High salaries don’t guarantee conflict competence

January 28, 2011

Even billion dollar deals can fall apart when the highly paid executives doing the negotiating get hurt feelings. Here’s a cautionary tale about the value of doing interest based negotiations, of managing your reactions to another person and of understanding how to have difficult conversations.

The Globe and Mail reported on January 28, 2011 (page B4), that the CEO of “of the fertilizer giant (Potash Corp.) who fought hard to fend off the $39-billion bid” blamed his opponent company (BHP Billiton Ltd.)– for the failure of the hostile takeover.

It wasn’t an economic failure, but a failure to make Potash Corp. feel good about– BHP Billiton Ltd.,– and its intentions once it had ownership.

“BHP Billiton Ltd. has itself to blame for Ottawa’s decision to reject its hostile takeover offer for Potash Corp. of Saskatchewan Inc.”, he said. In one of his first media interviews since Ottawa denied the takeover almost three months ago, Potash Corp. chief executive officer Bill Doyle said the Australian mining giant — got in their own way– when they launched the bid to buy one of Canada’s resource champions. "Had they come with just a little bit of humility they might have had a different outcome,– Mr. Doyle said in an interview with The Globe and Mail on Thursday.”
That’s right; even $39 billion dollars couldn’t buy the company after the suitor BHP Billiton Ltd. allegedly insulted the decision makers of Potash Corp. If ever you wondered about the importance of relationship building in the high stakes of big business, this is a classic case study in the making. Even had BHP Billiton Ltd. done its conflict analysis and apologized for its faux pas, the CEO of Potash Corp. ought still to have done his conflict analysis of his reaction (over reaction?) to the slight. Some conflict competence training for all concerned might have been more valuable than humility.

Filed Under: Conflict Competence      

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