January 21, 2010

“This is my final word…”

This sentence was uttered by one of our clients. The sentence was aimed at the German businessman, sitting at the opposite side of the table. After pronouncing this sentence our client got up from the meeting table and went to his desk as if his attention was required there on another business issue.

These parties had met 4 times before this meeting and had reached an agreement almost on all of the points of their future partnership. The last point on discussion was the price for the company shares. In this meeting for the last couple of hours both parties were trying to reach a point which was favourable to them.

The German businessman was somewhat shocked to hear the above mentioned sentence. When our client came back to the meeting table, the German businessman started to talk with a certain anger, “If you or I declare a final price at this point of our discussion, what is the aim of this meeting?” He continued, “Will we give each other ultimatums every day of our partnership?”

I have to note that declarations like “the final”, “no other alternative” and statements asserting your point of view as the only applicable approach do not have a place in the negotiations of the sales of company shares. Just like in all negotiations that end with an agreement, also in these discussions you will give some and take some. The important point is to show that little is great while you are on the giving end and to show great as little while you are on the taking end. To achieve this end you may need to spend days around the table in discussions. It is not possible to reach an agreement without detailed discussions.

A Swiss businessman had taught me years ago: The party, who leaves the table, loses.

You might be curious about the outcome of the negotiations between our client and the German businessman. When they shook hands, the mutually accepted price was lower than our client’s “final price” declaration but higher than the price that the German businessman wanted to give in the beginning of this meeting.

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