OK. You’re right. I’m totally obsessed about the Pittsburgh Penguins’ negotiations for a new arena.
Here are a few new thoughts for the new week based on negotiation principles that can be applied to purchasing.
1. Have A BATNA. I think that the first use of “BATNA” (short for best alternative to a negotiated agreement) came from the legendary negotiation book, “Getting To Yes.” Having a BATNA strengthens your negotiation position and helps ensure continuity in the event that negotiations don’t conclude positively. The Penguins clearly have a BATNA – move to Kansas City and get to play in a new facility without paying rent.
But what is Governor Rendell’s BATNA? He has alluded to the possibility of asking Gary Bettman and the NHL to block the move. And that’s not a totally bad idea. After all, the governor has indeed put a great offer on the table for the Pens. I think that it would be easy to demonstrate that the Penguins were given a great offer and are simply being greedy and unreasonable by continuing to make threats to leave.
But the NHL has more of a vested interest in keeping the Pens happy than keeping the governor happy. So that makes that BATNA not necessarily the best one.
What about pursuing other teams as a backup plan? There is likely someone that wants to create an expansion team. And what better market to introduce an expansion team into than a market where hockey has been strong for decades and there have been dozens of sellouts this year? Maybe one of the struggling Canadian franchises may be ready to move like what happened when the Quebec Nordiques became the Colorado Avalanche?
In my opinion, the governor should have a team investigating the possibility of getting another team in case the deal falls through. This would give the politicians’ team more leverage and a great BATNA that, if the Lemieux deal falls through, could even save their political careers.
Do your suppliers know that you have a BATNA?
2. Set Deadlines. Did you ever notice that things seem to get done at the last minute? Deadlines are effective negotiation tools. And this is where Kansas City is bumbling.
They’ve offered the Pens a sweet offer. But, all Lemieux and company are doing are using that as leverage in their negotiations with Rendell and co. By the way, using one supplier’s proposal just to get a better deal from a second supplier when you have no intention of making an award to the first supplier is called a “sharp practice” and is generally considered unethical.
If Kansas City was smart, they’d say “Enough is enough. We’ve made you a great offer. Don’t just use it against us. Decide by March 17th or the offer is off the table.” If the Penguins stay in Pittsburgh, I’m sure Kansas City will regret not setting such a deadline, which could have helped them land the team.
Are you using deadlines to motivate your suppliers to move?
Thank God I can relate this obsession to purchasing, huh?