Our discussion on Tuesday explored conflicts that occur during negotiations and ways to manage them, namely “Compromise,” “Win-Win” and “Forcing.” There are more techniques your legal or business advisor can employ to make sure negotiations are successful, or to determine if they should proceed at all.
Smoothing. Let’s say that the parties and their lawyers have been at the table for longer than expected. It could be for reasons involving finance, time, personnel or a combination of factors. Everyone is still interested in the deal and committed to making it work.
An approach to use is smoothing, which is reminiscent of compromise but puts the needs of the other party before your own. You’ll still act on your needs, but you’ll make the people on the other side of the table feel like they are the priority.
Ever had a fight with your spouse, but didn’t want to couch surf tonight? You can go to bed angry, or you can defuse the situation as only you know how with your spouse. The same tactic applies here: When you don’t want to walk away from the table and there are no better alternatives, just accept that some ideas are wrong for the sake of reaching an agreement and demonstrate your commitment to the deal. You’ll get your back rubbed eventually.
Of course, if you have tried this or other methods and nothing seems to be working, there’s always…
Withdrawal. Sometimes things don’t work out. If neither party’s objectives will be met and the financials don’t line up, or if nobody can settle for a decent negotiation, then it’s time to walk away and try to do so on amicable terms. The more time, effort and money you spend on a deal that will not proceed beyond a stalemate, the more time, effort and money you’ve wasted.
If you’re going to walk away, do it with class and leave the door open for another round of negotiations down the line. Maybe whatever held everything up — like counsel, price, or terms — will change after a long intermission.
The lawyers and staff at Brinen & Associates have used these conflict management methods and others that we may explore. Feel free to contact us when you are ready to consider buying or selling a business.