Walk Away as Negotiation Weapon

"Gibbs had learnt, by accident, that walking away was sometimes the best approach. Castle Hill was his biggest deal, but there were several others: a service station site, another supermarket with a wider group, and a large hardware store not far from Mosman."

"‘It was an example of Alan saying, “Stuff it, everyone says go left; I’ll go right”,’ says Heatley."

"*We agreed on $108 million, a bloody good price, and they said, ‘Well, we have to refer to our HQs and consult before we give you the final answer,* *but basically we’ve got a deal.’ Then they came back with the classic tack and said, ‘Oh dear, the due diligence was not as thorough as it should have been and our boards have told us we can’t go that far.’ So they offered us 20 per cent less. I knew that they really wanted it, but they were just trying it on. I said to Craig, ‘No way!’ Then I dictated a letter from our lawyer responding to the offer, which had only one line: ‘Your offer is of no interest whatsoever to our clients.’ We were losing money and they were still offering us $80 odd million. Craig was a bit nervous, but, sure enough, the phone line began to buzz a few hours later and we got the full amount.* Heatley concedes that Gibbs was a much better bluffer. ‘We were in a weak position,’ he says, ‘and Alan convinced them we were as strong as an ox; he knew they were just being bullies, trying to chisel us, and that they’d give way if we held firm.’"

"At the last session Gibbs tried a new negotiating technique. The big issues had been agreed, but 18 outstanding matters remained on the table. He feared they could drag on for another two days when he wanted to catch a plane home. So he announced to the assembled Americans that he had to leave in an hour to catch his flight: ‘I propose we auction the last 18 matters: you have the first one you want, I have next choice, then you next, and so on.’ The room broke up hysterically. *Ameritech’s Jeff White said you can’t resolve serious things like a lottery. I said, why not? Someone piped up, ‘We’ll take this.’ OK. There was* *uproar. Half the room was screaming it was cavalier; the other half was enjoying the fun. White realised it wasn’t the end of the world and started playing the game and it was resolved just like that. And since I knew the ones I really wanted, we gained a few points and gave away nothing of consequence.*"