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This is a true story that illustrates the importance of staying tuned in to the social dynamic during a negotiation.  Emotions can easily get in the way of a good outcome.  This is real.  All names have been omitted to protect the guilty. 

After months of negotiation, we were down to a difference of only $500,000.   This was a small amount of money in the grand scheme of things. Even though the two companies’ positions began far apart, each side had already made significant financial concessions to get us here.  From a purely rational perspective, this difference should have been innocuously divided, since both companies needed the deal to come off.  But human reality is always more complex.  Over many meetings and conversations, you see, emotion had crept into the mixture, and the cold calculus of money was being twisted by attitudes and opinions that had become factors in the equation.  Suddenly, this small sum felt material.

Feelings had forcefully exerted themselves in internal discussions on both sides, so a social misstep by either party could easily have become a deal breaker.  Nerves were frayed, and alarmingly, a warm bond had formed between just one pair of negotiators across the two teams. Consequently, only one communication channel was fully open after two months of interaction.

The lack of bonding was an indication of weak social intelligence on the part of key participants and it stood in the way of relationship building. It had become a barrier.  As it happened, for most of the players, the outcome was about them, and their personal needs.  It was beyond them to let go of strongly stated positions to achieve a mutually beneficial deal.  This was the roadblock – not the money.

The two tightly bonded negotiators fully understood the dynamics, so when they spoke privately, one noted that a little movement could make a big difference from his team’s perspective.  In return, the other one whispered confidentially that his CEO would be willing to split the difference, if the Silicon Valley CEO would just call and open the door.  This was a great opportunity to do the deal and establish a rapport between the two leaders.  Although this intended outcome is obvious, what happened next is instructional.

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When the Silicon Valley CEO called he rambled on about the unnecessary length of the negotiations instead of getting to the point.  He didn’t have the social intelligence to see this opportunity for what it was, and he fumbled.  He asked the other CEO if he would be willing to split the difference, indicating that this willingness had been communicated privately to his team, violating the confidentiality that was understood.

So, the Silicon Valley CEO had an opportunity to not only close the deal, but to establish a sound relationship with his counterpart – a layup but for his social ineptitude.

The Silicon Valley CEO should have:

  • Offered that a little movement could make the difference, in effect opening the door for a gesture from his counterpart.
  • Let his counterpart magnanimously offer to split the difference enabling his counterpart to feel good that he had personally made a difference and closed the negotiation.
  • Used the interaction to create a bond by thanking his counterpart for meeting in the middle and giving him credit for partnering. This would have created some much needed trust and a feeling of good will.
  • Respected the confidential nature of the information he had been given by his team and never mentioned it.

Instead he:

  • Failed to build a bridge and establish a much needed relationship.
  • Damaged the only sound relationship that existed between the negotiating teams by ignoring the confidentiality, thereby closing that communication channel.
  • Forced a concession, creating anger over “having to give away something”.
  • Further damaged whatever semblance of partnering existed.

The deal went through because both parties needed it.  Instead of ending as a win-win, the deal closed with a bad vibe that persisted and prevented a deeper business relationship from developing.  Social intelligence matters in just so many situations, yet it is often in short supply.

If you are going into a negation, try to keep egos and low EQ individuals out of it.

 

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