Dr. Michael Benoliel

Interview with Michael Benoliel

Can you share three tips for successful negotiation?

Based on my personal interviews with 40 world-class negotiators in the West and in Asia, master negotiators negotiate differently than most negotiators. Whether intuitively or consciously, they apply a unique combination of skills:

• Negotiation Thesis: Robert Campeau, a Canadian businessman, initiated a hostile takeover bid for Bloomingdale’s parent company, Federated Department Stores. Immediately a bidding battle escalated and Campeau topped Macy’s already high offer by roughly US$500 million. He won the bidding battle, but not the war. Two years later he declared bankruptcy. In contrast to Campeau, master negotiators have a clear negotiation thesis. They know (1) why they are negotiating – the value that they want to create by setting clear objectives that are divided into “must have” and like to have; (2) know how to create that value by using value creation strategies; and (3) walk away from the table if that value can not be created.
• Negotiate from Both Sides of the Table: Many negotiators are trapped in the “incompatibility bias” mindset often assuming a conflict of interests and thus behave competitively and adopt a win-lose negotiating style. Master Negotiators are aware of the differences, but focus primarily on the similarities, on the shared interests, and on how to creatively bridge the differences.
• Think Strategically: Inexperienced negotiators tend to think and act tactically – focus on the immediate and short term gains. Master negotiators, in contrast think and act strategically. First, they consider the interests of all the relevant stakeholders.  Second, they consider the long range implications of all the moves and countermoves by all the relevant stakeholders. Third, they are not maximizers but rather optimizers – bridging the differences between all the parties.

You have worked with a number of oil and energy companies, what types of benefit do you usually offer these companies through your talks?

Unlike marketing, research and development, and supply chain management, negotiation has not yet come to be recognized as a factor critical to the success of organizations. It remains a discrete, unstructured, sporadic, and in some cases, improvised event that often goes unrecorded or analyzed in the post-deal stage. In addition, most negotiators overestimate their negotiation capabilities. I call it the “competency overconfidence bias.”

Through my work with companies in the oil and gas, pharmaceutical, or service industries, I focus on building both individual level and organizational level competencies. Developing one level is not enough. The most successful negotiating companies like Nestle focus on both:

Individual negotiation competency (superb planning and preparation, strategies of value creation, creative deal design, etc) and building a a company-wide negotiation eco-system.

How can lessons of negotiation be used by regular people in everyday life?

Although each negotiation event is unique — has a different cast of negotiators, interests, capabilities, limitations, and aspirations — there are however, generic moves, principles and strategies of negotiation.

In every negotiation, whether it is a joint venture negotiation or buying and selling a car, the moves and challenges are the same: how to plan and prepare well, how to make offers and counteroffers, how to make effective concessions, how to design a value creating deals, etc. Therefore, highly effective negotiators negotiate well in their professions and in their personal lives.

How are risk and negotiation related?

Risks can not be avoided. They must be managed well. Unfortunately, inexperienced negotiators make two typical mistakes: First, they assume too much risk and not always realizing it fully. Second, they run away from risks by shifting it to the other side, often leading to no-deal (why should the other side assume your risk if you yourself refuse to assume it?).

Highly effective negotiators do not run away from risks nor transfer it fully to the other side. Instead, they design a risk sharing scheme by creating fair contingent contract. Based on my experience many do not know how to manage risky situations – probable future event — are thus end up with no deal. The more skilled the negotiators are the more they understand the value of contingent contracts as a risk management mechanism.

What types of audiences benefit most from your talks?

Since all people negotiate all the time in the professional lives and personal lives, everybody can benefit from knowing how to create value through effective negotiation. However, there are some that their roles require them to negotiate all the time – salespeople, procurement personnel, contracting officers, managers and executives.

Clearly, professional with superior negotiating capabilities create external value when they negotiate with professionals from other organization, and internal value when they negotiate with professionals from the same organization.