Some brief thoughts on framing the war in Ukraine

As the war in Ukraine moves to the center of global consciousness, I think it is important to remember the various actors’ positioning, constraints and likely agendas. As much as we would like to know ‘the truth’, the reality is always that beyond a core set of known facts, any situation is subject to interpretation based on positioning, constraints and agendas. And to the degree these factors make for focus on very different sets of data points, it makes it hard to reach common ground in a negotiated agreement.

When I was in business school, I took a class on negotiation that I thought was a very good primer. The defining elements of negotiation we learned are the “best alternative to a negotiated agreement” (BATNA) and the room for mutually acceptable outcomes. Based on this framework, if the negotiating parties have good BATNAs or at least perceive their BATNAs to be good, they are less likely to compromise in negotiation, limiting the area for mutually acceptable outcomes. If one party in a negotiation miscalculates and negotiates a position well outside the other party’s zone of acceptable outcomes – even though there are mutually acceptable outcomes – the other party could fall back on her BATNA and the negotiation will fail.

Think of it like selling a car. If I own a car that I want to sell for between $7,000 and $10,000 and I am negotiating with someone who is wiling to buy it for some price between $0 and $8,000, we have a window of mutually agreeable outcome between $7,000 and $8,000. But I could be willing to pass on the transaction because I don’t need the money. My BATNA is no deal. And so maybe I start the negotiation out at $13,000 and the buyer thinks there’s no room for negotiation and moves on.

I think we are going to witness the same thing over the war in Ukraine. And the complicating factor is that multiple parties are involved, not just the Ukrainians and the pro-Russian rebels. To varying degrees, Russia, the US, and the EU are also directly involved here and that’s going to make getting a mutually acceptable outcome more difficult.

I will be writing a lot about Ukraine, largely because I think it will have geopolitical and global economic implications. But, I will be looking to understand what the various actors here will do based on their prior positioning, constraints and agendas more than what they should do given what is right and decent. I think what is happening now is just what we saw in prior economic crises in Europe and the US; specific policy makers get locked into a course of action because of their own agenda, prior positioning, and political and economic constraints. One of the biggest reasons people can get caught up in a course of action that leads to a poor outcome is that people don’t like to look like flip-floppers. And so once someone’s position is established, it becomes an anchor for future action, limiting negotiating manoeuvrability.  We saw this in spades during the European sovereign debt crisis and I believe we are going to see it as well with the war in Ukraine.

I will have some thoughts out later today in my usual commentary.