Alright, in this lecture we want to talk about prescriptions for coalitions. What are the best practices we see out there? How do you make a coalition? How do you hold a coalition? We have four big ones for you. Cast a wide net, consider the meta-game, have the meeting before the meeting, and finally, give to get. Let's talk a little bit about each one of these. So, cast a wide net. want to quote from Bruce Bueno de Mesquita. He is a professor at NYU who among in addition to doing research he consults to large companies and countries trying to predict what's going to happen on these big hard questions like, what's Iran going to do around nuclear bombs? What's the Pakistan military going to do? That kind of thing. In his book he writes, in essence, the model looks for possible groupings of players who would be willing to shift their position toward one another if they thought that doing so was to their advantage. In short, the model predicts correlations. His model often produces surprising results. It methodically works through not only the obvious correlations we know and expect but also the invisible ones that we don't. Years appearing at this model have shown him that conflicts almost always have hidden solutions. One of the things that's going on with the model is that he's looking as broadly as possible. He's considering all possible correlations. This is not what we do naturally and so one of the big prescriptions is think broadly, think creatively about coalitional partners. Our colleagues at Harvard, Lax and Sebenius and one of their books on negotiation, 2006, suggest who some of these parties might be. So if you're negotiating with somebody, for example, you might want to think beyond just the person who has to give formal approval. Think about those who influence the decision makers, who might be in their ear for example, who has the highest value for what you offer. This is something that's terrifically important to entrepreneurs who are trying to sell into an organization a product or a service. Who is it in that organization who would most benefit from that product or service? Possible coalitional partner who can block decisions, who has misaligned incentives, who has to implement something that you negotiate. These are all critical members they might be helpful in getting over the hump or they might be necessary to actually get something done. Second prescription consider the meta-game. So you miss opportunities if you framed negotiations too narrowly. If you think you're only negotiating or trying to influence on a very particular matter and you forget all the matters that are related to it, that others might be thinking about. So if others are thinking about a broader coalition, broader interest, you're going to be exposed to people, they can bring the table that you're not thinking about. So, what all additional grounds for coalitions? Well, we've named the economic side, the interest, the narrow rational interest a party might have. But there also those emotional considerations. So, identity, loyalty, in some cases spite or anger, in some cases beneficence. So, what's critical is that you know what the other party cares about. They don't necessarily care about the same things you do. You may think it's a strictly economic negotiation or a strictly economic coalition, but in fact it might have these emotional or identity based interest. Those are missed opportunities for you and it's an opportunity for somebody else who's working against you. Prescription number three. This is a very basic one but perhaps the most important one. Have the meeting before the meeting. I'm always surprised to find professionals who don't use this all the time, this needs to be in your tool box for sure. So negotiations are always influenced, often constrained, and sometimes even settled, long before the official talks begin. So in these advance meetings your going to do some intelligence gathering, temperature taking, credibility building, groundwork laying. And some you're doing alliance creating. In this picture, we see a couple of guys sitting in a bar in a corner. That doesn't necessarily have to be the style of meeting. This can be just swinging by somebody's office, knocking on their door, bopping in to them at the water cooler. Texting them, giving them a call, dropping them an email. These all count as meeting before the meetings. These are ways of touching base with parties before you actually sit down. There's a great quote from Churchill, there is only one thing worse than fighting with allies, and that is fighting without them. You want to know before you get into the meeting whether you have allies with you or not. Prescription four, the fourth and final prescription. Give to get. So, this ties into a topic that's been studied in psychology and sociology for decades. And human nature is, we're inclined to respond in kind to other people. It's been talked about very well by Adam Grant in recent years in his book Give and Take. But the general observation is that regardless of the form behavior takes, positive form, favors, gifts, respect, and negotiation concessions. We're inclined to give back in kind. This applies to all negative behavior as well so when we mistreat people, or when they mistreat us. When client do respond, this is an opportunity for forming coalitions, and it's a risk if you're using these negative behaviors that will get in the way of your forming coalitions. So this again, we see in the apes, let's go back to Frans de Waal and the study of chimpanzees, looking on how fundamental coalitions are and how fundamental this reciprocity behavior is. He says, chimpanzee group life is like a market in power, sex, affection, support, intolerance, and hostility. The two basic rules are one good turn deserves another and an eye for an eye, a tooth for a tooth. So again, we're wired this way, we're hardwired this way. We know it from watching it in the chimps. Another example from de Waal talks about a primatologist, Toshisada Nishida, describing the case of an alpha chimp in the Mahale Mountains who maintained his rank for an extraordinary long time over a decade through an elaborate system of bribery. So a decade is ridiculous because chimps are usually at the top of hierarchy for 18 months or so. So this is something like a three center deviation event. How did he do it? He distributed meat selectively to those individuals whose support he could use against potential challengers. So apes are doing this, apes are using coalitions and it's making a difference in their influence. This is clearly something available to us. One of the implications is that you might bear some cost in order to have a more stable, sustainable coalition. So you might improve your long-term position by accepting lower, perhaps what even might be seen as unfair payoffs in the short term. So this may be one of the reasons we do see coalitions where the disparity in payoffs is more equal than you might expect. So one of my favorite examples comes from university athletics, collegiate athletics, in the Unites States. Teams compete as a part of a conference. So schools group together in conferences and one o f the things schools have to do is decide how to share their television revenues. This is the primary source of their revenues. So a huge percentage of what they receive from college athletics, companies big television contracts. How do you divide that money across all the different members of the conference? Take, for example, two organizations in two different parts of the country in different conferences, the University of Texas and the University of Alabama. So Alabama Crimson Tide. This is most successful football program of the last ten or 20 years, and one of the most successful of all time. They are kind of the flagship program of the Southeastern Conference. And the Southeastern Conference is known as being a stable, successful, probably the best football conference in the country in the last ten or 20 years. How do they divide their television revenues? The primary source of revenues. They divide it equally, equal parts to each school. So from big, strong Alabama down to little, maybe not so strong Vanderbilt. They receive the same television moneys. In fact, they have such a strong coalition that another equal share goes to the league office. That's how much they value their coalition. And they pay more equally there than you might expect, as a result there this incredibly, the results of other things as well but one other factor, is this is equal split they had a strong coalition. Contrast that with the University of Texas and the big 12, known as being one of the most unstable coalitions. They've lost University affiliates over the last few years as they migrated away. One of the reasons schools often give, one of the reasons observers think this happens is because they don't equal. They don't share their money equally across the school. So the University of Texas kind of the flagship organization of the big 12 has always demanded and received far more pay from the television contracts than the other schools. We think that this is one of the reasons that they have a weaker one. Now, Texas could argue it's fair, it's only fair that they get paid more, but it comes at a cost. It comes at the cost of a weaker coalition. And in the long term, they may end up with less. We don't know for sure but it's a great illustration of you might take a little bit less as the bigger party at the table, you might take a little bit less to secure a stronger coalition and a more sustainable long-term payoff. So four prescriptions, cast a wide net, consider the meta game, have the meeting before the meeting and give to get.
