Here’s the problem.
Negotiating an agreement, especially one that involves personal gain, is tough for the person personally involved. There is too much to lose to be objective, to be willing to walk when terms go upside down.
What if the negotiation is personally important?
It is my experience that you should have an expert negotiator with you or even in your place, whether from your board or an employee or outside professional such as an attorney – when the issue is personal.
An example you might recognize
Think of buying a car, for example. If you are looking for your spouse or offspring, it is probable that they’ve picked out the perfect car and are ready to take it off the dealer’s hands. Assuming that you are the elected or self-assigned negotiator, the last thing you want is to have them in the room while you haggle over price. Advantage other side.
Using an impartial negotiator:
Negotiating on behalf of business associates too personally involved in a transaction: it’s a role I’ve played tens of times over the years. There are the several that were disengagements between partners threatening to sue each other for perceived wrongs. There’s the sale of a company, where as a board member, I asked the CEO to name his asking price and then go home and wait the result. There’s the disengagement with an angry employee threating to sue the company.
Sometimes the issues are just too emotional.
[Email readers, continue here…] All of the above issues are personal to a CEO, founder or entrepreneur. And all of them draw that person emotionally into making decisions that cannot easily be objective, or into finding solutions that are mutually acceptable without the torture of constant re-explanation of opposing positions.
Some solutions to consider…
A smart lawyer, they say, should never represent himself. And yet, lawyers are trained in the art of negotiation. You should be careful not to miss the point of that admonition.
My oldest son learned to accompany me, but keep a deadpan look on his face as I negotiated for his ideal car, completing the purchase in minutes. The CEO described above endorsed his company selling for twice his asking price, after his absence helped the negotiation to be completed within an hour. The partnership described above dissolved without suit after a personal visit by the negotiator without the first partner present resulted in settlement within an hour. The employee that I just described accepted a severance check in trade for a release, without the emotion of arguing out old issues between employee and employer.
Are you too emotionally involved in a decision? Consider the advice lawyers give to each other and find a surrogate to argue your case.
through your organization, aimed at a higher calling. Others want to know that they are signing on to a career, not a job, and expect to move up within the ranks or on to a larger company that can accommodate their goals.
superstar agrees to work for you for a period while learning the ropes to move to a better job elsewhere, assuming that there is candor in the communication by the employee and a level of trust in and by the employer, it is perfectly proper to offer to help that employee succeed. The pact between employee and employer is that the employee gives the best possible service to the company, in return for the company helping the employee to grow in, and perhaps beyond the position.
order to do something that seemed either illogical or of low priority – to you. If you accepted the authority of the person giving you the order, you just performed the task, probably either wondering if that person was nuts or whether you just didn’t understand the reason for the task.
explain that it would be more than just helpful to know why these new reports are needed, that even though the salesman has no need to know, it would certainly make doing the work less of a chore. And by the way, I offered, if the boss could not explain why, there might be an opening to advance the argument that the trade in time between completing the new report and reduced sales call time might be worth a revisit of the order.
home, using company time to perform personal duties (if not permitted), and even traveling business class at company expense on short trips. Larger and more important examples involve direct promises that are broken, such as review dates with implied raises, or promised follow-through on an issue of great urgency to person receiving the promise.
investors. Less than a quarter of companies receiving early-stage investment voluntarily fulfill this promise. Usually, one or more of the investors is placed on the board as a requirement of the investment documentation. The entrepreneur often expects that person to keep fellow investors informed. And sometimes the board member does perform the service. But most often, the CEO or founder has a much better idea of the flow of quarterly activity than a board member meeting monthly or less often, and for a relatively short period of time. More importantly, the investors want to hear directly from the CEO.
If a company is meeting milestones and growing as projected, and if the CEO is diligent in keeping the investors informed, a second round is much more likely to be raised from the early investors. But the studies mentioned above include all second rounds, including those that were pulled from investors reluctantly to protect their first money in, skewing the curve away from more heavily weighting successful conclusions.
off in enough revenue.” “Why?” “Well, all we could measure is dollars of revenue against cost for clicks.” “Why?” “Well, we have no way to know which other ad words might have done a better job of conversion into revenue.” “Why?” “We have no-one on staff with enough knowledge of marketing to distinguish words from phrases, or with experience to know how to capture clicks into conversions.” “Why?” “We’ve never thought this to be an important part of our marketing effort.” “Why?” “We just don’t know what we don’t know. Will you stop asking ‘why’?”
Here’s a test of your patience and your willingness to suppress your tendency to avoid conflict or confrontation – all in the same insight.
First, it is not a rule, just a proposition from one of the many business books dispensing advice. Do not do it. Don’t draw a line each year to eliminate your bottom tier by firing them. But look at it from the other side of the coin. Some people just don’t excel or even fit into their jobs. Even those in the mid-tier of your organization. Coaching them to a better fit or even out the door may well be the most humane thing to do.
It seems to be a rule, not an exception. Many senior managers and early entrepreneurs create their own mess with this one. The first professional senior manager that an entrepreneur hires to share the growing workload does not last more than a year. You as a longer-term senior manager may make the same mistake and suffer the same result.
is a culture fit. But most important of all, I warn them that they must be ready and able to let go, to delegate clearly, and to establish metrics for measuring the performance of the newly hired manager – but not to interfere with that person’s day to day management unless absolutely necessary. I urge them to coach, but not to expect the new manager to be a duplicate in style or perceived ability.
to and have been a member since 1989 (Adaptive Business Leader Organization – or ABL). The organization, like Vistage, manages roundtables of CEOs meeting monthly in small groups, where they discuss their mutual challenges and help solve each other’s complex problems, acting as an informal board of advisors. Unlike other groups, ABL members all belong to either healthcare or technology industry-focused roundtables.
At each session we hear one of the dozen or so members present in depth, requesting feedback from each member of the group in response to a list of concerns that is explained during the presentation as background for the help hoped for from the group. I contribute my two cents of advice, as do the others in the group. As an active, professional angel investor and board member of over forty companies throughout the years, often I can help in areas not familiar to the others, when fundraising issues are on the list.
progress with his issues, many of them directly related to fundraising, as he grew his company from a raw start-up to an initial public offering on the NASDAQ exchange, followed by continued growth in revenues and stock price. During the early years, he often asked for advice about funding, comparing various sources and offers, threading the needle between the wishes of the investors and his judgment as to how to grow the company.
operational issues and focus upon the future, even if that meant a pivot to protect the business as the world was changing in that industry at an accelerated rate. That challenge would require vision from the CEO supported by data and what-if analysis by the CFO. How much more valuable would the role be if not to think and work strategically?
weeks from having no cash in the bank. Can you guess the board’s reaction? The CFO was immediately fired. I performed a forensic audit on behalf of the board to determine if there had been any fraud or theft; but there had been none. Spending had continued out of control, much of it for inventory and assets – neither of which appear on the income statement. So those expenditures were not reviewed by the board which had not been given a balance sheet to examine.
