Nickels and Dimes Don’t Add Up

4 Jul ’05

I’ve taken this title from Ed Sim’s excellent post at his blog, Beyond VC. Ed writes about an ill-fated negotiation with a candidate for a VP Marketing position – the post is about the impressions gained during the negotiation process, and how some concerns raised in that process led him to pass on a candidate who otherwise seemed to fit the bill:

There was no give from the other side and when issues such as vacation days were hotly contested, I got quite concerned. In the end we passed on the candidate. We reasoned that if he was this difficult during a negotiation for his contract that he would be just as difficult to work with. I am not sure if he relied on his lawyer too much or if it was just his style, but either way negotiating every nickel and dime is not how to get deals done. I felt that the basic element of trust was never established in the negotiation.

It’s a powerful lesson for clients and their counsel in any negotiation over a continuing business relationship – one must never lose sight of the forest for the trees. Gauging the other side’s appetite for controversy, and understanding when enough is enough, are vital skills. One must always remember that the negotiation is an important step in the development of that business relationship, and often has consequences far beyond its impact on the transaction in question.

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