Why should the people you’re supposed to lead follow you? If you believe that your charisma, your exalted office, or your vision is reason enough, you’re in trouble.
While these qualities may affect how others relate to you, the unvarnished truth is that other people will follow you when they judge it’s in their best interest to do so. Whether they’re acting as individuals or team members, people almost always give first priority to their own interests. Just as wise negotiators focus not on the other side’s positions but rather on their interests, effective leaders seek to understand the interests of those they lead and to find ways of satisfying those interests in order to achieve organizational goals.
Leaders’ failure to comprehend fully the interests of those they lead can have disastrous results. In 1985, Joe Foran established Dallas-based Matador Petroleum Corporation to find and develop oil and gas deposits in the American Southwest. Through a series of shrewd acquisitions, Foran built Matador into one of the larger privately held petroleum firms in Texas. To raise capital, he gave investors seats on Matador’s board. With a 10% interest in Matador, Chairman and CEO Foran remained its largest individual investor.
In spring 2003, Tom Brown Inc., a publicly traded oil company based in Denver, offered to buy Matador for $388 million. Foran opposed the offer, which he felt did not account for Matador’s growth potential. At the board meeting to discuss the bid, Foran was astounded when the other directors voted to approve the sale. He realized too late that the other directors’ interests were not the same as his own.
Foran had the energy, talent, and time to build a company that would give him financial security in his retirement, which was still many years away. But most of the other directors were retired individuals who had been hurt by a falling stock market and declining investment returns. Their interest was to take the money and run-and that’s exactly what they did. Had Foran understood all this earlier, he might have been able to structure an arrangement that would have given the directors the cash they needed while still allowing him to keep control of his company.
Effective leaders realize that they need to know people as individuals to truly understand their interests. Some individuals care more about long-term career development, for instance, than about compensation. When you understand where employees’ true interests lie, you can then shape your messages and your actions to meet those interests in ways that will achieve your leadership goals.
Adapted from “Real Leaders Negotiate,” by Jeswald W. Salacuse, Professor, Fletcher School of Law & Diplomacy at Tufts University.
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