Here’s a great tool for your next negotiation with an entity, say with a hospital or even a healthcare system. Or with any business, for that matter.
Tag: trick
In your negotiations, are you letting the other side think that they won?
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Mark F. Weiss
In your negotiations, are you letting the other side think that they won?
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss
Podcast: Play in new window | Download
It seems as if nearly everyone working in healthcare has some sort of accreditation or certification. It’s the case for individuals and for facilities. Ride along with Mark as he questions who’s accrediting the accreditors, even the biggest one of all, the Joint Commission.
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Mark F. Weiss
My dog Larry, the Briard, who had recently succeeded in catching a squirrel, came up to one of the doors from the backyard at around 9 o’clock one night, right after being let out for the final time that evening.
When he approached the door, I saw that he had an opossum hanging from his mouth, as lifeless as a dishrag.
After some coaxing (and the promise of a treat), I was able to get him to drop the opossum and come into the house.
I then went back outside to pick up the carcass, only to discover that the opossum had been playing possum. It really wasn’t dead at all. It had already walked away. No blood nor fur on the ground, just little footprints.
I was relieved. I didn’t want to pick up a bloody opossum carcass. But it did hit me that it was a great analogy for negotiation.
By playing dead, the opossum gave Larry a win. But, and here’s the key, it was a win that cost the opossum nothing.
Larry came into the house thinking that he had landed the best deal in the world, and maybe he had. In his mind he thought that he was the winner of the battle with the opossum. Yet, the opossum walked away.
In your negotiations, are you letting the other side think that they won?
For example, depending upon the negotiation, it could be as simple as deploying a sixth finger approach, or it could be as detailed as truly figuring out the other side’s underlying motivation and giving them what they seek, so that they, too, are satisfied with the result.
We can also look at “opossum negotiation” from the other angle. Consider whether you’ve been played in the same manner. But, in the end, it doesn’t make much difference if what you received was valuable to you.
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Mark F. Weiss
Picture the following situation:
Working with my client group’s leader, we’ll call him Dr. Bob, we’re deep into the negotiation of a deal with a hospital, one of the elements of which is the intensity of physician coverage, upon which we’ve agreed as the basis for a fair market valuation analysis.
Then, one morning at around 6:15 a.m., the hospital’s COO passed Dr. Bob in a hospital hallway. The COO said a quick hello and then, in a completely off the cuff, chatty manner, said something to the effect of “think we can handle running the new slot until 5?” Dr. Bob said “sure” and continued on his way. In retrospect, Dr. Bob doesn’t think that he even stopped walking, the exchange having taken perhaps 3 or 4 seconds.
A few days later, the hospital’s attorney generated a revised draft of the contract. It now included a 5:00 p.m. end time, a one hour increase in coverage, in connection with the newly added coverage slot. Despite the increase in workload, the amount of financial support from the hospital remained the same.
Dr. Bob was furious. To him, the hallway “chat” was just that: an exchange of pleasantries and an optimistic expression of the growth of the venture. But it was absolutely not a part of the current negotiation process. To Bob, the COO had engaged in “drive-by” negotiation.
The COO, on the other hand, didn’t see anything wrong with the exchange. To him, it was a brief exchange on an important deal point.
What went wrong, and why?
It boils down to a matter of perception of the negotiating process.
Physicians inexperienced in business often mistakenly regard hospital negotiation as a formal process separate from day-to-day activities at the facility. When at the facility, they are on their way to render patient care or are headed back to the office or out the door. Hallways are not negotiation tables. For many physicians, location is a factor in negotiation – the physical context controls the question of whether or not there is intended content.
To a hospital administrator, all discussions with contracting parties, whenever and wherever, are part of the negotiation process. The executive’s office, the board room, the wash room, or the hallway, even the check out line at the local supermarket, are all simply locations – and to him or her, location is not important; it is content, not physical context, that controls.
Because you can count on the fact that hospital administrators are not going to change their perception of the immateriality of physical location to negotiation, it’s incumbent on physicians to learn this lesson and learn it well. Any communication with, or within earshot of, an administrator is a part of the negotiation process. Physicians can never have an “off the record” conversation with an administrator. The only alternative is to have no communication at all; hardly an effective strategy.
Understanding this rule allows physicians leaders to both protect their negotiating positions and to use “informal” communication with administration proactively to inform and dis-inform in the context of a controlled negotiation.
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Mark F. Weiss
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.
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Mark F. Weiss
It’s not enough to discover the other entity’s motivation in the negotiation. What’s their representative’s personal motivation in concluding the deal?
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Mark F. Weiss
Do you know what happens upon the termination of the contract? What obligations do you continue to owe? And, what obligations continue to be owed to you?
Of course, the best time to consider these issues is before you enter into the contract. We all want deals to succeed, but even the best of deals come to an end. Then, what happens?
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Mark F. Weiss
In any negotiation, be the party to deliver the first draft and control the deal.
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Mark F. Weiss
