What You Can Learn About Negotiating From Conan O’Brien

As I’m writing this a few days before publication, by the time you read this Conan O’Brien will have probably left The Tonight Show on NBC with a hefty severance package in the neighborhood of $30 million. (See this article from the Financial Times for details.)  I’d leave for that amount and I’m guessing you would too. While it’s unlikely that any of us are going to have the opportunity to negotiate for such a lovely parting gift, there is a lot you can learn from how Conan handled his exit. 

As I said in my video book club post on Bargaining for Advantage, life is essentially a series of one negotiation after another. Some are high stakes, some are low but anytime you’re trying to reach an agreement with a co-worker, your boss, your spouse or your kids, you’re negotiating. (Why do I hear the voice of William Shatner in my head right now?)  In setting up the deal he’s getting from NBC, Conan demonstrated three basic approaches that all negotiators should keep in mind:

Know your strategy:  Are you most concerned with getting a particular result, maintaining a relationship or somewhere between the two? Your answer will determine your strategy. Depending on where you are in the process, your strategy can shift. For years, Conan was concerned with maintaining his relationship with NBC so he could eventually get his dream job of Tonight Show host. In those years, he had a strategy of accommodating NBC’s desires so he could be positioned to win the grand prize. When NBC wanted him to move the start time of his show to 12:05 am to accommodate the return of Jay Leno to the 11:35 slot, he’d had enough. At that point, he quit caring about his relationship with NBC and shifted to a competitive strategy to get the result of the biggest possible severance (and plenty of publicity to set him up for his next job).

Create leverage:  Once he switched to a competitive strategy, O’Brien created a lot of leverage over NBC by releasing a public statement outlining why he would not move the Show to 12:05 am and making a lot of jokes at the expense of network execs. He moved to seize the high ground and create a groundswell of public support. Fueled by social media, NBC was quickly behind the eight ball with a lot of fans who were angry at the way Conan was being treated. The leverage O’Brien created compelled NBC to make a lucrative deal to make the whole problem go away.

Know your BATNA:  BATNA stands for best alternative to a negotiated agreement. In other words, you need to know your walk away point and what you want to walk away. O’Brien’s BATNA point was a shift out of the 11:35 pm slot. Since he was clear on that with himself, he knew when it was time to change his strategy and create the leverage.

What else do leaders need to keep in mind when they’re negotiating? If you’ve been paying attention to the Conan/Jay drama, what’s your take on how they’ve handled their negotiations? Any lessons to be learned that apply to those of us who don’t have TV shows?

Comments

[Jenny Tucker]

Great analysis, Scott. Having a good sense of your power and where it comes from is the basis for leverage, and is so important to good negotiation. Some say that Conan took a bit of a risk that the public would be behind him and give him the leverage he needed - but how risky was it? Reading the field and knowing who will follow you when you walk away (and how that concretely benefits you now) are really important. Seems like Conan had a great read of the environment in addition to clarity about his own needs. Both are really important. Great post as always!

[Bill Catlette]

Well put, Scott. Would appreciate your analysis from the other (NBC) side of the issue as well.

My sense is that this matter is rife with management lessons, e.g., Decide, say goodbye, help 'em pack, take their keys 'er microphone, walk them out, THEN announce it!