Avoiding Negotiation Pitfalls

Recently, I’ve been conducting interviews with mid-career artists to locate some consistent practices that have worked for career advancement and business development in the arts. Interestingly, negotiation continues to surface as a critical skill and unfortunate pitfall.

“Artists have to learn business, because they are constantly negotiating…you are constantly negotiating with business people…it’s harder for artists, because we need the money… Also, don’t argue….negotiate…don’t blow an opportunity on emotion…” – Visual Artist and Arts Professor, Atlanta

As previously stated, many of the artists we surveyed and interviewed expressed feelings of being inept at (or resistant to) learning business skills like negotiation. However, negotiation is a requirement of living in a socially interdependent world that none of us can escape. “Negotiation is an interpersonal decision making process necessary whenever we cannot achieve our objectives single-handedly.” - The Mind and Heart of the Negotiator, by Leigh Thompson

The question is not: “Do I want to negotiate?” Or “Do I have to negotiate?”
The question is: “Can you effectively negotiate?”

I, also, have been resistant to (or intimidated by) the concept of negotiation, because I associated the word with the stereotypical car sales man who tries to manipulate you into a crappy finance deal for a lemon disguised as an automobile. You can imagine my surprise when I took a negotiation class last spring and discovered that negotiation is more effective when the parties involved try to:

· find solutions that fairly meet each other’s needs,

· to create value for both parties (1+1=3),

· and to build trust.
“Effective negotiation is not just about money – it is equally about relationships and trust.” – The Mind and Heart of the Negotiator by Leigh Thompson

I was under the assumption that negotiation was about fighting over who gets the bigger slice of the last pie on earth. I never considered that it could be about finding ways to make the pie bigger or make multiple pies. Also, I assumed that all negotiating parties wanted pie. I never considered that one party might not even like pie. That they might prefer to trade their slice of pie for the chocolate cake that makes the other party break out in hives.

In fact, researchers have found that negotiating parties rarely want the exact same thing. Most negotiations involve parties with at least some asymmetrical or complementary needs.

Fictitious example:

An emerging rock band (Young Bucks) with a strong grassroots following and a well-established music venue (Giant Stage) are negotiating the terms of a booking agreement.

A week ago, Young Bucks were approached by a major label (Big Guy Records) about opening up for a major celebrity (Bon No) on an international tour. However, Young Bucks have never played a large audience. Before booking the tour, executives at Big Guy Records want to see how well Young Bucks can perform in a large venue. Other then the Giant Stage concert, the only other opportunity Young Bucks have to play a large venue is at a new venue opening up across town (The Comp). Although The Comp is offering good money, they would have to wait a few months for construction to finish and risk losing the interest of Big Guy Records. Also, Young Bucks are aware of another emerging band (Ambitious) that wants their time slot at the Giant Stage concert.

Meanwhile, Giant Stage is going through some cash flow issues due to poor investment decisions by management. Although they have a reputation for paying bands a little over industry standard; they’re too cash strapped to pay their normal rate. Also, they are concerned about competition from The Comp. Giant Stage needs to protect their reputation as the leading edge presenter of “hot” new talent and there is industry buzz that Young Bucks’ could be the next Jonas Brothers. If they don’t book Young Bucks, they might sign a year-long booking agreement with The Comp.

Entering the negotiations, neither party is aware of the other party’s interests. Giant Stage assumes the negotiations will be about the pay rate. Young Bucks assume they have to fight for their time slot. Young Bucks enters the negotiation with “guns slinging.” They talk up the offer from The Comp, in order to indicate their value so Giant Stage will give them the time slot. Giant Stage interprets this to mean that Young Bucks wants them to beat The Comp’s pay rate, which Giant Stage can’t afford to do.

Unfortunately, no deal is reached.

When negotiating parties do not communicate their needs properly, then false assumptions, information hording, and misplaced suspicion cause them to “leave money on the table.” According to my professor, experts calculate that approximately 20% of negotiations end in a lose-lose situation, where resources are left unclaimed by either party.

“Understanding your counterpart’s interests and shaping the decision so the other side agrees for its own reasons is the key to jointly creating and claiming sustainable value from a negotiation.” - Six Habits of Merely Effective Negotiators, by James K. Sebenius; Harvard Business Review

Good negotiations result in a situation where all parties:

· make trades (not compromises),

· walk away with what they need (not just an even split),

· feel good about the deal,

· and maintain a good relationship for future exchanges.

In the light of this definition of negotiation and the ethical/fair practices it requires, I was able to overcome my resistance to learning about how to become an effective negotiator.

Currently, Fractured Atlas is in the process of developing infrastructure and course content for Fractured U., an online business training center for artists and arts manager. When the full fledge program is launched, we hope you take advantage of the opportunity to learn from industry experts and sharpen your business skills. Not to become a hardened sales person, but to avoid some of the pitfalls other artists and arts managers have suffered in the past. We don’t want you to “leave opportunity on the table.”

(Originally published on FracturedAtlas.org September 15, 2008)