A signage of Microsoft is seen on March 13, 2020 in New York City. (Photo by Jeenah Moon/Getty … [+]
Microsoft has just cleared a regional regulatory barrier in the battle to its $75 billion acquisition of Activision Blizzard, the Fortune 500 American video game company that owns the rights to Candy Crush, Call of Duty, and World of Warcraft to name a few.
This news comes after The U.K. Competition and Markets Authority (CMA)’s initial refusal of the Microsoft deal, and over 1.5 years of Microsoft negotiating with competition authorities in various regions globally. Why the change? CMA confirmed on Friday that Microsoft submitted a revised proposal to them that reduced loss to market competitors. While there are continued negotiations until October 6, 2023, this is a strategic move that has edged the tech giant one inch closer to finalizing the terms of the acquisition.
In accomplishing this, the leadership teams of Microsoft and Activision have showcased invaluable lessons of skills that the leaders of today need to possess to be market leaders:
Adapt and lead through challenges—don’t shun them
Instead of abandoning the idea altogether after CMA rejected Microsoft’s initial proposal, the deal was re-evaluated in consideration of the existing state of the market, and the decision was made to adapt accordingly, thus retaining one’s position while also profiting from it. Turning away from defeat results in many opportunities slipping through one’s hands. Leaders need to explore every possible option before accepting a final no.
Be responsive to stakeholder feedback
Microsoft’s leadership team adapted to regulatory feedback and revised their proposal accordingly. In addition, according to CMA, they are still engaged in ongoing consultations for other less flagrant issues that have been raised, for the next couple weeks. One of the core reasons many organizations fail is that there is lack of coherence, responsiveness, and willingness to cooperate. By adjusting their approach and acting promptly on the feedback of their key stakeholders, Microsoft was able to achieve a striking win for themselves in the gaming industry.
Learn to negotiate—lose to win
Although Microsoft’s resubmitted proposal entailed them relinquishing most of their rights to cloud-streaming for Activision’s popular franchises, they ultimately won CMA’s acceptance of the changes—the end goal.
Sometimes as a leader, you will need to step back and accept a minor loss, for the purpose of long-term gain. Effective negotiation ensures that all parties involved are mutually satisfied and in agreement, achieving the best possible outcome for all stakeholders.
The skill of negotiation comprises establishing and maintaining strong business partnerships, researching and anticipating the other party’s needs, and generating creative solutions accordingly. This art also necessitates leaders maintaining long-term vision, understanding how all their actions impact the battlefield of their respective market.
If leaders can learn to embrace and hone their skills in nurturing more advantageous and powerful partnerships, through effective negotiation, prompt responsiveness, and facing market challenges head-on instead of avoiding them, they will open up a myriad of business growth and expansion opportunities.
What will be the final outcome of Microsoft’s strategic negotiations in this critical period over the next two weeks?
One has only to wait and see.
