Negotiation 101 - Part 3. Always Be Prepared To Walk Away.
In this series of negotiating tips, this one may be the most obvious. .jpeg)
A very basic fact in deal-doing is that, if you are unprepared to completely walk away from the deal at any time, you face a distinct disadvantage. We discussed the desirability of establishing a BATNA in the last post: the Best Alternative To a Negotiated Agreement. If you don't have a BATNA, i.e. if you have to have the deal, you are left with a Scarlett O'Hara solution: Depending on the kindness of strangers. The other side will know if you are desperate and your effectiveness in negotiating will be impacted negatively. The knowledge that you are in a financial bind and the deal will bail you out or it's the last week of the quarter and you need the deal to make your numbers are all information the other party is likely to have.
Sometimes the best deals are the ones that you don't make. This could be due to the possibility that the relationship that you are signing up for will turn out to be problematic over the long haul. If you are unsure about whether the deal is a good one and the other party is a real problem to deal with in the negotiations, then it is pretty certain that their style will be the same through out the term of the deal.
Sometimes you have to look outside your own goals and needs to determine whether you can walk away. This is the case in the debt limit negotiations that are going on as I write this. The majority of people involved on both sides seemed to share the view that the U.S. should not be allowed to reach its debt limit. Therefore, failure to reach a negotiated agreement could redound to the detriment of an entire financial system. So, the pressure was great to reach a compromise, even if it didn't feel good to either side. Time will tell whether either side got what the public really needed out of this deal.
Time for another war story from an old guy. During one deal for some real estate and mineral interests, I represented a buyer who planned to buy up coal residue, refine it into large briquette-like lumps and ship it abroad for home heating purposes. We had arrived earlier at a price for these interests and I arrived at the closing with a cashier's check for the amount. At the closing, the seller reneged on its earlier price and stated that they knew they had agreed on a price, but now the price had gone up (this was in spite of a signed agreement). Although the seller probably didn't know it, the raised price was well within the price that my client had said they were willing to pay. However, I proceeded to pound the table, call off the closing and storm out. A couple of days later, the sellers capitulated to the price they had agreed to before (yes, obviously a very principled bunch). We closed, my client failed to start the mining recover process on time and forfeited all they had paid up to that point and then proceeded to stiff me on my fees. This was one that I should have walked away from and never gone back.
I think you mean a Blanche DuBois situation, rather than a Scarlett O'Hara situation. Blanch DuBois from "A Streetcar Named Desire" is the character that says ", I have always depended on the kindness of strangers."
Thanks for highlighting my lack of literary education. Do I get partial credit because it's the same actress?
Yes. Although I always think of Jessica Lange in the role, myself. :)