Negotiation Lessons From The Pittsburgh Penguins

Sorry to blog again about the Penguins/Pittsburgh/Pennsylvania arena negotiations, but there are so many interesting tactics to look at from a purchasing perspective.

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Today’s Pittsburgh Post-Gazette featured, not one, but two articles about how the politicians involved face personal risk over the outcome of this situation. You can check out those articles here and here.

The Penguins’ negotiation tactic here is to create a situation where the politicians have “skin in the game.” Incurring a loss to your organization is a motivator to perform well in negotiations. But incurring a personal loss is a much stronger motivator, not just to perform well but to “not lose.”

In purchasing, this tactic is used when you subtlely get the salesperson to start thinking “I don’t wanna be known as the guy who lost the Wal-Mart (or ExxonMobil or any other big customer) account.” It’s effective, but I don’t recommend such a kick-you-in-the-teeth approach when dealing with suppliers with whom you will have an enduring relationship.

And that brings up a point about relationships and hardball negotiation.

Simplified, the degree to which you employ adversarial negotiation tactics depends on the closeness of the subsequent relationship. The closer the relationship, the more collaborative you need to be. The more arms-length the relationship, the more adversarial you can be.

Because of the Penguins’ extremely adversarial approach, it is clear that they just want to maximize the saleability of the team and sell it as I mentioned in my previous post. No intelligent human would use such public insults in its negotiation repertoire if an enduring relationship was going to exist.

Now, onto the politicians’ responses…

Last week, Governor Rendell made a point in the papers about Ron Burkle being one of the top businessmen and not getting there due to being an easy negotiator. So I sarcastically thought to myself, “One of the country’s top negotiators going against Governor Rendell. Now that’s a fair matchup.” I’m not one of the Governor’s fans as all of the impact we’ve seen since he’s been governor has been negative, such as income tax increases with no benefit, talk of an increased sales tax, etc. But I digress…

But Governor Rendell has actually made a few smart moves here.

First, he stated that the Penguins have been offered a better deal than any of the other Pennsylvania sports teams that got corporate welfare, uh, I mean “public assistance,” when constructing their facilities. Nice use of objective criteria to further demonstrate how unreasonable Lemieux and company are being.

Second, he “called a ploy a ploy.” This is an effective negotiation technique. In purchasing, telling your supplier that you recognize that their tactics are just that, you can regain power over the negotiation. This doesn’t always work, though. Sometimes it inspires the other party to say “You think I’m bluffing? Fine. I’ll follow through just to show you.”

Since this is a blog, I’m going to once again reiterate my opinion here.

Mario, go.

Please go.

You’re a greedy son-of-a-gun who wants to line his pocketbook with money that would otherwise go to struggling Pennsylvanians. You should be ashamed to show your face around here. I can’t believe that a legend would let a small percentage increase in his personal net worth destroy his legacy. The only thing you can do to save your legacy is to immediately sell your remaining stake in the team to your partners and announce that you’ve done so because you disapprove of the approach that the owners are taking in negotiating with the individuals who are safeguarding the money of Pennsylvanians.

I don’t know if Kansas City loves greedy jerks, but we don’t like ’em in Pittsburgh. They can have you.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
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