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THE OVA and GOLF: Refocusing the Negotiation, Reframing the Relationship

The current (and future) residents of Oakmont Village and the golf courses around which the village was developed have deeply intertwined interests.  Since Oakmont Village Association does not own the golf facilities, it shares a classic interdependent relationship with the Oakmont Golf Club: neither can simply walk away and neither can force the other to agree.  Their current engagement regarding “golf” should, and likely will, become a negotiation.

Two aspects of a successful negotiation deserve special attention in this situation.  To use the framework popularized by Roger Fisher and William Ury in their classic book Getting to Yes, these are Interests and Alternatives.

Interests” are wants, needs, hopes, fears, and core principles.  We negotiate to determine whether or not we can satisfy our interests better through an agreement with another party than through actions we can take independently.  It is crucial to reflect upon, discern, and identify the interests we have at stake in a negotiation.  Even more important though is learning and understanding the interests of the other party. Since the other party can’t be forced to agree, the art of negotiation is to craft terms that will satisfy the other party’s interests – because otherwise it won’t agree – and that also will at least protect and perhaps advance our own interests.

 Alternatives” are the actions a party actually can take to satisfy its interests without the agreement or cooperation of the other.  Accurately assessing alternatives is crucial to a party’s ability to protect its core interests (its principles, its continued viability, the support of its constituents, etc.) in any given negotiation.   This is difficult because human beings naturally tend to exaggerate the righteousness or importance of their own interests and also tend to over-estimate – sometimes grossly – their actual alternatives.

A party’s ability to measure the acceptability of any proposed agreement requires accurate assessment of what Fisher and Ury termed its Best Alternative To a Negotiated Agreement, its BATNA.  BATNA represents the best set of actions a party can take to protect and perhaps advance its interests without the assent, participation or cooperation of the other party.  If the terms of a proposed agreement do not satisfy a party’s interests better than executing its BATNA would do, then the party should walk away from the negotiation. Conversely, if the terms of a proposed agreement at least protect and perhaps advance a party’s interests better than the most effective actions it can take independently, it should agree.

What is OGC’s BATNA?

OVA Vice President Tom Kendrick has seen and evaluated OGC-provided financial and operational information.  He led the recent OVA Town Hall on Golf.  A reasonable conclusion from his observations and comments is that OVA doubts the sustainability of a 36 hole, two-course golf operation in Oakmont without a substantial infusion of financial support from some source.  Based on its public statements and the dimensions of its “ask,” OGC probably sees the prospects for sustaining the status quo in a similar way.  So there appears to be agreement that the “problem” at the core of the coming negotiation is long term.

In preparation for the negotiation, OVA must discern and as accurately as possible assess OGC’s BATNA. The way to get that most clearly in view is to ask: What is the best long term outcome OGC can achieve if OVA were to refuse to be a source of any income? 

Notwithstanding OGC’s wanting – for good and understandable reasons – to keep the status quo (36 holes on two separate courses of different design and catering to different player needs), its BATNA may not be very good.  Would not OGC be forced to conclude, in the absence of substantial additional income from OVA, that 36 holes of golf are, unfortunately, unsustainable in the long term?  Does OGC have any other plausible, reliable source of additional income sufficient to sustain, much less improve, the current level of golf operations?  If not, then the status quo of 36 holes and two courses for golf is actually a burden it likely cannot carry in the long term – a burden that could even threaten the viability of OGC’s ownership.

Refocusing the Negotiation on OVA’s Long-Term Interests

OVA should refocus its attention to its own long term interests instead of reactively generating ideas for near term financial contributions to OGC.

OVA appears to have identified a primary long-term interest in the sustainability of “golf” in Oakmont village.  This is hardly unreasonable.  The village is built around the golf courses.  Its attractiveness to future buyers (crucial given the designed turnover of a 55+ community) as well as the property values of some (and a logical argument can be made for “all”) current residents are intertwined with golf.  A not insignificant number of residents play golf.  Some are members of OGC including some member-owners.

But the golf courses constitute not just attractive and challenging venues for playing golf.  They are also significant aesthetic amenities to the village – as greenbelts, as anchors to fabulous views of this magical place, even arguably as firebreaks for some locations.  It’s important to emphasize that OVA’s long term interests in Oakmont’s golf facilities attach not to ownership but to the broad potential scope of use (for golf, as greenbelts, as protection against the risk of deteriorating appearance and property values and potentially for other recreational activities wanted by current residents and perhaps even preferred by future residents).  Sustaining attractive and challenging venues for playing golf at Oakmont does not require maintaining forever the 36 hole status quo.

One possible reframing of the problem at the core of this negotiation is: How can OVA relieve OGC of some of the burden that it likely cannot carry in the long term while also advancing its own long term interests?

Here’s one possibility opened up by that problem statement.  OVA can lease land.  Since construction of an assisted living/memory care facility has been put on hold, the OVA manager currently is investigating leasing the land behind Oakmont Gardens for a dog park.  Might OVA lease 9 holes of the Executive Course from OGC and take on the costs of maintaining that land as a greenbelt?

Joint investigation and problem-solving would be required.

What might be the negotiated price of leasing the land plus basic maintenance of it as a greenbelt?  How does that compare to the cost of near term financial assistance that is plausibly sufficient to result in long term sustainability of the status quo?   How improved would OGC’s ability to sustain the remaining 27 hole operation be if it had steady lease income at some to-be-determined level and did not have to maintain and operate 9 holes-worth of golf operations, but could still offer 18 Executive holes (9 played twice)?  How would OGC calculate the value of continuing lease income in exchange for shedding a level of continuing maintenance and operational costs as well as protecting its viability as owner without giving up ownership rights to the land?

And how might OVA wish to utilize the greenbelt if it were potentially a long term lessee?  The parties are free to negotiate the terms of leasing – the amount to be paid; the duration; how the land may and may not be used; conditions for renewing, renegotiating and terminating the lease; and provisions for settling any disputes.

The idea of leasing may or may not be fruitful.  But it illustrates why OVA should pivot away from just responding to OGC’s “ask” toward negotiating an agreement intended to protect and advance OVA’s long term use interests.

 Reframing the OVA-OGC Negotiating Relationship

OVA can benefit significantly from reframing its negotiating relationship with OGC.

OVA has allowed OGC to control the public narrative and to frame the engagement over golf as simply an “ask” requiring a response lest abandoned golf courses go to weeds and ruin property values.  As a result, OVA has been positioned as just a potential funding source for sustaining OGC’s golf operations because everyone understands that OVA has no wish to get entangled in formal partnership or ownership.

At the Town Hall Vice President Kendrick stated that he hoped financial support to OGC would be forthcoming. He also stated that financial support would be limited by two conditions: 1) OGC would have to provide “concrete value” comparable to OVA’s interests and 2) the support would have to plausibly put OGC in a more stable position financially “in the near future” and could not be structured either as recurring or as an obligation.

The main OVA-presented ideas for residents’ reaction were certain small parcel land acquisitions, sharing maintenance costs, and contributing toward the costs of pond clearance and water management.  In short, although the problem posed was one of long term sustainability, the ideas were focused on rationales for near term contributions.  It was not clear how they could be sufficient for long term sustainability.

What if OVA reframed its role in an upcoming negotiation from Potential Funding Source to Potential Venture Capital Investor?  In that role, might OVA wish at least to consider finding ways to make certain continuing investments IF those investments protected and advanced OVA’s long term interests?

Based on the public record to date, OGC needs some “tough love” from OVA regarding the reality of OGC’s alternatives.  OVA should free itself from OGC’s frame, and instead approach the negotiation as a potentially collaborative venture capitalist open to proposals for investing in the long term sustainability of “golf” in Oakmont Village: “You want our money to meet your needs? Welcome to our Shark Tank.  We’ll be happy to disclose our long term interests to you and to learn yours.  Then make us some proposals.  We might even have some proposals for you.  Let’s talk!

Reframing OVA’s role in the coming negotiation and refocusing on long term interests potentially allows ideating much more broadly about “value comparable to OVA’s interests.”  Without having to own golf courses, OVA nevertheless can condition investing financial support that OGC wants and needs on the presence, commitment to, and ongoing performance of elements in OGC’s business plan that further OVA’s long term interests.

So, how would OVA wish OGC to spend conceivable financial contributions it might be willing to make going forward?  On improving the Quail Inn?  On providing walking access to some portions of the course(s) after some set seasonal time? On leasing a portion of the course(s) for OVA use?  What ARE OVA’s long-term interests attached to sustaining “golf “in Oakmont Village that a negotiated agreement might advance?  Focusing there is where OVA should be spending its time.

Fortunately for residents, the parties have time.  OGC says it is not at risk of failure.  OVA Vice President Kendrick characterized the problem at the Town Hall as one of sustainability.  It is well worth taking the time required to understand all of the dimensions of this long-term problem rather than jumping prematurely to potentially less-than-optimal solutions.

The appropriate tasks for OVA regarding “golf” in Oakmont are to determine the long term interests of its members and to negotiate an agreement with OGC that advances them.

 

 

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18 Comments

  1. Kay Oppenheimer on July 19, 2018 at 3:51 pm

    YES!!! Even if I didn’t know Don, I’d still agree wholeheartedly with this assessment. And because I know him, I’m not going to put up his name for an OVA Board position when one becomes available, because he knows where I live!

    However, this IS the kind of critical thinking we need here in Oakmont. Thank you Don.

  2. Peggy Dombeck on July 19, 2018 at 4:27 pm

    Very thoughtful. I hope the members of the board of directors read this.

  3. Joanie Guy on July 19, 2018 at 11:51 pm

    Most thoughtful
    Analysis so far. Love the concept of reframing discussion to also meet OVA needs. Love the walking path idea as a compromise… ie OVA dues to OGC could gives us walking path opportunities in golf course af certain times. Lots more possibilities how to serve OVA needs as well as OGC.
    Thank you Dan for sharing your understanding of the principles of negotiation and communication.

  4. Yvonne Frauenfelder on July 20, 2018 at 9:30 am

    In a finely worded essay Don McPherson encourages both OVA and the OGC to look at the golf issue long term, instead of developing short term solutions. He posits that the two entities are deeply intertwined and that “neither can simply walk away and neither can force the other to agree.” This relationship predisposes negotiations. And how these discussions will need to be formulated is at the core of this insightful piece of writing.

  5. James on July 20, 2018 at 10:28 am

    Wow Don, this is excellent!

    This is why this website is important, to share views that can open up the dialogue. As many know you were a writer in the Oakmont News too, and I believe this is the kind of article that can enlighten and inspire, but am not sure this kind of story would be published there.

    Hope the long-term gets the focus…

  6. Paula on July 20, 2018 at 1:41 pm

    I’m so happy to finally see a thoughtful, reasonable and expert analysis of how this process should go. Thank you, Don!

  7. jim Golway on July 20, 2018 at 5:21 pm

    My only problem with Don’s analysis is that it is based on the assumption made by the OVA (Kenrick) that the OGC status quo will never change and so the sustainability of the two courses (and Quail) is doubtful. Apparently, Don missed the fact made by a woman at the Town Hall that a five-star resort is planned to be built a few miles from Oakmont. Those high rollers, heavy-hitters will certainly enjoy having 36 holes of golf available just down the road. Certainly, that will change the status quo – for the good.

  8. Don McPherson on July 20, 2018 at 6:01 pm

    Thanks, Jim. Didn’t miss it, but there is the question of the timing, the unknown amount of business, etc. None of those are necessary problems of course if any financial support is spread out rather than given at one time, so that the effect of the resort can be measured, and/or those developments can be addressed with contingency provisions if levels of financial health improve, together with agreements addressing regular joint review of the bottom line.

  9. jim Golway on July 20, 2018 at 7:43 pm

    I get your point, Don. But the financial profile (illustrated by pie-charts and graphs) shows the OGC business is breaking even — with a small profit – and this year’s revenue projections are positive. So why the rush? Why all the, ‘oh my god the sky is falling – it’s not sustainable!’ I say; take a deep breath, the OVA has major costly projects on the horizon. I think it best that they sit this one out. The board should just say – ‘very interesting OGC, we’ll get back to you – but don’t call us – we’ll call you.’

  10. Gerry on July 21, 2018 at 8:29 am

    Don,

    To me there’s quite a cognitive disconnect between your OO opinion piece in early July re what OVA members can reasonably expect of the then-upcoming 7/10 Townhall and this article.

    It seems that essentially nothing happened at all at the 7/10 meeting that addressed your “reasonable expectations”.

    Yet now you posit “deeply intertwined interests” between the OGC and the OVA. Furthermore, you assume and assert that OGC is a responsible party with whom OVA MUST negotiate.

    So, in sequence, you stated reasonable expectations/outcomes from the 7/10 meeting but none of these expectations were met and yet you now propose somewhat elaborate plans based on OVA’s NEED to negotiate with an independent and, IMO, clearly unreliable and untrustworthy OGC partner.

    “Process” and schematics and suggestions for moving forward really must take backseat to first simply listening and observing and incorporating what the counter-party has very clearly communicated to you. Listen first.

    I think that your recent suggestions here do not reflect/incorporate the explicit communications to date to the OVA membership by either the OGC or the current OVA Board.

    So, what happened at the 7/10 meeting that leads you to propose that the OGC is a trustworthy and reliable negotiating “partner”?

  11. John Williston on July 21, 2018 at 8:58 pm

    A very thoughtful essay on what is a vexing and very complicated problem. Long Range solutions are very important to this issue and creating agreements based upon short term considerations are, in my opinion, not in the best interests of either OVA or OGC. That is why I have been advocating that the OVA Long Range Planning Committee, and other interested parties, including both Boards study the overall picture.

    In the future, as Jim Golway has noted in his example, the current conditions can change in a number of ways. Economic change and generational differences can have a significant effect on the future of the sport. Changes in the sport itself (i.e. making golf easier and less expensive to play) might increase its attractiveness to the general public. These are just a few things that should be considered in making arrangements between the two organizations which have enough flexibility to make adjustments to accommodate these changes.

    The consequences of making decisions which are fundamentally, and practically, irreversible need to be accounted for as they can be a cause of much regret later.
    The literature on golf course failures and the consequences is large and most likely instructive for Oakmont. Repurposing golf courses tends to be lengthy, expensive, and most often frustrating. IF a way can be found to ensure the life of the golf course(s), AND also guard the interests of the OVA and its residents, then by all means let’s do it.

    Gerry: OGC interests CAN be congruent with the OVA. Why not let the process of negotiation have a chance?

    *Edited 7/26

  12. John Williston on July 22, 2018 at 1:43 pm

    Gerry, maybe you could just do a bit of reading about the situation regarding golf in America, it might open your eyes to why the question is “vexing and complicated” (it really IS). Try a very thorough Ph.D. dissertation on the subject written by David B. Hueber in 2012. It’s long and boring, for some people, and could do some updating like a 2014 “inaccurate and biased” report you mentioned in your post, but you might learn something. The URL for Hueber’s Dissertation is: https://tigerprints.clemson.edu/all_dissertations/972/

    Enjoy

    *Edited 7/26

  13. Don McPherson on July 22, 2018 at 2:12 pm

    Gerry,
    It’s clear that you feel passionately about this entire matter and feel upset and mistreated or disrespected, by both OGC and OVA.

    It seems you believe that pursuing any agreement is senseless because OGC cannot be trusted to keep an agreement or maybe even cannot be trusted to be capable of negotiating one?

    I don’t know whether OVA will attempt to follow through with this, or just walk away from it which seems to be your counsel. Yet at the moment OVA appears still to be pursuing some action regarding the golf courses. And anything involving the courses must somehow involve OGC — they are the owners.

    Do you think there is anything that OVA can do/should do that could make OGC more trustworthy and reliable if they proceed, against your advice?

    To respond to your question….

    Based on the Town Hall, my interest was in OVA’s forcing OGC to be responsible. A negotiation between the parties is one way to do that.

    I called on OVA to re-think what seemed to be a reactive posture and instead to direct OGC to make proposals for funding consistent with OVA interests. For that to happen, I called for OVA to spend considerable time identifying its long term interests in the entire matter of “golf” in Oakmont.

    In asking OVA to refocus on its long term interests, I’m asking for much more time to be spent understanding this problem (including jointly studying it), getting first hand information about impact on other communities and how they’ve responded, evaluating successful responses, if they can be found, for “lessons for Oakmont,” i.e., trying to slow down the decision making process beyond the current and perhaps next budget year (since OGC has said its not in dire straits and OVA certainly has plenty of pressure on its resources.)

    In asking OVA to insist that it discover and disclose its long term interests and THEN invite OGC proposals to meet them, I’d like to see OVA step up into the driver’s seat, where they belong, instead of just studying and proposing reactive shorter term ideas for getting $ to OGC.

    The objective is precisely to demand via negotiation that OGC be a
    responsible party: if you want our $, here are our interests, show us
    proposals that advance them [ or you don’t get the money]; agree to guarantees that you will follow through [or you don’t get the money]; agree to provide the necessary information for monitoring whether you follow through and on the financial effects of changed conditions over time [or you don’t get the money], etc. This puts the ball in OGC’s court if they want $. If they decide they don’t want it under those conditions, that’s that.

    [note: that’s that FOR THE SHORT TERM — but if OVA believes from what they’ve seen that there is reason to believe OGC cannot sustain its golf operations in the long term, then OVA cannot responsibly ignore that conclusion. It still has to decide what to do even in the absence of an agreement with OGC and in the absence of giving them money. One approach to that would be Bruce Bon’s proposal of beginning to put back the $ itself, under OVA’s control, so the it is available for use in some way if it begins to look like the golf operation may fail. OVA needs long term strategic thinking about that regardless of what OGC says or does and we are fortunate at least that OGC’s “ask” has alerted OVA to that need.]

  14. Gerry Gwynn on July 22, 2018 at 3:10 pm

    Hueber’s dissertation was a retrospective look — using some national golf lobby database — of golf courses built in the 1990s VERSUS courses built in the 1960s and before.

    There is no question that the OGC courses were NOT built in the 1990s and it is those more modern courses that are the focus of his dissertation and conclusions.

    *Edited 7/25

  15. Don McPherson on July 22, 2018 at 3:39 pm

    Besides learning about and focusing on Interests and attending to Alternatives as the measure of agreements, Fisher and Ury (Getting to Yes) have plenty more sound advice for anyone who is truly interested in problem solving: “Separate the people from the problem. . . . Face the problem, not the people. . . . Separating the people from the problem is not something you can do once and forget about it; you have to keep working at it. The basic approach is to deal with the people as human beings and with the problem on its merits.”

  16. Gerry Gwynn on July 22, 2018 at 3:48 pm

    Don,

    I think that you’re projecting some of your own emotions onto me— it’s simply business that is the issue here.

    Actually my reaction to the whole OGC proposed bailout is 99% DISGUST. A business-based disgust. The proposed bailout — in any disguise as non-existent “for services rendered” — is bad business for the Oakmont community.

    After decades of experience directing global venture capital investments, I assure you that one party to an agreement cannot make the second party to an agreement “more reliable and trustworthy”.

    Certainly, giving OGC even more money to allow them to continue to mismanage their business and ‘keep the good times rolling’ is not going to be a solution. Unless OGC chooses to fix itself, it will continue to be a blackhole of a money pit.

    The primary business question is clear: is our current OVA Board of Directors legally authorized, in compliance with their fiduciary duties to OVA, to contractually commit OVA dues to fund the wholly separate commercial entity named OGC?

    If you think so, then please elaborate on your reasoning.

    *Edited 7/26

  17. Bob Latchaw on July 22, 2018 at 10:28 pm

    Don McPherson has done an excellent job of simplifying the Interest-Based Bargaining (IBB) process to apply it to the OVA/OGC matter. He has introduced some of the basics of the process so that those unfamiliar with it can understand some of the important concepts that apply to this situation. In my 40 year labor relations career, I spent the last 15 years training and facilitating the process developed by Fisher and Ury at the Harvard Negotiations Project. One of the key concepts is that the process proceeds independent of trust. I trained and facilitated many groups that did not trust or like each other who were able to reach satisfactory agreements. It is not possible to go into detail about how the process works because it has more steps than could be covered here. The training and facilitating I did took 1 to 3 days before we ever got around to discussing the issues in dispute. Getting to Yes is a quick read ( about 100 pages) and is widely available. A joint facilitated process differs a little from the book, but the concepts are the same. If the parties were willing to engage in this non-advisorial process I believe OVA and OGC would have a good chance to reach an agreement both parties could support to their constituents or at least have a clear understanding of why they couldn’t. And no, I’m not looking for a consulting job. A disinterested facilitator would be best in this situation.

  18. John Williston on July 23, 2018 at 10:14 pm

    Gerry, I can tell from your answer that you missed the whole point of why I suggested that you might read (skim) over Hueber’s dissertation. There is much background that is of value in dealing with the national situation in golf and even here in Oakmont. Of course it is only one piece of a very large literature available. Further reading puts in context why the issues are not simply hard-headed business ones for many.

    In any event, I would be happy to evaluate your comments attentively without the belittling of other commenters.

    *Edited 7/26

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