Never make this mistake while negotiating

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As a negotiator I got to see lots of high profile meetings. Meetings organized by some of the strongest businesses and governments in the world. One of my duties as a consultant was to spot mistakes. Fortunately, most mistakes weren’t severe. 

However, there was this one intense negotiation between a big tech company I worked for and labor unions. The company I worked for had labor unions threatening them with lawsuits if they did not improve working conditions for employees working in factories. The company I worked for was a tech company that used external sources to produce their products. 

The producers we worked with forced employees to work in poor conditions. Employees lived in a campus right next to the factory, they lived in small dorms with several people. The conditions were unimaginable. At one point, we had to set up bars on the windows so employees did not try to jump off. 

Instead of making an informed and calculated decision, my company decided to issue an ultimatum for all producers. We pledged to comply with all of the guidelines of the labor unions and fired several producers. The fired producers were replaced with producers the labor unions forced us to hire. 

The consequences of eliminating options were severe for us. Since we eliminated all possible options and committed to complying with the labor unions, we lost all authority. The labor unions had full control over us. In the next few years labor unions created guidelines that almost led to bankruptcy. 

We had lost all competitive advantage, labor unions were making us pay outrageous wages to our employees. We nearly went bankrupt 3 times. The price of trying to reverse the decision would be big, since we pledged to comply with all guidelines. The labor unions would ridicule us if we tried reversing the decisions. The lawsuits and protests from unions would lead to us losing more customers and possibly going out of business. 

Instead of eliminating all options and committing to one thing, we could have pledged to improve conditions and try our best. That would at least not hurt our competitive advantage. In fact, it would have probably even helped us get a bigger competitive advantage over our competitors. 

Authors Note

Noah’s handbook is a negotiating guide Noah made for his grandchildren. We wish our readers don’t just simply read this story but also try to learn from Noah. 

Book: You can negotiate anything by Herb Cohen (Purchase on Amazon)

Lesson(s)

  • Do not eliminate options from the start, meaning in any competitive environment do not eliminate your options unless you benefit from doing so. If you eliminate your options from the beginning that will dilute your power and turn you into a paper tiger. 

Notice: All of the entities and locations mentioned in this entry are fictional.

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