The key to having power in a negotiation
Ok, another true story.
Someone came to me asking for some help with a negotiation they were in.
And I don’t know if I’d call it a negotiation. His lawyers had already issued a letter of demand. We were getting towards the end game.
Long story short, he’d lent this bloke some money – a substantial amount. But this bloke never came good on it, and it was now looking like he was going to go bankrupt and phoenix into something else.
My mate wanted the money back, and if possible, wanted to keep it out of the courts.
Anyway, he showed me the letter he was going to write him. I don’t remember it all now. It was something like,
I know we’ve had our differences, but I still hope we can work things out. I’m reaching out one last time before the lawyers get involved to see if we can find common ground.
Blah blah blah.
“What are you doing here, mate?” I said.
“I’m trying to bring him back to the table, continue the negotiation. I want to appeal to his human side.”
I can kind of get this. The world is a much softer and more touch-feely place than it was when I cut my teeth. There’s an idea that kindness and compassion will always win out. That honesty and kindness are always the best policy.
Bob was the product of that culture.
And I’m not going to say that it’s wrong, but while kindness might be a beautiful intention to carry at all times, it’s not always going to be the right tool for the job.
Like this job.
“Seriously, you’re wasting your breath here. If I was reading this, I’d be thinking, there’s actually a chance I might get away with this. It might come to the crunch and Bob is just going to wuss out, call off the lawyers and just cut his losses.
This is actually the last thing you want to be sending him right now.”
You need to create a credible threat.
No matter what kind of negotiation you’re in, you’ve got to have a credible threat – to walk away, to go to the media, call in the cops, whatever.
If you don’t have a credible threat, if there’s no potential downside for your partner in negotiation, then you’re not in a negotiation. You’re in a situation where you’re simply asking for what you want.
And the most likely answer is ‘no’.
Everyone gets upset at Trump because he says that he might pull out of NATO or he might pull out of the Paris climate accord.
But he’s got to have a credible threat. Without it, he’s got no power, and he’s at the mercy of the other participants in the negotiation.
And it’s the same story for Bob here. He’s got to have a credible threat. Something like, “Mark my words, I will hound you to the ends of the earth and do whatever it takes to get my money back, no matter what the personal cost.”
That’s the threat. Now Bob was probably too soft by nature for that threat to be credible, so he needed a strategy there too, but that’s a separate problem.
Of course, part of good negotiation strategy is always making sure there is a threat available to you. If you’re nine months into a project and then find yourself trying to negotiate with a plumber when you and he both know that all the other plumbers in town are tied up with the new Olympic water park or whatever, then you’re not in a negotiation. You’re just asking.
You need to be alert to this ahead of time. Always making sure that there is a credible threat available to you. Plan your moves at least a few steps at time.
Anyway, the point is, kindness and softness are nice, and good intentions to carry, but they are terrible things to bring into a negotiation. You need to create a credible threat, and stand behind it like a rock.
I’ll write more on that credibility later…