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Saturday, October 11, 2014

To Negotiate Effectively, First Shake Hands

Negotiations − especially when they involve high stakes, complex issues, and multiple parties — require much thinking and preparation on each side of the bargaining table. Consider the recent negotiations over Iran’s nuclear program. Even before the contentious talks actually started, U.S. President Barack Obama and Iranian President Hassan Rouhani scheduled a meeting that took months to arrange. There was only one item on the agenda for the meeting: a handshake. At the last moment, however, Rouhani decided not to meet Obama, leading American pundits to call the incident the “historic non-handshake” that risked compromising the quality of the ensuing negotiations.
People make inferences about one another’s motives based on first impressions, which occur extremely quickly. We only need 100 milliseconds to form judgments of others on all sorts of dimensions, including likeability, trustworthiness, competence, and aggressiveness. Even more interesting, our first impressions of others are generally accurate and reliable. For instance, first impressions about a person’s competence have been shown to be good predictors of important outcomes such as who will win a political election.
Handshakes can create a positive first impression by conveying a sociable personality. In one study, a firm handshake was positively related to extraversion and emotional expressiveness and negatively related to shyness and neuroticism. Another study found that people who follow common prescriptions for shaking hands, such as using a firm grip and looking the other person in the eye, also receive higher ratings of employment suitability in job interviews. Witnessing people shaking hands in a business setting not only leads third-party observers to more positively evaluate the relationship, but it even increases activation in the nucleus accumbens in the observers’ brains — the area associated with reward sensitivity. That is, we feel rewarded simply by watching othersshake hands!
In the context of a negotiation, a handshake’s message can go even further, my research finds. Consider that we all rely on subtle sources of information to determine whether to behave in cooperative or antagonistic ways during our negotiations. One such source of information is nonverbal behavior, including handshakes. Across many cultures, shaking hands at the beginning and end of a negotiating session conveys a willingness to cooperate and reach a deal that considers the interests of the parties at the table. By paying attention to this behavior, negotiators can communicate their motives and intentions, and better understand how the other side is approaching discussions.
In one study, colleagues at Harvard’s and the University of Chicago’s business schools and I asked pairs of executives to negotiate as the buyer and seller in a hypothetical real estate deal. The executives had to negotiate over one issue only: the price of the land. In the simulation, the seller believed that the property under consideration was zoned for residential use only, but the buyer knew that the zoning laws would change soon, allowing the buyer to develop the land for commercial use and thereby making it much more valuable. Clearly, the buyer had little interest in sharing this information with the seller. In fact, when asked by sellers whether they intended to use the land for commercial development, many buyers lied or dodged the question altogether.
We instructed half of the pairs to shake hands before negotiating. We did not give specific instructions to the other half about handshaking, our control condition. Most of them just jumped into the negotiation without shaking hands first, presumably because they were under time pressure. Pairs who had been asked to shake hands divided up the pie more evenly than did those in the control condition. In addition, buyers in the pairs who had been asked to shake hands were less misleading about the zoning change than were buyers in the control condition.
In follow-up studies, we tested whether these results held for integrative negotiations — those where parties could discuss multiple issues and potentially create value. In one experiment, for instance, we randomly assigned undergraduate students to the role of “hiring boss” or “job candidate” and gave them time to prepare individually for the negotiation to determine the latter’s salary, start date, and office location. The students in the role of job candidates knew they had the job if they wanted it, but they needed to negotiate the details with the hiring boss. Both parties were instructed to prefer the same location and have opposing starting positions on salary and start date. Because the candidate cared more about salary and the boss cared more about start date, the solution that maximized the joint outcomes was to allow the candidate the highest salary and the boss the earliest start date. We told the pairs that the participant who received the better score in the negotiation would earn a financial bonus (for real!).
Half of the pairs were accompanied to the table where they would negotiate and told, “It is customary for people to shake hands prior to starting a negotiation.” The other half of the pairs was seated immediately and thus had no opportunity to shake hands. Pairs then negotiated for no more than 10 minutes. Two research assistants who were blind to the hypotheses of the study coded videotapes of the negotiations on a variety of criteria, including our main measure of interest: the parties’ openness in discussing their individual priorities throughout the negotiation. The result: Shaking hands induced greater openness about negotiators’ preferences on contentious issues and improved joint outcomes.
When I was little, I often got into conflicts with my brother and sister over toys or books. As in many other families across the globe, my parents used to tell us to “shake hands and make up.” Their words conveyed the belief that the simple gesture would induce cooperation and goodwill. As my research and others’ shows, the simple act of shaking hands is indeed a powerful gesture in negotiation.

Don’t Play with Dead Snakes, and Other Management Advice


“If you see a snake, kill it. Don’t play with dead snakes. And everything looks like a snake at first.” This sounds like it might be advice from a paranoid outdoorsman. But its author, Jim Barksdale, meant it as a guide to the business world  that dangerous environment where, famously, only the paranoid survive.
During a long and illustrious career that is far from over (you can read all about one of his most recent ventures — building the most direct fiber-optic connection between Chicago and New York – in Chapter One of Michael Lewis’s new book), Barksdale has become a big believer in the value of the folksy aphorism as management tool. The Mississippi-born former IBM salesman, FedEx COO, and CEO of AT&T Wireless and Netscape Communications argues that funny sayings, especially if they involve animals, stick with people in a way that PowerPoint strategy slides usually don’t.
There are whole collections of Barksdale sayings online. Lots of them aren’t original to him, but former colleagues still tend to identify them with him. Which is why, when I got Barksdale and his fellow former Netscaper Mark Andreessen on the phone recently to talk about Barksdale’s pithy take on the role of bundling and unbundling in business strategy, conversation inevitably turned to some of his other proverbs. What follows is the continuation of that discussion, edited for readability and length:
HBR: Marc, are there any other Barksdale sayings you can think of with key strategic implications for today’s business leaders?
Andreessen: Well, how about this one? “In the battle between the bear and the alligator, what determines the victor is the terrain.”
Barksdale: I heard that from somebody, somewhere, way in my past life, and used it repeatedly in trying to push people to figure out the right terrain to take on a competitor.
HBR: What do you mean by the terrain, then?
Barksdale:  Well, in the animal world, a bear is not going to whip an alligator in water. And an alligator isn’t going to whip a bear on dry land. So, it’s not just the fighter, it’s the terrain that they’re on, the market they’re in. You know, who’s your customer base that you want to take somebody on in? Where do you want to be in this strategy? I like animal analogies to get the point across, just like parables. People can remember that, they can’t remember some long strategic discussion with a lot of PowerPoint pictures.
HBR: Well, here’s another one. There are lots of these Barksdale sayings online; one can find them pretty quickly. This is Barksdale’s three rules of business. “One, if you see a snake, shoot it. Two, don’t play with dead snakes. And three, everything looks like a snake at first.” What does that mean?
Barksdale: Well, when we were first getting started at Netscape, and I was the old man working with Marc and all of his 18-year-old buddies, it seemed like they used to love to have get-together meetings to discuss problems that could have easily been resolved at the base level. They could have just taken care of it.
So, the first rule of snakes is, if you see a snake, which is a problem — I had to explain that to one lady who accused me of not liking snakes — you kill it. You don’t shoot it, by the way, you kill it. It’s hard to shoot a snake. Anyway, you kill it. Just take care of it.
The second rule is, once it’s taken care of, don’t keep having debates about it, which is don’t play with dead snakes. And one time, Marc may remember, I cut off the heads of a bunch of little rubber snakes and threw them out in the audience of Netscapers. They loved that and stuck them on their cubicle walls to remind them. Just keep moving forward. Even if you’re wrong, just keep moving. We were so anxious to get products out the door, and we were at lightning speed, thanks to Marc and his folks, we just wanted to keep moving. So, don’t play with dead snakes.
And the last point, which is to me the most important and salient: all opportunities start out looking like a snake. If it wasn’t a problem, there is no opportunity. Because opportunities come from solving problems. So, kill it, don’t play with it, and then they all look like snakes in the beginning. The great business successes have all come from solving some seemingly insurmountable problem. Or non-obvious problem.
HBR:  Any thoughts on that, Marc?
Andreessen:  Well, I’ll give you one more if you want it.
HBR:  Sure.
Andreessen:  It’s not the size of the dog in the fight, it’s the size of the fight in the dog.
Barksdale:  That’s very old, and again, not original, but it was useful at some stage. I heard a great speech the other day, the commencement address by this admiral at the University of Texas. He talked about the boat men of the SEAL teams, and how it was not necessarily the biggest guys who could get the boat out and back as quick, but the smaller men who just had more heart.
Andreessen:  Well, if you’ve ever actually spent time in a dog park, you see this all the time, which is, the dominant dog is invariably about 15 pounds soaking wet.
HBR: I want to try one more that’s much more specific than these, about experimenting on the Internet. It goes: “First you try something. Since it’s just software, there’s no need to bend any sheet metal or trouble the guys on the loading docks. Second, you post it on the net. If it works, it’s a product. If it doesn’t, it’s market research.”
Barksdale:  It’s market research, that’s right.
HBR: That’s something that you encountered back at Netscape. It seems to have become very much the ethos of modern digital business, right?
Barksdale:  As an old-line business guy, the most profound thing that hit me when I got to Netscape was that it was so easy to do things on the Internet that were so hard in the hardcore world of transportation or communication.
One of which was market research. Companies used to spend a ton of money testing products with focus groups and market research teams. On the Internet, just put it up. If people hit on it, it’s a product. If they don’t, it’s market research. It didn’t cost you anything, or it didn’t cost you very much.
In other words, you were immediately international. As soon as we brought the Netscape browser up, the beta version, we were worldwide. That was so hard to do in the real world, nobody could even conceive of it. Companies would go 30 years before they’d try their first international businesses. We were immediately international. There were so many things that the Internet brought, and we, being one of the early companies, were able to observe it like it was some new law. It was profound, and it was fascinating, and it was a lot of fun. It also allowed us to move very quickly.
HBR: So, Marc, that ethos of, you just throw something out there and try it, that is sort of becoming this dominant ethos, right?
Andreessen:  This is a really big deal. The changes have continued. Once we were up and running as Netscape, we were able to do new things very fast. But it still took a lot of effort and a lot of money to get Netscape itself, as a company, up and running.
I would say the biggest change is, if you wanted to start a new Internet company 10 years ago, you probably needed to raise $20 million, just to get started. You would spend $5 million on Cisco routers and $5 million on Sun Servers, and $5 million on Oracle software, and then you’d write Yahoo a $5 million check to get distribution. And then you could try all your new ideas.
Today it’s advanced to the point where entire companies can get up and running — to provide global services, in some cases to millions or tens of millions of people — for less than a million dollars. It’s become routine, to a shocking degree. A lot of the Internet startups that we see coming through here raising money are startups that raised a half million dollars, that still have most of it in the bank. It’s four kids and their laptops, and the entire company is run on the cloud, on Amazon Web Services, on Salesforce.com, NetSuite, and Gmail. These companies have effectively no capex. It’s literally their laptops and their ramen noodles, and that’s it. And they walk in the door, and sometimes they have five million users in 170 countries. And that’s just a phenomenon that’s never existed before.
HBR: Do you think it’s a potentially temporary phenomenon? Like, it’s this moment when everything’s wide open? Or, do you think conditions are permanently changed?
Andreessen:  I think it’s permanent. I mean, I’m a believer. You’d have to believe the Internet itself fundamentally shuts down or gets much more restricted and controlled, you know, which is why battles around things like net neutrality are so heated. But, as long as the Internet keeps working the way that it fundamentally does, then this is a permanent state of affairs.
More blog posts by 
80-justin-fox

Justin Fox is Executive Editor, New York, of the Harvard Business Review Group and author of The Myth of the Rational Market. Follow him on Twitter @foxjust.

Good Managers Look Beyond Their “Usual Suspects”




In the movie Casablanca, there’s a famous scene where Captain Renault, the head of the French police, avoids investigating the murder of a Nazi officer by telling his people to “round up the usual suspects.” The implication, of course, is that everyone should look busy and professional, even if the routine doesn’t really accomplish anything.
I’m always reminded of this line when I see managers respond to performance challenges by putting together a task force of the “usual suspects” to deal with the issue. These task force members usually end up with multiple specialty assignments piled on top of their regular duties. And because these few go-to people are spread so thin, they ultimately don’t accomplish all that much.
Managers sometimes “round up the usual suspects” because they only trust a small number of people to handle key projects or initiatives. Every organization has its “glue people,” the ones who don’t show up in organization charts but are assigned to every task force or initiative because they are respected and trusted. For example, in one organization undergoing a major restructuring, each division designated a “transformation leader” as its point person for the work. However, each person also had significant managerial responsibilities, regularly represented the company at customer and industry forums, served on standing committees, and juggled other major project assignments. So while they were all capable and willing to do what was needed, the effort suffered due to lack of time and bandwidth.
Here’s another case in point: A financial services company was struggling to turn around a large business unit. One of the key initiatives was a new customer-service approach that involved a combination of new systems, training, and process changes. However, after almost a year of work and significant investment, very little had changed. In fact, the effort had generated some fear and resistance in the customer care centers and, if anything, performance was now worse. In response to pressure from the CEO to get the turnaround back on track, the business head “rounded up the usual suspects” into a task force to recommend how to accelerate progress. Of course, the members of this team, while all very capable and well-meaning, were the same ones who were leading the various project work streams – and they all had full-time “day jobs.” So due to the limited time available, they merely rehashed their recommendations for the project, and progress continued at a snail’s pace.
If any of this sounds familiar, take a step back and think about how to expand your talent pool to get the actual results you want. Do a quick mapping of your committees, task forces, and other special assignment groups, to see if you have a “usual suspect” bottleneck. Although individual executives may engage in this dynamic intentionally (like Captain Renault), most do not; it just happens. By sketching out these responsibilities, and looking at them holistically, it’s possible to see whether the same names come up again and again. If that’s indeed the case, then consider lightening the load for some by prioritizing assignments, consolidating teams, and, most importantly, adding other people to the list. Are there other capable people who would welcome additional assignments? Perhaps some high potentials who are not being fully challenged? Is it possible to trust some other people outside of your “usual suspects” circle?
On the flip side, if you feel that you are one of the overburdened few who gets called on over and over, speak up. In my experience, many of the “usual suspects” suffer in silence. They are flattered by the attention and the opportunities, but they become overwhelmed by the amount of responsibility and frustrated by the lack of time to get everything done. And because they are good corporate citizens who don’t want to disappoint, they don’t push back, which reinforces the “usual suspect” scenario.
Most organizations have ambitious agendas that are limited by the availability of key people. There may indeed be times when calling upon a few trusted people is the right approach, but doing it too often can be severely constraining. That’s why thinking outside the roster of “usual suspects” can help you distribute responsibilities in a more even, efficient way.
More blog posts by 
Ron Ashkenas HBR

Ron Ashkenas is a managing partner of Schaffer Consulting. He is a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.

What to Do When You Can’t Predict Your Talent Needs


Predictive analytics are often used in strategic workforce planning (SWP), to forecast and close the gap between the future talent you’ll have versus the future talent you’ll need. Now, powerful analytical tools are driving that organizational calculus. Those tools predict who will leave and when, where talent will be plentiful and scarce, and how talent will move between roles. But there’s a catch: Very precisely matching talent to “the future” is of little value if that future doesn’t happen. For example, it can take five years or more to develop today’s high potentials into leadership roles. Can you know today the five-year future for which you should prepare them?  Increasingly, you cannot. Yet, because HR strategy typically reacts to organization strategy, SWP often assumes a single future as its goal.
Does this mean predictive analytics don’t work for talent? No. Powerful analytics have value in preparing for a VUCA (volatile, uncertain, complex, and ambiguous) world, but optimizing your talent decisions will often mean balancing less predictive power applied to many futures, against more predictive power applied to one future. Options will often trump predictions.
Where’s the right balance? “Work diligently, but don’t fixate on one outcome.” In the yoga Sutras, this is Abhyasa (diligence) with Vairagya (non-attachment). It may be key to effective predictive analytics, especially for your talent.
It’s easy to think expertise can solve this problem through more accurate predictions, but Philip Tetlock’s book, “Expert Political Judgment”  reports results from over 20 years of evidence spanning over 80,000 expert predictions.  He found that “people who make prediction their business … are no better than the rest of us.”  In fact, the deeper the expertise, the more chance of missing something important. Tetlock found that “hedgehogs,” who know a lot about one big thing, predict less accurately than “foxes” who know less about any one thing, but a moderate amount about each of many things. Forbes said, “Experts who had one big idea they were certain would reveal what was to come were handily beaten by those who used diverse information and analytical models, were comfortable with complexity and uncertainty and kept their confidence in check.”
Do you approach strategy and talent like a hedgehog or a fox? With the power that predictive analytics bring, it’s even more important for you to answer that question — are you driving toward one deeply-analyzed future or keeping your confidence in check by preparing for many futures? A hedgehog would start with a confident position such as, “the middle class in emerging regions will be the main source of consumer growth over the next 20 years,” and deeply focus predictive analytics on how to meet that future. A fox would start with many positions (such as different likely regional growth predictions) and use predictive analytics to optimize a collection of tactics for different futures.
In finance, the “fox” strategy is similar to using real options, and it can help you make talent decisions just as it helps in your decisions about R&D, manufacturing and finance. Consider yourtalent resource like an investment portfolio. As with financial investments, you could “bet on the most likely future” (build talent to fit the one highest-probability scenario and win big if you’re right but lose big if you’re wrong), the typical approach noted above. Sometimes, organizations admit they can’t predict the future and “go generic” by building talent attributes like intelligence, engagement and learning agility that are generally useful in most future situations, but not a complete match for any one.
Or, you might “diversify” talent, building several different talent arrays, each one well-suited to a different future scenario, similar to holding diversified financial assets, each well-suited to a particular future.  Only a small portion of the portfolio will actually “fit” the eventual future, but skillful mixing in advance can optimize risk and return. Of course, people aren’t financial instruments. You can adjust a financial portfolio by selling assets, but removing or retraining talent requires careful consideration. Yet, in those arenas where VUCA-like uncertainty is pivotal to your strategic success, using predictive analytics to diversify your talent options may be wiser than using predictive analytics to bet big on one future.
A “hedgehog” approach to organization and talent strategy can be a trap, even when supported by powerful predictive analytics. Perhaps your strategists should be more like foxes, optimizing prediction and options, by knowing when analytics should predict many futures moderately, rather than one future perfectly.
80-John-Boudreau

John Boudreau is professor of management and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations, and author of Beyond HR and Retooling HR.