MANAGING RISKS IN NEGOTIATION & LEADERSHIP

At this year’s Negotiation Conference taking place October 5 & 6 at the Zürich Kongresshaus, world-renowned experts will discuss the risks associated with negotiations, why playing safe is the biggest risk, and how business leaders can mitigate challenges when the stakes are critical

As part of our coverage on this topic, we had the opportunity to interview George Kohlrieser, a speaker at the Negotiation Conference 2023 and Distinguished Professor of Leadership and Organizational Behavior at the IMD Business School.

What do you think is the biggest risk in negotiation? Is it the risk of a disagreement, or is it something else?

No, the biggest risk is not taking risks and playing it safe. So, negotiators must be able to connect and not just play it safe but play to win and take the right risks. This can be in expressing desires: what you need and want, being able to put issues on the table, but holding back and playing it safe is the biggest risk.

Then the second one is not knowing what you want. You have to know what you want and not be afraid to put that out in the open. And then the third one is to not listen and understand the desires of the person. You must explore. What do they want? And then the other is self-leadership, where you cannot manage your focus and state, so you get taken hostage.

And I guess there's one more: not paying attention to the pain points. That part of the negotiation is to understand where resistance comes from. And resistance is normally connected to a pain point.

How has leadership changed over the past couple of years?

The whole idea of command and control is basically a thing of the past. COVID has proven so clearly that command and control do not work anymore. It can work temporarily, but it doesn't get sustained performance. And part of that is to understand the power of your counterpart, the power of the followers in being able to get what they want.

So this brings us to the whole idea that, in the end, negotiation is about a relationship. How do you build that relationship, and how do you both care and dare? The daring is the risk side. If you care, very good. You need that bonding. But it also means you must dare. You must be able not to play it safe.

Do you think empathy can be a double-edged sword in the sense that it can be a risk in negotiations?

There’s no such thing as too much bonding. The problem is not drawing limits or boundaries to bonding, so you need empathy. And empathy is particularly important in building that relationship. But then, don't let yourself become a hostage to that empathy. Being able to draw a boundary and take a risk within that.

There's this sense that people don't accept one another, that if you disagree with me, you're an enemy. We must be able to have a good debate, a good argument, and a good exchange around desires and interests. Debating and having an argument are part of risk-taking.

And so you have to be in that right state and use the mind's eye to stay focused on your goal. When you are involved in understanding what it is that you want, what they want, you don't get taken hostage psychologically and pulled off into another direction. And that generally means you have to understand pain points.

How can leaders and negotiators manage themselves and others in times of risk?

Negotiation is a part of leadership. So as a leader and as a negotiator, you must understand yourself and what your history is. What happened to you in your life that you become vulnerable to trigger points? Rejection, blame, shame, and all of these things that get triggered underneath them is an emotion.

Negotiators often try to approach negotiation as a purely rational process. It's not. Behavioral economics has proved that we are feeling beings who happen to think. Negotiation is successful in part because the emotions get brought openly to influence, not necessarily expressed, but most of the time to be able to label them and use that as part of the negotiation process.

However, that is one of the biggest risks for leaders. They're afraid of what they might lose, and it may be in a deal or something tangible or within the relationship itself. Understanding this loss aversion and how it is affecting most decision-making is vital.

And it's true for negotiation. You have to be able to face conflict and see it as an opportunity and not be pulled back into having a trigger. The brain hates pain, but you have to teach your brain to like pain at the right moment and time. That's the secret of talent development, whether it's music, whether it's sports, you must go through the pain to learn the talent.

How do you create a safe base in these high-risk environments, this volatile world that we live in?

It starts with the person. In fact, are you a person who has a sense of authenticity, vulnerability, and emotional availability in which people feel that you are not there to hurt them, that you're there as an ally?

Your common goal is what brings you together. You can bond with any adversary or enemy when you find a common goal. And that is what many people lose control of in leading themselves. They focus on their own goal and cannot look for a common one.

How do you know what a common goal is?

You must listen to the desire of what the other party wants, and that takes inquiry by asking questions. It's amazing if you pause what the other person will start expressing. And this is how you begin to understand the motivation.

Where did the metaphor ‘put the fish on the table’ come from?

This has become a worldwide metaphor that started in Italy when I was there for the first time. I was going to the fish market and seeing all these fishermen bring in their fish, and they were cleaning those fish with aprons, blood, and guts everywhere and drinking wine. 5:30 in the morning, having a jolly old time in this smelly, messy thing in the early eighties.

And I watched this, and I thought, this is interesting. The next day I went down again, and they saw me and recognized that I had been there the day before, so they invited me over. The next thing I knew, I got an apron on. I got a knife and cleaned the smelly, bloody fish. I had a glass of wine at 5:30 in the morning, and we were laughing, and I didn't speak much Italian.

And it just suddenly hit me. This is what conflict management is.

It's about putting that fish on the table and going through the bloody, smelly mess of cleaning it. For what? The great fish dinner at the end of the day, really.

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