The telecommunications, pharmaceutical, and airline industries all have undergone wrenching changes in recent years. Ma and the Baby Bells cut the cord in the 1980s, but deregulation continues to have significant ramifications. Pharmaceutical companies, which once sold drugs to the doctors that dispensed them, switched to the solution-selling method and started dealing with health-care companies. And many major airlines consolidated at the same time that low-cost upstarts like Jet Blue entered the market.
In each of these industries, the game changed, and with new rules came new ways to win. That is the premise of Harvard Business School’s “Changing the Game: Negotiation and Competitive Decision Making.” The program, which covers not only dealmaking but also topics as diverse as online auctions and strategic partnerships, “is for companies that are going through fundamental change in the way things are done,” says Max Bazerman, program chair and professor of business administration at the school.
This is not a program for novices, says Bazerman; most participants have already attended a general negotiation program. In “Changing the Game,” participants learn to understand their thought processes regarding negotiation, to compare rational and intuitive decision-making strategies, and to identify common mistakes made by even the most experienced professionals. By focusing on competitive environments, the program draws on some of the most advanced concepts from the emerging areas of behavioral economics, behavioral decision research, and behavioral finance.
Participants engage in simulated negotiations that highlight the tension between creating and assessing value, and learn how to think about both simultaneously. The soup-to-nuts simulations encompass preparation, team building, negotiating, and feedback, as well as the development of a conceptual structure for thinking about negotiations more rationally. Participants then apply that structure in their critiques of several large-scale negotiation cases, tapping into Harvard Business School’s well-known case-study method. Ultimately participants apply their newly honed analytical skills to their own companies and critique past negotiations.
Negotiations can take many forms, of course. Bazerman notes that auctions are becoming increasingly common, perhaps due to the growing importance of procurement to the finance community. Thanks to a renewed focus on driving down costs, auctions have emerged as a valuable way for buyers to exert maximum leverage (although the course offers advice to sellers as well). Here again, coursework focuses both on analysis of case studies and on simulations that give participants a chance to roll up their metaphorical sleeves and put themselves to the test.
“Changing the Game” is designed to avoid a common pitfall of executive education programs, maintains Bazerman. All too often, he notes, participants in other programs complain that “I heard some interesting things, but then I couldn’t apply them once I got back to work.”
Since “most people are resistant to change,” he adds, the simulations are designed to “unfreeze the behavior” — that is, by living through the situation, participants see mistakes they’re normally not aware of. Faculty members also help students tackle issues including ethical considerations, managing parallel negotiations, controlling emotionally charged situations, and adapting as the interests and goals of the parties change over the course of negotiations.
“Max’s approach is more pragmatic than other programs I’ve taken,” says Gerry Duffy, senior vice president of global marketing and logistics at Methanex, a producer of methanol based in Vancouver. “Looking at my prior experience, I could see what mistakes I made, and I’m more conscious of them now. The course had a profound impact on how I’ve modified my behavior [in negotiating situations].”
Participants in the program fulfill a variety of job functions, and they’re not necessarily all senior executives. Like Duffy, however, all of them hold positions where they can create significant value for their organizations. While happy to acknowledge that the program could be useful to a vast range of executives, Bazerman believes that it will be particularly valuable to “people in industries that are going through massive changes due to recent accounting scandals.” Bazerman, it seems, is holding the door open for a wide audience.
“Changing the Game: Negotiation and Competitive Decision Making” will be presented at Harvard Business School on August 17-22 and November 2-7, 2003, and on March 21-26, 2004.