never_split_difference.md

people want to be understood and accepted. Listening is the cheapest, yet most effective concession we can make to get there.

people want to be understood and accepted. Listening is the cheapest, yet most effective concession we can make to get there. By listening intensely, a negotiator demonstrates empathy and shows a sincere desire to better understand what the other side is experiencing.

Negotiation serves two distinct, vital life functions—information gathering and behavior influencing—and

In this world, you get what you ask for; you just have to ask correctly. So claim your prerogative to ask for what you think is right.

In a negotiation

Your goal at the outset is to extract and observe as much information as possible.

There’s plenty of research that now validates the passage of time as one of the most important tools for a negotiator. When you slow the process down, you also calm it down.

your most powerful tool in any verbal communication is your voice.

There are three voice tones available to negotiators:

1. The late-night FM DJ voice: Use selectively to make a point. Inflect your voice downward, keeping it calm and slow. When done properly, you create an aura of authority and trustworthiness without triggering defensiveness.
2. The positive/playful voice: Should be your default voice. It’s the voice of an easygoing, good-natured person. Your attitude is light and encouraging. The key here is to relax and smile while you’re talking.
3. The direct or assertive voice: Used rarely. Will cause problems and create pushback.

Mirroring

Mirroring also called isopraxism, is essentially imitation. It’s another neurobehavior humans (and other animals) display in which we copy each other to comfort each other. It can be done with speech patterns, body language, vocabulary, tempo, and tone of voice. It’s generally an unconscious behavior—we are rarely aware of it when it’s happening—but it’s a sign that people are bonding, in sync, and establishing the kind of rapport that leads to trust.

As negotiators a "mirror" focuses on the words and nothing else.

By repeating back what people say, you trigger this mirroring instinct and your counterpart will inevitably elaborate on what was just said and sustain the process of connecting.

It’s just four simple steps:

1. Use the late-night FM DJ voice.
2. Start with "I’m sorry . . ."
3. Mirror.
4. Silence. At least four seconds, to let the mirror work its magic on your counterpart.
5. Repeat.

Approach to pit bull or bossy managers

• A good negotiator prepares, going in, to be ready for possible surprises; a great negotiator aims to use her skills to reveal the surprises she is certain to find.

• Don’t commit to assumptions; instead, view them as hypotheses and use the negotiation to test them rigorously.

• People who view negotiation as a battle of arguments become overwhelmed by the voices in their head. Negotiation is not an act of battle; it’s a process of discovery. The goal is to uncover as much information as possible.

• To quiet the voices in your head, make your sole and all-encompassing focus the other person and what they have to say.

• Slow. It. Down. Going too fast is one of the mistakes all negotiators are prone to making. If we’re too much in a hurry, people can feel as if they’re not being heard. You risk undermining the rapport and trust you’ve built.

• Put a smile on your face. When people are in a positive frame of mind, they think more quickly, and are more likely to collaborate and problem-solve (instead of fight and resist). Positivity creates mental agility in both you and your counterpart.

• Mirrors work magic. Repeat the last three words (or the critical one to three words) of what someone has just said. We fear what’s different and are drawn to what’s similar. Mirroring is the art of insinuating similarity, which facilitates bonding. Use mirrors to encourage the other side to empathize and bond with you, keep people talking, buy your side time to regroup, and encourage your counterparts to reveal their strategy.

Labeling

Labeling is a way of validating someone’s emotion by acknowledging it.

Labels almost always begin with roughly the same words: It seems like . . . It sounds like . . . It looks like . . .

when you phrase a label as a neutral statement of understanding, it encourages your counterpart to be responsive.

emotions have two levels: the "presenting" behavior is the part above the surface you can see and hear; beneath, the "underlying" feeling is what motivates the behavior.

grandfather who’s grumbly at a family holiday dinner: the presenting behavior is that he’s cranky, but the underlying emotion is a sad sense of loneliness from his family never seeing him.

Example

when I make a mistake—something that happens a lot—I always acknowledge the other person’s anger.

"Look, I’m an asshole" to be an amazingly effective way to make problems go away.

the best way to deal with negativity is to observe it, without reaction and without judgment. Then consciously label each negative feeling and replace it with positive, compassionate, and solution-based thoughts.

So I don’t ask. Instead, I say, "In case you’re worried about volunteering to role-play with me in front of the class, I want to tell you in advance . . . it’s going to be horrible." After the laughter dies down, I then say, "And those of you who do volunteer will probably get more out of this than anyone else." I always end up with more volunteers than I need.

Accusation audit

Listing every terrible thing your counterpart could say about you is what I call an accusation audit.

Ryan bought a ticket for the next morning, Thursday, but a freak lightning storm whipped up in Baltimore, closing the airport for five hours. It became painfully clear that Ryan wasn’t going to make his original connection to Austin from Dallas. Worse, when he called American Airlines just before departing, he found that his connection had been automatically rebooked to 3 p.m. the next day, putting the contract in jeopardy. When Ryan finally got to Dallas at 8 p.m., he ran to the gate where the day’s final American Airlines flight to Austin was less than thirty minutes from takeoff. His goal was to get on that flight or, at worst, get an earlier flight the next day. In front of him at the gate, a very aggressive couple was yelling at the gate agent, who was barely looking at them as she tapped on the computer in front of her; she was clearly making every effort not to scream back. After she’d said, "There’s nothing I can do," five times, the angry couple finally gave up and left. To start, watch how Ryan turns that heated exchange to his advantage. Following on the heels of an argument is a great position for a negotiator, because your counterpart is desperate for an empathetic connection. Smile, and you’re already an improvement. "Hi, Wendy, I’m Ryan. It seems like they were pretty upset." This labels the negative and establishes a rapport based on empathy. This in turn encourages Wendy to elaborate on her situation, words Ryan then mirrors to invite her to go further. "Yeah. They missed their connection. We’ve had a fair amount of delays because of the weather." "The weather?" After Wendy explains how the delays in the Northeast had rippled through the system, Ryan again labels the negative and then mirrors her answer to encourage her to delve further. "It seems like it’s been a hectic day." "There’ve been a lot of ‘irate consumers,’ you know? I mean, I get it, even though I don’t like to be yelled at. A lot of people are trying to get to Austin for the big game." "The big game?" "UT is playing Ole Miss football and every flight into Austin has been booked solid." "Booked solid?" Now let’s pause. Up to this point, Ryan has been using labels and mirrors to build a relationship with Wendy. To her it must seem like idle chatter, though, because he hasn’t asked for anything. Unlike the angry couple, Ryan is acknowledging her situation. His words ping-pong between "What’s that?" and "I hear you," both of which invite her to elaborate. Now that the empathy has been built, she lets slip a piece of information he can use. "Yeah, all through the weekend. Though who knows how many people will make the flights. The weather’s probably going to reroute a lot of people through a lot of different places." Here’s where Ryan finally swoops in with an ask. But notice how he acts: not assertive or coldly logical, but with empathy and labeling that acknowledges her situation and tacitly puts them in the same boat. "Well, it seems like you’ve been handling the rough day pretty well," he says. "I was also affected by the weather delays and missed my connecting flight. It seems like this flight is likely booked solid, but with what you said, maybe someone affected by the weather might miss this connection. Is there any possibility a seat will be open?" Listen to that riff: Label, tactical empathy, label. And only then a request. At this point, Wendy says nothing and begins typing on her computer. Ryan, who’s eager not to talk himself out of a possible deal, engages in some silence. After thirty seconds, Wendy prints a boarding pass and hands it to Ryan, explaining that there were a few seats that were supposed to be filled by people who would now arrive much later than the flight’s departure. To make Ryan’s success even better, she puts him in Economy Plus seating. All that in under two minutes!

• Imagine yourself in your counterpart’s situation. The beauty of empathy is that it doesn’t demand that you agree with the other person’s ideas (you may well find them crazy). But by acknowledging the other person’s situation, you immediately convey that you are listening. And once they know that you are listening, they may tell you something that you can use.
• The reasons why a counterpart will not make an agreement with you are often more powerful than why they will make a deal, so focus first on clearing the barriers to agreement. Denying barriers or negative influences gives them credence; get them into the open.
• Pause. After you label a barrier or mirror a statement, let it sink in. Don’t worry, the other party will fill the silence.
• Label your counterpart’s fears to diffuse their power. We all want to talk about the happy stuff, but remember, the faster you interrupt action in your counterpart’s amygdala, the part of the brain that generates fear, the faster you can generate feelings of safety, well-being, and trust.
• List the worst things that the other party could say about you and say them before the other person can. Performing an accusation audit in advance prepares you to head off negative dynamics before they take root. And because these accusations often sound exaggerated when said aloud, speaking them will encourage the other person to claim that quite the opposite is true.
• Remember you’re dealing with a person who wants to be appreciated and understood. So use labels to reinforce and encourage positive perceptions and dynamics.

"No" is often a decision, frequently temporary, to maintain the status quo. Change is scary, and "No" provides a little protection from that scariness.

X counsels the reader to give their adversary (his word for counterpart) permission to say "No" from the outset of a negotiation. He calls it "the right to veto." He observes that people will fight to the death to preserve their right to say "No," so give them that right and the negotiating environment becomes more constructive and collaborative almost immediately.

When someone tells you "No," you need to rethink the word in one of its alternative—and much more real—meanings:

• I am not yet ready to agree;
• You are making me feel uncomfortable;
• I do not understand;
• I don’t think I can afford it;
• I want something else;
• I need more information; or
• I want to talk it over with someone else.

after pausing, ask solution-based questions or simply label their effect: "What about this doesn’t work for you?" "What would you need to make it work?" "It seems like there’s something here that bothers you."

There are actually three kinds of "Yes": Counterfeit, Confirmation, and Commitment.

There are actually three kinds of "Yes": Counterfeit, Confirmation, and Commitment. A counterfeit "yes" is one in which your counterpart plans on saying "no" but either feels "yes" is an easier escape route or just wants to disingenuously keep the conversation going to obtain more information or some other kind of edge. A confirmation "yes" is generally innocent, a reflexive response to a black-or-white question; it’s sometimes used to lay a trap but mostly it’s just simple affirmation with no promise of action. And a commitment "yes" is the real deal; it’s a true agreement that leads to action, a "yes" at the table that ends with a signature on the contract.

A counterfeit "yes" is one in which your counterpart plans on saying "no" but either feels "yes" is an easier escape route or just wants to disingenuously keep the conversation going to obtain more information or some other kind of edge.

everyone you meet is driven by two primal urges: the need to feel safe and secure, and the need to feel in control. If you satisfy those drives, you’re in the door.

Good negotiators welcome—even invite—a solid "No" to start, as a sign that the other party is engaged and thinking.

E.g. of staring with no:

don’t start with "Do you have a few minutes to talk?" Instead ask,"Is now a bad time to talk?" Either you get "Yes, it is a bad time" followed by a good time or a request to go away, or you get "No, it’s not" and total focus.

her boss decided to remove her from her position. For ignoring her regular duties, he said. But really it was for being a threat. When Marti sat down with her supervisor for her official dismissal, her options were few. He had every right to do as he pleased. Marti told me that she considered a variety of scenarios. She thought about going right at his jealousy and hashing it out, or explaining how the job would reflect well on the Bureau: "Would you like our office to be honored for its expertise?" But by the time she sat down with him, she had picked one of the most strongly worded "No"-oriented setup questions I have ever heard. "Do you want the FBI to be embarrassed?" she said. "No," he answered. "What do you want me to do?" she responded. He leaned back in his chair, one of those 1950s faux-leather numbers that squeak meaningfully when the sitter shifts. He stared at her over his glasses and then nodded ever so slightly. He was in control. "Look, you can keep the position," he said. "Just go back out there and don’t let it interfere with your other duties." And a minute later Marti walked out with her job intact.

"No" has a lot of skills. _ "No" allows the real issues to be brought forth; _ "No" protects people from making—and lets them correct—ineffective decisions; _ "No" slows things down so that people can freely embrace their decisions and the agreements they enter into; _ "No" helps people feel safe, secure, emotionally comfortable, and in control of their decisions; * "No" moves everyone’s efforts forward.

"Yes pattern" fund-raising script to raise money for Republican congressional candidates.

• FUND-RAISER: Hello, can I speak with Mr. Smith?
• MR. SMITH: Yes, this is he.
• FUND-RAISER: I’m calling from the XYZ Committee, and I wanted to ask you a few important questions about your views on our economy today. Do you believe that gas prices are currently too high?
• MR. SMITH: Yes, gas prices are much too high and hurting my family.
• FUND-RAISER: Do you believe that the Democrats are part of the problem when it comes to high gas prices?
• MR. SMITH: Yes, President Obama is a bad person
• FUND-RAISER: Do you think we need change in November?
• MR. SMITH: Yes, I do.
• FUND-RAISER: Can you give me your credit card number so you can be a part of that change?

In theory at least, the "Yes" answers built up a reservoir of positivity that exploded into donations when requested at the end of the script. The problem, in reality, was that the "Yes pattern" scripts had been giving poor rates of return for years. All the steps were "Yes," but the final answer was invariably "No." Then Ben read Jim Camp’s book Start with NO in my class and began to wonder if "No" could be a tool to boost donations. Ben knew that giving the potential donors a no-hard-feelings way to get off the call was going to be a tough sell to his grassroots fund-raisers, because it goes against everything they had been trained to do. But Ben’s a smart guy, so instead of totally swapping scripts he had a small group of his grassroots guys test-market a "No"-oriented script.

• FUND-RAISER: Hello, can I speak with Mr. Smith?
• MR. SMITH: Yes, this is he. FUND-RAISER: I’m calling from the XYZ Committee, and I wanted to ask you a few important questions about your views on our economy today. Do you feel that if things stay the way they are, America’s best days are ahead of it?
• MR. SMITH: No, things will only get worse.
• FUND-RAISER: Are you going to sit and watch President Obama take the White House in November without putting up a fight?
• MR. SMITH: No, I’m going to do anything I can to make sure that doesn’t happen. - - FUND-RAISER: If you want do something today to make sure that doesn’t happen, you can give to XYZ Committee, which is working hard to fight for you.

See how clearly that swaps "Yes" for "No" and offers to take a donation if Mr. Smith wants? It puts Mr. Smith in the driver’s seat; he’s in charge. And it works! In a truly remarkable turnaround, the "No"-oriented script got a 23 percent better rate of return.

One great way to do this is to mislabel one of the other party’s emotions or desires. You say something that you know is totally wrong, like "So it seems that you really are eager to leave your job" when they clearly want to stay.

Another way to force "No" in a negotiation is to ask the other party what they don’t want. "Let’s talk about what you would say ‘No’ to,"

despite all your efforts, the other party won’t say "No," you’re dealing with people who are indecisive or confused or who have a hidden agenda. In cases like that you have to end the negotiation and walk away.

EMAIL MAGIC: HOW NEVER TO BE IGNORED AGAIN

You provoke a "No" with this one-sentence email. Have you given up on this project?

• Break the habit of attempting to get people to say "yes." Being pushed for "yes" makes people defensive. Our love of hearing "yes" makes us blind to the defensiveness we ourselves feel when someone is pushing us to say it.

• "No" is not a failure. We have learned that "No" is the anti-"Yes" and therefore a word to be avoided at all costs. But it really often just means "Wait" or "I’m not comfortable with that." Learn how to hear it calmly. It is not the end of the negotiation, but the beginning.

• "Yes" is the final goal of a negotiation, but don’t aim for it at the start. Asking someone for "Yes" too quickly in a conversation—"Do you like to drink water, Mr. Smith?"—gets his guard up and paints you as an untrustworthy salesman.

• Saying "No" makes the speaker feel safe, secure, and in control, so trigger it. By saying what they don’t want, your counterpart defines their space and gains the confidence and comfort to listen to you. That’s why "Is now a bad time to talk?" is always better than "Do you have a few minutes to talk?"

• Sometimes the only way to get your counterpart to listen and engage with you is by forcing them into a "No." That means intentionally mislabeling one of their emotions or desires or asking a ridiculous question—like, "It seems like you want this project to fail"—that can only be answered negatively.

• Negotiate in their world. Persuasion is not about how bright or smooth or forceful you are. It’s about the other party convincing themselves that the solution you want is their own idea. So don’t beat them with logic or brute force. Ask them questions that open paths to your goals. It’s not about you.

• If a potential business partner is ignoring you, contact them with a clear and concise "No"-oriented question that suggests that you are ready to walk away. "Have you given up on this project?" works wonders.

Behavioral Change Stairway Model (BCSM). The model proposes five stages—active listening, empathy, rapport, influence, and behavioral change—that take any negotiator from listening to influencing behavior.

Whenever someone is bothering you, and they just won’t let up, and they won’t listen to anything you have to say, what do you tell them to get them to shut up and go away? "You’re right." It works every time. Tell people "you’re right" and they get a happy smile on their face and leave you alone for at least twenty-four hours. But you haven’t agreed to their position. You have used "you’re right" to get them to quit bothering you.

Hi Chris, I feel compelled to tell you that I just tried the "That’s right" technique in a price negotiation with a potential new client. And, I got what I wanted. I’m so excited! Before I probably would have just gone with the "in-the-middle" suggested price (halfway between my initial offer and her initial counter). Instead, I believe I correctly assessed her motivations, presented her with the right statement to get to a "that’s right" (in her mind) . . . and then she proposed the solution I wanted and asked if I would agree to it! So, I did of course. Thank you!

Use these lessons to lay that foundation: _ Creating unconditional positive regard opens the door to changing thoughts and behaviors. Humans have an innate urge toward socially constructive behavior. The more a person feels understood, and positively affirmed in that understanding, the more likely that urge for constructive behavior will take hold. _ "That’s right" is better than "yes." Strive for it. Reaching "that’s right" in a negotiation creates breakthroughs. * Use a summary to trigger a "that’s right." The building blocks of a good summary are a label combined with paraphrasing. Identify, rearticulate, and emotionally affirm "the world according to . . ."

Time is one of the most crucial variables in any negotiation. The simple passing of time and its sharper cousin, the deadline, are the screw that pressures every deal to a conclusion.

It’s not just with hostage negotiations that deadlines can play into your hands. Car dealers are prone to give you the best price near the end of the month, when their transactions are assessed. And corporate salespeople work on a quarterly basis and are most vulnerable as the quarter comes to a close.

"If you approach a negotiation thinking that the other guy thinks like you, you’re wrong," I say. "That’s not empathy; that’s projection."

"Fair" is a tremendously powerful word that you need to use with care.

The most common use is a judo-like defensive move that destabilizes the other side. This manipulation usually takes the form of something like, "We just want what’s fair." Think back to the last time someone made this implicit accusation of unfairness to you, and I bet you’ll have to admit that it immediately triggered feelings of defensiveness and discomfort. These feelings are often subconscious and often lead to an irrational concession.

The best response either way is to take a deep breath and restrain your desire to concede. Then say, "Okay, I apologize. Let’s stop everything and go back to where I started treating you unfairly and we’ll fix it."

The second use of the F-bomb is more nefarious. In this one, your counterpart will basically accuse you of being dense or dishonest by saying, "We’ve given you a fair offer." It’s a terrible little jab meant to distract your attention and manipulate you into giving in.

If you find yourself in this situation, the best reaction is to simply mirror the "F" that has just been lobbed at you. "Fair?" you’d respond, pausing to let the word’s power do to them as it was intended to do to you. Follow that with a label: "It seems like you’re ready to provide the evidence that supports that," which alludes to opening their books or otherwise handing over information that will either contradict their claim to fairness or give you more data to work with than you had previously. Right away, you declaw the attack.

The last use of the F-word is my favorite because it’s positive and constructive. It sets the stage for honest and empathetic negotiation. Here’s how I use it: Early on in a negotiation, I say, "I want you to feel like you are being treated fairly at all times. So please stop me at any time if you feel I’m being unfair, and we’ll address it." It’s simple and clear and sets me up as an honest dealer. With that statement, I let people know it is okay to use that word with me if they use it honestly. As a negotiator, you should strive for a reputation of being fair. Your reputation precedes you. Let it precede you in a way that paves success.

• How to Become a Rainmaker (Book about emotional drivers)

The theory argues that people are drawn to sure things over probabilities, even when the probability is a better choice. That’s called the Certainty Effect. And people will take greater risks to avoid losses than to achieve gains. That’s called Loss Aversion.

Prospect theory

To get real leverage, you have to persuade them that they have something concrete to lose if the deal falls through.

1. ANCHOR THEIR EMOTIONS

start out with an accusation audit acknowledging all of their fears. By anchoring their emotions in preparation for a loss, you inflame the other side’s loss aversion so that they’ll jump at the chance to avoid it.

The problems became so bad that I was going to have to go back to the contractors I’d signed up, who normally got $2,000 a day, and tell them that for several months, I could only offer $500. I knew exactly what they would do if I just told them straight out: they’d laugh me out of town. So I got each of them on the phone and hit them hard with an accusation audit. "I got a lousy proposition for you," I said, and paused until each asked me to go on. "By the time we get off the phone, you’re going to think I’m a lousy businessman. You’re going to think I can’t budget or plan. You’re going to think Chris Voss is a big talker. His first big project ever out of the FBI, he screws it up completely. He doesn’t know how to run an operation. And he might even have lied to me." And then, once I’d anchored their emotions in a minefield of low expectations, I played on their loss aversion. "Still, I wanted to bring this opportunity to you before I took it to someone else," I said. Suddenly, their call wasn’t about being cut from $2,000 to $500 but how not to lose $500 to some other guy. Every single one of them took the deal. No counteroffers, no complaints.

Exmple

2. LET THE OTHER GUY GO FIRST . . . MOST OF THE TIME.

By letting them anchor you also might get lucky: I’ve experienced many negotiations when the other party’s first offer was higher than the closing figure I had in mind.

That said, you’ve got to be careful when you let the other guy anchor. You have to prepare yourself psychically to withstand the first offer. If the other guy’s a pro, a shark, he’s going to go for an extreme anchor in order to bend your reality.

3. ESTABLISH A RANGE

While going first rarely helps, there is one way to seem to make an offer and bend their reality in the process. That is, by alluding to a range.

Jerry might have said, "At top places like X Corp., people in this job get between $130,000 and $170,000."

Example

4. PIVOT TO NONMONETARY TERMS

One of the easiest ways to bend your counterpart’s reality to your point of view is by pivoting to nonmonetary terms. After you’ve anchored them high, you can make your offer seem reasonable by offering things that aren’t important to you but could be important to them. Or if their offer is low you could ask for things that matter more to you than them. Since this is sometimes difficult, what we often do is throw out examples to start the brainstorming process.

Normally, for the training they were looking for, I’d charge $25,000 a day. They came in with a much lower offer that I balked at. They then offered to do a cover story about me in their association magazine. For me to be on the cover of a magazine that went out to who knows how many of the country’s top lawyers was priceless

5. WHEN YOU DO TALK NUMBERS, USE ODD ONES

The biggest thing to remember is that numbers that end in 0 inevitably feel like temporary placeholders, guesstimates that you can easily be negotiated off of. But anything you throw out that sounds less rounded—say, $37,263—feels like a figure that you came to as a result of thoughtful calculation.

6. SURPRISE WITH A GIFT

You can get your counterpart into a mood of generosity by staking an extreme anchor and then, after their inevitable first rejection, offering them a wholly unrelated surprise gift. Unexpected conciliatory gestures like this are hugely effective because they introduce a dynamic called reciprocity; the other party feels the need to answer your generosity in kind.

Back in Haiti, a few hours after the kidnappers had snatched his aunt, I was on the phone with the politician’s nephew. There was no way their family could come up with $150,000, he told me, but they could pay between $50,000 and $85,000. But since learning that the ransom was just party money, I was aiming much lower: $5,000. We were not going to compromise. It was a matter of professional pride. I advised him to start off by anchoring the conversation in the idea that he didn’t have the money, but to do so without saying "No" so as not to hit their pride head-on. "How am I supposed to do that?" he asked in the next call. The kidnapper made another general threat against the aunt and again demanded the cash. That’s when I had the nephew subtly question the kidnapper’s fairness. "I’m sorry," the nephew responded, "but how are we supposed to pay if you’re going to hurt her?" That brought up the aunt’s death, which was the thing the kidnappers most wanted to avoid. They needed to keep her unharmed if they hoped to get any money. They were commodity traders, after all. Notice that to this point the nephew hadn’t named a price. This game of attrition finally pushed the kidnappers to name a number first. Without prodding, they dropped to $50,000. Now that the kidnappers’ reality had been bent to a smaller number, my colleagues and I told the nephew to stand his ground. "How can I come up with that kind of money?" we told him to ask. Again, the kidnapper dropped his demand, to $25,000. Now that we had him in our sights, we had the nephew make his first offer, an extreme low anchor of $3,000. The line went silent and the nephew began to sweat profusely, but we told him to hold tight. This always happened at the moment the kidnapper’s economic reality got totally rearranged. When he spoke again, the kidnapper seemed shell-shocked. But he went on. His next offer was lower, $10,000. Then we had the nephew answer with a strange number that seemed to come from deep calculation of what his aunt’s life was worth: $4,751. His new price? $7,500. In response, we had the cousin "spontaneously" say he’d throw in a new portable CD stereo and repeated the $4,751. The kidnappers, who didn’t really want the CD stereo felt there was no more money to be had, said yes. Six hours later, the family paid that sum and the aunt came back home safely.

Great situation exmple

HOW TO NEGOTIATE A BETTER SALARY

• Situation story [label]

BE PLEASANTLY PERSISTENT ON NONSALARY TERMS Pleasant persistence is a kind of emotional anchoring that creates empathy with the boss and builds the right psychological environment for constructive discussion. And the more you talk about nonsalary terms, the more likely you are to hear the full range of their options. If they can’t meet your nonsalary requests, they may even counter with more money,

kept asking—with a big smile—for an extra week of vacation beyond what the company normally gave. She was "French," she said, and that’s what French people did.

they countered by increasing her salary offer.

SALARY TERMS WITHOUT SUCCESS TERMS IS RUSSIAN ROULETTE

make sure to define success for your position—as well as metrics for your next raise.

It gets you a planned raise and, by defining your success in relation to your boss’s supervision, it leads into the next step . . .

SPARK THEIR INTEREST IN YOUR SUCCESS AND GAIN AN UNOFFICIAL MENTOR

sell yourself, and your success, as a way they can validate their own intelligence and broadcast it to the rest of the company.

Ask: "What does it take to be successful here?"

The key issue here is if someone gives you guidance, they will watch to see if you follow their advice. They will have a personal stake in seeing you succeed. You’ve just recruited your first unofficial mentor.

• Situation story [label]

While Angel was finishing up his MBA, he went to his boss and began to lay the groundwork for his work post-MBA (which the company was paying). During his last semester, he set a nonspecific anchor—a kind of range—by suggesting to his boss that once he graduated and the company was done investing in his MBA (around $31,000 per year), that money should go to him as salary. His boss made no commitment, but Angel was pleasantly persistent about it, which set the idea as an anchor in his boss’s mind. Upon graduation, Angel and his boss had their big sit-down. In an assertive and calm manner, Angel broached a nonfinancial issue to move the focus away from "How much?": he asked for a new title. Angel’s boss readily agreed that a new role was a no-brainer after Angel’s new degree. At that point, Angel and his manager defined what his roles and responsibilities would be in his new role, thereby setting success metrics. Then Angel took a breath and paused so that his boss would be the first to throw out a number. At last, he did. Curiously enough, the number showed that Angel’s earlier efforts at anchoring had worked: he proposed to add $31,000 to Angel’s base salary, almost a 50 percent raise. But Angel was no rookie negotiator, not after taking my class. So instead of countering and getting stuck in "How much?" he kept talking, labeling the boss’s emotions and empathizing with his situation (at the time the company was going through difficult negotiations with its investors). And then Angel courteously asked for a moment to step away and print up the agreed-upon job description. This pause created a dynamic of pre-deadline urgency in his boss, which Angel exploited when he returned with the printout. On the bottom, he’d added his desired compensation: "$134.5k—$143k." In that one little move, Angel weaved together a bunch of the lessons from this chapter. The odd numbers gave them the weight of thoughtful calculation. The numbers were high too, which exploited his boss’s natural tendency to go directly to his price limit when faced by an extreme anchor. And they were a range, which made Angel seem less aggressive and the lower end more reasonable in comparison. From his boss’s body language—raised eyebrows—it was clear that he was surprised by the compensation request. But it had the desired effect: after some comments about the description, he countered with $120,000. Angel didn’t say "No" or "Yes," but kept talking and creating empathy. Then, in the middle of a sentence, seemingly out of the blue, his boss threw out $127,000. With his boss obviously negotiating with himself, Angel kept him going. Finally his boss said he agreed with the $134,500 and would pay that salary starting in three months, contingent on the board of directors’ approval. As the icing on the cake, Angel worked in a positive use of the word "Fair" ("That’s fair," he said), and then sold the raise to his boss as a marriage in which his boss would be the mentor. "I’m asking you, not the board, for the promotion, and all I need is for you to agree with it," he said. And how did Angel’s boss reply to his new ambassador? "I’ll fight to get you this salary." So follow Angel’s lead and make it rain!

• All negotiations are defined by a network of subterranean desires and needs. Don’t let yourself be fooled by the surface. Once you know that the Haitian kidnappers just want party money, you will be miles better prepared.

• Splitting the difference is wearing one black and one brown shoe, so don’t compromise. Meeting halfway often leads to bad deals for both sides.

• Approaching deadlines entice people to rush the negotiating process and do impulsive things that are against their best interests.

• The F-word—"Fair"—is an emotional term people usually exploit to put the other side on the defensive and gain concessions. When your counterpart drops the F-bomb, don’t get suckered into a concession. Instead, ask them to explain how you’re mistreating them.

• You can bend your counterpart’s reality by anchoring his starting point. Before you make an offer, emotionally anchor them by saying how bad it will be. When you get to numbers, set an extreme anchor to make your "real" offer seem reasonable, or use a range to seem less aggressive. The real value of anything depends on what vantage point you’re looking at it from.

• People will take more risks to avoid a loss than to realize a gain. Make sure your counterpart sees that there is something to lose by inaction.

calibrated, or open-ended, question. What it does is remove aggression from conversations by acknowledging the other side openly, without resistance. In doing so, it lets you introduce ideas and requests without sounding pushy.

as simple as removing the hostility from the statement "You can’t leave" and turning it into a question. "What do you hope to achieve by going?"

That whole ethos permeated everything the FBI was doing. Everything was a showdown. And it didn’t work.

Kevin Dutton says in his book Split-Second Persuasion.1

Open ended questions rationale book

Our job as persuaders is easier than we think. It’s not to get others believing what we say. It’s just to stop them unbelieving. Once we achieve that, the game’s half-won. "Unbelief is the friction that keeps persuasion in check," Dutton says. "Without it, there’d be no limits."

• Situation story [label]

A medical student who was faced with a patient who had ripped out his IV, packed his bags, and was making a move to leave because his biopsy results were days late and he was tired of waiting. Just then a senior physician arrived. After calmly offering the patient a glass of water and asking if they could chat for a minute, he said he understood why the patient was pissed off and promised to call the lab to see why the results were delayed. But what he did next is what really suspended the patient’s unbelief: he asked a calibrated question—what he felt was so important about leaving—and then when the patient said he had errands to handle, the doctor offered to connect the patient with services that could help him get them done. And, boom, the patient volunteered to stay.

Example on suspending unbelief uncover real reasons

he took what was a showdown—"I’m going to leave" versus "You can’t leave"—and asked questions that led the patient to solve his own problem . . . in the way the doctor wanted.

Asking for help in this manner, after you’ve already been engaged in a dialogue, is an incredibly powerful negotiating technique for transforming encounters from confrontational showdowns into joint problem-solving sessions. And calibrated questions are the best tool.

First off, calibrated questions avoid verbs or words like "can," "is," "are," "do," or "does." These are closed-ended questions that can be answered with a simple "yes" or a "no." Instead, they start with a list of words people know as reporter’s questions: "who," "what," "when," "where," "why," and "how." Those words inspire your counterpart to think and then speak expansively.

First off, calibrated questions avoid verbs or words like "can," "is," "are," "do," or "does." These are closed-ended questions that can be answered with a simple "yes" or a "no."

First off, calibrated questions avoid verbs or words like "can," "is," "are," "do," or "does." These are closed-ended questions that can be answered with a simple "yes" or a "no."

It’s best to start with "what," "how," and sometimes "why."

The only time you can use "why" successfully is when the defensiveness that is created supports the change you are trying to get them to see. "Why would you ever change from the way you’ve always done things and try my approach?" is an example. "Why would your company ever change from your long-standing vendor and choose our company?" is another. As always, tone of voice, respectful and deferential, is critical. Otherwise, treat "why" like a burner on a hot stove—don’t touch it.

Something as harsh as "Why did you do it?" can be calibrated to "What caused you to do it?" which takes away the emotion and makes the question less accusatory.

Use calibrated questions early and often, and there are a few that you will find that you will use in the beginning of nearly every negotiation.

• What is the biggest challenge you face?

Great standbys that I use in almost every negotiation, depending on the situation:

• What about this is important to you?
• How can I help to make this better for us?
• How would you like me to proceed?
• What is it that brought us into this situation?
• How can we solve this problem?
• What’s the objective? / What are we trying to accomplish here?
• How am I supposed to do that?

The implication of any well-designed calibrated question is that you want what the other guy wants but you need his intelligence to overcome the problem. This really appeals to very aggressive or egotistical counterparts. You’ve not only implicitly asked for help—triggering goodwill and less defensiveness—but you’ve engineered a situation in which your formerly recalcitrant counterpart is now using his mental and emotional resources to overcome your challenges.

The first and most basic rule of keeping your emotional cool is to bite your tongue.

The Japanese have this figured out. When negotiating with a foreigner, it’s common practice for a Japanese businessman to use a translator even when he understands perfectly what the other side is saying. That’s because speaking through a translator forces him to step back. It gives him time to frame his response.

when you are verbally assaulted, do not counterattack. Instead, disarm your counterpart by asking a calibrated question.

When you try to work the skills from this chapter into your daily life, remember that these are listener’s tools.

• Don’t try to force your opponent to admit that you are right. Aggressive confrontation is the enemy of constructive negotiation.
• Avoid questions that can be answered with "Yes" or tiny pieces of information. These require little thought and inspire the human need for reciprocity; you will be expected to give something back.
• Ask calibrated questions that start with the words "How" or "What." By implicitly asking the other party for help, these questions will give your counterpart an illusion of control and will inspire them to speak at length, revealing important information.
• Don’t ask questions that start with "Why" unless you want your counterpart to defend a goal that serves you. "Why" is always an accusation, in any language.
• Calibrate your questions to point your counterpart toward solving your problem. This will encourage them to expend their energy on devising a solution.
• Bite your tongue. When you’re attacked in a negotiation, pause and avoid angry emotional reactions. Instead, ask your counterpart a calibrated question.
• There is always a team on the other side. If you are not influencing those behind the table, you are vulnerable.

Besides saying "No," the other key benefit of asking "How?" is, quite literally, that it forces your counterpart to consider and explain how a deal will be implemented. A deal is nothing without good implementation. Poor implementation is the cancer that eats your profits.

Carefully calibrated "How" questions will convince them that the final solution is their idea.

be wary of two telling signs that your counterpart doesn’t believe the idea is theirs. As I’ve noted, when they say, "You’re right," it’s often a good indicator they are not vested in what is being discussed. And when you push for implementation and they say, "I’ll try," you should get a sinking feeling in your stomach. Because this really means, "I plan to fail."

When implementation happens by committee, the support of that committee is key.

asking a few calibrated questions, like "How does this affect the rest of your team?" or "How on board are the people not on this call?" or simply "What do your colleagues see as their main challenges in this area?"

The 7-38-55 rule.

The 7-38-55 fule states that only 7 percent of a message is based on the words while 38 percent comes from the tone of voice and 55 percent from the speaker’s body language and face.

How do you use this rule?

pay very close attention to tone and body language to make sure they match up with the literal meaning of the words. If they don’t align, it’s quite possible that the speaker is lying or at least unconvinced.

When someone’s tone of voice or body language does not align with the meaning of the words they say, use labels to discover the source of the incongruence. Here’s an example: You: "So we’re agreed?" Them: "Yes . . ." You: "I heard you say, ‘Yes,’ but it seemed like there was hesitation in your voice." Them: "Oh, it’s nothing really." You: "No, this is important, let’s make sure we get this right." Them: "Thanks, I appreciate it."

The Rule of Three

The Rule of Three is simply getting the other guy to agree to the same thing three times in the same conversation.

The first time they agree to something or give you a commitment, that’s No. 1. For No. 2 you might label or summarize what they said so they answer, "That’s right." And No. 3 could be a calibrated "How" or "What" question about implementation that asks them to explain what will constitute success, something like "What do we do if we get off track?" Or the three times might just be the same calibrated question phrased three different ways,

People who are lying are, understandably, more worried about being believed, so they work harder—too hard, as it were—at being believable.

PAY ATTENTION TO THEIR USAGE OF PRONOUNS

the harder it is to get a first person pronoun out of a negotiator’s mouth, the more important they are.

in a negotiation, smart decision makers don’t want to be cornered at the table into making a decision. They will defer to the people away from the table to keep from getting pinned down.

Humanize yourself. Use your name to introduce yourself. Say it in a fun, friendly way. Let them enjoy the interaction, too. And get your own special price.

We’ve found that you can usually express "No" four times before actually saying the word. The first step in the "No" series is the old standby: "How am I supposed to do that?" You have to deliver it in a deferential way, so it becomes a request for help. Properly delivered, it invites the other side to participate in your dilemma and solve it with a better offer. After that, some version of "Your offer is very generous, I’m sorry, that just doesn’t work for me" is an elegant second way to say "No." This well-tested response avoids making a counteroffer, and the use of "generous" nurtures your counterpart to live up to the word. The "I’m sorry" also softens the "No" and builds empathy. (You can ignore the so-called negotiating experts who say apologies are always signs of weakness.) Then you can use something like "I’m sorry but I’m afraid I just can’t do that." It’s a little more direct, and the "can’t do that" does great double duty. By expressing an inability to perform, it can trigger the other side’s empathy toward you. "I’m sorry, no" is a slightly more succinct version for the fourth "No." If delivered gently, it barely sounds negative at all. If you have to go further, of course, "No" is the last and most direct way. Verbally, it should be delivered with a downward inflection and a tone of regard; it’s not meant to be "NO!"

• Ask calibrated "How" questions, and ask them again and again. Asking "How" keeps your counterparts engaged but off balance. Answering the questions will give them the illusion of control. It will also lead them to contemplate your problems when making their demands.

• Use "How" questions to shape the negotiating environment. You do this by using "How can I do that?" as a gentle version of "No." This will subtly push your counterpart to search for other solutions—your solutions. And very often it will get them to bid against themselves.

• Don’t just pay attention to the people you’re negotiating with directly; always identify the motivations of the players "behind the table." You can do so by asking how a deal will affect everybody else and how on board they are.

• Follow the 7-38-55 Percent Rule by paying close attention to tone of voice and body language. Incongruence between the words and nonverbal signs will show when your counterpart is lying or uncomfortable with a deal.

• Is the "Yes" real or counterfeit? Test it with the Rule of Three: use calibrated questions, summaries, and labels to get your counterpart to reaffirm their agreement at least three times. It’s really hard to repeatedly lie or fake conviction.

person’s use of pronouns offers deep insights into his or her relative authority. If you’re hearing a lot of "I," "me," and "my," the real power to decide probably lies elsewhere. Picking up a lot of "we," "they," and "them," it’s more likely you’re dealing directly with a savvy decision maker keeping his options open.

• Use your own name to make yourself a real person to the other side and even get your own personal discount. Humor and humanity are the best ways to break the ice and remove roadblocks.

• Situation story [label]

drove to the dealer on a sunny Friday afternoon. I sat down across from the salesman, a nice enough guy named Stan, and told him how gorgeous the vehicle was. He offered me the usual smile—he had me, he thought—and mentioned the sticker price on "that beautiful vehicle": $36,000. I gave him an understanding nod and pursed my lips. The key to beginning a haggle is to rattle the other guy ever so gently. You do it in the nicest way possible. If I could thread that needle, I had a good chance at getting my price. "I can pay $30,000," I said. "And I can pay it up front, all cash. I’ll write a check today for the full amount. I’m sorry, I’m afraid I just can’t pay any more." His smile flickered a little bit at the edges, as if it were losing focus. But he tightened it down and shook his head. "I’m sure you can understand we can’t do that. The sticker price is $36,000, after all." "How am I supposed to do that?" I asked deferentially. "I’m sure," he said, then paused as if he wasn’t sure what he’d meant to say. "I’m sure we can figure something out with financing the $36,000." "It’s a beautiful truck. Really amazing. I can’t tell you how much I’d love to have it. It’s worth more than what I’m offering. I’m sorry, this is really embarrassing. I just can’t do that price." He stared at me in silence, a little befuddled now. Then he stood and went into the back for what seemed like an eternity. He was gone so long that I remember saying to myself, "Damn! I should have come in lower! They’re going to come all the way down." Any response that’s not an outright rejection of your offer means you have the edge. He returned and told me like it was Christmas that his boss had okayed a new price: $34,000. "Wow, your offer is very generous and this is the car of my dreams," I said. "I really wish I could do that. I really do. This is so embarrassing. I simply can’t." He dropped into silence and I didn’t take the bait. I let the silence linger. And then with a sigh he trudged off again. He returned after another eternity. "You win," he said. "My manager okayed $32,500." He pushed a paper across the desk that even said "YOU WIN" in big letters. The words were even surrounded with smiley faces. "I am so grateful. You’ve been very generous, and I can’t thank you enough. The truck is no doubt worth more than my price," I said. "I’m sorry, I just can’t do that." Up he stood again. No smile now. Still befuddled. After a few seconds, he walked back to his manager and I leaned back. I could taste victory. A minute later—no eternity this time—he returned and sat. "We can do that," he said. Two days later, I drove off in my Salsa Red Pearl Toyota 4Runner—for $30,000. God I love that truck. Still drive it today.

Quick guide to classifying the type of negotiator you’re facing

Analysts are methodical and diligent. They are not in a big rush. Instead, they believe that as long as they are working toward the best result in a thorough and systematic way, time is of little consequence.

People like this are skeptical by nature. So asking too many questions to start is a bad idea, because they’re not going to want to answer until they understand all the implications. With them, it’s vital to be prepared. Use clear data to drive your reason; don’t ad-lib; use data comparisons to disagree and focus on the facts; warn them of issues early; and avoid surprises.

Silence to them is an opportunity to think. They’re not mad at you and they’re not trying to give you a chance to talk more. If you feel they don’t see things the way you do, give them a chance to think first.

Accommodator The most important thing to this type of negotiator is the time spent building the relationship.

If you have identified yourself as an Accommodator, stick to your ability to be very likable, but do not sacrifice your objections. Not only do the other two types need to hear your point of view; if you are dealing with another Accommodator they will welcome it. Also be conscious of excess chitchat: the other two types have no use for it, and if you’re sitting across the table from someone like yourself you will be prone to interactions where nothing gets done.

Assertive The Assertive type believes time is money; every wasted minute is a wasted dollar.

When you’re dealing with Assertive types, it’s best to focus on what they have to say, because once they are convinced you understand them, then and only then will they listen for your point of view.

Mirrors are a wonderful tool with this type. So are calibrated questions, labels, and summaries.

Most important thing to get from an Assertive will be a "that’s right" that may come in the form of a "that’s it exactly" or "you hit it on the head."

When it comes to reciprocity, this type is of the "give an inch/take a mile" mentality.

Importance of time for different negotiators

1. Analysts: time = preparation
2. Accommodators: time = relationship
3. Assertive: time = money

Silences

1. For an Accommodator type, silence => anger.
2. For Analysts, though, silence => they want to think.
3. Assertive types, your silence => you don’t have anything to say || you want them to talk.

As a well-prepared negotiator who seeks information and gathers it relentlessly, you’re actually going to want the other guy to name a price first, because you want to see his hand.

• Situation story [label]

Farouq, showed how not to fold after being punched when he went to hit up the MBA dean for funds to hold a big alumni event in Dubai. It was a desperate situation, because he needed $600 and she was his last stop. At the meeting, Farouq told the dean about how excited the students were about the trip and how beneficial it would be for the Georgetown MBA brand in the region. Before he could even finish, the dean jumped in. "Sounds like a great trip you guys are planning," she said. "But money is tight and I could authorize no more than $300." Farouq hadn’t expected the dean to go so quickly. But things don’t always go according to plan. "That is a very generous offer given your budget limits, but I am not sure how that would help us achieve a great reception for the alums in the region," Farouq said, acknowledging her limits but saying no without using the word. Then he dropped an extreme anchor. "I have a very high amount in my head: $1,000 is what we need." As expected, the extreme anchor quickly knocked the dean off her limit. "That is severely out of my range and I am sure I can’t authorize that. However, I will give you $500." Farouq was half-tempted to fold—being $100 short wasn’t make-or-break—but he remembered the curse of aiming low. He decided to push forward. The $500 got him closer to the goal but not quite there, he said; $850 would work. The dean replied by saying that she was already giving more than what she wanted and $500 was reasonable. At this point, if Farouq had been less prepared he would have given up, but he was ready for the punches. "I think your offer is very reasonable and I understand your restrictions, but I need more money to put on a great show for the school," he said. "How about $775?" The dean smiled, and Farouq knew he had her. "You seem to have a specific number in your head that you are trying to get to," she said. "Just tell it to me." At that point Farouq was happy to give her his number as he felt she was sincere. "I need $737.50 to make this work and you are my last stop," he said. She laughed. The dean then praised him for knowing what he wanted and said she’d check her budget. Two days later, Farouq got an email saying her office would put in $750.

When someone puts out a ridiculous offer, one that really pisses you off, take a deep breath, allow little anger, and channel it—at the proposal, not the person—and say, "I don’t see how that would ever work." Such well-timed offense-taking—known as "strategic umbrage"—can

We’ve said previously that no deal is better than a bad deal.

Once you’re clear on what your bottom line is, you have to be willing to walk away.

The person across the table is never the problem. The unsolved issue is. So focus on the issue. This is one of the most basic tactics for avoiding emotional escalations.

Ackerman bargaining model

1. Set your target price (your goal).
2. Set your first offer at 65 percent of your target price.
3. Calculate three raises of decreasing increments (to 85, 95, and 100 percent).
4. Use lots of empathy and different ways of saying "No" to get the other side to counter before you increase your offer.
5. When calculating the final amount, use precise, nonround numbers like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
6. On your final number, throw in a nonmonetary item (that they probably don’t want) to show you’re at your limit.

• Situation story [label]

NEGOTIATING A RENT CUT AFTER RECEIVING NOTICE OF AN INCREASE Eight months after a Georgetown MBA student of mine named Mishary signed a rental contract for $1,850/month, he got some unwelcome news: his landlord informed him that if he wanted to re-up, it would be $2,100/month for ten months, or $2,000/month for a year. Mishary loved the place and didn’t think he’d find a better one, but the price was already high and he couldn’t afford more. Taking to heart our class slogan, "You fall to your highest level of preparation," he dove into the real estate listings and found that prices for comparable apartments were $1,800–$1,950/month, but none of them were in as good a building. He then examined his own finances and figured the rent he wanted to pay was $1,830. He requested a sit-down with his rental agent. This was going to be tough. At their meeting, Mishary laid out his situation. His experience in the building had been really positive, he said. And, he pointed out, he always paid on time. It would be sad for him to leave, he said, and sad for the landlord to lose a good tenant. The agent nodded. "Totally in agreement," he said. "That’s why I think it will benefit both of us to agree on renewing the lease." Here Mishary pulled out his research: buildings around the neighborhood were offering "much" lower prices, he said. "Even though your building is better in terms of location and services, how am I supposed to pay $200 extra?" The negotiation was on. The agent went silent for a few moments and then said, "You make a good point, but this is still a good price. And as you noted, we can charge a premium." Mishary then dropped an extreme anchor. "I fully understand, you do have a better location and amenities. But I’m sorry, I just can’t," he said. "Would $1,730 a month for a year lease sound fair to you?" The agent laughed and when he finished said there was no way to accept that number, because it was way below market price. Instead of getting pulled into a haggle, Mishary smartly pivoted to calibrated questions. "Okay, so please help me understand: how do you price lease renewals?" The agent didn’t say anything shocking—merely that they used factors like area prices and supply-and-demand—but that gave Mishary the opening to argue that his leaving would open the landlord to the risk of having an unrented apartment and the cost of repainting. One month unrented would be a $2,000 loss, he said. Then he made another offer. Now, you’re probably shaking your head that he’s making two offers without receiving one in return. And you’re right; normally that’s verboten. But you have to be able to improvise. If you feel in control of a negotiation, you can do two or three moves at a time. Don’t let the rules ruin the flow. "Let me try and move along with you: how about $1,790 for 12 months?" The agent paused. "Sir, I understand your concerns, and what you said makes sense," he said. "Your number, though, is very low. However, give me time to think this out and we can meet at another time. How does that sound?" Remember, any response that is not an outright rejection means you have the edge. Five days later the two met again. "I ran the numbers, and believe me this is a good deal," the agent started. "I am able to offer you $1,950 a month for a year." Mishary knew he’d won. The agent just needed a little push. So he praised the agent and said no without saying, "No." And notice how he brilliantly mislabels in order to get the guy to open up? "That is generous of you, but how am I supposed to accept it when I can move a few blocks away and stay for $1,800? A hundred and fifty dollars a month means a lot to me. You know I am a student. I don’t know, it seems like you would rather run the risk of keeping the place unrented." "It’s not that," the agent answered. "But I can’t give you a number lower than the market." Mishary made a dramatic pause, as if the agent was extracting every cent he had. "Then I tell you what, I initially went up from $1,730 to $1,790," he said, sighing. "I will bring it up to $1,810. And I think this works well for both." The agent shook his head. "This is still lower than the market, sir. And I cannot do that." Mishary then prepared to give the last of his Ackerman offers. He went silent for a while and then asked the agent for a pen and paper. Then he started doing fake calculations to seem like he was really pushing himself. Finally, he looked up at the agent and said, "I did some numbers, and the maximum I can afford is $1,829." The agent bobbed his head from side to side, as if getting his mind around the offer. At last, he spoke. "Wow. $1,829," he said. "You seem very precise. You must be an accountant. [Mishary was not.] Listen, I value you wanting to renew with us and for that I think we can make this work for a twelve-month lease." Ka-ching! Notice this brilliant combination of decreasing Ackerman offers, nonround numbers, deep research, smart labeling, and saying no without saying "No"? That’s what gets you a rent discount when a landlord wanted to raise his monthly take.

• Identify your counterpart’s negotiating style. Once you know whether they are Accommodator, Assertive, or Analyst, you’ll know the correct way to approach them.

• Prepare, prepare, prepare. When the pressure is on, you don’t rise to the occasion; you fall to your highest level of preparation. So design an ambitious but legitimate goal and then game out the labels, calibrated questions, and responses you’ll use to get there. That way, once you’re at the bargaining table, you won’t have to wing it.

• Get ready to take a punch. Kick-ass negotiators usually lead with an extreme anchor to knock you off your game. If you’re not ready, you’ll flee to your maximum without a fight. So prepare your dodging tactics to avoid getting sucked into the compromise trap.

• Set boundaries, and learn to take a punch or punch back, without anger. The guy across the table is not the problem; the situation is.

• Prepare an Ackerman plan. Before you head into the weeds of bargaining, you’ll need a plan of extreme anchor, calibrated questions, and well-defined offers. Remember: 65, 85, 95, 100 percent. Decreasing raises and ending on nonround numbers will get your counterpart to believe that he’s squeezing you for all you’re worth when you’re really getting to the number you want.

Black Swan theory tells us that things happen that were previously thought to be impossible—or never thought of at all. This is not the same as saying that sometimes things happen against one-in-a-million odds, but rather that things never imagined do come to pass.

things we know, like our counterpart’s name and their offer and our experiences from other negotiations. Those are known knowns.

things we are certain that exist but we don’t know, like the possibility that the other side might get sick and leave us with another counterpart. Those are known unknowns

most important are those things we don’t know that we don’t know, pieces of information we’ve never imagined but that would be game changing if uncovered. Maybe our counterpart wants the deal to fail because he’s leaving for a competitor. These unknown unknowns

No matter how much research our team has done prior to the interaction, we always ask ourselves, "Why are they communicating what they are communicating right now?"

there are three kinds: Positive, Negative, and Normative.

Leverage

POSITIVE LEVERAGE Positive leverage is quite simply your ability as a negotiator to provide—or withhold—things that your counterpart wants. Whenever the other side says, "I want . . ." as in, "I want to buy your car," you have positive leverage.

NEGATIVE LEVERAGE Negative leverage is what most civilians picture when they hear the word "leverage." It’s a negotiator’s ability to make his counterpart suffer. And it is based on threats: you have negative leverage if you can tell your counterpart, "If you don’t fulfill your commitment/pay your bill/etc., I will destroy your reputation."

So what kind of Black Swans do you look to be aware of as negative leverage? Effective negotiators look for pieces of information, often obliquely revealed, that show what is important to their counterpart: Who is their audience? What signifies status and reputation to them? What most worries them? To find this information, one method is to go outside the negotiating table and speak to a third party that knows your counterpart. The most effective method is to gather it from interactions with your counterpart.

A more subtle technique is to label your negative leverage and thereby make it clear without attacking. Sentences like "It seems like you strongly value the fact that you’ve always paid on time" or "It seems like you don’t care what position you are leaving me in" can really open up the negotiation process.

NORMATIVE LEVERAGE Every person has a set of rules and a moral framework. Normative leverage is using the other party’s norms and standards to advance your position. If you can show inconsistencies between their beliefs and their actions, you have normative leverage. No one likes to look like a hypocrite.

• Use backup listeners whose only job is to listen between the lines. They will hear things you miss.

People trust those who are in their in-group. Belonging is a primal instinct.

if you can trigger that instinct, that sense that, "Oh, we see the world the same way," then you immediately gain influence.

Research studies have shown that people respond favorably to requests made in a reasonable tone of voice and followed with a "because" reason.

IT’S NOT CRAZY, IT’S A CLUE

the moment when we’re most ready to throw our hands up and declare "They’re crazy!" is often the best moment for discovering Black Swans that transform a negotiation. It is when we hear or see something that doesn’t make sense—something "crazy"—that a crucial fork in the road is presented: push forward, even more forcefully, into that which we initially can’t process; or take the other path, the one to guaranteed failure, in which we tell ourselves that negotiating was useless anyway.

common reasons negotiators mistakenly call their counterparts crazy.

MISTAKE #1: THEY ARE

Often the other side is acting on bad information, and when people have bad information they make bad choices.

Your job when faced with someone like this in a negotiation is to discover what they do not know and supply that information.

MISTAKE #2: THEY ARE CONSTRAINED

In any negotiation where your counterpart is acting wobbly, there exists a distinct possibility that they have things they can’t do but aren’t eager to reveal.

because of legal advice, or because of promises already made, or even to avoid setting a precedent. Or they may just not have the power to close the deal.

MISTAKE #3: THEY HAVE OTHER INTERESTS

The presence of hidden interests isn’t as rare as you might think. Your counterpart will often reject offers for reasons that have nothing to do with their merits.

when you recognize that your counterpart is not irrational, but simply ill-informed, constrained, or obeying interests that you do not yet know, your field of movement greatly expands.

ways to unearth these powerful Black Swans:

GET FACE TIME Black Swans are incredibly hard to uncover if you’re not literally at the table.

OBSERVE UNGUARDED MOMENTS

Hunting for Black Swans is also effective during unguarded moments at the fringes, of formal interactions. During a typical business meeting, the first few minutes, before you actually get down to business, and the last few moments, as everyone is leaving, often tell you more about the other side than anything in between.

Also pay close attention to your counterpart during interruptions, odd exchanges, or anything that interrupts the flow. When someone breaks ranks, people’s façades crack just a little. Simply noticing whose cracks and how others respond verbally and nonverbally can reveal a gold mine.

WHEN IT DOESN’T MAKE SENSE, THERE’S CENTS TO BE MADE

My student had been performing due diligence on potential targets when a principal at the firm asked him to look into a mixed-use property in the heart of Charleston, South Carolina. He had no experience in the Charleston market, so he called the broker selling the property and requested the marketing package. After discussing the deal and the market, my student and his boss decided that the asking price of $4.3 million was about $450,000 too high. At that point, my student called the broker again to discuss pricing and next steps. After initial pleasantries, the broker asked my student what he thought of the property. "It looks like an interesting property," he said. "Unfortunately, we don’t know the market fundamentals. We like downtown and King Street in particular, but we have a lot of questions." The broker then told him that he had been in the market for more than fifteen years, so he was well informed. At this point, my student pivoted to calibrated "How" and "What" questions in order to gather information and judge the broker’s skills. "Great," my student said. "First and foremost, how has Charleston been affected by the economic downturn?" The broker replied with a detailed answer, citing specific examples of market improvement. In the process, he showed my student that he was very knowledgeable. "It sounds like I’m in good hands!" he said, using a label to build empathy. "Next question: What sort of cap rate can be expected in this type of building?" Through the ensuing back-and-forth, my student learned that owners could expect rates of 6 to 7 percent because buildings like this were popular with students at the local university, a growing school where 60 percent of the student body lived off campus. He also learned that it would be prohibitively expensive—if not physically impossible—to buy land nearby and build a similar building. In the last five years no one had built on the street because of historic preservation rules. Even if they could buy land, the broker said a similar building would cost $2.5 million just in construction. "The building is in great shape, especially compared to the other options available to students," the broker said. "It seems like this building functions more as a glorified dormitory than a classic multifamily building," my student said, using a label to extract more information. And he got it. "Fortunately and unfortunately, yes," the broker said. "The occupancy has historically been one hundred percent and it is a cash cow, but the students act like college students . . ." A lightbulb went on in my student’s head: there was something strange afoot. If it were such a cash cow, why would someone sell a 100 percent occupied building located next to a growing campus in an affluent city? That was irrational by any measure. A little befuddled but still in the negotiation mindset, my student constructed a label. Inadvertently he mislabeled the situation, triggering the broker to correct him and reveal a Black Swan. "If he or she is selling such a cash cow, it seems like the seller must have doubts about future market fundamentals," he said. "Well," he said, "the seller has some tougher properties in Atlanta and Savannah, so he has to get out of this property to pay back the other mortgages." Bingo! With that, my student had unearthed a fantastic Black Swan. The seller was suffering constraints that, until that moment, had been unknown. My student put the broker on mute as he described other properties and used the moment to discuss pricing with his boss. He quickly gave him the green light to make a lowball offer—an extreme anchor—to try to yank the broker to his minimum. After quizzing the broker if the seller would be willing to close quickly, and getting a "yes," my student set his anchor. "I think I have heard enough," he said. "We are willing to offer $3.4 million." "Okay," the broker answered. "That is well below the asking price. However, I can bring the offer to the seller and see what he thinks." Later that day, the broker came back with a counteroffer. The seller had told him that the number was too low, but he was willing to take $3.7 million. My student could barely keep from falling off his chair; the counteroffer was lower than his goal. But rather than jump at the amount—and risk leaving value on the table with a wimp-win deal—my student pushed further. He said "No" without using the word. "That is closer to what we believe the value to be," he said, "but we cannot in good conscience pay more than $3.55 million." (Later, my student told me—and I agreed—that he should have used a label or calibrated question here to push the broker to bid against himself. But he was so surprised by how far the price had dropped that he stumbled into old-school haggling.) "I am only authorized to go down to $3.6 million," the broker answered, clearly showing that he’d never taken a negotiation class that taught the Ackerman model and how to pivot to terms to avoid the haggle. My student’s boss signaled to him that $3.6 million worked and he agreed to the price. I’ve teased several of the techniques my student used to effectively negotiate a great deal for his firm, from the use of labels and calibrated questions to the probing of constraints to unearth a beautiful Black Swan. It also bears noting that my student did tons of work beforehand and had prepared labels and questions so that he was ready to jump on the Black Swan when the broker offered it. Once he knew that the seller was trying to get money out of this building to pay off mortgages on the underperforming ones, he knew that timing was important. Of

OVERCOMING FEAR AND LEARNING TO GET WHAT YOU WANT OUT OF LIFE

People generally fear conflict, so they avoid useful arguments out of fear that the tone will escalate into personal attacks they cannot handle.

But stop and think about that. Are we really afraid of the guy across the table? I can promise you that, with very few exceptions, he’s not going to reach across and slug you.

It’s not the guy across the table who scares us: it’s conflict itself.

remember that our emphasis throughout the book is that the adversary is the situation and that the person that you appear to be in conflict with is actually your partner.

Whether it’s in the office or around the family dinner table, don’t avoid honest, clear conflict. It will get you the best car price, the higher salary, and the largest donation. It will also save your marriage, your friendship, and your family.

KEY LESSONS

What we don’t know can kill us or our deals. But uncovering it can totally change the course of a negotiation and bring us unexpected success. Finding the Black Swans—those powerful unknown unknowns—is intrinsically difficult, however, for the simple reason that we don’t know the questions to ask. Because we don’t know what the treasure is, we don’t know where to dig.

• Let what you know—your known knowns—guide you but not blind you. Every case is new, so remain flexible and adaptable. Remember the Griffin bank crisis: no hostage-taker had killed a hostage on deadline, until he did.

• Black Swans are leverage multipliers. Remember the three types of leverage: positive (the ability to give someone what they want); negative (the ability to hurt someone); and normative (using your counterpart’s norms to bring them around).

• Work to understand the other side’s "religion." Digging into worldviews inherently implies moving beyond the negotiating table and into the life, emotional and otherwise, of your counterpart. That’s where Black Swans live.

• Review everything you hear from your counterpart. You will not hear everything the first time, so double-check. Compare notes with team members. Use backup listeners whose job is to listen between the lines. They will hear things you miss.

• Exploit the similarity principle. People are more apt to concede to someone they share a cultural similarity with, so dig for what makes them tick and show that you share common ground.

• When someone seems irrational or crazy, they most likely aren’t. Faced with this situation, search for constraints, hidden desires, and bad information.

• Get face time with your counterpart. Ten minutes of face time often reveals more than days of research. Pay special attention to your counterpart’s verbal and nonverbal communication at unguarded moments—at the beginning and the end of the session or when someone says something out of line.