In the context of negotiation, Mexican Shootout (also sometimes called a “Texas Shootout”) refers to a specific negotiation tactic used to break a deadlock. It’s a high-risk, high-reward strategy that can potentially lead to a quick resolution but also carries the chance of both parties walking away empty-handed. In Felix Dennis’ How To Get Rich, the Mexican Shootout refers to a resolution towards dissolving a partnership.
Here’s a breakdown of the Mexican Shootout in negotiation:
The Process:
- Stalemate: Both parties reach an impasse, unable to agree on terms.
- Sealed Bids: Each negotiator submits a sealed bid outlining their absolute best offer and their minimum acceptable offer without revealing these details to the other party.
- Revealing the Bids: The sealed bids are opened simultaneously.
- Possible Outcomes:
- Agreement: If one party’s “best offer” is within the other party’s “minimum acceptable offer” range (or vice versa), a deal is struck at the point where these ranges overlap.
- Impasse Continues: If there’s no overlap between the ranges, the negotiation remains unresolved, and both parties walk away with nothing.
Benefits:
- Breaking Deadlocks: The Mexican shootout can be a way to break through a negotiation stalemate by forcing both sides to reveal their true bottom lines.
- Efficiency: The process can be relatively quick, as both sides submit their offers simultaneously.
Drawbacks:
- High Risk: There’s a significant chance that the negotiation will fail entirely if the offer ranges don’t overlap.
- Burning Bridges: The competitive nature of the tactic can damage relationships and make future negotiations more difficult.
- Limited Applicability: It’s not suitable for all negotiation situations and may not be appropriate for building long-term partnerships.
Negotiation Alternatives to Consider:
- Brainstorming Solutions: Instead of a competitive approach, both sides can work together to identify creative solutions that meet each other’s needs.
- Concession Trading: Making small concessions can help bridge the gap between initial offers and reach a mutually beneficial agreement.
- Mediation: An impartial third party can facilitate communication and help both sides find common ground.
When to Use a Mexican Shootout:
The Mexican Shootout is a risky tactic and should be used with caution. Here are some situations where it might be considered:
- Time Pressure: When a quick resolution is crucial, and other options have failed.
- Relationships Not a Priority: If there’s no need for an ongoing relationship with the other party.
- Clear Bottom Lines: Both parties have a strong understanding of their absolute limits.
The Mexican Shootout is a last resort tactic in negotiation. It’s important to weigh the potential benefits and drawbacks carefully before resorting to this high-risk strategy.