High salaries don’t guarantee conflict competence
Even billion dollar deals can fall apart when the highly paid executives doing the negotiating get hurt feelings. Here’s a cautionary tale about the value of doing interest based negotiations, of managing your reactions to another person, and of understanding how to have difficult conversations. If ever you wondered about the importance of relationship building in the high stakes of big business, this is a classic case study: Hurt feelings come with huge costs
The Globe and Mail, (January 28, 2011, page B4), reported that the CEO of “of the fertilizer giant (Potash Corp.) who fought hard to fend off the $39-billion bid” blamed his opponent company (BHP Billiton Ltd.) for the failure of the hostile takeover.
It wasn’t economic failure, but failure to make Potash Corp. feel good about BHP Billiton Ltd., and its intentions once it had ownership.
“BHP Billiton Ltd. has itself to blame for Ottawa’s decision to reject its hostile takeover offer for Potash Corp. of Saskatchewan Inc.”, he said. In one of his first media interviews since Ottawa denied the takeover almost three months ago, Potash Corp. chief executive officer Bill Doyle said the Australian mining giant got in their own way when they launched the bid to buy one of Canada’s resource champions. “Had they come with just a little bit of humility they might have had a different outcome, Mr. Doyle said in an interview with The Globe and Mail on Thursday.”
Humility loses out to egos even when the stakes are large
That’s right; even $39 billion dollars couldn’t buy the company after the suitor BHP Billiton Ltd. allegedly insulted the decision makers of Potash Corp. BHP Billiton Ltd. could’ve done its conflict analysis and apologized for its faux pas, the CEO of Potash Corp. could’ve done his conflict analysis of his reaction (over reaction?) to the slight.
Conflict competence training for all concerned would’ve been valuable. Anyone who claims that business is objective and professional, not subjective and personal hasn’t spent much time in business. This deal didn’t start out personal; it got personal as soon as someone felt slighted.