Someone asked me how I deal with “difficult” negotiators, so I shared this story.
Back in 1995 when “the internet” was a shadowy world, like a digital Mirkwood, I was part of IBM’s “Internet Division.”
Our mission was to create potential online offerings and develop or license intellectual property that would allow IBM to create a footprint to grow its business in this new virtual space. (The Internet Division was created by Lou Gerstner shortly after his arrival at IBM in 1993 as part of his amazing turnaround, recounted in his book, “Who Says Elephants Can’t Dance?”)
My boss, “Clark,” and the rest of our team spent our days negotiating different deals to grow the Internet Division’s products and services. Some deals involved IBM selling services, some involved IBM buying services. With the sudden surge of technical creativity, much of what we did was license technology, specifically patents, from startups in Silicon Valley, Silicon Alley, and other centers of innovation with clever plays on the word “silicon.”
Clark and I were sitting in a conference room in an office building on Sand Hill Road preparing to meet with the CEO of a small company that had developed technology IBM wanted to license. It was just Clark and me, in business-casual attire. In walked “Bill,” the CEO of the startup, wearing jeans and a golf shirt. Behind Bill came a cadre of employees, and two stern looking lawyers from one of the area’s tech law firms, all in jeans and sportswear. Silicon Valley skipped the “business” part of “business casual.”
We greeted the group and sat down on opposite sides of the table. Clark, as he always did, leaned back in his chair and folded his hands across his belly, exuding an almost meditative calm. By that point Clark had spent over 10 years at IBM doing deals and was quite comfortable with who he was as a negotiator. He was not a “lean over the table” type of personality. Clark listened, would pause to reflect, and then respond. Clark did not react.
Immediately, I sensed that we had a mismatch. “Fred,” the partner from the law firm, was an “in your face”-type of personality and immediately took control of the meeting. Bill, the CEO, sat next to Fred, listening intently to how Fred was presenting this opportunity for IBM to obtain access to this amazing technology. Clark followed along from his reclined position, nodding in affirmation from time to time. Clark did not take notes. As second chair, I took notes, writing furiously to keep track of the dialogue.
Fred’s negotiation style was declaratory, not inquisitive:
“This is how it is going to go.”
“IBM will do this.”
“Bill has other companies interested in the technology.”
“IBM has to move fast and agree to these terms.”
For the next 60 minutes, Clark listened, paused and responded. Fred reacted emotionally. Clark listened, paused and responded. Fred yelled.
Clark… Fred got red-faced.
Clark… Fred stood up and shook his fist.
Bill’s face was signaling his frustration with the negotiation and a fear that this was not going well. A licensing deal with IBM would obviously boost the value of Bill’s company, but Fred did not seem to be working toward a positive outcome. Bill called a timeout. “I’d like to caucus with my team and just go over some of what I have heard here.” We agreed, and Bill took his people out of the room.
Clark and I patiently waited. Bill came back after 20 minutes without Fred. Instead, the associate working with Fred, “Vince,” sat in Fred’s chair.
Clark reclined.
Vince opened with: “OK, I want to go over what we have proposed, and we need to know now if we have a deal or not.”
For the first time, Clark leaned forward. He looked at Vince and said, “You know, your boss used that demanding style of negotiation, and it didn’t go so well. Maybe you want to try a different approach.”
That was when I realized that Fred’s departure was orchestrated by Clark.
After the meeting, Clark explained to me that he could tell right away that Fred was going to be a challenge to work with in shaping a deal that worked for both IBM and Bill’s company. Fred was positional, loud, and used threats of IBM losing the deal to try and scare us into saying “yes” to his demands. Clark said he tried offering options in response to Fred’s terms, but Fred was not willing to consider variations on his proposals. So Clark decided he needed to find a way to get Fred out of the first chair so we could shape a deal with someone more reasonable.
And this is what I learned from Clark: If you are dealing with someone who is actually counter-productive to getting a deal done, you cannot tell the other side, “You have to remove that person.” You have to show them that the person needs to be removed. “Show, don’t tell,” Clark said. And one way to do that is to highlight the destructive behavior to make the other party aware that this one person is wrecking what could be a great deal, and let them push the “eject” button.
Clark said he had to take some time to figure out what made Fred angry. What kind of responses would set Fred off? When Clark found what types of responses annoyed Fred, Clark kept responding in that way.
“When you find a button you can push to set the other person off, mash that button down every chance you get. Sooner or later the other party will realize a change is needed,” Clark said.
Clark could have leaned in, yelled, and gone toe-to-toe with Fred’s tactic of negotiating by demands with tactics of his own. That would be tactic on tactic, like a negotiation fist fight. Instead, Clark chose to develop a strategy to not just end the tactic, but remove the tactician as well.
Show don’t tell. I have used that strategy several times through the years, thanks to Clark. When you have a party across the table, and they don’t play nice, don’t say anything critical. Instead, find a way to leverage their negative behavior against them so their colleagues realize they will not meet their interests in the deal unless they make a change.
