| 22 Feb 2012 | 07:56

    No need for skinning when shearing will do “You can shear a sheep many times, but you can only skin it once” Hal’s father was famous for saying stuff like that. “No matter how smart you are, you’ll never be smart enough to be a good liar.” “You’ll never get rich carrying a dinner pail and punching a time clock.” “Control you money, don’t let your money control you.” Hal took most of his father’s advice and filed it in his mind under “Useful Stuff To Know - Someday.” He was sure Someday he’d need that counsel. Just like he was sure that Someday he’d understand it. But he understood sheep. As a farmer’s son, he was given a lamb to raise every spring. By the time he turned 12, he understood that his spring lamb became the mutton on the family table in the fall - even though his mother used to tell him that the lamb had just “wandered off.” He also understood that when you shear sheep, the sheep are better off because they’re cooler and cleaner, and you are better off because you have wool to sell or to make into clothes. But when you skin sheep.. well, only one side of that deal is better off. And it’s definitely not the sheep. So Hal understood sheep shearing. He just didn’t understand what that had to do with people, and he was pretty sure his dad wasn’t just talking about sheep - that’s not the way his father’s sayings worked. So he avoided skinning sheep, and he waited to find out how to avoid skinning people. Years later, Hal was running a successful business, with a special talent for negotiation. For some reason, he could usually get just about anything he wanted during a negotiating session. But something told him that he shouldn’t cut too deep or negotiate too good of a deal for himself. So he always left a little bit on the table, so nobody felt like they got.. you know.. skinned. On one occasion, one of his purchasing agents came into the office grinning from ear to ear about a price he had negotiated on some plastic parts. Evidently, the person with whom he was dealing thought the bid was for a smaller part, but in the course of negotiations he agreed to sell the larger parts for the cost of smaller ones. It was great for Hal’s business, but not for Hal. “I sat in my office for a while, and I felt uncomfortable about what I had been told about the deal,” he told me. “I thought about dad’s lesson on sheep shearing and skinning. Suddenly, its meaning became clear. We had a deal, but it wasn’t a good deal. We could skin this supplier, but what would we lose in the process? Fairness is a two-way street. If it isn’t a good deal for both parties, it isn’t a good deal - even if you’re the one getting the long end of the stick.” So Hal drove to the supplier’s office and asked to see the owner. “Sir,” Hal said after introducing himself, “I want to talk to you about the price we’re paying for plastic parts.” “Stop right there,” the owner said. “We’ve done a lot of business with your company in the past, so I’ll honor our new contract. But we won’t be doing business with you again.” “You don’t understand,” Hal said. “I’m not asking for a lower price. I want to raise it.” The owner was stunned. He picked up his phone and asked his partner to join them in his office. With the other gentleman present, he asked Hal to repeat his intention. “I’m asking you to raise your price,” Hal said. “Our people have agreed upon a price that isn’t fair. You charge me what’s fair. I’ll live with that.” As you might expect, Hal’s company still got a great deal on plastic parts. But what’s more important, they maintained a significant relationship that has been beneficial to their long-term success simply by being willing to settle for shearing the sheep. As opposed to skinning it.