A few years ago, I was asked to present a seminar on delay/disruption damages. In my presentation, I made reference to “The Art of War” by Sun-Tzu, an ancient recipe book on winning at battle.
My audience was critical, with many essentially saying that good business practices do not assume that the other side is the “enemy.”
But note that Sun-Tzu’s book is subtitled “The Classic Book of Life.” His lessons are meant to be applied to everyday living as well. The following are some of the rules of Sun-Tzu, with my suggestions on how they can be applied in your business life.
“Victory should be swift. If victory is slow, men tire, morale sags. Sieges exhaust strength.”
On a government maintenance contract, the contracting officer’s inspectors constantly issued notices of deficient performance. The contractor responded in writing, which was the correct approach, but he was getting worn down, and his employees were no longer giving their best efforts. Had he simply proceeded, the sheer weight of paper was going to take its toll.
Under the federal Contract Disputes Act, the contractor was able to file a claim for the first three months of the project before the Armed Services Board of Contract Appeals. His success before the Board altered the remaining course of the contract for the better. An arbitration clause allows for a similar form of interim dispute resolution. As Sun-Tzu wrote: “Prize victory, not a protracted campaign.”
“In … fighting, … change the enemy’s … flags and standards; mingle their chariots with yours.”
This technique works. How often have you gone to a negotiation meeting where you align your people on one side of the table, with the opposition poised on the other? You have already established that you are enemies, making concessions difficult and trust hard to establish.
What I like to do is arrive at the meeting room early, and spread my clients around the table. The other side is then forced to intersperse, with the result that the “sides” are blurred. Less contention, and more reason often results.
“The soldier’s spirit is keenest in the morning; by noon it has dulled; by evening he has begun to think of home.”
An ancient technique for negotiations: Do not accept a settlement meeting that begins at 2 p.m. or later. The other side will have had lunch and be impatient to leave.
Start as early as possible and save your best arguments and facts until later in the day. Get an agreement that no one leaves the room until a resolution is reached, and make sure your people understand and abide by this approach.
“Words of peace, but no treaty, are a sign of a plot.”
I have seen this principle in operation hundreds of times. The other side says: “Let’s just get through this and it will all work out” or “Let’s work together and avoid litigation” or “Look, I’m working with the owner on this so it won’t be a problem.” My response: “Put your promises in writing.”
On one project, the owner told my client to stop writing so many “notice” letters and just get on with the job. My client’s reply, on my advice, was a letter asking the owner to confirm that the contract’s “notice” clauses were waived.
“The skillful strategist defeats the enemy without doing battle.”
This quote is the heart of Sun-Tzu’s treatise, and is the base line for all negotiations. How to apply this concept to construction disputes?
In almost everything I write for the industry, I emphasize some key concepts: Know your contract, satisfy your contract’s notice requirements, protect your contract rights, and do not make an enemy of any other contracting party. “The skillful warrior attacks so that the enemy cannot defend; he defends so that the enemy cannot attack.”
The warfare analogies may be disconcerting to some, and for good reason. My clients would much prefer doing a good job, and getting paid, than being in a dispute. As an attorney, I mostly see disputes. Many could have been reduced with a sound approach to claims recognition and avoidance, and with a brush-up course on negotiations. EC