Home Featured Slider Michael McGurk and negotiation tactics… gangster style

Michael McGurk and negotiation tactics… gangster style


The events surrounding the death last week of Sydney businessman Michael McGurk have attracted greater intrigue and speculation than a Sopranos cliff-hanger.

Unless you’ve been living under a rock over the past five days (or sleeping with the fishes), you will already know that the 46-year-old property developer and “lender of last resort” (according to The Age Newspaper) was shot dead in his driveway as he arrived home at Cranbrook Avenue in Cremorne last Thursday.

The story gained a new level of complexity when former federal-minister-turned-lobbyist Graham Richardson told Channel 9 that McGurk wanted $8 million from a developer client of his for a tape he said could be disastrous for the government.

And, this week, The Daily Telegraph has reported that homicide detectives have interviewed a NSW MP  claiming that a man fitting McGurk’s description was seen coming into Parliament last Tuesday about 1.20pm – the day Health Minister John Della Bosca resigned over an affair – and allegedly overhead the McGurk look-a-like say, “I’ve got enough information here to bring down at least two ministers.”

Of course, the fascinating events surrounding McGurk’s demise immediately got me thinking. What lessons can we, as business people, extract from the practices of a stand-over man? Of course, the answer is… drum-roll please… negotiations tactics!

Make him an offer he can’t refuse

Few lines from crime fiction have greater commercial resonance than this classic from Coppola’s masterpiece, The Godfather.

However, the expression does not need to be steeped in veiled threats and intimidation to be effective. Sometimes it can simply mean coming up with a solution that your negotiation partner would be nuts to turn down.

For example, in the context of a sale, there are four theoretical steps to achieving such an outcome (and many little ones that go in-between):

  1. Isolate the problem that your solution is designed to fix.
  2. Establish what techniques your prospective customer currently uses to solve that problem.
  3. Find out how much your prospective customer currently allocates to solving that problem.
  4. Offer a cheaper alternative.

If only it were that simple.

As every entrepreneur will know first hand, sometimes the buyer is lazy, incompetent or has a vested interest in the less efficient, more expensive alternative. (I recently pitched an idea to a public servant only to discover later, after much effort, that my alternative, while cheaper and more effective, would make their role redundant. You don’t need the street-smarts of an Untouchable to realise that my pitch had the life expectancy of a Baltimore City hopper.)

In these instances, it sometimes makes sense to make an offer that is designed to fail. Yup, you heard me right.

Make an offer that must be refused.

Act like a Wise Guy

In Brian De Palma’s 1986 classic Wise Guys, the following exchange takes place:

Frank “The Fixer” Acavano: Let me waste ’em, Mr. Costelo!
Anthony Costelo: Do we really hurt them by killing them?
Louie Fontucci: It’s a good start.

It is a time-honoured tactic of good negotiators (and effective extortionists) to not kill a deal by pushing too hard.

When you make an offer that must be refused, what you really are doing is setting the stage for when you make a more compelling offer later on. These future offers will look reasonable in comparison to the offer initially presented.

For example, a stand-over man might initially threaten to ‘expose’ his victim unless he is paid $100,000 (assuming that his victim has something to hide). The later request of $10,000 will, therefore, suddenly seem compelling (a bargain, in fact).

Events marketers do this all the time.

We’ve all been invited to a conference priced at $2,950, only to be told moments later, after the first price sinks in, that an early-bird rate applies (and you’ll save 50 percent!). This tactic is common simply because it works.

Get ’em singing like a canary

Another reason for making an offer that your negotiation partner must refuse is perhaps less likely to appear in your average career-crim’s strategy book, but it is effective nonetheless.

When the other side starts to believe that perhaps no agreement may be able to be reached, they are often likely to drop their “negotiating face” and speak candidly.

This, of course, offers a great chance to discover their real motivations. Once you have this information, then you will be well positioned to use this knowledge to make a follow-up offer that will be more acceptable than the first.

Gambino crime family boss John Gotti is famously quoted for saying:

I never lie to any man because I don’t fear anyone. The only time you lie is when you are afraid.”

Take away the deal and you take away the fear of giving too much away.

Take your time

In another classic film of the crime genre, Al Pacino’s Tony Montana tells his brother:

“In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.”

Every male teenager will know this line well. (“Me, I tell the truth. Even when I lie.”) And sure, money does bring power. And power does indeed seem to be the world’s oldest artificial aphrodisiac (Just ask Donald Trump’s latest trophy wife).

But effective negotiators understand that time trumps everything else, because time brings power.

A stand-over man knows this.

He has all the time in the world and will exploit this strength for all it’s worth, letting his victims stew. On the other hand, the eager negotiator, keen for a resolution, is prone to compromise and watches his power disappear… in a puff of cigar-smoke.

Get yourself a bogeyman

Okay, the bogey-man is probably not a character you expect to see in the latest gangster flick. But this character is as essential to negotiation as… well… as the Bada-Bing is to Tony Soprano’s ego.

Put simply, when a shop assistant says, “It is a lovely dress. But it’s the last in the shop,” you have just met the bogeyman.

When your supplier says, “I’d love to buy your $2,000 product. But I only have $1,500 in the budget”, that’s also the bogeyman.

When your bookie says, “I like you. But Knuckles here likes to break fingers”…

Yup. That’s the bogeyman, too.

Any six-year-old can tell you, the bogeyman is the thing you fear. And fear, of course, cuts to the core of negotiation.

Whether you’re an underworld king-pin or cardboard-box reseller, it always pays to have the bogeyman on your side.

Because fear, like ambition, comes in all shapes and sizes.