NEGOTIATING: IT IS LOVELY to be writing an article on negotiating one’s way out of the country’s financial crisis – an article that won’t be much liked by many Irish politicians, business leaders, media or Irishmen and women.
It was this newspaper, of course, that published articles by UCD Professor Morgan Kelly predicting the Irish financial collapse when other newspapers wouldn’t, and many of the very people who caused the crash didn’t believe him.
So, whereas Prof Kelly had some rough things to say going into the crisis, I have some things to say about coming out of it. These are based on my 20 years as a professor at the Wharton School of business and a teacher and adviser of negotiation to 30,000 people in 45 countries. As Ireland is discussing “negotiation” – or “renegotiation”, as it were – with big international lenders, it seems appropriate to talk about what kind of negotiation might be helpful.
Negotiation, done right, is a powerful tool to solve problems and disputes, and gain opportunities. Most people do it wrong, especially when they get emotional. If they can limit the emotional elements, the people of Ireland and their leaders can probably improve their lot greatly. Here is some guidance.
1. Stop whining over yesterday.Yesterday is gone; you can't change it. Blaming people, being sad and focusing on the past takes from building a better future. Effective problem-solving starts with a single-minded focus on tomorrow, as in, what should we do now? Stop getting mad at culprits, having arguments in pubs and in parliament. Take the hand you've been dealt and deal with it constructively.
2. Focus single-mindedly on your goals.What Ireland's goal should be is to get enough financial support – and other support – to rebuild. That means one needs to do whatever it takes to do that. You don't like outside control of your financial system? Tough. If the IMF or EU will give you more money, kiss their butts if you have to. You got yourself into this mess; be gracious before those with the power to help. Eat humble pie to increase the number of benefactors. Your time will come again.
3. Lose the emotion.Emotion distracts from our goals because we stop listening and focusing. A calm sense of purpose is best. Lower expectations: it will lower your disappointment and your emotions. And if you work hard enough, relief will come sooner.
4. Fix the process.If you fix a problem but don't fix the process that led to it, you will soon have another problem. Overhaul the whole system, putting in checkpoints to prevent things getting out of control again. This will go a long way to reassuring financial benefactors. And while you're at it, ask them for advice; you'll get better ideas and more goodwill, which could translate into better financial terms.
5. Use standards.Now here is a place where Ireland can push back a bit. If the interest rates are punitive, Ireland should ask (a) why this is fair, (b) how this meets the goal of getting the country on its feet and (c) isn't this just a windfall for lenders taking advantage of the situation? Other countries have been bailed out. Germany and Japan were rebuilt at favourable rates after the second World War, and many developing countries got overarching help. Sometimes people make mistakes – Ireland should not be singled out.
6. Be incremental.Take comfort in small steps. Don't try to do everything at once. Try gradual but steady improvement; this is more doable and builds confidence. Set small goals – for example, give unfinished buildings productive uses, one at a time.
7. Build trust. Studies show that increasing trust among people and institutions in a society has a major positive economic impact: on the order of 5-8 per cent increases in employment and Gross Domestic Product. Ireland should try hard to heal past wounds and pull together as a country to solve its problems. This is no time for petty party politics, but leaders with vision at all levels of society.
Ireland has endured centuries of over-pessimism and some years of over-optimism. It’s time for a more balanced approach. Stop complaining about the rain, you can’t do anything about it. Make a raincoat (since you can’t afford to buy one anyway). And make one for your neighbour too – relationships produce more profit.
Prof Stuart Diamond, a Wharton professor and consultant, is a Pulitzer Prize winner, Harvard-trained attorney, Wharton lecturer and author of Getting More: How You Can Negotiate To Succeed In Work and Life (Penguin, 2010)
