2.18.2013

The One Conversation That Could Solve Your Worst Business Nightmare.

It all started with an email.

Around 7 p.m. on a Thursday evening, the CEO of one of my companies sent me an email asking me to take a look at some correspondence he had received from one of our largest technology providers.

As I begin to read the email chain, I could feel my annoyance turn into rage.

After months of painstaking work selecting this provider and spending considerable money on custom services, we were being kicked to the curb. It was worse than that though.

A large part of our agreement with this provider guaranteed exclusivity. Because we were sharing secrets with them and they were sharing their secrets with us, we worked out a comprehensive exclusivity agreement insuring that none of our competitors would ever have a chance to use the software that we were building together.

And now, the emails that I was reading made it clear that our exclusivity agreement was being voided.

To be frank, there really was not much to read. The CEO of their company sent the CEO of my company just 3 sentences. That was the extent of the correspondence — “You had an agreement. We are voiding the agreement. That is that.”

To make matters worse, the CEO openly inferred that they could make more money by screwing us out of our original agreement which prohibited them from sharing this technology with all of our competitors.

So I was in a rage.

Bear in mind, I run a world-leading consulting firm on marketing conversations that change conversations — of entire industries. We understand the nouns and verbs that get people to do what you wanted to do. Part neuroscience the other part psychotherapist, we embrace the art of being completely unreasonable.

We’ve negotiated tricky contracts with African diplomats, helps Indian companies out-fox their American counterparts, and trained European engineers how to deliver messages that get noticed.

But these three sentences were a whole new kind of unreasonable.

I told my CEO to stand down. I would send a reply later that evening.

Which, as you know, can be a tricky scenario. There are a lot of things you want to say; but you know deep down you should probably only say certain things in order to get the results if you want.

So I wrote an email with two or three paragraphs outlining why I was disappointed with this course of action. My intention was to figure out the motivation behind this unreasonable decision.

Early the next morning I received a response from the CEO. He replied to my two or three paragraphs with two or three paragraphs of his own. First, he let me know that he could make “3 times as much revenue” by not honoring our original contract. Second, he informed me that he had no desire to communicate with me further. In fact, he let me know that his email would be the last correspondence to me and that if I did not like what he was doing that I could fire him immediately and they would take all of our technology and services and leave “within 30 days”.

So I did what I do when I can’t resolve a situation with a normal side of conversations, I picked up the phone and called my legal team to begin the process of filing a lawsuit.

By the way, that’s a rare thing for me to do. In all my days of being a CEO I don’t remember a single time that I actually had to file a lawsuit against someone else. I bluffed many times. I had the paperwork in hand ready to go several times. But I never actually had to follow through. Usually, the right conversation would resolve even the most acrimonious of situations.

I already had plans to be meeting with my legal team for some other matters, so scheduling time to talk about this lawsuit was just a minor inconvenience for all of us. The wheels were in motion and I went about doing other things.

Like many of you, most of my day is spent on the phone or in meetings. My Friday was no difference. In the early afternoon, I received a series of calls from an area code that I did not recognize. Looking at my calendar I noticed that I did not have any calls scheduled for that time. So I ignored the ringing phone.

After several of these calls going unanswered throughout the afternoon I answered a call around 4 pm.

“Hello, my name is ‘Ted’ I know who you are, Daniel.  Before you do anything rash I wanted to talk to you.” — those were the first word I heard. Very quickly I understood that I was being called about the lawsuit I was preparing to file.

Over the next 60 minutes “Ted” and I spoke about the situation. He apologized for his company and for the poor communication that started this entire mess. We talked about the direction our company was trying to go and the direction his company was trying to go. We talked about our contracts and our ongoing relationship.

By the time we were done talking, I felt like we were getting a fair deal.  I never mentioned to “Ted” about my legal team working on a multi-million dollar lawsuit. I never had to. Because he did the right thing — emotionally and intelligently.

He picked up the phone and we had a hard conversation together. That took guts all by itself. The fact that he researched and knew who I was earned him even more respect.

(Too bad the CEO didn’t have enough guts to make that call himself. At least he had enough sense to hire a senior vice president with the smarts to know the simple secret that the right conversation can solve just about any problem.)

The next time you’re in a situation where you feel like there’s no answer to your problems, ask yourself what conversation you are avoiding.

Who do you need to call today?  Is it an employee who feels taken advantage of?  Is it a vendor or partner who could bring you more business but doesn’t feel valued?  Is it a competitor whom you need to ignore?

We call these “EDGY Conversations”.  That’s our words for them.  Whatever you call them, they share one big thing in common.  These conversations enable you to move past the confusion and noise and chaos at the middle of a problem to the edge where you can find breakthrough.

What is the edgy conversation you need to have?


  • John G. Pozhke

    In business and in life, you often find yourself at an impasse. Iit is an inevitavle by-product of business. Sometimes the situation is just impossible because the other person is deranged. Do not waste you time – you can not make sense out of nonsense. Avoid these people at all costs. Call your lawyer or take a write-off. It is a cost of doing business.
    When at an impasse, confirm what is causing it. It could be a misunderstanding or bad communication. Are you getting the straight goods? Better find out before you act. Succesful business people are problem solvers. Acknowledge what the problem is and offer a solution. Your most valuable asset are business relationships. Work through difficult situations because it enhances long term profitablity. It feels good to yell and scream but it is very expensive. Diplomacy is where it is at. JPOZ

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      Well said, John. Well said… The right words can solve just about any problem.

      Dan

  • http://twitter.com/joemutevu Joe Mutevu

    Quite handy tips for business survival — Joe @ Make Money Simplified

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      Glad you enjoyed it, Joe…

  • http://twitter.com/PhilGerb Phil Gerbyshak

    Wow. Quite a story! Glad it didn’t happen to me. I think it’s not just the right words, but the right tone, and real give a crap about the other person. And that is something you hire for, not something you teach.

    Curious – did you offer the senior VP a job with your much more ethical company? :)

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      I didn’t offer that guy a job, BUT I was impressed. And I save that memory away for a raining day when I am hiring. :-)

      Dan

  • http://milaspage.com/ Mila Araujo

    Excellent! Dan, let me ask you this – if the person you need to have the edgy conversation with is not willing to listen at all – do you force the conversation or just walk away knowing you tried and they were simply not in a place of reason (I’m not talking heat of the moment, I am talking over all) I’d love to hear your take on that. I’m a big fan of these edgy conversations helps everyone know exactly where they stand and your right takes you to that edge – but what if you’re trying to talk to a massive stake holder who is also a wall?

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      There are two different strategies:

      1. You don’t need to work for jerks or morons. Quit the bullshit and find an environment where your opinion is valued.

      2. You force the discussion. Demand to be heard.

      Part of having an edgy conversation is understanding the angle that drives the best results. Maybe I should write about that.

      Dan

  • Luke Brown

    This is a fascinating story, Dan. ‘Conventional Wisdom’ says the words don’t matter as much as how they’re said. This story seems more common than Conventional Wisdom would indicate. Thank you for sharing.

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      The sad truth is that this probably ALL TOO COMMON. Feelings get hurt and bridges get burned…

      Dan

  • Mark B

    Great story, powerful yet simple principle of making a call. So why don’t more people just use the phone? Too much emotional investment required to deal with a live conversation? Easier to engage in conflict behind written communications? Avoidance of something difficult?

    • http://www.DanWaldschmidt.com/ Dan Waldschmidt

      It’s fear and arrogance and anger all wrapped into one ugly package. Right, Mark? You nailed it though — it is so much easier to solve problems when you just pick up the phone.

      Dan

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