As the final assignment in my MBA negotiation courses, I always require my students to prepare and conduct a negotiation. The subject of the negotiation can be anything, as long as it involves a genuine and serious issue. Students in past classes have negotiated everything from selling a business to buying a car; from resolving a long-standing property line dispute with a neighbor to reaching a reasonable accommodation with a boss who strongly opposed the company's flextime policy. I have read hundreds of these papers describing and analyzing personal negotiations. Although their grade is based solely on the planning and analysis, not on the outcome of the negotiation, nearly all of the students have reported successful outcomes, often startlingly so to those who had taken on problems they originally felt were intractable.

In the last section of their papers, the students assess the key factors that helped them reach (or prevented them from achieving) agreement. By far, the most common positive factor they list is understanding. In case after case they report that they were able to resolve differences that had once seemed insurmountable, largely because they had gone from positional fighting ("I want X") to putting in the effort to achieve genuine mutual understanding ("What are your concerns? Let me explain mine. How can we fashion a solution that will respect them both insofar as possible?").

One of my favorite negotiations was conducted by a midcareer student, Nick. He and his wife, Susan, were a working couple in their early thirties. Their marriage had been happy and dynamic until about seven months earlier, when two longed-for blessings upended their lives in unanticipated ways: Susan gave birth to their first child, and Nick was accepted into an executive MBA program. By mutual decision, Susan left her job and put her career on hold to take care of the baby for its first eighteen months. Meanwhile, Nick became the family's sole breadwinner, holding down his full-time logistics job while also attending MBA classes Thursday nights and all day Saturdays. Since then, the combination of Susan's isolation and Nick's heavy outside commitments had taken a toll on their nerves and on their marriage.

One long-simmering issue that had become a serious dispute was Nick's desire to play basketball with his old group of regulars on Sunday afternoons. Nick felt as if all he had done since starting the MBA program was work, eat, and stress out. He felt sluggish and out of sorts most of the time. He worried about the weight he had begun to put on. He strongly needed a regular, vigorous workout, he said, as well as the camaraderie of old friends, to get back into mental and physical shape. Yet, whenever he broached the subject with Susan, she reacted with hurt and anger, pointing out that Sunday was the only day of the week he could spend with her and the baby. She was alone every day, she reminded him, as well as many nights when he was at school, working late in the office, or doing homework with his teammates. How could he even think of spending Sundays playing with his buddies? She openly questioned his commitment to his family and even began to wonder aloud whether she might not do just as well on her own. Alarmed by Susan's response and feeling guilty for appearing not to care about her or the baby, Nick backed off. But he remained sluggish and stressed—and secretly resented being denied something that, to him, seemed both reasonable and important.

Nick admitted that he was worried about taking on this topic for his negotiation and feared that raising the issue with Susan again could jeopardize their tenuous peace. But he also realized that this unresolved dispute and his resentment were damaging their relationship, so he decided it was worth one more try.

He began by planning the negotiation using the GRASP method laid out in Chapters Seven through Eleven. From the start, he later reported, he began to see things in a new light. He had always looked at this issue only from his own point of view: he was stressed out; he was gaining weight; he needed a break; he missed his friends; he was only asking for a few hours a week. Now he realized that he was only half of the picture. As he began to list Susan's goals, his perspective broadened and deepened.

Susan wasn't a harridan who sought to control his life and deny him any personal outlets, as he had begun to imagine when he saw her only in opposition to his own desires. She had desires and concerns of her own. She was used to spending her days in an office, with a position, projects that could be accomplished, and co-workers to talk to; now she was home alone with a preverbal baby, doing repetitive tasks with no clear conclusion, undoubtedly worried about losing her skills and sacrificing her future career. She felt unrecognized by Nick, who prioritized his job, studies, and now even basketball over her. Like him, she was stressed out, needed time away, and missed her friends. She may also have felt jealous of Nick's many colleagues and MBA classmates, with whom he spent most of his time.

After thinking about how Susan saw the situation, Nick understood how his request to spend Sunday afternoons with his basketball buddies because he "needed a break" must have sounded to her. This thought process, before he even spoke to her, markedly increased his understanding and commitment to finding a win-win solution.

This time, when Nick approached Susan, he spoke in a way she had never before heard from him. Instead of pressing to play basketball, he started by talking about what a rough time she had had and the sacrifices she had made since the baby was born and he had started his MBA course. He told her honestly how much he appreciated that she had carried much of the domestic load for them so that he could concentrate on his studies. He asked her about how she saw her present life, and they talked about her professional goals and their future once the baby was old enough to go to preschool. Only then did he share his concerns with her.

"Life hasn't been easy for either of us for the past seven months," he said. "We both feel that all we do is work. We're both stressed out by responsibility. We both miss our old friends and activities. On top of that, as you've pointed out a few times, I'm getting fat!" This time she could smile with empathy. No longer on the defensive, she began to listen to his explanation and to understand that Nick had valid concerns as well. Perhaps he wasn't the selfish, immature chauvinist she had begun to fear she'd married.

Having moved from opposition to mutual understanding, Susan was able to open her mind when Nick proposed a solution. He suggested that she choose one night of the week (except Thursdays) to be her night off. On that night, he promised to be home by 6:00 at the latest; no excuses, no exceptions. She would be free to do anything she wanted—see friends, take a class, go to the spa, sit with him and talk for hours, whatever she felt like—while he watched the baby. This would give her a needed break and a chance to regain some of her lost independence. In exchange, he would play basketball Sundays from 3:00 to 5:00 and she was welcome to bring the baby and watch the game or not, as she chose.

Within minutes, they settled a dispute that had caused increasing tension in their marriage for the past seven months. Even better, Nick related, they came away with a stronger relationship. Why? Because they had stopped fighting and had started understanding.

No doubt many of you are thinking right now that while understanding may be important within a marriage, it is unnecessary in the competitive world of business negotiation. On the contrary: understanding is a cornerstone of compliance in any relationship. A KPMG study of why well over half of all mergers and acquisitions (and more than three-quarters of international alliances) broke up in the first three years found that companies that focused their negotiations primarily on financial and legal issues had a failure rate that was 15 percent higher than average. Conversely, negotiators who worked to gain a thorough understanding of the other party, and how they could generate value together, had a 28 percent higher than average success rate.^[12]

Numerous studies have found that people across the spectrum assume very little responsibility for agreements they don't understand. This is why it is vital to the success of the agreement that you question everything you don't understand in a contract and keep questioning until any ambiguity is resolved. Just as important, you need to make sure that your negotiation counterparts fully understand everything they agree to, as well as the reasons behind an agreement, because a failure to fully understand it will become an excuse to violate it—and will lead to a destructive blame game.

Let's say you object to the wording of a clause in a contract. If you believe you have enough power, you could use force, insisting on your own wording. Or if you feel you have very little power, you could give way and leave the clause as worded, despite your misgivings. Neither solution will lead to dependable implementation. In the first instance, you ignore the interests of the other party, making your counterpart feel he or she has lost a battle with you; in the second, you make an agreement that ignores your own interests and that you will feel less than fully committed to.

The third—by far the best—way is to seek an honest understanding among all parties. You ask your counterpart what the clause is designed to accomplish or avoid, explain your own concerns about the way it is written, and work together toward a mutually acceptable solution that takes both parties' concerns into consideration. By increasing understanding, you can move from "either/or" (fighting for domination) to "both/and" (working together to find the optimal solution), greatly increasing your ability to work together beyond the deal.

What if the other party doesn't want a fair deal? Undoubtedly, there are short-term players who are only out for their own gain and don't care a fig for explaining themselves. When you encounter such transactional thinkers, it is tempting to dismiss any effort to reach a deeper understanding as a waste of time. In fact, these are the times when it is most important to be persistent in asking questions until you clarify their attitudes and goals. Their response will give you an important forecast of the problems that will likely arise in any future relationship. If your negotiation counterpart refuses to share information, shows no concern for your interests, doesn't listen to your arguments, and behaves in a domineering and high-handed manner across the negotiation table, you should not expect the relationship to be any different once the ink on the contract is dry.

Having said that, I assure you that in the vast number of cases, once you get beyond positions and start sharing concerns, you will find that what seemed initially to be a win-lose face-off can be resolved in a mutually productive way. Moreover, the deepening understanding that results will lead to smoother and more reliable implementation and, as an added bonus, the growth of trust.

Trust is an essential feature of successful relationships of any type. It is also a necessary part of doing business. Psychologists tell us that a foundation of trust is a precondition to people's willingness to contribute time and attention to pursuing common goals, to reveal useful and frank information, and to exercise "responsible restraint in sharing resources" (as opposed to grabbing everything for themselves).^[13] When there is no trust within a negotiation, your counterpart will misinterpret your statements, dismiss your explanations, view your offers suspiciously, and generally question your motives. When problems arise, as they inevitably do, the lack of trust will merely validate the other side's conviction that you had bad intentions all along.

Moreover, if you are going to rely solely on the enforcement power of a contract to ensure that I deliver the product I promised at the quality I promised and on the schedule I promised, then you'd better be prepared to spend a lot of time, money, and emotional energy taking me to court. Wouldn't it be much more effective and straightforward if I were to do it willingly, because you and I had built up a basis of mutual trust? This is especially important if you are in Milwaukee and I'm in Mumbai, Manila, or Managua, where the likelihood you'll get positive results through the courts is very slim indeed. When it comes to cross-border deals, if the parties are not committed to carrying out the agreement, the grim reality is that any contract we sign will be at best difficult, and in many places virtually impossible, to enforce.

Even within the same legal system, if you need to rely on my fulfilling my promises without going to all the expense and effort of getting a judge to force me to comply, then we need to develop a store of trust in each other's intentions and ability to follow through. In fact, alliance managers interviewed by KPMG overwhelmingly singled out the development of a trust-based relationship before entering the partnership as their key success factor.^[14]

Naturally, it will never be complete trust. Even the closest family relationships require reasonable limits and responsible oversight. (You may trust your teenager overall but still have a curfew and keep watch to ensure it's honored.) Nor should trust be handed over immediately. Trust needs to grow step-by-step over time, as each side proves through its actions that it has earned trust. Despite these limitations, however, we always benefit by seeking to build trust.

A contract does not and cannot replace a relationship. It can never be wholly unambiguous or anticipate all problems that might arise. Worse, the very attempt to put onto paper all the potential evils that might occur can poison the relationship. Many people around the world find long contracts full of detailed obligations and enforcement clauses to be offensive, in the same way that a long prenuptial contract setting out the penalty to be imposed every time a spouse is late taking out the garbage would be deemed an offensive start to a marriage. In most cultures, a degree of personal trust is prerequisite, not just to loyalty but to honest communication.

In a survey of three thousand American and European business executives engaged in manufacturer-retailer relationships (ranging from pharmaceuticals to apparel), London Business School professor Nirmalya Kumar found that dealers who said they had a trusting relationship with their supplier generated 78 percent more sales than those who felt they were just selling its products. Kumar found that in the long run trust was a far stronger force than raw power. "Partners that trust each other generate greater profits, serve customers better and are more adaptable," he concluded. By working as partners rather than hiding information, the manufacturers and retailers were able to provide the greatest value to customers and to significantly reduce costs.^[15]

On a smaller scale, a survey of 187 project managers published in Project Management Journal listed trust as the single most important factor in successful completion of projects that involve multiple partners with diverse interests.^[16] Building trusting relationships is at the core of creating successful professional service firms or in dealing harmoniously and productively with internal clients, colleagues, and employees.

The difficulty with trust is that it is so easy to destroy through short-term thinking by bending the truth or making promises that can't be fulfilled, in the confidence that the real picture won't be discovered until after the contract has been signed and the negotiator has safely left the scene. How many deals have fallen apart over the negotiator implying certain interpretations or understandings that the contract implementer later claims to know nothing about? How many long-sighted negotiators have then moved in to fill the vacuum of that broken trust and to reap the benefits their more transactional predecessors squandered?

In 1989 Dr. Kim Yong-Ho was working for General Dynamics, hoping to persuade the South Korean government to buy a fleet of 120 F-16 fighter jets. Although he worked hard to create strong relationships with the Korean government and military and to show the advantages of the F-16, he was disappointed to learn in December that the government had signed a purchase and sales agreement for the McDonnell Douglas F-18.

Despite the setback, neither Kim nor his boss on the F-16 project was ready to throw in the towel. "I view business as a long-term relationship," Kim told me nearly twenty years later. "Sure, I was disappointed, but you can't focus on each deal as a separate venture that's done and over once the ink is dry. Business is a continuum. The best way for me to achieve General Dynamics' long-term goals was to keep working to understand the customer and to develop their trust." Over the next months, Kim maintained regular contact with his Korean government counterparts and continued to share information and ideas with them.

That put him in an excellent position when the McDonnell Douglas deal started to fall apart the next year. The price of the F-18 had skyrocketed, from an estimated $4.2 billion at the time of the purchase agreement to $6.2 billion a year later. Additionally, the Korean government was unhappy with the new people McDonnell Douglas had sent in to implement the deal after it was negotiated.

"One problem in a lot of businesses is that they care less about the customer once they get the contract," Kim explained. "Before winning the contract, the business development guys are in charge. They make all kinds of assurances to get the deal. Then, once it goes into implementation, it's passed over to a wholly new team in the program office, and they say, 'Oh, they shouldn't have promised that.' So frustrating for the customer! That's how you lose trust."

Kim promised the Korean officials that if they withdrew the purchase from McDonnell Douglas and opted instead for the General Dynamics F-16, there would be total continuity between the business development and program office teams, ensuring no surprises or memory lapses. He promised personally to move from Fort Worth to Seoul to oversee the contract from beginning to end. That and assuring a firm (no bait and switch) $5 billion price tag for the F-16 swung the deal. In March 1991, the South Korean government announced that it was dropping the F-18 and would instead buy 120 F-16s from General Dynamics. When Lockheed Martin, coproducer of the F-16, acquired the General Dynamics division in 1993, Kim kept his promise to remain in Korea to manage the project, moving to Lockheed Martin to become senior vice president for South Korea.

By looking beyond the deal and keeping their promises, Kim and Lockheed Martin moved from outsider to partner with the Korean government, earning the company tens of billions of dollars. The F-16 was only the first project. In the years following that first deal, Lockheed Martin entered into a license agreement with the Korean government to produce a local version of the F-16 and a coproduction arrangement to jointly develop the T-50 Golden Eagle. The company now sells Korea maritime patrol craft, combat systems, early warning radars, air traffic control systems, and communication satellites and is negotiating to help produce the KF-X stealth fighter. Meanwhile, crushed under heavy debt, McDonnell Douglas was absorbed by Boeing in 1997.

"If you want to survive in this competitive world, you have to get out of the mentality of thinking only about the written agreement," advises Kim. No idealistic dreamer, he bases his philosophy on his experience of what succeeds and what fails in the real world of international business. "Foreign companies will never be loved. That means you have to work hard to be trusted more than others, many of whom are hated. We make every effort to understand and align with the customer's goals. We help the Korean government bring up their aerospace development program as much as they can. That way they come to trust us and appreciate our contribution. Each program then leads into the next. But it has to start from being open and fair, listening, and always keeping your word."^[17]

When parties to a negotiation lengthen their perspective from the deal to the relationship, they are able to look beyond particular terms to the potential impact their agreement will have on their business or personal goals.

America's largest natural food retailer, Whole Foods Market, places "creating ongoing win-win partnerships with our suppliers" among its core values. The company deals directly with local farmers and manufacturers to get just-in-time delivery of organic produce in order to reduce the consistent problem of short shelf life that plagues the standard global purchase and warehousing system. It works with vendors to develop new products and reduce production and distribution costs; educates them on how to become "greener"; and provides advice and assistance in packaging, marketing, and media relations. Whole Foods' philosophy is to treat its suppliers with "respect, fairness and integrity at all times and expect the same in return."

The management recounts with pride how those strong supplier partnerships saved its flagship store from ruin in its earliest days. Eight months after opening its doors, on Memorial Day, 1981, the first Whole Foods store was badly flooded, wiping out its entire inventory and damaging much of the building and equipment. The company at that time was uninsured, a surefire trigger for a raft of lawsuits. Instead, the retailer's creditors and vendors worked with the store management to help it reopen just four weeks later. Today Whole Foods has grown from that single store in Austin, Texas, in 1980 to 270 outlets across North America and the United Kingdom.

It never pays to assume that you're too powerful to need allies—or that you are so efficient on your own that you don't need the knowledge synergies that allies bring. That lesson was learned most painfully by the Port of Singapore in August 2000 when its single biggest customer, Maersk Sealand, announced that it was moving all of its operations from Singapore to the Malaysian Port of Tanjung Pelepas (PTP), an overnight loss of 10 percent of Singapore's harbor terminal business.

The world's busiest port with no competitors in the vicinity, the Port of Singapore accounted for around 3.5 percent of the city-state's GNP. The port's management arm, PSA, held a virtual lock on the regional shipping market, so it could call the shots, paying little attention to the requests of the shipping lines that used its berths. PSA pursued a single-minded policy of providing facilities that were among the most high-tech and efficient—and therefore most expensive—in the world. That wasn't a bad policy in and of itself. It's just that it wasn't what the customer wanted in the wake of the Asian financial crisis.

Faced with a severe economic slowdown, the shipping lines complained that PSA's high prices were draining away their already reduced profits. They were willing to sacrifice premium service, they said, if it would lower the price. Dismissing their appeals, the port authority held firm to its high-quality–high-cost policy. Occupying an effective monopoly position in the region, PSA was not troubled by the shippers' accusations of "inflexibility" and "heavy-handed" negotiation approach.^[18] Nor did its executives lose any sleep in October 1999 when Malaysia announced that it was opening its own port just across the narrow strait. PSA was confident that Tanjung Pelepas would not be able to match the Port of Singapore's size, quality, or value-added services.

Maersk, on the other hand, saw the challenge posed by the PTP as an opportunity to get in on the ground floor and develop a mutually beneficial relationship with a more customized port. While PSA rested secure in its position, Maersk management experts and engineers set to work with PTP's planners to develop the facilities and service menu the shipping line wanted. In exchange for a 30 percent equity stake in PTP, Maersk negotiated the right to dedicated berths so that it would no longer lose money waiting offshore for the next available slot (a request that PSA had consistently refused in order to maximize use of its terminal resources), as well as the right to manage its own terminal operations and to employ its own procedures and systems. The new arrangements reduced Maersk's costs by 30–40 percent.

PTP's willingness to look beyond the deal and negotiate a mutually profitable relationship with Maersk enabled the upstart David to beat Goliath and walk away with the prize. By problem-solving rather than fighting, Maersk saved time and money for years to come, while PTP not only got Maersk's business but also benefited from the shipping line's expertise and ideas for improving the port facilities, boosting productivity, and reducing costs. The knowledge and skills PTP gained from this partnership attracted other customers. In 2002 Evergreen Lines, the world's second-largest shipper, followed in Maersk's wake, moving its operations from Singapore to Malaysia as well—another 5 percent loss to PSA's business. Yet, as big a coup as that was, it was not the most surprising moment. That came in 2006 when PTP beat Singapore for the coveted Lloyd's List Asia award as "Container Terminal of the Year," recognized for having the highest recorded productivity among global ports as well as for its value, customer service, facilities, and overall efficiency.

Of course, maximizing value doesn't have to take place on such a large scale. It can be a part of your everyday life once you move away from positional thinking. Years ago I took part in an outing with my husband's extended family to visit some ancestral sites in Korea. We rented what seemed to be an excessively large bus, which soon proved to be just that. The bus made it over a narrow wooden bridge into a tiny village where an ancient Yun scholar had once lived. But when we got back after viewing the site, we found the bus driver in a shouting match with the villagers. The bus was stuck. There wasn't space to turn around, and given the angle, the driver couldn't maneuver the enormous vehicle backward across the bridge. Everyone was accusing the other of being at fault for "having such a ridiculously small bridge" or "coming here in such a ridiculously big bus."

At some point, however, one of the frustrated disputants pointed out that all parties shared the same goal of getting the bus out of the village and on its way. It was as if a bell had gone off. Fighting stopped, as everyone started throwing out ideas as to how to get the bus over the bridge. Soon everyone was working together, actually tearing down a fence and hauling in boards to widen the on-ramp to the bridge, then guiding the reversing bus across. Amazingly, the whole thing was accomplished in just over an hour. In our heartfelt gratitude, the bus occupants collected a generous "tip" to thank the local work team for their efforts, which was much appreciated by the poor, rural farmers. Everyone left feeling like a winner. Now that's creating value!

The brilliant innovation that made Tupperware a product found in millions of homes around the world was not molded polyethylene or even Earl Tupper's patented "burp" seal. When Tupperware was introduced in stores in 1946 it had both of these qualities, but sales were stagnant. What made the difference was the "Tupperware party," a sales concept developed by Florida saleswoman Brownie Wise. Begun in 1948, Wise's housewife sales concept proved so successful that within two years it became the company's sole sales outlet. Why were the parties so successful? Earl Tupper believed it was because people needed demonstrations to understand how the airtight seal worked. That may have been true in the early years, but why are these parties still going strong sixty years later? The answer—and the reason it is relevant to a book on negotiation—is that Brownie Wise understood that we like to say yes to people we like and with whom we feel a sense of kinship.

This was not a wholly new idea, of course. In 1936 Dale Carnegie published How to Win Friends and Influence People, the best-selling self-help book that has now sold over fifteen million copies.^[19] Carnegie's insight was that building positive relationships—by such steps as showing a personal interest, being respectful, letting the other party talk, and not arguing—went hand in hand with reducing resistance and gaining acceptance.

While Carnegie's may have been a new way of thinking to many in the United States, it has been a standard business assumption for centuries in much of the rest of the world. When Geert Hofstede interviewed over one hundred thousand IBM employees in fifty countries, he found that 60 percent of cultures (consisting of all societies outside of Europe and the Anglo-Saxon countries) put higher priority on honoring relationships than on achieving tasks.^[20]So the question is, why do so many people still not get it?

I was called in to advise a government agency that was having tremendous difficulties working with a partner agency whose permission it needed to launch any new initiative. Unfortunately, after years of minor turf wars, the relationship had become toxic. Nearly every issue turned into a fight, even down to who would be the first to come on the phone line when the secretary of one of them called the other. The irony of the situation was that the two organizations and their staffs had many similarities, faced many of the same issues, and operated under similar constraints. What they lacked were friendly, personal connections. I advised them to get to know their counterparts in the other agency in order to build up a store of goodwill and empathy that would reduce the level of resistance. "Why not invite them out for lunch sometime," I suggested, "or at least chat a bit before and after meetings?"

One woman on the team, Caroline, shook her head in disgust. "How can I act friendly toward someone who is so rude and sarcastic?" she asked. As Caroline explained it, the last time she had called her counterpart in the other agency, her contact had answered the phone by asking, "Am I speaking to the complaints department?" In some confusion, Caroline repeated who she was, then asked why the other woman would think it was the complaints department. "Because whenever you call, it's to complain about something," she replied. Caroline was miffed, yet when I asked her if she ever called her counterpart for any other reason than to raise a problem, she snapped back, "No, why would I? She's obnoxious!"

In this case, business communication had devolved into a vicious cycle of personal sniping. I worked with the staff to make them aware of their part in perpetuating the cycle and of how, by doing so, they had made their jobs significantly harder and their work lives more stressful. To help them change the dynamic, I set them some tasks to start creating more positive connections with their counterparts. They were skeptical of my assurance that it only takes one side to break a cycle, but they eventually agreed to give it a try. When I checked back with the agency head a few months later, he told me that things had indeed improved considerably. "They are beginning to understand our point of view," he said. "There's more give-and-take, and we're able to reach quicker agreements."

Swiss psychologist Carl Jung showed in 1921 that about half of all people base their decisions on feelings more than on rational calculations and that everyone combines the two to some degree. In other words, any decision is based on a combination of emotional benefits (Do I enjoy doing business with you?) and tangible benefits (What will I gain materially from this relationship?). It's vital to remember that people look to receive the emotional benefits first, as any tangible profit will be realized only after the negotiation is concluded. Moreover, even if the potential profits are high, if you feel emotionally accosted, you'll become so defensive and inflexible you may never reach agreement. If, on the other hand, you feel emotionally secure, your defensive mechanisms will come down, allowing you to get back to the business at hand.

Many times I have seen a skilled negotiator step into a seemingly intractable dispute over certain terms and break the impasse in just a few moments, simply by being warm, empathetic, open-minded, and seriously interested in understanding the other party's concerns. This has the almost immediate effect of allowing the other antagonist to step away from the corner he or she had felt trapped in. When people feel cornered or attacked, they are simply too engaged in defending their position to consider solutions. However, once they recognize that you are not trying to take advantage of them—even though you may have different interests or perspectives from their own—their minds relax, their creativity flows, and they are once again able to concentrate on maximizing value.

Even in disputes, you need to make it clear to other parties that you don't dislike them personally, that you respect their right to hold their own point of view, and when appropriate, that you regret the actions or misunderstandings that led to the impasse. Though you may disagree on how best to resolve the problem and move forward, you will stand a far greater chance of reaching a favorable resolution if you always give other parties the benefit of the "3 A's":

Creating a positive connection is particularly important because people are subject to emotional contagion: an automatic, subconscious response to another's voice, facial expressions, and body language that causes us to mimic those actions or emotions. We feel heartache when a child cries over a dead pet in a movie; we yawn when we see or hear another person yawn. In a negotiation context, we reflexively mirror the attitudes we observe in other parties. If they appear sour, we also begin to feel sour; if they sound upbeat, we too feel upbeat. In other words, the way we say things is just as important, if not more, than the content of our message.

A short time ago, I was working with a group of internal auditors to help them reduce resistance and build rapport with their clients. At the end of a day of training, the auditors took part in a paired role play in which they were to discuss with a "client" the problems they had uncovered, then agree on a jointly developed plan for fixing it. Most teams handled the task well. However, one pair still hadn't reached an agreement forty-five minutes later and showed no signs that it was likely to reach one. When I asked them what the problem was, the client said that the auditor had been hostile and demeaning throughout the meeting, so that he simply didn't want to work with him. The auditor seemed genuinely confused and slightly annoyed by the client's negative attitude to what he felt had been his fair and collaborative approach. Indeed, when the auditor summarized what he had said, his words sounded reasonable. Puzzled, I asked them to role-play their discussion again while I observed them. Immediately the problem became apparent. Although his sentiments were positive, the auditor wore a grim-faced expression and spoke throughout in a flat, downbeat tone. The client picked up the negative body language and tone, interpreted them as connoting a sense of coercive superiority, and began to mirror that behavior. The mirrored feeling was so palpable that the role-players remained genuinely upset well after the conclusion of the exercise.

On the other hand, people are able to deal quite positively with disagreements when they are approached in a respectful, friendly, and problem-solving manner, especially when the other party acknowledges the difficulties or frustrations they have faced. All negotiators would be wise to recall the words of William James, the father of American psychology: "The deepest principle in human nature is the craving to be appreciated."^[21] Admiration, affiliation, and acknowledgment cost the giver nothing, but they pay extraordinary returns. They may even be the "concessions" that break through a heretofore intractable conflict.

I experienced the power of the 3 A's in a dispute-resolution negotiation I conducted on behalf of a young financial analyst. Rich had accepted a job offer from a midsized bank for a position that required highly specialized knowledge. As he was working at the time for another company, Rich asked for a three-month delay before starting, so that he could complete his current project then take a vacation before beginning the new job. In light of the specialized nature of the position and Rich's excellent qualifications, the vice president who ran the section agreed to the delay. Rich signed a contract promising to start in three months' time.

About a month before he was to start the new job, though, Rich got a call from a search firm offering him a position at a larger, international bank at a base salary nearly 40 percent higher than that of the job he had already accepted. It was an offer he couldn't refuse. He contacted the first bank to let them know that he wouldn't be coming after all.

Naturally, they were furious, particularly the vice president, who had been waiting for Rich for over two months and was now convinced that he had used her offer in a calculated scheme to get a better-paying job. She sent him an official warning that if he failed to show up for work on the agreed date, the bank would sue him $27,000 for breach of contract. He pleaded for mercy, but the vice president was unmoved. He argued that a lawsuit would be expensive and time-consuming. She replied that as they were a bank, they had money and their own legal department, so it was no problem. Clearly, the trust between Rich and the bank had been shattered. But that didn't mean that another person couldn't step in to create a warmer relationship that would open the door to a resolution.

When I walked into the meeting with the vice president and the HR manager to try to resolve the dispute, the mood was icy. I smiled as I introduced myself and shook hands but got only dour faces and stiff arms back. The head of HR started the conversation with, "I don't know why we're wasting our time on this meeting. Your client is a liar and a cheat!"

Had I mirrored this mood or gotten defensive, I would have walked out with no deal, perhaps even heightening the animosity between Rich and the bank. Therefore, I set out to create positive emotional contagion. My first step was to show the two bank officers admiration, affiliation, and acknowledgment, first by thanking them for meeting with me when I knew they had many other demands on their time, then acknowledging their anger: "I really appreciate your agreeing to talk with me about what I know has been an unpleasant situation for you. I understand that Rich has caused you considerable problems. Even he knows it—and he honestly regrets how this happened. When you are ready to hear it, I'd like to explain exactly what took place, so that you can understand that he didn't intentionally set out to take advantage of you. But if you don't want to go there yet, that's okay. For now, let's just focus on how we can clear up this mess so that you can forget about this guy."

With those few words, the mood began to change. By the middle of the meeting, we were making jokes as we worked together to come up with a reasonable settlement. And at the end, we had reached an amicable agreement that was far better than Rich had hoped for.

Although being respectful and affirmative is essential, of course, negotiation based on the relationship is not just about saying nice words. It requires sincerity—and being "in it for the long haul." It means creating deals that are fair and that will be carried out as agreed. It's about approaching negotiation as the foundation for working together productively, not as a game in which one party sees how much it can trick or squeeze out of the other.

As we have seen, focusing on problem-solving rather than fighting or blaming makes negotiation far more likely to end in a value-maximizing agreement. Even more important, it carries the relationship beyond the deal into and through implementation, which brings you strong and lasting returns:

The next chapters will introduce the practical skills you will need in order to negotiate beyond the deal, starting with setting the stage.