The Power of Understanding

Increasing Negotiation and Leadership Performance through the Power of Understanding

Laws of Power 40: Design the Best and Worst Case

By Karen S. Walch

The most classic worst case scenario plan is the one to prevent the use of nuclear and other weapons of mass destruction. In the Cold War era, Herman Kahn perfected the classic plan of a highly coordinated, massive attack that would guarantee total annihilation. Such a “mega death” approach is believed to be the smartest way to prevent the classic “unthinkable” worst case scenario. This week’s law will address the preparation required for a successful rights-based negotiation strategy without the sole reliance on mutual assured destruction.

We will explore why preparation for the best case scenario is also fundamental to a good rights based negotiation strategy. Like the classic theorists assert, it is critical to be prepared for the destruction of relationships and a significant expense of time and energy required in a lawsuit or adversarial negotiation. However, over reliance on the worst case will prevent one’s ability to respond effectively to best case opportunities that may arise.

Throughout the Laws, we have addressed how much of negotiation strategy is framed by game theory from military and political economy. In this week’s focus on the rights based negotiation approach, we will explore the game theory theme of the conscious (and unconscious) drive to protect ourselves from worst case possibilities.

Once the decision is made to pursue an adversarial negotiation in order to protect your rights and positions, the risks of damaged relationships, emotional uncertainty, and financial ruin are increased. Therefore, it is critical from both a theoretical and practical point of view to protect your liberties and resources.

If you believe that your rights are violated, a lawyer, adjudicator, or agent can help you prepare a claim for damages against your counterpart. Just as in warfare, lawsuits and adversarial negotiation tactics are founded on the assumption of a fixed “pie” – one’s gain results in the counterpart’s loss.

A lawsuit or “suit in law” is an example of a rights based tactic. You can file an action in a court of law in which you as a plaintiff declare that your rights have been violated by a counterpart (or defendant). If successful, a judgment will be rendered in your favor and orders are issued to enforce your rights. In short, you are the winner and your counterpart becomes the loser with imposed injunctions or judgments.

It is always necessary to prepare for the worst case scenario that your counterpart will be the winner in this zero-sum – win/lose situation. However, in addition to the preparation for the worst case scenario, there are benefits to preparing for the best case scenario as well. Preparation for the best case scenario means that you are able to adapt to new information and the potential for pro social engagement and problem solving opportunities even though litigation has been commenced.

For example, despite the rigid rules and adversarial litigation process, there are increasing opportunities to pursue Alternative Dispute Resolution (ADR) techniques in the context of formal disputes. It is not necessary to think of a litigation process to be mutually exclusive from a problem solving method. It is critical to be flexible enough to pursue opportunities for continued dialogue and creative settlements.

In addition to classic strategic intelligence gathering about your counterpart in order to guard against your worst case scenario, it is necessary to scan the landscape for possible social and psychological opportunities for continued dialogue.

Scenario planning should also involve recognition of surprising insights, shifts in attitudes, and unprecedented engagement of key decision makers. Good rights based strategists design for flexibility and freedom to adapt when new information arises.

The need for flexibility is critical for not only individual negotiators, but also for those as agents for large organizations.

Some of you may be familiar with a case several years ago involving Texaco and Borden in an expensive and protracted lawsuit. After thousands of dollars and legal hours devoted to this suit, both organizations gained new CEOs.

Upon review of the litigation, one of them suggested to the other the method of mediation as an alternative to the continuation of the litigation. Mediation, facilitation or mini trials are forms of ADR which can be utilized even though a lawsuit has been formally filed.

A third-party neutral served in the discussion of the Texaco/Borden case in a mini trial session. The third party is advisory and can facilitate a problem solving discussion in which the parties are free to accept or reject the third party advice.

The Texaco/Borden situation was successfully resolved not by an adjudicator through the court process, but through a problem solving dialogue by the parties facilitated by a third party. Favorable terms were determined by the parties in a short period of time relative to an adversarial court trial.

The mini trials and facilitation methods are useful tools because of the time and cost reductions, problem solving method, and protection of long term relationships.

The adversarial legal system is a classic method used to determine the truth by giving two sides an equal chance to make their case before an impartial judge or jury. However, valuable and creative ideas and solutions can be destroyed or lost when a problem solving exchange is excluded.

On occasion, a local police officer speaks to my negotiation students about how to negotiate with hostage takers. He points out that even in these most difficult cases, it is important to plan for both the worst and best case scenarios.

Even though the SWAT team (his worst case scenario) is eager and available, his best case scenario (uncovering critical information which motivates “cooperation”) yields the most effective, efficient and safe results. He points out that what looks like a zero sum game is more complex and social than you first might believe.

Law 40 Exercises

Here are some Action Steps for strategic best and worst case intelligence gathering for Law 40:

1. Examine your assumptions about possible change. Decide on some key questions & uncertainties to be answered by your intelligence analysis.

2. Set the time, scope and plan of your strategic analysis. Take into consideration how quickly changes may have happened in the past, in order to predict future options.

3. Test for consistency in your information, and identify major stakeholders. Decide who may be most affected by legal costs or has interest in possible creative outcomes.

Extra Credit

Read Herman Kahn’s On Thermonuclear War (Princeton University Press, 1960), and see for classic worst case scenario preparation.

48 Laws for 21st Century Global Negotiators: Join Thunderbird Professor Karen S. Walch, Ph.D., as she explores the laws of power for 21st century global negotiators. Each Monday she discusses one law and provides an exercise to identify and enhance individual negotiation power. Go to the main menu for the series.