“Bailout Flips Confuse Market,” read the Arizona Republic headline this week in describing the U.S. Treasury Department’s “scattershot” efforts to stabilize our economy. Just five weeks after Congress passed a $700 billion bailout package focused on buying troubled bank assets clogging their balance sheets, Secretary Paulson reversed course and said he would not buy these assets.
And just 5 days after affirming his plan to use the second half of the $700 billion to ease access to home, school and auto loans, Paulson flipped again and indicated he would not even request the second $350 billion.
What’s going on here?
A very public problem illustrating the difficult challenges inherent in setting overall strategic goals and designing and implementing a consistent tactical way to achieve them.
I start many of my negotiation training programs by preaching the proven research-based value of goal-setting. As I note, it is the first step to negotiating strategically and getting away from an instinctive off-the-cuff approach. It’s a strategy that sounds simple – but is quite difficult to actually achieve.
So here are a few recommendations to help you effectively set your negotiation goals:
1. Set and prioritize your long-term strategic and short-term tactical goals
Strategies focus on your long-term goals and impact how, in a global sense, you should try to accomplish them. Tactics, by contrast, are con¬cerned with immediate, detailed maneuvers designed to accomplish your overall strategic goals.
The critical point here is to take both a long and a short-term view and understand the differences required to accomplish each.
In 1968, Jerry Colangelo as a 27-year-old potential general manager of the Phoenix Suns knew his long-term goal was to own the team. So he asked the then Suns’ owners for the right to buy the team if they ever decided to sell.
Over the next 19 years as general manager he developed strong, trusting relationships with many in the Phoenix business community. This tactical focus paid off in 1987 when they invested almost $20 million toward his successful effort to buy the team.
2. Brainstorm to set your goals
How many times did you hear growing up that “two heads are better than one”? Here it’s true. Brainstorming will help you focus on what you fundamentally want, and help you realistically evaluate the likelihood of achieving your goals.
I once spent several hours brainstorming about a religious discrimination lawsuit with a successful lawyer who had been practicing law for over forty years. In this matter the plaintiff allegedly had been ﬁred for refusing to engage in certain religious practices at work. At the end of our session the lawyer reset his expectations of the case’s settlement value. The brainstorming process focused his attention on several issues he had largely ignored.
3. Maintain flexibility and reevaluate your goals where necessary
Stubbornly sticking with goals and strategies that have become unrealistic or counterproductive due to changed circumstances can be highly ineffective. But switching goals and strategies midstream can also be harmful. Here you need to be flexible and balance these factors as circumstances change.
Of course, that’s what Secretary Paulson said he was doing by changing course on the bailout. Time will tell if he has struck the right balance.