Tuesday, May 15, 2012

The Mancini Coalition

One of my formative moments as a negotiator took place almost fifteen years ago during a case exercise at  Harvard.  I had been assigned the role of Enviromental Lobby in a multi-party negotiation over how an economic region would be developed.  Other roles included organized labor, the state's governor, business interests and a fifth party representing general voters.  As with many such exercises, the range of agreements was abstracted into several different issues, each of which could be given a score from 1 to 5. An agreement didn't have to be unanimous but required any four of the five parties.

As I read through the case, finding a good strategy looked difficult.  My goal (as defined by the case) was to get the highest possible score for environmental regulation but no other party seemed likely to have that high on their list of priorities.  (The case specified that the Governor had run on a "jobs" campaign.)  My best chance was to form a coalition with another party but I worried that it would be relatively tempting for the other four parties to shut me out and either form an agreement without me or present me with an ultimatum of agreeing to support a bad environmental result or having them go ahead with a worse one.

I arrived early at the designated negotiation spot without a solid strategy.  I hoped I could feel out other parties and find a favorable surprise -- perhaps the Governor really wanted a unanimous decision and could be persuaded to apply some pressure to the other parties.

Then Walter Mancini arrived.

Walter is one of those people who embodies the best traits of the military.  He's confident but humble, always ready to lead or to follow as the situation warrants, and completely trustworthy.  It turned out that he was playing organized labor and that, like me, he had one metric that was by far the most important to him.  He had a mild preference for low environmental regulation but it wasn't critical.

I proposed a coalition.  He and I would tell the other parties that we would agree to any deal that scored a 4 out of 5 on each of our primary metrics but would refuse any deal that was below 4 on either.  Walter agreed.

When the rest of the parties arrived, we explained our agreement.  Predictably, the other three parties tried to break our coalition, mainly by offering Walter more favorable deals.  Predictably, they failed.  In the end the three remaining parties negotiated separately to reach a deal that met our requirements.

Ever since then I've been a student of coalitions.  In my experience, negotiators often fail to get good value out of coalitions, either missing opportunities to build them, failing to nurture them or using them poorly.  I offer the following as a set of guidelines for building and using coalitions effectively.

  1. Think broadly about potential coalition partners.  Many people look only for parties with common interests -- our natural coalition partners.  Many times, however, your ideal coalition partners don't share your interests.  Walter was an ideal partner even though our interests were somewhat at odds because we trusted each other.  Knowing the other wouldn't defect made it easy for us to turn down favorable deals with confidence that we wouldn't get punished for it.
  2. Think about the purpose of your coalition.  Coalitions frequently exist to increase the power of their members but that's not the only function they can serve.  Some of the most effective coalitions are designed to persuade rather than to exert power.  Bringing on board someone your counterpart trusts and thinks highly of may convince them to take your proposal more seriously or to give credence to your claims where otherwise they might be skeptical.
  3. Consider how other parties may react to your coalition.  If your coalition gives you a position of power you risk having the other parties feel threatened or that you're not negotiating in good faith.  More broadly, inviting the wrong ally into a coalition may push others away.  A classic example is the Bush coalition in the first Gulf War.  Israel was kept out of the alliance of nations that pushed Iraq out of Kuwait precisely because their inclusion would have forced other Arab states to exit.  Being aware of office politics can let you avoid a similar trap, where a seemingly-powerful addition to your coalition causes other key parties to balk.
  4. If your coalition is powerful, consider moderating your requests.  One of the most dangerous situations for negotiators is when they have the other party over a barrel.  It can be very tempting to use your power to the utmost and to extract every ounce of value but often this is not the best approach.  First, there is always a risk that the other party will reject your strong-arm tactics, either out of principle, out of anger or because you have misjudged how costly it is for them to say "no deal".  Second, such tactics can seriously damage relationships and become part of your reputation.
In our case, Walter and I diffused potential tension by asking "only" for scores of 4 out of 5 in our preferred metrics and in stating our willingness to agree to any deal that met that condition.  This was clearly a good result for us but not excessive.  Instead of being angry our counterparts respected our tactical move.  We got better outcomes than we might have working independently and we strengthened our reputations going forward, being seen as trustworthy partners and as strong but reasonable opponents.

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