Negotiation Impasse Has Some Value

Notes on Negotiation

Written by Marty Latz, Latz Negotiation Institute

Impasses in three high-profile negotiations have recently focused the public’s attention on the nature of deadlock in negotiations – the Wisconsin Democrats’ walkout to Illinois, the federal budget showdown and just averted shutdown, and the NFL lockout.

So how should we evaluate the strategic nature of impasses?

First, impasses are not necessarily bad. Despite our psychological feeling that we’ve failed if we spend a lot of time engaging yet don’t reach a deal, success in a negotiation is not just reaching a deal – it’s reaching a deal that accomplishes your goals and is better than your alternative, or Plan B.

Success for everyone, in other words, could involve a stalemate if the sides recognize that the only way to break it is for a party to concede something it finds unacceptable (meaning the concession makes the package worse than its walk away alternative).

For example, look at Wisconsin. The Democrats certainly felt it was better to flee the state than to seemingly acquiesce to the Republicans’ action limiting public unions’ collective bargaining rights. And the Republicans felt they were better off pushing on to eliminate those rights versus dropping the issue.

Importantly, both sides can claim some success – based on their goals and alternatives – due to the impasse. The Democrats did everything in their power to stop the bill, and I’m sure they consider their actions better than just staying in Wisconsin and voting against the bill. And the Republicans found a way to actually pass it.

Second, impasses may represent a failure of one or more of the parties to effectively and creatively engage. There may be many reasons for this, including egos, but some impasses should be resolvable.

For instance, the NFL owners justify the impasse over money by arguing that teams’ cost increases have eaten into their legitimate share of the league’s profits. Yet they won’t open up their books and prove their costs have substantially increased, insisting on financial confidentiality.

I agree with their claim to confidentiality. However, there is a relatively common mechanism that would allow the owners to maintain their finances’ confidentiality while also confirming (or disputing) the cost increases.

How? Both parties together hire an independent financial expert to analyze the books and – while maintaining their confidentiality – simply report his/her conclusion relating to the cost increases. Former Arizona State University Law Dean Patricia White was used in this exact way in a similar dispute between the Major League Baseball owners and players years ago.

Why hasn’t this occurred in the NFL dispute? I’m not sure, but this appears to make the NFL’s cost-based argument for more money seem disingenuous.

Finally, impasses may represent a failure for one party and success for the other. The U.S. government shutdown in 1995 has been largely viewed as a negotiating success for the Clinton Administration, which successfully painted the Gingrich-led Congress as extremists and ultimately got many of the budget concessions it wanted.

This didn’t happen last week on the 2011 budget. But it may still happen for next year’s federal budget – a much bigger deal for both sides. We’ll just have to wait and see.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

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