Choosing Between Right and Right
A quick word first
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Say yes to your boss or tell him no?
Say you just negotiated a good agreement on behalf of your company. You shook hands on the deal. Your boss likes the terms, but he’s a hard bargainer. He instructs you to go back to the other party and tell them they have to improve their offer to get his approval. What should you do?
I posed this question in an article earlier this month and put up a survey that gave readers three options:
A. Tell your boss that you’ve already given your word to the buyer and that you’re not comfortable going back on it.
B. Do exactly what your boss says. It’s a common bargaining tactic, after all.
C. Meet with the buyer and ask if he or she can raise the offer, while making it clear that this isn’t a deal breaker.
Many thanks to the readers who responded and said it was okay to quote them1. JG chose Option A and spoke from sad experience:
“I got burned a couple times early in my career doing exactly what my boss wanted me to do when it was the opposite of what I wanted. I ended up looking bad and the blame was placed on me. Lesson learned.”
JG’s intentions are admirable, but there is a catch here. This case is different from the two others I posted earlier this spring.
In those scenarios some people chose to be honest even though doing so could be costly to them personally. The buyer of the vacation cottage who tells the elderly owner that the property is underpriced could end up paying more. And someone trying to sell a place could scare off buyer by revealing that a noisy motorcycle track is about to open nearby. In spite of that, people said that they’d be truthful and take the consequences.
But in this instance, standing up for your integrity wouldn’t cost you a cent. Instead, it’s the company that loses out on the chance to make a more profitable deal.
If you work for a giant financial firm, maybe you can convince yourself that any loss looks like a rounding error. But where do you draw the line? What if you work for a small, struggling outfit where every added dollar matters? Or how about if you work for a not-for profit that does noble work for disadvantaged residents in your community?
In all those cases, you’re being virtuous but someone else is paying the bill. And that gives me pause.
So let’s look at the opposite approach, Option B, doing exactly what your boss told you. Twelve percent of respondents chose this. PD put it bluntly:
“In this scenario, it’s just business. The goal is to get the best price for the company.”
True, at least in part. Do this and there’s no loss there for the company—no financial loss at least. This time it’s you that could take a long-term hit reputationally. If the gambit is okay here, why not use it always? And as word gets out, people will be cautious dealing with you—if they’re willing to deal with you at all.
More subtly, justifying the tactic as something that everybody else does is a sour way to view the world. It certainly won’t help you forge productive partnerships.
So, Option B doesn’t seem that great either.
Split the difference?
Then there’s Option C, going back to the other party and asking if they can raise their offer, but adding that’s not a deal-breaker. Thirty-eight percent of readers chose this. RS said:
“Why wouldn’t you ask? Easy to shift the blame for re-cutting the deal on your boss. And if the other party doesn’t go for it, no worse off. Only would approach differently if there was potential for repeated interaction.”
I see RS’s point about the difference between one-time and on-going relationships. At first glance, this may look like a nimble way to wiggle out of the Option A/Option B dilemma.
You’re sort of following your boss’s orders, so you avoid a confrontation with him. And with the other party, you’re telling them that they can still have the deal you shook hands on, so your integrity appears to be intact.
Sounds like a win-win. But is it?
For one thing, if you take this approach, you’re deceiving your boss. You nod your head yes when he gives you his order, but then out of his sight, you do something else. Not a good habit to get into. Second, after you tell the other party that this is not a deal-breaker, it’s unlikely they will sweeten the terms. That put’s you back in Option A territory where you’re salving your conscience, but potentially at the company’s cost.
In the end, another lousy option.
An ounce of prevention
AG nailed it when he wrote:
“At this juncture this is less a negotiation with a buyer and more with your boss. I would first ask what metric I am held to. Is it deal closure, or is it maximizing the deal value? (Then what your boss says is actually good, coz you can push and yet blame him for it if it falls apart.)”
Yes, this is a negotiation with your boss about ends and means (what tactics you will and won’t use). But it should have taken place before meeting with the outside party.
Make it a rule every time you negotiate on behalf of somebody else to confirm the scope of your authority.
Can you close the deal or does the ultimate power to say yes or no rest elsewhere?
Are there any non-negotiable issues?
Likewise, are there “must-haves”?
Finally, how will your performance be evaluated?2
Let’s come back to the present case. Maybe you didn’t confirm your mandate beforehand. Or maybe your boss conveniently forgot that he told you the deal was entirely in your hands. What then, if he still tells you to go back and ask the would-be buyer for more?
I’d suggest trying to persuade him that your commitment to preserving your own integrity aligns with the company’s interest in building its reputation as a reliable and trustworthy partner. Along with that, make a pitch for having more clarity about your authority when handling future negotiations. That puts this one case in a broader context.
What if says no and repeats his command?
Then you’re stuck in “pick-the-least-worst-alternative” land. I’ve listed the pros and cons of Options A, B, and C. Give all those considerations careful thought. What’s appropriate in one situation may not be right in another.
Or, you might consider SM’s advice:
“If I did agree with the buyer, it's because I thought I was in charge of the selling. Nobody told me that a supervisor had to approve my moves. So, if the boss wants to renegotiate the terms, he’s free to do it himself.”
Looking ahead
I really enjoyed thinking about the ideas that people shared via the survey. Building a community of negotiation fans sharing their insights and experiences would be great!.
Stay tuned and please let your friends and colleagues know about Jazz of Negotiation. Here’s the link to the Welcome page. Many thanks! Mike
I’ve used initials here instead of full names, just so whatever portion of their comments I use here aren’t misread out of context.
This is an important topic, one that’s often overlooked. I’ll write a full article on this in the coming weeks.