It was late December. I was sitting across the table from the hospital CEO. We were in the midst of negotiating a deal involving my client, a large physician group, and his facility.
And then, he made a major negotiating blunder, giving up on a deal point clearly in my client’s favor, in fact, a better result than we had projected.
Was he tired? Was he sick? Was he lazy? Probably none of the above. In fact, it probably wasn’t even a blunder.
More than likely, the terms of his compensation plan incentivized him to get the deal done before the end of the year. It’s like the pressure on a car salesperson to sell another car on the last day of the month. Just on steroids.
When you negotiate with an entity on the other side of a deal, you obviously have to take into account what the entity’s motivations, interests, and payoffs might be. Everyone knows this.
But what’s commonly missed is an appreciation for the fact that an entity is always going to be represented in the negotiation by an individual or individuals.
Ask yourself what is that person’s individual motivation in the negotiation? How does he or she get paid? How does he or she get evaluated? How does he or she get rewarded?
While you should, of course, research and evaluate what the business entity on the other side of the negotiation seeks in terms of success in a deal, it pays just as much to understand what success means for its representatives and executives.
It might be entirely possible to deliver a complete win to the individual sitting across the table from you while delivering a complete win to your own organization in regard to the terms of the deal.
I’m not a big believer in win-win in negotiation. But this isn’t win-win to the extent that sometimes the motivated executive is willing to cave on positions to his side’s detriment in order to advance his or her own personal position.
Sure, it sounds screwy. But it’s no more messed up than public company executives who play the quarterly earnings game.
You’re doing them a favor by taking advantage of it.