What Is a “Successful” Negotiation?

By Michael Friedlander

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 murky question…

What is “success” in a negotiation is a sometimes foggy question. Despite this, it is still a really important question to ask. Why? For a negotiation to be “successful,” you have to reach your planned destination. Your negotiating strategy is simply about how you get there. In planning your negotiating strategy, therefore, you can’t begin without knowing where you are going. Like Alice, if you don’t know where you are going, it doesn’t matter what strategy you choose…

Your 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. Until everyone on your team agrees on that destination, it will be difficult if not impossible to come up with an effective negotiating strategy. And, until you agree on your destination, you will find yourself struggling up a quite steep and slippery slope and 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.

In more complex business negotiations that are more than a once-off transaction in which the parties may never again do business together, it is less clear is what constitutes “success.” In these more complex cases, “success” is not easily quantifiable. The hidden danger is that, unless you and your team have clearly defined your destination, members of your negotiating team can unwittingly sabotage the process.

How executives and their lawyers sometimes view “success” differently…

Over the years, in my business travels around the world, I have regularly come across something that has never ceased to surprise me. I have found 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 took a long-term view of what was “success” in negotiation. They believed that a negotiation was only successful if the deal they were negotiating created a long-term ongoing relationship that each side would value long after the agreement was signed. These executives clearly 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. As a result, these business executives understood that the success of the negotiation could sometimes only be judged years after the agreement was signed.

The lawyers representing these executives sometimes took a much shorter-term view and often adopted a scorched earth approach to the negotiations. For them, success in a negotiation was simply reflected by the signing of the document they had negotiated and drafted. For them, success occurred as the ink was still drying on the parties’ signatures. And, 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…

Obviously, the problem with this scorched earth approach is that, while it certainly might result in a signed agreement, the long-term implications of this approach can be disastrous to the very relationships that are critical to the long-term success of the venture. What these professionals failed to understand was a business reality, namely, the value of an ongoing business relationship and the cost of acquiring a new business opportunity to replace the existing one.

What they also failed to realize is that a scorched earth approach can poison relationships. They fail to understand that a negotiation is a magical window through which both sides can look to see what it will be like to do future business together. My experience is that people never behave better than when they want something from you. And if they behave unreasonably, unprofessionally and without common courtesy 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 will not view the relationship as potentially a long-term one. Instead, from almost the moment the ink has dried on your agreement, they will start to look for other people or businesses to replace you. Your attorneys or other representatives are thereby doing you an enormous disservice if they use an approach that is inconsistent with your goals.

One conclusion…

Before going into a negotiation, decide what would constitute “success” in that 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. Then 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 adventure and the Bernard Madoff Ponzi scheme.. This article, What Is a “Successful” Negotiation? is available for free reprint.

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Tags: attorneys, Business, negotiating skills, negotiating strategy, professionals, successful negotiations

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