Should have accepted the compensation offer…
We’ve all seen similar pictures of a tiny house dwarfed by skyscrapers on either side or stranded in the middle of a supermarket car park; they all represent failed negotiations. We can gain a number of insights from these failures to make sure we don’t repeat them!
Don’t over-estimate your negotiating power
By holding out for a higher price while the rest of the village had agreed to sell the holdout, they (the owners) had thought that the company had no alternative but to meet their demand. What they failed to realise is the highway company did have an alternative to negotiating with them and that they were prepared to choose it.
Reveal your options
The house in the middle of the highway represents failure by both parties in this negotiation. Both parties have ended up with a less than ideal situation. The road builder needed to demonstrate that their offer was fair in relation to the homeowner’s loss and that the compensation offered reflected this.
The company also needed to state that greed on the part of the homeowner would make the alternative of building around them attractive. If this threat is perceived as credible by the other party, it may motivate them to sell. Particularly so if the demonstrated precedent below is demonstrated.
Don’t get greedy
Having assumed the company had no alternative but to meet their demands, the seller saw this as an opportunity to ‘win the lottery’.
They were dreaming about how they would spend their windfall gains rather than asking themselves whether the compensation was fair in relation to their loss. They had a fear of missing out (FOMO).
By succumbing to the fear, they actually did miss out! Greed is one of the seven deadly sins for good reason and is a common cause of negotiation failure. Counterparties will push back if they believe you are being motivated by greed.
Skilled negotiators are realistic in their objectives and understand that any deal has to work for both parties if it is to be implemented.
The power of precedent
If the road builders had capitulated to the holdout’s demands, they would have rewarded the very behaviour that they wanted to avoid in future.
Imagine the impact of the photograph of future negotiations when the company was confronted by potential holdouts. The modifications to the road may have been more expensive than the claim, but worth paying to demonstrate that the company had alternatives to negotiating.
I wonder where they put the washing line!