Scotwork’s advice for ending a relationship with a negotiation counterpart…
The lyrics of the Neil Sedaka ‘hit’ capture an essential truth.
Breaking up any relationship: business or personal, puts even the most skilled negotiators to the test. The reasons are a complex mixture of the emotional, rational, pragmatic and sometimes illogical. Those entering a relationship do not imagine that it would end, therefore the decision has upset a certain future for them.
The Weekend Australian reports that the split of the EY professional services firm has been abandoned. The rationale behind the intended division had long been advocated - to ensure audit independence by splitting off the large consulting businesses that have grown from the audit practice. As Sir Humphrey Appleby would say, “This is a courageous decision, Minister.” The word courageous was used to signal to the Minister that disaster follows such a decision.
The EY split was to involve over 70 national partnerships and a minefield of different regulations from country to country. The article reports that the costs to the firm are already into the $100’s of millions. This is not a criticism of EY, but an indication of how difficult it is to end a relationship. There are lessons from the past with the acrimonious split of Arthur Andersen and Andersen Consulting in 2000. The separation had to be arbitrated and some attribute the subsequent failure of Arthur Andersen’s auditing business to the subsequent aggressive behaviour of the firm designed to make up the perceived losses from the separation.
Our advice is that a master negotiator should approach a breakup in the following way:
- The decision has been made by rational analysis of the costs and benefits of the breakup. It is not a decision driven by anger or resentment. Before a final decision, seek independent advice from a trusted advisor. You may be too close to the issues to have clarity on some of them.
- Have plans to both explain the decision and a plan to implement. If there have been ongoing problems and attempts to resolve differences, then your decision should not come as a surprise to the other party. They may have been expecting the separation.
- Focus on the issues, not the person. This is not an opportunity to point score and revisit old, stale arguments. Keep it to the facts.
- Anticipate their reaction based on your experience with them and have a considered, appropriate response.
- Outline your plan for both a timeline and an asset division. Any division should be fair, consistent with the law and any prior agreements covering this eventuality. The proposal you make should have a timetable for all major elements of the separation.
- Don’t waver - any uncertainty on your part will just delay the process and make it all the more painful.
Keep these negotiation strategies in mind early – you never know if it’s going to be over, ‘til it’s over.