Timing, Bad Vibes, Uneasy Feelings Can Kill a Deal
(above: a conspiracy theory caught in the act)
From today's Wall Street Journal Market Watch We Learn that Microsoft says 'weird' Yahoo response killed deal
Microsoft Corp. executives told Wall Street analysts Thursday that the company ultimately failed to reach a merger agreement with Yahoo Inc. due to the Internet company's "weird" hesitance to negotiate in a timely way.
"It is a little weird," Microsoft Chief Executive Steve Ballmer said during the company's annual analyst day, "We had an offer out that was a 100% premium on the operating business of the company, and there wasn't a serious price negotiation ... until three months later."
Chief Financial Officer Chris Liddell added that Microsoft had been looking at late April as a "drop-dead stage" for negotiating a deal. "March would've been great," Liddell said.
"The deadline passed," Ballmer added.
In the absence of information we make stuff up. And the stories we're telling ourselves do not include the one where our bargaining partner is laboring to find a way to fulfill our every little wish, satisfy our desires and meet our needs. No, in the absence of information we develop massive conspiracy theories and attribute scheming, if not downright evil motives, to our deal maker counterparts when our offers or trial baloons encounter silence and delay.
For anyone who hasn't gone to the dentist lately or suffered a painful or embarassing medical procedure, you know what you want. You want your health care provider to give you the full pre-game tour.
"First I'll put some of this numbing stuff on your gum, so the shot of novocaine won't hurt too much. Then there will be some drilling." (holds up the drill and switches it on). "It will sound louder in your mouth than here in my hand, but I'll only have to drill for five minutes and it won't get any louder or more painful during that period of time." Etc., etc. etc.
This is what you need to do for your bargaining partners, remembering that for many people negotiations are something we look forward to with the same degree of happy anticipation as we do for a root canal.
So, here's the game plan.
If you're not "at the table" with your bargaining partner but instead are negotiating over time, over the telephone, or, using correspondence or email:
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say how long you believe it will take you to respond to the outstanding offer
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if you can do so without giving away your game plan entirely, say why it's going to take that long, i.e., "we have to loop the lawyers in and have a quick meeting with Bill, whose been notoriously hard to reach ever since he decided to tackle the May Mt. Everest climb. But if we can't reach him, we'll see if Sam feels he can conduct the negotiation without Bill's authority," etc., etc., etc.
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"your proposed licensing scheme is interesting and novel; we'll have to run it by our lawyers and financial gurus. It will likely take them . . . two weeks, a month, until the end of time . . . to give us their full analysis but whatever happens we'll give you an update or status report by [date certain]."
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"please, by all means feel free to call with questions without feeling that it will send a signal that you're too desperate for the deal." (this is dating 101 in high school; we should have outgrown it by this time but most of us haven't)
There are a trillion variations of these matters. The point is -- whatever they are -- let your negotiation partner understand why you're taking so long and what it is that you're doing with the time other than planning a strategic nuclear strike on their primary manufacturing facility in Minsk.
Here's the academic explanation for what happens when negotiating parties fail to stay in contact with one another. From Book Summary of Social Conflict: Escalation, Stalemate and Settlement by Dean G. Pruitt and Jeffrey Z. Rubin at CRInfo.
Negative attitudes toward the other party tend to be perpetuated by three psychological mechanisms: selective perception, self-fulfilling prophecy, and autistic hostility.
First, people tend to select those perceptions that tend to confirm their existing attitudes, and ignore or discount information that would disconfirm their existing attitudes. People also tend to see negative behavior as stemming from an adversary's basic character.
Self-fulfilling prophecies arise when a party's expectations about their adversary cause them to act in ways that actually provoke the adversary's "expected" response. The adversaries (provoked) response is then taken as confirmation of the party's original expectation, and a vicious cycle ensues.
Vicious cycles can also occur when the other party, who is unaware of our expectations, does nothing to disconfirm them, and so implicitly confirms our worst expectations. People tend to break off interaction and communication with those they dislike.
When this happens people become stuck in autistic hostility, that is, their hostility is perpetuated by their refusal to communicate.
Get it? Yes we see.
