Breakdowns are Potential Breakthroughs

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“Don’t take temporary set backs so seriously. Things are not over when we think they’re over. I used to believe that when you have a breakdown in a negotiation, then that’s it. What I learned after a while is that things are never over. It’s over if the parties involved both drop dead, then MAYBE, it’s over. Breakdowns are potential breakthroughs. Every exit is an entrance some place else.” – Herb Cohen

Herb goes on to tell a story of a negotiation he was in where he made an offer on something and after significant negotiation, the other party said, “That’s it, we’re done. This negotiation is over. Goodbye.” And as they were starting to pack up in a very angry and frustrated manner, Herb asked, “Now that it’s over, what could I have done differently? How could I have saved this deal. Help me.” And they did. And he ended up saving the deal.

Things are only over if we give up and walk away. And usually it’s over when we believe it’s over (again,…perception is everything).

Roger Dawson (author of Secrets of Power Negotiating) believes that when the negotiation gets to a point where you believe there’s no where to move, you’ve probably reached any one of the following 3 points in the negotiation:

  1. Impasse
  2. Stalemate
  3. Deadlock

There are solutions to each of these situations. The question becomes whether it’s worth investing the time associated to get past these potential deal killers.

1. Impasse
An impasse happens when the parties in the negotiation can’t reach an agreement on one or more issues and it threatens the agreement.  You sometimes hear people say things like, “We’ve reached an impasse.” or “We’re stuck” or “This is a major issue for our organization”. Sometimes it’s really easy to confuse an impasse with a deadlock. In fact, even Wikipedia confuses the two. But they are not the same thing!

I’m a visual person and so I like to think of impasses as a rock slide on a hiking path. It’s possible to proceed on the path, but you either have to clear the impasse or climb over it and deal with it on the way back down when you’ve got some momentum behind you. Sometimes you can clear the impasse fairly easily, but sometimes, because of the emotion attached to the impasse, it’s easier to climb over it and set it aside as a task to deal with later, and deal with it on the way back down the mountain when you have some momentum behind you.

What’s a good example of an impasse?
Vendor wants net 15 payment terms and because of their leverage in the negotiation (if there are only a small amount of vendors that do what they do), they believe that they can have it. Sometimes that sounds like this, “Look we want to do business with you, but as you know, our payment term requirements are net 15. We can’t really continue this discussion until we deal with this issue.” Sounds like a deadlock right? Especially when they say something like, “We can’t really continue until….” And so as the procurement person, you think to yourself, “Well shit, now what?!?” The key here is to remain calm. Chances are that you’ve reached an impasse because you’ve challenged a ‘holy’ area for the vendor. No one challenges them here and they’ve got strict instructions not to move from this. This is why we feel like we’re met with aggression as soon as we reach an impasse.

Remain calm! Set the issue aside (also called tabling the item) and deal with it later in the discussion.  I know it sounds simplistic, but it’s critical how you deliver the messaging here. It should sound something like, “I think I know how important this is to you. If I put myself in your shoes, I can see how important this may be (creating empathy), and let’s just set that aside for a moment and talk about some other issues. Tell me about the labor you’ll be using to complete this project. Can you use non-union labor? Let’s walk through the specs. Can we remove this item to cut down on total cost of installation.” Essentially you’re shifting the discussion to a smaller item that you know you can get an agreement on. By picking small items that you can gain alignment you begin to build momentum before coming back to the impasse. This momentum makes the larger issues easier to resolve.

2. Stalemate
Stalemates suck! A stalemate comes up when you’re still talking to each other and you want the negotiation to move forward but for whatever reason you’ve reached a point in the negotiation where you just can’t seem to get agreement on something, and it seems highly unlikely that you’ll come to an agreement on it. This happens sometimes in long protracted negotiations where both sides have had the same team negotiating for several months. Sometimes things just get stale.

When things get stale (and it happens) it’s important to recognize the stalemate early rather than beating a dead horse on either side, because that just leads to frustration. The key here is to CHANGE SOMETHING. Change anything, really. And I’m not kidding. Eventually, something will change in the negotiation when you change a certain dynamic of the negotiation. Herb’s story is the perfect example of how to deal with a stalemate. He changed his language and channeled the great Detective Columbo (this ages me) to open doors that were closed. Changing your language can be a MASSIVE shift in how to search for a solution. The easiest way to do this is to speak in hypothetical solutions. An example of a hypothetical solution is: “What if we looked at it this way…”

You could even try changing the team up (your side and/or theirs). Don’t let your ego get the best of your deal. Sometimes you’ve just been working on the deal too long to see easy solutions to problems and you need fresh eyes. Sometimes we just need to put our egos aside and bring in someone else in to manage the deal to give it fresh perspective.

You might consider changing the location. Don’t be fooled by those that would tell you that changing the location isn’t a big deal. It’s HUGE. If you’re negotiating on their turf, they will feel more confident and relaxed. If yours, you feel more confident and relaxed. Change it up, Make it neutral.

The key with stalemates is to change something, anything, to keep the negotiation dynamics shifting till there’s a breakthrough.

3. Deadlocks
A deadlock is where both sides are frustrated and believe there’s no reason in talking to each other any more because there’s no deal to be had. But there’s still hope even in this situation! When you reach a true deadlock, it’s time put on your big boy pants, strip your ego away completely and go to mediation or arbitration.

Good agreements have a dispute resolution process built into the agreement to allow for this process to unfold without bias. Hear me when I say, you’d much rather go through mediation than arbitration. In my opinion, it’s a significantly better process if both sides approach it in good faith. Also, in many states, arbitration is binding and you have to just suck it up if you get a bad deal. And yet, in saying that, I’d much rather go through arbitration than go to court.

So when you think the deal is over, it’s probably not over. There’s probably still room to negotiate. You just need to diagnose the issue and where you’re at.

Remember Herb’s advice, “Breakdowns are potential breakthroughs!”