Just when you think you have a pretty good grasp of the negotiating process, and after you have been through enough “deals” to gain a comfort level at the negotiating table, along comes one more surprise gambit or tactic employed by the other party. Unless you recognize this one for what it is, it can cost you dearly. I fondly refer to this tactic as “the clock!”
One of the most memorable times this tactic was used against me, I had just arrived in Mexico with the top level management team of the company that I then represented. We had flown in to sign the agreements I had negotiated, and to attend a dinner party to celebrate a joint venture between two highly recognized companies — one from the US and one from Mexico. At that time, I was an employee of the US company and the most junior member of the management group on site to execute the agreements. This was the first time I had been given complete responsibility to negotiate a complete “deal,” and being at the lowest level of the team just added another element of pressure.
As we entered the airport, I was called aside by the VP of Finance of the Mexican company, and was then whisked away to a meeting to discuss “one minor issue” before executing the agreements and proceeding to the dinner party to celebrate the successful “conclusion of the deal.” As it was then only about 4:00 pm, and the dinner party was scheduled to begin at 8:30 pm, I was not concerned about resolving “one minor issue.”
The “minor issue” resulted from a breakdown in communication between one member of my team and one member of the Mexican team relating to a financial schedule that was sent, but supposedly never received. It was not the schedule per se that was the core issue, but it provided the VP of Finance the opportunity to use the issue to open the door to renegotiate one aspect of the joint venture agreement.
As it turned out, the VP of Finance had never supported the joint venture and was looking for a way to gain more financial control over the venture. We ended up talking, reasoning and negotiating until just after 4:00 am the next morning when we finally resolved the “minor issue.” Later, I was told that the rest of the people from both companies ate a very quiet, tense dinner in an atmosphere of “gloom and doom.” As for all of the negotiators, we did not eat until the next morning when the revised contracts were delivered to the “celebratory” breakfast meeting about 10:00 am.
Needless to say, the VP of Finance of the Mexican company recognized that he had everyone in place on “his turf” with the expectation that the “deal” was done, and therefore, he had the perfect setting to extract one more concession from us — the other party. As it turned out, the final concession never compromised the working relationship between the parties, but it was a painful twelve hour session for me especially as I had to keep in mind that the clock was “ticking” in the background and I needed to get the “deal” done before we departed the next day.
Another situation that arose many times resulted from my frequent trips to Japan during the 70′s and 80′s to negotiate a series of license agreements. In many case, the Japanese company would greet me at the airport and deliver me to my hotel so that I could relax before dinner. During the two hour trip in from the airport, my host typically would offer to assist in reconfirming my return flight. During that time frame, most overseas flights required reconfirmation by phone at least 48 hours prior to departure.
Most of the time, I would plan three or four days in Japan as I anticipated spending two or three long days at the negotiating table where a significant number of items could be resolved. Usually, I found myself meeting with the host company for the entire time, but what I did not recognize at first was that the real negotiations did not take place until the last meeting prior to my departure when only a few hours remained.
It was not until this situation occurred several times, that I finally figured out that “the clock” had become a major player at the negotiating table. Once the “light came on,” and I recognized the tactic, I always left my return ticket “open,” and so advised the host company as soon as I arrived. My new tactic was to remain in Japan “until the parties had reached a mutually satisfactory agreement.” Not surprisingly, by eliminating “the clock,” negotiations began after dinner the first evening and continued throughout each day until I departed.
Lessons Learned: Do not let arbitrary deadlines affect your negotiations. Also be careful not to let the fact that you are on the other party’s turf work against you.