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Resolving a difficult negotiation

February 11, 2013

Of all the many topics contained in the IACCM on-line learning program, there is one that stands out for student comment. Indeed, it arouses strong emotions – and almost always negative.

The section in question relates to a discussion of the options when negotiators find themselves at an impasse. Everything is resolved – except one item on which they just cannot agree. And one of the suggestions offered is ‘flip a coin’.

On the surface I can see why students may be upset by this idea (even though it is one of several suggestions). They feel it trivializes the negotiation process; they cannot see how they could possibly justify such action within their organization (except, perhaps, if they won) and they suggest it is simply a ridiculous idea that no negotiator would ever accept – so it should be eliminated from the training materials.

While understanding the reaction, the very fact that this idea generates so much heated debate is itself useful. I suspect if suggested in practice, it might assist the two sides sometimes to step back from their entrenched positions and reconsider the importance of the item on which they are stuck. After all, the suggestion here is not that we are talking issues of monumental principle – if that were the case, the negotiations would have broken down.

Given the reactions we have observed, I was very interested to see that the issue of tossing  coin to reach resolution has been raised by the author of Freakonomics – indeed, research is now being conducted to validate the fact that this is often the best way forward when a decision can’t be made.

When it comes specifically to use during a negotiation, it seems to me that it would be validated in situations where:

a)     The parties are agreed that there are two options, but neither is sure which would be better

b)     The parties have distinctly different views on an issue that is significant, but both agree it should not be a deal-stopper and that they need to move on.

  1. My experience with flipping a coin started when I was a federal contracting officer back in the 1990s. I think there is validity when the sanctity (fairness, impartiality) of the process is more important than always making sense…

    Also, as you’ve observed before, an impasse is often caused by political divisions inside both parties to the negotiations. It can be impossible for negotiators to fight effectively against their own side in order to get a deal done, thus ‘we flipped a coin and got it resolved’ seems sensible.

    That said, my objection is that it enables poor decision making, discussions and problem resolution inside the party that wants to flip a coin. We do not want to have a hard internal conversation, or challenge an erroneous executive decision, so we resort to any mechanism that eliminates the need for visible leadership or managerial courage.

    So, a classic contracts answer, tell people it is an available mechanism, but caveat it so they can apply it to their unique situation…

    …or they can flip a coin when trying to decide whether to flip a coin.

  2. John Jorgensen permalink

    A sobering thought….especially for shareholders / investors.

  3. Steven Malloy permalink

    This is a flippant negotiation method and I cannot take it seriously when one should prepare all positions, identifying give and take levers, and show stoppers, prior to negotiations.

    A term may be very important to the Customer and insignificant or of minor importance to the Supplier. If it is insignificant, and we are approaching impasse situation on another contentious term, I would offer giving this minor term, to dampen the heated environment, so that the tougher term can be seen as negotiable.

    Flipping a coin, in my opinion, is simply unprofessional and potentially could undermine the entire negotiation.

  4. It’s a really interesting concept and in particular the research that Freakonomics are carrying out. I have to say that I’ve never been in a negotiation where the coin was physically put on the table, but maybe it was used in the heads of the negotiators.

    For me the spectre of a the coin coming out is as powerful as actually using it and in the context of the IACCM development programme it’s the discussion that comes from it that is valuable. On the basis that most negotiations have multiple levers and trade-offs along the way then if you find yourself at a point where you have to deploy the coin then maybe you need to re-think your negotiation approach. In my experience to have got to a point of closing with only one item on the table and with no margin to close means that it isn’t the coin that is trivializing the negotiation.

    Until perhaps the Freakonomics research gives us a reason to use a coin then the power maybe in the ‘spectre of the coin’ getting negotiators to more readily helicopter up during the negotiation to look at the route to close as much as the intellect going into the specific points on the table.

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