I wrote a post recently called the aftershock of hard negotiations. The general premise being, if you must live with vendors in the future (as part owners), then it’s wise to think of your future relationship when negotiating. (Even if you don’t live with them, you should still be decent, but that’s not nearly as convincing.)
So, with that in mind, I want to comment on negotiations again, but in the context of your internal private equity firm’s team dynamics. There are a few points to consider here:
- Team members are acutely aware of your negotiation tactics (and most tactics in general), so when you try to use them internally, it leads to instant contempt
- Your negotiation style becomes a part of you when you’re dealing with potential investees all day, so it’s not always easy to turn it off when dealing with your team dynamics
- You are married to your team dynamics; you aren’t selling them a set of encyclopedias; so, even though you may have superior negotiation skills, your team will be there tomorrow to resent you if you treat them unfairly
- Your team talks; there are cliques you can’t even see; don’t treat anyone in a way you wouldn’t want everyone else to know about
- In deals and in life, you often benefit much more from not getting your way
Too often we focus on the tangible and don’t acknowledge the potential value in maintaining good relations. Just food for thought for now.