The Latest Secrets of Super Negotiators
Former Executive Vice-President and General Counsel to The Walt Disney Company, entertainment law heavy-weight Lou Meisinger – now Judge Meisinger – handed me negotiation’s holy grail just before we walked on stage to teach one hundred Sony Pictures Entertainment lawyers how to put together better deals.
“The best way to break negotiation impasse,” Lou casually observed as we waited in the wings, “is to finesse the impasse by transforming it into an opportunity to make a different deal.”
Now Lou was delivering the holy grail of Breaking Impasse. It was like being given a third lung. I could breathe again.
Transform the impasse into an opportunity to create a different business deal.
Another negotiation koan like the sound of one hand clapping. What did it mean?
Three Dimensional Negotiation
On the same day I had this deadlock-transformation conversation with Lou, I started reading 3-D Negotiation - an advanced beginners or intermediate negotiation guidebook.
Lou’s advice to “finesse the impasse by changing the deal” can take place in any of the three primary dimensions of the deal-making or impasse breaking project.
Those dimensions are Tactics - strategies exercised at the bargaining table, such as improving communication, building trust, countering hardball plays and bridging cross-cultural divides; Deal Design - the invention and structuring of agreements that create greater value for all parties; and, Setup - involving the right parties, addressing the right issues, considering all no-deal options, and, sequencing the issues to be negotiated.
Staples Finesses Impasse with the Venture Capitalists
I won’t tell Lax and Sebenius’ entireStaples office supply store story here but it’s such a great example of Lou’s advice that I have to share some of it with you.
Staples was the original big-box office supply store. Like all wildly successful early entrepreneurial successes, Staples soon had a formidable competitor, Office Depot. To ward off the competition, Staples needed expansion capital and it needed it fast.
All of the venture capital firms and investment bankers were valuing Staples at the same price point, one its founder considered unacceptable. So he went to the top — Harvard Business School Professor Bill Sahlman, an expert on venture firms and start-up financing.
Sahlman recommended breaking the impasse by changing the deal-design and set-up by finding new players and re-sequencing the negotiation.
Together, he and Staples founder identified other investors who were flush with money and potentially interested in better ways to deploy it.
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