How Bad Negotiation Led To Brexit

I wrote the following 7 years ago for Spend Matters. As we enter election week in the UK, I thought it might be interesting to remember how the whole Brexit thing started - with David Cameron failing to get any concessions (on immigration, for example) out of Angela Merkel et al, concessions that might well have taken our history in a different direction ...

Everyone thinks they’re a good negotiator. Well, certainly every man I’ve ever met (women tend to be more realistic about their abilities, I’ve found). Yet, if you ask a few questions, their ideas on what makes them so skilled are usually formed around the vaguest of concepts such as ‘I’m tough’ or ‘I drive a hard bargain’ or ‘I always start with a really low offer’.

Yet the academic theory behind negotiation is solid, and there are some clear best practices in the field. But most people who consider themselves expert have no idea of the theory that underpins good practice. In particular, I wonder whether politicians receive any negotiation training? Or is it supposed to be something that comes naturally to them, like kissing babies and looking concerned when local voters bend their ears about arguments with the local council?

We have asked this before – we were concerned about the tactics being used in negotiations around civil service pensions, for instance, where threats were made against the trade union side that were clearly never going to be followed, though. Not a good approach, as any negotiator, or indeed parent to a toddler will tell you.

Now we see another example of what certainly looks like poor negotiation practice from our esteemed Prime Minister no less. He is going to enter negotiations with the EU on the UK relationship, powers that might be returned, budgets, and so on. But he is now making public statements around how great the EU is for the UK, how much he really wants to stay part of it, and so on.

This seems to be subverting his own BATNA – ‘best alternative to a negotiated agreement’. The BATNA, both real and apparent, largely dictates the strength of your negotiation position. Cameron’s BATNA is what he (and the UK) will do if the EU simply says ‘non’ to our requests for power to be returned, lower contributions or whatever.

In other words, to get the best deal for the UK, the PM needs his European ‘opponents’ in the negotiation to generally believe that he has an alternative, which must include ultimately walking away altogether. So, every time he says how much he wants to stay, he weakens his own negotiation position.

Perhaps he’s following the negotiation tactic that many of us may even have used, which goes along the lines of ‘Look, I want to do this deal, but my boss won’t let me unless you give us another 5% discount.’

In Cameron’s case that would be: ‘Look, I want to stay in the EU, but the British people will only do that if I get another ￡5 billion a year back from you.’

But the big flaw in that approach is that it positions the negotiator as powerless – the classic response in business negotiations is to say, ‘OK, let me negotiate with your boss, then.’ In a political situation, I suspect the opponent will simply call your bluff.

Cameron should be positioning that the UK is pretty relaxed about leaving the EU – that our BATNA looks pretty good, and acceptable to the mass of UK voters. And note that it is the perceived situation that is important – not any underlying, heart-of-heart beliefs. But you have to be convincing with your presentation of your position and your alternatives. At the moment, Cameron’s public remarks are not preparing the ground as well as they might for a successful negotiation.

There is one further issue here of course. This assumes that the EU negotiators want the UK to stay. If they have different objectives, or are simply neutral, then Cameron is in a fundamentally weak position. So, it is in the EU’s advantage to develop their own BATNA, which would be: ‘we don’t really care if you’re in or out!’

And if that were genuinely the case, Cameron will have a real problem in extracting any significant concessions.

(Article from "A Procurement Compendium", available now for just ￡12.99 at https://www.amazon.co.uk/Procurement-Compendium-Peter-Smith/dp/1839520450)