The Best Way to Win a Negotiation, According to a Harvard Business Professor | Inc.

good afternoon, how are we? I've seen some of the sessions you've been through and they've been fantastic. Let's jump into something a little different, which will be about

negotiation

s before I dive into it. I just want to give you a 30 second to 1 minute introduction about who I am and where I come from because I think sometimes it's helpful to know who you're going to be dealing with for the next half hour or 40 minutes, as I mentioned in my My name is Deepak Malhotra. I'm at Harvard Business School. I've been on faculty there for about 15 years. I got there in 2002 and my area of ​​work is

negotiation

s, negotiations, agreements, disputes, conflict diplomacy, anything in that area are things that I find interesting now that I'm out of

business

school, most of my work is in the

business

world and most of the things I do outside of Harvard Business School is working with companies, often early-stage companies or entrepreneurs thinking about how to help them consult with them.

I advise them on difficult deals, strategic partnerships, problems they face and escalation or other types of strategic problems, but while I work a lot with companies, I also work in other areas. I work with some governments thinking about how to help resolve armed conflicts. political conflicts are dealing with insurgencies or a peace process. I work with hospitals and doctors so they can think more carefully about how they could have effective conversations with their patients so that patients can make better health decisions and the reason I mentioned. than work outside of business in the world of conflict in the world of medicine, etc., the reason I mentioned this is because it has gone a long way in shaping my own view of what it is and what it is. which is not negotiation and I like to lay out My perspective from the beginning before diving into specific details after having negotiated and worked in negotiations and consulted within negotiations studied in different industries and also in different domains such as conflicts and healthcare, a One of the things I have come to appreciate is that at the end of the day's negotiation it is not about dollars and cents and it is not about terms of agreement and it is not about emotions and it is not about lives lost or lives saved. it's about ceasefires at the end of the day negotiation it doesn't matter where you negotiate what the bottom line is The question of negotiation is how many people you are dealing with.

Negotiation is always fundamentally about human interaction and the question that we are always trying to answer the problem that we are always trying to solve as negotiators is how do we engage with other people in such a way as to achieve better understandings and better agreements, that's right. , no matter what we are negotiating, through what medium we are negotiating, what the risks are, how complex it is, what we are always doing as negotiators is trying to discover how we can relate to other people in such a way that we achieve better understandings and better deals and what I'm going to try to do over the next 30 or 40 minutes is talk about some of the things that maybe you could do differently than you do.

I have been doing so that you are more likely to achieve success in that endeavor while dealing with other human beings. Now I spend all my time thinking about negotiations and I'm pretty sure you don't spend all your days thinking about negotiations, but most of you would probably admit that many of the interactions you have in your work, but also outside the professional sphere, have an element of negotiation whenever you deal with someone who has a different perspective than yours at any time. Dealing with someone who has different interests than your own can be helpful from a negotiation standpoint, so let's now talk about some of the ways you can make sure that when you're negotiating and when you find yourself in a situation difficult. situation where you're making a deal or you're in a dispute or some kind of conflict, you might be able to navigate a little better and the way we're going to do that is what we call the session, negotiation adjustments and the inspiration for that term. comes from golf.

I don't play much golf, but whenever I tell someone that I like golf and would like to improve at it, often what they tell me is that it is a very good idea to go to a coach for a professional to receive at least a lesson and I'll tell them, well, what a lesson will do and they'll say, well, it won't make you a great golfer, but they'll immediately see how you play golf and they'll be able to give you some adjustments. They'll see the way you grip. You know the golf club. They will look at your swing.

They will look to see if you are bending your arm or not. They will look at your feet. They're in position and they'll be able to learn a couple of things that you can do that are quick fixes, easy adjustments that you can make that will have downstream consequences to make you more effective at golf. I haven't done it, but I like it. the idea, so I'm going to do the same thing in this world of negotiation in the 40 minutes that I have and now, of course, in less than 40 minutes, I'm going to try to go over 22 things that you could consider doing in your negotiations. some of these things you may already be doing some of these things could be the opposite of what you've been doing some of these things could be something you've never thought about before and my hope is that everyone listening to this in the La live audience here or online will be able to find at least one, two or three things that you look at and say, "Oh, that's interesting." I never thought about doing it that way or is it something that I should really share with my team because, like, in our organization we don't do that systematically enough and the way we're going to do it is that the flow of the conversation is going to be in general from what happens in the early stages of the negotiation before you walk into the room to what happens as you go through it and then when you leave the room, here's how we're going to think about this and since I'm going to try to look at 22 of these things, some of them we'll cover quickly, some of them we're going to cover even quicker, that's how it's going to be, so the first thing I want to point out is having advised on many million dollar deals, thousands of dollar deals. million dollars, billion dollar deals and things where the money is not there.

One of the most important things I can tell you right off the bat is that you want to have a strategy meeting, you don't want to go in there trusting just your intuition, trusting just your gut, in my experience intuition is very nice. is very, very good, but it is not a strategy nor should it be a substitute for careful analysis when the stakes are high, the situation is complex, invite more people to that strategy meeting than you think you need. I've never regretted bringing a couple more people. The fourth, fifth, or sixth person won't add as much as a second or third person did, but they will shape the conversation in a way that will be useful and add something that will be useful.

They will see it from one perspective. that's different from the ones you've been seeing, the bizdev person brings something different than then the general counsel brings someone different the salesperson brings something different than the operations staff and someone who is on the front line you want to have a strategy Know too many people You go into a negotiation thinking that negotiation is about knowing what you want and then having four, five or six arguments for why they should give it to you and they walk into the room and say this is what I want and this is why. should happen this way and then hope for the

best

other than negotiation as we will find out as we go that there is a lot more to do and they need to coordinate as a team, another thing about being in a In meetings like this one of the mistakes What I've seen people do, especially leaders of organizations, senior managers or team leaders, is that they create a culture, they create an environment in their meetings and in their organizations that rewards people for coming up with the right answer.

That seems like a reasonable thing - you want the right answer, so you should reward people for finding the right answer or the right strategy - but I actually think that's the wrong way to do it. You don't want people in the space to think or feel that they will be rewarded for giving the correct answer. You want to reward people for making good arguments because this is not a math problem, usually there is not one right answer. that the smartest person in the room will be able to figure out if it is an interesting enough negotiation if the stakes are high if it is a complex negotiation the solution will not be obvious to one person it will be based on good arguments that different people make and it is not That you come in and say, well, whoever comes up with the right strategy will get a $1,000 bonus, but we do it implicitly, when the leader is speaking in a meeting and you're sitting in a boardroom.

When you are sitting in any type of meeting, whether you are the CEO, the founder, or the leader of a team, when the leader speaks he looks at everyone as he speaks, but when someone else in the room speaks he almost always looks directly at the leader. and they're looking to see if this person nods if they like what I'm saying and they're trying to get to the right answer as quickly as they can. That's not the kind of environment you want. You want to reward people for reaching out. with good arguments next you have to know what will happen to you if there is no deal this should be obvious you will make crucial mistakes if you have not thought carefully as a team what our starting point is how bad it really is if we don't get this deal or how good It's really if we don't get this deal, you need to know this, but there's a caveat: you don't want to obsess over what will happen to you if there's no deal.

One of the things we've learned through research and experience is that it turns out that negotiators who walk into a room obsessed with what will happen to me if there is no deal consistently do worse than people who walk into a room knowing what happens to them if there is no agreement, but when you make the negotiation about what happens to the other party if there is no agreement, when you frame the negotiation around what will happen to them if there is no agreement, now you're basically making it about the value that you bring to the table for the other side and when you make the negotiation about the value that you bring to the table that's when you have the ability to monetize the value that you create in the system for the other side to their organization, etc., to know what happens to If there is no deal, otherwise you will make crucial mistakes, but as much as you need to know, you need to focus on what will happen to them if there is no deal, why are they here today ?

What keeps this person awake at night? I do for them what no one else can do for them if you frame it around you having a greater opportunity to create and capture value in that deal. Next, many people obsess over the substance of the agreement for good reasons. Substance is everything. the things that will be in the agreement the terms the offers and counteroffers are about the substance of the agreement the language in the contract is the substance of the agreement what you don't want to lose sight of is the process the process is what gets us from where we are today to the finish line and the finish line could be a signing of an agreement, it could be the implementation of an agreement depending on the type of negotiation you are doing, one of the things I advise all my clients and all my colleagues should do. students is to get into the habit of negotiating process before substance, this is what I mean by this imagine a scenario where you have been negotiating for, say, six months, nine months or ten months and imagine that this is the type agree that It's a good amount of time and after these six, nine or ten months you finally get to the point where you think the finish line is in sight and you think this deal could happen now that you have a couple of saved concessions. in your back pocket for exactly one moment like today and you throw them outside hoping to seal the deal and the other side looks at you and says thank you, this is great, we really appreciate it, this is very helpful, now let me go. talk to my boss and see what she thinks about it and you're sitting there going what you have a boss I thought this was it I thought we were done I have nothing more to give that's an example of what can go wrong when you don't You negotiate the process before you dive into negotiating the substance The negotiation process before you dive into the substance is about asking things like how long does it take for an organization like yours to close a deal like this, who are all the people who need to negotiate? be signed before this agreement is approved, what are some factors that could speed things up and what are some factors that could slow down the process before the substance is also about having conversations like what are we going to discuss in the meeting tomorrow, who will be in the What about these other issues that we care a lot about?

When can we address them? All of these things None of these things have to do with the substance of the agreement. HEIt's about how we're going to get there from where. Today we are where we want to go and if you think about the negotiations that fail, many of them fail because people didn't pay enough attention, they didn't respect the process enough, they didn't have a process strategy, they didn't coordinate the process, they didn't think about the process. another thing I'm going to talk about raw will be the next lesson this is point number five actually comes from the world of mediation and have you ever gone through a mediation like a dispute mediation conflict some of you clearly have If they ever go through a really ugly conflict, it could be a business conflict, it could be a family conflict, any type of conflict and it's really ugly, and they go to a mediator whose job is to help them resolve this. problem one of the things that an effective mediator might do one day, when he brings people into the room, the mediator might say something like this you two think you hate each other today we're going to be at this for a week and about three days later From this process you will hate each other more than you have ever hated each other and when that happens I just want you to remember something that is normal, that is normal.

Now think about why a mediator might say that. What happens if the mediator doesn't say that and three days a week you hate each other more than you have ever hated each other the emotions have become even stronger there is more anger and anxiety than ever what are you going to think you are going to think that it is this? is not working well, we are moving in the wrong direction and you will abandon the process completely and what the mediator is doing is called normalizing the process. The mediator is normalizing the process for you. They are letting you know that things are not working.

You don't go from bad to good getting better every day when you try to take on these difficult challenges, the process from bad to good is a bit like that and that's how you get there, so when you're there don't expect too much. It's too much, not much importance is given to this idea of ​​normalizing the process, it is something we should do in negotiations of all kinds, not just in ugly conflicts. I was talking to a guy who had a business in South Asia and I did business from him. was that it had a lot of manufacturing facilities, one of the things that he told me we were talking about something else, he brought up this topic and said that one of the things that I have learned is that I will not do business with anyone from the West, he said and with The West was referring to the United States, Europe, etc., he said: I will not do business with anyone from the West unless they are willing to fly to my city, leave the airport, get in a car that calls them, and drive from the airport to our manufacturing facilities, which are about 18 miles away and take about three hours to get there until they've made it, once they don't know how it works here and the first time something goes wrong, they assume it's because we're stealing from them. or because we don't know what we're doing, you need to normalize the process for them even when you're selling to them, but very often we don't, we're too busy trying to seal the deal, sign the deal. get them to say yes, then we make it seem like nothing will go wrong, there will be no interruptions, there will be no delays, we will always seem as enthusiastic as we are today and when any of those things change or go wrong, they end up waiting too long. but when you've let them know along the way this is what's normal this is how we get from here to there we'll get there but this is the way to it they're less likely to end up with delays, interruptions and other types of roadblocks being killers. of relationships in this downline.

I know many people who talk too much in negotiations. I don't know almost anyone who asks too many questions. If I could have one mindset in every future negotiation, people have a very different mindset. Some people go. thinking this is war some people think this is relational some people think long term some people have a short term attitude some people think strategically some people think tactically you can have any mindset you want but if you had to choose one If you could take just a mindset and click on it before starting every future negotiation, I highly suggest you start every future negotiation with a learning mindset.

You are there, above all, to learn everything you can, but all the parts that are. relevant to this negotiation, whether they are inside the room or not, what are their interests, what matters more to them, what matters less to them, what keeps them up at night, why are they making this deal today instead of in six months or within six months. a year ago what are their limitations what are the things they can and cannot do how do they see situations think about the questions you ask write down all the things you would like to know they are not going to answer all the questions, but they are more likely to answer them Answer if you ask them or if you don't, and when you're done asking all the questions you can think of, I suggest you add ten more to the list and your team will help you. too many people talk too much, not enough people ask enough questions now it's not just about asking more questions, you also have to ask the right questions now every negotiation is different so the right question will vary depending on the context and the situation in the process you are just a small clue in general why it is more important than what people talk about what all the time what they want you can say what you want we want the deal to close in six months we want more money up front we want exclusivity , we don't I don't want exclusivity, that's what these are the demands that people make, the positions they occupy.

Your job as a negotiator is to try to dig deeper into that and figure out why they want these things, what the things are that drive them, what the underlying motivation is and when. you shift the conversation from what to why you often find more ways to resolve the dispute resolve the conflict resolve the impasse often the two sides have seemingly incompatible positions I want exclusivity they don't want to give me one so politely they seem incompatible and yes they are deal breakers for both of us parts, you're done, but sometimes what you find is when you start to dig a little below the surface, why what is your real fear?

What they are worried about is that they never want to give it or that they don't want to give it for more than a year. Is it the specific competitor who is worried about what the story is here when you go from what to why you often discover that seemingly incompatible positions are actually Do they hide underlying interests that are actually reconcilable? Get in the habit of asking more questions Get into the habit of asking why and finding out what is really driving your demands. They will then do the same thing, they will ask you questions and sometimes these are not the questions you want.

Listen how many of you know who Mike Tyson is. He's fine, boxer, heavyweight champion, known for a few other things. There is a story about Mike Tyson and it may be apocryphal, but it is an interesting story anyway, when Mike Tyson had been heavyweight champion for some time. being interviewed and someone asked Mike how you can maintain this level of success. The question is not how you got here but how you continue to stay here and, more specifically, every boxer that steps into the ring with you now, every single one of them has studied. They've seen all the footage, they've entered the ring with a plan designed specifically to beat Mike Tyson, how then do they continue to win and Mike Tyson says everyone has a plan until they get punched in the face? there is no this is true and the same is true when you are launching where is your product your service your solution your idea your approach you need to think about all the things that can go wrong and have answers for them or have a way to generally deal with a small tip in sales if there is a weakness in your argument it is almost always better if it comes out of your mouth before it comes out of their mouth if it comes out of their mouth first it becomes something bigger as quickly as possible One way to lose credibility as a salesperson is to come in and make it seem like you believe that your product, your solution, is right for everyone on the planet, even if you believe that to be true, the moment you talk like that, you lose credibility in their eyes because you don't believe it, They assume that their competitors exist for some reason, that there are other interests and other ideas for some reason, so what you have to think about is whether there is a weakness in the argument, whether there is a counterpoint, whether the competitors are actually They ask these difficult questions, how am I going to handle them?

So have a learning mindset but respect the fact that they see the world differently. Then there is the notion that you should let the other party make the first offer now that you could have made. I talked about this point for about 20 or 30 minutes and went through all the evidence. All I want to suggest for now is that I don't totally agree with the idea that you want the other party to make the initial offer. I'm NOT saying there are no times where that might be the right tactic, but I'm a big fan of being the party that submits the first offer, submits the first MOU, the first term sheet, the first LOI, whatever. whatever, because it helps you control the framework you establish. the benchmark shapes expectations, think carefully about who will make the initial offer, there is tremendous power in the party that sets the initial offer, that creates the initial expectation, okay, so if you've heard this and you're You may have heard it on television in some show where they talk a lot about negotiations.

I strongly suggest that you think about this a little deeper. Next up, another thing I'm a big fan of telling my students. My clients. Never let your offer speak for itself. the initial offer or a counteroffer when you make an offer don't let the numbers speak for themselves $50,000 five million 100 million tell the story that goes with it we're asking for X because dot dot dot dot we're asking for X here's our model here's our analysis here our assumptions the richer the narrative the richer the story again the more likely your number will stick the more likely the other party will have to find a compelling reason before deciding to just ignore it it's much easier to ignore an offer that doesn't come with a story that doesn't come with a justification that doesn't come with a narrative then it's ignoring one that has all those characteristics, then label your concessions the idea of ​​telling the story that goes With this, if you step away for a moment, what you really What we're trying to say here is don't leave it to chance how they will interpret what you're saying.

As a negotiator, you want to manage the attributions that people make. What you are doing when you make a concession, for example, the exact same concession in a negotiation may seem like a nice gesture, it may seem like a smart approach to negotiation, but a concession can also seem like what a gift might be, what else? Is it a weakness? You might seem desperate You might seem naive Well, what do you want them to think when you make a concession? well, ideally, you want them to, ideally you want them to think that you are wise and kind, intelligent and kind, not naive and desperate, but the same concession can be interpreted in many different ways, so one of the things you will always want to do , whether it's making a concession, whether it's calling them back, whether it's choosing not to call them back, it's thinking about the powers they're going to make and getting into the habit of trying to manage the powers and how you do that depends on the situation, not you're going to say here's a concession and just so you know, it's because I'm wise and I'm intelligent and I'm being kind, not those things, but you have to think about whether I'm going to look desperate if I do it now or this way without dot dot dot and How do I ensure correct attribution is established.

One of the mistakes that people often make in negotiation is They engage in what I would call meaningless haggling. Now there will be some haggling in a negotiation. They will start in one place. You will start in another. But the mistake we often make is taking a rich, complex negotiation and turning it. in a series of haggles, we have to talk about the price, we are going to haggle over the price and tomorrow we will talk about the financing terms, they will take care of the financing terms, then I will talk about the exclusivity, they were going to haggle.

Still Civet II, a better approach to negotiating is usually, instead of addressing one issue at a time, negotiate multiple interests simultaneously, one of the tips we often give is to try to break the habit of addressing one issue at a time and try to solve it. that issue and then move on to the next, you are much more likely to find smart trades where they are more flexible where there is less flexibility what you should be given what you don't have to get if you are trading multiple issues simultaneously rather than instead of doing one series of haggling, one issue at a time, have comprehensive offers and counteroffers that you give if someone says to me: you know?

Could you do 60% upfront instead of 40% upfront? My answer is not yes or no. My answer is. I have no idea what you're talking about, whatcontext, what are the other terms of this agreement and it is much more effective for both parties if you get into the habit of making bundled offers and counteroffers, but when it comes to making an offer, the next time you are in a negotiation, consider making something a little different than what I might have done in the past. In your next negotiation, there will come a time when you will have to make an offer, either the initial offer or the next time it will be a counteroffer.

They are supposed to make an offer, don't make one offer, instead make two or three offers at the same time. It is a notion of what is called making multiple offers simultaneously instead of saying my offer is this price with this royalty rate with these terms you give them two or three complete packages we can do it with option A, we can do option B or we can do option C the reason to do it is because often you don't know where they have more or less flexibility when you give them two or three different ways of doing it, you're not just indicating flexibility that they appreciate, you can legitimately tell them, listen to us.

We know what works for us, but we also want to make sure it works for you, so if you can do it with a very, very high royalty rate, this is what it would take, but if you don't have a lot of flexibility in that, but you have flexibility in these other terms we can do it this way or this way too. I think my record for the most deals I made at one time on the other side was a deal we were doing in Australia was 27 now sounds crazier than it was. There were 3 broad categories of bids, we could do it this way, this way some permutations were described in each one and the reason we had to do it was because they were not willing to sit down with any of the people who were bidding on this project. and so we wanted to make sure that we don't incorrectly guess what they care more about and what they care less about, where they do endodontics and they have flexibility, so we'll tell you all the different ways.

We can do it in general terms. I'm a big fan of telling the other side of the negotiation. I know where I have to go. I'm flexible about how to get there. I will often say those exact words. I know where we have to go. I am flexible on how we get there, as long as you can meet these needs we will be flexible on the style structure and anything else you need or to put it another way the more coins you allow someone to pay you in the more likely they are to pay you. pay, so it's one thing to want so much, but if you're also going to tell them and the only thing we're going to accept is if you do it this way, you're creating more limitations if you show more flexibility in the structure of the deal, suddenly there's more degrees of freedom so they can give you what you need to be able to happily say yes, initial reactions matter, we know this in general, let me give you a specific example from having been in the room and having been in many negotiations where this often comes up bad it's a small change, someone makes you an offer over the phone or in a face to face meeting, whatever and it's a ridiculous offer if it's a ridiculous offer, don't do it.

Don't waste your time before rejecting it or pointing this out to them. Sometimes you feel like I don't have the authority to say yes or no, so I'll go back to my team and discuss our answer. It doesn't work very well if someone tells you we're offering It seems totally ridiculous because it was totally ridiculous, you probably would have seen it before, very often we are not ready to answer some things that may arise, it is not that different from being prepared to answer the most difficult questions that may arise, think beforehand about what kind of sting you want to send them in different situations, otherwise the signal might now be credible.

Thank you, please understand and respect its limitations. There are things in negotiations that you deserve and that are rightfully yours, that you cite and that you should get, but that you won't get simply because your hands are really tied and the sooner and more effectively you discover where they have the most and least flexibility, where they are really tied and where they might hit, the more likely you are to be able to navigate the deal in the direction that is going to get you what you want and at the same time allow them to say yes, you have to put yourself in their shoes, you have to respect the fact that just because they you want and you believe it is yours by right, there may actually be some problem there where they have some strict restrictions think about why they might reject your legitimate demands now that you start giving them this benefit of the doubt again back off a little bit because there is a broader point I want to make very often people will come to me and say something like you know I'm dealing with these people and they're completely irrational or I'm dealing with these people and they're very, very stubborn or I'm dealing with these people it's a very difficult negotiation because they are very Untrustworthy Never in my life has someone approached me and said I am in this really difficult negotiation.

I am the irrational one. I am the untrustworthy one. I'm the stubborn one and I'm starting to think I'm the nicest people on the planet. You should ask me for help because it's never them. What I want to suggest to you is that it does you no favors to see them as irrational. I have to tell you and I have been to many parts of the world with There are many different types of negotiations, conflicts and disputes. The people you are dealing with are not irrational. It is highly unlikely that you are dealing with someone who is actually irrational.

By irrational I mean someone who is consciously doing something and knows that it will achieve the opposite. of the outcome of what they want probably that's not what's happening that would be irrational I know it's going to cause I don't want B and I'm still going to do knowingly that's not how people normally behave, what it seems to us rationality. It's one of two things: it could be ignorant or it could be that they have an interest that we don't fully appreciate, so when someone says no to what you know is the

best

offer they'll get, they walk away. when it will only be worse for them if they leave than saying yes, that seems irrational, but maybe it's not irrationality, it's ignorance, maybe they haven't fully understood the value to them and if that's the problem, the solution might be how we educate about the value we bring or it could be that they have different interests, maybe accepting this offer makes them look bad even if it is the best deal they are going to get, but saying yes maybe makes them look bad and it doesn't.

They want to look bad, that's not rational, they just have other interests or it's the best deal they'll find, but if they do it, it sets a bad precedent in future deals, there's something else going on before you assume someone is irrational or crazy. or evil or to make you step back and really try to understand how he sees the situation, what is really driving this behavior, how does this person go to bed at night without thinking of himself as irrational, crazy or evil, and when you have this level. of empathy you're not doing it to do them a favor when you see the world this way when you have this level of empathy you're actually doing yourself a favor because if someone is irrational the only solution is to lock them up, okay?

Stay away if they are evil, they should be destroyed, but if something else is going on, it will give you more levers to push and pull to solve the problem. Now, as far as this notion of economics and the psychology of the deal goes, it may be the best deal you'll ever get, but they keep saying no because one of the things I've found in business and other deals is that often people can't say yes without looking bad and there is a phrase that was initially stated by a guy named Bill URI, he was a colleague of ours at Harvard Law School for many years, he came up with this phrase that I love, he talked about her in the context of the conflict in which we must enter. habit of writing your victory speech for them we need to write your victory speech for them we can't be so selfish in that we need to lose sight of the fact that they have an audience and that's why one of the things you want to be doing in A deal, especially if it is a difficult negotiation, is to think about the person on the other side of the table and wonder how this person will possibly say yes to what I am proposing and still be able to come back and declare victory. whoever your audience is maybe it's your boss maybe it's your partners maybe it's your team maybe it's your shareholders maybe it's your investors maybe it's your voters whoever they are how are you going to launch this?

How are they going to look good at the end of this? Deal well because what you don't want is to be generous and bring a lot of value to the table to negotiate in good faith and still not get the deal even though it was a deal that was right for everyone because you didn't understand its true meaning. problem in negotiations you can't walk away saying well, that's their problem, whatever seems like their problem somehow finds a way to become your problem, well, because you're in a negotiation, next let's take this same principle and apply it in a different way. a more tactical way.

Have any of you ever been in a negotiation where someone gave you an ultimatum, threw you an ultimatum like: we will never do this, you must do this, yes, if you have lived, they have thrown an ultimatum at you, my answer if someone tells me give an ultimatum to our side if I am in a negotiation if I am in a conflict if I am going to reach an agreement scenario if it is a diplomatic situation whatever if the other party gives us an ultimatum I don't care if it is face to face if it is an email if it's a phone call my response is almost always the same if you're going to give me an ultimatum my response will be to just ignore it I'm not going to ask you to repeat what you said I'm not going to ask you to explain what you said I'm going to pretend that was never said and move on and address everything else you've touched on accept the ultimatum now why will it be a week from now a month from now?

Within a year there may come a time when what you said you would never do you realize you should do or what you said you would never do you realize that it is actually in your interest to do it and when that day comes the last thing you I want you to remember is having said I will never do this because I really am the last thing I want you to remember is for me to remind you of having said you will never do this because that day that will be the problem, it is the same principle as me. thinking about how to write your victory speech that day, I'm going to ignore your ultimatum to never force someone to choose between doing what's smart and doing what makes them look good to the extent possible, you want to align those two. things now, you might legitimately wonder what if it's a real ultimatum and you're ignoring it practically speaking from experience.

What I will tell you is that it is not a serious problem and the reason is that if it is a real ultimatum, they really can't do this. You're worried that they'll keep repeating that ultimatum over and over again through every channel throughout the entire negotiation and that at some point you'll be able to decide based on your understanding of the situation and where they've shown the most and least flexibility and everything else. I have learned in the process, but maybe this is a real red line for them, but it is also the case that often what seems like an ultimatum is not a real ultimatum, sometimes people just feel that they have been pushed enough and are trying to assert some control, sometimes they are just trying to gain some tactical advantage.

I will say that I will never be able to do it and then they will have to move sometimes perhaps cross-culturally, especially the language is used a little more forcefully than it was intended or needed to be used and for all those reasons it is often better to ignore it now. I'll give you a variation on the theme. Sometimes it's hard to ignore what someone said if we're negotiating and just what you say. for me it's I'll never do this and that's all you said and you're sitting there it's hard to ignore it again when they call me if I should commit to what someone said and it's an ultimatum that I'll do often.

This is the variation of the theme. I'll rephrase it as a non-ultimatum before I continue, so if you tell me I'll never be able to do this, I might say something like listen, I get it, given how things are today, this would be very difficult for you. what I have to do, I understand and what I'm doing is creating at least two outs, first of all, given where we are today; In other words, tomorrow or a year from now we may not be where we are today and secondly, this would be very difficult for you. I do it and I understand it, instead of this, of course, it will never happen, and in my experience, I have never had someone stop me in that moment and say no, no, that's all I said, I said, never, ever, for Generally, they will let it pass. to understand, okay, one point has been made and now both sides have some ways out, that is give, keep tomatoes, let me also say a brief point number 19 about how to make ultimatums because people often ask you if you should make ultimatums and negotiations.

I have sort of a two-pronged approach when it comes to giving ultimatums: we will never become aggressive or absolutist. There is no flexibility in something. OnlyI will give an ultimatum if it is a real ultimatum in the sense that I will actually follow through with what I said. because for me safeguarding our credibility and legitimacy is essential. I'm only going to give an ultimatum if I actually follow it if they don't do what was asked secondly, even if it's a real ultimatum, even if I'm ready to follow it. I won't use an ultimatum if I can find another way to solve my problem because ultimatums can sometimes leave a bad taste in people's mouths.

People don't like being told what to do. They don't like it when I think you're being too aggressive or forcing them to do certain things, some kind of psychological reaction comes up, so if I can find a better way to accomplish what I'm trying to accomplish, conveying what I'm trying to convey, getting the concession. I need to get there without being tactically aggressive. I will do it, but if both criteria are met, this is what I need to do, then I'm perfectly fine doing it and it's often good for the other party to know what can and can't be done.

If this really is a deal breaker for me, we'll both be better off if this gets passed on. The next point is that one of the things that often happens is that people leave the negotiation and they don't come to an agreement, which is fine, a lot of agreements. It shouldn't happen if there is a better partner they should work with if there is a better product for their problem you shouldn't get the deal Not reaching an agreement is not a problem Not reaching an agreement is only tragic when you really were the right partner for them when they actually created value for each other when there was no one better for both of you than the two of you together and when those agreements ended, oh, that's a little tragic because you've destroyed something of value.

What I don't like is when Someone leaves a room and if I ask them what happened, they say I wouldn't get the deal. I said, "Okay, well what went wrong or why" and sometimes the answer is "and I still have no idea." I still don't know what they really wanted, that's what I don't like. I can live with me. We didn't get the deal, but my opinion is that it's not always possible to get it, but it often is. Don't let the negotiations end. with a no, the negotiation should end with a yes or with an explanation of why not, if you are going to walk away and the agreement is still a no, you still push, you still investigate, you still ask questions exactly what would have made it different.

I have often done it. he said to the other side I understand it too no, I understand that this deal is not going to happen, but paint me a picture imagine a world where you were actually saying yes, no, paint me a picture of what that world should look like, what it would be like. I need to have been different about it and people are often open to that conversation and sometimes what I learned is that I am even more confident that this deal will never happen because what they would need is impossible for us to give right now, to sometimes I say.

Wait a second, we can actually address that issue and sometimes I say okay, we can't come to an agreement today, but at least now I know what will be necessary in the future, whether with them or with people like them, if we meet with this guy. everything, okay, next point, a small point, a small adjustment, a small tactical thing again, but something that you see often happens when you finish the meeting, if it was a face-to-face phone call, whatever it is. I'm a big fan of sending an email and sending a The subsequent email allows you to do a couple things first, it allows you to make sure you're on the same page that what you thought you had agreed to was actually agreed so you can confirm where things are because it's closest to you.

What we'll ever be with that person, being on the same page is the moment you leave the room and every moment after that you get further and further apart with respect to your memories of what happened and what didn't happen, and those They are being biased by what has happened to each of you since then and based on your own interest so that you can confirm, you can get some confirmation and if you are going to say no, that is not our understanding, it is better to know that now that Later it will also allow them to reframe the situation, if you didn't frame it well in the room, sometimes you walk out of a room and say man, I think we're coming across this too desperate, we don't even mention that we're talking to these other people or we they seemed too aggressive and it allows you to reframe and use a little more language about what your perception of the situation is and the third benefit is that you can get more information, sometimes you leave the room saying we forgot.

Ask them this, we don't even know who's supposed to reach out next, we don't know what the process is, so for all these reasons, a little adjustment get into the habit of reaching out to people via email or something after you . Once you're done with the negotiation to make sure you're on the same page, make sure you frame the negotiation the way you want and that you can get more information. Last point. I do not allow any of my clients to participate in any negotiations. that I have ever lied. I am a big proponent of telling the truth, always, always, always.

That's not the same as saying that every time we walk into a room we tell them everything we know, so this is the most we'll be able to do. able to pay and here's the thing and here's how much money is in my wallet that's all I mean, I'm talking about not lying and the reason is, first, it's the right thing to do, it's not fair, I guess I'm saying, well, We're We're negotiating, so that's different than how we are in real life or that it was a deal, this is your real life, this is what you're doing and, by the way, if you're sitting in this room or if you're on cnbc.com and you're watching this or anywhere else you might be streaming it live.

I don't think it's working that well. I'm pretty sure there's no one in this room or anyone watching this who can't afford to be more ethical. There are people who don't have much, none of those people are in this room, so everyone here has the ability to be more ethical when it comes to these things and, at least in my experience, people don't lie because they are slimy people. , they often lie because they are not prepared, they are not prepared to answer the difficult questions or they are impatient, they want to get somewhere sooner, whether that place is a success or that place is further along in the negotiation process.

I always have to remind people of our side, not because they are worse people than me. I have the same temptations: you have to take a step back and you have to make sure you are honest and all the great negotiators I have met. business in diplomacy people who I really consider effective negotiators. I think every one of them would tell you that they protect their credibility with their lives if they say they're going to do something, they'll do it, you know, they walk over hot coals to make sure they do it. And if this hasn't happened to you yet, I assure you that at some point in your journeys as negotiators, there will come a day when the only advantage you will have in a negotiation will be your credibility;

It will be the only reason someone is willing to sit with you, it will be the only reason they are willing to take the risk you are asking them to take. You have no other advantage except that they think you are credible. They know you are honest. They know you are credible. If you say it and you mean it, they know they can respect you or trust you and when that day comes you'll be even happier that you didn't let these things slide because most people don't preach much here, but uh. but since it's point number 22, why don't most people lose their credibility over some histrionic backstabbing act they did that everyone has heard about?

Usually, people lose their credibility and lose their reputation little by little when you say something that you didn't end up doing because it was inconvenient? You said earlier in the agreement process that this is really important. You can't not have this, but then you ended up making a concession and now they're like, wait a second, how? We always know what you want to say, so you have to be very aware of it and I don't know where to draw the line except always because every time you draw the line, someone else somewhere else knows it, so there is no accountability even to yourself. , so that's twenty-two settings.

They told me I had 40 minutes and I hope that's true because if it's true then we're on time and if that's not true then you know we've taken up someone else's time and we'll stop here. These are things that I am not assuming. I'm assuming that most of you are actually very good negotiators. I don't walk into a room like this thinking there are people here who know nothing about negotiation. In fact, I assume the opposite. I assume that most of you are very good negotiators, some of you may be incredible negotiators, but I also think that each of us could be even better, so if we talk about 22 things and you discover one thing, you never thought of doing it that way. that way. or should I talk to my team about it.

I think this will be time well spent and I will stay after this session and stay. I'm thinking about a reception today at 5:00. I'll try to be there too. I'd be happy to have any conversation you'd like about this good luck in your future dealings. I hope you found something of value.