Negotiation

An article in Bloomberg Businessweek profiles Lenn Rockford Hann, who has invented, according to the article 'the greatest running shoe never sold'. The story starts with Hann running a half marathon inside Chicago airport, which tells you he's pretty extraordinary.

The rest of the story is sad though. Despite his apparently having invented a way of replacing parts of a running shoe to allow runners to use less energy to run, the shoes are still not on the market. It's not that companies aren't interested. He's been in contract negotiations with Under Armor, New Balance and Adidas. Every time, the negotiations broke down.

The negotiations with New Balance didn't even get started. He set a high-price intending it as an initial starting point, and the company closed the discussions. A colleague says: “He would be way better off with an agent to represent him,” says Hartner. “He’s the inventor-scientist guy, you know it from movies. But in real life they sometimes end up shooting themselves in the foot, and it’s hard to watch. They’re not as good at the people thing.”

Most of us rarely negotiate for anything. New jobs and salary increases are at most once a year. They fall under Horstman's Christmas Rule: you do it infrequently, it's important to you, therefore you're not any good at it. Most of us would be better off taking the first offer we're given. Hann proves this by following the accepted wisdom: start high, and the negotiation falls apart. Good negotiators know that negotiations are FAR FAR more complex than this.

We're not saying don't negotiate if you want to. But weigh up the potential gains against the potential loses and also consider the goodwill you're burning. Still worth it?

http://www.businessweek.com/magazine/the-greatest-running-shoe-never-sol...