Leverage has a Bad Rap

Leverage is misunderstood and commonly gets a bad rap.

Leverage can be a weapon, but it can also be a tool to uncover additional values that are important to the other party or us.

Leverage creates options for all parties.

It unveils a roadmap of possibilities of creative options. This practice also helps me tease out what is important and allows me to prioritize my opportunities. It is like creating a game board with many options, so when it is your turn, you can make the best decision based on the current conditions. You can consider what is essential to the other person and still get what you want. Always consider the long-term relationship as a part of your strategy. It is a short-term strategy when we only believe in our interests, as we rarely negotiate in situations where the relationship is not essential post-negotiation.

Michael uses leverage as a weapon. He was the CEO of a services company providing media companies with a way to distribute their content worldwide. He would do his homework and find out all his opponent's costs. He would be so prepared that he knew more than anyone at the table about each party's business assumptions. Additionally, we would use power as leverage at the moment to create negative emotions in the people around the table so that he could get what he wanted. On paper, Michael was successful. The deals he closed were the best in the industry because he paid less for services than anyone else. In fact, he would commonly manipulate his opponent to take a loss on the deal. And when the contract was in place, he would move on to the next deal. The problem was the operational staff was stuck operating the agreement with fewer resources than they needed, and both parties were unhappy about the situation because resources were limited, so things were done bare bones. Over time, companies stopped hiring Michael because they valued relationships over a shroud business deal.

When you consider the leverage of both sides as information, it illustrates the importance of the broader deal, and you create a deeper understanding of how to maneuver. It is not compromised. It is considering your interests alongside the other side so that you can expand the possibilities and allow everyone at the table to trust and think creatively.

A simple way to anticipate the leverage in the deal is to brainstorm what is essential to you and the other party. Here is a quick list of things to consider in your next conversation.

• What is the best possible outcome for me or my team?
• What are my alternatives if we don't get to an agreement?
• What is the best result for the other side?
• What will they do if we can't agree?
• What are elements of the future situation that will make me most satisfied?
• What is something that they would want me to agree to?
• What do I know about the person, and what will be their demeanor during the discussion?
• Will they agree at the moment to my proposed solution?
• What questions can I ask them to understand what is important to them?
• What is important to me that they may not consider?

Allowing yourself to list items will unlock details you have yet to consider. Allow yourself to record insignificant and vital information that will give you much material for game day.

Leverage is a tool. Use it to your advantage, but always keep the relationship in mind.

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