Introduction

How can leaders increase their odds of having successful negotiations? This collection of articles from MIT Sloan Management Review examines the many stages of negotiation, from evaluating potential partners and valuing the deal to providing protection from lies during the bargaining process and managing the ongoing relationship.

From “How to Manage Alliances Strategically”:

• Strategic alliances are often viewed as critical tools for pursuing growth opportunities, but survey data suggests that roughly 50% of all alliance portfolios underperform.
• Managers are frequently ill prepared to handle the key stages of the alliance process.
• Managers often make three misguided assumptions: (1) that they will find good partners, (2) that they will be able to capture an adequate amount of economic value, and (3) that the alliances will continue to serve the company’s needs over time.
• Recognizing five distinct but interrelated stages that underpin most alliances can help leaders manage them more effectively.

From “Negotiating With Liars”:

• One of the enduring truths about human beings is that we lie — frequently, and often quite casually.
• One study found that people told lies anywhere from 30% to 50% of the time, on subjects including their feelings, their actions, their plans, and their whereabouts.
• Liars are not easy to spot, so minimizing the risk of lies requires taking steps to expose lies before negotiations begin and providing protection from lies during the bargaining process.
• As James J. White of the University of Michigan Law School puts it, the critical difference between those who are successful negotiators and those who are not is in one’s ability to both mislead and not be misled.

From “Negotiating Cross-Border Acquisitions”:

• When negotiating across borders, another country’s politics, culture, and corporate governance policies can erect nearly insurmountable obstacles.
• In the 1990s, acquisition negotiations by the Italian company Societa Metal-lurgica Italiana SpA (SMI) consistently overcame seemingly insurmountable obstacles. The company’s approach still provides broad lessons for effectively negotiating cross-border deals.
• SMI approached its acquisition targets with both an absolute clarity about its strategic objectives and an understanding that it can take many years to conceptualize and structure a deal that would overcome barriers and still align with SMI’s objectives.
• The essence of SMI’s negotiating strategy involved a sequential approach, building a deal-favoring coalition first and then drawing in, or ultimately subduing, the parties that would have obstructed the agreement.

From “Creating More Accurate Acquisition Valuations”:

• In “hot” deal markets, executives often overvalue companies they are considering acquiring — while in a cooler and weaker economy they undervalue potential targets.
• A biased valuation analysis is worse than useless, but it is difficult for executives to recognize their biases and make adjustments. Instead, they should use a formalized process to de-bias the decision-making team.
• A valuation checklist can help executives temper their inclination to focus on growth options in “hot” markets, and divert their attention from short-term risk to long-term growth options in “cold” deal markets. This article provides checklists for each circumstance.

From “The Art of Managing Complex Collaborations”:

• If institutions don’t use established tools and methods, they invite chaos, but if they slavishly rely on only known tools and methods, they won’t be able to innovate. One solution: Establish routines to change routines.
• The Biomarkers Consortium, a public-private partnership managed by the Foundation for the National Institutes of Health, provides a case study for how to negotiate the development of such an organization and the subsequent balancing of common and competing interests.
• One lesson: Agree on what you can’t achieve alone and create a permanent, well-defined space to advance collaborative projects.
• Require teams with representation by all founding partners to both evaluate and execute project proposals — being sure to highlight the shared risks involved.

From “Rewriting the Playbook for Corporate Partnerships”:

• Companies are experimenting with more flexible, adaptive strategic partnerships to leverage the resources and capabilities of both customers and suppliers.
• The best of these adaptive strategic partnerships have figured out how to navigate between the risk of being exploited by an opportunistic partner and the risk of being trapped in the rigidities of vertical integration.
• One example: Bharti Airtel Ltd., a telecommunications services company based in New Delhi, India, negotiated unconventional partnerships with some of its leading vendors to facilitate growth in a fast-changing market.
• Adaptive strategic partnering makes the most sense when the product or service in question is of strategic importance to the customer, the vendor has superior domain expertise, and there is a fair degree of uncertainty about the evolution and outcome of the relationship.