Chaos Strategy

NOTES ON NEGOTIATIONS:
By Marty Latz, Latz Negotiation Institute

“You never know what I’m going to do – and I consider this a negotiation advantage. In fact, I even appear to act irrationally at times. This unpredictability helps, right?”

Yes and no. What do I mean? In very limited circumstances it can help. But much more often, it’s highly counterproductive.

How can we evaluate this? Consider the following.

1.    Future relationship factor
Does anyone really want a business or other relationship with someone who’s completely unpredictable, inconsistent and seemingly irrational?

It’s one thing to be exciting and a risk-taker. This can be productive. In fact, occasionally doing the unexpected and not being 100 percent predictable can unleash creativity and other positive negotiating traits.

However, it’s quite a different story to consistently act and react in ways that no one expects. This scares folks. And it should. You never know what to expect – good or bad.

This is highly problematic in business and other relationships that rely on planning and predictability of actions for success. And this makes partnering or negotiating with them highly dangerous and full of risk (both negotiating within organizations and between them).

The result? An unacceptable risk-reward ratio leading to possible negotiation counterparts just walking away from these folks if they can. Why even engage, even if it appears that you might enjoy some mutual interests?

High likelihood the relationship will just crash and burn at some point. Just not worth it.

2.    Reputational factor
Many years ago, a fellow lawyer told me of a telephone negotiation that got quite heated on one final element. While the lawyers went at it, the clients just listened.

But then everyone started hearing a clicking noise on the phone every 10 seconds or so. Finally, one of the lawyers asked what caused the clicking. One of the clients then drawled, “Don’t worry, fellas. That’s just my shotgun trigger.  It calms me down when I get real upset.”

The lawyers shortly thereafter got the deal done. The notion of a slightly crazy client pulling the trigger of his shotgun – while listening to lawyers arguing – apparently caused his opposing lawyer to concede.

Did this slightly crazy act work? Yes – on that one issue in that one deal. But in today’s highly connected social media world, I expect that client’s slightly crazy act would become known. That’s how reputations get made.

And who would want to do business with him? Not many.

3.    Performance factor
“Hold on,” you might say. “I would still do a deal with him if it’s a one-shot deal with no future relationship and no future performance issues. For example, I would still buy a classic car or a house from him, especially if I couldn’t get a similar car or house anywhere else.”

I agree. But you’d still rather do that deal with someone not a bit crazy and not totally unpredictable. And his actions won’t help him in his deal with you. In fact, it will make it less likely you will reach a solid deal with him.

After all, his tactics will lead you to distrust him and ensure you dot every “i” and cross every “t” and address every possible contingency that might arise. Why? Because you will never know or predict whether or when he would turn around and not perform or renege later.

This makes dealing with him riskier for you and more expensive and time-consuming for everyone – including him. It’s certainly not helping him.

One final note. You don’t want to be entirely predictable either, especially with your moves in the offer-concession stage. But even then, you will want to be relatively consistent with the overall patterns that exist in that environment (like not bidding against yourself, etc.). If you aren’t, you risk getting accused of negotiating in bad faith.

That’s also not helpful.

Latz’s Lesson:  Sending inconsistent signals and acting a little bit crazy and unpredictable in negotiations will lead to predictable results – and they’re not good.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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