Handling Hardball Negotiators
Executive Roundtable is a weekly column by TEC Worldwide, an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help each other solve problems in a round-table session. The following questions and answers are summaries of discussions at recent TEC meetings in Southern California.
Question: I’m engaged in very intense negotiations that have the potential to increase my company’s sales by 50%. However, the chief executive of the other company seems to have no regard for anything except getting what he wants. He is arrogant and combative, and several times I have caught him in “little white lies.”
I don’t want to lose the deal (because several of my competitors are champing at the bit to do business with this guy), but I wonder whether he is worth the aggravation.
How can I defuse his competitive streak and still cut a deal that works for both of us?
Answer: People who bring questionable ethics, selective memory loss and/or a desire to win at all costs to the bargaining table can turn even the simplest negotiations into a nightmare.
Running into one of these “hardball” negotiators, says Doug Gilliss, a negotiations trainer and consultant for Negotiation Services International in Solana Beach, Calif., doesn’t mean you should avoid the deal.However, it requires a more deliberate and measured approach to the negotiations.
First, Gilliss advises, take a hard look at the implications of the deal and what you stand to gain from it. What are the potential risks and rewards? Does an agreement signal the advent of an ongoing relationship or is it a one-shot deal? How much contact will you have with this person once the deal is signed? Can your two companies work together well in spite of this person? How would it affect your company if a competitor won the deal? Most important, will the outcome justify the grief you must endure to negotiate and maintain the deal?
Should you decide the potential rewards outweigh the risks, Gilliss recommends the following steps when dealing with these types of negotiators:
1. Defuse the conflict. Never go head-to-head with hardball negotiators, because you will always lose. Instead, step aside and defuse the conflict they’re looking for by acknowledging their position. Don’t agree or disagree with their position, and don’t try to put them on the defensive or prove them wrong. Simply acknowledge their concerns and focus on building the relationship.
2. Don’t take it personally. In most cases, hardball negotiators’ approaches have nothing to do with you; it’s simply the way they like to play the game.
Playing hardball represents their technique, not their position, so don’t respond as if it were. To avoid getting caught up in negative emotions, focus on the particulars, not personalities.
3. Uncover their real interests. Find out their criteria (or their bosses’ criteria if they aren’t the decision makers) for the deal. Give hardball negotiators plenty of “air time” to talk about what they value, what they are looking for and any items they feel they must have.
Ask plenty of open-ended questions and use active listening to demonstrate your interest in their ideas.
4. Get them on your side. Get the hardball negotiator involved in creating the solution by asking questions like, “What would you do in this situation? What suggestions do you have for this? How could we make this work?” Encouraging their involvement shows that you value their opinions and are willing to listen.
5. Demonstrate the benefits or penalties of doing or not doing business with you. Analyze what the negotiator values the most and offer opportunities to maximize those values. For example, “We can offer a 10% discount on all volume purchases.” Or, “We can extend payment up to 60 days at certain volumes.” When possible, use third-party examples, such as, “Last year we had a situation just like this with another company. What they found was ... “ This approach allows hardball negotiators to pick up the analogy and translate it to their position.
6. Build a bridge to closure. To close the deal, build a bridge between you and the other party. Recognize the negotiators’ positive points so they will perceive their idea as the solution, and demonstrate clear benefits so they can look good to their boss. Above all, make sure that what they get from you meets some important company criteria.
7. Hold fast to your walk-away point. Good deal makers never enter a negotiation without having a clearly defined point at which they will push away from the table and kill the deal. This is especially true when dealing with hardball negotiators. In addition, don’t allow yourself to get caught up in an auction situation in which the other negotiator pits you against several competitors for the deal.
“If you can’t accomplish your objectives without taking on too much risk, walk away from the deal,” Gilliss says. “In today’s environment, the business that you don’t take will affect your bottom line more than any business that you do take. Knowing when to say no so that you can maintain margins is the sign of a good negotiator.”
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If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, Ext. 3177. To learn more about TEC, visit www.teconline .com.
