The Art of the Deal in Full Display

I know, I write a lot about Trump’s politics. Bear with me on this one, this short post is not about politics, it’s about simple negotiation principles that could be used in politics but also in business.

You are the CEO of a large organization. Say there’s a decision (we will call it decision #1) on which you cannot fail, i.e. if you don’t deliver on it, then you are losing your job, period. Your current board of directors is aligned with you and wants to pass decision #1 as well. However, you also have to deal with a group of activist shareholders who don’t necessarily see decision #1 as key but insist on passing another decision (decision #2). To make matters a bit more complicated, in a few months, the group of activist shareholders may have an opportunity to join the board and even take control of it. Approvals on any decision have to be approved by the board first and then ratified by all the shareholders in a full shareholder vote. Finally, every year you, the board and the shareholders have to agree on employee payroll, short of that, employees don’t get paid (you are always getting paid, however).

Knowing that decision #1 will be voted by the board, it seems logical that there is a win/win for all parties. The deal would be to insist on decision #1 being voted by the shareholders if you accept to implement decision #2. Your current board is also aligned with this.

Situation 1:

You do the “decision #1 for decision #2" deal. This was an easy deal, as the zone for an agreement existed in plain sight. You did your job. You are a stud. End of story.

Situation 2:

You don’t suggest the “decision #1 for decision #2” deal to your board or shareholders. You don’t move at all and miss an opportunity to show everyone, including your employees that you know how to make deals. That’s mistake #1.

The shareholders (that are not on the board) then decide to react and go see the board and signal they would vote on decision #1 if the board approves decision #2. The board thinks it makes sense and takes it upon itself to present the win/win deal to you, the CEO. They do, but you decline. Your rationale is that you can get 1 without giving in on 2, even though you know that the board may change soon and if so would not vote positively on decision #1. That’s mistake #2.

Time passes, there’s no deal on decision #1 or decision #2, and unfortunately for you, the group of activist shareholders were able to join the board and even take control of it. Your position has worsened! However, there is a glimmer of hope, as the board reshuffle is not taking place for another month. Are you seizing that opportunity and put back the “decision #1 for decision #2” deal on the table now, even if you might not be able to get decision #1 all the way? You should, in fact, you must, since your alternative to a no-deal will become horrible in a month. But you don’t. That’s mistake #3.

In fact, you approach the activist shareholders at a public shareholder meeting and threaten them that if they don’t give you 100% of decision 1 ASAP, then you will vote no on the payroll for employees in 2 weeks, and in fact, you would be happy to do so. That’s mistake #4. Why is this your biggest mistake? The optics of voting no on employee payroll are obviously awful, but worse, why would the activist shareholders play ball now, when they know they will have more leverage in just 1 month? In fact, you would have been better off just not putting the payroll on the negotiation table. Indeed, you now have to vote no on the payroll, which you do. Employees are not getting paid and are mad at you, your current board is disappointed, and the activist shareholders are now waiting for the board reshuffle to get a better deal than they could have hoped for just a few months ago. It’s a mess. You should be fired!

You have guessed it. Decision 1 is a $40B budget for a wall on the southern border. Decision 2 is the protection from deportation and creation of a path to citizenship for the DACA dreamers. Your current board is the GOP. The activist shareholders are the Dems. And the CEO is Trump, the guy who wrote the art of the deal.

Osama Bin Laden would not rejoice at US pullout from Syria (hint: that's not why the US should stay)

Now that the shock of Mattis' resignation is waning down, the liberal press is starting to praise the decision to get out of Syria and also attack Mattis record. All these attacks are based on ideology and because of the tribalism that has gripped American politics, there is dramatically less demand for facts and logic when reporting on foreign affairs issues. 

Let’s look at the facts and objectives.

America has only 2,000 troops in Syria and thus the argument could be made that such a small number of troops could not be effective in the middle of a multiparty civil war. After all, compare that to the ten or even hundred of thousands that the US has deployed in Iraq or Afghanistan without any clear “victory” in these 2 countries. So why not just leaving this dangerous zone and bring the boys back home safe?

As I just mentioned, that’s a valid argument on face value, but it doesn’t pass logical thinking. However, before I elaborate on this, let us stress that Trump has not used that argument to withdraw US troops from Syria, rather he is advancing his now recurring and deeply flawed argument that America is paying for other countries security and that it is about time that America get “respected” again.

Both the first argument and Trump’s argument are flawed on the same level: the objective of having our troops in Syria. The first argument assumes that US troops are there to destroy ISIS and stop the civilian bloodshed, while Trump’s argument assumes that US foreign policy main objective is to make money. Both cannot be farther from the truth.

First let’s look at Trump’s moneymaking argument. Take the example of US troops deployed in South Korea. Trump has repeatedly declared that America is being "ripped off" because the South Korean government doesn’t pay a dime for these troops while America ensures their security. That’s wrong. Yes, the US helps secure South Korea while providing a deterrent to North Korea’s potentially catastrophic behavior. However, the strategic objective for our troops being there is to reduce the US response time from a few hours to a few minutes in case of a North Korea ICBM launch targeting the west coast of the US (ICBMs travel at 4 miles/sec, so it would take about 20 minutes to hit Los Angeles). This example perfectly illustrates how obvious it is that the US power objective around the world is not to make money, in fact it would be extremely dangerous if it were.

Now let’s analyze why despite their relatively small numbers, our troops in Syria have had a big strategic impact. Indeed, the Pentagon’s objective in Syria is not to bring the civil war to an end, otherwise they would have deployed drastically more troops (which would have been a mistake on its own). Their objective is to check Iran’s growing hegemony in the middle east, and by the same token, provide security assistance to America’s strategic allies in that region, i.e. the Sunni Arab countries and Israel. That’s exactly why all these 2,000 troops have been deployed along the border triangle joining Syria, Iraq, and Jordan. By being stationed at that strategic junction, we have blocked Iran from taking over the Iraqi-Syria border and by doing so, preventing Iran from projecting power all the way to the Mediterranean through Iraq (now an Iranian ally), Syria (up for grabs), and Lebanon (a strong Iranian ally through Hezbollah). US troops have also used minimal effort to prevent Iranian-controlled forces from attacking Jordan, a sworn Sunni enemy of the Shia regime. With the US troops out, America is letting, indeed inviting, Iran to take control of a huge swath of land with a Mediterranean port. That may, or may not, bode well for ISIS (ISIS is a Sunni terror group ideologically at odds with Iran), but it certainly doesn’t bode well for the US, Europe and the Arab world.

When one walks back the chain of events that lead us to this point, one gets to the 9/11 attacks orchestrated by Osama Bin Laden, a Sunni terrorist. Bin Laden’s objective was always to push American troops out of the region. It’s ironic that, because of Trump’s lack of strategic compass, Bin Laden is posthumously achieving his goal but also giving Iran, his main enemy, the power to impose its version of Islam, and Islamism, on a growing part of the middle east.