The Class: Advanced Negotiations
Booth’s basic negotiation class, Strategies and Process of Negotiation, is one of the most popular electives in the school. About 75 percent of our MBA students take the class before graduating, and we teach students to negotiate by having them master basic analytic principles and the core strategies and processes involved in negotiation.
The Advanced Negotiations class exposes students to more-advanced processes as well as strategies and analytical frameworks, and embeds these negotiations in more realistic, authentic environments.
The basic negotiations class has always been extraordinarily popular, but when I came to Booth, we didn’t have anything for students who wanted more training. I started this class in 2012 to serve students who wanted to further develop their skills. This year is my fifth iteration. I change things every year—I tinker, depending on what my appetite is for trying something new.
In the basic class we spend a lot of time doing scored negotiations, where students get a certain number of points for certain clearly defined objectives. In the advanced class we have more free-form negotiations that aren’t as well defined, that are more qualitative, where the student has to do the work of figuring out what the possible outcomes are and how they weigh against each other.
I also throw students into a tough situation and have them write a script for how to respond. Imagine, for example, that you’re working for someone who doesn’t pay you very well, and you’ve been offered a job where you anticipate getting a much higher salary. The first question often is: “What are you being paid now?” I have students write down answers and anticipated responses, and we discuss. It’s a great way of making the negotiation live for them so that they can study it in slow motion and be prepared in the future.
The Case Studies
Right now, I’m using a negotiation simulation between Green Mountain Coffee and Keurig that established the licensing agreement that made Keurig the company it is now. It’s a negotiation that was resolved in a way that determined the future for Keurig—and an example of an authentic and complicated negotiation. The students don’t face every complication, but they are thrown into a negotiation that is quite complex and has enormous stakes.
I’ve also used a simulation based on the negotiation between two pharmaceutical companies, Johnson & Johnson and Merck, over the status of a licensing agreement between the two firms. At stake was the possibility of going to court and having an agreement thrust upon them worth tens of billions of dollars.
Once a quarter, we film students negotiating. People are usually overwhelmed during a negotiation. There’s a lot to process: making sense of what the other side is saying, trying to read the other person, analyzing the faces, and reacting quickly. The videotape gives students a chance to watch the negotiation like professional athletes would watch a videotape of last night’s game. They see what they could have done differently, cues they might have missed, things the other person was saying that they misinterpreted, or body language or emotion they might need to adjust.
I have everyone in the class identify their own objectives. Some are very content specific: a better understanding of how multiparty negotiations work or how to best approach private equity negotiations. But every student also has specific things that they know they aren’t good at: listening, being persuasive, dealing in situations where they don’t feel they have a lot of power. The goal is to improve through practice. What makes this class great is that students can have a variety of experience levels and goals, and the class can serve each of them in appropriate ways.
From the Students
Bill Dworsky, ’15: Coming into the class, my impression of negotiating was still one of hard bargaining and intractable demands, but Professor Wu helped me to see negotiations as problem-solving opportunities to create value for all parties. My favorite simulation used a dynamic, multistage case on book publishing to show how new information can change potential outcomes and strengthen negotiating leverage—I learned that closing the deal quickly can be beneficial, but that patience sometimes pays off. Remembering that lesson later get me a heavily discounted, last-minute ticket onto a boat going to Antarctica, a win for a wandering tourist who drove a hard bargain.
Phil Caruso, AB ’07, MBA ’15, JD ’15: What makes Advanced Negotiations great isn’t a single groundbreaking “aha” moment, but the cumulative effect of the range of viewpoints that Professor Wu pushes his students to try on. As the simulations become more complex, you take new roles at the negotiating table, play the observer, and even act as the instructor, crafting your own negotiation simulation to run. After class ended, I realized the full impact of those experiences and how much the effort to structure your negotiating environment drives the outcomes. Professor Wu’s class gave me a perspective that I find myself putting to use every day.
—As told to Leah Rachel von Essen