One day, Alice was lost. She came to a fork in the road and saw a Cheshire cat in a tree. “Which road do I take?” she asked.
“Where do you want to go?” was his response.
“I don’t know.” Alice answered.
“Then,” said the cat, “it doesn’t matter.”
Alice in Wonderland
A sometimes difficult question…
What constitutes “success” in a negotiation is a sometimes murky question. Despite this, in planning your negotiating strategy, it is a critically important question to ask. For a negotiation to be “successful,” you must reach your planned destination. Your negotiating strategy is about how you get there. In starting the planning for your negotiating strategy, therefore, you have to know where you are going. Like Alice, however, if you don’t know where you are going, it doesn’t matter what strategy you choose…
The planning for the negotiation and the ultimate negotiating strategy, therefore, can only begin once you and your team has agreed on the destination you want to reach — and once you have an idea of the chosen destination of the other side. Certainly, until everyone on your team agrees on that destination, coming up with an effective negotiating strategy will be difficult if not impossible. And, until you agree on your destination, you will almost certainly find yourself struggling up a quite steep and slippery slope and you will face a near certain negotiating failure.
“Success” in a negotiation is sometimes quantifiable. For example, sometimes it is measured by the price at which you are prepared to buy or sell whatever you are negotiating to buy or sell. Obviously, unless you know the target maximum purchase price you are prepared to pay — or the target minimum sales price at which you are prepared to sell, you are negotiating in the dark. In these cases, “success” is relatively clear and you either reach your destination or you do not.
What is less clear is what constitutes “success” in more complex business negotiations that are more than a once-off transaction in which the parties may never again do business together. In these more complex cases, “success” can mean many things and is not easily quantifiable. And this presents a hidden danger: Unless you and your team have clearly defined your destination, members of your negotiating team can unwittingly sabotage the process of reaching it.
How executives and their lawyers sometimes view “success” differently…
In my business travels around the world over the years, I have never ceased to be surprised that some of the most successful business executives I came across seemed to have a different idea of “success” to that of their lawyers. The result was almost always interesting — and was almost never particularly good for the executives.
For example, some of these executives believed that a negotiation was only successful if it created a long-term ongoing relationship that each side would value long after the agreement was signed. These executives focused on the value of ongoing business and on the possibility of each side increasing business with the other. They understood that, to accomplish this, both sides would have to build and nurture relationships with the other side. These executives understood that the success of the negotiation could sometimes only be judged years after the agreement was signed.
The lawyers representing these executives often took a much shorter-term approach and adopted a scorched earth approach to the negotiations. For them, success occurred when document they had negotiated and drafted was signed. For them, it didn’t matter what carnage might have resulted in the process. Nor did it matter if feelings were hurt and egos were bruised along the way. All that mattered was that the document was signed…
The problem with this scorched earth approach is that, while it might result in a signed agreement, the long-term implications can be disastrous to the very relationships that are critical to the long-term success of the venture. What these professionals don’t understand was the business reality that the value of an ongoing business relationship — and the cost of acquiring a new business opportunity to replace the existing one.
This scorched earth approach can poison relationships. These professionals just don’t understand that a negotiation is a magical window. Both sides can look though it and see what it will be like to do future business together. Because people never behave better than when they want something from you, if they behave unreasonably in a negotiation, you can bet the farm this is how they will continue to treat you long after the ink has dried on your agreement. The result of this scorched earth approach is that the other side won’t view the relationship as potentially a long-term one. Instead, they will start to look for other people or businesses to replace you. By using a scorched earth approach, your professionals are doing you an enormous disservice.
A conclusion…
So, before going into a negotiation, decide what would constitute “success” in your negotiation. And if your goal is to build both a long-term ongoing relationship and an agreement that each side will value long after the agreement is signed, be sure your team is on the same page as you. Critical to the process, therefore, is to assemble a negotiating team that is in sync with your goals.
Learn about negotiating skills and how they can help detect scams using Nelson Mandela’s negotiating skills and modern relevance. In his critically acclaimed book, Michael Friedlander tracks Mandela’s skills and applies them to high-profile scams such as the Enron scam and the Bernard Madoff Ponzi scheme.. Free reprint available from: What Is a “Successful” Negotiation?.
