It’s been a tough month. I lost a close friend to a two-year battle with pancreatic cancer. My 85-year-old dad went in for emergency surgery (which was successful). And I just saw a cousin who last year lost his 34-year-old son (my cousin, too, obviously) in a tragic accident.
What does this have to do with negotiations? Everything. Business, personal and legal oriented negotiations often revolve around past, current and/or future relationships. Whether and how much we value those relationships – and the extent our counterparts value them too – can make or break a negotiation.
So how should we evaluate and incorporate relationships into our negotiation strategies?
1. Determine its value relative to your goal.
Does your short or long-term negotiation success involve seeing or working with the other party in the future in any context? How much and to what extent? And how much do you really care? This is crucial. It’s easy to say you care. Here’s the question to ask, at the beginning of the negotiation, to test your real feelings. Would you be willing to accept less or give up more top reserve and/or strengthen the relationship? Then quantify this. Put a dollar sign next to it. This will help you truly evaluate how much you care.
Of course, it’s also crucial to evaluate how much your counterpart cares, too. Would they take less or give up more to preserve and strengthen the relationship with you? If so, great. If not, do their feelings impact your feelings?
2. The higher the mutual value – the more you problem solve.
I recently met a highly successful patent litigation attorney at a large national firm. Some of the largest companies in the world hire him to protect their patents and intellectual property — which often form the lifeblood of their success.I asked him to share one of his most successful negotiation strategies in settling these huge, often called “bet the company,” cases.
While he is a highly successful and aggressive litigator who has had significant courtroom success, his approach to the negotiations takes a very different tack.In his experience, he said, at the appropriate point in many cases it’s often in all the parties’ interests to problem-solve by exploring possible partnership options and cross-licensing opportunities.
It’s only in this way that the parties can find a solution, which often involves working together in mutually profitable ways. What specific tactics does he use? One, he engages in some information sharing about his client’s goals and interests — and insists this sharing is mutual. By doing this, the parties often begin to recognize the overlap in their interests. This is the sweet spot in their negotiations and often becomes the fundamental basis for their deals. And two, he urges everyone to focus on standards that can form the benchmarks of such deals (like similar previous deals, market rate elements, costs avings opportunities, etc.).
Bottom line — he helps his clients solve their problems and create and/or repair their relationships.
3. Recognize no relationship situations.
Not all deals involve possible future relationships between the parties. Or one party might care about the relationship and the other doesn’t. Many of these matters require a more competitive approach.
If so, hold your cards close to your vest, more forcefully exercise your leverage, and make aggressive offers where appropriate.
Of course, never be unprofessional or unethical. That would harm your relationship and reputation — with them and likely others too.
Latz’s Lesson: Relationships can possess almost incalculable value. Recognize and incorporate this into your negotiation strategy.
Published March 13, 2016 The Business Journal