How to Use Imposed Deadlines to Your Advantage
by Marty Latz
“If we only had a little more time, I’m sure we could have reached a deal. We were so close.”
I can’t tell you how many times I have heard a variation of this. Every time, the speaker sounds sincere. Almost every time, they’re wrong.
Why? Because we tend to behave in certain predictable ways when faced with deadlines. So what should we do when dealing with deadlines? Try the following four steps:
1. Identify What, if Any, Deadlines Already Exist
Deadlines almost always have a significant impact on negotiations. The first step, therefore, is finding out what deadlines exist for you and your counterpart.
If you are in sales, do you have a month-end, quarter-end or year-end deadline? What about your counterpart(s)? If you are a trial lawyer, has your trial date been set? If you want to sell your company, what advantages exist if you close the deal by December 31?
And don’t just look on the surface for the obvious deadlines. Sometimes, a party’s personal deadline, such as an upcoming vacation, can have a huge impact on the negotiation.
2. Evaluate the Impact of the Deadline(s)
Several years ago, a friend in Chicago bought what he calls the Daddy Warbucks house once owned by the creator of Annie. When he first offered to buy the house, it had only been available a short time. Since he felt the house was priced below market, he worried that someone else might come in shortly after his offer and start a bidding war.
He told the seller that his offer would only remain valid that day. If not accepted within that time, he said, he would withdraw it and offer less for the house.
If you’re the seller here, your first step after identifying the deadline should be to evaluate its potential impact on your negotiation. To do so, analyze the various types of impacts that deadlines almost always create, at least to some degree:
- Urgency impact: Deadlines often create an increasing sense of urgency for all of the parties especially for those with relatively weaker leverage. Here, the seller had relatively weak leverage, with no good alternative offer at the time, and an interest in selling fairly quickly. My friend, by contrast, had a decent alternative and no real need to buy. So why did my friend impose a deadline? In part, he wanted to focus the seller’s attention and create a sense of urgency.
- Timing impact: The passage of time short-circuited by deadlines usually helps or hurts you: short deadlines generally help if the passage of time hurts you. And short deadlines generally hurt if the passage of time helps you. So avoid short deadlines if the passage of time helps you. And vice versa.
My friend felt that time would help the seller by presenting alternative potential buyers. So he imposed a short deadline to minimize this possibility and to emphasize the transitory nature of his offer. It worked. He received a signed contract back before his deadline expired.
- Organizational impact: Deadlines also often increase the likelihood that the negotiations will move along at a more organized and controlled pace. Creating a set time frame within which the negotiation is to conclude, or within which certain activities are to take place, often causes parties to behave in a way consistent with the deadline.
3. Decide What Type of Deadlines You Want
Different types of deadlines impact negotiations in vastly different ways.
Short deadlines increase pressure, tension and competition, and are often used by those hurt by the passage of time and with little interest in a future relationship with their counterparts.
Longer deadlines or even no deadlines at all tend to decrease pressure, tension and competition, and are often used by those helped by the passage of time and who want a future relationship with their counterpart(s). Longer deadlines also help those creatively working together to resolve mutual problems.
Other types include flexible deadlines, legally required deadlines, interim deadlines, and many others. The key is to determine what types of deadlines give you a strategic advantage. Only then can you decide how to most effectively use them.
4. Manage and Control the Deadlines
Finally, you need to manage and control the deadlines. How? Negotiate them.
Find out what your counterpart wants in terms of deadlines. Do they care? If so, why and to what extent? What options exist for various deadlines? What standards or procedures apply to deadlines in this context? Is there a common amount of time that this type of negotiation tends to take? What about precedents? What do the experts say about how long this type of negotiation takes?
All of these considerations help you effectively manage and control your deadlines. So don’t just leave your deadlines up to chance or the other party. Remember, those who control the deadlines often achieve the best results.
Hopefully, then, you won’t soon say, “If we only had more time.”