Never Split the Difference: Negotiating as if Your Life Depended on It

As an example, I’m going to use the experience of one
of my students, Anna, because I couldn’t be more proud at
how she turned what she learned in my class into $1 million.
At the time, Anna was representing a major government
contractor. Her firm had won a competition for a sizable
government deal by partnering with a smaller company,
let’s call it ABC Corp., whose CEO had a close relationship
with the government client representative.
Problems started right after they won the contract,
though. Because ABC’s relationship had been instrumental
in winning the deal, ABC felt that it was owed a piece of the
pie whether it fulfilled its part of the contract or not.
And so, while the contract paid them for the work of
nine people, they continually cut back support. As Anna’s
company had to perform ABC’s work, the relationship
between ABC and Anna’s company fragmented into
vituperative emails and bitter complaining. Facing an
already low profit margin, Anna’s company was forced into
tough negotiations to get ABC to take a cut to 5.5 people.
The negotiations left a bitter aftertaste on both sides. The
vituperative emails stopped, but then again a l l emails
stopped. And no communication is always a bad sign.
A few months after those painful talks, the client
demanded a major rethink on the project and Anna’s firm
was faced with losing serious money if it didn’t get ABC to
agree to further cuts. Because ABC wasn’t living up to its
side of the bargain, Anna’s firm would have had strong
contractual grounds to cut out ABC altogether. But that