Understanding the Risks of a Competitive Negotiation Style

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."

If you negotiate outside the lines, agreements will be unstable. I've done that before. 1. When I was young(er) and brash(er), I negotiated a comp package too large for my experience. My ambition was so obvious that my boss thought I needed (deserved?) a VP title. Then I thought I needed (deserved?) a corresponding comp package. Based on the higher pay we bought a larger house, and all was good until it wasn't. New funding round, new CEO, and my base pay was reduced by 30%. Now we couldn't afford our larger house. What to do? 2. Much, much later I was CCO at a SaaS company where a large contract was up for renewal. The customer had contractually committed to expand, but they hadn't, and they wanted out of the expansion clause. We didn't let them. We forced them to spend the money on something-- services? Guess what happened one year later? They canceled and moved to a competitor. These agreements--negotiated hard--are not stable. Yes, you can negotiate hard. And you can get what you want. But if you want long-term, sustainable relationships, it's a give and take. It's a win-win. It's a third alternative... and you can't tip the scales too far in your own favor without upsetting the equilibrium and shortening the life of the "contract." My advice is... 1️⃣ Fit first. Make sure there's fit from both sides. If it is no-fit, force-fit, or fake fit, that's a short-term arrangement. 2️⃣ Optimize for IMPACT. *You* want to deliver impact... that's your side of the bargain. That's what you can control, and as long as you are delivering, you increase the stability of your arrangement. 3️⃣ Be realistic. If circumstances change for you or the other party, let them. If it was a great arrangement for you both but now it's not so great for one or the other--have another look with fresh eyes. Don't hold on for dear life to an arrangement that isn't good--that doesn't help anyone. Don't over-negotiate. Add value. Achieve equilibrium with win-wins. Play the long game. 👊

Bullying works—until it blows up in your face. Why reckless negotiation tactics sabotage your success. Ever bullied your way into a deal? That short-term “win” often leads to broken trust, resentment, and future problems. Decades of studying negotiation—both industry leaders and my own mistakes—taught me this: heavy-handed tactics create shaky outcomes. Win the match, and you risk losing the tournament. Here’s how to avoid blowing up your deals: 1️⃣ Separate people from problems. → Focus on issues, not personal tensions. → Acknowledge emotions but don’t let them derail the agenda. → Use phrases like, “Let’s solve this together,” and practice active listening to show respect and stay solution-oriented. 2️⃣ Make facts your secret weapon. → Prepare with industry benchmarks, case studies, and solid data. → Present facts calmly, using visuals or examples to emphasize your points. → Avoid exaggeration—it undermines credibility. → A solid fact beats bravado every time. 3️⃣ Exploit your BATNA (but don’t flaunt it). → Build your Best Alternative to a Negotiated Agreement beforehand, ensuring it’s realistic. → Use it as quiet confidence, not a threat. → A strong fallback shifts your posture from desperate to disciplined. 4️⃣ Expand the pie—or walk away hungry. → Ask open-ended questions like, “What’s most important to you?” or “What does an ideal outcome look like?” → Seek creative trade-offs and explore joint gains. → Brainstorm before settling on a deal to uncover hidden synergies. 5️⃣ Invest in relationships like gold. → Build rapport early. → Discuss shared goals and show respect by acknowledging their contributions. → Post-negotiation, follow up with goodwill gestures—small actions that build trust for the long term. What good is a contract if everyone secretly hates it? Shift from fear-based to partnership-driven negotiation. Before pressing leverage, ask yourself: “Does this foster collaboration or enforce compliance?” That choice shapes your future deals. What’s your best tip for turning standoffs into partnerships? Share it in the comments! Ever burned a bridge while sealing a deal? Let’s learn—and heal—together.