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6 degrees of sequestration

Negotiating: ‘Deal or no deal’ works in business, not politics

Eve Troeh Feb 28, 2013
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6 degrees of sequestration

Negotiating: ‘Deal or no deal’ works in business, not politics

Eve Troeh Feb 28, 2013
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Much has been made of politicians’ unwillingness to negotiate in these last hours leading up to the possible budget sequestration. But not negotiating happens all the time in the business world, says Ed Brodow, a negotiation expert who helps a variety of people and institutions. In business, a tough stance simply means deal or no deal. Will we make money, or lose money?

“In the business world they’re much more pragmatic about this,” he says. “There’s no excuse for not getting the job done because you have to be responsible to your shareholders.”

But politicians have a much different relationship with constituents. Looking tough can take precedence over practical matters.

“So they’ll go out and make all kinds of outlandish statements,” he says. “We’re not going to do this and we’re going to do that, and then they get into a closed room and they make a deal.”

Which is what will eventually happen, he says. But we may have to go over the edge first. Thomas Kockan at the MIT Sloan School of Management says that happens in labor negotiations. The sequester situation reminds him of an air traffic control strike in 1981. The industry and the union were each too beholden to their constituents.

“Both parties allowed themselves to get backed into those corners, and the result was a disaster for everyone,” he says.

Lots of jobs and money were lost, and an entire industry had to be rebuilt. He says after the sequester takes effect, negotiation will be more likely, but also more difficult. Making deals once the parties are fully in crisis mode makes everything more tense, he says.

John Spiegel* is a mediator in the Washington, D.C., area who works with families. He says all the nasty language being thrown around shows that, despite their griping and grousing, politicians are still not really in crisis mode. Because if they were, they’d act and speak very differently.

“When the moment of crisis comes they don’t say things to deliberately upset the other people,” he says, “because they need the other people for a solution.”

Listen for that change in language in the next week or two, he says, as reality of the budget sequestration hits home.


*CORRECTION: The original version of this story mispelled the name of mediator John Spiegel. The text has been corrected.

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