Lyric Opera Case

Debriefing – Lyric Opera Case (30 Sep 2006)

General: What happened; what was the outcome; were you successful or not; why and why not;
We started by negotiating at two different ends of the spectrum. We started at the lower end and the other side started at the very high end with our respective opening bids. I think we were successful given the situation but we could have done better. We were successful because besides the odds both sides realized that we will have to make a lot of concessions due to our need for each other.

Who was satisfied (answer this before comparing walkaways or comparing information);
Both teams were satisfied as nobody violated their walkaway prices.

· did either violate his/her walkaway; if so, why?
No we did not violate our walkaway price.

· if there was a gap in walkaways, how did you bridge (or try) the gap.
There was a gap in the ZOPA so we had to come to agreement on terms other than the salary. We had to negotiate for certain extras as part of the package.

· did we get near the “Pareto Frontier?” or …did we “leave money on the table”…where are we on the graph?
We did not leave any money on the table.

· was there anything that surprised you about the negotiation
Even though we set the anchor Ben was extremely aggressive in his counter oofer. We thought the other side would be in a desperate situation but it did not seem so as the negotiation continued.

Negotiation Process: What was the process of negotiation- opening offers, sequences of offers, counteroffers, anchoring, initial offer, counteroffers? Did the other side start high/low? What effect did this have on the negotiation?
The process to start with was quite integrative with both sides laying out their priorities and what their limitation were. However, in between we reached an impasse with both sides not agreeing with each other. We set the anchor at 16,000 and then Ben came back with a bid of 65K plus 5% of gate. We said that was too high and said that was way off industry norms . We countered with 19 K + future consulting option with us. He said the base was too low,that was not possible and he wanted us to counter bid against ourselves which we did not . He offered 55K + 5 % of gate and wanted to discuss the details of the consulting project. We said we could do 24k but no gate collection. He said 45 K + 5% of the gate + details to be worked out for consulting project. We offered him 26 K and at this point the negotiation kind of stalled. He said he wanted to negotiate the consulting offer specifically in order for him to move forward, which we said we could not as that was separate and we could work that after this deal would come through. Finally, we agreed to the offer of 26K and the consulting work which would be based on if she gets an average of 90% capacity over the performance. The consulting would last for 5 years and Sally would be involved in the marketing campaigns deeply.

A test: was my negotiation effective? (some of these may not apply in a particular exercise)
Score yourself from 1=poor to 5=excellent
_4_ Planning and Strategy: did I have a strategy; was my walkaway right; did I estimate the other’s well?
_3_Did I establish my own priorities and potential trade-offs
_4__First approach: were we win-win, positive; try to establish rapport; did I deal with first offers effectively?
_3__How well did I develop a plan for managing the process of negotiation?
_4__Did I actively shape the agenda and manage the process to my advantage?
_4__How well did I try understand the other person:
_4__Exploring Interests: did I communicate my interests;
_4__Persuasion: How well did I persuade the other side about my legitimate needs and limits and the value of what I offered
_3__The Other's Interests did I find out the other side's real interests and constraints
_3__Creating Value (integrative or win-win) vs Claiming Value (distributive or win-lose)
_5__Options: Did we explore "expand the pie" options: did we try to find ways of meeting each party’s needs
_4__Inquiry vs. advocacy: did I ask (inquiry) a lot of questions, or just advocate my position
_4__Alternatives: Was I clear on my BATNA; was I clear about what happens if there is no agreement
___Legitimacy: was the agreement considered fair by some external benchmark
_3__Commitments: did the agreement avoid problems in the future; were any “strings left untied?”
_4__Communication: did we practice effective two way communication…did we listen…did we rephrase…
_5__Focus on the problem, not the person: did we avoid attacking or threatening the other person
_4__Relationship: did we deal well with differences; is our relationship better off now than before
_2__Psychological factors: did outside factors (eg. emotions) affect the outcome (their efforts or ours)
_4__Did we reach an outcome that maximized potential mutual gains; did we come close to the "Pareto Frontier?"
_5__Other factors: did anything else affect the negotiation-physical space, time pressure, etc.


Did we use the Techniques of Principled Negotiation: (did the other party?)…If not, what blocked it?
· listen, be warm and friendly; avoid quarreling; ask questions, ask questions, ask questions, ask clarification, rephrase
· be open to persuasion
· be principled (“You want to pay….I need …Can you think of ways that is fairer than splitting
· turn the interaction from adversarial haggling into side-b-side solving of the problem of what is fair.

For Yourself: General Conclusion: In areas where you felt you were less than totally successful, how might you be more effective next time. From this exercise, what did you learn that you are going to try to do better next time you negotiate;
I did try to build a rapport from the beginning. I felt I was not as focused on my financials, which was important. I thought the other side would be desperate which I should not assume and of I do then I should be prepared to deal with behaviours that do not portray that.

· What were keys to the negotiation being successful or unsuccessful
The key to the negotiation in this situation was to give make concessions based on the other person’s response to it and not showing total desperation but at the same time work to solve the problem.

· What would you do differently if you were to do this same negotiation again
I would share risks if the other team is asking for too many concessions.
· what did you learn about yourself? About negotiations What tendencies do you have in negotiation that you need to be careful about (too aggressive, too likely to quit searching for solutions once your; What do you feel you need to work on? What would you do differently next time?
I learnt that I have to keep my cool even though it can be tough to do so. I feel I need to be more patient in long negotiations and focus on the end result.

· What did you learn in general?
I learnt that norm of reciprocity is a two street that needs to be tested initially and continuously through out the negotiation applicable only between two parties that are committed to solving the problem. In addition, the framing of the argument is very important and we tried to frame the argument in a way that we wanted a good working relationship thereby not showing our desperation for getting Sally for the role.

· If this were a real case, what obstacles to joint problem-solving might you encounter; how would you overcome them?
If this was real case we would have to consider the interests of the third party on whose behalf we are negotiating and the terms and conditions that we agree on might not be agreeable to them. We might need to refer to them .Additionally there is a possibility that we reach an impasses during negotiation itself due to no ZOPA.