Jack Welch is one of the most revered names in modern American business history. He’s credited with leading global business giant General Electric to a 4000% value increase between 1981 and 2001. During that time, Welch developed a reputation for being both strategic and somewhat ruthless; the latter largely stemming from his policy of firing the bottom 10% of his leaders annually. Given his reputation, many people may be surprised to learn about Welch’s views on negotiation. In a recorded conversation with emotional intelligence researcher Daniel Goleman titled “What Makes a Leader?", Welch said the following:
“I made some deals where I paid more than I probably had to because you always want to leave something on the table. When I got more authority [moving up the ranks in General Electric] I was never trying to get it for the last 50 cents. You always want to leave the last 50 cents there so you leave goodwill there.”
You did not read that quote incorrectly. The man famous for firing thousands said he intentionally left money on the table to foster goodwill and relationships. For Welch the immediate financial result of a deal was not the only determiner of its success. He believed that the state of relationships after a deal was completed was an important matter worth consideration.
Whether with suppliers, new hires, or candidates for acquisition, leaders often find themselves in negotiations. Keeping in mind the long-term relational implications of a financial agreement and the manner in which it is reached is strategically smart. Take it from Jack Welch: To myopically define success in negotiations as grabbing every last penny available is to ignore that which drives long term results in leadership—relationships. To leave a little on table is to invest in your own success as a leader.
Share Your Thoughts: Have you ever squeezed the last penny out of a negotiation only to regret the relational dynamic that action created? Have you ever left money on the table in the spirit of fostering healthy relationships? Tell us about it.We'd love to hear from you. Join the conversation by clicking here.
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