Mission’s SRCTec Helps to Further another Amazing Success Story

Super Intelligent Electronic Mediator is ready for Mainstream Applications

Negotiations.  It’s a word charged with a variety of nuances, and most often preceded by a very telling adjective.  Lengthy negotiations, complex negotiations, difficult negotiations, deadlocked negotiations – our newspaper headlines are riddled with such references.  All told, the word implies the concept of winners and losers, coupled with a massive dose of adversarial tension.

On the other hand, negotiators don’t have to be adversaries, a fact noted in the dictionary definition that includes two starkly different points of view.  The first is definitely adversarial – “a process to gain advantage for one party over another and to craft outcomes to satisfy that party’s self interest”.  That’s where the winners and losers come in.  But the second part of the definition is much more constructive – “a dialogue between or among two or more parties intended to reach a mutually beneficial outcome and resolve points of difference”.  Under this definition, no one party walks away with everything.  Instead all the parties come away with maximum benefit under the circumstances.

It’s this definition that has driven the passion of Abbotsford’s Ernest Thiessen for more than twenty years.  The UBC trained engineer earned his doctorate in Civil Engineering Systems Planning and Analysis at Cornell University.  His experience while working on a water management project in Nepal taught him that most negotiation processes are deeply flawed.  “Every project involves conflict resolution and negotiation”, he tells me.  “You soon learn that there is a huge gap between what the engineers recommend and what the decision makers do.   And that is mostly due to the sheer numbers of issues on the table”.

Ernest Thiessen, Creator of Smartsettle

Ernest Thiessen, Creator of Smartsettle

He goes on to explain that negotiations can contain billions of possible alternatives – way more information than can be grasped by the human brain.  “So negotiation has tended to follow a process of elimination”, he points out.    “Agree on the easy stuff, and then put it away where it can’t influence bargaining on the hard stuff.  The end result is that many agreements are not nearly as mutually beneficial as they could be had all the stuff been left on the table”.

Human brains have their memory limitations.  Computers do not.

So Ernie started to work on a computer software program that could keep all the possible positions and alternatives in play.  Called Smartsettle, it starts with one simple principle.

“The author, teacher and radio personality Earl Nightingale told us that a well-defined problem is already half solved” he says.   “So we have applied that logic to negotiations. Our first step is to model the entire problem by creating an Agreement Framework.  Looking like a final agreement except for blanks representing the unresolved issues, this method allows the parties to present their preferences in such a way that complete packages can be easily compared.  As long as the parties are willing to collaborate, we make it easier to rate the capacity of each party to give and take”.

Ernie illustrates how Smartsettle works with a simulation based on a real-world conflict in the Middle East. Three countries are competing for water flowing in one river, and are engaged in negotiations as to available volumes by season, cleanliness and level of salinity.  Because the water is needed for electricity generation, agriculture and industrial and domestic consumption, degree of control represents either a huge monetary benefit or loss to the affected parties.  Donor nations represent a fourth party offering funding in exchange for a low-carbon footprint.

Swift Fruit River Watershed

Swift Fruit River Watershed

I watch as the program serves up a variety of packages. Using a process called “Visual Blind Bidding” parties exchange proposals and ask the system to generate suggestions. Instead of trying to wear down their opponent until they capitulate, each party instead focuses on what is important to it. The parties are encouraged to rate the packages on a monetary scale – in this example each point on the scale is valued at $100 million of potential economic gain or loss.  It then becomes easy for the parties to determine how much each package is worth to them, and to place hidden acceptances on packages where they are willing to agree.    When all parties have accepted the same package at the end of a session it becomes a binding deal.  Each package has a satisfaction rating and is studied carefully. Many of the packages are rejected but a few are accepted in each session.   Finally, after a number of sessions, all four parties are satisfied.  Bingo- we have agreement!

“The computer acts as an auto mediator”, notes Ernie.  “But it’s a mediator with an enormous memory and incredible powers of suggestion.  It can do what no human mind can do, and that’s keeping every single contentious give or take issue in play. It is also perfectly neutral so parties can trust it. This all adds up to a huge advantage over human mediation.”

You would think that’s the end of the exercise, but it’s not.  Ernie clicks on another tab as he explains.  “Just because the parties agree doesn’t prove they have reached the best possible solution to address all their concerns.  Because the program now understands their positions so well, it’s able to use that understanding to suggest an even better agreement.  Watch!”

That we do as the points numbers (each one, you will remember, representing $100 million in economic value) flash on the screen and finally settle.  “There”, says Ernie.  “The computer has found improvements that give almost $1 billion in added benefits to the agreement.  Show me a human run negotiation that has ever done that”.

Recognizing that his software could be used in the agricultural sector, Ernie took his fledgling business through the SRCTec Agricultural Venture Acceleration Program in Mission’s Raymond Szabada Technical Centre of Excellence.  Resolving crop insurance disputes was identified as just one of many possible applications for Smartsettle within the local BC Agriculture Ministry.   SRCTec Program Director Mike Manion raves about his student.  “The potential for Ernie’s business is absolutely huge”, he says.  “Everything is in place.  He just needs to become known”.

Ernie himself views his company as being in the electronic negotiation engine and training business.  His next step is to train facilitators – people who will mentor the process and train other facilitators to work with the various parties involved in a negotiation.  The goal is to create capacity to apply Smartsettle to many important problems around the world.

Those opportunities abound.  “Look at the Trans Pacific Partnership (TPP)”, enthuses Ernie.  “It took seven years for twelve countries to come to agreement.  I am convinced that Smarsettle would have delivered a better agreement in less than half the time.  That’s the future, and we’re ready to be a part of it”.

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