Daniel Shapiro, director and founder of the Harvard International Negotiation Program, has negotiated some of the most challenging conflicts with heads of state, corporate executives and even families. Shapiro recently joined us on the Knowledge at Wharton show on Wharton Business Radio on SiriusXM channel 111 to talk about his new book on the subject, Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts.

An edited transcript of the conversation follows.

Knowledge at Wharton: I found it interesting that your book takes a look at both ends of the spectrum, both the personal and the professional. When it comes to resolving conflict in the office, a lot of the same types of incidents and issues arise at home and work that could be negotiated in the same kind of manner.

Shapiro: Yes, our research has shown that the underlying dynamics that make our conflicts so miserable — whether at work with a tough colleague or at home with a tough spouse — tend to be quite similar. The power of them might be more at work or at home, but the impact is just the same. It’s difficult.

Knowledge at Wharton: You break it down into a very simple and straightforward point: Whether you’re talking about conflict in the office or conflict at home, the biggest common denominator is that both involve humans. And humans are still a very flawed species.

Shapiro: We are both a flawed species and an incredible species. How do you deal with these emotionally charged conflicts — with your board, with somebody at work, at home? On the one hand, fighting back doesn’t work, it just escalates the conflict. Two, ignoring the conflict doesn’t work because the conflict continues to fester. Three, and here’s the twisted part, even if you try to collaboratively work things out — with your spouse, with your tough teenager, at work — in emotionally charged conflicts, even that tends not to work. Because we’re not getting to the underlying dynamics that are at play, the underlying emotional forces that tend to drive us toward conflict.

Knowledge at Wharton: What are those forces? What are people just missing that would enable them to resolve difficult conflicts?

Shapiro: Let me start with at least one example. In the book, I talk about a concept that my research has shown is quite powerful in any conflict, and I call it vertigo. Think about the most recent conflict that you’ve gotten into. You don’t need to tell me what it is — at home, at work. Vertigo is when you get so emotionally consumed in that conflict that you can think of nothing else other than that evil person who did not consult you before making that decision, or whatever the problem is. You go home after that long day of work, and yes, you are physically at home — your body is at home — but your mind is still racing about what happened at work. You are in vertigo. We all know the experience, but to give it a name empowers you to decide, do I want to go there, toward vertigo? Or do I want to try to have a collaborative, positive conversation here?

“These aren’t foolproof methods. I’m not saying these are all the answers, but this stuff does work.”

As an example, just last week I was working with Israelis and Palestinians in the Middle East, and sharing with them some of the ideas of this new book, some of the new research, including this concept of vertigo. I got an email two days ago from one of the very senior players on one of the sides of the conflict. She said to me in that email, “I just got out of a meeting right now.” This was a meeting between sides, in fact. She said, “As I was there, in that meeting, I felt that tornado of vertigo moving toward me,” ready to sweep her away. She said, “I thought in my head, do I want to go there? Do I not?” She decided no, and she said it was an incredibly productive conversation. We all have that choice, whether it’s vertigo or some of these other research points in the book.

Knowledge at Wharton: In some respects, taking a different approach ends up being the best path then, correct?

Shapiro: Absolutely. But it’s hard to do. Another concept that we’ve really worked to mine in the book is a concept that Sigmund Freud initially called the repetition compulsion. This is the idea that we tend to repeat the same dysfunctional patterns of behavior again and again and again and again, even though we’re shooting ourselves in the foot. You can send all of your employees to corporate training on negotiation. They come back from the training, and they think, “Oh, I’m much better.” Yes, they might be better for a day or two, but unless you deal with these underlying dynamics, your solidified and imprinted patterns of conflict resolution, unless you can deal with these and try and really work at them and change them, it’s lost money for your company.

Knowledge at Wharton: You talk also in the book about the taboos that exist in the office, and can be in the family as well.

Shapiro: Yes, whether it’s the office or home, there are those issues that are socially prohibited from talking about. Yet it’s often those issues that are the ones that are driving so much of the dysfunction either at work or at home. In the home setting, everybody knows it, but nobody can talk about mom’s drinking problem. Or at work, everybody knows that there is dysfunction going on in that one department, but nobody dares tell the CEO or the senior executive for fear of getting socially punished in some way. Yet if you don’t talk about those issues, you’re suffering. It affects the bottom line.

Knowledge at Wharton: You did an interesting experiment, which I want you to share because it was a rather unique tack in terms of trying to mitigate and work through what you call the Tribes Effect.

Shapiro: Yes, most senior business people think, “Ah, I’m immune to that stuff. I’m good at conflict resolution.” As you said at the beginning of our conversation, people are people; we are all human beings. There’s this exercise I did at Davos at the World Economic Forum. The first time I did it there was back in 2006. Forty-five global leaders come into the room. I divide them up into six groups. I ask them to create their own tribes at their tables — what are their values, what are their beliefs, so on. I ask them to dress up in their own tribal outfits. Literally, I have the greatest [stories for] blackmail in the world — a deputy head of state in that room with balloons on his head, VCs helping to create some of the most well known companies, and so on.

They create these six tribes, and then I get up in front of the room and say, let’s debrief the exercise. All of a sudden, the lights go completely black in this room, and into the room bursts this intergalactic alien who says, “I am an intergalactic alien. I have come to destroy Earth. I will give you one opportunity to save this world from destruction. You must choose one of these six tribes to be the tribe of everybody. You cannot change anything about your own tribe, and if you cannot come to agreement by three rounds of negotiation, the world will be destroyed. Ha! Ha! Ha!” And out floats the alien.

“I did everything in my power to try and make the world explode, but at the end of the day, you had a choice. You could have saved the world.”

Three rounds of negotiation, the intensity builds and builds. They are talking rationally, emotions start to pick up, and by round three, in the middle of the room, you have six chairs. Five men and one woman come to the middle of the room. One of the most well-known VCs in the world is one of those negotiators, [as well as] a media mogul, a president of a university. These men start yelling over one another.

They start yelling over this woman, “Our tribe!” “No, our tribe!” “No, ours!” This woman gets so upset that she literally stands on her barstool, and she yells, “This is just another example of male competitor behavior! You all come to my tribe!” One other tribe comes to hers. The others refuse. Five, four, three, two, one, boom! Our world explodes at Davos. I have run this exercise dozens and dozens of times with groups around the world, and almost always the world explodes again and again.

Knowledge at Wharton: What’s the reaction after the fact, by all these executives?

Shapiro: This is our reality right now, and this is a beautiful question because it’s exactly the point of the book. Someone who is listening to your show right now might be in the midst of a miserable divorce, and yet on some rational level, you’re not supposed to be mean to your spouse that you’re divorcing. You have two kids or whatever it is.

At work, I should not be doing this behavior with my colleague. You get sucked into it. That’s the problem. The book offers ideas on how to deal with it. How do people deal with it? At Davos, I asked the group afterward, how do you feel? This one guy points to me, and he says, “This is all your fault!” He said, “You set us up for this!” I said, “You know what? I did everything in my power to try and make the world explode, but at the end of the day, you had a choice. You could have saved the world.” That is the reality.

Conflict is one of the greatest costs on any business, any company, in any family, and it is also one of the things that we have more than any other power to do something about. Exactly to your point at the beginning because we are human beings, and this is a human problem, there is a human answer.

Knowledge at Wharton: But a lot of the time the conflict, and you talked about this as well, is something that you can’t see with the naked eye. It’s just behind the scenes and festering a lot of times.

Shapiro: Yes, and at the same time, if you take just a little step back, there often are a small set of factors that tend to drive a lot of our conflicts. Let me lay out a few that I talk about. One, autonomy: this core motivation to have the freedom to make decisions without somebody else imposing a decision on you. At work, if one of your teammates makes even a small decision but didn’t consult you, it can have a big emotional impact. That’s autonomy — recognize it.

Let me give you just one more. Status: We all like to feel high and good in our social standing. If someone comes along and says — “Yeah, why did you do that?” — you suddenly feel smaller, shrunken. Those are the kinds of things we can be aware of. What are the underlying emotional factors that tend to stimulate our negative emotions and get us all revved up?

“Shift the dynamic, so it’s no longer me versus that other person in the conflict; it’s the two of us facing the same shared conflict.”

Knowledge at Wharton: How much harder is it for people who are not only dealing with this type of stress and conflict at work, but then they have it at home? Being the dad of a 9-year-old and two 7-year-olds, I get this quite a bit right now.

Shapiro: So you have a 9-year-old and two 7-year-olds. I have a 10-, an 8-, and a 4-year-old. So we’re quite similar in our family lives. It’s the same tools. Are the tools perfect? No. This negotiating the nonnegotiable, is it a quick fix? If you read the book, you’re going to have beautiful relations immediately? No, and that’s not the point. The point is it takes work, but there is a path to get there.

At home, for example, my wife and I, we both know this concept of vertigo, and she doesn’t reject it even though I’ve been working on it. She’ll be the first to say to me, “Hold on, Dan. We are moving toward vertigo. Do you really want to go there now?” Some of the time, it’s like, “You know what? I do.” Some of the times, no, I don’t. But we’re taking back power: We’re not letting the conflict control us; we’re controlling the conflict.

One other connected point: A huge point is to shift the dynamic, so it’s no longer me versus that other person in the conflict, it’s the two of us facing the same shared conflict. It’s not me versus my colleague, me versus my wife. They are not the problem. The problem is the conflict. How do we deal with it? That mindset shift is what takes people out of that Tribes Effect, that adversarial mindset, and what allows people to save the world.

Knowledge at Wharton: You talk about how identity is such a strong factor in this. There are many times when people hold things sacred, which is the term you use. How do you deal with that?

Shapiro: Business people might think, “Wait a minute, sacred! That’s outside the workplace, that’s the religious element.” My notion of the sacred is anything that you find deeply meaningful, within your organization or beyond. It can be religion but it is much bigger — it’s sacred.

Looking at the current situation between Apple and the government, the FBI, around the phone situation. There is a sacred value that it appears that Apple holds, which is privacy of information. They are willing to sacrifice a lot to risk elements of their reputation for that. So the sacred is there with us. One huge point is, just recognize it. And even more than that, think carefully — with your various different teams, with the leaders of teams in an organization, what do you hold sacred? What is your identity within the organization?

In the book, I talk about a simple model called BRAVE, you can walk and think through it with your organization. What are the beliefs that are important to your organization or to you personally? What rituals do you find are useful to do — the holidays, the monthly outing that your team does? What are the allegiances that are important to your company? What are the values that are most essential? What are those emotionally meaningful experiences that define your organization? Way back in the day, when all those Microsoft, Apple people were in a garage building their computers, that was a big deal, and that story still affects these companies to this day.

Knowledge at Wharton: Do the companies themselves truly understand how important a topic this is — not only to the bottom line but for the corporate culture as well?

Shapiro: Your point hits it dead on. When a company looks at their financial spreadsheet, what they see is, one, cost, typically around conflict, which is the legal fees, the litigation and so on. Yet, like you are saying, the burden of conflict is tremendous with all of the hidden costs. You have the poor decision-making because that team is so dysfunctional. … It is extraordinary, in terms of cost, the amount of time devoured when resolving conflicts between the disputants [and people who get involved such as] the manager, HR, the [folks doing the] grievance investigation.

“These aren’t foolproof methods. I’m not saying these are all the answers, but this stuff does work and it can save extraordinary amounts of money.”

You have your superstar players that end up walking from your company to go next door to your competition. Is it about the salary? Absolutely not, it’s because I can’t stand you guys. Then you get the toxic corporate culture, the damage to the reputation, and on and on and on. And it stacks up to be exponentially more.

Knowledge at Wharton: If you get to the point where you really just have irreconcilable differences, how do you deal with that?

Shapiro: That’s the number one reason I get called into organizations to consult. A CEO brings me in, closes the door to the office and says to me, “Look, how do you deal with irrational people?” The moment I hear that question, 99% of the time, a siren goes off in my head and says, you know what? This is completely negotiable. What people tend to do, once you get into this adversarial mindset, all of a sudden I am closed off to the other side, to their world. I start to believe my way is right and legitimate; their way is wrong and illegitimate. I am living in a closed world.

So often what I’ll do with people in the corporate world, and even in the family world, in crisis, is to have them literally move seats. I want you sit over here in this other seat right here, take on the role of that other person who they find completely irrational. We systematically walk through what things look like from your perspective as the other party. This little exercise alone has allowed breakthroughs in international conflicts — Peru and Ecuador is an example.

I was working with someone recently who was doing a multibillion dollar merger, and it hit some problems. It was a problem between the two CEOs; they just didn’t like each other. I did it there, and it broke the impasse. These aren’t foolproof methods. I’m not saying these are all the answers, but this stuff does work and it can save extraordinary amounts of money. It leverages the organization. It helps your family.