Learning To Wield The No-Fail Negotiation Technique Of Retreat

Successful negotiating is not about winning a battle, or even positioning yourself to win. Sometimes, retreat is the very best tactic—here's how to use it to your advantage.

The Chinese have a proverb: "The number one strategy is retreat." I have often called it to mind during times of personal crisis.

In 2002, I realized that I didn’t know how to negotiate. Business would suffer if I did not quickly develop this critical skill. Whether arranging contracts with customers, setting priorities with employees, creating quotas and commissions for the sales team, or establishing target delivery dates and feature sets with engineers, I needed to grow my ability to listen with respect, communicate with clarity, and influence with authenticity in order to reach agreements.

I wound up wandering into a bookstore in search of answers. In the business section, I found the bestseller Getting to Yes by William Ury, Roger Fisher, and Bruce Patton.

Negotiating is not about winning a battle, or even positioning yourself to win. It is about not getting into a fight in the first place. By resolving conflicts before they escalate, respecting mutual interests, and engaging others with compassion, you can achieve something far greater than victory: peace.

An opportunity to put the lessons from Getting to Yes into practice arrived quickly. In 2002, when Geomagic was still teetering at the brink of bankruptcy, two large multinational technology companies served us with a lawsuit. The sheriff walked right into my office to deliver the subpoena. My heart pounding, I tore open the envelope. Two customers, both large global companies, claimed that Geomagic had violated the non-disclosure agreement (NDA) while negotiating business contracts with them.

Victor Souto from Hale and Dorr, LLP arrived from New York City the next day. After we reviewed the case, he said to me, "Ping, winning is losing in this case. Geomagic will run out of money before you even get to court, not to mention the time and energy you will waste if the case drags on for years. If you want me to fight, I will fight for you. But to what end? You’ll just wind up stuffing my pockets and those of the other attorneys on the case."

"I suggest you call a meeting with them and tell them not to bring lawyers," Vic said. "I will not come with you."

I immediately thought about how taking this approach would utilize the retreat strategy. It fit so well with my own experience and what I had just read about in Getting to Yes. I called my contacts at the companies behind the lawsuit at once and suggested that we meet without our attorneys. Both graciously accepted my invitation. We set a date for two weeks out.

I flew into Newark that morning and met with the two executives—let me call them Adam and Bob for the moment—at the Marriott hotel conference room. I began by thanking them both for their willingness to meet me without their attorneys present. Then I took responsibility for our being there.

"Geomagic almost went bankrupt this past year. The truth is we have no money to fight this case. I called this meeting because I believe it is not your intention to put Geomagic out of business. There must be something else you want that is not expressed in this lawsuit. Can we talk about it and see if we can settle out of court?"

The two executives were accustomed to people positioning themselves to win an argument, not asking for help. Their demeanors shifted as they leaned back in their chairs. Bob once again led the way in responding to me. "You’re right—we certainly have no intention of destroying your company."

Adam nodded and then got to the point. "Ping, the trouble is that Geomagic filed patents in our field. We consider that unacceptable because you used the knowledge we had given you during our negotiations with Geomagic to develop these patents."

I caught myself reacting to what Adam had said, thinking, If you were after our patents, why didn’t you fight us in patent court? This is not fair. But I had practiced enough in the office before the meeting to keep myself from saying anything aloud. Retreat is the best strategy, I reminded myself.

"I’d be happy to license the patents to you," I offered at once.

Adam looked agitated. "We want you to hand the patents over to us, free of charge," he said. "We want to own these patents outright. You shouldn’t have filed them in the first place without our approval."

I was stunned. I knew full well that we had every right to have filed these patents. I felt quite certain that I’d be able to prove in a court of law that Geomagic had not relied on any of these two companies’ proprietary information. But I stepped back to gain a larger view. At first glance, it didn’t seem fair to me for these companies to take ownership of our patents. At the same time, I had no other choice: agreeing to their terms was the only way out of Geomagic’s current predicament.

I recalled William Ury’s advice to focus on the desired outcome rather than short-term consequences. It was more important for me to be able to run a financially viable company than it was for us to own these two particular patents, which comprised a relatively small market anyway. Handing over the patents in their field would be the "golden bridge," as Ury calls it, that these executives needed to cross over and drop their lawsuit.

Bob cleared his throat. "Would you give us five minutes alone?"

"Of course," I replied, and stepped out of the room.

When I came back, Adam and Bob had a reasonable settlement ready for me. It released Geomagic and our customers and partners from further legal action and provided a financial payout for our two patents and legal fees. It took us a total of 20 minutes to agree on everything. The entire meeting had taken less than an hour.

I had learned valuable lessons about how, in negotiation, vulnerability can be a strength.

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Excerpted from BEND, NOT BREAK: A Life in Two Worlds. Published by Portfolio/Penguin. Copyright (c) Ping Fu, 2012.

—Ping Fu is CEO and founder of Geomagic and author of Bend, Not Break; she was honored in 2005 by Geomagic aims to enable advanced design and manufacturing of personalized products that are made locally with global accessibility. Follow Ping on Twitter.

[Image: Flickr user Avard Woolaver]

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