Two men entered a conference room in an office tower high above Lexington Avenue in
New York City. On one side of the
table sat Peter Jovanovich, the Chief Executive of Harcourt Brace Jovanovich (HBJ), a company now on the edge of financial ruin. As the son of one of the firm’s founders, Jovanovich was deeply committed to preserving the family’s legacy. Across the table sat Dick Smith, the aggressive leader of General Cinema, a large conglomerate probing for a corporate foothold in the publishing business. Both sides have carefully
prepared their “scripts” for the
opening of the negotiation. Smith was to be a suitor and had planned a detailed presentation on General Cinema’s financial strength and reputation. Jovanovich’s team, was also very positive about the deal, and prepared Jovanovich for the role of “listener.” He would be interested but noncommital. He would not tip his hand or show his urgency.
On cue, Smith began his opening speech, but within seconds Jovanovich interrupted. The HBJ advisers stirred. This was not in the script. Jovanovich spoke and placed a small box on the table between him and Smith. “My father always gave a watch like this to his partners at the beginning of a new
business relationship,” he said. “This is meant to signify my sincere belief that General Cinema is the right buyer of HBJ.” It was a risky admission, and both men knew it.
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