Archives for September 2008

Lessons in Interest-Based Bargaining

Build trust, be yourself, prepare for tradeoffs – and watch the junk food. Ford Canada’s Vice President of Human Resources Stacey Allerton Firth shares these and other secrets for successful interest-based bargaining.

In this article, Stacey draws on her experiences as a long-time senior HR executive and as lead negotiator for the 2005 Canadian Auto Workers National Negotiations team.

Interest-based bargaining (IBB) places an emphasis on co-operation and working together to come to agreement on complex issues.

One rule for IBB is that you need to meet other party where they are, and not where you wish they would be. If you think they are on another planet, my advice is to get out your space suit. Don’t get into saying, “How could they; why don’t they see this; only a moron wouldn’t get this.” Your job is to meet them where they are.

A second key consideration is relationship and trust building. Trust is what the whole interest-based, collaborative approach is based upon. Yet in my experience, it is often not attended to. People then wonder why things are not working smoothly.

In the words of Indira Ghandi, former Prime Minister of India: “You can’t shake hands with a clenched fist.”

Taking the attitude, “They have to earn my trust,” is a gamble. You have you give it to get it, so go out on a limb and take a risk. When no one wants to extend an olive branch, sometimes the process never gets off the ground.

Relationships are critical to success and are built up over time. Bargaining is no time to repair a damaged relationship. It has to be built before you sit at the table. You cannot have one relationship for two years and then show up and say, “Now we’re going to trust one another, behave in a collaborative way, forget the last two years when we’ve been at one another’s throats.” Your greatest credibility is built on your interactions away from the table; you will not be able to erase what was built before.

Be realistic in your expectations – one round of bargaining will not fix all the issues created over various contracts.

As well, be aware of your own reactions. There is a model called the Ladder of Inference, created by U.S. organizational learning expert Chris Argyris. If you are starting in a place where there is a lack of trust, the likelihood is high that you will interpret data in a particular way.

The ladder has the following steps: an event occurs; we select parts of the data; we use the meaning we assign to strengthen or shape beliefs; we act consistently with the beliefs we have formed. It is human nature to think this way, but you need to be aware when you are climbing the ladder and how it affects the process – and that there are other potential beliefs that could be better in guiding your actions.

With an interest-based approach, it is also important to keep in mind that you will be firm on the objectives and flexible on tactics. So the objectives don’t change – what you need to establish with the collective agreement – but as for the paths and tactics, realize that there are many potential ways to get there.

As well, tradeoffs frequently occur. The IBB approach takes more time than a positional approach, which just involves saying yes or no, and one party wears the other down. It takes more intellectual capital; you have to be willing to let go of tactics to get to your objective. It requires patience and reworking solutions. IBB often results in a new path that was not the proposal of either party.

There are many considerations around communications. First, you need to think about the long-term relationship and not just this bargaining process. I have had people say, “You finished the agreement nine days in advance – why didn’t you hang around? You could have gotten more.”

It is because I knew when we crafted an agreement that it met our objectives and their needs. I was not going to hang around and irritate and push, because it is not worth it. We were both happy with the outcome and we are in the relationship for the long term.

I would advise to share information early, openly, and often with union counterparts. It is good to start with facts and check for additional data from others involved in the process. So ask for the union bargaining team’s information too – you want to make sure you are aligned around costs, as this data is the basis for saying “Here’s why I need you to trade off for something else.”

You need to be willing to share your thoughts and feelings; and ask for the other party’s too. Be transparent about what you want. It is very important that if you need something, you say: “I really have to have X delivered,” or “This one element is killing me with the company, the industry, creating these problems, and I’m looking for you to help me on this round.” The sooner you are honest about that, the less time they waste on finding another solution that meets your interests.

Practicing active listening and doing so as an ally – respecting others’ views and beliefs without judgment – is a critical element of building trust in relationships.

Coupled with the need to listen as an ally is another skill: balancing advocacy and inquiry – or encouraging the other party to tell you his/her point of view, and sharing your views, beliefs, and feelings freely. There are many times in our business day when we need to do more than just listen. We need to reach agreement and to share our views in a way that encourages good decision-making.

Doing this ensures many views are heard; improves decision-making as more data and meaning are shared; and reinforces commitment to a course of action because views are openly expressed and considered.

Learning how to phrase things is important too. Saying, “Here’s what I’m thinking” has a different feel than, “Here’s my offer.”

I have also learned that early preparation pays off: the research, the team training (data, expectations, culture, communications), the relationship building. All are critical to success.

In terms of research, modeling financials well in advance is really important in an IBB approach. When you are in throes of negotiations and asking, “Can you cost that?” and are told, “I’ll get back to you next week,” it does not work. So plan in advance and cost all permutations of events in your economic mix. That lets you throw around ideas and the model can spit out cost in a matter of minutes. It is really important to keeping the pace going, to give you flexibility to consider different ideas.

Success in IBB also depends on your ability to be true to your organization’s style and you own identity in the collective bargaining process. It is the best way to build trust and credibility – or harm it. Be your own person in this process.

I would also advise taking measured risks in changing the process to achieve a different outcome. Once in negotiation I was told what the usual process was, and I asked, “What if we do it another way?” We tried it, but really were not sure what would happen. In this case it worked well. The point is that you do not always have to do things the way they were done – especially if you want the outcome to be different.

Finally, remember to maintain some fun and team-building during the process. Collective bargaining does not have to be an all-night-long endurance contest to see who can still make wise decisions on the least amount of sleep. During one negotiation we actually had bargaining fitness teams. People got credit for sleeping for eight hours, for working out, for going home to spend time with their families. We had days where no one was allowed to eat junk food: there were more arguments about what constituted junk food than we had with the union.

It was goofy thing but it built relationships, and that carried over into bargaining process and helped to create a collaborative atmosphere. I am also convinced it helped us move as fast as we did in that particular negotiation.

New Brunswick’s Hothouses and Pipelines

In 2007, a variety of groups in New Brunswick interested in the viability and success of the province got together to create a plan for sustainable economic renewal. Faced with massive emigration, erosion of their natural resource-based economy, and poor academic standings, New Brunswick was ready for change. “Maritime provinces are at a crossroads”, commented Donald Savoie in the Telegraph Journal on May 7, 2007; “We can sit by, make political noises about the state of our economy and see our population continue to drift away, or we can define an ambitious and overriding goal and pursue it with all the energy that we can muster.”

  1. “Self sufficiency in 20 years” was chosen as the overriding vision, and three major strategies were selected to achieve it:
  2. Restructure natural resource-based businesses according to long-term stewardship instead of short-term exploitation
  3. Attract businesses from outside the province by providing tax incentives, skilled workers, a welcoming climate, and sufficient infrastructure
  4. Help more entrepreneurs succeed at building large, solid businesses

Entrepreneurship was picked as the centerpiece for obvious reasons: Transformation of natural resource-based businesses will take a long time and a lot of experimentation. Imported businesses do not have local roots, and therefore no loyalty to the host province; they tend to move according to market conditions. Entrepreneurs born and raised in New Brunswick, however, are attached to their home and have a stake in its future. By enhancing entrepreneurial support and boosting leadership capacity, the province can build a robust economy, independent of outside decision-makers and finite natural resources.

Hothouses and Pipelines

To succeed with the plan meant borrowing approaches from the world of sports, namely “hothouses” and “pipelines.”

Hothouse strategies are focused on the short term and concerned with issues such as: who can compete in the next Olympic Games and what will it take to get them ready?

Pipeline strategies are focused on the long term, and concerned with issues such as: increasing fitness levels in the overall population, stimulating widespread interest in sports, and building competitive capacity over time.

In the case of leadership development, hothouse approaches such as succession planning groom the next crop of executives, while pipeline strategies such as leadership education in schools groom the next generation of leaders.


New Brunswick decided to hothouse high potential entrepreneurs running businesses established five to eight years ago and ready to “bust out and go big.” A province-wide needs analysis was conducted and entrepreneurs identified four areas where assistance was needed: financing, networking, innovation, and education.

In education, businessperson and philanthropist Wallace McCain donated funds to create an Institute mandated to “help entrepreneurs develop the understanding, tools, and relationships needed to grow their businesses.”

Fifteen high potential entrepreneurs were selected as the first cohort, which began in July 2008. Spread over a year, the curriculum includes topics such as Change and Innovation, Strategic Planning, Building and Managing Human Capital. Participants meet once a month and benefit from the expertise of a wide range of professionals, academics, and executives from all over the country.

Other developmental and support strategies are also being used. Members of the New Brunswick Business Council, for example, have volunteered to serve as mentors. Paul Johnson, CEO of Quantum 5X Systems from London, Ont., was named an executive in residence for the Wallace McCain Institute; participants can draw from his experience on a continuous and personal basis.


The province is also determined to build a “leadership pipeline” by totally revamping the curriculum from elementary school to university, injecting a heavy dose of entrepreneurial and leadership components, as well as beefing up computer and business literacy.

This educational strategy will be complemented by business start-up competitions at the elementary level, entrepreneurship boot camps at the secondary level, and university incubation labs to help entrepreneurs test and fine tune their ideas.

Students will also be exposed to entrepreneur role models and mentors in schools. Currently, pilots are being conducted in elementary schools: students start businesses with a small budget, and make them prosper with skills they learn.


This historic initiative is a stellar example of large-scale systems thinking. For instance, a roundtable is planned for November to align the various stakeholders. This is organizational development at its best.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.