Donald Trump described his deal-making motivation in the opening lines of his 1987 bestseller The Art of the Deal: “I don’t do it for the money. I’ve got enough, much more than I’ll ever need. I do it to do it. Deals are my art form.”
Golf course owners, managers and superintendents may not share the president’s motivation, but they do share the intended result of his deal-making: the most favorable terms possible.
Everyone wants to make good deals. Good deals make us look better to our boards, our bosses and our members. More importantly, they help us operate our facilities more efficiently and more cost-effectively. In today’s thin-margin, highly competitive landscape, good deals may be the difference between an under- or over-budget operation.
The key to making a good deal is learning to be a more effective negotiator. While some are naturals, everyone can learn the basic skills that make for more successful deal-making. No one knows this better than Bill Garcia, the master negotiator and managing partner at TableForce, an international consulting firm expert in negotiation training. Since 1997, Garcia has trained procurement and management professionals who are responsible for transactions exceeding hundreds of millions of dollars.
Garcia’s keys to successful negotiations are try, plan and raise the bar.
“The first step is to be committed to trying to negotiate,” he says. Many managers who are expected to look out for the interests of their club or course are uncomfortable with conflict or the appearance of being “cheap.” According to Garcia, those too timid to try fall short in carrying out one of the major responsibilities of their jobs – being conscientious stewards of their facility’s budget.
Always establish terms and conditions that are agreeable to your side of the bargain. TableForce teaches a four-step method to improve bargaining skills:
Create a deadline. As we’ve seen with national labor negotiations affecting everything from garbage pickup to the NFL, everyone is more focused as the negotiation nears its end. Establish a clear-cut understanding of the schedule and why it is needed.
Get them to negotiate. Ask the other side questions. Garcia says, “Give them choices; they’ll negotiate.” When parties share choices, the wants, needs and limitations of each party are revealed.
Understand the market. Good negotiators do their homework and know fair-market pricing and value. It is difficult to know and understand fair-market value absent market research and the knowledge gained from it.
Determine the budget. State your limitations so you don’t waste time on discussions that are unrealistic. Be willing to state what you are able and willing to pay. It helps the other side right-size their offering.
Managers charged with the duty to shepherd the club’s resources often make one and sometimes two of the same mistakes. Garcia says that two of the most important pieces of knowledge are (a) who has the final authority? And (b) what is the deadline for a decision?
If you want to improve your own bargaining skills remember a simple two-part tactic. The answer to most bargaining points is either; “Yes, if … .” or “No, but… .” Garcia says, “In its simplest form, a plan needs only to list both low-value and high-value items. Then the process of trading begins: “Yes, I’ll consider X if you consider Y,” or “No, I cannot consider X, but I will consider Y, if you consider Z.”
Raise the Bar
Once the negotiation nears its end, it’s time to raise the bar, a process that aims to increase value.” Rather than trying to improve the terms or conditions you have bargained, many people become impatient near the end of a negotiation. “People make the biggest concessions as the deadline approaches,” Garcia says.
Raising the bar is often called a “stretch request.” If the goal is $100, open at $110. If the desired outcome is “eight weeks to completion,” open at “six weeks.” Garcia advises that opening positions should be a significant but plausible stretch from a target; similarly a target should be a significant but plausible stretch from a bottom line. While there are no charts or rules of thumb that can be used as reference, research confirms most people do not raise the bar high enough.