Beware the perils of giving in

Like millions of people in the UK, we've been hooked by the reality TV show, The Traitors. While waiting for the second-to-last episode of season 2, we watched the end of another popular TV program in the UK called Dragon's Den. The show features entrepreneurs pitching their business ideas to the Dragons, multimillionaire investors who decide whether to invest in exchange for a stake in the company.

During this particular episode, two jewellery entrepreneurs asked the Dragons for a £250,000 investment in their business, in exchange for a 3% stake. Two Dragons refused, one agreed, and two demanded a 5% stake. One of the Dragons who demanded 5% was Steven Bartlett, a British entrepreneur, investor and podcaster.

However, to the surprise of the Dragons, the entrepreneurs declined all the proposals and made it clear they were prepared to walk away with nothing. The Dragons were puzzled and asked why they would do such a thing when at least one proposal met their needs. The entrepreneurs explained that they had a preferred Dragon, Steven Bartlett, but that the demand of 5% was beyond their limit (or so the assumption is). The entrepreneurs asked Steven Bartlett to reconsider, and he took a brief timeout to consider it and consult his notes.

As a negotiation skills trainer, at this point, I assumed (and hoped) he was consulting a list of variables that he could use to trade the 2% concession demanded by the entrepreneurs. Unfortunately, when he responded, it was effectively, 'ok, no problem,' giving in to the demand and missing the opportunity to get something in return for the concession. He could have proposed a lower investment in exchange for the concession or staggered the investment over a longer period. By not doing so, he missed a chance to add more value from his point of view. (It's possible, and I hope it's the case, that there was a further negotiation once the cameras stopped rolling.)

Additionally, the response has the danger of setting a precedent for future negotiations. The entrepreneurs saw that he gave in quickly when they said no, which may lead them to take the same approach in future negotiations.

Therefore, it's crucial to have a list of variables to trade when making concessions in negotiations, particularly in long-term relationships and there will be many negotiations to come. Furthermore, avoid setting a precedent by giving in to demands without getting something in return - if it's a demand you can agree to, always trade value in return.