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Q: Heavy psychology. A: I'm just a student of human behavior -- and history. Think about what took place with Lord Chamberlain before World War II. And think about what Chamberlain gave up -- what he went to Munich prepared to give up! -- when negotiating with Hitler, and without really knowing or studying or understanding what was really going on with his opponent. And then think about what it took to fix that mistake Chamberlain made.
Or think of Vietnam -- my war, the war I spent a year at. Think about Lyndon Johnson saying to Robert McNamara -- and he said this, I read it, it was quoted many times, "Let's show Ho Chi Minh and the Vietnamese people that we're not bad people. Let's stop bombing the North and let them see that we're good people. That way we'll make them like us and we can bring peace in our time."
Q: Didn't work. A: Sure didn't. It got us killed.
Q: So what approach would you have advocated? A: I would have said, "Ho, we have two choices: We can -- and you can say no to either one of these -- we can stop the war, withdraw the troops, and we'll negotiate a settlement and we'll support North Vietnam and help you rebuild your nation. Or, we can have an all-out war and the gloves come off."
Q: When you're negotiating, to cite your example of Ho Chi Minh, it should be with someone who has the power to make decisions that stick. A: We call that negotiating with the qualified -- and typically, be aware that when you're going through preliminary negotiations, what is happening is that you're being soften up by underlings. Because of the prevailing mindset that compromise is required, the lower-level negotiators says, "Hey, we'll only give you 3% off." Later, when the big guys get involved, they offer 8%, and the deal is done. But do you see the strategy? The 3% was the foot in the door, and by the time you actually reach the climax of the deal, you've been seduced by the psychological climate that was set early on. Fact is, if you're prepared to say no, you're likely to get a result that's better.
Again, these mistakes happen because of the whole mindset that, because of the win/win perspective, compromise is an essential prerequisite.
Q: Are these weaknesses in negotiation technique primarily found in smaller businesses? A: No, absolutely not. I worked with a very high-profile company, and the chairman asked me to sit in on a meeting of his global strategic sales team as they talked about new equipment they were going to be selling, and at $20 million a unit. The senior vice-president started off by saying, "I really believe that if we approach this marketplace aggressively" -- he was talking about the Pacific Rim -- "and we start with a 25% discount, they're going to be so impressed that they're going to like us and they'll give us even more opportunity to build other equipment in that arena."
Guess what? In Korea, the discount wasn't good enough. The Koreans sensed that 25% was where negotiations started, so their demand was that they get the equipment for free for three years before deciding if they would buy it. It's unfortunate, but that's so often the mindset...win/win, give and take, the expectation that compromise is always required. The truth is that you should always be prepared to say no.
Q: Emotionally, that can be a tough call. A: We can't take emotion out. The fact is, and there's no disputing this, it is 100% emotional at all times, until the decision has been reached. As successful negotiators, our job is to provide the backboard, if you will, for that emotional ball: However we act or react, we're aware that we've got to help the other side see what we want them to see. When they do see it, they're going to make their decision in the emotional arena. We're all human -- we can't take emotion out, so we should be aware of it.
I'll give you another example, also illustrating how important it is to take copious notes of negotiating sessions, a basic and essential skill and one I always stress. One client came back from a very large negotiation in Asia and said, "Well, things went extremely well, but they had to have 5%." I said, "Well, where in the meeting did they specify 5%?" And this fellow, the leader of the team, said, "It was somewhere in the middle of the talks." And I looked at the other three team members assigned to take notes, and none of them had written down a 5% requirement.The team leader was projecting! His mind was going so quickly, so fast, that it was almost like he was hearing them say that 5% would make this deal. He actually talked himself into it. He kept hearing 5% in his mind, but they never said it! He went into the negotiation with the assumption that 5% would make the deal, and that preconceived thought just overwhelmed him.
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