NEGOTIATING THE MEGA-DEAL

PART TWO OF FOUR

This article is the second part of a four part series about tactics to be used when negotiating a massive contract, a mega-deal, as the lead negotiator for a client company. For context and consistency, the prior Minutillo Newsletter on this topic, part one, ended as follows:

“The opponent lead negotiator must believe that he or she can have the upper hand during the negotiations, whether true or not. Most lead negotiators on a deal show an enormous amount of self-confidence, sometimes to the point of arrogance. The loud, arrogant, flashy opponent is usually the weakest, least confident person in the room. Attitude is usually a cover-up for insecurity. Show vulnerability as a lead negotiator and an insecure opponent will feel superior, confident, and calm—exactly what you want. Why?”

Negotiate Don’t Litigate

Negotiating is not litigating, and this is particularly the case when negotiating the mega-deal, whether the negotiation relates to a US Government contract, Government sub contract, or commercial contract.

Negotiation is adversarial but in a much different way than happens during trial or during an argument with opposing counsel. The objective might be the same, that is, to get a result satisfactory to your client company, but the process used to achieve this result hinges on subtle manipulation of the opponent as opposed to presenting and arguing hard facts to a third party, judge or arbitrator.

Negotiating the mega-deal is not about arguing, it is about moving your opponent, slow but steady, to an acceptable result. You risk losing the deal if you approach a negotiation in a trial like or adversarial way.

What has this got to do with showing vulnerability intended to disarm the opposition’s lead negotiator at the start of a negotiation so that you can move the lead negotiator to a position satisfactory to your client company? In this context, what is vulnerability?

It’s Desirable to be Vulnerable

A vulnerable person, without hesitation, exudes honesty and integrity because the person’s words and conduct tell the opponent, this is who I am, and this is what I believe in, warts and all. The person may not actually be vulnerable but may be merely showing vulnerability to elicit trust.

Vulnerability promotes trust which promotes discussion, attentiveness, and believability. Faith is a better word than believability but could be taken out of context here. Trust disarms an opponent. You put your gun down if you truly believe, trust, have faith, that your opponent does not have one or will put it down at the same time as you. The first order of business in a mega-deal negotiation is to get everyone in the room to put their guns down, to disarm, so productive negotiations can commence.

Vulnerability disarms an opponent because it is a glaring hole that appears to the simple mind to be a weakness which can be exploited. To the trained eye, vulnerability is strength, confidence, telling the opponent to take me for what I am. Vulnerability powerfully promotes receptivity and honesty, if used correctly by a lead negotiator during a negotiation. Receptivity is key to negotiating the mega-deal.

Watergate

Many of you may be too young to remember Sam Ervin, a US Senator from North Carolina, who, in 1973 questioned members of the Nixon administration during the Watergate scandal. When I first saw Sam on television, yes, television not on my Google glasses, smart phone, or tablet, I thought, what a bumpkin. This is the guy chosen to lead the questioning of some of the most cunning political people regarding the biggest scandal the US had seen in the modern political world to date, Watergate? He is going to get slaughtered. He seemed so weak, intellectually vulnerable, and so open that he appeared emotionally vulnerable. The wrong guy for the job. No, the perfect guy for the job.

Sam presented himself as slow and predictable, almost to the point of being a dullard. He appeared to be honest and forthright, so different than the Nixon administration personnel that he was about to question.

In particular, Sam seemed intellectually vulnerable and incredibly naïve, to understate. Before the hearings started, I could not imagine Sam going toe to toe with the likes of Nixon men, Haldeman, Ehrlichman, Segretti, McCord, and Magruder.

The world waited for the one-sided slaughter to begin. The cunning, brilliant Nixon men who allegedly may have concocted or covered up Watergate against a vulnerable, country bumpkin from North Carolina. This lopsided matchup was going to be a slaughter.

Far from it. Sam, in his usual unassuming, slow, deliberate way took apart the statements, conduct, and hardline personalities of every opponent in front of him, one at a time. It all started with Sam’s vulnerability, quiet, unassuming confidence and simple but penetrating questions posed to the most powerful men in the world at the time. The vulnerable country bumpkin far outmatched the polished, coached, deceptive Nixon regulars to bring Watergate to what Sam considered a satisfactory conclusion, the resignation of a President of the US.

What would have happened if someone with a personality like President Trump was the lead Senate panel questioner during the Watergate Senate hearings rather than Sam Ervin? Argument, fighting, confrontation, resulting in chaos. The hearings would not have been successful, and, if anything, would have been circus like rather than methodical and deliberate; different styles for different occasions.

Sam Ervin set the tone during the Watergate hearings. His apparent intellectual vulnerability and, as will be discussed in part three of this series, his demeanor, and likeability as a friend, a facilitator, not a foe, during the hearings brought the Nixon administration to its knees. Though appearing simple minded, vulnerable, and intellectually weak, Sam was the most confident person in the hearing room.

Present a Flaw

How do you show vulnerability as the lead negotiator during a high level, big ticket negotiation? You expose a flaw in the (your) product, technology, service, or better yet, in yourself at the start of the negotiations.

I know this sounds odd. The flaw should be something decided on by the negotiating team in advance; something very minor that in no way could be a deal breaker. Even if the flaw is about the product which is the subject of the negotiation and is already known to the opposition, mention it. Sam was a master at disarming the opponent by appearing vulnerable in a humble, open, honest way.

What does this self-deprecation accomplish? It quickly achieves and provides a sense of honesty and the appearance of vulnerability to everyone in the room. The opponent thinks, “If the lead negotiator on the other side is willing to expose a product or personality flaw, he or she must be an honest person.” I can trust this person. Who, other than an honest, open person discloses a flaw in their product or themselves?

Showing vulnerability to gain trust during a mega-deal negotiation can be personality oriented as demonstrated by Sam in the above example, or by exposing a flaw, no matter how minor, in the product which is the subject of the negotiation. Showing vulnerability is a crucial first step which the lead negotiator must take to disarm an opponent at the start of a mega-deal negotiation.

Next, Respect Cultural Differences; Befriend the Opponent

The next part, part three of this four part series, will appear in the next Minutillo Newsletter and will explain how the lead negotiator on a mega-deal must understand cultural differences and create friends at the negotiating table, not adversaries or enemies, resulting in an outcome satisfactory to your client company.