Conducting Effective Negotiations

Conducting Effective Negotiations

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Be a little bit more of a class, than a,
kind of a lecture presentation. I learned something about marketing. Cause I was told that the title of this
initially was, How to negotiate, when you absolutely have
to have the deal. Well that is a great ti, I mean, that’s a
title. That you would you’d come for. I mean, everybody would have come to hear
how you, how do you negotiate when you have to have
the deal? You know, everybody wants to know how to
do that. They asked me, you know, well, what will
you teach them, and I would say, don’t get in that
position. [LAUGH] Where you absolutely have to have
the deal. So it would be a very short session. So I change. The session, to the one that you, you
signed up for. Which is conducting effective negotiation. So a little more pedestrian title. A little less exciting, but I think we’ll
go over some things here that may influence the way you
think about negotiations. so, who in here likes to negotiate? Raise of hands. So that’s maybe 20% of the class. Who just dreads negotiation? That’s even a smaller percent. So the rest of you are kind of
indifferent. You’ll do it. You know, you’ll eat your broccoli, if you
have to, but you’re not looking forward to it, this
is, the. Negotiation is your vegetables of your
business life. You’ll do it. You know it’s good for you. You know you have to do it, but you don’t
absolutely love it. So, who and, let’s just take a second on,
why, those of you who like it, why do you like
it? What is it you like about it? Now the hands disappear. Yeah?>>Well, compared to my engineering field,
where I knew everything was right or wrong, black or white, in negotiations
everything’s grey, and nobody can say I’m wrong. [LAUGH].>>So you feel better about yourself. [LAUGH] You don’t get any bad, and you
don’t get any->>[INAUDIBLE] I get credit, you know? Nobody can say they could have done it
better.>>Yeah, all right.>>Yeah the reason I wanted to go
negotiate, is that typically I have heights to take
him. I’m, when I negotiate, I’m going to wing
it. I”m going to get better on the other side.>>So you are gonna improve your, your-.>>Situation.>>Your situation. Okay, so you negotiate to improve whatever
situation you are involved in.>>Conflict situations is just rarely the
case you can make a deal without some level of
negotiation. So I look at it as just as, as a means to the end, and getting to the end is kind of
the goal. On the flip side, doing win-win deals is
really a lot of fun.>>Okay. So you see it largely as eating your
broccoli, but sometimes you do get to turn it into
desert. [INAUDIBLE] [LAUGH].>>[INAUDIBLE] By working for me.>>I keep thinking of the first George
Bush who made the comment about. How he hated eating broccoli.>>Yeah.>>So I actually like broccoli too.>>Yeah. [LAUGH].>>Yeah.>>Yeah [INAUDIBLE] that I think the
win-win thing is is fun, and it’s also like a pizza, it’s like
putting in the puzzle [INAUDIBLE] if you’re the
person, why why why, how you do you get it all together, and make
it work. And [INAUDIBLE] win-win, and that’s fun if
you make it work.>>So, win-win agreements are fun, and
you, and you can negotiate. the, the, the higher the percentage of
deals you can get that are win-win, the more you
like it. Other?>>I think it’s a, a unique opportunity
for creativity, in business. It’s one of the most creative aspects of
business.>>It does allow you to fashion solutions. According to, usually different kinds of
facts, different fact situations, so you get to be, you get to express some
creativity other things that yeah.>>We have building relationship, as well
as the other person.>>Yeah, building.>>You understand better where, what they
want, where they wanna go and you can [INAUDIBLE] some
more [CROSSTALK].>>Yeah, and I’ll bet you, those of you
who said you didn’t like negotiation, saw it as a way of destroying relationships, of stressing
out relationships. So, a lot of it depends on, on, you know,
what are you doing to relationships, as you
negotiate with other parties? How about those of you who didn’t, let’s
get some more of things that you don’t like
negotiation. For those who just say, I can do without
this. What do you not like? Yeah.>>Just makes me very uncomfortable think,
to think that, I do not have enough information, to get the
most out of this negotiation. And more often than not, I just regret the results, thinking I could have done
better.>>Okay, so you look back on it, and you
say, shoot, I got taken. I didn’t get as good a deal as I might
have gotten. I lost. Other things you don’t like about, yeah?>>[SOUND] Most of the time, hopefully,
the person on the other side is Or are, is an intelligent
team, you’re dealing with. But you do get the what I call amateur,
like if I pound on the table [INAUDIBLE] in fact can get just, intellectually and
emotionally tiresome to deal with.>>You can get abused, in negotiations. And there’s a whole lot of, there are a lot of issues around power, and
information. If there’s a disparity in power, leverage,
information, and you’re dealing with a party who’s gonna use that and take
advantage of that. You can go out of the room feeling abused. [INAUDIBLE] Yeah. [LAUGH] Yeah. I actually met with Donald Trump, in his office in New York, about 20 years ago,
before he was a huge cheese, but he was with a
well no, he still had the same hair. [LAUGH] And actually he tried to sell me
an interest in the Washington Generals. Any of you know the Washington Generals? This was a, a USFL football team, that had
drafted Herschel Walker. And so he was very proud of that, and he,
was trying to sell me an interest in that, and I
didn’t fall for it. So, that’s my qualification for teaching a
class on negotiation. [LAUGH] [INAUDIBLE] Actually my
qualifications is, I, I have negotiated billions of dollars, of transactions, over the years Literally,
hundreds if not a thousand different kinds of
transactions. I was in the real estate business for 20
years [COUGH] and I was actually the chief financial
officer of a big real estate company for about ten years,
so I was negotiating debt deals, and equity deals, and then partner departures, and solving
litigation. And, so, my, my life was a diet of
negotia, just solid diet of negotiations. And then, when I got done with that, I
started buying companies and it became a different
diet of negotiations. So, I’ve seen a lot of different kinds of
negotiations. I’ve experienced the feeling of looking
forward to a day. When I’m negotiating, and with great
anticipation, and really loving it, because I like the people on the other
side. I like trying to problem solve. I like being creative. I like all those, those elements. And I also have looked at certain days of
negotiating, where I dread it. I cannot wait to get the day behind me. So there’s nothing intrinsic about
negotiations that say you should like it or not like it. I, I remember teaching a real estate class
here at Stanford about ten or 12 years ago, and
asking the class roughly the same question, but i did it in
the form of, who of you likes to buy a new
car? And that was the most highly correlated
question with who likes to negotiate, and who
doesn’t. There are some people who absolutely hate,
the process of buying a new car, because it feels like you come
out a little dirty. [LAUGH] You know? You don’t have the, it’s uneven
information, uneven power. And whatever, so it can, it can be a bad experience Well, who here are expert
negotiators? Raise of hands. [LAUGH] Every hand should go up. Every hand in the room should go up. You all are here in life, because you have
been superb negotiators. You would not be in. What is the negotiating? Negotiating is getting what you want, at a
price that’s acceptable to you. So you have paid prices, to be at this place in your life, that you’re happy
with. So you are expert negotiators, and I wanna
ventilate that a little bit, and let you really kind
of. Peer into what it is that you’re, you’ve
been so good at. But, first of all, here’s maybe a little
bit of a map for you to start thinking about the
terrain of negotiation. All of the conversations you have in life,
if you think broadly about it. Everything that you’ve done has been a
negotiation. For those of you who are married. You’re negotiating all the time. With your spouse, with your children. In your job, you’re negotiating all the
time. In school you’re negotia. I mean, conversations, are in effect, a
give and take, and there, and there’s a give-get transaction, and usually, the
more informal they are, the more successful
people feel. When you do it with friends and family, usually, they feel more successful, then
you get into these, sort of sty, where we think about negotiations, entrepreneur, is in this
area of stylized negotiations. Where there are agreements, there are
certain things that we negotiate, we sit down at a table, somebody takes notes,
we write it up. And there’s certain things that we trade off, and then finally, very formal
negotiations. These are typically ones that are done, in
arbitration, or litigation, where there are rules of
evidence, where there’s a very structured, narrow thing, and that
one is not a very fun one, although I’ve now spent four
years in litigation. I’m good enough. In fact, I had one attorney say that I was
the best witness he had ever run into. And I started liking negotiation or
Litigation after that. [COUGH] This was an opposing attorney,
too. So you feel pretty good about that. So what makes for successful negotiations? In across all of those. If if I recognize, so many people from my
past in here, it’s gonna be hard not to cold call, on Angie here,
or [UNKNOWN] or Nicola. So what, what makes for successful negotiatia, if you think about successful
negotiations. What do you think about? I’ve just had a successful negotiation. What’s your self talk? Yeah.>>Set the right expectations.>>Okay, expectations are, your
expectations, you’ve set ’em the right way going in. They’ve been met, therefore you’ve
achieved your objectives. That’s a successful negotiation. Yeah.>>[INAUDIBLE]
[INAUDIBLE] and [INAUDIBLE].>>Okay.>>[INAUDIBLE] Is also, why [INAUDIBLE]
how do we [INAUDIBLE] how do we [INAUDIBLE] oh, that
is bottom line. Or, that is something that I should fight
for. And then [INAUDIBLE].>>Okay, so, some of it is how you, how
you define the terrain. How the other, how you and the other party
perceive it, and then are you able to execute, in that
perceived terrain. Bonny?>>[INAUDIBLE] win-win. It’s easy to define what winning is on
your perspective, cuz u’re happy. But I see when on the other side, is that the person, the residual effect after they
walked out of the room, and as time goes on, that they’re
not upset, and they don’t try to undermine and negotiate
whatever the result was. So they were happy too.>>Okay, so you are thinking more broadly than a lot of business people, think about
negotiation. I mean, these are, what I would call
enlightened comments about negotiations. Here’s what most business people are
negotiating. This is the essence of most business
agreements. These five things. So, they’re focused on getting the best
price, getting the most attractive terms. Making sure that whatever time frames for execution or deliverables, whatever
are acceptable. Making sure the warranties are in place. And then if things go wrong, they’ve got
remedies. They may be legal remedies. They may be economic remedies. They’re probably a combination of both. So, most business negotiating, which is in
this stylized category, in the middle, is so focused on me getting what I want in
these five areas. And people don’t think more broadly than
that. If [SOUND] people who do a lot of
negotiating around these things, talk about these techniques. Does anybody not run into these before as sort of things that are taught in
negotiation classes? Are any of these new to any of you,
surprising?>>The bathroom. The bathroom one is a, is a commonly used
technique. Feed the person a lot of water, and a lot
of food [LAUGH] and then just keep talking,
keep the pressure on. So, using the bath, bathroom breaks is a
powerful, if you’re using techniques, you know, there, and
what do I mean by plane? They’ve got a plane to catch. Their schedule, exactly. They’ve gotta catch a plane, and so you
just carry on the negotiation. You speak slowly. You make things drag out. You disagree at the last minute. Just as they’re running for their plane,
and say oh, you do the Colombo thing, you know oh, one
more thing. You know, have any of you been subject to
any of these? What does it feel like?>>Well [COUGH] is what you have to assess
whether it’s a, it’s, it’s it’s always incompetence, or
is it actual bad faith? And that can be difficult. And it’s annoying to have. To have to even have that [CROSSTALK].>>Either case, what do you, how do you
feel? If you’re dealing with an incompetent
party, or a bad actor?>>Wasting your time [INAUDIBLE].>>It makes you angry.>>Yeah.>>[INAUDIBLE] Very few people, don’t
recognize these. If you’re on the other side of the table, it’s not like oh, my gosh, what is
happening? I don’t know, I don’t understand, this is
sure working on me! You know, most of the time you perceive immediately these techniques, and
you resent them. Or you’re angry about them. So, in term of techniques that people
teach, you know, I think these are
anti-successful agreement techniques. You may get a deal done. But you’re unlikely to get a deal that is lasting, enduring, flexible, where you
build relationships. Where you create solutions. But these are used all the time, mostly
by, investment bankers. I’m just kidding. [LAUGH] Sorry, sorry, I know. [LAUGH] Roy, could you turn that tape off
up there? [LAUGH]. I have one other technique which I run
into quite a lot dealing with competitors. Which is the, during a set of conflicts, long, long negotiations, maybe over the
course of months. The, you, you discover that in the course
of this supposedly good faith negotiation the competitor, for example, has been
actually promoting something completely different
talking to somebody else. And the explanation you get when you
protest is, I’m very sorry we had no idea that was going
on.>>The impersonation of-.>>Deny, deny, deny, right?>>Yeah or just innocent you know I had no
idea or oh, my god.>>Same organization.>>Yeah. Yeah. Which puts you on your heels, puts you at
a disadvantage, maybe there are others, anybody in here experience other
obvious techniques that are being used to gain
power. Yeah, John.>>We were locked in a room once. [LAUGH]
>>Yeah.>>I think it was kinda amateurish back in
the early days in eastern Europe, that we just
climbed out the window. [LAUGH]>>I bet there are a lot of interesting
stories. That was another one, so, yeah.>>Language, there’s a [UNKNOWN] in terms
of a, an experience having, having negotiations in China where I was
sitting across the table from a gentleman who, spoke or at least didn’t
claim to have spoken any English.>>Yeah.>>And so I had a translator, fortunately. And so that was one kinda, it’s an
interesting barrier. Cuz I was pretty sure that he understood.>>Mm-hm.>>English. And for a variety of reasons, and smoke
was also another one.>>Yeah.>>He was an avid smoker. And I can’t stand smoke, and, and I tried my hardest to make sure that he didn’t
know that. Because that’s really affected, kinda, the
way it helps to have everyone to spend in this, you know, four
by eight room.>>Yeah.>>It was very interesting.>>So, making things physically
uncomfortable or getting a leg up. There’s another way that I see language
used and that is abusive language. You know, people that start dropping F
bombs, or shouting, you know, cursing at you,
whatever. They believe they get a leg up. And in some ways, most of us kind of
react. We, we go a little bit on our heels when
somebody starts cursing at us, or they raise their
voice or something. I mean, as tough as you may be, if
somebody starts doing. There’s something in the inner child of
all of us that recoils a little bit, and is back on
our heels. Now, it can cause you to come back in like
manner. It can cause you to get to that level yourself, which may or may not be a good
thing. Comment?>>So I had actually the opposite happen
to me once where we were having issues and then we
couldn’t come to an agreement and then they came back and
they were actually, you know, they could do more, more than
what they were saying. If they gave me everything so they were
treating me with kindness and then they went behind my back
and changed it again. So it was the opposite of using the
abusive language.>>So it’s kind of the limp leg.>>It was [UNKNOWN]. Yes.>>Yeah, where people use different
techniques to deceive and.>>So Joe, I have a feeling your gonna
tell us ways to do actually do this that aren’t
these ways, but let’s use these guys examples, where
you actually are faced with people like this on the other side of
the table. And how do you actually take control or
sort of set it on a positive tone, especially
if you’re in a situation where you’re sort of
feeling like, this is the company I really wanna
buy.>>Mm-hm.>>Or this is the job that I really wanna
get.>>Yeah.>>And you don’t really have as many
options. But these people are actually coming at
you with these techniques.>>Yeah.>>What would you advise us to do?>>Well, let’s have the group, I’ll, I’ll
give you my, the way I react to it. But anybody in the group, you know,
somebody is using one or more of these on you. Yeah?>>Just call em on it.>>So calling them on it is one really
[UNKNOWN]. You know, I’ve actually done this in a, in a litigation, where the opposing attorney
was deposing me. And he stood up and got right in my face
and started to shout at me, he said why did you do
such and such. And you know, it really is off-putting. And you’re, you’re, the, the. All it shows in the transcript, is, why
did you do. [LAUGH].>>Such and such. That’s all it shows. That’s all it shows. And if you answer the way you’re feeling
when somebody gets in your face and shouts at you in an accusatory way, you
say, well, you son of a gun. I’ll tell you the reason. You know? And you’ll do it in a way that isn’t
effective. The most effective thing that I found was
exactly what you’re saying. I say why are you standing up and raising
your voice? That goes on the record. [LAUGH] But, it’s, that’s the most, copied
down way of doing exactly what your saying is. You’re really call him on it in a nice
way. Why are you raising your voice? What makes you shout about that question? Why are you standing up? Why are you pacing the floor as you get
all of it on the record? Now, you don’t need to get it on the
record in a normal negotiation, but calling him on
it is one thing. What’s another way that you could deal
with that?>>I, I’d start asking questions. That where I start to do.>>Questions are very effective, you know
just asking, just posing questions. You know, that’s always a, a very
inoffensive way of taking the volume level down, getting
information, cooling people off. Another way.>>You gotta reach a higher plane, cuz if
you’re in this type of mode and the other person’s not in good
faith in most negotiations we’re gonna be doing, you need to have a relationship, and, and the relationship usually a lot
more important than the actual deal you finally
end up with in a lot of cases. So, I mean, I think you do have to call
him on it. You have to say, you know, what’s your
purpose here?>>Yeah.>>And you guys, if he’s doing one and
your doing another, it doesn’t make sense. You guy’s have to be both wanting a deal, and both wanting the best, you know win
win.>>Sometimes [INAUDIBLE] have such power,
and such an advantage, and you really do need the
deal. That they get away with more that it’s
tough to raise them to that level. When there’s such a disparity in terms of
information or power, that it can be very tough to do. I tell you what I try to do is make it completely ineffective, just make it so
either I ignore it, I just don’t pay attention to what it
is they’re doing, by that I mean, I don’t
drink water. You know, I am able to outlast, my bladder
is better than their bladder. You know. Or I I will plan my trip with an extra night of hotel room and I’ll have an extra
flight out the next day, so I’m not even anxious
about I’ll let him know I’m leaving at 5 o’clock
tonight. That oftentimes they’ll push the thing. And I just don’t sweat it. We stay and then, then pretty soon to me
it becomes a question of let’s keep staying
here, let’s keep working. You know, I’ve missed my plane let’s work. It’s 11 at night, no problem. I can keep working. Well, I mean you kind of make it so that
the game that they setup, hurts them. So they really pay the price for whatever
game they setup. So make it ineffective. So these techniques, really can sometimes
work marginally in the short run, on some
people. But they’re not really very powerful long
term techniques. Now, if you look at textbook discussions
and negotiation, you run into these terms. And I’m not gonna talk about, I wanna talk really today about very practical,
real world situations. But these are, this is the terminology. I know some of you are gonna take classes
or have taken classes in negotiation. These will not be unfamiliar terms to you
in the lexicon of negotiation. So here are some practical keys to
successful negotiation. And these will look just so simple minded,
which is in fact what most really practical
things are. Born of experience. But the first thing is negotiate with the
right person. I’m gonna tell you a half a dozen stories
here before we wrap up, where you’ll see how I learned
these particular lessons, I think. But get with the right party. You would be amazed at how many
negotiations go on with the wrong party, with the unempowered lieutenant, with
somebody who really is not the, the decision maker,
whatever. So figure out who the right party is. And are you talking with the right party? Secondly is become a trusted negotiator. And I put here that’s a function, of CCP,
and my students will recognize this. This is a function of character,
competence, and power. For somebody to be trusted, they have to
be high character, they have to be competent, and they have to be
empowered to make a decision. So you wanted, the right party for you to
negotiate with, is somebody you can trust. The right party for them, is that you must
be also trusted. So if you want to enter high quality
negotiations, getting high levels of trust based on character competence and empowerment, are really important things
to assess. Then know your own BATNA. What’s a BATNA?>>Best Alternative to a Negotiated
Agreement.>>In unison. [LAUGH].>>Best Alternative to a Negotiated
Agreement. Okay, this is a term that was developed by
Fisher and Ury in 1981 out of the Hartford negotiation
study, which they really found that if people could go into a negotiation
with an idea of what is their best alternative to this,
this negotiation working out successfully. They came out with better end results. You go in with far more confidence. I’ve taken it to another level. When I go into negotiations now it’s, I
figure out, I don’t know it for sure. But I try to assess what is the other
party’s BATNA? So I really think hard about what is it
they want to achieve, and what are their
options because that really helps you kind of assess the whole
thing and you’re not just thinking my agenda, my
agenda, my agenda. Here’s what I want: price, term, remedies,
warranty. This is what I need. And so many negotiators are going in with
their own agenda. Well, go in and think about what is the
lay of the land for the other party, and that
helps. We’ll talk a little bit later about Fisher
and Ury’s map, but I think there are three or four suggestions that they
make that are kind of their broad map. They’re really very helpful. Discern the difference between battles and
wars. What, what we used to call the elephant
ant. Some people don’t know the elephants from
the ants. Have you ever negotiated with somebody for
whom every deal point is something that they have to
win? You know, everything is compared,
everything that’s brought up, they have to win every deal point. I’m here to submit to that’s a really dumb
way to negotiate. This is give-and-take, you’re, if, if
you’re gonna try to develop relationships the way Nichola
said, or if you’re gonna try to come out with creative solutions or
whatever, you really don’t want this, I have to win every deal
point, thing. So know where the elephants are and where
the ants are. Be willing to lose some battles to win the
war. Yeah?>>Wouldn’t be to my advantage just to
points there where I know, I don’t feel so
strongly about. Wouldn’t the other party be doing the same
thing?>>They should be, and you should, I mean,
in really effective sort of win win negotiations, you share
what you’re trying to achieve. Lei Coca has a great line you know he was
the guy that turned around Chrysler. And he said you know, when I want to achieve something, I tell the other
party exactly what it is I’m trying to achieve, and what
price I’m willing to pay to achieve it. And that’s really kind of the starting
point where it’s sharing, so there’s a lot more sharing of information in that
kind of a model of negotiation. It doesn’t always, it not always something
you can do. And I, you know, getting back to these
techniques, I would say don’t worry too much about takings, you
have to be aware of them. You have to be careful, and it tells you
something. Somebody is using, I, I was thinking when
somebody is shouting at me or walking out of the room or throwing
things, there is information in that. It’s like, I had a partner one time in the
real estate business who looked at a joint venture
document that was this thick. And he looked at it and he picked it up
and he says, and any document that’s that thick,
there’s something in it for me. [LAUGH] And in a way, anybody who’s
throwing things and screaming and shouting and
slamming doors or locking you in rooms, or anything like
that, there is something in that for you. You know, you can get the high moral
ground, you can at least get information. So don’t worry too much about them, but be
aware of them. And then really understand what the other
party. This is kind of back to the figuring the
other person better. But if the more you can understand their
values and I’ll tell you stories in a minute that
illustrate each of these. The more you can understand really what it
is that drives them, what’s important to
them, the more likely you are to craft a solution to
things that satisfies what it is that’s important
to them. so, here, you’ve all seen this before. Just to pause on it for a second. Those of you who dread negotiations
probably have experienced some of this win-lose
experience. Those of you who said you really enjoyed
them have probably experienced more of the, the
left hand column. Okay, so here’s seven situations that have
sort of illustrated these points for me, and I only tell you
these not because I’ve had some unique
negotiating experience, but because you may recognize in some of these things
your own experience. You may be able to tie it in to your own
experience and internalize it in your own way so that it really does
belong to you the first one. I, I taught a negotiation session in the
real estate course here at Stanford a number of years ago, and I had a version
one and a version two of this. In version one, the instructions were, I
want you all to have fun. So this was the three party negotiation. There was a buyer, there are two or three properties a buyer, a seller, and a
lender. And they had to come up with a tripartite
agreement. And so everybody went off in these
negotiating teams, and made deals. The instructions were have fun, be
creative, learn everything you can about real estate and everything, and then just
report back on your experiences. Well, here’s what happened. There were reasonable deals made. They were made quickly. They were relatively easy to understand
and document. And there was a lot of camaraderie. People came out of it saying, man this
was, this was a fun exercise. We like each other. Aren’t Stanford MBA’s cool? I just really love my classmates. So that was kind of the outcome. So that was negotiations 1.0. So then we change the instructions. Okay, the objective is to win. You know? You’re going into this negotiation, the
idea is you wanna win. Your grade’s gonna be influenced by it,
and the results are gonna be published in rank order, and you need to make a report
on how you feel about it. What would you guess the change in results
[LAUGH] was.>>Some deals made.>>Yeah, fewer deals were made.>>Slowly.>>They were made more slowly, a lot more
time was expended. I mean, tons more time, people said this,
negotiators actually said, took longer and was tougher than
anything they had done.>>At Stanford. [LAUGH].>>People are frustrated.>>People are frustrated and they hated
their classmates. [LAUGH] They said I will never do business
with these turkeys again. I had no idea these people were such jerks
you know. So fundamentally change, with the mindset
and I said with the mindset that means my fault. But the economic outcomes weren’t any, but
they were fewer, as somebody pointed out, a lot more complex deals, a lot of more
unworkable, undocumentable, unenforceable, and the
interpersonal relationships were strained. So you can see by having this mindset of
we’ve gotta win, and it’s a zero sum, and it was
defined. I mean there were so, I mean, there’s so
few things in most business negotiations. There was so little data that price, term,
time-frames, warranties, and remedies were about the only thing that
people could work with. Well, I mean, they just went in and
pummeled each other, just beat each other to bloody
pulps. [COUGH] So, that’s the first story. And I’ll let you draw your own conclusions
from these. The second was is when I was first
starting in business I had a deal that I was working on in [UNKNOWN] or
as they say [UNKNOWN] Spain. Did I do that right? Any of the Spanish speakers? [UNKNOWN] And we were going into a bank
there to borrow money. And we walked in, and it was clear within a few minutes that they really weren’t
quite expecting us. There, so they ushered us into this
office, with a guy that said oh, well, you know, so he sat down to
listen to us. And as we were sitting there negotiating
over, financing this office building, two guys in white coats came in,
and they took the painting off the wall. And a few minutes later they came back in
and took the credenza. [LAUGH] And then they unplugged the phone
and walked out with the phone. [LAUGH] Pretty soon they came in and took
the desk put it on a dolly and went out with it. We’re sitting there in these chairs
talking and all of the furnitures been moved out. [LAUGH] Well it turns out this guy was
not. Really, the person who had anything to do
with me, he was just a courtesy party. We said, well, these guys are here,
they’re from the United States, make them feel good, and so the
negotiation went all of. This kind of, I will tell you, my point on
this is goes back to make sure you’re
negotiating with the right party. We had absolutely, this guy could not have
made any deal with us whatsoever, but we didn’t
check it out, so we sat there talking across an empty office about a deal that was never
gonna happen. Well, that’s an extreme example of
something that we all do a lot of times. We end up negotiating with parties without power, without the ability to make a
decision. So you really want to think that through. The 3rd one, was also early on in my
career. I was a chief financial officer in my late
20’s, of a big big company. I was supposed to make a joint venture
with a life insurance company. And, so I’d studied all the joint
ventures, then I figured out what I wanted on this deal, and what a win-win, I mean I had all, I was steeped in all these things
and. So, I sat down with a, a very senior, 50 years life insurance executive, and we
started going through the deal points, and there were eight or ten
of them, and about after I’d been sent no, we’re
not gonna do that in about the eighth deal point, I had
rose, then I had rose in the ninth deal point
and said you know, we really need to have this,
you’ve said no on eight of them, and he said Joel, sit
down. Just take notes. Your job here is just to take notes. [LAUGH] You know, we’re not negotiating
anything. Just take notes. We’re the life company. We’ve got all the money. You’re just the developer. Take notes. And, so it was clear to me that what that
negotiation was about. That negotiation was not gonna be one in,
in that series of discussions. But, I was really going to just document
it in a way that we had, a chance to do our business, and we
had options in the future. You know, so that wasn’t the only option
that I had. [COUGH] Limited partners, I, I recall
early on thinking that I wanted to develop a a
brand. I wanted to be seen as a certain kind of
negotiator. And I, part of my brand was going to be
that I would calculate exactly what a deal was
worth, and then I wouldn’t budge. On the price I was, I wanted to be known
as somebody who knew the value of what it was
I was offering. And so if I said, this is a million dollar investment, I didn’t wanna
settle for 950,000. You know, I really wanted to say, It’s a
million dollar. And I guess if you want to trade two
nickels for dime, I’ll do that, but I’m not gonna trade a
dime for one nickel. So, I really wanted that to be my brain. Cuz I realized I was going to be in this business a long time and do hundreds
of deals. So in negotiating with these limited
partners I became very stiff on this. And it was only when I got options, and
what happened to me in this in, in one case, a guy said well I’m
not gonna do the deal. I need to do the deal at 950 thousand not
a million. I went out that night and called another
limited partner, investor group and said I’ll tell
you what. If you’ll do this deal at a million
dollars, I can document the deal tonight. And I can give you all these other things,
but I need the agreement tonight. So, and the guy called up the next day to resume negotiations I can say, sorry I’ve
already done that deal. So, I was able to establish that I don’t
move on price. And it worked for a while until, we, the
guy and I became really good friends. We ended up doing 300 deal together over a
20 year life span. So, a lot of transactions. About 50 deals or so into it, he said
Joel, he says, I just gotta tell you, I like to
negotiate price. I don’t feel good, unless I can negotiate
price. So, if you want it to be a million
dollars. Tell me it’s a million fifty. [LAUGH] Just tell me it’s a million fifty. I’ll come back with a million, and then
we’ll both feel good. [LAUGH] And, so we negotiated that, the
last 250 deals we did, I would go in about five or 8% higher than
what I would accept. He would knock it down. He’d feel good and I’d feel good. So you, you, kind of going in and having
sort of a, sort of a reasonable back, a, a rule, what I’m
calling ROR, our rules of the road. If you gonna have serial negotiations with
somebody, develop rules of the road. Senior partner departure. This is a situation, there was a billion
dollar transaction. So it’s a big deal. And this was 15 or 20 years ago. So it’s a very significant transaction. And the partner came to me and said, you know, I want to, let’s agree going into
this negotiation. Let’s agree on values. Let’s agree what these properties are
worth. And then we’ll make the trade. And on this particular case I thought, you
know, the biggest mistake we could make was, would be to
agree on the values. Let’s disagree on the values. So, you set up whatever you know, the
properties better than I do. You value them however you wish, and then
I’ll select. And the very fact that we didn’t agree on
values. Allowed me to select deals where I thought
I was getting more than my fair share. He then was able, because he said guys, he
was fine with the, with the deal, because he
represented what the values were. It was just applying the percentage to the
values he’d set. So we were able to get a transaction done. My departure. So I left the Crow organization with the
reputation of being a conciliator. With the reputation of being reasonable. With the reputation of being a win-win
dealer. I’d settle all the litigation that crow would had for 20 years, departing
partures. I was seen as somebody who was litigation
averse. And because that had become my brand, my
negotiating brand, when it came to that, they filed
litigation. Against me, realizing that he’ll never
fight. This guy’s such a pussy, such a conciliator, he’s such a giver, he’ll make
everything. I really had no place to go. I had set myself up with my brand. So, I want, from that I want you to think very carefully about the brand you
want to have. The last story is one that I think you’ll
remember.>>So what happened?>>We ended up in four years of
litigation.>>No [INAUDIBLE]
>>So I now have a new brand. [LAUGH] I’m now known as the ferret. No, it’s interesting, because I think what
my brand has become is I am somebody who is very reasonable, who
will do win-win negotiations, but if you get to the point where you cross me and my
principles or if you do something that I really think is completely unfair then I become very
stiff. So, you don’t want to get into litigation
with me, but you don’t need to. So, that’s, that’s a better brand than the
brand I had before, which was the guy will never
sue. He will never get into litigation. So, you really wanna think carefully,
because that brand, and part of my message, here is that there are no
episodic negotiations. You may think it’s an episode. You may think you’re going in and having a
one-off, deal with somebody. That person talks to somebody else who
talks to somebody else who talks to somebody else, and pretty soon everything
is we live in a very connected world. So think carefully. If you’re doing a lot of negotiation for a living, think very carefully about the
brand you wanna have. Now, I apologize to my students, former
students for this next one, because several of you seen this, but I had a, [COUGH] a negotiation with my daughter over this
last topic. So, I’m out here teaching at Standford. And I come out for basically ten weeks,
when I teach here. So, she’s back in another state, and we
correspond by email. I get back a couple of times, she and my
wife get out a couple of times, but we’re basically
away from each other. So here I get this email from her. Dear Dad, did you hear I’m getting a rat? Won’t that be cool? The pet store lady said that you can train
rats to fetch and stay. I wanted to get mice, because they are
cuter and don’t have a disgusting tail, but mice just run away,
and they never become your friend. Rats will sleep on you, and I’m sure dad
you’ll become great friends with my rats. [LAUGH] I’m thinking of naming them Ritzy
and Scraps. Won’t that be cute? And you can even see them when they’re
tiny babies. Take deep breaths if you’re getting
nervous. [LAUGH] I will pay for them and the cage
with my very own money. All you and mom have to do is buy the
food, which really doesn’t cost much. I’ve already done everything else. I think I’m ready, it’s okay, I can take
care of them. I’ve proven I can take care of animals, I
even sweep up the cats barf.>>[LAUGH].>>I can handle it. So, you can trust me to take to care of
Ritzy and Scraps. They already have names. I hope you’re doing well at Stanford. Isn’t this warm and fuzzy? I’m doing well here, same normal things, practicing soccer, whining to mom about
getting rats. Just, so you know, she already said yes. [LAUGH] Is this a negotiator? This 11 year old kid, I mean some of this
stuff, when I ask who are the expert negotiators, I promise you we are born
knowing something about negotiation. Just see you know, she oh, yeah, I’m sure
she’s sick of the same conversations can I get a
rat, mom? Please, I’ll do my practicing that’s my
secret in life. Promise to do my practicing. [UNKNOWN] So here’s this, this is the
initial volley. This is the negotiating position. She’s kind of laid out her negotiating
position. So you’re sitting out here, 1,500 miles
away, thinking no way. [LAUGH] She has crossed the barrier I’m
unwilling to cross. So, here’s my response, and I want you to
notice this, because this is, this is a real life
negotiation. And I’m gonna have you predict how it came
out.>>[INAUDIBLE].>>What’s that? [LAUGH] Good point. Dear Elise are you nuts? I have been killing rats at the house in
Woodside they are not cute they’re not nice they are not controllable they stink
they eat everything, they make little black
poops everywhere. And I have to clean up the mess. Just this week, I bought some decon, to
put out where the rats live.>>[LAUGH]>>The next day I found a dead rat near the pool, and another one trapped in
the garage. Just to be clear, how, about how I feel, I
must inform you, that we smashed it’s head in
with a [INAUDIBLE]>>[LAUGH]>>I’m a negotiator, come on. [LAUGH] It was fat and ugly. By the way, I think its name was something
like Ritzy. [LAUGH] In any event, one of the big
reasons I was getting so excited about coming home was to get
away from the rats. Now I may as well stay, huh? See how hurt. I’m just hurt, I’m appealing to this young
daughter. now, what would like next, a python, or
how about some Ebola virus?>>[LAUGH]
>>Or maybe you could raise maggots. Anyway, I still love you and miss you and
will see you next week. Love, Dad.>>[LAUGH]
>>So how did this negotiation come out? Straight egg. What’s that.>>He get’s the rats.>>She get’s the rats exactly. She got the rats. Now why would an expert professional
negotiator with $10 billion worth of deals under my belt. Given to this 11 year old kid on some
stinking rats.>>Imbalance of power.>>[LAUGH] That’s a great point. Or besides your mom had already said yes,
so real imbalance of power. To me this is the difference between
knowing the elephants and the ants. You know, I was willing to lose a battle
to win the war. And the war, what I wanted, winning for
me, defining winning for me was raising a child who’s responsible,
who loves me, who will listen to me on things that really do
matter, and, so I was really willing to take a kind of
different view of this. Now again, now, the really gratifying part
of this story is. In the end she gave the rats back to the
pet store lady, after the pet store lady had told her she would
be feeding them to the snakes. So she disliked the rats as much as I did
in the end, and she came away saying, dad you
were right about the rats. [COUGH] So now.>>What was that. [INAUDIBLE] change [INAUDIBLE].>>she, I arrived home and the rats were
there.>>[LAUGH].>>[INAUDIBLE].>>Bothering [NOISE]. no, no, that was done, it’s a done deal,
mom had already said yes [LAUGH] it was do you
wanna hold them dad? [LAUGH]. No I think I’ll pass on that [LAUGH]. So, I think we’ve covered most of this,
this idea of episotic versus serial, think serial in your mind,
as you think about your brand. Outside versus inside. This last was a very much of an inside
negotiation. You’ll have negotiations with third
parties, and with people who are really close, whether they are employees partners, brothers sisters
children spouses. The inside ones are by far the toughest. Negotiations, they’re the least forgiving
and they’re the most important ones to lose. So this idea that every negotiation is a
competitive game that you have to win, it really helps you
get over. The more inside negotiations you do in
your life the more that you realize you don’t have
to win. Certainly not every deal point and you
don’t have to win every negotiation. So don’t think of it as a competitive
game. This idea about, jus lik, I just like this
quote. Don’t wrestle with pigs, you get dirty and
they enjoy it. So be very careful who you negotiate with. And that means generating options, that
means always having other people to talk with and to do
business with. If there’s the worst thing in life, is to
get in business with people that don’t have the same values you
have, that you don’t respect. I mean, it is misery. It’s a different kind of misery from just
about everything you know, except being married to somebody
who makes you miserable. [COUGH], then this idea of being
reputation building. I’ve given you my examples of that. But. Here are some alternative reputations you
have. One is, I’m tough, I’m unbending the legal
documents govern. I’ve known a lot of people who are that
way. And often they are people who have a lot
of money [INAUDIBLE] and they really believe that’s a really
smart way to do business. Guess what happens? In the end they may not have a lot of money they may not have the same position
of power. And they may not have a friend when things
go against them. Live by the sword, die by the sword. You can be flexible, be, reopen, open to
reworking the, the life company joint venture partner I told you about who just
said, take notes, Joe. Turns out, he was one of the most flexible
partners you could ever have. So the documents were the documents were
the documents. He couldn’t negotiate them, he didn’t want
you to negotiate them, just take notes. But when it came to working out the
problems of living in the real world of doing business, he
was extra ordinarily flexible. And so I kept doing business with him. I probably did 25 deals with him over my
life in real estate. Because he was such a great partner. He was a tough negotiator documenter but
he was a great partner. You can have this, reputation being eager
to make deals. Where you just say I do a lot of singles
and doubles. I don’t do home runs. The other is that. People, there are some people in the
negotiating world who just say I only do home runs. If I don’t, get a four bagger, if I don’t
hit a home run, if I don’t win the thing, it’s, those are
the only deals I’ll do. So you need to decide what your reputation
is there. We’ve talked about these last couple of
the last one is this Fishy Fisher and Yuri. Trained problem solver and we’ll talk for
a second about Fisher and Yuri. Yeah, comment? [INAUDIBLE], [INAUDIBLE], we’re talking
about basically these selector, that they, [INAUDIBLE], what do
you do when you’re in the situation; where let’s
just there’s event that you need to associate
with. Mm-hm. And they are, we really need their thing,
there’s. There’s not another alternative out there. You don’t agree with their values. Yeah. What do you do in that kind of situation? In some cases you just have to suck it up
and negotiate with them. In some cases you can get another party in
the organization you negotiate with. In other cases you can talk to them and
say okay, here’s where I think our conflict is coming, and
get to a deeper level. And talk with him about that. I used to have a partner that would say to
people you know we’re not making a deal on this what would it
take to make a deal? And that was effective in certain
circumstances you know what would it take to get this relationship on a better footing or
to develop a more long lasting give take
relationship? and sometimes you can get that real with
people. My, my views going back to the very
beginning is generate options so you don’t have one vendor that you really rely on, or one alternative source of
financing. I mean, I like having a lot of options, so and I, I realize that’s a bit of a
Pollyanna. You can’t always do that. I mean we just did a deal with one of the
companies I’m involved in where they, they were about 40% of our
business, they were really important. We had to get that deal done. So consequently we took notes and got the
deal done. So you gonna do some of that. There’s not a panacea to every negotiating
problem. You are gonna deal with difficult people. You’re gonna have win lose negotiations. You are going to have some things that you
dread. But I’m just saying that you can nudge
it’s so that it a happier experience. It is more of a win, win experience, and
the better you choose party. So here, here mindsets that I’ve got when
I go into your shoes. What time do we end Marcello? Where did Marcello go? 8:12. 8:12? So we have till 12. Are you happy until then, or are people
wanting to get out of here? You’re okay? Well, let’s talk a little bit about these. And one of the con, one of the mindsets
that I think is a really good mindset is that a
negotiation is just a conversation. It’s just an exchange. You’re good at conversations. You talk to people all the time. So, this idea of oh my gosh, we’re going
into a room, we’re closing the doors, we’re
sitting on opposite sides of tables. You know, that feels a lot more
threatening than, I’m just gonna talk. About our various interests and try to have a conversation to come up with
something that’s mutually satisfying, so think of
negotiations as conversations and your good at it,
think of negotiations as a series we’ve
mentioned think that agreements as [INAUDIBLE]
winning it’s back to this idea of what is winning, the idea
is that your agreement should be durable. There’s no point in coming to an
agreement, that it terminates in a law suit six months
later. You’ve not negotiated a good agreement. So you want them, there to be some
elasticity. Some sense, and usually that is a function
of how much trust you’ve developed with your
opposite party. If you’ve developed very high trust with
your opposite party once you come to an issue the first instinct
isn’t, oh my gosh. Let’s go to the documents. What do the documents say? Most of the good deals I’ve ever made have
never once referred back to the documents. Not once, and some of these things have lasted 25 30 years,i mean, my whole
business career. We never ever once go to the documents. Why? Because we like and trust each other and
these are real issues and we sit down and talk it
through. So you want a durable agreement. So that’s, that’s another mindset they
have. Another mindset is, is thinking win win. In other words, to recognize that you’re
accountable to [INAUDIBLE]. A lot of times, people think is the negotiator, they’re only accountable
to themselves. I’m winning for me. There are very rare negotiations where you
don’t have broad accountability. It’s to your employees, it’s to the
community, it’s to shareholders. it’s to a board. Sometimes this can be a very effective not
in the room party. That you can use to give you, you some
breathing room to pause and say, well, I can’t, I wouldn’t feel right about this [INAUDIBLE] the
community. I don’t really feel good about dumping
this sludge into the river, you know? I mean, you really have an accountability. So this idea that there’s an
accountability outside your own interest is a good mindset to
have. [COUGH] Watching your language. I don’t think it works to curse, scream, swear, slam doors, walk out of rooms, even
bluff. I think bluffing is, a fools game cuz all
you need to do is bluff once and have it not happen and
you have spent your reputation. You are forever more seen as a bluffer. So my, my view on that is just never
bluff. Never use, what I call high velocity
words. Just, you think of the words that just sorta raise people’s emotional tension and
their temperature. Just stay away from them. And if somebody uses them on you, ignore
it. Don’t let it work. And you don’t let your temperature rise. So watch your language and watch What if
you are genuinely upset and you get frustrated
you know you are not doing it for effect and your not
using a technique that you try to control it all
costs? I think you should try to control it. And, here’s why. You know, if you, and if part of it is
you’re setting a baseline, you know. What, whatever your baseline is, it’s the variation from your baseline that will get
affect. So if I say to you, I will never agree to
that, that’s pretty powerful. If you know me, if you’ve negotiated with
me a lot of times,. For me to say, I will never do that. I mean, you really believe. I’ve just screamed that out. Whereas if I’m throwing things around and
cursing and, you know, lot of histrionics. I can shout, I’ll never do that! And you’ll say, yeah, yeah, okay, he’ll
come back tomorrow. So I think keeping the baseline. Keeping the baseline really low is a very
smart thing to do. Plus it keeps your own blood pressure
down. I did walk out of it. This billionaire dollar deal that I did
out here. Where we were swapping a billion dollars
worth of property. I sat with the partners. There were six of them and one of me. And the most senior of them just said
something that was just completely of the wall and
unfair. And I just stood up and said gentlemen,
it’s been a pleasure to be your partner all these years I am so sad that
it has to end this way. I am catching my plain and I will be gone. Give me a call in Dallas if you want to
talk about this. And, it was that simple before I could get
to the airport. I had a call from three of these partners
to say, please come back, we want to negotiate business, and it
wasn’t that I’d, I, I had gotten up. I’d stood up when they said it, I’d left the room, but my speech was really that
calm. And I think they took that as, oh my gosh
he is serious. He is really serious. And that’s the message, that I’m really
serious. That’s the on that I want to get across, not that I’m chapped and that I’m out of
control. because, people don’t trust that as much. in the end that idea of being trusted. You know if you really want to be an
effective negotiator be trusted. if the other party can trust you. Over the long run, you’ll develop that
brand. And you’ll develop durable agreements,
high trust relationships, creative solutions, relationships with
others that you like, etc. So, I’m just recommending it as a,
different mindset than a lot people have towards it. Yeah. [INAUDIBLE]. [COUGH]. North America and Wesson, I worked all
over the world. Getting angry may or may not work, but
it’s not a big surprise when it happens. The rest of the world, I mean if you’re always calm, it translates across
all cultures. Yaah, yes, it’s kind of a universal
language. Clarity. Something in some cultures is just an
absolute no no and you’ve lost… We burned all your credibility. You lose credibility. Yeah, you’re seen as an unstable person. Here, people might or might not forgive
you. Depending on the industry. Yeah. Some industries are full of wild people
[LAUGH]. Yeah? We negotiate to an intermediary, an
investment banker, an agent… Or an attorney who’s actually negotiating
an agreement, would, would you use this as a model for find, for
selecting and intermediary? Cuz that person can often have a
tremendous impact on your brand as well because they might act completely,
and they’re off on their own. You don’t really know exactly what they’re
doing either. Neither. I think you have to be very careful in who
you select, cuz they carry your brand. I’ve seen more attorneys foul up deals
than actually facilitate deals. In fact, I select my attorneys in terms of
are they deal facilitators. Are they dealmakers, problem solvers? Or are they sort of egomaniacs who throw,
who have to be right on every deal point, who have to
draft the toughest documents? A lot of times what you’ll do in deals is
you’ll get attorneys fighting. And the attorneys’ll fight. And it’ll de, destroy the deal and the
relationship. So, I number one is I try not to have very
many intermediaries on the front line. I don’t like. To have agents, brokers, investment bankers, or attorneys negotiating my
deals. I like to establish a one on one relationship with the other principal,
in deals. I really think that’s the safest way to
maintain your brand. And it’s the way to create uh,better
relationships, to create better outcomes. It’s more work in the short run. It’s less work in the long run. I think there is a reason that people use these intermediaries and I think they can
be valuable. I think it’s always smart to have somebody
outside the room. Because negotiations are these real time
things where you’re exchanging things back and forth, back and forth, back and forth,
and you can make mistakes and it really helps to have somebody,
whether it’s a board, a partner, an attorney, or whatever who can
come in, refine, correct, smooth over. So I like to use them in all those things
a lot of times I’ll say I need to run this past
my partners. This makes sense to me but let me check
with the attorney or the tax council or my
accountant on this. So you know,I like to have a little bit of
a backed on. So, I use them that way. But I never put them, my attorney will associate with your attorney and make a
deal. I think it’s very dangerous. Not to say it doesn’t work but, yeah. I had this question regarding not, not
really going above or below the median as someone, I’m
very emotive. That’s who I am and what,what I’m hearing
is. You know, poker face, try not to get hooked into these things, try not to be
emotional. Which to me is really like, if you said,
the best way to negotiate is if you’re six
foot tall. And I’m five feet tall. Yeah. So, that, to me it’s like okay, that, I
agree, I can see how that would be effective, how
do you,. But you’re just not six feet tall. Yeah, I’m not six feet tall. So how do I do that? I think you start out by being yourself. Authenticity is something that will be
measured by the opposing party, which it, which
will. [BLANK_AUDIO] Go back to trust a lot. I’m just saying that the, you can
modulate. You can, you can keep the swings from
being so wild and, and that will help you, you
know? Won’t make you 6′ tall, but it may make
you 5’2″.>>So it’s okay to [CROSSTALK].>>I, I think you need to be yourself. I mean I’m demonstrative too, I mean speak
with my hands, I wander around. I, I get excited about idea. I mean it’s who I am. So I be, I am that. But I just said there are certain things,
there are certain thresholds, that I don’t wanna cross
because I spend a lot. If I crush those thresholds, I’ve spent
something that doesn’t return to me what it’s worth. So, if you’re all over the map, and around
like that, you just need to realize you’re spending something that’s
pretty valuable and, and you don’t have any place to go. You know, once you’ve cranked the volume
up all the way, there’s no place to go. So, leave yourself a place to go and I, I
think moderate it. And the final one is be likeable. And I know this is I mean you didn’t come
to Standford to hear be likeable. But I, when I went through litigation I
remember talking with, I think it was opposing counsel
after it was all over again. And he said something like, you know, I
wanted to dislike, I wanted to hate you. I really wanted to be as angry at you as
the plaintiff was. He said, but I couldn’t help, but kind of
liking you, and he said, it, I didn’t wanted influencing, I’m a
professional and I did my job but it still had an impact. So I talked to my attorney about it and he says, you know, I’ve had the same
experience where I’ve got. And he’d, he’d, deposed Ivan Boesky, he, I
mean you go down the list, people he’d been
through, a whole bunch of them and he said, you know,
certain of them were really likeable scoundrels and
it made a difference. And others, you know, you just wanted to
fry. And so this idea, there is something in
all, even the most jaded professionally trained
litigator who does gladiating for, for a life, you know, says
it makes a difference if you like the other
party. So I think there is almost no upside in
being a jerk, in being a turkey, I just dont’ think it
gets you anywhere. Well, we’re about out of time, I well, let’s just see if we’ve got anymore of
these. We talked about agents, being of
principle. We’ve talked about lawyers as
memorializers or agents, disputes. You know, this is in the far end, or the
formal end of negotiation. Whether you mediate, arbitrate, or
litigate. I guess my advice on that is, they’re all
kind of bad outcomes. And you really want to avoid, you really want durable flexible agreements,
and trust relationships. If you have to get to these litigation and
arbitration are not that different in terms of,
arbitration may be a little shorter and a little less expensive, but you’re
still presenting information under rules of evidence typically to a special master
or rented judge or something. So it’s very much the same kinda thing. Mediation. That negotiation is a split the baby
negotiation. So if you’re right, you’re gonna lose
half. So I think you, you just want to be, so this is again in this very sty stylis,
formalized way. The rules of those negotiations very much
narrow your outcomes. So, just be aware. Implementing the agreement, flushing out hidden agenda items, outbursts
[INAUDIBLE]. We’ve kind of talked about all of those, I
think. So Fisher and Ury. Has everybody in here read, how many of
you read, Getting to Yes? Only a few of you. It may be so old that people don’t read
it. It’s still the classic book on
negotiation. I would recommend it to all of you who
want to become a better negotiator. Written in 1981 by Fisher and Ury, two
Harvard lawyers. And they talk about their negotiations in
the salt talks. And a lot of data on really sort of what
works and what doesn’t. They wrote another book called Getting
Past No. So Getting to Yes is the first one,
Getting Past No is the second one. Actually the second one is much less read. In fact is there anybody in here that’s
read Getting Passed? Okay, great. Not very many people have read it. It’s actually, I think, even a better more insightful book, if you’ve done a lot of
negotiating. Those are two really sort of good
practical academic texts that give you a good map. And I can usually tell when I’m
negotiating with somebody who has studied Ury and
Fisher. It’s a different kind of a negotiation. It’s actually quite pleasant. So here’s the, if you don’t want to read it, [LAUGH] here’s the Reader’s
Digest version. I’m saving you time. You thought you were wasting an hour with
me, I’m gonna save you a couple of hours. Basically, the idea is separate, so here
are the four fundamentals. Separate the people from the problem,
which a lot of people don’t do. They merge them, you know? The problem’s thorny, therefore I don’t
like the people. The people who have this issue that is
brought before me, because I don’t like the issue or it’s putting me in an awkward
position, I also don’t like those people. And so, a lot of confusion, so they say separate those two and focus on interest,
not position. Now, in other other words what would you
like to see happen? Not what positions are you going to take,
is the other party gonna take, because positions are not
necessarily related to what are really in your interest. People express positions that may not be the actual end point that reflects their
interest. Then invent options together for mutual
gain where you think outside the box you invent
options. And then insist if you can, this is the hardest one for me, is figuring out
objective criteria. You know what, what would be a winning
deal? What would work? And then assess your deal against these
objective criteria. That is the hardest one for me, but I’ve
seen it work. And then finally for me I’d say know your
bartner. Figure it out, write it out, know it going
in and my corollary to that is, calculate the
other party’s bartner. So you really know, that it’s not life or
death. There are alternatives and you’ll be more
likely to have successful negotiations. Now I’m gonna show you there, these are,
again more Fisher and Ury things. But if you’ll just, this is how they deal
with some of this. Dealing with problems and framing things. So I’m gonna flash this slide up and one
other slide up, and then have you think about, what
else this relates to. You know, discuss each, don’t blame the
opponent see the opponents intentions, see the situation, you know from their
prospective, give them a stake in the outcome. You know, don’t react to provocation, step
away, don’t respond reflexively, be an active
listener, agree when you can. I used to have a friend that I negotiated,
a guy that became a friend that I negotiated with, who’d start out every
negotiation with all of the things we agreed on. So the, you’d go through ten items and
say, okay, we agree on this. We agree on this. And you got in this reflexive habit of
just agreeing. Okay, I agree to that. That works. I agree to that. That works. Okay, that’s good. And you’d get done to, then number 11 and
12 and 13, which were the tough ones. So, these are things that Ury and Fisher
discuss. And would it, you know? I guess I’ll just tell you, because we’re
out of time. My take on this is, this is marriage. [LAUGH] You know, this is how I’ve made a marriage work for 35 years, is basically
doing these things. And, and most of the relationships you’re
in are subject to negotiation. If you kind of listen to these best
practices, your life will work better, your relationships
will work better, and your conversations’ll be happier, your
agreements will be more durable, and most of the time you’ll feel like you
won. Most of the time you won’t feel dirty,
like you need to take a shower. And negotiations won’t be just eating your
broccoli but will be something that gives you life, let’s your express creativity and build
relationships. So, I’ll hang around here after if any of
you want to discuss this or have any questions, but
thank you very much. [NOISE]

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