Appropriate timing can be impacted by several factors, including:
- the extent to which key evidentiary information has been exchanged by the parties
- the parties’ level of knowledge regarding the current state of the law on the issues in dispute
- the emotional readiness of the parties to sit down and work through their differences
- the financial resources available to each party and the willingness to allocate them to the dispute
- the view each party has about the other’s perceived need to achieve a timely resolution
Fully exploring the first two factors allows each side to clearly see the strengths and weaknesses of their case. This involves preparation, but is well within each party’s control to manage. The impact of the remaining three factors is more difficult to assess since one or more factors may drive another. For example, a party’s willingness to spend money to feed a dispute may be based on that party’s perception of the other’s financial means (“We have deeper pockets; we’ll outlast them”) or the reluctance of one party to let go because of the pull of strong emotions (e.g. broken trust, sense of betrayal, absence of acknowledgement).
But, what if both sides ultimately lose the longer the dispute lingers?
In a piece titled DC Brinksmanship Part 1: Deadlines, Deadlocks, and Negotiation Dynamics, Harvard Business School Professor, Michael Wheeler, posits that negotiators motivated by a desire to outlast the other, whether based on perceived strength or some other factors, stand to lose at the end of the day. Citing the recent Washington government shutdown and recent NHL labour disputes as examples (see my posts on the 2012-13 NHL lockout: Facing Off: Thoughts On the NHL Lockout, NHL Lockout Revisited), Wheeler offers compelling evidence that the fallout from a protracted negotiation hurts all parties and that negotiators do far better for their constituents when they reach an early resolution.
The basis for Wheeler’s conclusion is surprisingly simple: time is money. The longer the dispute runs the greater the financial cost. The Washington Post reports that the 16-day U.S federal government shutdown trimmed one-quarter of a percentage point from the nation’s fourth-quarter economic growth. Ratings agencies Standard and Poor’s and Moody’s Analytics said the shutdown cost the U.S. economy at least $23 billion in lost economic output,
while the U.S. Travel Association said the nation missed out on $2.4 billion in travel spending. And these hard costs don’t account for the impact that the shutdown will have on public trust and morale and ongoing relationships within government and future negotiations.
So, why, if early resolution makes so much sense do many of us not apply this thinking in our negotiations? Why do some of our best negotiators fail to deliver timely outcomes when the stakes are highest?
There are no simple answers to these questions, but I suspect ego, emotion, power and control are all contributing factors. But time doesn't wait.