Will your business negotiation make it to the finish line?

It’s not uncommon for promising deals to blow up at the last moment. By anticipating potential problems, you can ensure your next negotiation has a happy ending.

By — on / Business Negotiations


This past summer, the White House and the pharmaceutical industry buckled down to negotiate a long-awaited deal aimed at lowering the price of prescription drugs for Americans. Both parties had strong motivations to reach an agreement: With the 2020 presidential election looming, President Donald Trump was eager to fulfill a campaign promise he’d made during the last one. As for drugmakers, they wanted to rise above public perceptions of them as price gougers.

After several months of dealmaking, the Trump administration and the pharmaceutical industry reached a tentative agreement in late August for the industry to contribute $150 billion to defray consumers’ out-of-pocket costs and to cover older Americans’ copayments in Medicare’s prescription drug program. Then Mark Meadows, Trump’s chief of staff, issued a final demand: The White House wanted drugmakers to pay for $100 cash cards to be mailed to American seniors before the election, to the tune of several billion more dollars, the New York Times reports. Seniors could use the “Trump cards,” as some in the pharmaceutical industry referred to them, to pay for prescriptions.

The drug companies refused, unwilling to become complicit in what appeared to be a blatant play for votes, the Times reports. The deal collapsed, leaving the White House to its Plan B, which involved issuing an executive order tying drug prices to prices paid by other countries and figuring out how to fund and deliver cash cards to seniors before November 3.

“A short story exists, in a sense, to end,” the late fiction writer Frederick Busch once wrote. If the ending to a short story falls flat, this idea suggests, whatever captivating writing preceded it is overshadowed by the failure. The feeling might be familiar to negotiators: No matter how promising a deal-crafting process has been, if talks end in impasse, parties are likely to believe they wasted their time.

When deals fall apart, it’s often for good reason. Maybe one or both parties realized they could get better outcomes elsewhere or didn’t see how they could work together in the future. In such scenarios, there’s no sense in investing further time and effort. But when a draft agreement that would make both parties better off than their BATNA (best alternative to a negotiated agreement) collapses, we need to look at what went wrong so we can write better endings in the future.

Unwanted surprises

Sometimes, one or both parties’ overly competitive negotiating tactics sink a promising deal. Consider what happened when billionaire hedge fund manager Steven Cohen negotiated to purchase Major League Baseball’s (MLB’s) New York Mets from its majority owners, the Wilpon family, for about $2.5 billion in February. In a highly unusual move, managing owner Fred Wilpon and his son, Jeff, the team’s chief operating officer (COO), also negotiated to keep their jobs for the first five years of Cohen’s ownership.

At the end of a lengthy negotiation, last-second demands can, indeed, manipulate counterparts into conceding just to wrap up a deal—but be prepared for them to resent you and tell others that you can’t be trusted.

Cohen reportedly believed the Wilpons planned to take on more ceremonial roles with the team. After all, Fred was in his 80s and had already planned to step back from daily duties. Moreover, other family members were said to have initiated the sale to take decision-making authority away from Jeff Wilpon, given that the team was hundreds of millions of dollars in debt and operating in the red. The Wilpons were widely unpopular among Mets fans for failing to make the major financial investments needed to build a strong team.

But after seven months of negotiation, when Cohen sat down to hammer out the details of the five-year transition period, the Wilpons refused to sign anything that would give him gradual control, according to the New York Post. In fact, they wanted new language stipulating that Jeff would remain COO during that time and be guaranteed pay raises and perks. Jeff had no intention of stepping back from his duties, Cohen suddenly understood. He reportedly tried to negotiate a slower payout or a lower price in return for meeting the Wilpons’ demands, but they refused.

As it turned out, the Wilpons have a history of making last-minute demands in negotiations with business partners, government officials, and even baseball players. “Just when a deal appears to be done and it is time to shake hands, the Wilpons reach for a little more,” according to the Times. When another billionaire hedge fund manager, David Einhorn, tried to buy a significant share of the Mets in 2011, for instance, he was caught off guard when the Wilpons sent a “new round of comments on our definitive agreement” that changed many agreed-upon provisions, he told the Times. Fred Wilpon may have adopted the tactic while making his fortune as a real-estate developer, an arena where such surprises are common, according to the Times. (Cohen came to the negotiation with his own baggage: In 2013, he was prohibited from managing clients’ investments for two years after the hedge fund he founded, S.A.C. Capital Advisors, pled guilty to insider trading.)

At the end of a lengthy negotiation, last- second demands can, indeed, manipulate counterparts into conceding just to wrap up a deal—but be prepared for them to resent you and tell others that you can’t be trusted. Better to ask for everything you reasonably hope to gain before you’ve agreed to a deal framework.

What if a counterpart blindsides you with a new condition for closing? If you’re open to it, explain that you would need comparable concessions in return, as Cohen did. If they respond favorably, take a break to evaluate the revised proposal. But if you don’t like the new request or they’re unwilling to make you whole, walk away.

Knowing how hard to push

Last-minute requests aren’t always strategic or manipulative. They can also reflect the inherent difficulty of gauging how much to ask for in a negotiation.

In his book The Art of Negotiation: How to Improvise Agreement in a Chaotic World (Simon & Schuster, 2013), Harvard Business School professor Michael Wheeler describes how a professor he knew, Ben, negotiated hard for a great job offer from a prestigious university. Ben won an exception to the school’s usual practice of requiring that new hires start as visitors for a year. He also pushed for a high salary and an increase in his research budget.

“Are we all done?” the dean asked on the phone after making these concessions.

“Just one more thing,” Ben said. He explained that his wife would need time to wrap up her current job and find another one in their new city. “We’d like to delay our arrival by a year.”

After a long pause, the dean said he’d get back to him. Two days later, Ben received a curt letter from the dean informing him that the offer had been withdrawn.

Ben was shocked: He hadn’t meant for his last request to be nonnegotiable, but apparently the dean had taken it that way. Through the grapevine, Ben found out that the dean thought he had pushed too hard and would be a difficult colleague.

When negotiators start off far apart on key issues, the gradual process of moving toward agreement may leave one or both sides feeling aggrieved, writes Bond University, Australia, professor John H. Wade in his chapter “Crossing the Last Gap” in The Negotiator’s Fieldbook (American Bar Association, 2006). Near the finish line, even a tentative or relatively minor request from a counterpart can detonate talks.

Preparation helps us avoid pushing too hard and souring a deal. Before negotiating, list all the major issues at stake—for both you and your counterpart—and be sure to cover them all during the heart of your discussion rather than after you’ve agreed to a tentative deal. Set reasonable goals and think about what the other party might want in return. When setting particular goals, anticipate why the other party might balk at meeting them. Look beyond financial concerns to consider whether accepting your terms might put them in an uncomfortable position. Is there likely to be anything you can offer that might change their mind?

Returning to our opening story, White House chief of staff Mark Meadows apparently was so focused on winning over voters for Trump that he failed to consider that pharmaceutical-company executives might balk at being enlisted to the cause. There may have been nothing the White House could have offered to persuade the executives that backing the cash-card plan would work in their favor. Meadows and others in the Trump administration could have anticipated this barrier by looking at the situation from the other side’s perspective.

“When tempers erupt at the end of negotiation, it’s often because pressure has been building up along the way,” writes Wheeler. Check in with your counterpart throughout the negotiation to assess their interests, and identify any frustrations or concerns. When making a request, offer a compromise on another issue in return. Highlight your concessions to reinforce their perceptions of a fair deal.

If you do decide to ask for a bit more during the final stretch, frame your requests with care. Rather than tacking on a final “ask,” for example, Ben might have told the dean that he was ready to sign off on the deal as it stood but wanted to bring up one more possibility, Wheeler suggests. By committing to the agreement on the table, you lower the risk that the other party will be put off by a late request. The White House may have benefited from this strategy in its negotiations with the pharmaceutical industry as well.

What if the deal still falls apart, despite all your best efforts? Then you might take heart in the Mets story. In September, seven months after their initial negotiation ended abruptly, the Wilpons agreed to sell a 95% stake in the team to Steven Cohen for about $2.4 billion. With ticket sales on pause as a result of the Covid-19 pandemic and no other serious buyers having emerged, the Wilpons became willing to drop both their price and their power-sharing demand this summer, according to the Times. That’s a story that earned its happy ending.

Deal closing dos and don’ts

  • Do focus on subjective value. Negotiators’ satisfaction with how a bargaining process unfolded has a strong impact on their willingness to close a deal, Massachusetts Institute of Technology professor Jared Curhan and his colleagues have found in their research. Check in throughout the process to gauge the other side’s satisfaction, highlight your concessions, and stress what they have to gain.
  • Do frame final requests with care. When deciding whether to ask for just a bit more in a negotiation, try to gauge how satisfied your counterpart seems with the agreement on the table. To avoid triggering an impasse, explain that your request isn’t a nonnegotiable demand, and offer a tempting concession on an issue you care less about in return.
  • Don’t make last-second demands. The tired old ploy of demanding final concessions at the deal signing might coerce a reluctant agreement in the short run, but it could very well doom your partnership and tarnish your reputation as a trustworthy bargainer. Make sure you’ve covered all the bases before agreeing on a deal.

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