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‘Art of Negotiation’ Mr. Marketing ™ / Stephen L. Bainton
One thing that annoys the hell out of me are negotiation gurus. Today, the business of espousing (and publishing) negotiation strategies is huge. Everywhere you turn, someone else has come up with a new method, packaged neatly as THE definitive how-to negotiation manual. Here’s just a few of the available titles: The Power of Nice, Start With No, Winning With Integrity, The Negotiation Tool Kit, and the all-time classic, Getting To Yes, which, as of this date, has sold over 3.5 million copies. Needless to say, I’m sure there’s also a special edition For Dummies®. A simple question: Is it possible that business negotiation is really all that complex to merit the birth of an entire industry? Well, that’s for you to decide, but here’s a real-life example from yours truly.
About six years ago, I was in a posh New York law firm, sitting with fellow executives and a throng of attorneys. The negotiation wasn’t minor: our foreign partner wanted out. He’d invested $30 million into one of our deals plus an additional $75 million in debt equity. In all, a $105 million dollar commitment, not including interest and other excellent growth and return-on-investment possibilities. Regrettably, our former friend believed we were out to get him, which was simply not the case. So, in order to level the perceived playing field, he hired New York’s toughest lawyers (a bunch of idiots, in my opinion) and the negotiation, obviously, began on a rather nasty note, and progressively got worse. After about an hour, all niceties had flown out the window, and we found ourselves in an all-out screaming match. Unbelievably, fists were about to fly when one of our seasoned executives called a loud “timeout,” and all parties went to separate rooms to cool down. The rest of the negotiation was handled by the passing of drafts between both rooms. In the end, it was a win-win situation for both sides, simply because we were appropriately separated physically from one another during the negotiations. Regardless, on that day, I could have written a simple book entitled, Is This a Private Fight or Can Anyone Join In? Sometimes, it seems, you need physical separation in order to conclude a respectful agreement. Fortunately, most negotiations are not so miserably handled. In the above example, the lawyers thought they could push us around from the beginning and acted like jerks from the outset. Simply a bad move. However, if you take the above example, here are a few ideas that could have produced better results. First, the most important aspect of getting a good result is to thoroughly understand the other person’s motivations and true feelings. In the above instance, the underlying motivation (believe it or not) was not money but respect. Our partner’s decision to flee was due primarily to cultural miscommunication. In short, the whole nastiness could have been averted if proper (and respectful) communication had been practiced throughout the business relationship. Second, prepare thoroughly for any negotiation. Information is power, and your saving grace. In the above instance, our negotiating leader was prepared to discuss financials at length, but not prepared to handle the emotional aspects of a deeply offended partner. Thus, our leader’s responses were not thoughtful but negatively reactive. In preparing and understanding thoroughly the entire negotiating context, you will enter the meeting with quiet confidence…and it will show. Third, know yourself and your true needs. Strangely, I am now convinced that besides the finances involved, we didn’t have a clue as to what we really wanted to strategically achieve with our disenchanted partner. Unfortunately, we didn’t consider all of the intangibles involved, and, in retrospect, this may have hurt our stock price as well as our ability to consummate further acquisitions. As for other helpful hints, here are a few more to reflect on: For pricing, look to your industry for standards and benchmarks; often previous deals can be researched and information from associations tapped into. Control the negotiating environment; a more neutral and relaxed atmosphere can open things up and help you get to the core of what the other person really wants or is thinking. Listen well and ask open-ended questions, not yes-or-no questions. If possible, never give away your deadline; remember, time spent with someone shows both serious interest and can make or break a close bid. If possible, you should always be able to walk away from the negotiation; if you can’t, then simply project that attitude anyway.
Finally, reading several books will not make you a great negotiator. This is an art that requires practice and hard experience. If you’re new to this, then simply keep your eyes open and watch the more experienced executives in your firm. And remember—always emulate the successful ones.
Stephen Bainton is CEO of Mr. Marketing, Inc. and can be reached at:
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