the break, I approached the gentleman from the Ministry of Finance and asked if I could speak with him privately. He agreed. What follows is the essence of what transpired in that one-on-one discussion.


Me: I acknowledge that my country failed to honour its legal and moral obligations to comply with the terms and conditions of the original loan.

Still Me: I apologize for that. That breach occurred under the former administration. However, government is continuous. So, we accept responsibility for remedying the breach.

More Me: Permit me to share with you something about the structure of government in my country. We operate in a two-party system. My administration has taken office after being in opposition for 28 years. It was a hard-fought victory at the polls.

My technicians have crunched the numbers and advised me that we simply cannot meet the terms that are currently on the table. However, let?s assume for a moment that you maintain your position and that we are forced to comply. Inevitably, that would result in our government not being able to provide essential social and infrastructural services such as schools, healthcare, roads etc. By the next election cycle, the likely outcome is that we would be voted out of office. Since we operate in a two-party system, that would mean that the Opposition would form the next government. The current Opposition is the same party that negotiated the loan in 1981 and failed to make a single payment.

Me Wrapping Up: So, which administration would you prefer to work with ? the one who gave you a commitment, reneged on it and refused to engage in any meaningful discussion on the matter for over twenty years? Or the current administration, which is committed to righting a wrong but doing so in a manner that is sustainable?

Me: (Pulling out my last lapel pin) I offer this to you as a symbol of the relationship that exists between our two countries and my personal commitment to do everything in my power to right this wrong.

Him: (Accepting the flag pin) Ambassador, I understand and appreciate what you have said.

Me: Thank you.

When the negotiations resumed shortly thereafter, the gentleman was wearing his new lapel pin. He had also moved away from his hard positional negotiating stance. The tenor of the discussions had changed? As a result, when my delegation left Brasilia a few days later, we had an agreement in principle for new loan terms that were well within what the Debt Manager and the consultants deemed manageable.


Positional Bargaining vs Interest-Based Negotiation

I share this story to illustrate the power of interest-based negotiation as an alternative to positional bargaining. The latter term refers to a strategy that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. If both parties adopt this approach, the likely outcomes include:

In contrast, interest-based negotiation is geared towards reaching a mutually acceptable outcome, something that is beneficial to both parties. There is a simple four-point formula to interest-based negotiations[1]:

  1. People: Separate the people from the problem. In this case, I used the one-on-one meeting to separate myself and my colleagues from the problem and reposition ourselves as solution-seekers.
  2. Interests: Focus on interests, not positions. Instead of focusing on the number that was on the table, I reframed the discussion to highlight the underlying interest ? i.e. recovering as much of the owed money as possible.
  3. Options: Generate a variety of possibilities before deciding what to do. Once my counterpart accepted the reframe, both delegations were then able to work collaboratively to develop various options.
  4. Criteria: Insist that the result be based on some objective standard. Both parties agreed that sustainability was an important criterion for the negotiated settlement. Once that was accepted, it became easier to rule certain options out and to rule others in.

Would you like to get others to say yes more often? Using interest-based negotiation can help you to achieve that goal. The bottom line is that you need to figure out the underlying interests of the other parties involved in the negotiation. What do they want to achieve? Don?t think of the answer as a position but rather as the interests that they are seeking to satisfy.  Once you have done so, you are on your way to getting others to say yes and to doing so in a manner that enhances rather than erodes relationships.

[1] I was introduced to this model when I attended the Harvard Program on Negotiation in 2004. It is featured in the national bestseller Getting to Yes (1991). Since then, the authors have updated the model. It now includes six principles. I will be featuring those principles in my daily microblog series over the next week. You can access the series by clicking on the IG, FB or LinkedIn icon in the footer.

Ambassador Joan H. Underwood is a senior management consultant and policy advisor with extensive experience in both the public and private sectors.

Professional designations held by Ambassador Underwood include that of a Senior Professional in Human Resources (SPHR) from the US-based HR Certification Institute, the Society for Human Resource Management Senior Certified Professional (SHRM-SCP), Accredited Director (Acc.Dir.) and credentialed Master Trainer as designated by the Association for Talent Development (ATD).

She also holds the designation of an Erickson Professional Coach (EPC) and is a member of the International Coaching Federation (ICF).

Joan?s most recent professional accomplishments include certification by the Human Capital Institute (HCI) in Strategic Workforce Planning and Change Practitioner as certified by Prosci Canada and the Change Management Learning Centre.

If you are looking for the resources required to help you take your management performance to the next level in 2021, click HERE to obtain a FREE SAMPLE from her upcoming book.

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