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Leadership What managers can learn from the Trump-Lighthizer memo of (mis)understanding

Associate professor University of Toronto’s Rotman School of Management and Department of Psychology; director of the Rotman School’s executive negotiation program.

In February, Robert Lighthizer, the U.S. Trade Representative, had a well-publicized conflict over the term “memorandum of understanding” with his boss, President Donald Trump, in an exchange on negotiating a new trade deal with China. As with many aspects of the Trump presidency, social media had a field day with the dispute. Many thought that Mr. Trump, in spite of his proclamation as an ace negotiator, really showed how truly naive he was about international bargaining. Others thought Mr. Trump’s interpretation was a fair one rooted in his own background as a real-estate negotiator.

What the social media debate missed is that the exchange provided valuable lessons in negotiating for the rest of us. One of the biggest problems for Mr. Trump and Mr. Lighthizer was publicly airing their differences to a room full of reporters. Worse, their lack of unity was on full display to their lead counterpart in trade negotiations with China, Liu He, the country’s Vice-Premier.

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Negotiating parties gain from their teams – more brains, eyes and ears lead to greater effectiveness at problem-solving the challenges negotiators confront with their counterpart. But teams do more than that; they can be a source of bargaining power.

Power can be fleeting in negotiations, so negotiators learn to grab it where they can. One such source of power is the team’s united front – negotiators representing themselves in a unified way give more assertiveness to the offers they table, more emphasis to those they reject, and they can strengthen the perception that they can carry out co-ordinated forms of collective action that their counterpart may wish to avoid. A lack of unity undercuts this source of power and weakens the negotiating team.

The public disconnect between Mr. Lighthizer and Mr. Trump could have been avoided, and their hand strengthened, with three straightforward strategies managers can use to improve the team dynamic.

The first recommendation is to make time to prepare together. We lead busy lives but setting aside time does not require that it be a lot of time. One purpose of team preparation is to check assumptions, identify differences and reconcile them. Anticipating what those differences might be can substantially reduce the time required. Had Mr. Lighthizer anticipated Mr. Trump’s distaste for the term “memorandum of understanding," he could have approached Mr. Trump about it early on. It also helps to have these meetings to catch differences managers do not anticipate.

The second recommendation builds on the first: Prepare in private. The airing of differences can occur more easily in private spaces outside of the ears and eyes of other stakeholders, including the press, where a team can be more motivated to reach a common understanding. A straightforward misunderstanding can be easily reconciled, and this can allow teams to have a deeper analysis and debate over other issues too.

Finally, with preparation out of the way, it is helpful to practise a final recommendation: Maintain a united front to the public. The reality is not all differences will be caught when preparing. If something arises that a team has not prepared for, the team can break for a private discussion. Ordinarily, this works well for a team negotiating with a counterpart. This wasn’t really an option for Mr. Trump and Mr. Lighthizer; with the press in the room, requesting a meeting in private could have conveyed doubt to the reporters and others who watched. Barring that, it also helps to follow the lead. While good advice, Mr. Trump’s rejection of the phrase was particularly problematic because Mr. Lighthizer and his counterpart already were working with the phrase, and such phrases have a described common understanding when governments engage in trade negotiations. While we usually expect subordinates to “toe the line” by following their boss’s actions, Mr. Lighthizer also had to remain accountable to his Chinese counterpart too, lest the Vice-Premier think that the United States reneged on the progress they had made in their negotiations. When it comes to maintaining a united front in public, it would have been helpful had the President followed his trade negotiator’s lead.

Co-ordination is the name of the game when it comes to negotiating as a team. We help ourselves more when we invest in the time and effort needed to create and maintain a united front.

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