Negotiating with a Monopoly

In some of my negotiation workshops I teach eight techniques for negotiating with a monopoly. They all can work, but they’re not easy. If you’re a nine-to-fiver you won’t do it. Ditto if you’re complacent, unimaginative, or afraid to take on a boss that is complacent or unimaginative.

One of the techniques involves vertically integrating, or doing (or threatening to do) what your monopolist does, thereby creating competition where none previously existed. I point out that Elon Musk has done this several times at SpaceX. Originally, Musk planned to purchase decommissioned ICBMs from Russia. When they jerked him around on price, he decided to build his own rockets. When Alcoa demanded an excessive price for fabricating nose cones, Musk built his own. When a specialty valve manufacturer did the same, Musk did the same.

At this point someone in the class will invariably say “Sure, Elon Musk can do that, he’s a billionaire, he’s the CEO, etc. I can’t do that at my company.” Wrong on both counts!

First objection: Elon Musk isn’t able to do it because he’s a billionaire CEO. Musk is a billionaire CEO because he is able to do it. Big difference! It takes time, money, effort, determination, and other things that most people aren’t willing to put in.

Second objection: Maybe your job description does not grant you the authority to make that call. In that case, maybe your real job is to persuade your boss (or his boss, or her boss) that he or she needs to make that call. If your company doesn’t, someone else will.

Lots of bosses worked hard to get where they are (middle management!). They’re not interested in taking a chance on something beyond the pale. They can get in trouble for screwing up, but not for doing the same old same old! That’s dinosaur thinking, and we know what happened to them.

Disrupt or be disrupted.