Leave Something On The Table
One of the best lessons I learned early in my career about negotiation is simple: always leave something on the table for the other party.
To many, being a skilled negotiator means expertly and ruthlessly optimizing your self-interest. Negotiating is about winning, or even better, beating the other party. Satisfaction is knowing that you have left nothing on the table – you got everything the other party was willing to give and one more pound of flesh thereafter. You have squeezed out every last dime. I do not agree with this approach.
I think we all have to decide whether our primary objective is to win the negotiation or to win the relationship. You can choose to go through life leaving a trail of dust comprised of those you interact with – seeing people as transactional resources to be drained at every opportunity. Alternatively, you can go through life being fair and reasonable, not losing sight of the other party’s needs and appreciating that a good deal is one where both parties probably have given a little more than they wanted going in. Both parties have left something on the table because they value the relationship as much as anything else.
I really respect and prefer to work with those who adopt the latter approach. I would say that all of my portfolio company CEO’s are of this mold. They are people for whom a handshake still means something. There is some old fashioned sensibility about them which is a high compliment in my mind. They have the character to start off a negotiation with, “What’s important to you?” There is no front-end posturing because that’s not necessary among friends and colleagues. And they ultimately hope that as many people as possible become friends and colleagues over time.
I’d like to think that operating in this manner, while perhaps not necessarily optimizing every short-term economic matter, does enhance long-term fiduciary value. I guess it’s hard to know until you’ve seen a full body of work – but at least the ride will be an enjoyable one.