esidential election campa asaul Fannivimal Guinn nsni SEBENIUS Solving Teddy Roosevelt 's Negotiation Problem THEODORE ROOSEVELT , NEARING THE end of a hard - fought pres - dential election campaign in 1912 , scheduled a final whistle - stop journey . At each stop , Roosevelt planned clinch the crowd 's votes by distributing an elegant pamphlet with a stern presidential portrait on the cover and a stirring speech , " Confession of Faith , " Inside , some three million copies had been printed when a cam - paign worker noticed a small line under the photograph on each brochure that read , " Moffett Studios , Chicago , " Since Moffett held the copyright , the unauthorized use of the photo could cost the campaign one dollar per reproduction . With no time to reprint the brochure , what was the campaign to do ? Not using the pamphlets at all would damage Roosevelt 's election prospects . Yet , if they went ahead , a scandal could easily erupt very close to the election , and the campaign could be liable for an unaffordable sum . Campaign workers quickly realized they would have to negotiate with Moffett . But research by their Chicago oper - atives turned up bad news , although early in his career as a pho - tographer , Moffett had been taken with the potential of this new
artistic medium , he had received little recognition . Now , Moffett was financially hard up and bitterly approaching retirement with a single - minded focus on money . Dispirited , the campaign workers approached campaign manager George Perkins , a former partner of JP Morgan . Perkins lost no time summoning his stenographer to dispatch the following cable to Moffett Studios : " We are planning to distribute millions of pam - phlets with Roosevelt 's picture on the cover , it will be great public - ity for the studio whose photograph we use . How much will you pay us to use yours ? Respond immediately . " Shortly , Moffett replied : " We've never done this before , but under the circum - stances we'd be pleased to offer you $ 250 . " Reportedly , Perkins accepted - without dickering for more . Perkins 's misleading approach raises ethical yellow flags and is anything but a model negotiation on how to enhance working
relationships . Yet this case raises a very interesting question : why did the campaign workers find the prospect of this negotiation so difficult ? Their inability to see what Perkins immediately perceived flowed from their anxious obsession with their own side 's problem : their blunders so far , the high risk of losing the election , a poten - tial $ 3 million exposure , an urgent deadline , and no cash to meet Moffett 's likely demands for something the campaign vitally needed . Had they avoided mistake 1 by pausing for a moment and thinking about how Moffett saw his problem , they would have re alized that Moffett didn't even know he had a problem . Perkins 's tactical genius was to recognize the essence of the negotiator 's central task : shape how your counterpart sees its problem such that it chooses what you want . The campaign workers were paralyzed in the face of what they saw as sharply conflicting monetary interests and their pathetic BATNA . From their perspective , Moffett 's only choice was how to exploit their desperation at the prospect of losing the presidency By contrast , dodging mistake 5 . Perkins immediately grasped the importance of favorably shaping Moffett 's BATNA perceptions , both of the campaign 's ( awful ) no - deal options and Moffett 's ( powerful ) one . Perkins looked beyond price , positions , and com mon ground ( mistakes 2 , 3 , and 4 ) and used Moffett 's different in terests to frame the , photographer 's choice as " the - value of
publicity and recognition , " Had he assumed this would be a stan - dard , hardball price deal by offering a small amount to start , not only would this assumption have been dead wrong but , worse , it would have been self - fulfilling . Risky and ethically problematic ? Yes ... but Perkins saw his op - tions as certain disaster versus some chance of avoiding it . And was Moffett really entitled to a $ 3 million windfall , avoidable had the campaign caught its oversight a week beforehand ? Hard to say , but this historical footnote , which I've greatly embellished , illumi - nates the intersection of negotiating mistakes , tactics , and ethics .
negotiated in good faith , but , at the end of the day , the two sides sharply disagree on the likely future of the com - pany and so cannot find an acceptable sale price . Instead of seeing these different forecasts as a barrier , a savvy ne - gotiator could use them to bridge the value gap by pro - posing a deal in which the buyer pays a fixed amount now and a contingent amount later on the basis of the com - pany 's future performance . Properly structured with ade - quate incentives and monitoring mechanisms , such a contingent payment , or " earn - out , " can appear quite valuable to the optimistic seller - who expects to get her higher valuation - but not very costly to the less opti - mistic buyer . And willingness to accept such a contingent deal may signal that the seller 's confidence in the busi - ness is genuine . Both may find the deal much more at - tractive than walking away . A host of other differences make up the raw material for joint gains . A less risk - averse party can " insure " a more risk - averse one . An impatient party can get most of the early money , while his more patient counterpart can
get considerably more over a longer period oftime . Differ - ences in cost or revenue structure , tax status , or regula - tory arrangements between two parties can be converted into gains for both . Indeed , conducting a disciplined " dif - ferences inventory " is at least as important a task as is identifying areas of common ground . After all , if we were all clones of one another , with the same interests , beliefs , attitudes toward risk and time , assets , and so on , there would be little to negotiate . While common ground helps , differences drive deals . But negotiators who don't ac - tively search for differences rarely find them .
Mistake 5 : Neglecting BATNAs BATNAs -- the acronym for " best alternative to a negoti - ated agreement " coined years ago by Roger Fisher , Bill Ury , and Bruce Patton in their book Getting to Yes - reflect the course of action a party would take if the proposed deal were not possible . A BATNA may involve walking away , prolonging a stalemate , approaching another po - tential buyer , making something in - house rather than procuring it externally , going to court rather than set - ting , forming a different alliance , or going on strike . BATNAs set the threshold - in terms of the full set of in - terests - that any acceptable agreement must exceed . Both parties doing better than their BATNAs is a neces - sary condition for an agreement . Thus BATNAs define a zone of possible agreement and determine its location . A strong BATNA is an important negotiation tool . Many people associate the ability to inflict or withstand damage with bargaining power , but your willingness to walk away to an apparently good BATNA is often more important . The better vour BATNA appears both to von
and to the other party , the more credible your threat to walk away becomes , and the more it can serve as lever - age to improve the deal , Roger Fisher has dramatized this point by asking which you would prefer to have in your back pocket during a compensation negotiation with your boss : a gun or a terrific job offer from a desir - able employer who is also a serious competitor of your company ? Not only should you assess your own BATNA , you should also think carefully about the other side 's Doing so can alert you to surprising possibilities . In one in -
ing division for a bit more than its depreciated , asset value of $ 7 million to one of two potential buyers . Realize ing that these buyers were fierce rivals in other markets , the seller speculated that each party might be willing to pay an inflated price to keep the other from getting the division . So they made sure that each suitor knew the other was looking and skillfully cultivated the interest of both companies . The division sold for $ 45 million . Negotiators must also be careful not to inadvertently damage their BATNAs I saw that happen at a Canadian chemical manufacturing company that had decided to sell a large but nonstrategic division to raise urgently needed cash . The CEO charged his second - in - command with negotiating the sale of the division at the highest possible price . The target buyer was an Australian company , whose chiefexecutive was an old school friend of the Canadian CEO , The Australian chief executive let it be known that his company was interested in the deal but that his sen - ior management was consumed , at the moment , with
other priorities . If the Australian company could have a nine - month negotiating exclusive to " confirm their sen - ousness about the sale , " the Australian chief executive would dedicate the top personnel to make the deal hap - pen . A chief - to - chief agreement to that effect was struck . Pity the second - in - command , charged with ur - gently maximizing cash from this sale , as he jetted off to Sydney with no meaningful alternative for nine endless months to whatever price the Australians offered . Negotiators often become preoccupied with tactics , trying to improve the potential deal while neglecting
their own BATNA and that ofthe other side . Yet the real negotiation problem is " deal versus BATNA , " not one or the other in isolation . Your potential deal and your BATNA should work together as the two blades of the scissors do to cut a piece of paper . Mistake 6 : Failing to correct for skewed vision You may be crystal clear on the right negotiation problem - but you can't solve it correctly without a firm understanding of both sides ' interests , BATNAs , valu