Negotiating the Sweet Spot by Leigh Thompson

Author:Leigh Thompson
Language: eng
Format: epub
Publisher: Harpercollins Leadership
Published: 2020-05-13T16:00:00+00:00

HACK 14

Skin in the Game

Negotiations often get stalemated and stall out because parties cannot agree about certain events or situations. They steadfastly hold to their own views of the world and attempt to educate and enlighten their colleagues (or spouses): “Here’s why I’m right!” However, this persuasion technique usually only makes the target of the persuasion more entrenched in their views. Disagreement morphs into distrust and even contempt. Is there a way out of the quicksand?

Yes! My favorite strategy is what I call the skin in the game method. I think this is because I like a good wager and it’s also because I’m kind of pigheaded. Let me use my own past situation to explain how it works. In this case, I was negotiating with one of my clients about a training session. I had a long-term relationship with him, and wanted to keep it that way. But the client was pressuring me to give him a steep price reduction—less than half of what I would quote to other clients. This presented a problem for me. My client was using our long-term relationship as a bargaining tool: “Hey, look at how long we’ve known each other,” he pleaded. He promised the lower price would lead to more business in the future. Frankly I was not so sure this would happen, not least of which because of some budget cuts I knew were going on at his company. We both presented our arguments, all the while trying to be diplomatic in saying, “I think you are wrong.” The fact is, I was convinced that my dimmer view of the future was accurate and he was convinced his brighter one was. So, what to do, given that we had no access to a time machine?

The skin in the game hack was our solution. Here’s how it worked. We set up a simple contingency term that stated that I would give him a (deep) price discount on the current training session, provided that another group in his company scheduled a training session within six months. If that did not happen, then he would pay the full price. Each of us walked away from the table feeling that we had won—that means we’d found the sweet spot. Now, in fact, only one of us would be “right,” but the important part is that we were able to leverage our different beliefs. As it turned out, I “won” the bet because there was no other client group who scheduled a session within the six-month period. Now look, even though I “won” the bet, if I had not, I would have still have been satisfied (thrilled, even) with the outcome. That’s a key benefit of hitting the sweet spot.

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