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Elon’s Plan B – from Overt to Covert


So, it looks like a deal is now done, subject to shareholder approval, between Elon Musk and Twitter. In, what on the face of it, looked like a fairly quick and (arguably) unexpected U turn by the Twitter board.


Compare and contrast the observed behaviours on display from the point at which the initial Elon Musk offer was made to the point that the deal was announced earlier this week as being done – very different for both parties. It’s very much a lesson in Emotional Intelligence – if we face resistance to our ‘publicly displayed’ thoughts and ideas in our commercial conversations maybe we need to move the other side from a position of competitive resistance to one where they are more amenable to seriously discussing our thoughts and ideas in constructive dialogue. We then also have to go about making sure that the environment is conducive for this to happen e.g. private, less pressured and more open dialogue. In essence making people feel that they can express their hopes and concerns without fear of subsequent reprisals later.


The initial offer made by Musk was very public, it was published openly 24 hours after it was made – within it we were also treated to an example of ‘how to start to run through the gears’ of commercial conflict resolution options. The downside with ‘negotiating’ is that it costs, which is why it’s often not the first option people explore. Elon’s comments within his opening offer reflect this;


“I am not playing the back-and-forth game.”

“I have moved straight to the end.”

“It's a high price and your shareholders will love it.”


What Musk does do here is use his own ‘Authority’ (you all know I really know my stuff) to influence shareholders that they should accept the deal (authority being one of seven ways to influence). Let’s face it, if this is successful then it has cost Elon Musk no more than his original offer - OK maybe a bit of extra hot air, but that’s it.


In the ensuing weeks we have subsequently learnt that after the offer was made, back channels were left open and private conversations were held. It’s reported that the Twitter board had an issue with how this deal would be financed – whilst Elon Musk is apparently the richest man in the world – he is not ‘cash rich’ with a large proportion of his money tied up in in Tesla and other companies. So, by wheeling in Morgan Stanley who have apparently offered to contribute a large slice of equity for this deal, Musk has problem-solved the concern that the Twitter board had. The cost of doing this in context is still relatively small relative to Musk’s own wealth and still probably a cheaper alternative than having to negotiate up the holy grail price of $54.20 per share.


Last but not least, it’s reported that Musk’s team then spent the weekend ‘negotiating’ the final deal with the Twitter board. The nature of this dialogue is unclear – maybe bonuses, earn outs and/or other sweeteners for board members, maybe. The one thing that has never changed is the price - $54.20 which seems to have become the mantra.


So, in summary, we may wish to seek to influence or problem-solve before we negotiate because they are potentially less expensive forms of conflict resolution. They aren’t however mutually exclusive as we’ve demonstrated here. At Savage Macbeth we talk about all of these options, teaching people when and how to use them to the greatest effect.


One final point, the next time somebody says to you that something is non-negotiable ($54.20), remember that it may well mean implicitly that other things just might be!


Sam Macbeth 28th April 2022



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