Don’t Take Your Dealmaking Tips From DT

It seems Donald Trump got the wrong takeaway from this weekend’s brief government shutdown:

This crowing boast of his own negotiating prowess gets things entirely backward. If I had to point to a single cause of the  shutdown, it would be Trump’s own ineptitude at negotiating. For despite his self-professed bargaining acumen, Trump is really just a one-trick pony: he’s got a single approach to dealmaking, one that likely worked well for him in real estate and licensing deals but which is wholly inadequate to the circumstances in which he now finds himself.

Trump’s is a chaotic approach, combining affability and relationship-stroking with mercurial changes in temperament and deal terms. He frequently re-trades or tries to change deal terms at the 11th hour – or even after the fact. That’s a crappy way to do business, and it doesn’t yield good long-term returns. It increases the risk of any given deal imploding, and it craters the dealmaker’s reputation, making future deals harder.

Unfortunately, it’s a technique that can be very effective in wringing favorable terms out of deals where you’ve got lots of leverage. And that’s certainly familiar terrain for Trump, who cut his dealmaking chops squeezing small vendors, aspiring licensees of the Trump name, and creditors fearful of yet another debt-sucking Trump bankruptcy. Those people didn’t have any good alternatives to making a deal with Trump, so they had to grit their teeth and suck it up, even as he went back on his words, changed terms mid-stream, and generally acted like a mercurial jackass.

We’ve certainly seen Trump roll this play out repeatedly in his first year in office, with predictable results: chaos, disorder, and a lack of any meaningful negotiated outcomes, despite plenty of them being within reach. And that’s because negotiation in governing is a lot different and more complex than squeezing a plumber who can’t afford to sue to accept sixty cents on the dollar for his invoice. Getting stuff done requires a mix of credibility, toughness, and the smarts to know when to stop negotiating and take a deal.

To be successful at getting deals done in this kind of environment, there are times when you need to ask counterparties to take you on faith. And for them to be willing to do so requires a reservoir of trust. If Trump had any such reservoir, his year of bald-face lying and retrading has drained it bone-dry.

“See you at the negotiating table?” Not likely. Watch as experienced pols increasingly pack up and walk from negotiations with Trump – that is, if they’re unsuccessful in sidelining him from the table in the first place.

 

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