How to negotiate – showing your teeth

By March 19, 2008blog

I’ve learned two highly effective negotiating techniques recently that I thought I’d share. I was on a conference call last week with my attorney and a company that I am investing in. While it’s a great fast-growing company that I’m excited to invest in, AND also good long-time friends of mine who founded and run the company, the structuring of the financing documents were far from what my attorney felt they needed to be.

So on this call, we were all playing nice on the introductions about how great everyone is and how excited we all are to work together. Then my attorney threw out that the entire structure needed to be adjusted prior to us funding the deal. The company pushed back saying the deal may not be able to wait for those changes, there was a fiduciary responsibility, and basically saying it wasn’t a practical request. Then suddenly my attorney JUMPED all over my long-time friend in a very direct and forceful way… effectively showing his teeth. Everyone on the call was stunned by the change in tone, including me, and scrambled to bring peace back to what-was a nice friendly call. We are a week later now, and the changes my attorney suggested are almost done. AND the company feels like it WAS the right thing to do all along.

At first I didn’t understand why my attorney needed to show his teeth on such a friendly call. Then I realized that that was EXACTLY what he needed to do to really MOVE everyone on the call (including me) from the status quo of just tweaking the existing structure into making a much bigger/harder shift towards doing it right.

Sometimes we need to show our teeth to shake people out of the status quo. Dogs do it without reservation to establish pecking order in the pack. Teddy, my sweet gentle 110-lb golden retriever, on rare occasions has looked like the most ferocious animal on the planet by growling and showing his big teeth. He does it only when other dogs don’t know yet to respect that he is alpha. If they try to dominate him, he’ll snap back at them in a scary way and instantly change the other dogs mis-perception of pecking order. Then everyone plays nice again with a new, more clearly established order.

I’ll give you one other example that came up for me personally in the past week. Someone from our parent company had asked for one of my employees to help on a project. I said yes. A week later the employee gave notice for unrelated reasons. I told the person from the parent company that I’m sorry that my employee wouldn’t be able to help anymore as a result of them wrapping up on higher-priority items on our end. They didn’t like that answer and asked two more times if they could get some help before the employee left. I gave them the same “no” answer. They then emailed my employee directly asking for help and cc’d me. I responded back in a very direct and forceful way because they were not hearing my answer. They replied that they were “surprised” by my response. None-the-less, the requests stopped immediately.

My conclusion is that showing your teeth once in a while to shift people’s thinking is a necessary and ok thing to do. We sometimes need to disturb the peace to have better peace in the structures around us.

Where could you show a little more teeth in your negotiations to help shift the status quo?

P.S. – killer comment: thanks to Chelsea for also pointing out that it’s important to not show your teeth for everything. It’s only efficient when you’re nice 99% of the time and pull teeth out only when absolutely necessary. Otherwise people start blowing you off as the jerk who is always upset about something.

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