Growth Strategies: The Art of the Deal

Ronald M. Shapiro is The Man when it comes to negotiating. He was the agent for famed baseball player Cal Ripken as well as five other major league stars. He was instrumental in helping end a national baseball strike and an orchestra strike. He has offered commentary on television shows including “Good Morning America,” “Nightline,” and CNBC’s “Power Lunch” as well as National Public Radio’s “Morning Edition.”

His book summarizing his negotiation approach, “The Power of Nice,” has been a business must-read since its release in 1998.

Shapiro’s theory in brief: Give your negotiating opponents something they want in order to form a long- lasting relationship with them and to obtain an ending with which everyone can be happy. You win big, but they win something as well. It’s WIN-win.

Shapiro’s 2005 follow-up to “The Power of Nice,” titled “Bullies, Tyrants, and Impossible People: How to Beat Them Without Joining Them” made The Wall Street Journal’s business best-seller list the first week of its release.

But don’t think this highflier wouldn’t understand the internecine politics of negotiation that take place among the partners, potential partners, and business partners within a medical practice. On the contrary, his advice might just help you get out of a sticky situation.

Empower yourself with his answers.

Physicians Practice:One of the main messages in “The Power of Nice” is the necessity of researching and understanding your negotiating partners before starting a conversation. You say that with that approach, you know for yourself what would be a reasonable outcome, what they might really want, and what leverage you might have. It’s fairly obvious how to research a publicly held company or the previous salaries of star outfielders, but how would one research, say, a potential professional business partner?
Shapiro: I have a template called the preparation planner. The first place I’d start doing my research when it comes to joining a particular practice - or exiting a practice - is to find precedents that might apply. So I’d talk to people I went to medical school with or people I had practice experiences with in a particular, relevant geographic area. I’d ask about their partnerships. I’d talk to people in the practice, if they were available to me. For example, if I’m a younger physician joining a practice with middle-aged and older physicians - but there are a few younger physicians in there too - I might try to seek them out and talk to them.

If I had access to a lawyer, I’d look for one with a substantial experience base, so we could draw on his or her precedents in my negotiations. I’d survey the field in terms of my network to see what’s available to me and come up with good and bad precedents that would guide me in developing alternative approaches in my negotiations.

PP:So you are looking for precedents. For example, say you want to know how people in a particular practice usually share call duty. But you are also looking for what really motivates the people with whom you are negotiating. Which question should you focus on?
Shapiro: Both. I’d try to gather information, and as a busy physician I can’t go on an endless research adventure. But one of the things I’d do as part of information gathering is to try and tap the interests of the physicians or partners with whom I’m negotiating. I’d ask them questions. I wouldn’t necessarily ask them about the offer they made me. I’d ask questions in the W.H.A.T. mode, which is an acronym. The W stands for first asking open-ended, sequential “W” questions like, “What’s important to you?” “What do you mean by that?” “Why is it most important?”

The H stands for “hypothetically speaking”: Putting the specific offer details aside, what are you looking for in a partner?

[The] A stands for “Answer a question with a question,” and T stands for “Tell me more.”

That whole probing process is an attempt to understand the motivators of the physician or partner with whom I’m dealing. What underlies the relationship we are trying to create? A key element of negotiation is to see what you can find in the nonfinancial arena to put the deal together, in addition to the financial terms. So the motivators are very important.

PP:Can you give me an example of a deal you’ve negotiated in which nonfinancial elements became crucial?
Shapiro: Sure. I was involved with some physicians bringing someone into their practice, and they were unable to meet her needs in terms of the dollar amount she had in mind. So we said to her, hypothetically speaking, if the salary were not the issue here, what are your other issues? Well, she was moving from another city, and it related to her family and kids’ school. It related to her sense of security. If they made the move, she didn’t want to have to make a series of additional moves. So what really became the focus of the negotiation was security for a term until she converted from an employee position to a partner position.

Although they couldn’t meet her initial financial goal, ultimately, the practice partners were able to structure something that made her feel she was going to be secure for a period of time during which she felt confident she could reach her partnership goal. The school issue became important, too, and helping address that solidified the relationship.

PP:In your book, you talk about reaching a conclusion that everyone can live with. But is there danger that along the way - in the negotiating process itself - people can get really nasty? I mean, you are talking about people’s money. People can get mean in negotiations, but you are still going to have to work with that person. For example, in a three-person group, you are going to see that person every day for the rest of your career. How do you keep the negotiating process from getting mean before you get to the end point?

Shapiro: I try to convince people to be motivated by a guiding principle, a philosophical approach: In order to get what you want, you need to help them get what they want. And then I convey to them my picture of what a win-lose scenario in negotiations can do. You may be able to trump the other side, but if they are your partner in a practice, their desire to cover for you, help you, support you will be limited by the legal terms of your agreement rather than the motivation that comes from wanting to be a partner in the truest sense of the word. What you’ve done there is make a bad deal for them, and you have built no relationship in a business and profession in which relationships are absolutely vital.

So I urge WIN-win. I want to emphasize that WIN-win is not “wimp-win.” I’m not saying that you need to make massive concessions to be a WIN-win negotiator.

Make the best deal you can for yourself, but don’t forget the other person’s needs. That leads you to a mutually satisfying deal, a deal that can really govern the relationship in a positive way. You save a lot of stress and strain. You begin to build a lot of bridges as you are negotiating. In medical practices, there are so many stresses. If your relationship with your partners is also stressed, you are going to have an unsatisfying time going in, an unsatisfying time being in, and probably ultimately a rupture that can really damage
the practice.

PP:Talk to me about situations in which you have resolved completely different assumptions regarding what the conversation even concerns. I hear from a lot of older physicians who are trying to bring in younger physicians. They think those younger physicians don’t “get” what the profession is about. They think younger physicians should take more call duty, work 60 hours a week, and basically allow the senior partner to gracefully step back a bit. But younger physicians want a work-life balance and don’t see why they should get paid less to work more. How do you bridge a gap like that?
Shapiro: First of all, you have to recognize that some gaps are not bridgeable, and if you can’t bridge a gap, then maybe you don’t do the deal. But to best attempt to bridge the gap you mention, I would go back to probing again. I’d talk to experienced physicians about how they handled younger physicians in their practices. And if I’m a younger physician, I’d talk to other young physicians about how these issues were addressed in their negotiations. In the final analysis, it’s the probing that will or will not uncover an opportunity to compromise what may appear to be vast differences between the two parties. A true negotiation doesn’t put you exactly where you want to be and doesn’t put your negotiating partners exactly where they don’t want to be. It’s a compromise, and compromise comes from learning everything you can about what relates to one another’s desires.

PP:How do you know when you can legitimately negotiate to begin with? For example, if you are really young and looking for your first job, if you are dealing with a big managed-care company that just mails you contract terms, or even if you are looking to buy an EHR and the vendor says, “Here’s what it costs,” how do you know when it’s OK to negotiate?
Shapiro: How do you know that you should negotiate? You know it if what they are offering makes you unhappy. If you end up feeling like the loser, that is as damaging to the relationship as if you made them feel like the loser. You are going to reach a dissatisfaction point very early on. I’ve talked to young physicians who have gone into practices feeling like nothing is negotiable, and after a year they are asking me, “How do I get out of this? How do I overcome this?” when they should have been negotiating in the beginning. Same thing with vendors. You may think the price is fixed, but they may need to expand their market or they may need an endorsement. Those things all make the deal more negotiable than it appears at the outset.

Pamela L. Moore, PhD, is senior editor for Physicians Practice. She can be reached at pmoore@physicianspractice.com.

This article originally appeared in the September 2006 issue of Physicians Practice.