Every Decision Is A Result Of A Negotiation

A headline on CNN Online reads: "Egypt’s Cabinet Resigns amid Protests, Violence."

In the article, we learn that thousands of protesters are hitting the streets. Many are killed, and many more wounded, by police with clubs, tear gas, and even firearms.

Let’s look at the decisions made in the past few days:

By the protesters in Tahrir Square:

Should we go to the square?
Should we take weapons?
Should we be peaceful, or violent?
Whom should we follow?

And after it got bad:

Should we go back home or stand up to the government’s show of force?

By the police:

Should we take tear gas?
How about clubs or batons?
Taser devices?
Rubber bullets? Live ammunition?
What degree of force should be authorized?

By the government:

How should we respond to this?
Should we resign?
Should we hold our ground?
How shall we announce our decisions?
Should we hold a press conference?
What should be the timeline?

My point is every action taken by more than one individual is the result of a negotiation. In this, business is no different from government or civil disobedience!

Every poor business decision is the result of a poor negotiation, just as every good business decision is the result of a good negotiation.

Every day, we read about an obviously poor decision by a large company filled with bright people, and we wonder, how did they let that happen? Depending on your age, you may think of Edsel, Classic Coke, Netflix, or any of hundreds of other examples. And you think, as crazy as this decision was how could any group of savvy business people ever have thought it would be a good idea?

Well, my friends, that is an excellent question! 

Remember back when Google was just another search engine with a funny name? Today it is valued at $180 billion—a bit more than the $750,000 it could have commanded from Internet portal Excite in 1999. At the time, Excite was a highly trafficked search engine at the forefront of the dot-com boom. Google founders Larry Page and Sergey Brin, recognizing Excite’s stature, tried to sell their search engine to it for $1 million. Getting nowhere, they eventually reduced their asking price by $250,000. Excite CEO George Bell turned them down. A few years later, his company was bought up by AskJeeves following a precipitous drop in the price of Excite’s stock.

Now, it’s quite possible that some other executives at Excite saw the value in acquiring Google, but they couldn’t negotiate convincingly enough to make their boss, Bell, see the light. If that’s what happened, then Bell’s loss was also their loss, because they had to leave on the negotiating table what would have become a 2.4 million percent return on Excite’s investment.

How many times have you sat in a meeting and known that the decision being made was not the best—for anyone—but you either failed to speak up or just got out-negotiated?

The truth is it was probably obvious to a lot of people that it would be a bad decision, but they were out-negotiated. Out negotiated by others who were maybe better negotiators, more passionate about their beliefs, better at marshaling others in support, or just plain bulldozer types, who spend their entire careers bullying their way through organizations.

If you've ever wondered about the importance of negotiation, wonder no more. Every decision, good or bad, business or personal (unless you’re a hermit living in a cave) is the result of a negotiation. Negotiation determines the quality of your life, your government, and your world. It makes anything possible. Get good at it.