Module 4
This was authored by Prof. Robert Perkins. Slight modifications by Greg Kinney 2-20-10 and Bennett 1-04-12
Chapter 4, Managing Conflict and The Art of Negotiation, provides a shotglass of insight into the vast sea of project-related conflict. But it's about all the authors could say in one chapter.
In 4.1 the authors use the concept "pareto-optimal." Here is a discussion of pareto-optimality which includes the mathematical theory. The math assumes you know the various parameters, while in negotiation, you never know the other parties parameters and sometimes don't know your own.
Which brings up a point the authors did not emphasize. Often the toughest negotiations are with your own people, within your own organization. And often you must negotiate with these people first, or are in the process of negotiating with them, when you enter into tough negotiations with outside entities. Trust between these outside entities and yourself is hard to develop but easy to lose, since presumably your interests are different from theirs. What happens when you reach an agreement with an outside entity, only to have your internal clients or in-house support staff change their minds?
The Corps of Engineers has a policy of partnering with their contractors. At one time in the recent past, a Corps website stated, "To date, no Partnering project has had claims go to court." That was an enormous claim (incidentally that I can no longer find on the Web), given the billions of dollars and thousands of construction projects the Corps builds each year. (A cynical Corps project manager might note that if the government just gives in and pays whatever claim a contractor makes, there is no need to go to court. ) A knowledgeable Corps manager described it to me, "Partnering will help a good job become better, it will not help if the contractor is losing money."
Conflicts between outside construction contractors and different classes of owners can be very different. Owner-contractor conflicts will be different if the owner is a major industry or utility than if the owner is a government entity. Governments are required by law to give future contracts to the lowest responsible bidder, and "responsible" is defined as being able to supply the bonds. That is, there is no "good will" in public construction contracting. Hence construction contractors have no incentive to settle for less than they feel entitled to. Private companies do not have use the low bidder, or permit any particular contractor bid on their work. Hence good will is very important when contracting with large industries or utilities that have many projects available for bid. Contractors will frequently relinquish small points in exchange for being eligible for future work.
An important point your author makes, "It is also possible that any type of conflict will appear, at first blush, to be a personality clash." Here's something to think about: if I have to give you some bad news, for example, my team failed to get you a promised component on time. I am liable to be afraid you will hurt my team, fire me, not pay my bill, or whatever. When I am afraid, my sympathetic nervous system kicks in, and my "flight or fight" hormones are induced. I probably will not come across as being afraid. Rather I will appear as "angry." Further, with my conscious mind, I will grasp for someone to blame for my failure to perform. Often my mind will seize on some minor deficiency on your part. Hence I will appear both angry and have a reason, perhaps flimsy, but a reason of some sort, for being angry at you. This is not a good starting place for "conflict resolution," is it? On the other hand, if I had or could cultivate a personality that refused to clash, so that people were comfortable with me no matter what they had done or how bad things were, conflicts would be reduced.
I don't teach charm school, but if you have grasped the preceding paragraph, you will see the virtue in not getting angry (or at least not appearing to) and being able to "get along" (or at least appear to get along) with your adversaries (or potential adversaries). When I was a young engineer, I got quite frustrated with "good ole boy managers" who seemed to visit and BS with everyone at great length, and refuse to confront or fix obvious problems. Today I realize that they were simply trying to stay on good terms with everyone, and if they did so, the technical problems would eventually take care of themselves (or Perkins would fix them). While if they confronted the problems, they might fix the problem a little sooner, but if someone got mad at them, good relations might be destroyed for a long time, perhaps forever. And, in the long run, things would be worse. Although my experiences are with Northern Europeans, the Japanese do a similar thing, without pointy toed boots and drawl, by use of protracted discussions and negotiations. Again, by moving slowly, rancor is reduced.
Here's a quote from your text.
Deviation
I like the term "deviant administrative behaviors." When I open a project office hundreds or thousands of miles from the home office, I am liable to deviate from establish administrative procedures. For example, "Sure, Jason, you can have a 10% raise, starting with the next pay period." I promised this because Jason could get that 10% from another employer and I needed him on my project, here, now. When the home office sees paperwork changing Jason's pay, the HR director will call and tell me that I can't do that. I failed to follow the company rules about giving raises, salary brackets, job titles, etc. I will tell the HR director to get lost, it's my project, my budget and that's that. The HR director will then go the CEO and point out that my unauthorized raise upsets the company-wide salary structure and that if she approves it, there are 35 employees in the home office that are senior to Jason and they will want a similar raise. The same with time sheets, expense accounts, company autos, computers, etc., etc. It's important for the PM to realize that all those administrative entities in the home office see the CEO much more often than the PM does, they play golf with the CEO, and if I get them too mad, they will hurt me.
Superior-subordinate confusion.
In a "weak matrix" type organization, all the project manager's resources have to come from functional managers or other entities over which the PM has little control. Even if the PM is paid as much as the functional managers, that is, is on the same seniority level, those functional managers control all the resources, and the PM is basically begging. If the PM needs resources that are not forthcoming, the PM's recourse is to the CEO, who has often hired the PM precisely to avoid having to deal with these issues. Hence the PM seems to always be in a subordinate position.
The notion of separating the interests from the positions is one of the most important in negotiation. Once you are on to that, you will realize it is important not to let your opponent state his position, but rather to talk around subjects and "ease into" each difficult situation. Once your opponent states a firm position, his ego becomes locked into that position, regardless of his true interest. ("Opponent" is a unfortunate, but standard, term in negotiation theory, although it seems contrary to win-win, partnering, and similar terms that imply cooperation.) Avoiding positions may be part of the key of the protracted negotiations and discussions favored by the Japanese. Both parties avoid saying something from which they will later have to back down from and consequently lose face.
I'm surprised your authors did not mention Chester L. Karrass' books, Give and Take and The Negotiating Game. Both are classics. They did mention a book by Nierenberg, which is good, but which I don't recommend because it makes extensive use of dishonest and unethical ploys in negotiations.