Monday, October 5, 2009

Emotional issues in negotiation

Last night's season final episode of Entourage contained some good examples of the intangible factors that sometimes create, and then break, logjams in negotiations. First Ari Gold had to persuade his wife, in front of their counselor, to allow him to put up her assets as collateral for a loan needed to purchase Gold's former agency. She was distrustful because she suspected that he was pursuing this opportunity mainly to exact revenge against some of his former colleagues. In order to gain her trust, Gold had to admit, in graphic terms, that in fact he did have the basest and most personal of motives for buying out his former boss, and that he was looking forward to firing a number of their employees, but in spite of that, the deal made excellent business sense. As soon as he confessed his emotional and personal motives, he regained his wife's trust, and she consented to allow her assets to be pledged.

Later in the episode, the deal almost broke down over Terrence's demand that the agency he was selling continue to bear his name. Ari walked away from the table at this demand. Only when Terrence came back to Ari with an apology for his past mistreatment of Ari, would Ari allow the deal to get back on track. Ari was so moved by the apology that he even agreed to Terrence's demand.

Both incidents illustrate how seemingly irrational and emotional elements can prevent business negotiations from reaching a conclusion; and how settlement can sometimes only be reached after the emotional needs of the participants are fully acknowledged and at least partially met.

I would not hold Ari Gold up as a model in all respects, however. For example, I would caution against using a paintball gun as a means of firing employees.

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