Mistakes have been made. I’ve screwed up many times. I will continue to screw up. But as with everything, when we screw up we also learn our biggest lessons. Negotiation is no different. It’s tough to know what you should have done differently unless you make a mistake. I’ve had some major bombs in negotiations, but there are a few that stick out as truly memorable. This post is about one of the mistakes I made and what you can do to ensure you don’t do the same thing.
One of the most memorable mistakes I made in a negotiation was assuming power over the other party. The early days of my negotiation career was all about finding the biggest stick and wielding it like a tyrant. I would effectively beat all the other parties I negotiated with into submission. Not very nice, I know, but hey, live and learn. I became very good at demanding things and then getting people and companies to submit.
This excessive stick wielding negotiation led to a certain amount of arrogance on my part. I worked for a massive company, managed the largest category, and had what I thought was the biggest stick. I was very full of myself.
The stick wielding negotiation style is very effective, until it isn’t. I know that sounds cryptic, but it may shock you to know that some companies and people don’t like getting repeatedly bludgeoned into submission. Some of them even fight back. Worse though is when some just walk away and decide it’s not worth it.
And that’s exactly what happened.
I was negotiating a very large service contract for the company I was working for. The other party was “the best” service company in the industry for what they did. My company wanted to work with them. My job was to get a deal in place. No problem. I’d done it a hundreds of times before. I knew I’d get them in and I knew they’d do as they were told.
My arrogance had gotten to a point where I believed I knew the outcome before the game had even started. I believed I knew the market. I believed I knew the players. I believed I had ultimate power over the other party and while they may fight for a little, that ultimately they would do as I told them. And so my arrogance betrayed me (as arrogance always does) and I did no research because I ‘knew’ the outcome.
What I didn’t know at the time (because I had done no research) was that the party I was negotiating with was the only company we wanted to do business with. They truly were the best. And the next competitor wasn’t even close. We really had no BATNA. They knew this. They had done their research, and this gave them the luxury of choosing whether or not to business with us. I went in like a bull in a china shop and started laying down the law in the first meeting. It fell on deaf ears. They weren’t phased. They had prepared well and knew that they could walk away whenever they wanted to. To their credit, they let it get past the first meeting and get to the point of looking at the numbers without shutting me down.
We actually got within the ZOPA (Zone of Possible Agreement) in the negotiation. But my arrogance kept me pushing for more. Ultimately I pushed too far. They said, “no”. And then I did something really stupid. I told them that if they couldn’t meet my demands, I’d give the business to someone else. The problem was, there was no ‘someone else’. I hadn’t done any research, remember. This actually was the best company at what they did and we had no desire to work with anyone else. It had to be with them.
They walked away from the table with no deal (They understood their relative power). Which meant I had no deal. And I needed a deal. My direction was to get a deal in place with this company. Which I had, until I let my arrogance totally ruin the negotiation.
The last thing they said to me was, “No deal is better than a bad deal.”
They were right.
With my tail between my legs, I called my business partner and said there was no deal and walked him through the negotiation. Then I got told to go back to them, apologize and get a deal in place because they were the best.
Ever had to walk back to a party you’ve negotiated with, where they’ve walked away and ask for a deal? Well I hope you never have to. It’s one of the most humiliating feelings in the world.
Ultimately we did get a deal, but ended up paying significantly more (like A LOT more) than we should have if I hadn’t let my arrogance ruin the negotiation.
So what’s the moral of the story?
Don’t get arrogant. Be confident, yes, but not arrogant. Arrogance blinds you and gives you a false sense of security. Do your research. Plan a prepare for your negotiations. And ultimately, don’t be a jerk. It will bite you in the ass eventually. Trust me. I know.