How To Walk Away From a Deal in a Negotiation
By Chuck Doran and Megan Winkeler
In our last post, we discussed the questions you should ask yourself before walking away from a negotiation. Once you determine that you’re ready to end the conversation, it’s time to think about how to walk away from a deal.
In this moment, it can feel satisfying to burn bridges or walk away in style. However, you have an opportunity to create value even when you are walking away from a negotiation (or when the other side is walking away from the negotiation). As you think about how to walk away from a deal, consider the following:
Protect the relationship – even if it’s a short term one.
When the relationship during a negotiation is short-term and involves a single interaction, preserving the relationship may seem unnecessary. However, you never know what may be in the future. Taking steps to preserve a connection will prove more valuable than venting frustration.
A few years ago at MWI, we were negotiating the details of a contract that would have established MWI as the sole mediation provider for a nation-wide corporation. The negotiation was going well, but the client ultimately chose a different provider who significantly underbid at the last minute. MWI invested significant time and resources into designing the project, and the loss of this contract was a major blow. However, MWI refrained from venting dismay at the outcome of the negotiation. Instead, we expressed our desire to maintain contact with the client and follow up in a few months. Six months later, the selected vendor failed to fulfill the terms of their contract and the client ended up retaining MWI at favorable terms.
If you started a negotiation with someone, there was some interest or need of yours that you felt they could satisfy. While they might not be able to do so now, remind yourself that things change in the future. Even if they are low-balling and using tough negotiation tactics, you can choose how to walk away from a deal on your own terms and avoid doing damage to the relationship. Reassert the reasons you want to work with your negotiation counterpart, and recognize their interests in the negotiation as well.
Explain your reasons for ending the negotiation.
If you are walking away from a negotiation, the offer on the table is failing to fully satisfy your interests. Maybe you’ve been offered a great job, but the salary is simply too low for your current needs. Maybe the deal is good, but you have a better offer that more effectively meets your interests. Maybe you are concerned that you can’t trust this business partner to follow through at this time.
It can be tempting to walk away with a vague explanation, either to save yourself the effort or to avoid damaging your relationship with your negotiation counterpart. However, explaining how the deal fails to meets your interests allows the other side to better understand you and your needs, and it paves the way for preserving your relationship in the future.
As you consider how to walk away from a deal, think about the specific interests that you must satisfy in this negotiation. Start by noting the interests they have been able to meet, and then explain why it’s so important that they haven’t been able to meet your other interests. You can also acknowledge their interests in the negotiation and how they will be met better by someone else. Using the job offer negotiation from above, here’s what that might look like:
“It’s important for me to work with an organization that shares my dedication to making a difference and building their staff’s skills to be as effective and efficient as possible, and your organization has all of those things. While I would love to work with you, I also have a strong need to earn a salary that will provide for my family’s needs, and your offer does not meet those needs. I know that, given your current resources, you cannot offer a higher salary and are looking for someone who will benefit from other resources such as extra vacation time and investment in professional development.”
Design the path to future deals.
Now that you have clearly articulated why you want to work with your negotiation counterpart and why the current deal does not meet each of your interests, you have an opportunity to create value for the future. Each of your situations may change – jobs with more responsibility may open or resources for a business partnership may come to fruition. By keeping the lines of communication open and defining how you want to work together moving forward, you pave the way for future collaborations.
Show your negotiation counterpart that you are committed to finding the right deal with they are ready and able to do so. Lay out your goals for the future. In the job offer example, you could express your hope that another opportunity may arise to work together when your interests align more closely. Be specific about how you will create those opportunities and preserve the relationship. If you make the decision to follow-up with one another in the future, set a specific time and place to do so, and send out the calendar invitation at the end of the meeting.
You may be inclined to ignore this suggestion in a one-off negotiation. However, there’s potential value even in that short-term relationship. At the very least, exchanging business cards and discussing ways that you might work together in the future keeps the lines of communication open and defines how to walk away from a deal together.
Click Here to Improve Your Negotiation Skills
To improve your negotiation skills and create better deals, contact Chuck Doran at 617-895-4026 or cdoran@mwi.org.
