Art of the Deal in Brexit Britain

JM Group
4 July 2017
 

“No deal is better than a bad deal”
“Not in a mood to compromise”
“No deal IS a bad deal”

Soft, Hard or Squidgy Brexit? (Stop Googling - I made the last one up). No matter where you stand, the whole process has become something of a spectator sport. At times an unedifying one, with people taking up hard and immovable positions or 'red lines' one minute, and abandoning them the next.

The whole thing seems somewhat chaotic. So what is going on? Is the British political class as second rate as some would have us believe? At first glance, it might seem so. Or are they playing to the rules of the game that, just like cricket, can be somewhat opaque to the uninitiated?

Rule 1 – Winners lose
Bold statements threatening dire consequences seem to go against the first rule of negotiation - make the deal Win/Win, or the deal won't last. Not only that, but at least from the UK side some of the utterances have been frankly nonsensical - "Brexit means Brexit" was an interesting start. The latest is "No deal is better than a bad deal". No deal in fact is a deal. One that puts the UK on the world default trade rules set down by the WTO, and they are very bad indeed compared to where we are now. On the EU side, we have Michel Barnier saying he is 'not in a mood to compromise'. Intransigence abounds, and we seem to be heading for lose/lose, not win/win.

What we are seeing is the hard reality of complex negotiations. There is a table in the centre. On one side is the UK Conservative party. On the other, the EU negotiation team. But behind each is a mess of interests, personalities and positions that have somehow to be reconciled and managed.

Rule 2 – Principles not positions
For the EU side, there are 27 sovereign governments, ranging from the hard right in Poland to the pro-European in Germany and France and leftist Greece. At one level, these negotiations are about the UK exit, but on a far more important level for Europe, how these negotiations are undertaken and the result that emerges could strengthen the EU or tear it apart completely. Up against the principle of European solidarity and peace, the UK might be at the table, but they are a small sideshow to the main event.

For the UK side it is just as complex. In the Conservative party itself there are Remain, Soft Brexit and Hard Brexit factions. Then we have the reluctant Brexiteers of the Labour party, and the Remainers of the LibDems and the SNP. The Conservatives are a minority government, being kept in power by a small, very socially conservative Northern Irish party (another negotiation).

There are cross party alliances being formed in the Commons. It is all about as orderly as a box of frogs. Different positions abound, from Jacob Rees Mogg's “if it’s good enough in India we’ll accept it here” on emission standards to the SNPs threat of another independence vote if they don't like the result (although the latest election result appears to have weakened their hand just as it has the Hard Brexiteers).

It just shows what Brexit has become in the UK - a subject of internal party wrangling. Victory looks like a win in the next general election. The Europeans are (at least for the Right) the whipping boys to be blamed and demonised for all the ills of the world, in their quest for dominance of the UK. A bad process, a bad deal, and the ability to blame the Europeans for it might just be the outcome they are looking for...

All of which is about the second rule of negotiation. Understand the principles behind the stated positions. Only if you get what your side and the other side really care about will you understand what to give and how to get a good result. Looking at the principles playing out on each side at the moment, I'm nervous.

Rule 3 – Know the game you are playing
But I do have hope. The last UK election gave a great example of what happens when you lose track of your most important stakeholder, and misunderstand the game you are playing. In 'Game Theory', there are finite and infinite games. In a finite game, there is a winner. In negotiation, this is win/lose. In an infinite game, the game never stops, so there is no winner, only staying in the game. In negotiation, this is win/win.

Think of a football match. 2 sides, 90 minutes, the only purpose is to win. By fair means or foul. It is a finite game that has an end. So, if one player finds a way to cheat, maybe a dive in the penalty box or a sly tug of the shirt, there are no negative consequences as long as the ref doesn't see. This game is Win/Lose.

Now change the game. Still football. But widen the view. The footballers are playing for their contracts. They are wondering about their next move, or getting into their national team. Before and after the game it is all hugs and handshakes. Score a goal, and the scorer runs to the fans, kissing the club badge on their shirt. In the end that is where the money comes from, and their relationship with their fellow professionals and the fans will in the long term greatly determine their career. The aggregate of those fan relationships and how well the players play determines how many people watch, and therefore what their wages are. This is the game footballers and clubs really play, and it never ends.

This is the position the negotiators find themselves in. If they try to 'win' the Brexit negotiation, they will both lose. Just over a month ago the Conservative right tried to 'win' by calling a snap election on their version of Brexit, and talked openly of crushing the Labour Party and finishing it as a power in British politics. They tried to 'win' British politics.

Two months ago, I was thinking that History would judge them harshly. It turns out I was wrong. History may well do, but the electorate got there first. From a very low start, Labour came within a whisker of the Tory popular vote, and added together left leaning parties received more votes than right leaning ones (if less seats). The Tories forgot who they were supposed to be fighting for. It is about the electorate. A party that forgets that and focuses on the opposition instead will find itself in trouble as the Conservatives just have.

In this negotiation, both the EU and the UK must remember who their real stakeholders are.  If the deal they strike does not work for their electorates, the people will judge them harshly way before history gets a chance to. That is my beacon of hope.

Negotiation is everywhere
The couple of principles of negotiations mentioned here were cemented a long time ago (early ‘80s) by Fischer & Ury. Negotiation skills and practice has come a long way since. Max Bazerman’s Negotiating rationally (1991) looked at how cognitive and motivational biases make for bad negotiations and bad decisions. The US airlines industry as a collective lost $3 billion in the ‘90s in giving away free seats due a competitive escalation of commitment in their frequent flyer programmes. And these companies were run by smart managers.

Harvard Business School’s Deepak Malhotra has written (and tweeted) a lot about explosive negotiations and conflict escalation in his latest book “Negotiating the impossible”. His HBR piece on “When winning is everything” is a masterpiece on escalation of commitment.

Good negotiation skills stand alongside selling and influencing as key life skills whether you are an employee, an entrepreneur, a manager or a government leader.

If you want to find out more about how a negotiation works, try out TechUK’s
one day course on Negotiating Fundamentals. TechUK is a membership organisation of 900 companies collectively employing more than 700,000, about half of all tech sector jobs in the UK.

The last one of the year runs on the 14th of July: http://www.techuk.org/training/management-skills-training/item/10834-negotiation-fundamentals-and-skills

Neil Marshall is Development Director of ChangeSchool.
ChangeSchool believe elite business education should be for everyone, not just the few.
Reach him at neilm@changeschool.org or +44 7967 092015

 

 

BLOG

How to be smart with security

What are your most important assets? Your people, staff, employees, or that awful term, human resources. What is the biggest threat to your organisation? The same. The Danger Within People are important because they are intuitive, innovative, creative, responsive, curious, and at times, unp

10 July 2017

The Ultimate Guide to Getting a Job in Your 20s

You have your entire career ahead of you. Exciting stuff! There's a chance that by the end of your 20s you'll be settled on a career path that will dictate your income and development until your retirement. Scary stuff! Now is the time to find out what you really want to do and set y

17 July 2017

How to get the most out of a recruitment agency

The benefits of using a recruitment agency are plentiful.  Here's Sophie, one of the JM Consultants, talking about how best to work with an agency and also how to manage your job search expectations.

19 October 2017

Preparing for a CEO Shakeup

ByAppliedInfluenceGroup For anyone who's part of a senior leadership team, a change in CEO can be as exciting as it is scary. But 'preparing the ground' for this transition can make a huge difference to your own relationships inside and outside the business, and more importantly, give the

12 September 2017

Entrepreneur To Angel

You've built and sold a successful business - what's next? Many entrepreneurs turn to angel investing to help other businesses grow. Angel investing is fast becoming the go-to source of funding for start-up owners looking to take their businesses to the next level. In 2015, a record £1.8bn was

18 September 2017

Giving Effective Employee Feedback

  Effective feedback is highly beneficial to business.  Delivering feedback however is not something everyone is comfortable with.  Studies have shown that effective feedback not only benefits your bottom line but also keeps employees more engaged with their work, removes co

12 September 2017

Agent-based Computational Economics The start of rational forecasting for good

Historically, economic forecast - on which most countries taxation, interest and spend policy is based - has used Dynamic Stochastic General Equilibrium (DSGE) models (1). In 2008, these models failed and a financial crisis of gargantuan proportions followed. The echoes of that crisis can be still h

17 August 2017

The Cyber-Value Connection

Cyber risk has risen to the top of the corporate agenda but few company leaders are aware of the full extent of damage caused by a cyber breach or the full costs. CGI has worked with Oxford Economics to create a rigorous model that captures the damage done by cyber breach to a company's share

26 June 2017

Preparing for a CEo Shakeup

By Applied Influence Group For anyone who's part of a senior leadership team, a change in CEO can be as exciting as it is scary. But ‘preparing the ground' for this transition can make a huge difference to your own relationships inside and outside the business, and more importantly, give

12 September 2017

Art of the Deal in Brexit Britain

"No deal is better than a bad deal" "Not in a mood to compromise" "No deal IS a bad deal" Soft, Hard or Squidgy Brexit? (Stop Googling - I made the last one up). No matter where you stand, the whole process has become something of a spectator sport. At times an unedifying one, with people takin

04 July 2017

The Car is the Future of Loyalty

The car has the potential to become the ultimate loyalty card. The car is essentially an extension of our everyday lives. Most people use their car every day, spending a considerable amount of time listening to music on the radio or making important phone calls on the go. As a result, drivers s

11 October 2017

How To Be Smart With Security

What are your most important assets? Your people, staff, employees, or that awful term, human resources. What is the biggest threat to your organisation? The same. The Danger Within People are important because they are intuitive, innovative, creative, responsive, curious, and at times,

10 July 2017

The Ultimate Guide to Getting a Job in Your 20s

You have your entire career ahead of you. Exciting stuff! There’s a chance that by the end of your 20s you’ll be settled on a career path that will dictate your income and development until your retirement. Scary stuff! Now is the time to find out what you really want to do

17 July 2017

Team Cohesion and Group Performance - From Applied Influence Group

“If everyone is moving forward together, then success takes care of itself” – Henry Ford We certainly agree with Henry Ford’s view that moving forward together is a key element of business success.  In context however, Ford’s meaning was that everyone in his business was to follow

21 August 2017

Team Cohesion and Group Performance - From Applied Influence Group

"If everyone is moving forward together, then success takes care of itself" - Henry Ford We certainly agree with Henry Ford's view that moving forward together is a key element of business success. In context however, Ford's meaning was that everyone in his business was to follow his lead exclus

21 August 2017

The Car is the Future of Loyalty

  The car has the potential to become the ultimate loyalty card. The car is essentially an extension of our everyday lives. Most people use their car every day, spending a considerable amount of time listening to music on the radio or making important phone calls on the go. As a resul

11 October 2017

Entreprenuer to Angel

You’ve built and sold a successful business – what’s next? Many entrepreneurs turn to angel investing to help other businesses grow. Angel investing is fast becoming the go-to source of funding for start-up owners looking to take their businesses to the next level. In 2015, a record

18 September 2017

The Ultimate LinkedIn Profile Guide

LinkedIn is the most powerful social network in the world and if used properly, you will find significant growth in your career.  To use LinkedIn to its full potential, you must fully optimise your profile.  Complete profiles are 40 TIMES more likely to receive opportunities through Linked

25 July 2017

Agent-based Computational Economics - The start of rational forecasting for good

Historically, economic forecast – on which most countries taxation, interest and spend policy is based - has used Dynamic Stochastic General Equilibrium (DSGE) models (1).  In 2008, these models failed and a financial crisis of gargantuan proportions followed.  The echoes of that crisis

17 August 2017

Are you progressing to plan with your IT platform implementation?

New core IT platform implementations are complex, challenging and often one-off change events, that your own team have not been through before. The programme organisation, workstreams and activities involved can be extensive. How do you implement a new IT platform within budget and with minimal

13 June 2017
Top