Don't Cut To the Chase Without Doing Proper Homework
November 2, 2007 The Business Journal
By Marty Latz
November 2, 2007 The Business Journal
“Can't we just cut to the chase if we know where the parties usually end? It's a colossal waste of time and money to do the dance."
As my regular readers know, I usually recommend the dance.
First, most negotiators truly haven't done their strategic homework and don't have sufficient information about their offer-concession patterns to accurately evaluate where they will end up.
Second, even if the pattern is clear, your dance can make a significant difference in your result.
Third, the give-and-take process has a psychological value. Regardless of an item's objective value, both sides may need to see and feel the other side give up something significant to accept the result as "fair."
Finally, it's tough to undermine parties' expectations of the dance. You might say "Look, I can start at 10 and you can start at 1, but we both know we will end up at 5.5. So let's save us both time and money and go directly to 5.5."
The problem: Most counterparts figure your statement is just the empty rhetoric everyone says when they make a first offer.
So can or should you cut to the chase? Sometimes -- but it's risky. Of course, it might be worth it if looks like a long dance with little upside potential.
If you're inclined to give it a shot, consider these factors:
1. Do your strategic homework.
Make sure you have researched what typically occurs in your context, and there is a fairly ascertainable end point. The more objective and predictable the result, the more likely a "cut to the chase" strategy will work. Vice versa, too.
Let's say you're in a Middle Eastern market looking for an allegedly rare artifact. There, the typical negotiation pattern includes a lot of back-and-forth. And it's extremely difficult to objectively predict the final price. I would rarely recommend a "cut to the chase" strategy there.
2. Aggressively stick to independent standards.
Aggressive, consistent use of independent standards can lessen our expectations of the dance. Such standards may include market value, precedent, tradition and policy.
Let's say I want to buy some undeveloped land outside town to build a retirement community. And last month, the farmer-owner sold an adjoining parcel to a home builder at an excellent price.
I might offer the same price per acre to that farmer and explain its fairness by referencing the previous sale as evidence of its market value. The more I defend my offer's fairness with that standard, the more likely the farmer will not expect an extensive dance.
3. Use a more efficient process that still gives psychological value.
The exponential growth of mediation as an alternative to litigation and to direct party-to-party negotiations provides a perfect testimonial for those looking for more efficiency. And, critically, mediation still provides the psychological value of the typical back-and-forth process.
In mediation, an independent third party is asked to help the two parties involved to reach agreement and, among other things, to orchestrate the back-and-forth process within a fairly condensed time frame.
One critical advantage of mediation is that most parties go into it already expecting to do the dance within a short time.
Other procedures that also may help do this more efficiently and provide a psychological benefit include organizing an in-person party-to-party meeting at the start of the offer-concession stage, or credibly imposing short deadlines that will condense the offer-concession stage into an atypically short time frame.
4. Build a "straight shooter" reputation.
The problem with "cut to the chase" statements early on is that most recipients don't believe they're true.
This expectation can be countered by a well-known reputation as a credible straight shooter who just doesn't do the dance.
But for this to work, the straight shooter has to consistently not do the dance, and their counterparts must be able to confirm this independently. And even then, the straight shooter's counterparts may not feel psychologically satisfied given the lack of the back-and-forth process.
So, should you cut to the chase? I'll give you a great lawyerly answer: It depends. And while this answer doesn't cut to the chase, it's better to be accurate and effective than just to be fast and get the deal done.