To be successful in the turnaround field, you need to have a lot of skills: the ability to assess the financial health of a company; the capability to make the tough decisions, the willingness to listen to the parties involved and the capacity to motivate people toward common goals are just a few of them.
But one of the most crucial skills is the ability to negotiate. I employ this skill every week and my several decades in the turnaround business have made me very good at it. I didn’t earn the nickname the Monty Hall of Business for nothing. Most days for me involve some form of “Let’s Make a Deal.”
I engage in negotiations with lenders, clients, employees, vendors — all sorts of parties are involved in the deals I’m working on. We are able to come up with a suitable solution in the majority of cases and all parties leave on amicable terms and could consider doing business together in the future.
So, how does that happen? I make it a rule to always negotiate in what I consider a positive and open way. I genuinely want all sides to a negotiation to feel good about the outcome.
So what’s the key ingredient to a successful negotiation? Aretha Franklin said it best in song, “R-E-S-P-E-C-T.”
If I can negotiate within the context of mutual respect for all parties, we are able to achieve much better outcomes for everyone than if any party becomes hostile or aggressive. If someone begins name-calling, raises their voice or personally attacks one of the parties, then people feel disrespected. And when that happens, emotions flair up and the process breaks down.
Rather than searching for mutually beneficial outcomes, negotiation can spiral down into a very expensive game of one-upmanship. Just ask any divorce attorney. They can regale you with stories of couples spending thousands of dollars fighting over a painting or other household item that neither one of them really liked or cares about. What they do care about is beating the other person.
From the outset I work to establish a positive rather than adversarial position. It’s much easier to find common ground and get buy-in for the negotiated agreement under those conditions.
I make it known we are looking for the best win-win solution we can achieve under the circumstances. If people feel heard, validated and respected, they are much more open to brainstorming to come up with creative solutions.
I show respect to all parties by listening and validating their needs, maintaining a calm demeanor and gracefully giving in on points that aren’t crucial to my party’s interests. To show our good faith and desire to reach a good outcome, I sometimes share information to the other party to assist in the process, information that senior management did not want to share but agrees to do so only in this situation. In those cases, we tag it “For settlement discussion purposes only” to limit its use for any other purpose, such as a lawsuit.
Yes, I do have to play hardball sometimes. That can happen when some parties to the negotiation are not working in the best interests of the company, or who are undermining the process by not negotiating in good faith. They may be spreading false information or currying favor with senior management to skew the results in the direction they desire.
I’ve dealt with plenty of manipulative people and I can generally spot when someone is poisoning the negotiation process.
Remember Aretha Franklin during your next negotiation. Everybody wants a little R-E-S-P-E-C-T.