Successful businesspeople like to think of themselves as rational beings that apply thorough analysis to get optimal outcomes. Of course, this is not always the case. We’re humans, not optimizing machines: We’re biased towards doing business with people we like and trust; we succumb to pride when a calmer perspective would have yielded a better outcome for everybody; we get emotionally invested in a deal and can lose focus of its true merits.
It is easy to become emotionally invested in a deal, especially a complex one that has required a large time and resource commitment from you and your team. Nobody wants to simply walk away from something they have cultivated for months—even when the rationale for actually doing the deal starts to dwindle.
We once engaged with a client who was on the verge of a lucrative technology deal. Their position was incredibly strong: Their potential customer was well aware of the value of the deal and our client had painted a compelling picture of what would happen with every passing month that the customer failed to act. Our client even had a track record of successful projects with that same customer, which greatly enhanced their credibility.
With the deal seemingly on the goal line, the customer suddenly began to demand concessions. Our client’s CEO, who had promised his board that the deal would land soon, felt the pressure from both sides. As a result, he gave on some of the concessions, when no concessions were necessary. This elicited more demands from the customer, spiraling into terms we had already agreed to and a cascade of “unprincipled concessions.” He really wanted that deal done, and as the saying goes, “If you want it really bad, you’ll get it…really bad.” The deal closed, but with lost profits for our client.
Your Team is Your Guardrail
We suspect that our client could have closed the deal on much more favorable terms, and sooner, had he trusted the other sales and client services team members on the deal and their rock-solid value argument.
In the end, there was nobody that could counterbalance the CEO’s impatience, which brought in a short-term win at the cost of a more lucrative sale. When building a negotiation team, you recruit internally with your own weaknesses in mind. If you have a hard time asking the difficult questions, get team members who can. Solicit advice from people who challenge your assumptions, who welcome a constructive challenge.
Give yourself the edge by assembling a team of players who complement each other’s strengths and weaknesses. If you are an intuitive, hard-charging risk-taker like Captain Kirk, you’d better make sure there’s a logical Spock on board to lessen the likelihood that the other team will take advantages of your weaknesses and neutralize your strengths.
Staying focused on the merits of the transaction is tough to do when you become emotionally invested. That’s why it takes a good team around you to keep this question front and center as the negotiation unfolds: “Does this deal make sense for both parties?” Because sometimes we’re just too human to be rational all on our own.