By: Gary Bedian
I discovered “The Realist” when I realized that balance was essential for establishing mutual benefits and mutual satisfaction; the keystone for building sustainable long-term business relationships. I found the Realist lurking in every successful deal I had made. Where there was balance, contracts tended to outlive the original lifetime of the contract. Relationships tended to move on to form new deals. Where there was imbalance: more negotiation and management; decreased productivity and increasing cost. The relationships tended to be acrimonious and hostile, some even wound up in litigation.
Often, where there was imbalance there were struggling egos, deep emotional rifts, damaged personal pride and bruised feelings. These negotiations often so volatile that they couldn’t help but lead to rocky times at the negotiating table – people just didn’t want to be nice.
In situations like these, people don’t compromise; they seem to prefer confrontation. If you are lucky, somebody will quickly tire of the argument. If not, then prepare yourself for a long and arduous negotiation.
The Realist will try to uncover the motivation for conflict and resolve the ‘ego-involved’ issues. But he must also ask himself, “Is this it worth the effort?”
I dislike ego-involved negotiations because they are inherently unproductive. Sometimes the kinetics of EGO is equal to the opposing inertia of PRIDE. Put another way, it takes a heck of a lot of energy just to move people toward a productive conversation. People will things for their own reasons, not for the benefit of others. The more one pushes their agenda, the more the opposing side will push back.
Naturally, the goal is to bring both sides together by making them feel that the deal points are of their own making. If you are successful, you achieve the “win win” balance –everyone wins, everyone profits. But, consider the words of Ayn Rand: “You may evade reality, but you cannot evade the consequences of evading reality.”
Reality is a state of disambiguation; a perspective on things as they actually exist. Therefore, the Realist looks for deal points that are founded upon actual knowledge, not hypothesis or wishful thinking. For that reason, the ‘reality check’ is probably the most important first step in any negotiation. “Is it worth the trouble?”
Remember the KISS principle? “Keep It Simple, Stupid.” Simplicity is essential and avoiding unnecessary complexity is goal in every negotiation. Exerting heroic efforts to rescue a deal is not simple. Fighting personalities and egos is also not simple. A professional negotiator knows that everything is negotiable, compromise is a tool, “fairness” is a range of possibilities and, more important, sometimes a deal is just a deal. Grounded in reality, you can negotiate the compromises and establish a balance of fairness that makes relationships flourish. The viability of the business deal, therefore, depends entirely upon how well grounded you are in reality.
What do we do when we come to a situation where reaching an agreement takes more effort than we’re willing to expend? We take Kenny Rodgers at his word: you’ve got to know when to hold ‘em, know when to fold ‘em. Walk away from the table. It’s that simple.
“No-win” scenarios are not failure. It just means that the current situation is overweighed toward effort and against benefit. And this move also has a clear tactical advantage.
Consider the affect on the other party by declining the negotiation – before it begins! You may push one other side into changing a key position. But, consider this benefit: by avoiding a useless debate and constant bickering, you may save a chance for a better agreement in the future.
The Realist also forces us to acknowledge that negotiation is an act of communication that occurs any time somebody wants something. Draw the emphasis on communication – the gainful exchange of thoughts, messages and information. Therefore, with healthy lines of communication, you will reach goals that can be carved in stone, which is far better than drawing bottom lines in the sand.
Gary H. Bedian, Investment Advisor, Founder of Bedian International. Manages and consults on assets and investment portfolios representing more than $1.2 billion in capitalization. Email: firstname.lastname@example.org Website: www.gbedian.com