What are the elements of being a successful negotiator?
The first key is a thorough understanding of one's own value system and to be an introspective process that considers short-term economic gain, long-term economic security, geographic location, whatever considerations are important to an individual and to be very clear on those before getting into a negotiation. If you're talking about a CEO, is it more important to him to have a big corner office or is it more important to have flexible locations or is it more important to have the right benefits package. In other words, people need to be clear on what truly is their top priority because many times in the work it is impossible to create the perfect result and hard choices have to be made.
The next step is research: it's a thorough understanding, if we're in a business context, of the industry itself, and the economics of that industry that one is dealing with. It's necessary to immerse oneself in a thorough understanding of what the business practices and economics are of any individual area. Then a thorough understanding of the world as the other negotiator sees it. Putting yourself into the heart and mind of the person on the other side of the table. Understanding what the pressures are on that person. Is this someone negotiating for themselves, is it someone negotiating for an owner or a CEO. In other words, how much real authority does that person have, and what is going to be a result that will ultimately make that person happy and look good. It's understanding of sort of how to research in a way to create win-win.
Then you have the whole issue of presentation. I like to think that the person I'm negotiating with is intelligent and has pride and dignity. So rather than simply saying, ""I want this or else..."" I think it's real important to create a rationale for whatever result you want to get to. In other words, in negotiating many time the question is whose reality is going to prevail. There are a number of factors and considerations that go to pricing or go to what the economics could be. They need to be organized in a way that shows the value or the service that you're representing or the corporation has great value for these 12 reasons. And try to quantify it using bar graphs and using color exhibits to make your position stronger. To create, if you will, an intellectual argument to motivate the result that you are trying to get, and hoping that if people agree on the 15 premises that the actual outcome will be much easier.
I think successful negotiators need to have the ability to distance themselves personally and not expose all of their emotional range in a spontaneous way. In many senses we are trying to avoid 170,000 years of evolution which has left us with tremendous intellect and technology but the emotional system of people is still similar to when we ran away from wooly mammoth. So we're trying not to turn something into an ego fight between two parties that will break down and become competitive and hostile to each other.
A successful negotiator needs to be able to bleed a certain level of emotion out of him and understand that this is not a contest where you have to achieve victory over another person - the vanquisher and the vanquished. Not only is that concept destructive, but its not very effective. So the key is how to craft a win-win scenario. So bleed emotion out of it.
Organization is important in terms of whatever the financial proposal is that's being dealt with. A good negotiator knows that proposal backwards and forwards and is able to quantify what concession A will being in terms of benefit B. In other words, what is the relationship on a list of 20 issues between conceding one thing and receiving another. There needs to be a mastery of that ahead of time.
The other key in all of this is setting the stage. A good negotiator needs to anticipate the negotiation a year, a year and a half in advance. Since the key to all this will be leverage, the ability to have an option or an alternative. Because without very little can be achieved. But the time to think about that is a year ahead of time, whether your selling your business or selling yourself as an executive. The time to think about that is a year and a half before. From an employee standpoint, create the concept of irreplaceability, as opposed to being a fungible, modular totally replaceable entity, someone is irreplaceable, invaluable. The institution can't go on without them.
Or to the extent that you are trying to actually sell a business or a concept or supplies. There has to be an alternative buyer or seller as the case may be.
Does it matter what you are negotiating?
The subject of negotiations can be varied; the principles remain the same. Research is critical. Organization is critical. Establishing the right spirit is critical. But most critical before anything is establishing leverage.
Is there such a thing as a win-win negotiation?
Most people in the world of business have repetitive relationships where they continue to deal with other human beings on an ongoing basis. The consequence of savaging someone -- of embarrassing, humiliating, driving out of business another person -- is to mean that it will be very difficult to ever do business again. Any transaction after that will be characterized by hostility or suspicion, so that stepping on the neck of someone who is vulnerable in any situation that's not a one-off is ridiculous. It takes away the ability to do repetitive business. The relationship has to be key and sort of a paradigm of honesty has to exist.
No deception will ever, ultimately, go undiscovered.
What's the most common mistake people make when negotiating?
First they become completely confused in what their priorities are. Instead of prioritizing and categorizing they think of 20 issues as all critical. They don't understand that if every single point in a situation is equally critical it becomes impossible to fashion a deal. There have to be some thins which are critical and area deal breakers, and some which can be compromised.
What is the dumbest mistake you every made in negotiating?
The dumbest mistake I made was to argue publicly that an owner was being unfair. The more persuasive I was in the press, and the more vividly and effectively I stated our case, the more rigid and intransigent the negotiator on the other side became. It ended up in a long and costly holdout that hurt a player and his career. The point is: be careful about the concept of external pressure because it may have unintended consequences. When we're dealing with the world of business, most people have pride and ego. To publicly embarrass or challenge someone can result in no settlement ever occurring. And generally when people say it can't get any worse, it can. When a situation seems convoluted and intractable and things seem very dark and foreboding, it is possible that they can get worse.
How do you break a deadlock?
Again we're trying to escape 170,000 years of evolution. People are trying to run from the woolly mammoth or to fight. They either flee or they fight. In a fighting situation, our human emotions are such that people can start to act in a very self-destructive way. In the case of deadlock: take a break. Go for a walk. Change the circumstances. Don't press a losing argument to the end. Be creative. Figure out another way to tackle the problem. But don't just sit staring each other down. Take a break. Change the atmosphere. Change the environment. Rethink your proposal. Try to get more creative.
The key there is to say, ""Look, obviously we've reached a little bit of an impasse, let's just give it a try another way. Part of the key is to try to encourage the other negotiator not to give enough. A really important quality in all of this is resilience. Things generally will look murky an d doubtful at different points. But if ultimately you want to achieve a result, you can't give up. You have to come at it with renewed creativity, energy and enthusiasm. So take a break.
One of your 12 essential rules of negotiation is never split the difference. Why is that?
Unless it's completely logical to split the difference. But splitting the difference assumes that both parties are equally in good faith and equally accurate in terms of their intentions to insist on a figure. For the sake of argument, if the fair market value of this car, the blue book would tell you is $10,000, and I come and offer you $3,000, then the concept is not to split the difference between 3 and 10, which would give you 6, it's to inform the other party that they do not appear to be serious at this time. The point is: splitting the difference implies that you have two totally reasonable positions which are equally credible.
Who is the toughest negotiator you have every faced.
I think a guy who was very tough for me was the general manager George Yong of the New York Giants football team. He recently retired but he was able to screen himself off from what would be normal pressures/. The imminence of training camp, the press commentary on a negotiation, the anxiety of the coach. In the case of a draftee he was able to make himself somewhat immune to all of those outside pressures and, therefore, unshakable. On an A through F basis, it would not be in his best interest to ever produce a C or a D result for the other side because it would be perceived as unfair. So the best that one could do almost every time was about a B+.
Again, this is someone who had self-confidence, who had a world view that philosophically had been worked out and who had a sense of perspective and who wouldn't be panicked or pressured into conceding too much.
How did you become a good negotiator?
Most of my experience was mostly political in school. It was much more in student politics or in political situations. Other than being a lawyer there is no classical training in the art of negotiating in law school. I inherited the very first pick of the draft back in 1975. I think psychology is probably the most important factor in understanding human behavior. Why people act the way they do and what will motivate them to act better. The ability to look past the words someone is saying to the subtext that may be present.
All of life is a negotiation. The reality is we negotiate in all of ours lives everyday. We negotiate with our wives over a whole series of circumstances, about how to spend time, about whose obligation something will be. We negotiate with our kids. All of us negotiate in the workplace. A large part of interaction has an aspect of negotiation to it. These are life skills. Anyone who thinks that negotiation is a subject that doesn't concern them is not properly analyzing their interaction in life.
What is the most important advice you have received?
To be very careful in manner and in terms of custom and verbally. Not to flight someone, in other words, not to allow a totally unrelated matter -- who returned whose phone call, who use fighting words -- to interfere with the flow of a discussion. To be careful not to give gratuitous offense.
There was a movie called ""Hoffa."" The Hoffa character, Jack Nicholson, explains to someone why never to slight someone: ""Because they'll remember that for the rest of their life."""