Finance Monthly May 2019 Edition

never more important than in the final stages of a negotiation process, or indeed in this case when Mike Ashley will be looking to persuade parties to reopen talks. It means ensuring that both parties are willing to head back to basics and reassess the ideal outcome for both sides and adjusting the tone of his discourse accordingly, and this could prove to be a far better strategy yielding greater success than the mad man approach. It will be interesting to see the final outcome of the Debenhams takeover, and whether Mike Ashley does indeed get his way. However, what’s concerning is that he is already falling into the habit of ‘dirty negotiation tricks’ – often a last resort – which are designed to deliberately irritate the opposition and provoke them into action. In this case, we see rash public outbursts, a controversial post-announcement statement expressing his opinion that the Debenhams deal was simply ‘a long-planned theft’ and his new threat of legal action. These, of course, will completely close off the chance of any future productive dialogue, so it would make sense for Ashley to change tact if he wants any further progress. In some instances of negotiation, putting ego or frustration aside and recognising and respecting opponent power can result in the best outcomes – namely Presidents Trump and Nixon among others. Its characteristics include emphasising an initial stance – often extremely bold or aggressive – which will then help pave way for a lesser, but still related, demand. It also makes one’s opponents think that the negotiator is unpredictable and willing to do anything to get their way – which may even mean pulling out of the deal altogether. However, while it’s a risky approach, it does work on occasion. In this case, it’s likely Mr Ashley headed into these negotiations with a bold stance because he quite understandably wanted to protect hundreds of jobs and shareholder assets. However, this display of passion was not well received and has led to the Debenhams lenders steamrolling in and wiping his offer off the table – which has certainly been a source of contention for many. In a sensitive negotiation environment such as this, a more nuanced approach is often needed. In business negotiations, compromise is key – an effective outcome would result in a win-win for both parties involved, but this relies heavily on both parties being willing to negotiate in the first place. With Mike Ashley wanting to do things his own way, and making that very clear, and the Debenhams lenders ultimately in the position of power – potentially possessing negative preconceptions of what entering into business with him would look like – it doesn’t leave Mr Ashley with much of a leg to stand on, unless he’s willing to make serious concessions to the offer he’s put forward or can put forward a far more persuasive case. Reversing Debenhams’ decision Negotiations are about compromise for both parties and focusing the commentary on what is mutually beneficial for all key stakeholders involved. In the case of Debenhams entering into administration, Mike Ashley must look to emphasise that it’s not just his own personal investment at risk, but that of other shareholders, lenders, and the jobs of thousands of employees and impact on contractors too. This case, if put forward in the right way, should ultimately align with Debenhams’ intentions. It is vital that negotiators in this type of sensitive situation steer clear of harsh language and rash behaviour, and instead take a much more thoughtful approach, remaining open and flexible in order to create the positive climate needed for a successful negotiation. This is “ “ In business negotiations, compromise is key – an effective outcome would result in a win-win for both parties involved, but this relies heavily on both parties being willing to negotiate in the first place. www.huthwaiteinternational.com If you want to hear about how Huthwaite International can help your team increase negotiation skills and business revenue for your company, contact enquiries@huthwaiteinternational.co.uk 51 www.finance-monthly.com ASK THE EXPERT - DEBENHAMS COLLAPSE