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3Q: “Winning together” in natural resources negotiation and leadership

Bruno Verdini, executive director of the MIT-Harvard Mexico Negotiation program, discusses his award-winning research on negotiating for mutual gains

Francesca McCaffrey June 19, 2018 MITEI

Bruno Verdini is executive director of the MIT-Harvard Mexico Negotiation Program and a lecturer in urban planning and negotiation at MIT. He teaches The Art and Science of Negotiation, one of MIT’s highest ranked and most popular electives (with over 500 students from 20 different departments pre-registering per year), and leads training and consulting work for governments, firms, and international organizations around the world. The research underpinning his new book with MIT Press, Winning Together: The Natural Resource Negotiation Playbook, was the winner of Harvard Law School’s Award for best research paper of the year in negotiation, mediation, decision-making, and dispute resolution. He talked with MITEI following a recent seminar in which he discussed his research and shared expertise on negotiating for mutual gains.

Q. What drew you to study negotiation, and has your interest always been in conflict resolution, or did that evolve over time?

A. I fell in love with the field because it requires a full engagement, with mind, hands, and heart. Negotiations are present in every single professional activity and in our daily personal lives. They entail feeling comfortable with the unknown but curious about how to render it familiar, through individual preparation and collaborative decision-making, showcasing the ability to persuade and the desire to be persuaded, as well. As such, it is an eminently human endeavor, highly analytical and at the same time spiritual. Whether we find ourselves with family, friends, colleagues, partners, or foes, negotiations offer an opportunity to communicate and pursue our principles and aspirations, and as such, a chance to learn from each other (and inevitably, about ourselves!). That’s a transformative opportunity. Whether we have the foresight, willpower, and humility to root out our blind spots, move away from vicious cycles, and build new and better bridges, is up to us. I embrace that responsibility at the heart of the field, as it involves constant self-reflection and the belief that we can learn from our past to change our present and build a better future. In sum, I experience negotiation as an exhilarating expedition that brings new challenges every day, and where our moral compass plays a crucial role.

Q. For your book, you interviewed more than 70 high-ranking officials who were involved in U.S.-Mexico negotiations around energy resources in the Gulf of Mexico as well as water and environmental resources within the Colorado River Basin. How did your conversations with them inform your thinking on the kinds of challenges people need to be aware of and overcome to maximize the potential for successful negotiations?

A. Look around, at work or on your way home, and you’ll see people with self-serving biases and faulty beliefs that cause them to miss opportunities and arrive at needless standoffs. Look inward, and you’ll probably see a couple of hurdles keeping you from being your best version too. Decades of empirical research support the notion that we tend to see stakeholders and situations in biased ways, with harmful effects at the negotiating table (and beyond). We all struggle with change in different ways at different moments, so, without proactively documenting and practicing against these traps, once we return to complex, ambiguous, stressful, highly competitive, and rapidly changing situations in our professional or personal life, the cognitive and motivational biases that besiege us tend to re-emerge. Against this backdrop, on a transboundary scale, I wanted to examine and piece together, through the eyes of the stakeholders on all sides and across all levels, whether and how these blind spots and faulty beliefs had been dislodged, as part of the efforts to solve high-stakes resource management conflicts that had lasted for over seven decades. In my experience, whenever you focus on how people work side-by-side against the problem (rather than against each other), good insights tend to emerge.

Q. Which negotiating strategies do you consider crucial no matter what area you’re working in, be it natural resources, politics, business, or another area?

A. There are so many, depending on the scenario, the stakes, and both the processes and outcomes we want to foster. In Winning Together, I focus in on 12 strategies in approximate chronological order, from well before a negotiation is initiated to follow-up measures after an agreement has been implemented. One element to reiterate is that there are great differences between acquiring power and wielding it effectively. A zero-sum mindset, which is quite frequent in the world, can secure the first, but is seldom useful for the latter. If we want to address the complex challenges that besiege our communities, instead of blaming each other or kicking problems down the road, we have to foster leadership practices that better unearth all valuable sources of information and empower willing stakeholders to shape meaningful action. Communities need to provide each other the opportunity to build together and test new courses of action during a pilot period. Such trials can garner support, easing fears of the unknown by securing an end date from the outset. Once the pilot is underway, stakeholders can experience its impacts firsthand. Should the pilot result in more benefits than costs, the stakeholders will become advocates for this approach. In sum, a commitment to put ourselves in the other sides’ shoes, when intertwined with reciprocity, tends to lead to more creative solutions, a shared sense of fairness, and resilience in the implementation of partnerships. Communities thrive when we do that.


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Transcript

So Bruno is executive director of the MIT Harvard-Mexico Negotiation Program and lecturer in urban planning and negotiation at MIT’S School of Architecture and Planning. He teaches the art and science of negotiation, which is one of MIT’S highest ranked and most popular course electives on campus. He leads training and consulting work for governments, firms, and international organizations around the world.

And as a diplomat, he’s been involved in the teams negotiating financial, technical, and scientific cooperation between Mexico and nations, including the US, Australia, South Korea, India, Saudi Arabia, Brazil, and numerous others, in addition to organizations such as the International Energy Agency, the World Bank, OPEC, and others.

So I’m so pleased to introduce Bruno to present his research and discuss his new book, Winning Together– The Natural Resource Negotiation Playbook. After that discussion, we’ll have some audience Q&A followed by a reception, which I hope you can all stay for. Thank you.

[APPLAUSE]

Emily, thanks so much for such a warm introduction. It was quite a blessing to meet you back in that cold October in Germany. That UN conference was supposed to be in Fiji. They moved it to a different kind of weather.

Let me just, before we go to the conversation with Emily, where we will be able to unpack a little bit, indeed, in terms of the research, share with you a little bit of the genesis behind this work. I had the blessing and am very fortunate to do my PhD here at MIT. As part of that responsibility, I wanted to explore how both developed and developing countries can figure out steps to better share natural resources with a win-win mindset.

And I didn’t want to do some theoretical research. I wanted to speak with the practitioners, from presidents to ambassadors to CEOs, of different industries and the managers of the NGOs about how they go about in their daily life in terms of fostering resilient, sustainable agreements.

And so I was fortunate, for over two years, of conducting a series of what we call in the negotiation field stakeholder rounds, where I spoke, in the end, with around 70 high-ranking officials from both sides, Mexico and the US, to try to learn from them how did they foster these two agreements– one centered on the Gulf of Mexico as it pertains to deepwater exploration of hydrocarbons, and the other on the management of the shared environmental and water resources in the Colorado River.

And what is wonderful, certainly when you’re doing this research where the goal is not to figure out whether the agreements were good or not, but actually learn from what people did in their daily life, well, you reach out to them. You say that your interview will take 20 minutes. But since they’re talking about themselves, they would spend 90 minutes with me.

As a result, I was able to gather and piece together how these agreements were negotiated, agreements that resolved over 70 years of disputes in both cases, agreements negotiated by completely different teams and across different administrations– George W. Bush and Obama, Calderón and Peña Nieto on the Mexican side– and then tried to extract, from those experiences, some of the steps that, from the perspective of the negotiation field, the adaptive leadership field, the collaborative decision-making field and the persuasive political communication, we could then share with both developed and developing countries, and tried to go and work against the idea that there are not enough resources to go around, and that one side needs to win and the other needs to lose.

And so that’s what the book explores in detail. And I really look forward to be able to share more of the details today with Emily.

So first, I thought that the audience might like to hear, what drew you to study negotiation, and whether your interest has always been in conflict resolution or if that evolved over time.

Thanks, Emily. Well, then I’ll share with you a story about how I was fortunate to negotiate the creation of a PhD in negotiation here at MIT. So when you come here as a grad student, it’s such a beautiful university in terms of all the different skills and experiences that your mentors can expose you to. And as I was working in urban planning and political science, I was struck by how much I enjoyed the negotiation field and disappointed that there wasn’t actually a PhD on it.

And really, MIT is unique in the sense that it has these guidelines where if you can make the case that a field has not been researched in depth, and you have the coalition of mentors to support you, you can go ahead and propose that PhD and do it. And so the reason I wanted to devote my professional career to the exploration of the negotiation field is that it’s quite spiritual. That is, it’s not only technically quite rewarding to explore a set of strategies that can help unlock significant conflicts in our communities, but it’s also a field that challenges you every day to question which are your blind spots, what is your moral compass, what do you stand for, what kind of relationship you want to foster at home and abroad.

And I felt that this was a set of skills that would challenge me throughout my life, and that I’d be honored to work with people passionate about this field. So it was very organic. It wasn’t planned when they came to MIT, and I’m very fortunate now to be responsible for teaching about it. As many things in life, they just come to you, and you run with it.

Excellent. And so your book is about natural resources negotiation. How did you come to specialize in that area?

Well, coming from Mexico City, a city with over 20 million people and where the stories that I would hear from my mom about how the city looked 30, 40 years ago are kind of sad– it doesn’t look like what she describes anymore. I’m passionate about figuring out how can we practically both foster economic development and, at the same time, creatively ensure that we can hand down these resources to future generations.

And what’s exciting about the negotiation field is that all the skills associated with adaptive leadership and conflict resolution really require an understanding of mutually beneficial trades, the ability to put myself in other people’s shoes and so on. And if we want to be effective in the management of natural resources, those are skills that are necessary. So naturally, it’s a field where the skill set that we develop in negotiation matches the challenges that we have.

And so when I was deciding about my research projects, I felt that Mexico, as it transitions as an economy in terms of being able to serve a larger subset of the population, knowing how to practically address these challenges with a problem-solving mindset, which is at the heart of MIT, would be important. And so that’s how I came to these topics.

And when you were talking just now, you mentioned how you had interviewed more than 70 high-ranking officials who were involved in the US-Mexico natural resources negotiations around hydrocarbon resources in the Gulf of Mexico– that is one of the case studies in your book– and then the water resources within the Colorado River basin, your other case study. I thought, by way of getting to know your book a little better for the audience, maybe you could tell us about a few of the interviewees and the conversations where people had some interesting perspectives or surprising insights.

Mm-hm. Well, on the Mexican side, I spoke with President Calderón. I spoke with the ambassador, at the time during the negotiations, to the US on the Mexican side, Ambassador Arturo Sarukhán. I spoke with all the high-ranking officials at the Ministry of Energy– currently the deputy secretary for energy transition and planning, Leonardo Beltran; the deputy secretary for hydrocarbons, Mario Budebo, and so on.

And on the US side, I was fortunate to speak with the right-hand of Secretary Clinton at the time, David Goldwyn, who was the special envoy for international energy affairs at the State Department. I spoke, on the Colorado River side, which was fascinating, with all the heads of the metropolitan water agencies in the seven US basin states. Let’s see if I recall them correctly. It would be Utah, Wyoming, Colorado, New Mexico, Arizona, Nevada, and California.

I was fortunate to speak with, at the time, the deputy secretary of the interior, Mike Connor, but during the negotiations, the commissioner of the Bureau of Reclamation. And what happens is that you start with a certain list of high-ranking officials, and they very kindly then share with you the opportunity to speak with their staff, and with the technical managers, and the head of NGOs, and so on. And you can really piece together a complete perspective of what they did.

In negotiations, that takes years. The Colorado River case negotiation, it was five years. And the Gulf of Mexico focuses on three. And so people are sharing with you what they did on their weekends. They’re talking to you about the challenges that they had as they were traveling back and forth between the two countries. And they really can share with you these stories of reciprocity and trust that emerges from such an intense contact with one another.

And so in that sense, they were very rewarding conversations that I structure around a set of 25 key questions that I felt were necessary– and they’re certainly at the end of the book in one of the appendices– where we explore the nitty-gritty of the negotiations against some key insights that we have in the field to figure out how people structure a negotiation process, who they send as a representative, who they choose and why, what characteristics the negotiators need to have, how they frame the dispute.

At the table, how they manage communications with their constituents and with the other side, what steps and sequence they followed to create value and then distribute it, how will they manage spoilers, how will they communicate their outcome, do they have a press strategy, and then what kind of steps they follow to monitor what they agree on the table, which fortunately, for the case of what we will be discussing today, both agreements, approved in 2012, were further implemented and have been ratified even by the Trump administration.

And actually, that seems like a good segue to, are you able to give a brief overview of one or both of the case studies to–

Sure.

What’s at stake there?

OK, I don’t want to bore you with many details. So in summary, in the Colorado River, the challenge was that Mexico and the US, in 1944, got together and signed a binational treaty that said, every year, we have 16.5 million acre-feet of water. We’re going to divide 15 million between the upper basin and lower basin states on the US side. And the 1.5 million acre-feet remaining, we’re going to give it to Mexico. And we’re deciding that this is the amount of water we have available to us based on rainfall expectations that we gather during the 1920s.

And so that model worked. But as the decades went by, what they discover is that of all the decades, going 150 years back, the 1920s was the one where it rained the most. So that was already a strike.

And in addition, we’re facing, certainly in the American Southwest, quite significant climate risks and drought. And so what happened in the Colorado is that the US basin states first negotiated with one another how they would deal proactively– and that’s a great testament to their foresight– with future climate risks by enhancing a structure to deal with shortages. And once they negotiated that, they went to the secretary of interior, Dirk Kempthorne with the George W. Bush administration. They said, we have this agreement. Now we want to negotiate with Mexico for shortages.

And of course, when they went and knocked on Mexico’s door and said, we just want to negotiate how to reduce your water allocation, had the Mexican delegation said yes, they would all get fired. And so they had to actually get together and figure out, how can we unpack a negotiation that not only deals with shortages, but perhaps explores environmental restoration in the Colorado River delta, figure out how can we partner to improve the infrastructure we have on both sides, create new sources of water, and so on. And I’ll give more examples later on.

On the Gulf of Mexico side, by now, many of you who are acquainted with the energy sector in Mexico, over the last few years, there’s been a massive change in terms of welcoming foreign investment, which was not the case since the 1930s. But at the time when this negotiation was ongoing, Mexico had yet to make that transition. And they saw, on the Mexican side, they need to set a framework in the maritime boundary that the two countries share in the Gulf of Mexico about how the two countries should jointly explore and develop hydrocarbon reservoirs that straddle the maritime boundary.

The challenge, though, was that on the US side, the guidelines that govern the management of these reservoirs are called the rule of capture. And that didn’t match the needs that, at the time, the Mexican company that had the monopoly on oil, Pemex, would be able to partner with. And so the two countries needed to figure out, also proactively, a framework that would allow them to create value if they were able to develop these joint resources.

And so the agreements negotiated between the two countries quite creatively addressed both challenges, challenges that were outstanding since the 1940s in both cases.

And I think that in your book, the ways that you talked about some of the– like, there were the broader challenges, and then there were the challenges within the negotiations themselves. And I just found that fascinating to get that window into all these things happening at the back tables, and then when they went to their counterparts and how they built those relationships. So what do you see as some of the most crucial challenges within those negotiations that each side overcame to reach a successful outcome?

Mm-hm. Wonderful question, Emily. Let me share a couple of stories. Let’s see if these resonate with you, and you can even apply it to your daily practice.

So on the US side, as they were negotiating with Mexico, they start off the launch of the negotiations in the Gulf of Mexico. The biggest challenge was that traditionally, the two countries had exchanged drafts about what they would want in a binational agreement governing the exploitation of shared hydrocarbon reservoirs. And when I share an idea with you about the length of the maritime boundary, it’s three times the size of the state of Massachusetts. That’s the amount of hydrocarbon reservoirs at stake.

And the two countries would always share with one another a set of drafts, from the 2000s. And they would come back with 100 critiques and never be able to get on the same pave. And so sure enough, as they were preparing to launch the negotiations in the late 2010s, after the Deepwater Horizon oil spill, which would make you think that it’s not the best circumstance to negotiate a deepwater exploration agreement, [? David ?] Sullivan, the head of the US delegation on behalf of the State Department, shared with me that he’s at the White House with the DOI team and the Obama team.

And they’re talking about the draft that Mexico sent to start the negotiations. And they’re saying, the Bureau of Ocean Energy Management looked at it for the last five months. And they have 180 complaints and reasons why it would not work. And as a result of that, I think that if we start tomorrow the negotiation, by showing them how we’re going to tear down their draft, the negotiations are dead right there.

So why don’t– and he tried to convince his team, why don’t we tell the Mexican delegation that we should launch a set of joint workshops? We should travel to DC, to New Orleans, to Mexico City, and to somewhere in the Gulf of Mexico. They ended up choosing Tabasco.

And let’s just get together with experts in the different elements at stake– the market and political structures that we’re going to try to transform, but also the nitty-gritty of deepwater exploration. And rather than work against each other, let’s work side by side against the problem. And so for three months, they went into these workshops to build a common framework to then discuss how can we develop a draft together, the two countries.

At the time when they heard this proposal, the Mexican delegation thought, aha, so they’re trying to delay the negotiations. They know the Calderón administration ends in a year and a half from now. But jokingly, they said, we won’t say no to three months of vacation. So we’ll travel back and forth.

Evidently, they took it more seriously. And after the workshops, what they realized is that they had been able to move past a lot of the misconceptions that both sides inevitably had about both the market and political frameworks on both sides. And so that’s an example of creative solutions to move away from the traditional arm’s-length protocol that governs many diplomatic negotiations.

Another narrative to share in the Colorado River– traditionally, in the Colorado, the rule is that when Mexico and the US negotiate, it must be only with federal stakeholders. But in order to create value in this kind of negotiation, the agencies that really have flexibility are the metropolitan water agencies in each of the seven basin states because they know the challenges on a daily basis, and they are the ones who would be able to make significant trades with the other side.

And so Mexico had to be convinced that even though traditionally, they negotiate one-on-one only between federal stakeholders, they needed to embrace a process where, in front of them, the seven states would have delegates. And they would not only have voice, but actually decision-making power.

And it took Mexico quite a while to be comfortable with having small delegations and be confronted with the delegations that doubled them in size. But the benefit is once you do that, you can foster a set of creative traits, which I imagine you want me to discuss later down the road. So I’ll keep I’ll keep the cliffhanger and talk about it later.

Excellent. Well, I think a few of the things that stood out to me were in the mutual gains and how, rather than approaching things from the standpoint of who gets the biggest piece of the pie, it was about expanding the size of the pie. And I liked a lot of what you had in your book about building relationships and the unexpected camaraderie that sprung out of there.

When it comes to environmental and natural resources negotiations, are there elements of negotiation for mutual gains that make it inherently more likely to lead to environmentally sustainable outcomes?

Mm-hm. Yes, I believe that the data not only in my research, but for the last, I’d say, two decades in the negotiation field, underscores that it’s the only feasible path to really foster agreements that are both resilient and able to adapt to the circumstances, which is crucial in terms of the management of natural resources. So let me come up with two examples right away from the negotiations in the Colorado.

I laid out that the case was about how do we negotiate shortages between the two countries. So when Mexico said, OK, let’s launch the negotiations, they requested that the US be willing to negotiate about surplus, about environmental restoration, and about creating new water sources. The US said, how can we negotiate about surplus? We’re literally negotiating about shortage. What part didn’t you get from the memo?

But Mexico was saying, I have a back table and an audience in the capital that needs to be able to say that, on the merits, engaging in these negotiations and achieving an outcome will actually generate benefits that were not available to us. That’s what needs to be feasible from a political and technical standpoint.

In that process, however, they didn’t know what kind of trades that they would uncover. So one of the first challenges that the other two delegations had is to get past the mirage that the problems that you have on one side of the border can be solved by actors on the other side. So, for example, what they realized after many rounds of negotiations that included, for the first time– it’s quite shocking, but for the first time, involving the high-ranking officials from both sides to travel to the other country and visit and tour the infrastructure.

Well, what the US realized is that on the Mexican side, most of the canals were not lined with concrete. And so annually, Mexico would receive their 1.5 million acre-feet, but a lot of the water would be lost through seepage. What that means is that that water was not being used by any farmer on the Mexican side. And so there was no human being relying on it, nobody feeling that it was a political entitlement.

So what if you line the canals with concrete? It would immediately create new water. Nobody’s using it yet. What if the US invests in lining the canals and, in exchange, Mexico trades a portion of that water at the rates on the Mexican side, which is much cheaper than the USA side, and trades it with the metropolitan water agencies, which are desperately trying to find new water sources, but the farming rights on the US side are far more expensive?

And so they realized, hey, we can make this trade, and everybody wins. The infrastructure on the Mexican side improves. Water is cheaper for the ratepayers in Arizona, Nevada, and California. And we even get around the challenges of setting a federal precedent. We don’t need the US to pay for these trades. The metropolitan water agencies can do it on one-off trades.

And so that’s something that sounds commonsense. It took them three years to figure out because one of the challenges is that for over 70 years, the two countries managed water with two completely different data sets. The US relied on the CRSS modeling system, and Mexico [INAUDIBLE]. And I won’t get into the nitty-gritty. But the fact is that they spoke two languages, and they had never agreed which one they should rely upon to actually understand what was happening to the whole basin.

So what, creatively, the US did is to propose funding training all the technical managers on the Mexican side on the modeling on the US side. And after a year of training, they finally were able to see some creative solutions. So that investment in joint fact-finding and creating a common base of knowledge was important.

And it underscores how frequently countries think that they’re managing a resource together, but in reality, they are treating each other as perhaps one country is the customer, and the other is the one that sets the rules. Whereas when you work in a partnership, you really see the benefits on investing bringing up the other side to your level because you can actually then create some more beneficial outcomes.

Excellent. So before, you were mentioning the origins of the negotiations and how they originated under the Calderón administration in Mexico and under the George W. Bush and then the Obama administration in the US. So we’re now under different administrations on both sides. And given current US-Mexico relations, what advice would you offer to negotiators on both sides who are going to be engaging or are currently engaged in either natural resources or other kinds of negotiation?

Sure. Well, I have the blessing of being able to work in such a beautiful country as the US, to have done my PhD here. I have fallen in love with my fiance as a grad student here, who happens to be a New Yorker Jew. I’m quite in love with the US.

And I can see how significant and pressing are all the problems that both countries face and how necessary it is to figure out the steps that can foster solutions for such an array of stakeholders that have different priorities and interests. The challenge of approaching these problems with a win-lose mindset, which happens on both sides, is that you lose the ability to foster the trust and reciprocity that allows you to find solutions you didn’t see initially.

And so you go away from the table thinking that you foster a good deal for yourself. But in reality, you never actually saw even 10% of what was feasible. So in the book, I really tried to present 12 steps that are applicable to any significant negotiation between transboundary partners. And let me hit some of the examples that I have.

There is no doubt that ideally, you would want the highest authorities on both sides to declare a mandate that says, we’re looking for mutual gains. That, of course, requires you to go against the idea, quite widespread, certainly right now in the media, that if you are doing fine, I must be losing. But the reason why that curtails the creativity of your bureaucracy is that when you convey to them that my win comes at the cost of the losses of the other side, is that they are less willing to invest the time to learn from one another.

And so what was interesting in the negotiations is that, for example, some of the actors would share, well, when we have a weekend of negotiations, sometimes, a high-ranking political official will come and pound on the table and say, your country is responsible for A, B, C and D. And if you don’t behave, we’ll make you pay. But if you foster reciprocity within your delegation team, you can hold the wave of that anger, let that person vent, and then move forward.

And so what they told in these negotiation is that often, high-ranking officials on both sides would come to certain sessions and speak in a combative, aggressive language. But when they would have the break, the heads of both delegations would go by and say, don’t worry. We haven’t changed our approach. We still got your back. Just let that person vent. They are above us. Well, we know the real problems we face. We’ll work together.

Some funny examples are they were negotiating the last pages of the Gulf of Mexico agreement. They were at the State Department. And Arturo [INAUDIBLE], the head of the Mexican delegation with the foreign ministry, got up from one of their rooms and left his badge on the table. And he was calling on the phone the Mexican president, lost track of where he was, and went past the line where you need a badge.

So the police– or rather, the officials at the State Department took him out. And no matter how much the US delegation wanted– no, like, he’s there. Don’t get him angry, blah, blah, blah. He had to wait in line, get the new badge, and start the negotiation 90 minutes later.

When he comes back to the table, he says that he could hear a pin drop. And with good humor, he said, next week, we have the meetings in Mexico City. If somebody gets arrested before, it’s not my fault. And they moved on from that.

And there are countless examples in the book where what is really heartwarming is that when you realize that the other side is really putting themselves in your shoes– they’re investing the time and resources to figure out a package that works for you, for the people you represent, and they devote the time to understand which are your values, your political constraints, the things that your community needs– then you build a certain rapport.

For example, I was interviewing at the Caesars Palace in Las Vegas now the head of the metropolitan water agency in Nevada, but at the time, the second in command, John Ensminger, who was saying, I was in one of those meetings with Mexico in San Diego. And I had to fly back to Nevada to do a board meeting Friday morning, and then I flew back Friday afternoon to be with the Mexican delegation.

And as soon as I came in through the door, they applauded like crazy as if I was one of them.

I love that story.

And I think it’s quite genuine. I mean, when you see that people can be hard bargainers in terms of defending what’s important for their country and, at the same time, recognize that you’re with a partner willing to figure out how you can come back home with a victory speech. And so those are some of the things that I saw in the research that has carried through.

The example is that even though administrations have changed in both countries and even the tone of the national relationship right now is different, both agreements have been ratified because the communities that depend on these agreements were not only consulted, but empowered with decision-making. And so one example here which is important is that traditionally in the Colorado River, you would have the governments negotiate with one another. Not only did they break the protocol in terms of empowering the states to participate in negotiations, but the NGOs– and you and I were at the UN event– which often are seen as only observers that can provide voice or insights as part of a technical team, were empowered when managing an entire decision-making group within the negotiation.

So the NGOs were involved because the two countries wanted to figure out how do they restore the Colorado River delta that had been decimated over the past 50 years [INAUDIBLE] 90%. So it’s the last chance to revive it. How can we get water from both countries to restore the delta, deal with invasive species, and actually enhance native growth? They were brought for that purpose.

But the NGOs have the unique characteristic that they are transboundary in their work. They really look at the basin as a whole. And they have to work in both languages. They have offices on both sides.

So what the two countries did is often rely on them as neutral conduits to float creative solutions. And so for example, if the US thought that pursuing a path would be beneficial for five of the seven basin states, and perhaps only California would be against it, and they didn’t want to be the ones proposing it, they would suggest to the NGO on the US side that they could mention to be NGO on the Mexican side that of Mexico asks next week at this point in the negotiations, how about we do this, there will be a positive response.

And so in addition to being these neutral [INAUDIBLE] of information, they also had a critical role in a challenge that you wouldn’t think about is as prevalent as what the book underscores, which is that if two countries are negotiating in two different languages, because that’s the diplomatic protocol, what happens if there’s a translation problem? Who’s going to notice? And so they were at the end of the negotiations. Mexico sends the last draft on the Colorado River agreement to the US.

And Mike Connor tells me– I remember that he was at his office in DC at the secretary of the interior. And he says, we received the draft from Mexico, translate it to English, and they’ve come up with some last-minute requests that make no sense. We’ve negotiated in earnest for five years. We’re about to sign. 10 new requests? Where did they come from?

And he said, we’re so angry, we think we should pretty much end the negotiation. And the NGOs on the US side looked at the document and said, it’s funny. The Mexican draft in Spanish had footnotes explaining every request. For some reason, those footnotes are not in your English translation. I would suggest you ask for a second translation.

It’s never been clear. Perhaps the translator was just tired and he decided, why would the footnotes be important? But in any case, this second translation allowed both sides to say, OK, these are last-minute requests, but I gather that’s now come from the president of Mexico. I gather some make sense. And some, we can debate [INAUDIBLE].

And so having that third party, and neutral, create value for both sides is something that they didn’t expect, and underscores how often, in the management of natural resource, empowering a larger array of stakeholders is to the benefit of all parties because you can come up with more effective agreements.

I thought that the part about the NGOs’ involvement was really interesting. And as a communications person, I also really enjoyed how they worked on the press strategies in that joint way with the messaging and everything.

Oh, it’s a great observation. It is true that– you can certainly see now, in the age of Twitter and presidential politics, that might be different. But at the time, well, the two countries decided [INAUDIBLE] is in a negotiation, I’m going to need maneuvering room to tell my back table that some of the things they asked of me at the beginning, they’re no longer feasible. Because in the process of having a conversation with the other country, I’ve discovered some of the constraints that we didn’t know, and I discovered some of the trades that we didn’t think about. So I need to be able to explore these trades, have them as points of tentative agreement, and until everything is settled, then announce it.

And so both countries in both negotiations said, we’re going to have only joint declarations, and we’re going to do it very sparsely, a couple of times per year. And when we gather with the press, we’re going to focus our communication to the foundations– in the case of the Colorado River, that [? working ?] environmental restoration. So we’re not going to have the press conferences in Mexico City because we know, then, that somebody that has nothing to do with the North of Mexico will try to connect their problem with what is going on there.

And in the case of the negotiations with the major oil companies and so on, the same decision was made. Let’s communicate with the communities that live in the Gulf on both sides, who are aware of the benefits that would accrue to both countries if we work together. And so they worked in these joint statements.

You remind me of– it’s a good– I’m sorry, I have to tell. It’s in the book. So Pat Mulroy, which is known as the water czar of all metropolitan water agencies in the US– she’s had a tremendous career and, at the time, was the head for Las Vegas.

She tells a story that unlike Arizona and California where when you have a binational agreement, you can announce the nitty-gritty of the deal to your board behind closed doors, in Nevada, they have sunshine laws. And so the first time you’re going to tell your board the nitty-gritty of the final deal, all the press needs to be there, present. And they can take any narrative and tell it to the outside world.

And she was very worried because the Mexican delegation had told her that the US should not say that the water that Mexico would be giving to the US through the new infrastructure was water that Mexico was selling. Because in Mexico, there’s a political subset that always blames the US for everything that is wrong. It’s quite a comfortable way to approach problems. And if you say that you’re selling water to the US, they could use it as a sign that you lost in the negotiation.

So you have to say that it was a trade, which it was. But Pat couldn’t be certain that that’s how it would be written, not only in the US press, but most importantly, what is often published in the US press, is actually what is then published in the Mexican press. They just go and get that, and translate it verbatim.

So she met with the heads of all the newspapers, radio, and TV agencies before that meeting with the board and said, this is what you can say, this is how it can be said, so that when it gets translated to Mexico, they are fine and they don’t have problems at home. Quite unusual to think about that, and it underscores their relationship. Well–

Unusual for the press to agree to something like that as well.

Indeed. And she was saying– she was very close to Senator Harry Reid. She said, I’m presenting to you, in detail in these meetings, why this agreement serves the constituents of Las Vegas. And if you think that’s not true, go ahead. And so she devoted the time to present why the package made sense. She used that reputation she had with different agencies.

And then she’s sleeping. And she wakes up at 3:00 AM, and she realizes, but the person that writes the title of the story, that wasn’t present. And it’s completely different from the one who writes the article. So she had to call right away and change that title before 5:00 AM.

And so it’s telling to commit yourself to think about how your message works for the other side. And again, it underscores that both sides– you behave that way when you’ve achieved a deal that is good for you, right? And it’s telling that that’s also how Mexico behaved. They would only convey the outcome of the negotiations to the foundations that invest in restoration. So quite a good story in that sense.

Absolutely. And I thought maybe you could briefly tell us about some of your current areas of research. And then we can turn it over to the audience for a few questions.

Sure. Well, I think that my research is connected also with the blessing that is to be able to chair at MIT. So a lot of my work over the past year has been focused on building, for the entire campus, the first ever inter disciplinary concentration in negotiation and leadership.

And so in partnership with five schools, I’ve been leading the effort that has gathered over 125 undergraduates from 22 different departments in figuring out which are the subjects and the pedagogy, that includes both mind, hand, and heart, to empower people to develop these skills and be able to go out to the outside world and say, I have mastery in negotiation and leadership that people usually develop in their MBA or MPA when I’m 18, 19, 20.

I’ve taken a year and a half of classes on these subjects. And I now have my career to put this win-win approach to practice. So a lot of the research there is empowering undergraduates to be able to contribute to conflict resolution research in the field.

Now, in the spirit of winning together, I’m part of binational collaboration between MIT, Harvard, and the Mexican Ministry of Energy, the national oil company, and [? CFE, ?] the major electricity company, in rethinking how Mexico negotiates domestically and abroad. And by that, I mean that we’re in the process of empowering agencies in Mexico to develop negotiation units within their companies.

And what that means is you often think that negotiation is an individual skill. You go to a certain training. You read a certain set of books, and then you bring those skills to your organization.

But the reality is that in such diverse and challenging fields as energy and water management and so on, the wisdom that the different entities in your organization have about how to foster effective negotiations needs to be nurtured. That knowledge needs to be able to be transmitted effectively and quickly between different agencies in different parts of the world.

And so we’re in the process of figuring out how these negotiation units that are traditionally only available in some companies like Google, Apple and so on can be put in practice in Mexico so that these companies that now face a completely new economic landscape can actually foster benefits for the myriad of different communities that, in Mexico, desperately need economic development, social justice, and so on.

And I think to the extent that we can empower different actors to go against these win-lose mindset and, in practice, show, throughout the hierarchy in an organization, that investing that time generates benefits for everyone well beyond the energy companies. It’s a wonderful responsibility to have. I’m thankful that MIT has entrusted me with that.

Well, I’m sure everyone here is thankful to have you here.

Oh, thank you, Emily. Thanks so much.

And now who has some audience questions?

Go ahead. Thank you for the questions.

Hi, Bruno. I love listening to you. This is great.

Thank you.

I’m just recovering from negotiating a deal with a state-owned entity in China, Mexico, and the United States, corporation around water treatment. I got trained at Tufts in negotiations around a lot of the same ideas, and they’re not prevalent in industry.

You have the CEOs banging the table. You have nobody wanting to spend time to learn from each other. And it is almost an academic approach to something that people feel has to be machismo, men standing at the table.

So I’m interested– I thank you for keeping this training going because it is the right way to solve problems. It works for everybody. Why do you think this difference persists? And what do you think is the difference between the private sector and public sector in these type negotiations?

Oh, wow, thank you for such a fantastic question. It’s true that– I see three angles. The first one is that to some extent in democracies– and there’s different degrees of how democratic different societies are. Certainly in Mexico, there’s so much room for improvement.

To some extent, the acquisition of power and the execution of that power is associated with casting the other side as someone you don’t need or someone that is preventing you from achieving your goals. And so often, many of our leaders are selected by their ability to tell these narratives to the point that they actually represent how they approach the world.

And so within that framework, which is certainly win-lose and happens in certain dynamics where you’re trying to acquire power, once you acquire it, you feel comfortable with executing it and using it in such a way. And you’re not worried if actually, you’re leaving value on the table.

And so the only way to get to practice it on a daily basis is to make sure that across different responsibilities, we empower these specific companies to rethink how they negotiate. And that means that as it pertains to the bottom line, as it pertains to the effectiveness of their agreements, we can actually show, this is how you negotiated deal A, following the traditional protocol. And this is how you negotiated deal B– with a team of negotiators that you foster for a year, that you nurture, that you’re preparing these skills.

And once they see that it adds up to the bottom line, they can rethink how they go about things. And so you certainly need backing from up above. And then you need people who see leadership from a facilitative role, almost as a mediator within your company and across.

I think that a big challenge is that people believe that if a deal is good for me, that’s all I care about. Often, then, that’s a parasitic agreement. And somebody who wasn’t sitting at the table pays.

So empowering this approach to negotiation, at the end of the day, saves litigation costs. It enhances implementation and fosters relationships that allow you to create more value in other things. And so I’m happy to see that there is this move in Mexico with these major companies to develop these skills.

And when I speak with them, what they tell me is, because we’re seeing all the partnerships that we’re not able to build. And we are terrified about the value we’re losing. We see the disparity between the knowledge that the foreign companies have and the knowledge that we have, and we wish we had the structure to approach this without fear and actually make decisions that are rational and also generate value.

So I think that is part of a process. And you just need to hope that more people in positions of leadership are willing to test it, and then empower their teams with that. In that sense, I think that’s why MIT is so unique. That concentration will be the first in any top US university that offers that level of intense training. And we are the only university to have an advanced negotiation course for undergraduates.

So MIT’s taking the lead in seeing that we need to empower people earlier so that from the start up, they build. They have this approach to the problems they face. Any other question?

So I think one of the most important negotiations that’s going to go on are the future COP negotiations. And you and Emily met each other at a related event. What do you think– I mean, first of all, I guess the French have gotten credit for doing something magical that helped the COP21 come together. But what do you think needs to happen to ensure– I mean, these are going to get tougher as people have to really make good on their promises. What needs to happen ahead of time?

Sure.

Is there hope?

Well, how can I tell a positive story in that sense? So there’s 20 years of trying to deal with this. And I think that research is quite clear that local communities need to make these decisions.

So for example, MIT has invested a lot of time in empowering coastal communities in New England to think proactively about how to deal with climate risks regardless of political positions by going to communities in Maine, Massachusetts, New Hampshire, and Rhode Island, and gathering not only experts, but actually citizens that represent business, environmental interests, and so on, and fostering these workshops where they can engage in role-play simulations where they negotiate, for example, how to deal with coastal flooding.

And what the research underscores is that being able to, even in a role-play simulation, put yourself in the shoes of a completely different actor when you are exposed with hard data about the challenges, but you also see the emotional components behind why people want to keep with a daily practice and they don’t want to change it, fosters a set of conversations that often underscores how now, you’re missing the opportunity to create significant value.

So one of the most important challenges with the UN, if we take it globally, is that often the discussion is about all the costs. And all neuroscience research underscores if people are thinking about the costs, they will not support your agreement. So the ability to frame and persuasively communicate about the benefits and devote your time to structured conversation around those benefits needs to be in the front of the conversation.

And that won’t happen if, the way countries currently negotiate, they leave it up to the last month, and the last week, and 11:00 PM on the last day, to make the deal. There is no maneuvering room there to make the trades.

But of course, if you want to embrace a negotiation process only to make political declarations and speak about a perspective of the world where you’re protecting your country by doing nothing, which happens across all continents, then that’s the outcome. So we need a genuine desire from stakeholders in industry, environment, and in government to say, the way we negotiate does not match what research, in 40 years, has underscored. We don’t negotiate that way because it serves us in terms of remaining in power, but it doesn’t solve the problems. How about we figure out a way to solve the problems and remain in power?

I believe that’s feasible. I’ve seen it. Everybody I interviewed has advanced in their career, whether Republican or Democrat. And so it’s just desire to rely on our imagination and to stop being narrow-minded, which unfortunately, is often a challenge that if we don’t resolve when we are young, it gets tougher the more you get old. Any other question?

You touched on it briefly, both the value of having models– so very strong data from a joint fact-finding perspective that people agree on and can use to find good answers– and also the benefits of designing your agreements to be flexible with some sort of either changes in the face of uncertainty or openings for how we negotiate again in the future [INAUDIBLE] structured in some way.

I found, in some of my work, that I have trouble convincing people of both of those things. And instead, they’d really prefer to do just one because they view the creation of good models and data as finding the right answer, and then they don’t need it to be flexible. Or they want to create a flexible solution because they don’t trust any of the data, and they just feel like they need to do this over and over again.

And I wonder if you have thoughts on how you combine both of those things into one combined package when sometimes, the constituent stakeholders are– it’s a tough sell for them.

Yeah, well, it’s a fabulous question because it’s related with timing. That is, to the extent– I mean, one thing that comes across from these negotiations is– and people will repeat it on both sides, is you really need to empower your colleagues to practice putting themselves in other people’s shoes. And that means being able to deal with their negative reactions at the beginning where you’re exposing them to a different approach to the problem.

So for example, when the two countries were negotiating the beginning of the negotiations in the Gulf of Mexico, what the US said was, we are certain that Mexico has no proof that there are transboundary reservoirs. All our genealogical research underscores that it’s unclear whether they exist. And so we don’t see even the point of negotiating.

And Mexico would answer back and say, our data underscores that there are. You’re just saying you don’t want to see our data. Once you do, you’ll be convinced.

Both sides were protecting from one another. The US would say, even if the federal government wanted to believe Mexican data, we can’t have access to the proprietary data that is in the hands of the US companies.

And so Mexico came up with a creative solution and said, OK, so we [? can’t ?] share data, but how about I present it to you? So I’ll invite you to Tabasco. You leave your phones out. Your delegation comes in, and I’ll present slides with the data, and we discuss it. And if you feel more comfortable about it afterwards, then we can move forward.

And so the desire to figure out how the sharing and presentation of the data can move parties beyond their preconceptions needs to come from the top. Then if you invest in training both sides in acquiring knowledge about a same language, it won’t be easy. It won’t be smooth sailing throughout.

In the negotiation, something that was very interesting is, well, when the US came in, they had a set of projections about how water availability in the Colorado River system is going to decrease in the upcoming decades. And then they trained the Mexican officials on the modeling system for a year. And then they are, one day, in a meeting in California. And the US comes in and presents an update in the system. And it turns out that there’s going to be even less water.

Well, the Mexican delegation was saying, you’re cooking the books on us. How dare you do this? We’re about to leave. They storm out of the room. They’re discussing whether they’re going to fly back to Mexico.

And then the head of the California agency says, we have to stop them. They’re not understanding that if we’re revealing to them that there’s an update in the system, they can check whether it is true. If we’re trying to pull one over them, we will have actually done the opposite.

And they said, but Mexicans won’t stop. So what could we do to keep them here? Mm-hm. Culturally, there’s a tradition for hospitality. How about we call for the cookies that the hotel has ready, say and present the cookies to them, and they won’t say no. And while they’re eating them, one-on-one, we explain them the problem.

You say, in these major negotiations, such a move is useful? Boy, it was. I interviewed the Mexicans. [INAUDIBLE] those cookies, they were critical. We were about to leave. But once I saw them, I said, OK, I’ll give half an hour.

So those steps of speaking the same language, I understand why you struggle with it. But the message is, embrace the challenge of both sides having to discuss their assumptions. But the payoff is in the long-run, because the better your picture, the easier it is to see what is really feasible.

And the right answer from a technical standpoint needs also to fly politically. So that second step starts with having the technical data correct. Then the second is up to the politicians to see what is feasible. And that will be a second negotiation that relies on emotion and the nitty-gritty of the context you face.

And speaking of cookies, I hope that you guys can stay for our reception. Thank you so much, Bruno, for having this talk with us. And also be on the lookout out. The MIT Energy Initiative has a twice-annual magazine, Energy Futures. And in the next issue, there will be a conversation with Bruno there.

Thanks so much, Emily. Thank you for sharing your evening with me.

Thank you, guys.

[APPLAUSE]


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