James A. Baker, III 2016-05-30 00:52:10
Six methods of negotiations. Editor’s note: This speech, as prepared for delivery, was given by James A. Baker, III, at the Association of International Petroleum Negotiators International Petroleum Summit in The Woodlands. Published here with permission. Before I get started today, I have a confession to make. Ladies and gentlemen, I have been asked to speak to you today about “negotiations.” And to begin at the beginning, let me say a word or two about what I think it takes to be a good negotiator. Over the decades, I have learned that successful negotiations come to those who are well-honed through years of hard work at developing this special talent. That is important because, as you would expect, bad negotiators produce bad negotiations. As I moved from the world of law and business to the world of politics and public service, I was struck, not so much by their differences as by their similarities. Success in the boardroom and the courtroom, and success in elections and in government, may not be exactly the same. But the art of “politics” is required in both. What I learned in one I was able to apply in the other. My old friend, George Bush, No. 41, taught me that there are two kinds of politicians. One, he said, is like the Dalmatian who grows up in the fire house. From the time he’s a puppy, every time the bell rings, he runs. The other achieves success in the private sector first and only then enters politics and public service. President Bush and I were that other kind. Both of us served in the military, then worked for a living. He founded a successful oil company before he ran for Congress in the 1960s. I worked as a lawyer before joining the executive branch of government in 1975. Today, when I speak to young people who are interested in politics, I encourage them to do what 41 and I did: First, get a life! Get a job. Start a family. One reason for this advice is personal. I think you’ll be a happier and more productive human being if you put family and profession ahead of politics. But another reason—with many, many honorable exceptions— is that our country is better governed, I think, by people who have earned a paycheck in the private sector. In my case, almost everything I did in public life was based at least in part on the experiences I got while serving for 18 years as a business lawyer in my hometown of Houston. In all my government posts—whether dealing with my fellow executive branch officers, with members of Congress, or with foreign diplomats and heads of government—I always enjoyed negotiating ... maybe because I had spent so many years doing just that for my law firm’s clients. Along the way, I have found that there are a half-dozen approaches that, when properly applied through solid preparation and hard work, can be used to develop good skills as a negotiator—whether you’re negotiating for a client in the private sector or for your country; whether you’re negotiating a merger of two companies; or whether you’re negotiating a peace agreement. And so, I would like to discuss those six approaches for a moment. First and foremost, you need to understand your opponent’s position. If there was one key to whatever success I’ve enjoyed in negotiating in the public and private sectors, it has been that I was able to develop an ability to crawl into the other guy’s shoes. When you understand your opponent, you have a better chance of reaching a successful conclusion. That means paying attention to how they view issues and appreciating the political constraints they face. This approach was important when I was secretary of state to President Bush and our administration confronted the unexpected collapse of the Soviet Empire. No great power wants to relinquish its status. No leaders like to see themselves humiliated on the world stage. We therefore did all we could to avoid “triumphalism”—public crowing over the defeat of communism and the implosion of the Soviet Union. I believe that our attention to Moscow’s sensitivities was a major reason the Cold War ended with a whimper and not with a bang. That period in American diplomacy also illustrates a second approach—building trust through personal relationships. I am referring to trust that transcends written documents. Of course, you never sacrifice your principles or your country’s national interest in order to acquire a relationship of trust with your interlocutor. But building trust at the personal level greatly enhances the chances of success in negotiations. Over the years, I developed a close relationship with the Minister of Foreign Affairs of the Soviet Union, Eduard Shevardnadze. During moments together in foreign capitals—or in Washington or Wyoming—we nurtured a unique relationship that helped us steer the Cold War to a peaceful conclusion. Though he started out as an adversary, he became a close colleague and even a friend. Through mutual trust, we were able to achieve things that benefited both our countries. When both sides trust each other, even the most difficult talks can succeed. When there is trust, the negotiators can relax and explore the territory outside their formal negotiating positions. They can talk about their assumptions, strategies, and even fears. This doesn’t guarantee success, but it improves the odds. And it leaves both parties in a better position to try again later if they are not initially successful. But sometimes, building trust needs a little help, or a kickstart. And this is the third approach. I call it “parallel reciprocal confidence building.” It is the method of confidence building that keeps the parties talking. As a business lawyer, I learned that the best way to think about a big negotiation was as a series of small negotiations. It was always important to start with an issue that could be resolved quickly, reasonably, and amicably. Finding a common point of agreement—even a minor one, like the shape of the negotiating table—can help set the tone of the relationship. It also helps develop a dialogue, which is one of the most important aspects of negotiations. Ambassador Max Kampelman, one of our arms-control negotiators, had it right when he said that: “A dialogue is more than two monologues.” The longer you can keep the sides talking with one another—instead of delivering sermons to one another—the better are the chances that a middle ground can be reached. In 1991, when I was trying to get Israel and all of her Arab neighbors to meet in Madrid for peace talks, I asked both sides to consider modest confidence-building measures. At the time, direct talks between the two sides were taboo. Building trust was a difficult challenge. But once the two sides were able to take small steps in unison, they moved to larger and larger ones. That confidence building led to the ending of that taboo and to those historic face-to-face negotiations in Madrid between those long-time adversaries. I call the fourth approach: “principled pragmatism”—the art of the possible without the sacrifice of principle. Negotiation, almost by definition, is the art of compromise. But no compromise should be taken to the extreme of sacrificing core principles. In fact, I would argue that success in politics requires “principled pragmatism.” From 1981 to 1985, I served as President Reagan’s White House chief of staff. These were the years of tax reduction and reform, economic deregulation, rebuilding our defense capabilities, and Social Security reform. Working with Congress to achieve these goals was part of my job description. In this regard, compromises were needed and compromises were made, often over the objections of some of the president’s more ideological supporters. But those compromises were made by the Gipper himself, who told me many times: “Jim, I’d rather get 80 percent of what I want than to go over the cliff with my flag flying.” It is a lesson I applied again and again in my public career: “Don’t let the perfect become the enemy of the good.” The fifth approach is timing—the ability to recognize when to press a point and when to withdraw. Like a good poker player, you have to know when to hold them and know when to fold them. In 1991, international developments provided good timing for creating better relationships between Jews and Arabs. Remember, the collapse of communism was proceeding around the world. That phenomenon, coupled with the defeat of Iraqi radicalism in the first Gulf War, created a new geostrategic dynamic. The timing was right to try to bring Israel and her Arab neighbors to the bargaining table for the first time ever, and so we were able to succeed. On the other hand, bad timing can undermine successful negotiations. The sixth and final approach is to maintain a deep appreciation of, and respect for, politics. We probably all know that the Prussian military philosopher Clausewitz said war is the continuation of politics by other means. I would argue—and in fact, I did in the book I wrote about my years as Secretary of State—that diplomacy is also the continuation of “politics.” In a broader sense, governance is also a continuation of politics. By “politics” here, I refer to two things. One is the noble art and science of winning election to public office. It’s hard to argue with J. William Fulbright, who stated the obvious: “To be a statesman, you must first get elected.” “Politics” in the second sense is what occurs between elections, the process of turning ideas into policies. In other words, “governing.” It is only through politics (in this second sense) that we can transform political philosophy into public policy. However, an elected official can transform his ideas into policy only to the extent that he has power. And power in our system ultimately derives from public support—as expressed through elections and as reflected in the meantime by shifts in public opinion. A public official who loses public confidence also loses power. A public official who husbands that resource and uses it wisely can change the direction of history. My point is that “politics”—not in the electoral sense but in the broader sense of that term—enters into every policy decision that a president or other public official makes and that is both necessary and good. In building my team at the State Department, I looked for certain characteristics—loyalty, leadership, and a willingness to work as a team. I also looked for people with good political sense. Why? Because, quite simply, politics drives diplomacy, not vice versa. The difference between success and failure is often measured by the ability to understand how political constraints shape the outcome of any negotiation. When negotiating on behalf of the United States, I tried to never forget that most foreign leaders are themselves politicians. They view their problems, and their opportunities, through political eyes. To persuade them, as I mentioned earlier, it is often helpful to put oneself in their shoes—to determine how to help them explain, justify, or even rationalize positions back home. Also, foreign political leaders respect American diplomats who can work the domestic side of U.S. politics in order to deliver on international commitments. This approach helped us build the Gulf War coalition that ejected Saddam Hussein from Kuwait in 1991. Effective U.S. leadership depended on our ability to persuade others to join with us. That required us to appreciate what objectives, arguments, and trade-offs were important to our would-be partners. The six approaches that I have just discussed can help sharpen negotiating skills but only if they are combined with the hard work and attention to detail required of a successful negotiation. Of course, how one considers these six approaches will change from situation to situation. For example, an approach to timing that proved effective in one negotiation might not work in another. And so, one should always remain flexible in regards to utilizing these approaches. There are three other things, however, that I think should be absolute, and one should remain inflexible with them. Let’s call them maxims. Ignoring one of these three maxims can seriously jeopardize a successful negotiation. First, and this is the Golden Rule of negotiating: Never lie. Misunderstandings and miscommunications are inevitable. But they can be corrected with solid dialogue. Lies, however, break trust between the sides, and trust is vital to negotiations. The second maxim is a simple negotiating rule: “Nothing should be deemed to have been agreed to until everything is agreed to.” This prevents both sides from claiming that one or more disputed items were resolved and trying to pocket them, even though the entire problem was not resolved. This rule is essential to avoid misunderstandings. And the third maxim is: Keep a written record of all discussions. This prevents the parties from having to rely on their memories, which can fail after long hours of talks. Ladies and gentlemen, finally let me say in conclusion that successful negotiations play a vital role in helping create, maintain, and preserve peace, prosperity, and liberty—whether in the public sector or in the private sector. JAMES A. BAKER, III, is a senior partner in the law firm Baker Botts and honorary chairman of Rice University’s James A. Baker III Institute for Public Policy. He was secretary of state under President George H.W. Bush, secretary of the treasury under President Ronald Reagan, and White House chief of staff under Bush and Reagan.
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