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How Senior Leaders Can Handle a “Lose-Lose” Situation

Many executives, whether senior leaders of large corporations, finance businesses, colleges, universities or secondary schools, have been trained to look for so-called “win-win” situations in all of their dealings. Spurred on by many prominent treatises on effective negotiation techniques, their executive employment attorneys are equally keen on creating situations where all parties feel that they have achieved a positive result.

In fact, in the negotiation of executive employment agreements, such a “win-win” result is often an important goal. For example, having gone through an extensive (and no doubt expensive) search process lasting a full year or more, the Board of Trustees of a university hiring a new president wants to make certain that its prospective leader is sufficiently well-compensated and protected so that he or she can devote their full time and attention to the all-consuming business of the school without having to worry about their own entitlements. This is why we ordinarily are able to collaborate with university counsel to fashion a presidential employment agreement which is sufficiently satisfying to both parties and can legitimately be characterized as a “win-win.”

However, like many of those phrases which become a common mantra of American life — another one is “hostile work environment,” the legal definition of which is consistently misunderstood by many non-lawyers — there are in fact situations which we encounter in our work as executive employment attorneys which are not, and cannot be converted into, a “win-win” situation. (For a healthy corrective to the notion that every negotiation must, or even can, end in a “win-win,” we respectfully refer you to one of our favorite books on negotiation, Just Say No by Jim Camp (Crown Business 2002).)

Moreover, in our executive employment law practice, we also encounter situations which are not only “win-lose,” but are actually “lose-lose”! Particularly in the increasingly fraught worlds of higher education and independent secondary schools, it is incontrovertible that the leader can be faced with a choice between alternative courses of action, both of which are not only unpalatable but downright disastrous. In these “lose-lose” choices, either of the evident alternatives will surely offend at least one, and often more, of the leader’s constituencies, because these leaders almost always have a number of different constituencies whose interests are strikingly opposed. Does a college president make a choice which will be well-received by students and/or faculty but will be seen as an affront to alumni, trustees, and/or current and prospective donors? Or, by contrast, should the leader take the road which will be lauded by the Board of Trustees but offend faculty, staff or students? As we have repeatedly seen in practice, the possibilities for conflict between these various constituencies are nearly endless, so certain choices confronting the leader of the institution are or can be true “lose-lose” affairs.

This means that there simply is no choice which will make everyone happy, and almost certainly will make one or more groups which are important to the leader’s success decidedly unhappy, sometimes to the point of outright protest if not rebellion. This calls to mind the song in the old musical Damn Yankees, where the devil, wistfully remembering how bad things were in the Middle Ages, sings, with a broad smile, “Was anybody happy!?!”

When an executive is faced with a true “lose-lose” choice, that is the precise moment when he or she needs to pick up their cell phone and call their executive employment attorney for a prompt, thoughtful and independent analysis of the potential outcome of the various “lose-lose” choices on the executive’s own career and employment prospects.

Our experience, not just in the educational arena but also in the worlds of finance, industry and media, is that senior executives too often so identify with the schools or companies they lead that they cannot, by themselves, easily untangle and separate their own interests from the interests of the institutions they run.

Accordingly, it is even more important for an executive confronted with a true “lose-lose” choice to obtain the perspective of a knowledgeable executive employment lawyer. With that lawyer’s assistance, the executive can think through the effects of each of the “lose-lose” options on the possibility of retaining the executive’s job as well as the long-term impacts on the executive’s career and future employment prospects.

This is not by any means to suggest that such an analysis will dictate or be the sole determinative factor in the choice the executive will ultimately make. However, at the very least, looking several steps ahead may well allow the executive and his or her attorney to take important steps to protect the executive’s position, reputation and employment entitlements. Sometimes this analysis is key to saving the executive’s job. And, in the worse case scenario, it allows us to plan for and strengthen the leader’s position for a more productive and lucrative employment termination negotiation.

About the Author

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George Birnbaum

Since 1980, sophisticated business people have relied on George to apply the meticulous preparation, attention to detail, and devotion to his clients he learned from fabled trial lawyer Louis Nizer. A graduate of Harvard College and Harvard Law School, George has over 35 years of distinguished deal-making, litigation, mediation and arbitration experience which he has used to negotiate high-stakes agreements for senior executives and select business clients throughout the United States.