Negotiating Part III
The theme of this article is negotiating effectively as a team.
If you ever saw the movie “The Godfather,” you may remember a scene where the “Godfather’s family” is negotiating getting into the illegal narcotics business with another family. The Godfather is adamantly opposed to selling drugs. His son though (played by James Caan) chimes in over his father and says that maybe pop is wrong.
Jump to next scene and you have a furious pop telling his son to never ever disagree with him in public again. To the outside world, they’re one family with one position.
Jump ahead a few more scenes and you see an attempted assassination of the Godfather. Later we learn that the motive behind the assassination was to make James Caan the family’s leader because he was willing to enter the drug trade.
The Godfather had it right. If you want to be effective in your negotiations, your team must have a single unified voice. Show disharmony to the other side, and if they’re any good, they’ll use it to shear holes right through you.
You start hearing things like, “Your lawyer said that this is a non-negotiable deal point, but you’re saying it isn’t.” Don’t ever do that to me or any member of your negotiating team.
Don’t ever forget the six “P’s.” Prior Planning Prevents Piss Poor Performance.
Before you began the negotiation, you should have spent time planning your positions. Going in, you should know things like what you need and want, what your bottom line positions will be and where you’ll start.
You should have also choreographed who’s your lead speaker, who’s playing backup to reinforce points and have agreed not to hesitate to leave the room together to privately discuss any internal points of disagreement as they come up during the negotiation.
Coming back to my Godfather story, the Godfather’s rule is a cardinal one. Speaking now from the perspective of outside counsel who is often hired in the role of professional negotiator, and frankly usually paid quite well for the role, once my client has disagreed with me in public, I might as well go home. He’s now told the other side that a back channel around me might get them a better deal.
It’s a simple rule and don’t ever break it. No member of the negotiating team should ever publicly disagree with another member. Period. Do it and you’re an amateur waiting to be eaten alive.
I know that once I notice internal discord on the other side, I look for ways to have back channel communication with the guy whose position is most favorable to my client. My goal is to make him an ally and then let him sell it to his side. Cliché time -- “Divide and conquer.”
Let’s say we’re buying a software company and the biggest advocate for the deal on the other side is their Director of Marketing. I’ll go out of my way to privately let him know that we think the marketing department is one of his company’s strengths and budget won’t be an issue under the new regime. You get the picture. It has something to do with saliva dripping from his mouth.
I remember one client in particular (and this was years ago) who just didn’t get it when I talked about a united front. This was a particularly nasty negotiation too and it wasn’t because it needed to be. We were just acquiring a division of a company. The problem was that one of the human beings on the other side had the personality of a rabid dog on a bad day.
This was a complex negotiation that went on for days. We would start each day with a private meeting. We’d agree on what positions the client wanted to take. I’d reiterate that we can and should evolve our positions during the course of the day as things develop, but we should do it in a unified way after a private discussion in the hallway (be careful about who might be sitting on the other side of that cubicle wall).
After all, in a negotiation your position must evolve. Here’s the caveat though. Whoever took the position that you’re changing should be the one to deliver the message about the compromise position.
You emasculate your lawyer, acting in his role of professional negotiator, when you publicly modify the position he took for you. In the deal I alluded to with my friend the rabid dog, I finally resigned. The client was simply incapable of effectively using a professional negotiator.
It’s frustrating to privately discuss a strategy and as soon as the game begins watch a person with no stomach for the stress of a sophisticated business negotiation give it all away. They wore him out. He felt desperate to do the deal, they knew it, they played tough and he caved in faster than a house of cards. I felt like I was coaching a little league team against the New York Yankees.
The close for this column is simple. Remember the story about the Godfather.