Negotiate 1-2-3

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Learning Objectives Est. time: 9 min.

  • Identifying what can spark heated moments in negotiation
  • Assessing techniques for coping with other people‚Äôs emotions
  • Recognizing the importance of maintaining one's poise under pressure

Overview and Introductory Case

Biographer Walter Isaacson described the relationship between Steve Jobs and Bill Gates as being like "a scorpion dance, with both sides circling warily, knowing that a sting by either could cause problems for both."

The men were competitors, of course, as well as rivals in the public spotlight. But their two companies also partnered with each other, even as they vied for customers (and acclaim) in other arenas. For example, Apple contracted with Microsoft to write important software for some of its devices. Nevertheless, sometimes there were difficult moments between Jobs and Gates.

That tension came to head when Microsoft was preparing to launch Windows. Jobs felt that the new product blatantly copied Apple's graphic operating system. He was furious, even though both Microsoft and Apple had each borrowed liberally from an operating system developed earlier at Xerox PARC. Jobs summoned Gates to a meeting in Cupertino, California. In front of Apple's top management team, Jobs excoriated Gates, shouting, "You're ripping us off! I trusted you, and now you're stealing from us!"

Gates just sat there, however. Then he offered another way to look at it. "I think it's more like we both had this rich neighbor named Xerox," he said, "and I broke into his house to steal the TV set and found out that you had already stolen it."

Gates's response may have been spontaneous. Or, knowing Jobs' mercurial temperament, maybe Gates had it up his sleeve, ready to play at the right moment. Rather than fall into the trap of defending himself, Gates cheerfully admitted to being a thief but differed on who it actually was that he had stolen from. The comment also reminded Jobs that he had been in on the same heist.

Jobs' anger abated somewhat. Later the two men met privately and Gates demonstrated the new Microsoft operating system. Jobs was scornful about its design (with some justification) but recognized that he had little legal standing to thwart its release. But Gates's composure at the larger meeting was important in preserving the business relationship. Gates says of himself, "I'm good when people are emotional, I'm kind of less emotional."

In this module we'll explore heated moments in negotiation. When there is much to win or lose financially, unsurprisingly, tempers can flare. Feelings are all the more intense if parties feel personally wronged or matters of principle seem at stake.

When there's an unexpected outburst, whatever the cause, others must choose how to respond. Should they counterattack, apologize, or simply ignore the threat or insult? Usually there's little time to weigh the options. Bill Gates notes the importance of maintaining one's poise in heated moments. As we will see, however, that doesn't mean being unemotional.

An archival drawing of a brawl in Congress between Lyon and Griswold, Philadelphia, Feb. 15, 1798.
Brawl in Congress between Lyon and Griswold, Philadelphia, Feb. 15, 1798.

In this next section, we will analyze another emotional explosion at a business meeting, this one involving sports agent/promoter Donald Dell and executives of the company that makes Head tennis racquets. You will watch a short video clip and then answer a series of questions. To begin, click the button below. (Note: this activity will open in a separate tab in your web browser.)

When the Tables Are Turned

It's one thing to defuse a tense situation that's not of your own making. But what if you're the person who did or said something hostile or foolish? Two things may be needed to set things right: a lot of brass and a friend like Kramer, the goofy neighbor on the old Seinfeld show.

Years ago, a young comic named David had the coveted but highly demanding job of writing for the Saturday Night Live comedy show. New material had to be cranked out each week. The rehearsal schedule was brutal and much of what got written ended up in the waste basket. Like many comics, David had a big ego and insecurities to match. He lobbied hard for his material. Sometimes too hard.

David had gone through a bad streak. The producers had scrapped a half dozen of his sketches. The last one was cut after dress rehearsal. Five minutes before airtime, David accosted Dick Ebersol, the executive producer, in the control room. Ebersol was already wearing his headphones and was intent on the imminent broadcast. Nevertheless, David lit into him, telling him everything that was wrong with the show. Then, in a flare of temper, he publicly quit. By the time he got home, David regretted his outburst. His next-door neighbor told him he was stupid for quitting a well-paying job that other writers would kill for.

"What can I do?" David moaned.

"Pretend it never happened," his neighbor said.

Monday morning, David showed up for the writers' meeting. His colleagues were too shocked by his arrival to say anything. It wasn't their place to challenge him (and they probably wondered what was going to happen next). Then Dick Ebersol came in. The writers' room was set up just as it had been every Monday in the past. Ebersol shot David a funny look but never said a word.

The punch line? Sometimes situations that seem irreversible actually aren't. It's just that we're so involved emotionally we can't see a way out. That's when we need a fresh perspective from a friend or colleague who's more daring than we are ourselves.

There's a postscript to this particular case. The David here is the comic Larry David, who later became the fabulously successful producer of Seinfeld and then the creator and star of Curb Your Enthusiasm. The real life neighbor who advised him to act as though his tantrum never happened became the model for Jerry Seinfeld's fictional neighbor, Kramer. If this story seems familiar, maybe it's because Larry David later exploited it as a gag in one of the Seinfeld shows he later created.


Coping successfully with tense moments in negotiations requires self-awareness. On one level that means knowing your own hot button; that is, other people's actions and statements that could provoke you to respond in a way that is contrary to your own interests. It might be a particular insult or it could be a series of dismissive remarks that betray a lack of respect. It is important to note first stirrings of irritation or resentment, so that you address the matter constructively before your self-control is diminished. And you might calmly decide that it's not worth responding to the provocation.

In maintaining your own poise it is also important to empathize with whoever has lost his or her temper. That you have to respect the other person or feel sorry for them, but like Bill Gates and Donald Dell you have understand the position they have put themselves in and "for your own sake" help them back down gracefully. If you have not already seen the module on Powerplays, check it out. It includes video clips of a woman negotiating with her boss for a promotion. In the face of various challenges, she maintains her poise very well.


Donald Dell, Never Make The First Offer (Except When You Should), (Portfolio, 2009).

Kimberlyn Leary, Julianna Pillemer, and Michael Wheeler, "Negotiating with Emotion," Harvard Business Review, pp. 96-103.

Walter Isaacson, Steve Jobs, (Simon & Schuster, 2011), pp. 177-179.

Michael Wheeler, Ch. 5,"Presence of Mind," The Art of Negotiation: How to Improvise Agreement in a Chaotic World, (Simon & Schuster, 2013), pp. 75-96.

Next Module: Agility [20 min.]

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