Bad negotiation leads to these things automatically: anger, resentment, crying, slavery, and poverty.
So it’s very important to constantly study yourself, study the negotiations you’ve done, and try to improve so you don’t experience the above, which can be easily avoided.
Every day for the past 20 years I’ve learned something new about negotiation. Mostly I learned how to screw myself over by doing bad negotiations. You learn more from a bad negotiation than a good one.
Communication is the thread that weaves humans into humanity.
Make sure the result brings you life and love. Tomorrow is 100% based on the negotiations you do today.
When I do the below, when I live life as gently and positively as possible, then my negotiations work out, and then my tomorrows and the tomorrows of the people around me are pleasant.
I’ve learned about negotiation while selling a company, while buying a company, while closing a sale, while buying services, while getting married, while getting divorced, while figuring out what to do with my life, while screwing up my life (in a BIG way), and all the variety of things in life that happen in between. 10,000 negotiations.
I haven’t read any books on negotiation and there may be better suggestions than these. But this is what works for me and I think what will work for others but try for yourself.
So if you have to do a negotiation TODAY, do these things and tell me if they work. And offer more suggestions please.
I told this to someone the other day who is about to get fired from his job. Don’t act like it’s a done deal. Getting fired is a legal action. It’s always a negotiation with many more moving parts than people realize.
Say “No” and that you need to “think about it”. They’ll say something like, “this is not a negotiation”. You can say, “That’s ok, I need to think about this.”
Give it 24 hours. Think about everything that’s happened to you on the job. Think about what you need to get a new job or career. Do the techniques listed below.
In general, with everything you negotiate, give yourself permission to think about it. Else, it’s manipulation and not negotiation.
– DON’T BE A CHILD.
Don’t “meet in the middle”. Here is a dumb negotiation that never really happens:
You offer $40, I offer $20, and we meet in the middle at $30.
I love cartoons but I wouldn’t try to learn how to negotiate from “Family Guy”.
The middle stuff never happens. Many people think it does so they always start off negotiations with being inauthentic.
Always be honest. Say what you want and why. Negotiation equals Authenticity. Without authenticity you lose the tires on your car.
Then you end up going nowhere.
– LET THE OTHER SIDE HELP YOU.
There’s the trick, “I have to talk to X”. Where you have some other X who needs to confirm.
But this is just a trick. It works when you have it and when you don’t have it, it’s useless.
So I will give a better trick: get the other side of your negotiation to be X. In other words, get them to negotiate against themselves.
The word “against” is wrong. The only way the negotiation is going to work is if they are happy also. So “against” also means “for”.
They clearly want something from you. That’s why you guys are at the table in the first place. If they don’t want something from you, then you’ve lost before you’ve started.
So here’s how what you say: “I’m new at this. You guys are the grandmasters of negotiation. If a grandmaster plays a novice then he will always win. So help me out, if you were me, what would you do?”
And then NO MATTER WHAT THEY SAY, you say, “but seriously, if you were ME, what would you do. Again, I’m just a novice. I have no clue what I’m doing. Help me out here.”And they will help you out. Because they want the deal to close and you really do need their help, else the deal will never close.
Is this being inauthentic?
No. Because you want as much information on the table as possible. If they help you, then you have more information, and can be even more authentic. If anything, you might end up helping them more than they help you.
– MY LIST IS BIGGER THAN YOURS.
Have more items than they have. Let’s say you are negotiating a book advance. They offer a $10,000 advance and they can’t budge higher.
That’s fine. Now make your list of other things: how much social media marketing will they do, what bookstores will they get you into, who has control over book design, what percentage of foreign rights, of digital rights, you can get. Do royalties go up after a certain number of copies are sold, will they pay for better book placement in key stores, will they hire a publicist? And so on.
Before every negotiation. Make a list. Make the list as long as possible. If your list is bigger than theirs (size matters) then you can give up “the nickels for the dimes”.
This is not just about negotiation. This is to make sure that later you are not disappointed because there is something you forgot. Always prepare. Then you can have faith that because you prepared well, the outcome will also go well.
– SECRET VALUE.
Let’s say someone is buying your company. It may seem like all they are doing is buying the assets of your company. But they are also buying the “negative imprint” of your company. In other words, they are buying: “nobody else can buy your company”.
They can say, “Well, we don’t care about that.” Then fine. See if it’s true. Offer your services to other companies.
If you can’t walk away from a negotiation, then you aren’t negotiating. You’re just working out the terms of your slavery.
– IF IT’S NOT EASY, THEN WALK AWAY.
If a negotiation is not easy, then it means you need to work harder to develop more value to offer.
Negotiation should always be easy, else you need to take a step back and be patient for when it becomes easy.
NEVER waste time chasing down a difficult negotiation. Else you will lose, you will be unhappy, the other side will be unhappy (even though they got you cheap, they will secretly think you are worthless) and you will have wasted time and squandered money.
IMPORTANT: Every day, your body requires energy to survive, to think, to do well, to be happy. You don’t get infinite energy.
One way to replenish energy is to sleep. The other way is to eat well and to exercise.
But another way to replenish energy is to live a gentle life. As gently as possible. So your energy grows and is used where it is needed.
Which means all negotiations need to be smooth else they result in anxiety and fear and guessing and out guessing and much future depletion of energy.
And then you die faster than the one who lived gently.
Try this. Next time you are in a negotiation, don’t forget to relax your face.
– OPTIONS EQUAL FREEDOM.
For instance, a freelance employee has the ability to take on more than one job. An employee can’t take on more than one job and everything he does on company time is owned by the company. That’s slavery.
When you rent, try to give yourself as many options as possible to leave.
When you get married, make it clear in advance what you want (maybe one side wants kids and the other doesn’t) and how this can be resolved.
This is not the same as a prenuptial (which is purely financial) but an understanding of what both sides want (communication is always good in a marriage) and an understand of how it can be resolved if wants and desires change (i.e. options to leave or change the nature of the relationship).
Sometimes there are not that many options you can negotiate. That’s ok. Just remember the line, “options equal freedom”.
In some cases, you may want to sell your freedom if the price is right.
For me, there is no price that is worth sacrificing freedom. But not everyone is the same and that’s fine.
If someone says, “you can be CEO of Google but you have to work 14 hours a day for 5 years or we take all the money back” you may think that is an ok sacrifice for your freedom. Or not.
But until you sign, you have the option.
This seems like a contradiction. Most people think, “More Money equals more Freedom.”
There’s a balance. You don’t want to be a slave to your bills and debts.
But you don’t want to be a slave to massive downside either. Bernie Madoff was very wealthy for instance, until he went to jail and his son committed suicide.
Everything in life is about having as many options as possible so you can maximize your freedom. “Options” is not the same as money.
Every decision you make, don’t let cognitive biases limit your options. As an example, if you spend $400,000 and 12 years of your life learning how to become a brain surgeon, you now have this HUGE cognitive bias that you MUST be a brain surgeon.
This is not true. Make sure you can always list your options. Don’t succumb to cognitive biases that are just trying to trap you.
– IT’S NOT ME, IT’S YOU.
When you negotiate, you always are bringing something to the table. But the negotiation is not about what YOU own. It’s about the value you can deliver the other person.
The negotiation should be about whoever is bringing the higher value to the table.
As an extreme example, let’s say you are selling your technology to Google. You’ve invested $5 million in the technology. They offer you $10 million.
This seems great, right?
You counter: With this technology, you can generate an extra billion in profits every year!
Now the negotiation is about that billion and not about your five million.
If they say, “No”, then no problem. You say, “Ok, let’s just work together.” And you keep your options open while you talk to other companies and they start to get nervous you might sell to someone else.
Remember: the negotiation should ALWAYS take place on the side where the higher value is. Unless the “secret options” discussed below take precedence.
Which leads me to:
– INFINITE PATIENCE BRINGS IMMEDIATE RESULTS
Note that the words “infinite patience” and “immediate” seem to refer to time. but they don’t. There is no unit of time called “immediate” and no unit of time called “infinite”.
When you have to deal with time in a negotiation, then you lose. If a negotiation has to be done by tomorrow, for instance, or next month.
If you can have infinite patience, then the negotiation will work out. And whether it works out immediately or not, does not matter. You will have immediate results anyway.
What those results are, we don’t know. But infinite patience means that whatever happens next will be all according to plan. New suitors may show up. The negotiation might get finished. Or something new altogether might happen that is good for your life.
Your only goal is to structure your life and business and opportunities so that you can always have that infinite patience. Then the results will ALWAYS be immediate.
Remember that we all go back to the dust. Every word you say, every thought you think, floats upwards into the ozone, then into the memory zone, then into the nothing zone.
The only thing that makes a difference is if you have infinite patience or if you are feeling the slavery chains of time. To nobody else it matters. But to you it does.
If you can’t negotiate with infinite patience, on any aspect of your life, then you lose.
– NEGOTIATE WITH YOUR GUT
Many people think that the brain is where all of the reasoning happens.
And it’s true that this is where you calculate math, and make logical assumptions, and draw logical well-thought out conclusions from your observations.
But your gut and your heart have just as many neurons as the brain. More on this in another post on how to take advantage of these “brains” (although it’s really all one big intelligence system).
Your gut doesn’t say “yes” or “no”. But it does tell you when you are feeling good or bad about something.
Practice listening to your gut. If someone invites you to a meeting of the Ku Klux Klan then your gut will feel pain even faster (I hope) than your head will.
That’s an extreme. But your gut is very much involved in every negotiation you do. You have to practice paying attention to it.
I find that most people don’t practice this. So they make their negotiations with their brain and their gut gets more and more sick.
One way to practice is to try not to do anything today where you feel even the slightest twinge in your gut that this might be wrong.
See what then happens. In this way you learn to trust your gut or at least build a better connection between the gut and the brain.
Let’s say someone invites you to a meeting and you feel a twinge. “But,” your brain might say, “you HAVE to go this meeting. Your Boss will be there.”
Pay attention to the twinge. Maybe you are not prepared enough. Maybe you think it will be a waste of time. Maybe you have other things to do.
Everything is a negotiation. Make your list of reasons why you can’t go bigger than the list of why you can. Negotiate your way out of the meeting.
Listen to your gut just as much as you listen to your brain, if not MORE.
IMPORTANT: 95% of your serotonin (the neurochemical for happiness) is in the gut and not the brain.
So in many cases, the decisions of your gut are much more important for your overall happiness.
DNA doesn’t care about happiness. The only goal of DNA is to replicate itself.
But my guess is you care about your happiness.
– NEGOTIATE WITH YOUR HEART.
I only negotiate with people I like. Else, what is the point of living.
Let’s say you have to negotiate with the IRS. I don’t like the IRS. But the people there are just doing their jobs. I can help them do their jobs by doing a good negotiation with them.
On a bigger scale, there is no sense in selling a company or a service to someone you don’t like.
Both sides will feel remorse. Both sides will be unhappy. And then they will die at some point. A bad negotiation is a cancer of the soul.
– THE SECRET NEGOTIATION
When you negotiate there are really two things being negotiated. The visible negotiation and then all the things that are hidden.
For instance, maybe you are selling your company. But that’s because you might be buying your freedom (if you get a lot of money for your company).
Or if you are getting a book advance, the secret thing (Hugh McLeod calls this “your evil plan”) might be that you feel with a book out you will get speaking opportunities since most books don’t make a lot of money.
Always make sure that a negotiation gives you secret options. Options equals freedom (again). Research thoroughly your secret options. Else, don’t begin the negotiation because you have not prepared properly.
– BE RIDICULOUS.
In the upcoming book, “Think Like a Freak”, Stephen Dubner and Steven Levitt describe the negotiation that the band Van Halen would do with concert organizers.
In the contract Van Halen would require that a jar of M&Ms be delivered to their hotel room at the beginning of a gig and that there would be ZERO brown M&Ms in the jar.
Why would they do this? Are they just being “rock stars” with ridiculous demands?
The answer is interesting: if they get brown M&Ms in the jar, despite this rider in the contract, then they know that the concert organizers were probably not detailed in all the other 1000s of things that go into concert preparation.
This would be a bad sign for Van Halen and force them to pay closer attention to the details of the concert or even force them to abandon the concert altogether.
Throw some ridiculous things into your negotiation. Not only does this make your list bigger but this will allow you to test how much someone really wants you involved and the care and attention they will place on you once the negotiation is finished.
Even the ten commandments were easily broken (Moses actually smashed them and had to go back up the mountain to get new (and DIFFERENT) ones.)
Every day and every interaction is a negotiation. Just because you have a signed and sealed contract doesn’t mean it won’t be broken. Doesn’t mean you cant break it.
I don’t mean this in an unethical way. But if you are unhappy and feel you cannot perform your fullest then make sure you come equipped with two things: the new value you offer the other side (or a big list of value) and what you need to succeed in this value.
People may sometimes seem like they are unreasonable. But if you start off with the suggestions on this entire guide, then when it comes time to renegotiate (and this happens in 90% of situations) then everyone will continue to be reasonable.
Particularly if you are staying physically, emotionally, mentally, and spiritually healthy, which allows you at all times to negotiate with your gut, heart, and brain instead of just the overworked brain.
“But is it against the law to break a contract?”
No. Because the value you bring is constantly changing and the world needs to be adjusted. All contracts can be broken if both sides agree that the world has changed.
And the more options you have, the more the world will change in ways that are positive for both sides.
– PREPARE EVERYTHING. SCRIPT NOTHING.
Make sure you know all of your numbers. All of your lists of wants. All of the other side’s numbers. All similar deals in your industry. All similar deals that the other negotiator has done. As many examples of negotiation, particularly in this arena, that you can find.
Then make sure you are negotiating from a position of strength. People usually think that means, “I have more power than you”.
This is NOT what strength is. That will only result in a bad negotiation that in the long run will satisfy nobody.
Strength simply means physical health (you’re well slept, you’ve eaten well, you feel energy), emotional health (you are dealing with people you like), mental health (you have done your preparation) and spiritual health (you feel fully deserving of the abundance and gratitude that is coming your way).
Having faith in your strength is all you need to bring to the table. Nothing else.
Once you do your preparation have faith that the right negotiation will happen.
– THE BEST NEGOTIATION IS NO NEGOTIATION.
I read recently that “in a good negotiation, both sides end up unhappy”.
This is not true. That’s a horrible negotiation.
In a good negotiation, both sides don’t even realize they were negotiating. Both sides have just made a wonderful change to their lives that will make life better.
This is not a negotiation but a way that two sides can help each other improve their lives and the value they offer the people around them.
– – –
Most important, don’t forget the bigger picture.
The bigger picture is that you get a chance to love what you do. And you get the chance to live life as gently as possible.
This gives you the energy to love what you do.
You don’t need to read all the self-help books on how to “win” a negotiation. There is no winning or losing.
We’re all negotiating with the Universe around us every single second, even right now as you read this.
The good news is, the Universe wants us to win and has given us the sun, air, the ground, and all the people around us who we love so we have the best opportunity to succeed.
Now…don’t blow it.
BY: JAMES ALTUCHER