Last week I got my “forever bike,” the last bike that I will ever need. A few years ago, I learned that it is powerful to have celebration during the milestones associated with the flow of deals that come through our brokerage office. I had a picture of my Cannondale High-Mod Dura-Ace Di2 Disc next to my computer, which kept me focused on getting a deal completed during the grind common on all deals. I love this bike, and I have been riding it every chance that I can.
The problem is that the bike is in short supply and I almost lost it before the deal closed. The bike shop called me to say that there was one left at the factory, and if I wanted it, I would need to order it now. But the deal was not closed yet – if I bought the bike, and the deal did not close, I would have a hard time justifying the purchase. But the leases had been negotiated and they were sitting on the CEO’s desk to be signed. I reasoned that the deal was close enough to being done and it was okay to spike the ball and give the shop my credit card number.
But a problem arose before I’d completed the deal. That bike is in short supply, and I was in danger of losing it. The bike shop called me to say that there was one left at the factory, and if I wanted it, I would need to order it now. I knew I would have a hard time justifying the purchase if I bought the bike and the deal didn’t close. But the leases had been negotiated and they were sitting on the CEO’s desk waiting to be signed. I reasoned that the deal was close enough to being done and it was okay to spike the ball and give the shop my credit card number.
When the CEO changed his mind and decided to re-visit the market one more time, I found myself reacting a lot differently than I would have without the bike! Typically, I am the strong advocate for my client, and in this instance I would have kept my cool and developed strategy with my client. Now, my initial reaction was to speed up the deal and get it closed. Thanks to that stupid bike, I had to work hard to make sure that my advice to my client stayed “pure.” With all clients, I use a negotiation worksheet to help re-check my gut reactions to make sure that we are always working towards my client’s best interest.
From time-to-time you may wonder if your broker is “in the deal.” In the October 2014 issue of Negotiation Briefings, tips are given to hiring an agent and how to avoid what is explained as “motivational blindness” – the tendency to not notice the unethical actions of others when it is against our own best interests to notice. In my book Go For Broker, I explain that most of the frustration that people have with their broker is a result of not understanding how they are motivated. Often, a broker’s interests are misaligned with their client’s unless they are motivated by pro-social factors, such as retaining long-term relationships and the desire to over deliver on the behalf of the client.
Here are some tips to make sure that your broker remains an indispensable member of your team, even when he has already spent his commission:
- Hire the right broker in the first place. Check the team’s references, ask for evidence of experience, review their processes and ask the broker to put some skin in the game to align their interests with yours.
- Clearly define your expectations for your broker. Establish a mandate for your broker and meet with her from time to time to discuss progress on the deal. At Cardinal, we establish goals for the deal and base our fees upon the client’s satisfaction on these performance indicators.
- Openly discuss when there are instances of the broker’s interest overshadowing your interests. I once had a client say to me, “You are just wanting me to accept these terms so that you can get your commission in a hurry!” That was a flat-footed approach to addressing the right issue. This client would have been more effective, and given me the chance to be a better consultant on his behalf, if he would have simply asked me some open-ended questions about the logic in my recommendation for the counter-offer.
As soon as I started getting the uneasy feeling of being conflicted with my client, I got off my new bike and pulled-out a trusted negotiation worksheet my firm uses to help me re-check my reactions and make sure I was working toward my client’s best interest. The Prepared to Win-Win™ negotiation worksheet remind myself of the client’s goals and the history of the transaction. The Prepared to Win-Win™ worksheet assured me and the client that our interests were aligned when the third-party got squirrely. Then I got back on the bike and had a blast!