Pie for Everyone

Take a negotiations class? Seriously? Maria Bailey (EMBA '16) was pretty sure she could teach it.

She negotiates all the time as the owner of a multimillion-dollar marketing agency, BSM Media. And earlier in her career, she helped a national corporation complete 129 acquisitions in one year.

So she was justifiably skeptical about taking Negotiations as part of the Notre Dame Executive MBA program. Plus, it seemed unnatural to learn what's widely considered a cutthroat skill from a priest, the Rev. Eric Zimmer, S.J., an associate professional specialist in management.

"I come from such a hard-core corporate environment," she says. "So the presence of religion in any way — even if it's just the person delivering it — is the antithesis of where and how I have operated," she says.

But by the end, she was converted. "It only took two classes to show me I could have done better over the years and that I left a lot on the table in past negotiations," she says. "It was a very humbling experience.

"Father Zimmer taught me that there is a moral side of negotiations, that the other party is a person and that negotiations run deeper than what's on a piece of paper," she says. "Sometimes it's easy to forget about the spiritual side and human side of business."

Growing the Pie

It's common for EMBA students such as Bailey to stroll into the classroom thinking they know everything about negotiation, Zimmer says. They are, after all, successful business people.

So it takes some reprogramming to get them to overcome the biggest misconception about negotiation: that it's an adversarial process where someone wins and someone loses.

"People think it's about cutting up a pie — whatever you get, I don't get," Zimmer explains. "And sometimes that's all you're doing in a basic negotiation, just dividing a pie. But in higher level interactions, a successful negotiation means both sides benefit. It's not a competition where you crush the opposition.

"In fact, you're not splitting up the pie; you're making a larger pie. In good negotiations you're creating value rather than dividing value. Both sides come out ahead."

And the traditional view on negotiating? "If there's a feeling that one person senses they haven't won unless the other person lost, that's coercive, that's abusive and it's not really negotiation," Zimmer says. "The two parties are not entering into the agreement with real freedom."

Yes, this may sound like something a priest would say. But beyond his spiritual wisdom, Zimmer, who earned an MBA in finance from the University of Chicago Booth School of Business and a Ph.D. in communication theory from the Annenberg School for Communication at the University of Pennsylvania, knows a thing or two about negotiating and about business.

Before joining Mendoza in 2013, Zimmer represented the Permanent Observer Mission of the Holy See as an attaché and negotiator on human rights issues in the General Assembly of the United Nations. In fall 2012, along with other delegates from 193 countries, Zimmer deliberated over wording in resolutions covering a range of issues, including human trafficking, the rights of indigenous people and ending obstetric fistula, a medical condition that can result from severe or failed childbirth, to name a few.

Ethics: The Critical Ingredient

Like the U.N. negotiations, business negotiations should also have the ultimate goal of satisfying all parties involved. And to create that bigger pie means a number of competitive behaviors must be eliminated.

No bluffing.

No hiding facts.

No misrepresentation.

No force.

No sweet talking.

In short, the best negotiations are based on ethics, communication and respect for the humanity of the other party.

"I try to get the students to consider the other person's perspective," Zimmer says. "And the other party needs to know yours." The back-and-forth negotiating process should reveal greater truth on both sides.

To learn these principles, Zimmer's students participate in a number of scenarios from published case studies that present challenging ethical questions, such as: An elderly couple is selling a vacation home that's significantly underpriced compared to surrounding homes. What do you do in negotiating a deal? The scenario encourages students to think about how they'd want their parents treated; how they'd feel if the deal was widely publicized; how their friends and family would react to their dealings.

Applying this lesson to a business context, the best negotiations start with research and preparation, Zimmer says, contrary to the misconception that winging it is sufficient. Good negotiators find out what's important to the other party, what common interests the two parties share and, especially, the best alternative to a negotiated agreement (BATNA) for each side. In other words, what will each side walk away with if no agreement is reached?

"Even if the other side won't tell you what its BATNA is, we should try to get clarity about it as negotiations go on," Zimmer says. "And we should always keep our own BATNA in mind during negotiations."

Additionally, it's optimal to negotiate with interests in mind instead of rights and power. For example, if an employee wants to ask for a raise, it's best for her to make her case from the perspective of common interest: She should approach her boss by presenting evidence of how she adds value to the organization and how her performance contributes to the goals of the organization. This is likely more effective than approaching from a position of power or rights, such as demanding a raise.

The employer, too, should consider mutual interests instead of automatically looking at the request as an opportunity to exert the power or right to say no. Typically, it is in the best interest of the employer to keep employees happy and motivated, so requests for raises need to be considered with an open mind.

Students sometimes are doubtful initially of the approach, but they eventually come around. "Not only do they see where this is better in strict business terms, they see their higher responsibility," Zimmer says. "And there is no reason for the University of Notre Dame as a Catholic university to have a business college unless it's a school that imparts values as part of its curriculum. If we're not different, there's no reason for us to be here. People come here expecting a values-based education, and we can provide this without apology."