I’m sure you’ve encountered an ultimatum or two in your time.

Maybe you’ve been on the receiving end. Maybe you’ve been the one delivering it.

Usually it’s one or the other, depending on where the perception of power sits within the negotiation environment you operate.

At home, for me at least, with two young kids in my care and power clearly defined, I find I’m the one issuing them to bring things to a conclusion.

“If you don’t clean the playroom, there won’t be any ice cream after dinner.”

Or something like that.

I’m ashamed to admit cancelling Christmas has also once been suggested. But let’s not go there for now.

And unsurprisingly, the approach tends to be very effective.

A tactic designed to shock your “adversary” or, in this case, a child into action, and get them cleaning the playroom with great gusto.

For obvious reasons, it’s not recommended.

Using negative punishment to motivate and incentivise action isn’t something I want to revert to as a parent. Nor as a negotiation advisor. But there are isolated moments when one falls into the trap and chooses the strongest lever available.

The threat.

The Business World

I see the same tactic play out in commercial deals all the time.

One side has more power, usually because they have more options available outside of the current negotiation, and they are quick to let their counterpart know.

It often appears as:

• “Take it or leave it.”

• “We will have to go somewhere else.”

• “This is our final offer.”

• “If you don’t accept, we will remove our investment.”

All classic ultimatum lines. Again designed to accelerate the discussion towards your objective. And many across a spectrum of severity.

What’s the issue?

You might ask, what’s wrong with using such a tactic?

Nothing, in principle. But most people go there to quickly. And it’s positioned as a punishment. A caution. It can also signal that you’re in control and the other side needs to play by your rules.

All things that don’t help or strengthen collaboration.

So why do we go there?

It typically comes down to pressure and control.

The powerful party feels under pressure due to timing, money, stress, or internal politics. Usually one of these. Sometimes all.

They look to take control of a heightened situation and turn to the most visible lever within their armoury. The lever that feels like it will get the fastest result.

So they act. On impulse. And make a threat.

The real problem

The threat isn’t usually the preferred path.

The pain of following through. The time. The cost. The resistance. The fallout.

It’s often worse than finding a collaborative solution.

But once you say it, it becomes hard to save face and back down.

Especially when the other side calls your bluff.

What to do instead

When pursuing a deal based on trust and relationship, I come back to three things:

1. Remove the pressure

This isn’t easy, but it’s important. Take time to consider all levers available. Manage internal deadlines and reassess options with your team. You won’t regret the time spent aligning here.

2. Give them choice. Don’t take it away

Ultimatums push people into a corner where their hand is forced. Greater influence is achieved by doing the opposite. Give them a proposal with options and let them choose the path.

“We could look at holding the current price and adjusting volume, or we could explore a revised price with a longer-term agreement. Which direction feels more workable from your side?”

3. Leave the door open

If you go there, it happens. But keep the door open so they can walk willingly through it.

“Look, that’s one option we’re considering. But I’d much rather find a way to make this work together.”

Ultimatums can work. There’s no denying that.

But the best deals are formed when parties work together, rather than are forced together.

Kids included.