This is what happens when you negotiate too hard. And your counterpart loses face.

Negotiation is one of the most multifaceted human activities.

There are no two identical negotiations, for the context, the actors, the interests, the leverage, the power dynamics, the individual perception of the people involved are always different. Every time.

Yet, there are many negotiation techniques and strategies and, when used wisely, they can yield excellent results.

However, a negotiator must know that flexibility is paramount. That a strategy can and must be dropped when proven inefficient, or when the conditions change.

In the corporate world, one of the most commonly shared negotiation principles is “win-win”. It is popular because, for an economic environment to function well, there must be a certain level of trust and collaboration between all the participants.

The ruthless negotiators, the ones who squeeze every drop of value, leveraging their (sometimes only temporary) dominant position, build for themselves a poor reputation. A reputation they will, eventually, pay the price for.

In a recent interview, the founder and former CEO of We Work, Adam Neumann, said that a lesson he learned from being ousted from his own company, was to always leave something for the counterpart.

“Another thing that was said about me,” he admitted, “is that when I negotiated, I negotiated a little too heavy-handed and that I wouldn’t leave enough on the table for the other side. That’s another lesson I learned. If you walk out of the negotiation table without both sides feeling they gave a little too much, and both sides being slightly unhappy, then you’ve taken too much”.

I think this is interesting.

First, because Adam Neumann's history made the headlines many times and for many years.

In 2008 he co-founded We Work, a provider of co-working space which, in less than ten years, became one of the fastest growing companies in the world. As a leader, he adopted a “messianic” style. Long hair, unshakable self-confidence, every speech filled with universal principles such as building a community or elevate the world's consciousness.

People and the press loved him, and investors, too.

Famously, it took him 12 minutes to convince Masayoshi Son, head of Softbank, one of the largest investment conglomerates in the world, to invest 4 billion $ in his company.

At the height of his time as a CEO, in 2019, Neumann was preparing to take his We Work public at a valuation of 46 billion $. The IPO didn’t take place until two years after he was ousted, in October 2021 at a valuation of 9 billion $ (as I write today, the company is worth 5.2 billion $).

The other reason I think this is interesting is because it’s quite a unique way to look at a win-win negotiation. It sounds closer to a lose-lose situation, and, taking a closer look, it also reveals the true nature of Neumann.

Yet, when you sacrifice something, especially if you are in a position of strength, you give the other side a good reason to reciprocate. And you build for yourself a reputation of a fair negotiator.

A smart way to approach this strategy is to give away something the other side values more than you.

Many years ago, I was involved in a negotiation between the company I was working for, the holder of an incredibly desirable brand, and a new customer, a retailer in a foreign market.

The retailer was a young company. It was well funded and managed by experienced people, but they needed our brand to further establish themselves in their market.

As you may suspect, we had all the leverage.

The negotiation went smoothly, mainly because the client accepted all our conditions, many of which required a significant commitment from them.

They attempted, shily, to negotiate better prices, payment terms, and other business conditions and all they heard from us was “NO'‘.

As the deal was being signed, I felt uncomfortable. I had the impression they moved from wanting to deal with us to having to deal with us. And I didn’t like it.

That’s when I started asking myself what I could give them that would be valuable to them, and acceptable to my company.

Reckoning that displaying our brand would strengthen their position in the marketplace, I asked our PR office to issue a press release about this new collaboration.

This was quite unusual for my company, given the (smaller) size of the client and the strict communication policies, and yet my colleagues went the extra mile, also managing to get the CEOs of the two companies in the same room, and to take a picture of them as they shook hands.

A minor concession from the stronger side made a big difference to the weaker. And, as far as I know, the two companies are still on excellent terms.

Another principle to keep in mind always is that pushing the counterpart into a corner and force them to lose face is a very dangerous thing to do.

When cornered, people can do anything.

There is a famous anecdote circulating these days. A young Vladimir Putin was chasing a rat on the streets of St. Petersburg. At the end of a long, exhausting chase, he finally closed the rat into a corner. Left with no other choice, the rat jumped towards Putin’s face, trying to bite him.

Desperation can trigger the most extreme actions.

People, when cornered, often stop thinking rationally, and act out of fear, rage, and desperation. And their reactions are not only unpredictable, they can also be against their own best interest.

One of the biggest mistakes a negotiator can make is to be merciless and expect the other party to act rationally.

Desperation, the most common emotion human beings feel when left without a choice, can also translate as hopelessness.

Think about it. If there is no hope, why would anyone act responsibly?

We’ve seen people jump out the windows of skyscrapers on fire. Even if there was a 0.01% possibility of surviving, they chose to take their own life, as if dying falling were better than dying intoxicated by smoke.

As a negotiator, missing to feel for the counterpart can turn out to be a fatal error.

THE CONCEPT OF FACE SAVING

Losing face can create unbearable suffering.

In many Asian cultures, especially the Chinese culture, the concept of saving face is of paramount importance.

No one should travel to, let alone negotiate with, China without being aware of it.

In Chinese culture, the concept of ‘face’, Mianzi, refers to the amount of “dignity” or “prestige” an individual has. So, ‘saving face’ means to keep others from losing respect for us and to avoid embarrassment.

Although with varying degrees of importance, the same applies to pretty much every other culture. Human beings are social animals, and it’s no secret that many build their self-esteem upon other people’s judgment.

And, even worse, upon what they think this judgment may be.

This is to say that when people look at themselves with someone else’s eyes, they’re bound to suffer.

Every negotiator should know it and avoid it at all costs.

As the war in Ukraine continues, the West is united in its condemnation of the Russian Government.

Meanwhile, many political analysts urge western leaders to soften their language, and to give Putin a way out, afraid that the war could escalate both in terms of an involvement of Nato, and the use of nuclear weapons.

“Give Putin something he can present to the Russian people as a victory” the analysts say, “for him to save his face”.

French President Mr. Macron must have listened, since the news broke today with “Macron warns Russia must not be humiliated in any peace deal”. From a negotiation perspective, this is good news.

In a fantastic episode of Lux and Friends Podcast , I had the pleasure of interviewing Harvard professor of negotiation Joshua Weiss .

Joshua is also the author of The book of real-world negotiations.

In the book, and in the insightful interview you can find here , he tells the story of a man who threatened to take his own life.

A drug addict from Calgary, Canada, the man refused to go to rehab with his wife, who, in return, left him.

Desperate, he drove to the rehab center, put a rope around his neck and told her he’d kill himself to give her a lesson. That’s how far desperate men can go against their own self-interest.

As she couldn’t convince him to give up, the police got involved.

After several hours of inconclusive conversation, the police officer in charge asked him: “There must be something I can do to get you out of here. What is it?”.

“Find the meaning of my name in native Canadian,” the man replied.

It didn’t take long for the cop to learn that his name meant “Running Buffalo”.

An hour later, after the man took the rope off his neck, the police officer asked him, “Why did you accept to surrender on the condition I found your name?”.

“Because I needed you to give me something to claim as a victory, to save face. Had I come down unconditionally, you would have won, and I would have lost’

I have learned that humiliation is the most painful wound. Don’t inflict it on anybody, unless strictly necessary. They’ll never forget, and some people may seek revenge forever.

This realization made me reconsider how to reprimand my 7-year-old twins.

In the past, like many parents, I’ve been harsh with them.

It happened when they had small domestic accidents, and especially after my wife and I had told them repeatedly to calm down.

“Had you listened to me, you wouldn’t have hurt your leg, you stubborn, naughty boy!” I must have said.

What a mistake, for a moment of physical pain is not the right time to impart a lesson. Rather, this is the time to show empathy and care. They feel guilty already and are extremely fragile, and they need anything but a finger pointed.

Negotiating well is a fine skill, perhaps one of the finest, and is an art you never stop honing.

To your success!

Carlo Pignataro

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