Understanding What Went Wrong in a Failed Negotiation

In one of the classes I am teaching I assigned my book "Getting Back to the Table" for the students to read. They have come up with some really wonderful and practical examples that I want to share (anonymously of course). Here is a very good example of the Pennywise and Pound Foolish Failure: "One time I learned the wrong lesson from a negotiation was early in my supply chain career. I believed that the key to success was to be aggressive in every negotiation, with the sole focus of cutting costs regardless of the context or long-term impact. Looking back, that mindset was not only flawed, but it led to a situation that I still regret. I was negotiating with a small, long-standing vendor, one that had maintained a strong relationship with the company I worked for over the previous 12 years. Driven by my goal to maximize savings, I took an overly aggressive approach and used our purchasing power which made up about 70% of their total revenue to push for deep cost reductions. While I achieved short-term savings, the consequences were far more damaging. I later learned that the vendor had reduced the number of clients they served to prioritize our business and meet our high demand. My negotiation left them financially vulnerable and, in the process, severely strained a valuable partnership that had taken over a decade to build. When I fully understood the impact of my actions, I felt terrible. That experience taught me an important lesson: effective negotiation isn’t just about cutting costs, it’s about creating value and maintaining healthy, sustainable relationships, especially with smaller vendors. Since then, I’ve been much more mindful in my approach, focusing on strategies that support mutual benefit and long-term success."

I think most negotiations that fail do so because one side assumes the other is a rational actor. Pro tip: no one is a completely rational actor. PE folks tend to be very analytical. You might say it's one of their super powers. It's what makes them good trend-spotting and problem-solving. But when you're negotiating with a founder who is about to sell their family business... Or with a candidate who is about to relocate to a new city with a 2nd kid on the way... Or with a vendor who's personal identity is tethered to their brand... You're not just dealing with numbers. You're dealing with intangible, tricky to quantify emotions. Fear. Ego. Hope. Loyalty. Pride. Anger. Imposter syndrome. The list goes on. Coming in with an extreme lowball offer or proposal to "anchor low" so you can "meet in the middle somewhere" is a weak negotiating strategy. It's like buying a 1ct diamond ring to propose to your girlfriend but offering them a gumball machine ring first, "just to see where we stand". Make negotiations a conversation. Lean in. Listen. Probe. Ask open-ended questions that start with "what" or "how". "What are you hoping will happen when you sell your business?" "How would accepting this offer benefit your career and your family?" When you truly understand the other side's motivations, You stop negotiating to WIN And you start negotiating to PARTNER. Because how you make someone FEEL is more important than the decimal point. This: "Based on comps, headwinds, and market data, our offer is X." Becomes: "You said your goal is to focus on health and family while still taking care of your company and legacy. You don't want to hurt those who worked so hard for you. This offer reflects a complete exit, plus a retention bonus for your key team. We structured it intentionally, around what you told us matters most." One dies on a hill. The other extends and hand... and climbs it together. #PrivateEquity #Negotiation #Leadership #FounderExits #ExecutiveSearch #GVentures

"We decided to go in another direction." Words you never want to hear in sales... I was ready to close the biggest deal of the quarter. Then I got the dreaded news. I was floored. It felt like a punch in the gut. I had already mentally spent my commission. I didn't want to tell my boss. I knew I needed to be prepared if I was going to get reamed out. So I asked myself three questions: 1. How would the customer describe the value? - This helped me see the deal from the customer’s point of view. - I realized I hadn't communicated our value enough. 2. Who was the most influential voice in and out of the room? - This helped me identify key decision-makers. - I understood that I had missed connecting with a crucial influencer who had already been in talks with a competitor 3. Beyond price, what were the key deciding factors in the client's decision? - This made me think about other important factors like service and support. - I learned that I had focused too much on price and not enough on these factors. Just by asking these questions, I understood where I went wrong. I brought this analysis to my boss. He applauded me for my effort and insight. These questions were crucial because they helped me see the bigger picture. They showed me how to improve my approach. In future deals, I made sure to: - Communicate value. - Identify and connect with key influencers. - Focus on all critical factors, not just price. Ask yourself these three questions everytime you lose a deal. I learned that every setback is a chance to improve and grow. --- Follow me for more sales tips like these!

Sick of hearing “no” in negotiations? These five fixes will turn rejections into wins. Understand why your negotiations fail, and gain powerful strategies to flip rejections into confident agreements. After decades of coaching global leaders through tough negotiations, I’ve learned a crucial truth: Most rejections aren’t about your offer, they’re about your negotiation approach. Here are honest lessons from my own painful negotiation mistakes, paired with clear, actionable fixes: 🔴 Mistake #1: Selling instead of solving Early in my career, I passionately pitched a partnership that was quickly rejected, it served my interests, not theirs. High stakes and embarrassment followed. ✅ Action: Never pitch without first asking clearly: “What outcomes matter most to you?” 🔴 Mistake #2: Ego over empathy Confidently proposing strict terms to demonstrate professionalism backfired when the client felt disrespected. Immediate rejection taught me, empathy beats ego every time. ✅ Action: Clearly show respect and collaboration: “Your insights are vital; let’s build this together.” 🔴 Mistake #3: Ignoring their better alternatives A major deal slipped through my fingers because I overlooked my client’s superior alternative (BATNA). My silence made my proposal irrelevant and costly. ✅ Action: Address alternatives directly: “I recognize you have other strong options; here’s why my offer uniquely benefits you.” 🔴 Mistake #4: Threatening their reputation I once had a deal collapse because accepting it would’ve undermined my counterpart’s internal credibility. A painful oversight I won’t forget. ✅ Action: Actively protect their reputation: “How can we structure this deal to enhance your internal credibility?” 🔴 Mistake #5: Losing trust Repeated rejections from a key client taught me they had lost trust due to hidden risks. Transparency became my essential tool for successful negotiations. ✅ Action: Be radically transparent: “These are the risks; let’s address them openly and together.” Rejection isn’t failure, it’s your best negotiation guide when you decode it clearly. What’s your go-to strategy for overcoming negotiation rejection? If this helped you rethink how you handle rejection don’t keep it to yourself! Repost, comment, or tag someone who needs to read this today. ♻️ 

The buyer walked away 2 days before closing. Here’s what went wrong: After 8 months of negotiations, due diligence, and countless meetings; Everything collapsed when the buyer discovered undisclosed employee retention issues. The seller hadn't mentioned that 3 key employees were planning to leave post-acquisition. No retention agreements. No transition plan. This isn't just about transparency. It's about understanding what buyers truly value in the final stretch. Here's what I've learned from 50+ failed deals: - Financial records are table stakes - Cultural fit determines long-term success - Key person dependency can kill any deal - Operational continuity is non-negotiable The seller thought they were being strategic by waiting. Instead, they lost a buyer willing to pay 20% above asking. Due diligence never really ends. It intensifies as you approach the finish line. What's the biggest red flag you've encountered in M&A transactions?