Never Split the Difference - Book NotesNote: Whenever I read any book, I take notes to make sure I don't miss or forget its key learnings. These notes are a way for me to come back and read them to refresh them in my mind. I hope you find it useful as well
Link to book - Never Split the Difference
After reading this book, I try to use this format to prepare for negotiations - Negotiation One Pager
Why this book?
Humans are the only animal that haggles — a monkey does not exchange a portion of his banana for another’s nuts — but no matter how we dress up our negotiations in mathematical theories, we are always an animal, always acting and reacting first and foremost from our deeply held but mostly invisible and inchoate fears, needs, perceptions, and desires. To be a great negotiator, you need to understand these fears, biases, needs and desires.
Early thought process on negotiation
Getting to Yes
In early 1980s, “Getting to Yes” was a seminal work on how to do negotiation, their playbook was something like this:
- Separate the person—the emotion—from the problem
- Don’t get wrapped up in the other side’s position (what they’re asking for) but instead focus on their interests (why they’re asking for it) so that you can find what they really want
- Work cooperatively to generate win-win options
- Establish mutually agreed-upon standards for evaluating those possible solutions.
But this approach assumed that human beings are rational beings. But in reality, they aren’t.
Halfway across the United States, a pair of professors at the University of Chicago was looking at everything from economics to negotiation from a far different angle. They were the economist Amos Tversky and the psychologist Daniel Kahneman. Together, the two launched the field of behavioral economics—and Kahneman won a Nobel Prize—by showing that man is a very irrational beast. Feeling, they discovered, is a form of thinking.
Their biggest discovery was that our brain works in two ways: System 1, our animal mind, is fast, instinctive, and emotional; System 2 is slow, deliberative, and logical. And System 1 is far more influential. In fact, it guides and steers our rational thoughts. System 1’s inchoate beliefs, feelings, and impressions are the main sources of the explicit beliefs and deliberate choices of System 2. They’re the spring that feeds the river. We react emotionally (System 1) to a suggestion or question. Then that System 1 reaction informs and in effect creates the System 2 answer.
Other pyschological discoveries were:
It demonstrates that people respond differently to the same choice depending on how it is framed (people place greater value on moving from 90 percent to 100 percent—high probability to certainty—than from 45 percent to 55 percent, even though they’re both ten percentage points).
It explains why we take unwarranted risks in the face of uncertain losses.
Loss Aversion It shows how people are statistically more likely to act to avert a loss than to achieve an equal gain.
Negotiation is for gathering information
Negotiation serves two distinct, vital life functions—information gathering and behavior influencing—and How to Quickly Establish Rapport
In negotiation, each new psychological insight or additional piece of information revealed heralds a step forward and allows one to discard one hypothesis in favor of another.
Your goal at the outset is to extract and observe as much information as possible.
Too often people find it easier just to stick with what they believe.
Be aware of a counterpart’s overuse of personal pronouns—we/they or me/I. The less important he makes himself, the more important he probably is (and vice versa).
Work in teams
- At FBI, they used to always worked in teams. The thinking behind this policy was that all these extra sets of ears would pick up extra information. In some standoffs, they had as many as five people on the line, analyzing the information as it came in, offering behind-the-scenes input and guidance to their man on the phone.
The goal is to identify what your counterparts actually need (monetarily, emotionally, or otherwise) and get them feeling safe enough to talk and talk and talk some more about what they want.
Wants are easy to talk about, representing the aspiration of getting our way, and sustaining any illusion of control we have as we begin to negotiate; needs imply survival, the very minimum required to make us act, and so make us vulnerable. But neither wants nor needs are where we start; it begins with listening, making it about the other people, validating their emotions, and creating enough trust and safety for a real conversation to begin.
SLOW. IT. DOWN.
When you slow the process down, you also calm it down.
When deliberating on a negotiating strategy or approach, people tend to focus all their energies on what to say or do, but it’s how we are (our general demeanor and delivery) that is both the easiest thing to enact and the most immediately effective mode of influence. Our brains don’t just process and understand the actions and words of others but their feelings and intentions too, the social meaning of their behavior and their emotions. On a mostly unconscious level, we can understand the minds of others not through any kind of thinking but through quite literally grasping what the other is feeling.
When we radiate warmth and acceptance, conversations just seem to flow. When we enter a room with a level of comfort and enthusiasm, we attract people toward us. Smile at someone on the street, and as a reflex they’ll smile back.
Voice is key
There are essentially three voice tones available to negotiators: the late-night FM DJ voice, the positive/playful voice, and the direct or assertive voice.
Most of the time, you should be using the positive/playful voice. It’s the voice of an easygoing, good-natured person. Your attitude is light and encouraging. The key here is to relax and smile while you’re talking.
The way the late-night FM DJ voice works is that, when you inflect your voice in a downward way, you put it out there that you’ve got it covered. Talking slowly and clearly you convey one idea: I’m in control. When you inflect in an upward way, you invite a response. Why? Because you’ve brought in a measure of uncertainty. You’ve made a statement sound like a question. You’ve left the door open for the other guy to take the lead, so I was careful here to be quiet, self-assured.
Mirroring, also called isopraxism, is essentially imitation. It’s another neurobehavior humans (and other animals) display in which we copy each other to comfort each other. It can be done with speech patterns, body language, vocabulary, tempo, and tone of voice. It’s generally an unconscious behavior—we are rarely aware of it when it’s happening—but it’s a sign that people are bonding, in sync, and establishing the kind of rapport that leads to trust. It’s a phenomenon (and now technique) that follows a very basic but profound biological principle: We fear what’s different and are drawn to what’s similar.
Mirroring, then, when practiced consciously, is the art of insinuating similarity. “Trust me,” a mirror signals to another’s unconscious, “You and I—we’re alike.”
It’s almost laughably simple: for the FBI, a “mirror” is when you repeat the last three words (or the critical one to three words) of what someone has just said.
One group of waiters, using positive reinforcement, lavished praise and encouragement on patrons using words such as “great”, “no problem”, and “sure” in response to each order. The other group of waiters mirrored their customers simply by repeating their orders back to them. The results were stunning: the average tip of the waiters who mirrored was 70 percent more than of those who used positive reinforcement.
HOW TO CONFRONT—AND GET YOUR WAY—WITHOUT CONFRONTATION
If you take a pit bull approach with another pit bull, you generally end up with a messy scene and lots of bruised feelings and resentment. Luckily, there’s another way without all the mess. It’s just four simple steps:
Use the late-night FM DJ voice.
Start with “I’m sorry . . .”
Silence. At least four seconds, to let the mirror work its magic on your counterpart.
In any interaction, it pleases us to feel that the other side is listening and acknowledging our situation.
Imagine yourself in your counterpart’s situation. The beauty of empathy is that it doesn’t demand that you agree with the other person’s ideas (you may well find them crazy). But by acknowledging the other person’s situation, you immediately convey that you are listening. And once they know that you are listening, they may tell you something that you can use.
The reasons why a counterpart will not make an agreement with you are often more powerful than why they will make a deal, so focus first on clearing the barriers to agreement. Denying barriers or negative influences gives them credence; get them into the open.
Pause. After you label a barrier or mirror a statement, let it sink in. Don’t worry, the other party will fill the silence.
Label your counterpart’s fears to diffuse their power. We all want to talk about the happy stuff, but remember, the faster you interrupt action in your counterpart’s amygdala, the part of the brain that generates fear, the faster you can generate feelings of safety, well-being, and trust.
List the worst things that the other party could say about you and say them before the other person can. Performing an accusation audit in advance prepares you to head off negative dynamics before they take root. And because these accusations often sound exaggerated when said aloud, speaking them will encourage the other person to claim that quite the opposite is true.
Remember you’re dealing with a person who wants to be appreciated and understood. So use labels to reinforce and encourage positive perceptions and dynamics.
The real power of the word “NO”
For good negotiators, “No” is pure gold. That negative provides a great opportunity for you and the other party to clarify what you really want by eliminating what you don’t want.
“Yes” and “Maybe” are often worthless. But “No” always alters the conversation.
“No” is the start of the negotiation, not the end of it. It comes down to the deep and universal human need for autonomy. People need to feel in control.
When you preserve a person’s autonomy by clearly giving them permission to say “No” to your ideas, the emotions calm, the effectiveness of the decisions go up, and the other party can really look at your proposal.
When someone tells you “No”, you need to rethink the word in one of its alternative—and much more real—meanings:
- I am not yet ready to agree;
- You are making me feel uncomfortable;
- I do not understand;
- I don’t think I can afford it;
- I want something else;
- I need more information; or
- I want to talk it over with someone else.
Then, after pausing, ask solution-based questions or simply label their effect:
- “What about this doesn’t work for you?”
- “What would you need to make it work?”
- “It seems like there’s something here that bothers you.”
People have a need to say, “No.” So don’t just hope to hear it at some point; get them to say it early.
In every negotiation, in every agreement, the result comes from someone else’s decision. And sadly, if we believe that we can control or manage others’ decisions with compromise and logic, we’re leaving millions on the table. But while we can’t control others’ decisions, we can influence them by inhabiting their world and seeing and hearing exactly what they want.
Everyone you meet is driven by two primal urges: the need to feel safe and secure, and the need to feel in control. If you satisfy those drives, you’re in the door.
That’s why when you’re doing a sales call, don’t start with “Do you have a few minutes to talk?” Instead ask, “Is now a bad time to talk?” Either you get “Yes, it is a bad time” followed by a good time or a request to go away, or you get “No, it’s not” and total focus.
As you can see, “No” has a lot of skills.
- “No” allows the real issues to be brought forth
- “No” protects people from making—and lets them correct—ineffective decisions;
- “No” slows things down so that people can freely embrace their decisions and the agreements they enter into;
- “No” helps people feel safe, secure, emotionally comfortable, and in control of their decisions;
- “No” moves everyone’s efforts forward.
How to get someone to say “no” to you?
One great way to do this is to mislabel one of the other party’s emotions or desires.
Another way to force “No” in a negotiation is to ask the other party what they don’t want. “Let’s talk about what you would say ‘No’ to,” you’d say.
EMAIL MAGIC: HOW NEVER TO BE IGNORED AGAIN
You provoke a “No” with this one-sentence email. Have you given up on this project?
How to Gain the Permission to Persuade
TRIGGER THE TWO WORDS THAT IMMEDIATELY TRANSFORM ANY NEGOTIATION - “That’s right”
When your adversaries say, “That’s right,” they feel they have assessed what you’ve said and pronounced it as correct of their own free will. They embrace it.
“THAT’S RIGHT” IS GREAT, BUT IF it’s “YOU’RE RIGHT,” NOTHING CHANGES
Compromise is often a “bad deal” and a key theme we’ll hit in this chapter is that “no deal is better than a bad deal.”
To make a point on compromise, let’s take an example: A woman wants her husband to wear black shoes with his suit. But her husband doesn’t want to; he prefers brown shoes. So what do they do? They compromise, they meet halfway. And, you guessed it, he wears one black and one brown shoe. Is this the best outcome? No! In fact, that’s the worst possible outcome. Either of the two other outcomes—black or brown—would be better than the compromise. Next time you want to compromise, remind yourself of those mismatched shoes.
I’m here to call bullshit on compromise right now. We don’t compromise because it’s right; we compromise because it is easy and because it saves face. We compromise in order to say that at least we got half the pie. Distilled to its essence, we compromise to be safe. Most people in a negotiation are driven by fear or by the desire to avoid pain. Too few are driven by their actual goals.
Creative solutions are almost always preceded by some degree of risk, annoyance, confusion, and conflict.
DEADLINES: MAKE TIME YOUR ALLY
Time is one of the most crucial variables in any negotiation.
Whether your deadline is real and absolute or merely a line in the sand, it can trick you into believing that doing a deal now is more important than getting a good deal. Deadlines regularly make people say and do impulsive things that are against their best interests, because we all have a natural tendency to rush as a deadline approaches.
“No deal is better than a bad deal.”
To gauge the level of a particular threat, we’d pay attention to how many of the four questions—What? Who? When? And how?—were addressed. When people issue threats, they consciously or subconsciously create ambiguities and loopholes they fully intend to exploit.
It’s not just with hostage negotiations that deadlines can play into your hands. Car dealers are prone to give you the best price near the end of the month, when their transactions are assessed. And corporate salespeople work on a quarterly basis and are most vulnerable as the quarter comes to a close.
First, by revealing your cutoff you reduce the risk of impasse. And second, when an opponent knows your deadline, he’ll get to the real deal- and concession-making more quickly.
NO SUCH THING AS FAIR
“If you approach a negotiation thinking that the other guy thinks like you, you’re wrong,” I say. “That’s not empathy; that’s projection.”
This rocks my students’ view of themselves as rational actors. But they’re not. None of us are. We’re all irrational, all emotional. Emotion is a necessary element to decision making that we ignore at our own peril. Realizing that hits people hard between the eyes.
Antonio Damasio explained a groundbreaking discovery he made. Studying people who had damage in the part of the brain where emotions are generated, he found that they all had something peculiar in common: They couldn’t make decisions. They could describe what they should do in logical terms, but they found it impossible to make even the simplest choice.
THE F-WORD: WHY IT’S SO POWERFUL, WHEN TO USE IT, AND HOW The most powerful word in negotiations is “Fair.”
Even nonhuman primates are hardwired to reject unfairness. In one famous study, two capuchin monkeys were set to perform the same task, but one was rewarded with sweet grapes while the other received cucumbers. In response to such blatant unfairness, the cucumber-fed monkey literally went bananas.
If you find yourself in this situation, the best reaction is to simply mirror the “F” that has just been lobbed at you. “Fair?” you’d respond, pausing to let the word’s power do to them as it was intended to do to you. Follow that with a label: “It seems like you’re ready to provide the evidence that supports that,” which alludes to opening their books or otherwise handing over information that will either contradict their claim to fairness or give you more data to work with than you had previously. Right away, you declaw the attack.
Here’s how I use it: Early on in a negotiation, I say, “I want you to feel like you are being treated fairly at all times. So please stop me at any time if you feel I’m being unfair, and we’ll address it.”
Your reputation precedes you. Let it precede you in a way that paves success.
HOW TO DISCOVER THE EMOTIONAL DRIVERS BEHIND WHAT THE OTHER PARTY VALUES
If you can get the other party to reveal their problems, pain, and unmet objectives—if you can get at what people are really buying—then you can sell them a vision of their problem that leaves your proposal as the perfect solution.
BEND THEIR REALITY
What I am saying is that while our decisions may be largely irrational, that doesn’t mean there aren’t consistent patterns, principles, and rules behind how we act.
To get real leverage, you have to persuade them that they have something concrete to lose if the deal falls through.
How to negotiate during salary raise or when you join a company?
ANCHOR THEIR EMOTIONS
LET THE OTHER GUY GO FIRST . . . MOST OF THE TIME.
ESTABLISH A RANGE
While going first rarely helps, there is one way to seem to make an offer and bend their reality in the process. That is, by alluding to a range.
Instead of saying, “I’m worth $110,000,” Jerry might have said, “At top places like X Corp., people in this job get between $130,000 and $170,000.”
PIVOT TO NONMONETARY TERMS
WHEN YOU DO TALK NUMBERS, USE ODD ONES
SURPRISE WITH A GIFT
HOW TO NEGOTIATE A BETTER SALARY
BE PLEASANTLY PERSISTENT ON NONSALARY TERMS
SALARY TERMS WITHOUT SUCCESS TERMS IS RUSSIAN ROULETTE
SPARK THEIR INTEREST IN YOUR SUCCESS AND GAIN AN UNOFFICIAL MENTOR
Ask: “What does it take to be successful here?”
The key issue here is if someone gives you guidance, they will watch to see if you follow their advice. They will have a personal stake in seeing you succeed. You’ve just recruited your first unofficial mentor.
CREATE THE ILLUSION OF CONTROL
We learned that successful negotiation involved getting your counterpart to do the work for you and suggest your solution himself.
DON’T TRY TO NEGOTIATE IN A FIREFIGHT
THERE IS ALWAYS A TEAM ON THE OTHER SIDE
My boss Gary Noesner had, in a previous kidnapping, pointed out to me that a change in negotiators by the other side almost always signaled that they meant to take a harder line.
AVOID A SHOWDOWN
It’s a “how” question, and “how” engages because “how” asks for help. Best of all, he doesn’t owe the kidnapper a damn thing. The guy volunteers to put the girlfriend on the phone: he thinks it’s his idea. The guy who just offered to put the girlfriend on the line thinks he’s in control. And the secret to gaining the upper hand in a negotiation is giving the other side the illusion of control.
Kevin Dutton says in his book Split-Second Persuasion.1 He talks about what he calls “unbelief,”which is active resistance to what the other side is saying, complete rejection. That’s where the two parties in a negotiation usually start. If you don’t ever get off that dynamic, you end up having showdowns, as each side tries to impose its point of view. You get two hard skulls banging against each other, like in Dos Palmas. But if you can get the other side to drop their unbelief, you can slowly work them to your point of view on the back of their energy, just like the drug dealer’s question got the kidnapper to volunteer to do what the drug dealer wanted. You don’t directly persuade them to see your ideas. Instead, you ride them to your ideas. As the saying goes, the best way to ride a horse is in the direction in which it is going.
“Unbelief is the friction that keeps persuasion in check,” Dutton says. “Without it, there’d be no limits.”
Giving your counterpart the illusion of control by asking calibrated questions—by asking for help—is one of the most powerful tools for suspending unbelief.
“How am I supposed to do that?”
CALIBRATE YOUR QUESTIONS
And that’s the difference between “You’re screwing me out of money, and it has to stop” and “How am I supposed to do that?”
Calibrated questions have the power to educate your counterpart on what the problem is rather than causing conflict by telling them what the problem is.
First off, calibrated questions avoid verbs or words like “can,”“is,”“are,”“do,” or “does.” These are closed-ended questions that can be answered with a simple “yes” or a “no.” Instead, they start with a list of words people know as reporter’s questions: “who,”“what,”“when,”“where,”“why,” and “how.” Those words inspire your counterpart to think and then speak expansively. But let me cut the list even further: it’s best to start with “what,”“how,” and sometimes “why.”
Even something as harsh as “Why did you do it?” can be calibrated to “What caused you to do it?” which takes away the emotion and makes the question less accusatory.
Here are some other great standbys that I use in almost every negotiation, depending on the situation:
- What about this is important to you?
- How can I help to make this better for us?
- How would you like me to proceed?
- What is it that brought us into this situation?
- How can we solve this problem?
- What’s the objective? / What are we trying to accomplish here?
- How am I supposed to do that?
HOW NOT TO GET PAID
The first and most basic rule of keeping your emotional cool is to bite your tongue.
But you have to keep away from knee-jerk, passionate reactions. Pause. Think. Let the passion dissipate. That allows you to collect your thoughts and be more circumspect in what you say. It also lowers your chance of saying more than you want to.
When negotiating with a foreigner, it’s common practice for a Japanese businessman to use a translator even when he understands perfectly what the other side is saying. That’s because speaking through a translator forces him to step back. It gives him time to frame his response.
“Yes” is nothing without “How.” While an agreement is nice, a contract is better, and a signed check is best.
“YES” IS NOTHING WITHOUT “HOW”
Questions, always questions.
Calibrated “How” questions are a surefire way to keep negotiations going. They put the pressure on your counterpart to come up with answers, and to contemplate your problems when making their demands.
That’s why negotiation is often called “the art of letting someone else have your way.” There are two key questions you can ask to push your counterparts to think they are defining success their way: “How will we know we’re on track?” and “How will we address things if we find we’re off track?” When they answer, you summarize their answers until you get a “That’s right.” Then you’ll know they’ve bought in.
On the flip side, be wary of two telling signs that your counterpart doesn’t believe the idea is theirs. As I’ve noted, when they say, “You’re right,” it’s often a good indicator they are not vested in what is being discussed. And when you push for implementation and they say, “I’ll try,” you should get a sinking feeling in your stomach. Because this really means, “I plan to fail.” When you hear either of these, dive back in with calibrated “How” questions until they define the terms of successful implementation in their own voice. Follow up by summarizing what they have said to get a “That’s right.” Let the other side feel victory. Let them think it was their idea. Subsume your ego. Remember: “Yes” is nothing without “How.” So keep asking “How?” And succeed.
INFLUENCING THOSE BEHIND THE TABLE
SPOTTING LIARS, DEALING WITH JERKS, AND CHARMING EVERYONE ELSE
THE 7-38-55 PERCENT RULE In two famous studies on what makes us like or dislike somebody,1 UCLA psychology professor Albert Mehrabian created the 7-38-55 rule. That is, only 7 percent of a message is based on the words while 38 percent comes from the tone of voice and 55 percent from the speaker’s body language and face.
When someone’s tone of voice or body language does not align with the meaning of the words they say, use labels to discover the source of the incongruence.
THE RULE OF THREE
The Rule of Three is simply getting the other guy to agree to the same thing three times in the same conversation. It’s tripling the strength of whatever dynamic you’re trying to drill into at the moment. In doing so, it uncovers problems before they happen. It’s really hard to repeatedly lie or fake conviction.
THE PINOCCHIO EFFECT
In a study of the components of lying,2 Harvard Business School professor Deepak Malhotra and his coauthors found that, on average, liars use more words than truth tellers and use far more third-person pronouns. They start talking about him, her, it, one, they, and their rather than I, in order to put some distance between themselves and the lie.
PAY ATTENTION TO THEIR USAGE OF PRONOUNS
The more in love they are with “I,”“me,” and “my” the less important they are.
THE CHRIS DISCOUNT People always talk about remembering and using (but not overusing) your counterpart’s name in a negotiation.
Instead, take a different tack and use your own name. That’s how I get the Chris discount.
It makes the other side see you as a person.
HOW TO GET YOUR COUNTERPARTS TO BID AGAINST THEMSELVES
We’ve found that you can usually express “No” four times before actually saying the word. The first step in the “No”series is the old standby:
“How am I supposed to do that?” You have to deliver it in a deferential offer.
After that, some version of “Your offer is very generous, I’m sorry, that just doesn’t work for me” is an elegant second way to say “No.”
“I’m sorry but I’m afraid I just can’t do that.”
“I’m sorry, no”
No part of a negotiation induces more anxiety and unfocused aggression than bargaining, which is why it’s the part that is more often fumbled and mishandled than any other. It’s simply not a comfortable dynamic for most people. Even when we have the best-laid plans, a lot of us wimp out when we get to the moment of exchanging prices.
Now, bargaining is not rocket science, but it’s not simple intuition or mathematics, either.
Negotiation style is a crucial variable in bargaining.
Some people are Accommodators; others—like me—are basically Assertive; and the rest are data-loving Analysts.
To be good, you have to learn to be yourself at the bargaining table. To be great you have to add to your strengths, not replace them. Here’s a quick guide to classifying the type of negotiator you’re facing
ANALYST Analysts are methodical and diligent. They are not in a big rush. Instead, they believe that as long as they are working toward the best result in a thorough and systematic way, time is of little consequence. Their self-image is linked to minimizing mistakes. Their motto: As much time as it takes to get it right.
They are reserved problem solvers, and information aggregators, and are hypersensitive to reciprocity.
They respond fairly well in the moment to labels. They are not quick to answer calibrated questions, or closed-ended questions when the answer is “Yes.” They may need a few days to respond.
As long as they’re communicating, they’re happy. Their goal is to be on great terms with their counterpart. They love the win-win.
Accommodators want to remain friends with their counterpart even if they can’t reach an agreement.
They will yield a concession to appease or acquiesce and hope the other side reciprocates. If your counterparts are sociable, peace-seeking, optimistic, distractible, and poor time managers, they’re probably Accommodators.
While it is very easy to disagree with an Accommodator, because they want nothing more that to hear what you have to say, uncovering their objections can be difficult.
If you have identified yourself as an Accommodator, stick to your ability to be very likable, but do not sacrifice your objections.
Also be conscious of excess chitchat: the other two types have no use for it, and if you’re sitting across the table from someone like yourself you will be prone to interactions where nothing gets done.
The Assertive type believes time is money; every wasted minute is a wasted dollar.
For them, getting the solution perfect isn’t as important as getting it done. Assertives are fiery people who love winning above all else, often at the expense of others.
They focus on their own goals rather than people. And they tell rather than ask. When you’re dealing with Assertive types, it’s best to focus on what they have to say, because once they are convinced you understand them, then and only then will they listen for your point of view.
an Assertive, every silence is an opportunity to speak more. Mirrors are a wonderful tool with this type. So are calibrated questions, labels, and summaries. The most important thing to get from an Assertive will be a “that’s right” that may come in the form of a “that’s it exactly” or “you hit it on the head.” When it comes to reciprocity, this type is of the “give an inch/take a mile” mentality.
If you are an Assertive, be particularly conscious of your tone. You will not intend to be overly harsh but you will often come off that way.
With it, we unconsciously project our own style on the other side. But with three types of negotiators in the world, there’s a 66 percent chance your counterpart has a different style than yours. A different “normal.”
You have to identify their type by opening yourself to their difference. Because when it comes to negotiating, the Golden Rule is wrong. The Black Swan rule is don’t treat others the way you want to be treated; treat them the way they need to be treated.
TAKING A PUNCH
Once when a hospital chain wanted me to name a price first, I said, “Well, if you go to Harvard Business School, they’re going to charge you $2,500 a day per student.”
PUNCHING BACK: USING ASSERTION WITHOUT GETTING USED BY IT
“WHY” QUESTIONS Back in Chapter 7, I talked about the problems with “Why?”Across our planet and around the universe, “Why?”makes people defensive. As an experiment, the next time your boss wants something done ask him or her “Why?”and watch what happens. Then try it with a peer, a subordinate, and a friend. Observe their reactions and tell me if you don’t find some level of defensiveness across the spectrum. Don’t do this too much, though, or you’ll lose your job and all your friends. The only time I say, “Why did you do that?”in a negotiation is when I want to knock someone back. It’s an iffy technique, though, and I wouldn’t advocate it.
There is, however, another way to use “Why?”effectively. The idea is to employ the defensiveness the question triggers to get your counterpart to defend your position. I know it sounds weird, but it works. The basic format goes like this: When you want to flip a dubious counterpart to your side, ask them, “Why would you do that?”but in a way that the “that”favors you. Let me explain. If you are working to lure a client away from a competitor, you might say, “Why would you ever do business with me? Why would you ever change from your existing supplier? They’re great!”In these questions, the “Why?”coaxes your counterpart into working for you.
NO NEEDINESS: HAVING THE READY-TO-WALK MINDSET
If you feel you can’t say “No” then you’ve taken yourself hostage. Once you’re clear on what your bottom line is, you have to be willing to walk away. Never be needy for a deal.
- Set your target price (your goal).
- Set your first offer at 65 percent of your target price.
- Calculate three raises of decreasing increments (to 85, 95, and 100 percent).
- Use lots of empathy and different ways of saying “No”to get the other side to counter before you increase your offer.
- When calculating the final amount, use precise, nonround numbers like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
- On your final number, throw in a nonmonetary item (that they probably don’t want) to show you’re at your limit.
FIND THE BLACK SWAN
FINDING LEVERAGE IN THE PREDICTABLY UNPREDICTABLE
In every negotiating session, there are different kinds of information. There are those things we know, like our counterpart’s name and their offer and our experiences from other negotiations. Those are known knowns. There are those things we are certain that exist but we don’t know, like the possibility that the other side might get sick and leave us with another counterpart. Those are known unknowns and they are like poker wild cards; you know they’re out there but you don’t know who has them. But most important are those things we don’t know that we don’t know, pieces of information we’ve never imagined but that would be game changing if uncovered. Maybe our counterpart wants the deal to fail because he’s leaving for a competitor. These unknown unknowns are Black Swans.
UNCOVERING UNKNOWN UNKNOWNS
negotiating. I began to hypothesize that in every negotiation each side is in possession of at least three Black Swans, three pieces of information that, were they to be discovered by the other side, would change everything.
To uncover these unknowns, we must interrogate our world, must put out a call, and intensely listen to the response. Ask lots of questions. Read nonverbal clues and always voice your observations with your counterpart.
THE THREE TYPES OF LEVERAGE
In theory, leverage is the ability to inflict loss and withhold gain. Where does your counterpart want to gain and what do they fear losing? Discover these pieces of information, we are told, and you’ll build leverage over the other side’s perceptions, actions, and decisions.
At a taxonomic level, there are three kinds: Positive, Negative, and Normative.
Whenever the other side says, “I want . . .” as in, “I want to buy your car,” you have positive leverage.
NEGATIVE LEVERAGE Negative leverage is what most civilians picture when they hear the word “leverage.” It’s a negotiator’s ability to make his counterpart suffer. And it is based on threats: you have negative leverage if you can tell your counterpart, “If you don’t fulfill your commitment/pay your bill/etc., I will destroy your reputation.”
A more subtle technique is to label your negative leverage and thereby make it clear without attacking.
NORMATIVE LEVERAGE Every person has a set of rules and a moral framework.
No one likes to look like a hypocrite.
Discovering the Black Swans that give you normative valuation can be as easy as asking what your counterpart believes and listening openly.
KNOW THEIR RELIGION
THE SIMILARITY PRINCIPLE
People trust those who are in their in-group. Belonging is a primal instinct. And if you can trigger that instinct, that sense that, “Oh, we see the world the same way,” then you immediately gain influence.
Similarities as shallow as club memberships or college alumni status increase rapport.
THE POWER OF HOPES AND DREAMS Once you know your counterpart’s religion and can visualize what he truly wants out of life, you can employ those aspirations as a way to get him to follow you. Every engineer, every executive, every child—all of us want to believe we are capable of the extraordinary.
RELIGION AS A REASON
In a famous study from the late 1970s,3 Harvard psychology professor Ellen Langer and her colleagues approached people waiting for copy machines and asked if they could cut the line. Sometimes they gave a reason; sometimes they didn’t. What she found was crazy: without her giving a reason, 60 percent let her through, but when she did give one, more than 90 percent did. And it didn’t matter if the reason made sense. (“Excuse me, I have five pages. May I cut in line because I have to make copies?” worked great.) People just responded positively to the framework.
IT’S NOT CRAZY, IT’S A CLUE
Negotiation Genius,4 Harvard Business School professors Deepak Malhotra and Max H. Bazerman provide a look at the common reasons negotiators mistakenly call their counterparts crazy. I’d like to talk through them here.
MISTAKE #1: THEY ARE ILL-INFORMED Often the other side is acting on bad information, and when people have bad information they make bad choices. There’s a great computer industry term for this: GIGO—Garbage In, Garbage Out.
MISTAKE #2: THEY ARE CONSTRAINED
MISTAKE #3: THEY HAVE OTHER INTERESTS
OBSERVE UNGUARDED MOMENTS
During a typical business meeting, the first few minutes, before you actually get down to business, and the last few moments, as everyone is leaving, often tell you more about the other side than anything in between. That’s why reporters have a credo to never turn off their recorders: you always get the best stuff at the beginning and the end of an interview.
WHEN IT DOESN’T MAKE SENSE, THERE’S CENTS TO BE MADE
OVERCOMING FEAR AND LEARNING TO GET WHAT YOU WANT OUT OF LIFE