Spring training is well underway for the Red Sox this week but one player that isn’t joining the team in Fort Myers, All-Star pitcher Jon Lester, who left the Red Sox for the Chicago Cubs at the end of the last season, is notable because of his long history with the team, including their 2007 World Series victory. At first glance, Lester’s defection looks like a simple disagreement over salary. The Red Sox made a final offer of $135 and the Cubs put down $155 million. Lester chose the higher offer and normally this would be the end of the story.
Yet, like many negotiations, there’s more to this story than meets the eye. Red Sox leadership made a series of poor decisions that tanked their talks with Lester. A close look at how they went from the World Series to a world-class failure holds five key insights for any negotiation where strong interests and powerful personalities are at play.
1. Learn from the Past – In 1996 the Sox had one of the best pitchers in baseball on their side. 33 year-old Roger Clemens was eager to stay and hoped to sign a multi-year contract, but the Sox offered one year only, citing Clemens’ age. In response, Clemens walked and signed a multi-year $40 million contract with Toronto instead.
18 years later, the Sox repeated the mistake, spending big on younger players before making a $70 million opening offer to Lester. Making the first move to set a clear price can be important in a negotiation, but setting the tone by learning from past mistakes is just as crucial. Had Sox owner John Henry looked backed at Clemens, his odds for moving forward with Lester would have been far greater.
2. Debrief Often, Adapt Quickly – Adaptive leadership is one of the greatest assets in a challenging negotiation. Everyone puts forward an unsuccessful offer from time to time. Effective leaders change tactics by debriefing early and often, assessing what is going well, and what is going badly. When their opening offer landed with a thud, Sox management should have quickly caught on and just as swiftly changed course. Instead, it seems they convinced themselves they were being reasonable and Lester was not, even after they lost the negotiation.
According to negotiation scholar Keith Allred and Harvard Kennedy School negotiation expert Brian Mandell, “an inflated view of one’s own level of cooperation relative to the perceptions of one’s counterparts has decidedly negative implications for one’s ability to create value and maintain a good relationship with the other party.” What does this mean in shorthand? Instead of telling yourself you’re doing a good job, be prepared and be flexible if you want to find a deal with the other side.
3. Know When You’re a Known Quantity – It should have come as no surprise that Cubs President and former Red Sox manager Theo Epstein had an eye on his old team’s players and knew their managers’ moves. As a result, Epstein knew how to recognize when negotiations with Lester were going south and how to take advantage. Effective team leadership comes from being keenly aware of how you are seen by potential competitors in a negotiation. Had the Sox deeply understood that Epstein was watching they would have known the tradeoffs needed to seal a deal. Epstein clearly did, and he walked away with a win.
4. Understand Interests, Not Positions – Baseball fans love numbers, but what went wrong in this negotiation says a lot about deeper interests than cold, hard figures. In 2006, Jon Lester was diagnosed with cancer. Not only did he survive, he went on to lead the team to a World Series victory the following year. Negotiations should have accounted for the fact that the terms of a contract likely had deeper meaning than just numbers for Lester. Epstein didn’t just offer more – he was someone with whom Lester worked closely during those difficult years.
5. Pick a Leader, Just One Leader – Individually, Sox managers might have lacked the leadership qualities to win the negotiation, but they certainly lacked the leadership skills to do it together. Criticized for crowing their negotiation with too many leaders, the Sox confused the talks by involving John Henry, team President Larry Lucchino, and GM Ben Cherington all at once.
Leadership and teamwork go hand in hand. In this case, three leaders may have been good at convincing themselves that they were the considerate ones in the negotiation but effective team leadership would likely have given them the win they wanted. Rather than crowding a negotiation, thinking about what the other side needs to understand your position is a surefire way fore creating value and reaching a deal.