The Success of Failure

I recently presented on Transformative Negotiation at NBIA’s 28th international conference on Business Incubation in New Orleans. The presentation was a success. We spent an hour with incubation managers from all over the world identifying potential gaps in negotiations –cultural, communication, trust– and discussing strategies for dealing with those gaps. We also covered use of leverage, including publicity (good and bad), timing, and a willingness to walk away. Surprisingly, this last item resonated with many in the audience.

And yet, we are mostly afraid to abandon our negotiations, except when we do it to gain advantage.

Opening day of the conference, John Danner, senior fellow at Berkeley’s Haas School of Business, gave a keynote speech about the significance of failure on innovation and entrepreneurship, and the value of stress-testing a start-up’s value propositions. As I wrote down a few relevant themes to incorporate into my session, I realized that my presentation is a stress test for negotiations. When each negotiation partner is well prepared, speaking clearly and directly, actively listening, acknowledging cultural differences and building trust, the negotiation succeeds. Without these elements, it fails. Understanding why negotiations fail allows us to apply those lessons to future negotiations, and maximize our chances for success.

A failed negotiation is an inability to come to consensus; partners walk away from the table and the deal falls apart. There might be a variety of reasons for this outcome. But transformative negotiation is not solely about satisfying the parties’ wants/needs. It is also about connecting, creating value, and building relationships. Strangely, in some cases those goals cannot be met, even when agreement is possible.

Imagine this negotiation scenario: after several months, each partner has worked hard to craft a relatively fair bargain. But the relationship is damaged. One party may have bullied the other, or insisted on a few unreasonable terms. Even if those terms do not end up in the written contract, a residue remains. Also be aware that negative behavior exhibited during the negotiation likely will continue past its endpoint.

I have counseled my clients to walk away, and most (not all) have ignored my advice. The contract gets signed with much fanfare and ends up in a drawer. People try to work together, but bad feelings linger. Often, the language of compromise agreed to in a document means little to a party determined to carry on with his or her uncompromising actions. Predictably, the matter ends up in court.

Based on my experience, I would argue that a spiritually broken deal can be far worse than no deal.

After his talk, I asked Danner if his research on failure included gender-specific data, and he said not squarely. We hear that women are good at relationships, but not good at failing, which means we might find it more difficult to walk away from a negotiation. Katty Kay and Claire Shipman’s new book, The Confidence Code: The Science and Art of Self-Assurance—What Women Should Know, explores the significance of failure in building confidence at a young age, and partially explains that confidence gap: boys are more willing than girls to take risks and to fail.

Being willing to walk away from a negotiation takes courage, and learning from our failures is how we develop mastery in transformative negotiation, as in life.

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