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I've violated my no-politics-on-LinkedIn rule today to talk about Friday's meeting between Zelensky and Trump. I'm doing so because I think it illustrates the failure mode of a common negotiation tactic in real estate, namely change the deal at closing. Let me illustrate with a less-controversial but real-world example.
At a previous employer, we were buying some specialized equipment - equipment only two companies in the US could provide. They had given us a quote for approximately $116,000. Just before we met with the sales rep to sign the contract, a real estate person told me "watch and learn. I'm going to save the company $16,000."
So the sales rep came in, made his presentation and handed over the contract. Mr. Real Estate said, "this is great. Reduce the price to $100,000 even and I'll sign it right now." The sales rep politely said, "no, I can't do that. The price is the price."
The sales rep did this for two reasons. First, he knew that his sole competitor was, if not higher then his bid, only slightly lower. Second, the $16,000 reduction was more than his profit on the deal and there was no reason for him to buy our business. Spoiler alert: we signed the original contract and paid exactly what it called for, not a penny less.
Thus unto Trump and Zelensky. First, Zelensky knows that whatever deal Trump thinks he has with Putin will become significantly less favorable to the US between now and the deal signing. Second, any deal that doesn't have meaningful security guarantees for Ukraine isn't worth the paper it's written on.
Two morals of this story. First, a negotiation is a two-way street, and not understanding what the other party needs will lead to failure. Second in the immortal words of Kenny Rodgers, you need to "know when to run." Zelensky is apparently familiar with the song.
At a previous employer, we were buying some specialized equipment - equipment only two companies in the US could provide. They had given us a quote for approximately $116,000. Just before we met with the sales rep to sign the contract, a real estate person told me "watch and learn. I'm going to save the company $16,000."
So the sales rep came in, made his presentation and handed over the contract. Mr. Real Estate said, "this is great. Reduce the price to $100,000 even and I'll sign it right now." The sales rep politely said, "no, I can't do that. The price is the price."
The sales rep did this for two reasons. First, he knew that his sole competitor was, if not higher then his bid, only slightly lower. Second, the $16,000 reduction was more than his profit on the deal and there was no reason for him to buy our business. Spoiler alert: we signed the original contract and paid exactly what it called for, not a penny less.
Thus unto Trump and Zelensky. First, Zelensky knows that whatever deal Trump thinks he has with Putin will become significantly less favorable to the US between now and the deal signing. Second, any deal that doesn't have meaningful security guarantees for Ukraine isn't worth the paper it's written on.
Two morals of this story. First, a negotiation is a two-way street, and not understanding what the other party needs will lead to failure. Second in the immortal words of Kenny Rodgers, you need to "know when to run." Zelensky is apparently familiar with the song.
