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One of the most important lessons we can take from culture is that culture is not about making differences, culture is about recognising differences. Due to the rise of social media and the fast pace of information being communicated, people are quick to make judgements based on assumptions being presented on a surface level without giving due cause to what informs people’s behaviour.

This is where culture meets negotiation. If we want to effectively influence someone or work in a collaborative manner, one must understand the opposing party. What has become clear over the last few years is the way some politicians have polarised society by concentrating on fixed positions and the single narrative.
Culture is Stories, lots and lots of Stories

Chimamanda Adichie in her Ted Talk, “the danger of the single narrative” said “it is impossible to engage properly with a place or a person without engaging with all of the stories of that place and that person. The consequence of the single story is this: It robs people of dignity. It makes our recognition of our equal humanity difficult. It emphasizes how we are different rather than how we are similar.”

Ury and Fisher of Harvard PON fame are best known for their research into successful negotiations. They describe taking a fixed position as a contest of wills in which the side that takes the more extreme position and holds out longer fares better.

What Boris Johnson, Jacob Reese Mogg, David Davis and all the Brexiteers have done is highlighted the importance of culture when trying to influence the counter party when in negotiations. Their maintenance of a fixed position in the organisations has ultimately proved unsuccessful and all three have now resigned their party positions, but the crucial point they missed in their negotiations was culture.

 

Negotiation Involves Two Sides

The approach of the Brexiteers differed widely from that of their European counterparts was their approach to negotiations. For example Michael Barnier visited the border to gain a deeper knowledge to the challenges posed by the Brexit issues to Northern Ireland. By taking the time to visit people and understand their circumstances, Barnier was able to champion the cause of the customs union and protect the Good Friday agreement.

Another stakeholder in the Brexit negotiations is the DUP’s Arlene Foster, and she’s a lighting rod for controversy from all sides, but particularly the ‘Remain’ political wing.

This is where we need to move from the singular narrative to understand the frame of reference from Arlene Foster’s perspective. People mistake personality and cultural identity. As Erin Meyers has stated, it is not a question of personality or culture, it is personality and culture.

While many may see Arlene in negative terms, her supporters will see her as a champion of their cause. What is their cause

 

Protecting Stories

Arlene Foster is protecting the cultural identity of her community. Up until the civil rights movement in the 1960’s the Unionists in Northern Ireland had great power and a strong identity in Northern Ireland.

Ever since Austin Currie’s 1968 housing protest which ignited the Northern Ireland civil rights movement the balance has shifted towards the Nationalist identity. The DUP stance therefore went from a position of great power and strength to a weakened position where they gave an inch and the nationalists took a mile.

Therefore, they have always been on the losing side since 1968. Even during the Good Friday agreement, Arlene Foster made a very public exit during the final negotiations in protest such was her dissatisfaction with the Good Friday agreement. We must remember that over three thousand lives were lost during this protracted conflict and countless victims of many levels.

One must also take into account that Arlene Foster was also a victim of the troubles when a school bus full of children was blown up and a school friend of Arlene’s was seriously injured. To add to this, there was a murder attempt on Arlene’s father as he was shot by the IRA in the name of the nationalist cause.

I personally spoke to Ernie Wilson - the driver of the school bus. Ernie said that the it feels like yesterday and the pain still lives on. Hearing different narratives like this provides a greater appreciation for cultural awareness.

One must remember that the Unionist’s identity is at stake here. An all-Ireland government would be a major threat to their identity. Looking back through history, the celebrations of William of Orange and the siege of Derry informs the culture. This siege mentality is celebrated every year through orange order parades. Given a new perspective to the importance of cultural identity.

Many people do not fear change, people fear loss – a loss of power, a loss of identity, a loss of community, a loss of security. Hence, the DUP’s is not an antagonistic stance, this is a protectionist stance against loss of heritage, culture and identity. By viewing the Brexit issue through the frame of reference of the DUP, one can appreciate the great sense of fear and positive intention behind the anger that can sometimes be displayed.

Arlene Foster was further enraged by comments by both Michael Barnier and Simon Coveney in some comments to the press. She challenged both politicians to become more culturally aware.

Since Arlene Foster made her views known, both Barnier and Coveney have changed their language to be culturally sensitive. Arlene herself has made strides to move away from her singular story by attending the GAA Ulster football final where she supported her local county Fermanagh. This was a first for a DUP leader and the symbolism behind this attendance was to show that she too is making an effort to be more culturally sensitive.

 

A Single Lens is Blinding

So Brexiteers, much like Trump, only focused on their positions and saw the conflict through the singular lens. This approach clouded their judgement while limiting the options available to them. By omitting the culture factors to negotiations, they were unable to understand the frame of reference of their counterpart and reduced their ability to influence.

Much social and political capital can also be gained by adopting this approach. In a complex and volatile world which is ever increasingly volatile, uncertain, complex and ambiguous should there be a heighted awareness of cultural intelligence and emotional intelligence.

These cultural factors are often lost during media reports during conflict and negotiations.

To conquer new frontiers and navigate the complex challenges that the political world poses to businesses and nationality’s. We must show appreciation to these nuances as they serve as essential elements to advance negotiations. To an end they enhance relationships towards a collaborative approach to mutualise shared interested and needs.

Taking this approach will move away from a zero-sum game that the Brexiteers have created towards a mutually beneficial treaty that will benefit citizens and celebrate diversity. Seeing life though different cultural lenses, as Chimamanda Adichie tells is, “Our lives, our cultures, are composed of many overlapping stories”.
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            [post_content] => [caption id="attachment_22432" align="aligncenter" width="600"]The recent snowfall in Ireland caught many of us unprepared The recent snowfall in Ireland caught many people unprepared[/caption]

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Walking into any open shop during the recent storms to find hundreds queuing for bread and beer after only a day of snow was bewildering. We were well warned in advance. How hard can it be to insulate pipes and put a few loaves of bread in the freezer, or be ready to make your own bread?

Presumably many people did not believe the warnings but, even if Met Eireann had been exaggerating, surely insulating your pipes can only ever be good, and making your own bread is always a pleasure?

Preparations for Brexit in Irish business feel very similar.  After the initial shock and sterling drop, businesses now seem to be lulled into a sense of complacency. There is the philosophy of “we will take it as it comes” without any sense of an urgent need to prepare.  Many no longer even believe it will happen.

Businesses who do not prepare for Brexit are likely to see far worse consequences than running out of bread but mitigating against Brexit risk is a bit more complicated than insulating pipes.

For many business owners, trying to prepare for Brexit right now may seem impossible.  How can I prepare for something that may not even happen, and even if it does happen we are still guessing as to what it will look like?

 

Preparing for the Unknown Knowns

[caption id="attachment_22433" align="aligncenter" width="600"]Anti-Brexit protestors outside the 2017 Conservative Party conference Anti-Brexit protestors outside the 2017 Conservative Party conference[/caption]

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We read daily reports of radical disagreement within the UK Tory party on the desired outcome, leaving us unsure what we are meant to be preparing for.

For any business looking for a sustainable long-term future, Brexit, like any other significant risk has to be addressed, measured and managed.

Unlike the Twin Towers attack, or the Icelandic ash cloud, this is more like Storm Emma, you can’t say you were not warned. We do know there is a very high probability that something will happen on March 29th, 2019, and that it’s very unlikely to be pleasant for Irish industry.

To manage any risk the first step is to measure it. How badly would I be impacted in the worst outcome – a full hard Brexit with the UK exiting the Customs Union and the Single Market? To do this you stress test your forecast. Run your profit and cashflow forecasts and then change your assumptions to the worst possible scenario - what would happen if…

 

Predict, Forecast, Measure, Predict Again

[caption id="attachment_22434" align="aligncenter" width="600"]3299182350_615be7351e_b Brexit will bring a worry of tariffs and levy's not seen for decades[/caption]

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Different sectors will be impacted in different ways. Food companies manufacturing in Ireland exporting to the UK worry about tariffs, weakening sterling and fret about their shelf life as the prospect of horrendous border delays looms imminently. Other concerns often raised include a future “buy British” mindset in the UK which may impact how consumers make purchasing decisions, or cheaper competition from less regulated geographies eroding price for better quality but more expensive Irish goods.

Software companies with major revenues from the UK public sector worry about how a post Brexit UK government will purchase when EU regulations no longer apply.  Many Irish companies have operations that are deeply integrated between Irish and UK facilities with goods moving back and forth across the Irish sea or indeed the Northern Irish border carrying out various steps in the production process as they move. How is that going to work in a work of border checks with a hopelessly under-resourced UK customs infrastructure?

The customs paperwork required if the UK becomes a “third country” is absolutely terrifying and the costs of compliance will sky rocket with a shortage of people who actually understand the system.

Running a forecast on a “what would happen if” basis will probably focus your mind very quickly to the fact that Brexit complacency is just not an option for most Irish businesses. Profitability would be quickly annihilated by a combination of sterling drops and tariffs, let alone the increased overhead burden from the extra administration work.

 

Strategy Works

It would be easy to get pessimistic, but the really important step is to pull together a coherent strategy to deal with the issues. Let’s take an example of a food company manufacturing in Ireland selling to the UK.

captureWhile hedging may help in the very short term, the reality is that for most businesses Brexit will demand much more productive and efficient operations and major strategic changes, including market diversification for the many companies who are over dependent on the UK. The good news is there is a huge amount of help available from all of the Irish support agencies as this is currently a top priority for the Irish government.

For many companies Brexit is acting as a catalyst to implement the sort of changes businesses should be constantly implementing anyhow – lean operations, better procurement processes, tightening up financial management in particular forecasting, planning, product profitability management and hedging for the major risk exposures of foreign exchange and commodity prices.

These are all changes that can only benefit the companies whether or not Brexit materializes. Brexit is like a health warning that galvanises you into a better exercise and nutrition regime.

For Irish businesses, it’s time to stop waiting in queues, roll up the sleeves, and make some dough.

 

head-picMoira Creedon is an associate faculty member on the IMI Diploma in Management. Moira works with a wide range of Irish businesses in Food, Technology sectors and Life Sciences to address and prepare for Brexit risks.
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            [post_title] => Financial Management: at the Heart of Dealing with Brexit Risks
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William Corless

William Corless

22nd Jan 2020

William Corless is a senior associate faculty and programme director in the IMI. William facilitates on IMI's Advanced Negotiations short programme.

Related Articles

Brexit and the Culture of Negotiations
Brexit and the Beast – preparing for the worst is always best
Financial Management: at the Heart of Dealing with Brexit Risks

Brexit and the no good, very bad negotiation strategies

In recent times, many Brexiteers (Boris Johnson, Michael Gove, Priti Patel, Dominic et al) fancy themselves as expert negotiators.

They’ve won an election, and their Brexit deal is currently being hashed over in the House of Lords, but have their negotiation strategies pushed them forwards or backwards compared to where they began?

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Do you know if you are getting a good deal?

More than 80 percent of CEOs and other executives leave money on the table when negotiating, according to J. Jay Gerber Professor of Dispute Resolution & Organizations Leigh Thompson.

They settle for too little. They walk away from the table unnecessarily. They act tough, damaging the long-term relationships their businesses need to thrive.

Therefore, is there a question here that the bias of over-confidence is a play here. This is just one of the nuances that might be a play with the Brexit negotiations. This might raise the question: if the Brexiteers have not been trained in negotiation, how will they know once they get a deal, if it is a good deal or not?

It also raises the question, if we ourselves have achieved the best deal possible in our own negotiations.

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Know the type of negotiation are you in

The UK Brexit negotiators were rarely able to convey a clear position to the opposing side.

Again, using Brexit as an example, how do you know what type of negotiation are you in?

Negotiating with another party in for a once off transaction brings a different style and type of negotiation versus a type of negotiation where there is a long-term negotiation at play.

British Irish relations were at an all-time high due to the Good Friday Agreement. Years of toil in regard to building rapport and relationships between diplomats on both sides could be unravelled by the current impasse with untold consequences and damage.

Adapting your style is therefore vital in negotiations is for future deals which will strengthen even the most fraught relationships. Referring to Martin McGuinness and Ian Paisley as the “chuckle brothers” prior to the Good Friday agreement would have been unfathomable, but they came to embrace the moniker.

So, a gentle piece of advice for people in long term negotiations is that the relationship matters. Short term gain versus long-term pain versus short term pain and long-term gain; choose wisely your approach to negotiations.

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Negotiations strategy

Negotiation is like playing a game of chess – you need to understand the consequences of each move, and the counter move of your opponent. Grandmaster chess players take into account all the possible moves and their consequences.

Boris Johnson et al are prone to taking huge risks and being overconfident in their approach. Is the strategy that Boris Johnson is employing to deliberately crash out or the market so that the deal made with Theresa May is invalid, therefore allowing the UK to strengthen their bargaining position?

This then poses the question, how strong is that bargaining position?

How strong is your bargaining position. Know are your alternatives?
Negotiation is about communication and relationships. It is also about trading value, what will the UK have to offer if they crash out of the EU. So, two crucial terms are key in negotiation’s are BATNA (best alternative to a negotiated agreement) and WATNA (worst alternative to a negotiated agreement).

While different agreement models are being bandied about, the BATNA of WTO, Canada plus plus, the Singapore model are the primary ones being seen by the Brexiteer’s as alternatives. However, the Brexiteers need to focus on the position of the EU.

The UK administration may not be viewing the BATNA and WATNA of the EU. Boris Johnson is, at the time of writing, about to propose a new solution after negotiating with the DUP, wrapping it up in a new proposed offer to the EU.

Even though, if the UK get everything they ask for in their deal, what will the long-term consequences of that deal be?

Especially with the rise of right-wing populism, the EU could become fractured and it’s mere existence is threatened. Therefore, the UK need to look at the deal from the perspective from all viewpoints, not just their own. This is what makes Brexit so complicated is negotiating in a multiparty is hugely complex.

Trying to simplify or make side deals weakens your power position, hence the EU is so aligned with Ireland every step of the way. In short, the lesson here is to prepare. Many people get poor deals as they don’t fully prepare. So, a rule of thumb from Robert Olson is on successful negotiations are 70% preparation, 20% implementation, and 10% acting.

We can predict Boris will at least have the 10% covered.

 

This article was originally published in the Sunday Business Post.