[00:00:00.150 --> 00:00:05.250] Be a little bit more of a class, than a, kind of a lecture presentation.
[00:00:05.250 --> 00:00:07.140] I learned something about marketing.
[00:00:07.140 --> 00:00:11.638] Cause I was told that the title of this initially was,
[00:00:11.638 --> 00:00:16.640] How to negotiate, when you absolutely have to have the deal.
[00:00:17.690 --> 00:00:20.460] Well that is a great ti, I mean, that's a title.
[00:00:20.460 --> 00:00:22.370] That you would you'd come for.
[00:00:22.370 --> 00:00:24.703] I mean, everybody would have come to hear how you,
[00:00:24.703 --> 00:00:27.960] how do you negotiate when you have to have the deal?
[00:00:27.960 --> 00:00:30.030] You know, everybody wants to know how to do that.
[00:00:30.030 --> 00:00:31.990] They asked me, you know, well, what will you teach
[00:00:31.990 --> 00:00:34.035] them, and I would say, don't get in that position.
[00:00:34.035 --> 00:00:37.100] [LAUGH] Where you absolutely have to have the deal.
[00:00:37.100 --> 00:00:38.800] So it would be a very short session.
[00:00:38.800 --> 00:00:39.560] So I change.
[00:00:40.826 --> 00:00:45.890] The session, to the one that you, you signed up for.
[00:00:45.890 --> 00:00:48.210] Which is conducting effective negotiation.
[00:00:48.210 --> 00:00:50.460] So a little more pedestrian title.
[00:00:50.460 --> 00:00:53.877] A little less exciting, but I think we'll go over some
[00:00:53.877 --> 00:00:58.570] things here that may influence the way you think about negotiations.
[00:01:00.602 --> 00:01:04.690] so, who in here likes to negotiate?
[00:01:04.690 --> 00:01:07.818] Raise of hands.
[00:01:07.818 --> 00:01:09.997] So that's maybe 20% of the class.
[00:01:09.997 --> 00:01:14.930] Who just dreads negotiation?
[00:01:14.930 --> 00:01:15.980] That's even a smaller percent.
[00:01:15.980 --> 00:01:17.820] So the rest of you are kind of indifferent.
[00:01:17.820 --> 00:01:19.130] You'll do it.
[00:01:19.130 --> 00:01:21.257] You know, you'll eat your broccoli, if you have to,
[00:01:21.257 --> 00:01:23.400] but you're not looking forward to it, this is, the.
[00:01:24.520 --> 00:01:27.800] Negotiation is your vegetables of your business life.
[00:01:27.800 --> 00:01:28.950] You'll do it.
[00:01:28.950 --> 00:01:29.860] You know it's good for you.
[00:01:29.860 --> 00:01:32.790] You know you have to do it, but you don't absolutely love it.
[00:01:32.790 --> 00:01:36.072] So, who and, let's just take a second on, why,
[00:01:36.072 --> 00:01:38.530] those of you who like it, why do you like it?
[00:01:38.530 --> 00:01:41.708] What is it you like about it?
[00:01:41.708 --> 00:01:42.797] Now the hands disappear.
[00:01:42.797 --> 00:01:44.250] Yeah?
[00:01:44.250 --> 00:01:49.068] >> Well, compared to my engineering field, where I knew everything was right or
[00:01:49.068 --> 00:01:52.573] wrong, black or white, in negotiations everything's
[00:01:52.573 --> 00:01:54.945] grey, and nobody can say I'm wrong.
[00:01:54.945 --> 00:01:55.330] [LAUGH].
[00:01:55.330 --> 00:01:57.339] >> So you feel better about yourself.
[00:01:57.339 --> 00:01:59.230] [LAUGH] You don't get any bad, and you don't get any-
[00:01:59.230 --> 00:02:00.915] >> [INAUDIBLE] I get credit, you know?
[00:02:00.915 --> 00:02:03.460] Nobody can say they could have done it better.
[00:02:03.460 --> 00:02:03.730] >> Yeah, all right.
[00:02:03.730 --> 00:02:06.617] >> Yeah the reason I wanted to go negotiate,
[00:02:06.617 --> 00:02:09.520] is that typically I have heights to take him.
[00:02:09.520 --> 00:02:10.885] I'm, when I negotiate, I'm going to wing it.
[00:02:10.885 --> 00:02:13.340] I"m going to get better on the other side.
[00:02:13.340 --> 00:02:14.940] >> So you are gonna improve your, your-.
[00:02:14.940 --> 00:02:15.966] >> Situation.
[00:02:15.966 --> 00:02:16.743] >> Your situation.
[00:02:16.743 --> 00:02:21.180] Okay, so you negotiate to improve whatever situation you are involved in.
[00:02:21.180 --> 00:02:23.239] >> Conflict situations is just rarely the case you
[00:02:23.239 --> 00:02:25.930] can make a deal without some level of negotiation.
[00:02:25.930 --> 00:02:27.855] So I look at it as just as, as a means to
[00:02:27.855 --> 00:02:31.410] the end, and getting to the end is kind of the goal.
[00:02:31.410 --> 00:02:35.110] On the flip side, doing win-win deals is really a lot of fun.
[00:02:35.110 --> 00:02:35.800] >> Okay.
[00:02:35.800 --> 00:02:39.024] So you see it largely as eating your broccoli,
[00:02:39.024 --> 00:02:42.340] but sometimes you do get to turn it into desert.
[00:02:42.340 --> 00:02:43.674] [INAUDIBLE] [LAUGH].
[00:02:43.674 --> 00:02:44.850] >> [INAUDIBLE] By working for me.
[00:02:44.850 --> 00:02:46.930] >> I keep thinking of the first George Bush who made the comment about.
[00:02:47.950 --> 00:02:49.110] How he hated eating broccoli.
[00:02:49.110 --> 00:02:49.800] >> Yeah.
[00:02:49.800 --> 00:02:51.120] >> So I actually like broccoli too.
[00:02:51.120 --> 00:02:51.288] >> Yeah.
[00:02:51.288 --> 00:02:52.369] [LAUGH].
[00:02:52.369 --> 00:02:52.955] >> Yeah.
[00:02:52.955 --> 00:02:55.420] >> Yeah [INAUDIBLE] that I think the win-win thing is is
[00:02:55.420 --> 00:02:57.884] fun, and it's also like a pizza, it's like putting in
[00:02:57.884 --> 00:03:00.610] the puzzle [INAUDIBLE] if you're the person, why why why, how
[00:03:00.610 --> 00:03:02.773] you do you get it all together, and make it work.
[00:03:02.773 --> 00:03:05.103] And [INAUDIBLE] win-win, and that's fun if you make it work.
[00:03:05.103 --> 00:03:09.380] >> So, win-win agreements are fun, and you, and you can negotiate.
[00:03:09.380 --> 00:03:12.867] the, the, the higher the percentage of deals you
[00:03:12.867 --> 00:03:16.283] can get that are win-win, the more you like it.
[00:03:16.283 --> 00:03:17.567] Other?
[00:03:17.567 --> 00:03:20.822] >> I think it's a, a unique opportunity for creativity, in business.
[00:03:20.822 --> 00:03:23.071] It's one of the most creative aspects of business.
[00:03:23.071 --> 00:03:26.010] >> It does allow you to fashion solutions.
[00:03:26.010 --> 00:03:31.961] According to, usually different kinds of facts, different fact situations,
[00:03:31.961 --> 00:03:37.920] so you get to be, you get to express some creativity other things that yeah.
[00:03:37.920 --> 00:03:40.610] >> We have building relationship, as well as the other person.
[00:03:40.610 --> 00:03:41.506] >> Yeah, building.
[00:03:41.506 --> 00:03:43.621] >> You understand better where, what they want, where
[00:03:43.621 --> 00:03:45.885] they wanna go and you can [INAUDIBLE] some more [CROSSTALK].
[00:03:45.885 --> 00:03:49.139] >> Yeah, and I'll bet you, those of you who said you didn't
[00:03:49.139 --> 00:03:51.000] like negotiation, saw it as a way
[00:03:51.000 --> 00:03:54.737] of destroying relationships, of stressing out relationships.
[00:03:54.737 --> 00:03:57.738] So, a lot of it depends on, on, you know, what
[00:03:57.738 --> 00:04:02.256] are you doing to relationships, as you negotiate with other parties?
[00:04:02.256 --> 00:04:04.001] How about those of you who didn't, let's get
[00:04:04.001 --> 00:04:06.071] some more of things that you don't like negotiation.
[00:04:06.071 --> 00:04:08.991] For those who just say, I can do without this.
[00:04:08.991 --> 00:04:12.006] What do you not like?
[00:04:12.006 --> 00:04:12.773] Yeah.
[00:04:12.773 --> 00:04:15.937] >> Just makes me very uncomfortable think, to think that, I do
[00:04:15.937 --> 00:04:19.675] not have enough information, to get the most out of this negotiation.
[00:04:19.675 --> 00:04:22.716] And more often than not, I just regret
[00:04:22.716 --> 00:04:26.275] the results, thinking I could have done better.
[00:04:26.275 --> 00:04:30.757] >> Okay, so you look back on it, and you say, shoot, I got taken.
[00:04:30.757 --> 00:04:32.696] I didn't get as good a deal as I might have gotten.
[00:04:32.696 --> 00:04:35.620] I lost.
[00:04:35.620 --> 00:04:37.830] Other things you don't like about, yeah?
[00:04:37.830 --> 00:04:42.134] >> [SOUND] Most of the time, hopefully, the person on the
[00:04:42.134 --> 00:04:44.750] other side is Or are, is an intelligent team, you're dealing with.
[00:04:46.180 --> 00:04:51.252] But you do get the what I call amateur, like if I pound on the table [INAUDIBLE]
[00:04:51.252 --> 00:04:56.280] in fact can get just, intellectually and emotionally tiresome to deal with.
[00:04:56.280 --> 00:04:58.300] >> You can get abused, in negotiations.
[00:04:58.300 --> 00:05:00.092] And there's a whole lot of, there are
[00:05:00.092 --> 00:05:02.810] a lot of issues around power, and information.
[00:05:02.810 --> 00:05:07.063] If there's a disparity in power, leverage, information, and you're dealing
[00:05:07.063 --> 00:05:10.281] with a party who's gonna use that and take advantage of that.
[00:05:10.281 --> 00:05:13.147] You can go out of the room feeling abused.
[00:05:13.147 --> 00:05:14.550] [INAUDIBLE] Yeah.
[00:05:14.550 --> 00:05:18.336] [LAUGH] Yeah.
[00:05:18.336 --> 00:05:21.114] I actually met with Donald Trump, in his
[00:05:21.114 --> 00:05:24.547] office in New York, about 20 years ago, before
[00:05:24.547 --> 00:05:29.985] he was a huge cheese, but he was with a well no, he still had the same hair.
[00:05:29.985 --> 00:05:35.580] [LAUGH] And actually he tried to sell me an interest in the Washington Generals.
[00:05:35.580 --> 00:05:37.480] Any of you know the Washington Generals?
[00:05:37.480 --> 00:05:43.344] This was a, a USFL football team, that had drafted Herschel Walker.
[00:05:43.344 --> 00:05:46.409] And so he was very proud of that, and he, was trying
[00:05:46.409 --> 00:05:49.566] to sell me an interest in that, and I didn't fall for it.
[00:05:49.566 --> 00:05:52.827] So, that's my qualification for teaching a class on negotiation.
[00:05:52.827 --> 00:05:56.733] [LAUGH] [INAUDIBLE] Actually my qualifications is, I,
[00:05:56.733 --> 00:05:59.857] I have negotiated billions of dollars, of
[00:05:59.857 --> 00:06:03.670] transactions, over the years Literally, hundreds if
[00:06:03.670 --> 00:06:06.061] not a thousand different kinds of transactions.
[00:06:06.061 --> 00:06:09.116] I was in the real estate business for 20 years [COUGH]
[00:06:09.116 --> 00:06:12.517] and I was actually the chief financial officer of a big
[00:06:12.517 --> 00:06:16.128] real estate company for about ten years, so I was negotiating
[00:06:16.128 --> 00:06:18.211] debt deals, and equity deals, and
[00:06:18.211 --> 00:06:21.641] then partner departures, and solving litigation.
[00:06:21.641 --> 00:06:28.310] And, so, my, my life was a diet of negotia, just solid diet of negotiations.
[00:06:28.310 --> 00:06:30.464] And then, when I got done with that, I started
[00:06:30.464 --> 00:06:33.570] buying companies and it became a different diet of negotiations.
[00:06:33.570 --> 00:06:36.580] So, I've seen a lot of different kinds of negotiations.
[00:06:36.580 --> 00:06:41.930] I've experienced the feeling of looking forward to a day.
[00:06:41.930 --> 00:06:46.210] When I'm negotiating, and with great anticipation, and really loving
[00:06:46.210 --> 00:06:48.560] it, because I like the people on the other side.
[00:06:48.560 --> 00:06:49.860] I like trying to problem solve.
[00:06:49.860 --> 00:06:51.400] I like being creative.
[00:06:51.400 --> 00:06:52.830] I like all those, those elements.
[00:06:52.830 --> 00:06:58.400] And I also have looked at certain days of negotiating, where I dread it.
[00:06:58.400 --> 00:07:01.060] I cannot wait to get the day behind me.
[00:07:01.060 --> 00:07:04.220] So there's nothing intrinsic about negotiations that say
[00:07:04.220 --> 00:07:06.930] you should like it or not like it.
[00:07:06.930 --> 00:07:10.803] I, I remember teaching a real estate class here at
[00:07:10.803 --> 00:07:15.267] Stanford about ten or 12 years ago, and asking the class
[00:07:15.267 --> 00:07:18.468] roughly the same question, but i did it in the
[00:07:18.468 --> 00:07:21.440] form of, who of you likes to buy a new car?
[00:07:22.940 --> 00:07:25.154] And that was the most highly correlated question
[00:07:25.154 --> 00:07:27.370] with who likes to negotiate, and who doesn't.
[00:07:27.370 --> 00:07:31.707] There are some people who absolutely hate, the process of buying a
[00:07:31.707 --> 00:07:35.591] new car, because it feels like you come out a little dirty.
[00:07:35.591 --> 00:07:37.150] [LAUGH] You know?
[00:07:37.150 --> 00:07:41.115] You don't have the, it's uneven information, uneven power.
[00:07:41.115 --> 00:07:44.352] And whatever, so it can, it can be
[00:07:44.352 --> 00:07:49.046] a bad experience Well, who here are expert negotiators?
[00:07:49.046 --> 00:07:51.430] Raise of hands.
[00:07:51.430 --> 00:07:56.634] [LAUGH] Every hand should go up.
[00:07:56.634 --> 00:07:59.384] Every hand in the room should go up.
[00:07:59.384 --> 00:08:04.586] You all are here in life, because you have been superb negotiators.
[00:08:04.586 --> 00:08:05.685] You would not be in.
[00:08:05.685 --> 00:08:06.718] What is the negotiating?
[00:08:06.718 --> 00:08:11.984] Negotiating is getting what you want, at a price that's acceptable to you.
[00:08:11.984 --> 00:08:14.348] So you have paid prices, to be at
[00:08:14.348 --> 00:08:18.124] this place in your life, that you're happy with.
[00:08:18.124 --> 00:08:21.377] So you are expert negotiators, and I wanna ventilate
[00:08:21.377 --> 00:08:24.204] that a little bit, and let you really kind of.
[00:08:24.204 --> 00:08:27.443] Peer into what it is that you're, you've been so good at.
[00:08:27.443 --> 00:08:31.168] But, first of all, here's maybe a little bit of a
[00:08:31.168 --> 00:08:35.974] map for you to start thinking about the terrain of negotiation.
[00:08:35.974 --> 00:08:39.810] All of the conversations you have in life, if you think broadly about it.
[00:08:39.810 --> 00:08:41.440] Everything that you've done has been a negotiation.
[00:08:41.440 --> 00:08:44.790] For those of you who are married.
[00:08:44.790 --> 00:08:46.580] You're negotiating all the time.
[00:08:46.580 --> 00:08:48.950] With your spouse, with your children.
[00:08:48.950 --> 00:08:51.080] In your job, you're negotiating all the time.
[00:08:51.080 --> 00:08:52.670] In school you're negotia.
[00:08:52.670 --> 00:08:57.401] I mean, conversations, are in effect, a give and take, and there, and there's
[00:08:57.401 --> 00:09:00.242] a give-get transaction, and usually, the more
[00:09:00.242 --> 00:09:03.371] informal they are, the more successful people feel.
[00:09:03.371 --> 00:09:05.393] When you do it with friends and family,
[00:09:05.393 --> 00:09:08.274] usually, they feel more successful, then you get into
[00:09:08.274 --> 00:09:10.419] these, sort of sty, where we think about
[00:09:10.419 --> 00:09:14.375] negotiations, entrepreneur, is in this area of stylized negotiations.
[00:09:14.375 --> 00:09:19.279] Where there are agreements, there are certain things that we negotiate, we
[00:09:19.279 --> 00:09:23.560] sit down at a table, somebody takes notes, we write it up.
[00:09:23.560 --> 00:09:25.985] And there's certain things that we trade
[00:09:25.985 --> 00:09:29.310] off, and then finally, very formal negotiations.
[00:09:29.310 --> 00:09:32.766] These are typically ones that are done, in arbitration, or
[00:09:32.766 --> 00:09:36.562] litigation, where there are rules of evidence, where there's a
[00:09:36.562 --> 00:09:39.610] very structured, narrow thing, and that one is not a
[00:09:39.610 --> 00:09:43.450] very fun one, although I've now spent four years in litigation.
[00:09:43.450 --> 00:09:43.980] I'm good enough.
[00:09:43.980 --> 00:09:48.960] In fact, I had one attorney say that I was the best witness he had ever run into.
[00:09:48.960 --> 00:09:53.477] And I started liking negotiation or Litigation after that.
[00:09:53.477 --> 00:09:56.128] [COUGH] This was an opposing attorney, too.
[00:09:56.128 --> 00:09:58.745] So you feel pretty good about that.
[00:09:58.745 --> 00:10:02.780] So what makes for successful negotiations?
[00:10:02.780 --> 00:10:04.800] In across all of those.
[00:10:04.800 --> 00:10:10.202] If if I recognize, so many people from my past in here, it's gonna
[00:10:10.202 --> 00:10:15.718] be hard not to cold call, on Angie here, or [UNKNOWN] or Nicola.
[00:10:15.718 --> 00:10:18.478] So what, what makes for successful
[00:10:18.478 --> 00:10:24.100] negotiatia, if you think about successful negotiations.
[00:10:24.100 --> 00:10:25.010] What do you think about?
[00:10:25.010 --> 00:10:27.390] I've just had a successful negotiation.
[00:10:27.390 --> 00:10:29.839] What's your self talk?
[00:10:29.839 --> 00:10:31.128] Yeah.
[00:10:31.128 --> 00:10:32.589] >> Set the right expectations.
[00:10:32.589 --> 00:10:35.599] >> Okay, expectations are, your expectations, you've
[00:10:35.599 --> 00:10:37.296] set 'em the right way going in.
[00:10:37.296 --> 00:10:40.623] They've been met, therefore you've achieved your objectives.
[00:10:40.623 --> 00:10:43.332] That's a successful negotiation.
[00:10:43.332 --> 00:10:44.285] Yeah.
[00:10:44.285 --> 00:10:49.093] >> [INAUDIBLE] [INAUDIBLE]
[00:10:49.093 --> 00:10:52.461] and [INAUDIBLE].
[00:10:52.461 --> 00:10:53.983] >> Okay.
[00:10:53.983 --> 00:10:58.041] >> [INAUDIBLE] Is also, why [INAUDIBLE] how do we
[00:10:58.041 --> 00:11:03.221] [INAUDIBLE] how do we [INAUDIBLE] oh, that is bottom line.
[00:11:03.221 --> 00:11:05.541] Or, that is something that I should fight for.
[00:11:05.541 --> 00:11:08.108] And then [INAUDIBLE].
[00:11:08.108 --> 00:11:12.058] >> Okay, so, some of it is how you, how you define the terrain.
[00:11:12.058 --> 00:11:14.987] How the other, how you and the other party perceive it,
[00:11:14.987 --> 00:11:18.240] and then are you able to execute, in that perceived terrain.
[00:11:18.240 --> 00:11:19.164] Bonny?
[00:11:19.164 --> 00:11:20.800] >> [INAUDIBLE] win-win.
[00:11:20.800 --> 00:11:24.740] It's easy to define what winning is on your perspective, cuz u're happy.
[00:11:24.740 --> 00:11:26.511] But I see when on the other side, is that
[00:11:26.511 --> 00:11:29.252] the person, the residual effect after they walked out of the
[00:11:29.252 --> 00:11:31.829] room, and as time goes on, that they're not upset, and
[00:11:31.829 --> 00:11:34.970] they don't try to undermine and negotiate whatever the result was.
[00:11:34.970 --> 00:11:35.880] So they were happy too.
[00:11:35.880 --> 00:11:37.893] >> Okay, so you are thinking more broadly
[00:11:37.893 --> 00:11:41.260] than a lot of business people, think about negotiation.
[00:11:41.260 --> 00:11:45.530] I mean, these are, what I would call enlightened comments about negotiations.
[00:11:45.530 --> 00:11:47.820] Here's what most business people are negotiating.
[00:11:50.630 --> 00:11:54.010] This is the essence of most business agreements.
[00:11:54.010 --> 00:11:55.740] These five things.
[00:11:55.740 --> 00:12:01.430] So, they're focused on getting the best price, getting the most attractive terms.
[00:12:01.430 --> 00:12:03.440] Making sure that whatever time frames
[00:12:03.440 --> 00:12:07.230] for execution or deliverables, whatever are acceptable.
[00:12:07.230 --> 00:12:10.290] Making sure the warranties are in place.
[00:12:10.290 --> 00:12:14.390] And then if things go wrong, they've got remedies.
[00:12:14.390 --> 00:12:15.500] They may be legal remedies.
[00:12:15.500 --> 00:12:16.910] They may be economic remedies.
[00:12:16.910 --> 00:12:18.870] They're probably a combination of both.
[00:12:18.870 --> 00:12:23.984] So, most business negotiating, which is in this stylized category, in the middle,
[00:12:23.984 --> 00:12:27.430] is so focused on me getting what I want in these five areas.
[00:12:28.490 --> 00:12:31.800] And people don't think more broadly than that.
[00:12:31.800 --> 00:12:38.380] If [SOUND] people who do a lot of negotiating around
[00:12:38.380 --> 00:12:44.356] these things, talk about these techniques.
[00:12:44.356 --> 00:12:48.064] Does anybody not run into these before as
[00:12:48.064 --> 00:12:52.660] sort of things that are taught in negotiation classes?
[00:12:52.660 --> 00:12:55.090] Are any of these new to any of you, surprising?
[00:12:55.090 --> 00:12:55.590] >> The bathroom.
[00:12:57.780 --> 00:13:00.620] The bathroom one is a, is a commonly used technique.
[00:13:01.650 --> 00:13:04.284] Feed the person a lot of water, and a lot of
[00:13:04.284 --> 00:13:08.210] food [LAUGH] and then just keep talking, keep the pressure on.
[00:13:08.210 --> 00:13:11.868] So, using the bath, bathroom breaks is a powerful, if you're
[00:13:11.868 --> 00:13:15.679] using techniques, you know, there, and what do I mean by plane?
[00:13:17.710 --> 00:13:19.430] They've got a plane to catch.
[00:13:19.430 --> 00:13:21.550] Their schedule, exactly.
[00:13:21.550 --> 00:13:25.690] They've gotta catch a plane, and so you just carry on the negotiation.
[00:13:25.690 --> 00:13:27.080] You speak slowly.
[00:13:28.650 --> 00:13:30.720] You make things drag out.
[00:13:30.720 --> 00:13:32.060] You disagree at the last minute.
[00:13:32.060 --> 00:13:34.572] Just as they're running for their plane, and say oh,
[00:13:34.572 --> 00:13:37.150] you do the Colombo thing, you know oh, one more thing.
[00:13:38.510 --> 00:13:42.090] You know, have any of you been subject to any of these?
[00:13:44.280 --> 00:13:47.293] What does it feel like?
[00:13:47.293 --> 00:13:50.666] >> Well [COUGH] is what you have to assess whether it's
[00:13:50.666 --> 00:13:55.985] a, it's, it's it's always incompetence, or is it actual bad faith?
[00:13:55.985 --> 00:13:56.878] And that can be difficult.
[00:13:56.878 --> 00:13:57.861] And it's annoying to have.
[00:13:57.861 --> 00:13:59.061] To have to even have that [CROSSTALK].
[00:13:59.061 --> 00:14:01.649] >> Either case, what do you, how do you feel?
[00:14:01.649 --> 00:14:05.566] If you're dealing with an incompetent party, or a bad actor?
[00:14:05.566 --> 00:14:06.318] >> Wasting your time [INAUDIBLE].
[00:14:06.318 --> 00:14:07.825] >> It makes you angry.
[00:14:07.825 --> 00:14:09.753] >> Yeah.
[00:14:09.753 --> 00:14:13.436] >> [INAUDIBLE] Very few people, don't recognize these.
[00:14:13.436 --> 00:14:14.889] If you're on the other side of the table,
[00:14:14.889 --> 00:14:16.599] it's not like oh, my gosh, what is happening?
[00:14:16.599 --> 00:14:21.160] I don't know, I don't understand, this is sure working on me!
[00:14:21.160 --> 00:14:23.460] You know, most of the time you
[00:14:23.460 --> 00:14:28.436] perceive immediately these techniques, and you resent them.
[00:14:28.436 --> 00:14:29.250] Or you're angry about them.
[00:14:29.250 --> 00:14:32.224] So, in term of techniques that people teach,
[00:14:32.224 --> 00:14:36.818] you know, I think these are anti-successful agreement techniques.
[00:14:36.818 --> 00:14:38.808] You may get a deal done.
[00:14:38.808 --> 00:14:40.970] But you're unlikely to get a deal that
[00:14:40.970 --> 00:14:44.967] is lasting, enduring, flexible, where you build relationships.
[00:14:44.967 --> 00:14:46.780] Where you create solutions.
[00:14:46.780 --> 00:14:52.274] But these are used all the time, mostly by, investment bankers.
[00:14:52.274 --> 00:14:53.169] I'm just kidding.
[00:14:53.169 --> 00:14:56.238] [LAUGH] Sorry, sorry, I know.
[00:14:56.238 --> 00:14:59.023] [LAUGH] Roy, could you turn that tape off up there?
[00:14:59.023 --> 00:15:00.443] [LAUGH].
[00:15:00.443 --> 00:15:04.054] I have one other technique which I run into quite a lot dealing with competitors.
[00:15:04.054 --> 00:15:06.459] Which is the, during a set of conflicts,
[00:15:06.459 --> 00:15:10.160] long, long negotiations, maybe over the course of months.
[00:15:10.160 --> 00:15:15.460] The, you, you discover that in the course of this supposedly good faith negotiation
[00:15:15.460 --> 00:15:18.390] the competitor, for example, has been actually
[00:15:18.390 --> 00:15:23.510] promoting something completely different talking to somebody else.
[00:15:23.510 --> 00:15:27.177] And the explanation you get when you protest is, I'm
[00:15:27.177 --> 00:15:29.960] very sorry we had no idea that was going on.
[00:15:29.960 --> 00:15:31.070] >> The impersonation of-.
[00:15:31.070 --> 00:15:31.810] >> Deny, deny, deny, right?
[00:15:31.810 --> 00:15:35.270] >> Yeah or just innocent you know I had no idea or oh, my god.
[00:15:35.270 --> 00:15:36.330] >> Same organization.
[00:15:36.330 --> 00:15:36.631] >> Yeah.
[00:15:36.631 --> 00:15:37.533] Yeah.
[00:15:37.533 --> 00:15:43.863] Which puts you on your heels, puts you at a disadvantage, maybe there are
[00:15:43.863 --> 00:15:48.255] others, anybody in here experience other obvious
[00:15:48.255 --> 00:15:52.255] techniques that are being used to gain power.
[00:15:52.255 --> 00:15:53.643] Yeah, John.
[00:15:53.643 --> 00:15:56.325] >> We were locked in a room once.
[00:15:56.325 --> 00:15:56.530] [LAUGH] >> Yeah.
[00:15:56.530 --> 00:15:57.931] >> I think it was kinda amateurish back in the early
[00:15:57.931 --> 00:15:59.762] days in eastern Europe, that we just climbed out the window.
[00:15:59.762 --> 00:15:59.929] [LAUGH]
[00:15:59.929 --> 00:16:01.820] >> I bet there are a lot of interesting stories.
[00:16:01.820 --> 00:16:03.283] That was another one, so, yeah.
[00:16:03.283 --> 00:16:08.310] >> Language, there's a [UNKNOWN] in terms of a, an experience having,
[00:16:08.310 --> 00:16:13.175] having negotiations in China where I was sitting across the table from a
[00:16:13.175 --> 00:16:18.707] gentleman who, spoke or at least didn't claim to have spoken any English.
[00:16:18.707 --> 00:16:19.241] >> Yeah.
[00:16:19.241 --> 00:16:21.240] >> And so I had a translator, fortunately.
[00:16:21.240 --> 00:16:24.225] And so that was one kinda, it's an interesting barrier.
[00:16:24.225 --> 00:16:25.681] Cuz I was pretty sure that he understood.
[00:16:25.681 --> 00:16:26.482] >> Mm-hm.
[00:16:26.482 --> 00:16:27.170] >> English.
[00:16:27.170 --> 00:16:31.150] And for a variety of reasons, and smoke was also another one.
[00:16:31.150 --> 00:16:31.270] >> Yeah.
[00:16:31.270 --> 00:16:32.510] >> He was an avid smoker.
[00:16:32.510 --> 00:16:35.449] And I can't stand smoke, and, and I tried
[00:16:35.449 --> 00:16:39.040] my hardest to make sure that he didn't know that.
[00:16:39.040 --> 00:16:42.658] Because that's really affected, kinda, the way it helps to have
[00:16:42.658 --> 00:16:45.630] everyone to spend in this, you know, four by eight room.
[00:16:45.630 --> 00:16:45.900] >> Yeah.
[00:16:45.900 --> 00:16:47.920] >> It was very interesting.
[00:16:47.920 --> 00:16:50.197] >> So, making things physically uncomfortable or getting a leg up.
[00:16:50.197 --> 00:16:55.390] There's another way that I see language used and that is abusive language.
[00:16:55.390 --> 00:16:57.940] You know, people that start dropping F bombs,
[00:16:57.940 --> 00:17:01.390] or shouting, you know, cursing at you, whatever.
[00:17:01.390 --> 00:17:03.410] They believe they get a leg up.
[00:17:03.410 --> 00:17:05.570] And in some ways, most of us kind of react.
[00:17:05.570 --> 00:17:07.760] We, we go a little bit on our heels when somebody
[00:17:07.760 --> 00:17:11.250] starts cursing at us, or they raise their voice or something.
[00:17:11.250 --> 00:17:14.150] I mean, as tough as you may be, if somebody starts doing.
[00:17:14.150 --> 00:17:17.860] There's something in the inner child of all of us
[00:17:17.860 --> 00:17:21.360] that recoils a little bit, and is back on our heels.
[00:17:21.360 --> 00:17:24.300] Now, it can cause you to come back in like manner.
[00:17:24.300 --> 00:17:26.069] It can cause you to get to that level
[00:17:26.069 --> 00:17:28.512] yourself, which may or may not be a good thing.
[00:17:28.512 --> 00:17:29.499] Comment?
[00:17:29.499 --> 00:17:32.544] >> So I had actually the opposite happen to me once
[00:17:32.544 --> 00:17:36.526] where we were having issues and then we couldn't come to
[00:17:36.526 --> 00:17:40.506] an agreement and then they came back and they were actually,
[00:17:40.506 --> 00:17:44.750] you know, they could do more, more than what they were saying.
[00:17:44.750 --> 00:17:47.382] If they gave me everything so they were treating me with
[00:17:47.382 --> 00:17:50.482] kindness and then they went behind my back and changed it again.
[00:17:50.482 --> 00:17:53.845] So it was the opposite of using the abusive language.
[00:17:53.845 --> 00:17:55.603] >> So it's kind of the limp leg.
[00:17:55.603 --> 00:17:56.570] >> It was [UNKNOWN].
[00:17:56.570 --> 00:17:57.447] Yes.
[00:17:57.447 --> 00:17:58.230] >> Yeah, where people use different techniques to deceive and.
[00:18:00.990 --> 00:18:02.911] >> So Joe, I have a feeling your gonna tell
[00:18:02.911 --> 00:18:05.588] us ways to do actually do this that aren't these ways,
[00:18:05.588 --> 00:18:08.792] but let's use these guys examples, where you actually are faced
[00:18:08.792 --> 00:18:11.392] with people like this on the other side of the table.
[00:18:11.392 --> 00:18:13.156] And how do you actually take control or sort
[00:18:13.156 --> 00:18:14.920] of set it on a positive tone, especially if
[00:18:14.920 --> 00:18:17.076] you're in a situation where you're sort of feeling
[00:18:17.076 --> 00:18:19.015] like, this is the company I really wanna buy.
[00:18:19.015 --> 00:18:19.110] >> Mm-hm.
[00:18:19.110 --> 00:18:21.530] >> Or this is the job that I really wanna get.
[00:18:21.530 --> 00:18:21.840] >> Yeah.
[00:18:21.840 --> 00:18:23.810] >> And you don't really have as many options.
[00:18:23.810 --> 00:18:26.130] But these people are actually coming at you with these techniques.
[00:18:26.130 --> 00:18:26.430] >> Yeah.
[00:18:26.430 --> 00:18:28.440] >> What would you advise us to do?
[00:18:28.440 --> 00:18:31.650] >> Well, let's have the group, I'll, I'll give you my, the way I react to it.
[00:18:31.650 --> 00:18:34.520] But anybody in the group, you know, somebody
[00:18:34.520 --> 00:18:36.735] is using one or more of these on you.
[00:18:36.735 --> 00:18:37.327] Yeah?
[00:18:37.327 --> 00:18:38.655] >> Just call em on it.
[00:18:38.655 --> 00:18:41.372] >> So calling them on it is one really [UNKNOWN].
[00:18:41.372 --> 00:18:44.980] You know, I've actually done this in a, in
[00:18:44.980 --> 00:18:50.380] a litigation, where the opposing attorney was deposing me.
[00:18:50.380 --> 00:18:52.580] And he stood up and got right in my face and started
[00:18:52.580 --> 00:18:55.710] to shout at me, he said why did you do such and such.
[00:18:55.710 --> 00:18:56.210] And
[00:18:57.910 --> 00:19:00.150] you know, it really is off-putting.
[00:19:00.150 --> 00:19:02.370] And you're, you're, the, the.
[00:19:02.370 --> 00:19:05.065] All it shows in the transcript, is, why did you do.
[00:19:05.065 --> 00:19:05.859] [LAUGH].
[00:19:05.859 --> 00:19:07.803] >> Such and such.
[00:19:07.803 --> 00:19:09.285] That's all it shows.
[00:19:09.285 --> 00:19:11.050] That's all it shows.
[00:19:11.050 --> 00:19:14.552] And if you answer the way you're feeling when somebody gets in your face and
[00:19:14.552 --> 00:19:17.790] shouts at you in an accusatory way, you say, well, you son of a gun.
[00:19:17.790 --> 00:19:18.660] I'll tell you the reason.
[00:19:18.660 --> 00:19:19.520] You know?
[00:19:19.520 --> 00:19:21.170] And you'll do it in a way that isn't effective.
[00:19:21.170 --> 00:19:24.500] The most effective thing that I found was exactly what you're saying.
[00:19:24.500 --> 00:19:27.786] I say why are you standing up and raising your voice?
[00:19:27.786 --> 00:19:29.513] That goes on the record.
[00:19:29.513 --> 00:19:34.341] [LAUGH] But, it's, that's the most, copied down
[00:19:34.341 --> 00:19:38.170] way of doing exactly what your saying is.
[00:19:38.170 --> 00:19:40.160] You're really call him on it in a nice way.
[00:19:40.160 --> 00:19:42.090] Why are you raising your voice?
[00:19:42.090 --> 00:19:44.440] What makes you shout about that question?
[00:19:44.440 --> 00:19:45.180] Why are you standing up?
[00:19:45.180 --> 00:19:47.790] Why are you pacing the floor as you get all of it on the record?
[00:19:47.790 --> 00:19:50.035] Now, you don't need to get it on the record in
[00:19:50.035 --> 00:19:52.950] a normal negotiation, but calling him on it is one thing.
[00:19:52.950 --> 00:19:56.850] What's another way that you could deal with that?
[00:19:56.850 --> 00:19:58.180] >> I, I'd start asking questions.
[00:19:58.180 --> 00:19:59.040] That where I start to do.
[00:19:59.040 --> 00:20:02.370] >> Questions are very effective, you know just asking, just posing questions.
[00:20:02.370 --> 00:20:06.800] You know, that's always a, a very inoffensive way of
[00:20:06.800 --> 00:20:12.000] taking the volume level down, getting information, cooling people off.
[00:20:12.000 --> 00:20:12.500] Another way.
[00:20:15.570 --> 00:20:17.720] >> You gotta reach a higher plane, cuz if you're in this type of
[00:20:17.720 --> 00:20:20.630] mode and the other person's not in good faith in most negotiations we're gonna be
[00:20:20.630 --> 00:20:22.106] doing, you need to have a relationship,
[00:20:22.106 --> 00:20:23.708] and, and the relationship usually a lot more
[00:20:23.708 --> 00:20:26.470] important than the actual deal you finally end up with in a lot of cases.
[00:20:26.470 --> 00:20:28.610] So, I mean, I think you do have to call him on it.
[00:20:28.610 --> 00:20:31.010] You have to say, you know, what's your purpose here?
[00:20:31.010 --> 00:20:31.140] >> Yeah.
[00:20:31.140 --> 00:20:34.960] >> And you guys, if he's doing one and your doing another, it doesn't make sense.
[00:20:34.960 --> 00:20:36.500] You guy's have to be both wanting a deal,
[00:20:36.500 --> 00:20:38.110] and both wanting the best, you know win win.
[00:20:38.110 --> 00:20:41.738] >> Sometimes [INAUDIBLE] have such power, and such
[00:20:41.738 --> 00:20:45.890] an advantage, and you really do need the deal.
[00:20:45.890 --> 00:20:49.560] That they get away with more that it's tough to raise them to that level.
[00:20:49.560 --> 00:20:52.368] When there's such a disparity in terms of information
[00:20:52.368 --> 00:20:54.510] or power, that it can be very tough to do.
[00:20:54.510 --> 00:20:56.960] I tell you what I try to do is make
[00:20:56.960 --> 00:21:02.000] it completely ineffective, just make it so either I ignore
[00:21:02.000 --> 00:21:04.490] it, I just don't pay attention to what it is
[00:21:04.490 --> 00:21:07.930] they're doing, by that I mean, I don't drink water.
[00:21:07.930 --> 00:21:12.340] You know, I am able to outlast, my bladder is better than their bladder.
[00:21:12.340 --> 00:21:12.630] You know.
[00:21:12.630 --> 00:21:15.600] Or I I will plan my trip with an extra
[00:21:15.600 --> 00:21:19.290] night of hotel room and I'll have an extra flight
[00:21:19.290 --> 00:21:22.890] out the next day, so I'm not even anxious about
[00:21:22.890 --> 00:21:27.450] I'll let him know I'm leaving at 5 o'clock tonight.
[00:21:27.450 --> 00:21:29.868] That oftentimes they'll push the thing.
[00:21:29.868 --> 00:21:30.434] And I just don't sweat it.
[00:21:30.434 --> 00:21:32.646] We stay and then, then pretty soon to me it
[00:21:32.646 --> 00:21:36.455] becomes a question of let's keep staying here, let's keep working.
[00:21:36.455 --> 00:21:38.057] You know, I've missed my plane let's work.
[00:21:38.057 --> 00:21:39.881] It's 11 at night, no problem.
[00:21:39.881 --> 00:21:40.400] I can keep working.
[00:21:40.400 --> 00:21:46.800] Well, I mean you kind of make it so that the game that they setup, hurts them.
[00:21:46.800 --> 00:21:49.310] So they really pay the price for whatever game they setup.
[00:21:49.310 --> 00:21:50.220] So make it ineffective.
[00:21:51.330 --> 00:21:55.470] So these techniques, really can sometimes work
[00:21:55.470 --> 00:21:59.390] marginally in the short run, on some people.
[00:21:59.390 --> 00:22:03.100] But they're not really very powerful long term techniques.
[00:22:03.100 --> 00:22:08.220] Now, if you look at textbook discussions and negotiation, you run into these terms.
[00:22:08.220 --> 00:22:10.369] And I'm not gonna talk about, I wanna
[00:22:10.369 --> 00:22:14.330] talk really today about very practical, real world situations.
[00:22:14.330 --> 00:22:15.810] But these are, this is the terminology.
[00:22:15.810 --> 00:22:20.520] I know some of you are gonna take classes or have taken classes in negotiation.
[00:22:20.520 --> 00:22:26.550] These will not be unfamiliar terms to you in the lexicon of negotiation.
[00:22:28.150 --> 00:22:30.970] So here are some practical keys to successful negotiation.
[00:22:30.970 --> 00:22:33.600] And these will look just so simple minded, which
[00:22:33.600 --> 00:22:36.710] is in fact what most really practical things are.
[00:22:36.710 --> 00:22:37.880] Born of experience.
[00:22:37.880 --> 00:22:40.620] But the first thing is negotiate with the right person.
[00:22:40.620 --> 00:22:43.897] I'm gonna tell you a half a dozen stories here before we
[00:22:43.897 --> 00:22:49.060] wrap up, where you'll see how I learned these particular lessons, I think.
[00:22:49.060 --> 00:22:51.470] But get with the right party.
[00:22:51.470 --> 00:22:55.534] You would be amazed at how many negotiations go on with the wrong party,
[00:22:55.534 --> 00:22:58.585] with the unempowered lieutenant, with somebody who
[00:22:58.585 --> 00:23:01.588] really is not the, the decision maker, whatever.
[00:23:01.588 --> 00:23:03.733] So figure out who the right party is.
[00:23:03.733 --> 00:23:04.810] And are you talking with the right party?
[00:23:06.590 --> 00:23:08.460] Secondly is become a trusted negotiator.
[00:23:08.460 --> 00:23:12.800] And I put here that's a function, of CCP, and my students will recognize this.
[00:23:12.800 --> 00:23:15.880] This is a function of character, competence, and power.
[00:23:15.880 --> 00:23:21.470] For somebody to be trusted, they have to be high character, they have
[00:23:21.470 --> 00:23:25.220] to be competent, and they have to be empowered to make a decision.
[00:23:25.220 --> 00:23:29.590] So you wanted, the right party for you to negotiate with, is somebody you can trust.
[00:23:29.590 --> 00:23:33.910] The right party for them, is that you must be also trusted.
[00:23:33.910 --> 00:23:38.031] So if you want to enter high quality negotiations, getting high levels of
[00:23:38.031 --> 00:23:40.290] trust based on character competence and
[00:23:40.290 --> 00:23:44.320] empowerment, are really important things to assess.
[00:23:44.320 --> 00:23:45.590] Then know your own BATNA.
[00:23:45.590 --> 00:23:46.736] What's a BATNA?
[00:23:46.736 --> 00:23:48.592] >> Best Alternative to a Negotiated Agreement.
[00:23:48.592 --> 00:23:49.742] >> In unison.
[00:23:49.742 --> 00:23:51.030] [LAUGH].
[00:23:51.030 --> 00:23:53.776] >> Best Alternative to a Negotiated Agreement.
[00:23:53.776 --> 00:23:57.301] Okay, this is a term that was developed by Fisher and Ury
[00:23:57.301 --> 00:24:02.101] in 1981 out of the Hartford negotiation study, which they really found
[00:24:02.101 --> 00:24:05.626] that if people could go into a negotiation with an idea of
[00:24:05.626 --> 00:24:11.340] what is their best alternative to this, this negotiation working out successfully.
[00:24:11.340 --> 00:24:13.230] They came out with better end results.
[00:24:13.230 --> 00:24:14.860] You go in with far more confidence.
[00:24:16.170 --> 00:24:17.490] I've taken it to another level.
[00:24:17.490 --> 00:24:22.360] When I go into negotiations now it's, I figure out, I don't know it for sure.
[00:24:22.360 --> 00:24:25.514] But I try to assess what is the other party's BATNA?
[00:24:25.514 --> 00:24:28.024] So I really think hard about what is it they
[00:24:28.024 --> 00:24:31.469] want to achieve, and what are their options because that
[00:24:31.469 --> 00:24:34.483] really helps you kind of assess the whole thing and
[00:24:34.483 --> 00:24:38.600] you're not just thinking my agenda, my agenda, my agenda.
[00:24:38.600 --> 00:24:41.440] Here's what I want: price, term, remedies, warranty.
[00:24:41.440 --> 00:24:42.810] This is what I need.
[00:24:42.810 --> 00:24:45.910] And so many negotiators are going in with their own agenda.
[00:24:45.910 --> 00:24:48.124] Well, go in and think about what is the lay
[00:24:48.124 --> 00:24:50.730] of the land for the other party, and that helps.
[00:24:53.160 --> 00:24:55.990] We'll talk a little bit later about Fisher and Ury's map, but I think there
[00:24:55.990 --> 00:25:00.290] are three or four suggestions that they make that are kind of their broad map.
[00:25:00.290 --> 00:25:01.570] They're really very helpful.
[00:25:02.810 --> 00:25:05.620] Discern the difference between battles and wars.
[00:25:05.620 --> 00:25:08.200] What, what we used to call the elephant ant.
[00:25:08.200 --> 00:25:10.920] Some people don't know the elephants from the ants.
[00:25:10.920 --> 00:25:13.890] Have you ever negotiated with somebody for whom every
[00:25:13.890 --> 00:25:16.970] deal point is something that they have to win?
[00:25:17.980 --> 00:25:20.450] You know, everything is compared, everything that's brought
[00:25:20.450 --> 00:25:22.520] up, they have to win every deal point.
[00:25:22.520 --> 00:25:25.626] I'm here to submit to that's a really dumb way to negotiate.
[00:25:25.626 --> 00:25:28.981] This is give-and-take, you're, if, if you're gonna try to
[00:25:28.981 --> 00:25:32.519] develop relationships the way Nichola said, or if you're gonna try
[00:25:32.519 --> 00:25:35.630] to come out with creative solutions or whatever, you really
[00:25:35.630 --> 00:25:38.620] don't want this, I have to win every deal point, thing.
[00:25:38.620 --> 00:25:41.780] So know where the elephants are and where the ants are.
[00:25:41.780 --> 00:25:45.210] Be willing to lose some battles to win the war.
[00:25:45.210 --> 00:25:45.710] Yeah?
[00:25:47.110 --> 00:25:50.248] >> Wouldn't be to my advantage just to points
[00:25:50.248 --> 00:25:54.370] there where I know, I don't feel so strongly about.
[00:25:54.370 --> 00:25:57.280] Wouldn't the other party be doing the same thing?
[00:25:57.280 --> 00:26:00.355] >> They should be, and you should, I mean, in really effective
[00:26:00.355 --> 00:26:04.040] sort of win win negotiations, you share what you're trying to achieve.
[00:26:04.040 --> 00:26:08.100] Lei Coca has a great line you know he was the guy that turned around Chrysler.
[00:26:08.100 --> 00:26:09.867] And he said you know, when I want
[00:26:09.867 --> 00:26:12.812] to achieve something, I tell the other party exactly
[00:26:12.812 --> 00:26:18.360] what it is I'm trying to achieve, and what price I'm willing to pay to achieve it.
[00:26:18.360 --> 00:26:22.812] And that's really kind of the starting point where it's sharing, so there's
[00:26:22.812 --> 00:26:26.980] a lot more sharing of information in that kind of a model of negotiation.
[00:26:26.980 --> 00:26:28.750] It doesn't always, it not always something you can do.
[00:26:29.828 --> 00:26:32.648] And I, you know, getting back to these techniques, I would say
[00:26:32.648 --> 00:26:35.590] don't worry too much about takings, you have to be aware of them.
[00:26:35.590 --> 00:26:37.830] You have to be careful, and it tells you something.
[00:26:37.830 --> 00:26:41.279] Somebody is using, I, I was thinking when somebody is shouting at me
[00:26:41.279 --> 00:26:45.600] or walking out of the room or throwing things, there is information in that.
[00:26:45.600 --> 00:26:49.187] It's like, I had a partner one time in the real estate
[00:26:49.187 --> 00:26:53.890] business who looked at a joint venture document that was this thick.
[00:26:53.890 --> 00:26:56.515] And he looked at it and he picked it up and he
[00:26:56.515 --> 00:27:01.493] says, and any document that's that thick, there's something in it for me.
[00:27:01.493 --> 00:27:04.032] [LAUGH] And in a way, anybody who's throwing
[00:27:04.032 --> 00:27:07.121] things and screaming and shouting and slamming doors
[00:27:07.121 --> 00:27:12.010] or locking you in rooms, or anything like that, there is something in that for you.
[00:27:12.010 --> 00:27:17.250] You know, you can get the high moral ground, you can at least get information.
[00:27:17.250 --> 00:27:19.590] So don't worry too much about them, but be aware of them.
[00:27:19.590 --> 00:27:21.400] And then really understand what the other party.
[00:27:21.400 --> 00:27:24.950] This is kind of back to the figuring the other person better.
[00:27:24.950 --> 00:27:26.877] But if the more you can understand their values and I'll
[00:27:26.877 --> 00:27:29.580] tell you stories in a minute that illustrate each of these.
[00:27:29.580 --> 00:27:31.110] The more you can understand really what it is
[00:27:31.110 --> 00:27:35.330] that drives them, what's important to them, the more
[00:27:35.330 --> 00:27:38.430] likely you are to craft a solution to things
[00:27:38.430 --> 00:27:43.360] that satisfies what it is that's important to them.
[00:27:44.910 --> 00:27:48.330] so, here, you've all seen this before.
[00:27:48.330 --> 00:27:49.450] Just to pause on it for a second.
[00:27:49.450 --> 00:27:52.720] Those of you who dread negotiations probably
[00:27:52.720 --> 00:27:55.470] have experienced some of this win-lose experience.
[00:27:55.470 --> 00:27:59.217] Those of you who said you really enjoyed them
[00:27:59.217 --> 00:28:05.000] have probably experienced more of the, the left hand column.
[00:28:07.230 --> 00:28:11.343] Okay, so here's seven situations that have sort of illustrated
[00:28:11.343 --> 00:28:13.991] these points for me, and I only tell you these
[00:28:13.991 --> 00:28:18.244] not because I've had some unique negotiating experience, but because
[00:28:18.244 --> 00:28:22.280] you may recognize in some of these things your own experience.
[00:28:22.280 --> 00:28:25.305] You may be able to tie it in to your own experience and internalize it
[00:28:25.305 --> 00:28:28.680] in your own way so that it really does belong to you the first one.
[00:28:28.680 --> 00:28:33.770] I, I taught a negotiation session in the real estate course here at Stanford a
[00:28:33.770 --> 00:28:38.330] number of years ago, and I had a version one and a version two of this.
[00:28:38.330 --> 00:28:43.220] In version one, the instructions were, I want you all to have fun.
[00:28:43.220 --> 00:28:45.030] So this was the three party negotiation.
[00:28:45.030 --> 00:28:47.164] There was a buyer, there are two or
[00:28:47.164 --> 00:28:50.410] three properties a buyer, a seller, and a lender.
[00:28:50.410 --> 00:28:52.330] And they had to come up with a tripartite agreement.
[00:28:53.580 --> 00:28:57.490] And so everybody went off in these negotiating teams, and made deals.
[00:28:57.490 --> 00:29:02.320] The instructions were have fun, be creative, learn everything you can about
[00:29:02.320 --> 00:29:05.740] real estate and everything, and then just report back on your experiences.
[00:29:05.740 --> 00:29:07.300] Well, here's what happened.
[00:29:07.300 --> 00:29:09.160] There were reasonable deals made.
[00:29:09.160 --> 00:29:10.840] They were made quickly.
[00:29:10.840 --> 00:29:13.460] They were relatively easy to understand and document.
[00:29:13.460 --> 00:29:14.620] And there was a lot of camaraderie.
[00:29:14.620 --> 00:29:19.520] People came out of it saying, man this was, this was a fun exercise.
[00:29:19.520 --> 00:29:20.680] We like each other.
[00:29:20.680 --> 00:29:23.410] Aren't Stanford MBA's cool?
[00:29:23.410 --> 00:29:24.780] I just really love my classmates.
[00:29:24.780 --> 00:29:27.240] So that was kind of the outcome.
[00:29:27.240 --> 00:29:28.740] So that was negotiations 1.0.
[00:29:28.740 --> 00:29:30.150] So then we change the instructions.
[00:29:31.560 --> 00:29:32.870] Okay, the objective is to win.
[00:29:34.400 --> 00:29:34.730] You know?
[00:29:34.730 --> 00:29:37.780] You're going into this negotiation, the idea is you wanna win.
[00:29:37.780 --> 00:29:41.880] Your grade's gonna be influenced by it, and the results are gonna be published in
[00:29:41.880 --> 00:29:45.880] rank order, and you need to make a report on how you feel about it.
[00:29:45.880 --> 00:29:48.440] What would you guess the change in results [LAUGH] was.
[00:29:48.440 --> 00:29:48.940] >> Some deals
[00:29:51.060 --> 00:29:51.180] made.
[00:29:51.180 --> 00:29:52.460] >> Yeah, fewer deals were made.
[00:29:52.460 --> 00:29:52.960] >> Slowly.
[00:29:54.680 --> 00:29:57.163] >> They were made more slowly, a lot more time was expended.
[00:29:57.163 --> 00:30:00.369] I mean, tons more time, people said this, negotiators actually
[00:30:00.369 --> 00:30:03.474] said, took longer and was tougher than anything they had done.
[00:30:03.474 --> 00:30:04.718] >> At Stanford.
[00:30:04.718 --> 00:30:06.108] [LAUGH].
[00:30:06.108 --> 00:30:07.811] >> People are frustrated.
[00:30:07.811 --> 00:30:10.804] >> People are frustrated and they hated their classmates.
[00:30:10.804 --> 00:30:15.940] [LAUGH] They said I will never do business with these turkeys again.
[00:30:15.940 --> 00:30:20.090] I had no idea these people were such jerks you know.
[00:30:20.090 --> 00:30:22.268] So fundamentally change, with the mindset and I
[00:30:22.268 --> 00:30:24.190] said with the mindset that means my fault.
[00:30:25.660 --> 00:30:29.270] But the economic outcomes weren't any, but they
[00:30:29.270 --> 00:30:31.390] were fewer, as somebody pointed out, a lot
[00:30:31.390 --> 00:30:34.580] more complex deals, a lot of more unworkable,
[00:30:34.580 --> 00:30:38.920] undocumentable, unenforceable, and the interpersonal relationships were strained.
[00:30:38.920 --> 00:30:41.580] So you can see by having this mindset of we've
[00:30:41.580 --> 00:30:44.520] gotta win, and it's a zero sum, and it was defined.
[00:30:44.520 --> 00:30:48.430] I mean there were so, I mean, there's so few things in most business negotiations.
[00:30:48.430 --> 00:30:53.220] There was so little data that price, term, time-frames, warranties, and
[00:30:53.220 --> 00:30:55.940] remedies were about the only thing that people could work with.
[00:30:55.940 --> 00:30:57.660] Well, I mean, they just went in and pummeled
[00:30:57.660 --> 00:31:01.430] each other, just beat each other to bloody pulps.
[00:31:01.430 --> 00:31:03.880] [COUGH] So, that's the first story.
[00:31:05.990 --> 00:31:08.150] And I'll let you draw your own conclusions from these.
[00:31:08.150 --> 00:31:12.010] The second was is when I was first starting in business I had a
[00:31:12.010 --> 00:31:16.530] deal that I was working on in [UNKNOWN] or as they say [UNKNOWN] Spain.
[00:31:16.530 --> 00:31:17.370] Did I do that right?
[00:31:17.370 --> 00:31:18.935] Any of the Spanish speakers?
[00:31:18.935 --> 00:31:24.420] [UNKNOWN] And we were going into a bank there to borrow money.
[00:31:24.420 --> 00:31:26.768] And we walked in, and it was clear within
[00:31:26.768 --> 00:31:30.300] a few minutes that they really weren't quite expecting us.
[00:31:30.300 --> 00:31:32.290] There, so they ushered us into this office, with a guy that
[00:31:32.290 --> 00:31:34.420] said oh, well, you know, so he sat down to listen to us.
[00:31:34.420 --> 00:31:39.340] And as we were sitting there negotiating over, financing this office
[00:31:39.340 --> 00:31:44.901] building, two guys in white coats came in, and they took the painting off the wall.
[00:31:44.901 --> 00:31:49.885] And a few minutes later they came back in and took the credenza.
[00:31:49.885 --> 00:31:51.935] [LAUGH] And then they unplugged the phone and walked out with the phone.
[00:31:51.935 --> 00:31:53.800] [LAUGH] Pretty soon they came in and took the desk
[00:31:53.800 --> 00:31:55.450] put it on a dolly and went out with it.
[00:31:55.450 --> 00:31:57.510] We're sitting there in these chairs talking
[00:31:57.510 --> 00:31:59.465] and all of the furnitures been moved out.
[00:31:59.465 --> 00:32:02.280] [LAUGH] Well it turns out this guy was not.
[00:32:02.280 --> 00:32:07.660] Really, the person who had anything to do with me, he was just a courtesy party.
[00:32:07.660 --> 00:32:09.650] We said, well, these guys are here, they're from the United
[00:32:09.650 --> 00:32:13.140] States, make them feel good, and so the negotiation went all of.
[00:32:13.140 --> 00:32:15.130] This kind of, I will tell you, my point on this
[00:32:15.130 --> 00:32:18.180] is goes back to make sure you're negotiating with the right party.
[00:32:18.180 --> 00:32:20.490] We had absolutely, this guy could not have made
[00:32:20.490 --> 00:32:22.916] any deal with us whatsoever, but we didn't check
[00:32:22.916 --> 00:32:24.878] it out, so we sat there talking across an
[00:32:24.878 --> 00:32:28.430] empty office about a deal that was never gonna happen.
[00:32:28.430 --> 00:32:32.430] Well, that's an extreme example of something that we all do a lot of times.
[00:32:32.430 --> 00:32:34.796] We end up negotiating with parties without
[00:32:34.796 --> 00:32:37.500] power, without the ability to make a decision.
[00:32:37.500 --> 00:32:40.310] So you really want to think that through.
[00:32:40.310 --> 00:32:42.960] The 3rd one, was also early on in my career.
[00:32:44.074 --> 00:32:49.720] I was a chief financial officer in my late 20's, of a big big company.
[00:32:49.720 --> 00:32:54.930] I was supposed to make a joint venture with a life insurance company.
[00:32:54.930 --> 00:32:57.596] And, so I'd studied all the joint ventures,
[00:32:57.596 --> 00:32:59.580] then I figured out what I wanted on this
[00:32:59.580 --> 00:33:01.626] deal, and what a win-win, I mean I had
[00:33:01.626 --> 00:33:04.480] all, I was steeped in all these things and.
[00:33:04.480 --> 00:33:06.548] So, I sat down with a, a very senior, 50
[00:33:06.548 --> 00:33:09.770] years life insurance executive, and we started going through the
[00:33:09.770 --> 00:33:12.185] deal points, and there were eight or ten of them,
[00:33:12.185 --> 00:33:14.773] and about after I'd been sent no, we're not gonna do
[00:33:14.773 --> 00:33:17.130] that in about the eighth deal point, I had rose,
[00:33:17.130 --> 00:33:19.314] then I had rose in the ninth deal point and said
[00:33:19.314 --> 00:33:21.844] you know, we really need to have this, you've said
[00:33:21.844 --> 00:33:24.800] no on eight of them, and he said Joel, sit down.
[00:33:24.800 --> 00:33:25.410] Just take notes.
[00:33:25.410 --> 00:33:28.178] Your job here is just to take notes.
[00:33:28.178 --> 00:33:33.010] [LAUGH] You know, we're not negotiating anything.
[00:33:33.010 --> 00:33:34.670] Just take notes.
[00:33:34.670 --> 00:33:35.620] We're the life company.
[00:33:35.620 --> 00:33:37.370] We've got all the money.
[00:33:37.370 --> 00:33:38.710] You're just the developer.
[00:33:38.710 --> 00:33:39.210] Take notes.
[00:33:40.310 --> 00:33:43.630] And, so it was clear to me that what that negotiation was about.
[00:33:43.630 --> 00:33:48.890] That negotiation was not gonna be one in, in that series of discussions.
[00:33:48.890 --> 00:33:53.258] But, I was really going to just document it in a way that we
[00:33:53.258 --> 00:33:58.820] had, a chance to do our business, and we had options in the future.
[00:33:58.820 --> 00:34:01.819] You know, so that wasn't the only option that I had.
[00:34:01.819 --> 00:34:07.131] [COUGH] Limited partners, I, I recall early on
[00:34:07.131 --> 00:34:12.205] thinking that I wanted to develop a a brand.
[00:34:12.205 --> 00:34:16.893] I wanted to be seen as a certain kind of negotiator.
[00:34:16.893 --> 00:34:20.617] And I, part of my brand was going to be that I
[00:34:20.617 --> 00:34:26.597] would calculate exactly what a deal was worth, and then I wouldn't budge.
[00:34:26.597 --> 00:34:28.742] On the price I was, I wanted to be known as
[00:34:28.742 --> 00:34:32.350] somebody who knew the value of what it was I was offering.
[00:34:32.350 --> 00:34:33.892] And so if I said, this is a
[00:34:33.892 --> 00:34:38.537] million dollar investment, I didn't wanna settle for 950,000.
[00:34:38.537 --> 00:34:40.840] You know, I really wanted to say, It's a million dollar.
[00:34:40.840 --> 00:34:44.033] And I guess if you want to trade two nickels for dime,
[00:34:44.033 --> 00:34:48.690] I'll do that, but I'm not gonna trade a dime for one nickel.
[00:34:48.690 --> 00:34:50.260] So, I really wanted that to be my brain.
[00:34:50.260 --> 00:34:51.840] Cuz I realized I was going to be in
[00:34:51.840 --> 00:34:53.830] this business a long time and do hundreds of deals.
[00:34:53.830 --> 00:34:58.960] So in negotiating with these limited partners I became very stiff on this.
[00:35:00.070 --> 00:35:04.027] And it was only when I got options, and what happened to me in
[00:35:04.027 --> 00:35:08.580] this in, in one case, a guy said well I'm not gonna do the deal.
[00:35:08.580 --> 00:35:10.360] I need to do the deal at 950 thousand not a million.
[00:35:10.360 --> 00:35:16.240] I went out that night and called another limited
[00:35:16.240 --> 00:35:18.690] partner, investor group and said I'll tell you what.
[00:35:18.690 --> 00:35:23.910] If you'll do this deal at a million dollars, I can document the deal tonight.
[00:35:23.910 --> 00:35:26.740] And I can give you all these other things, but I need the agreement tonight.
[00:35:26.740 --> 00:35:28.893] So, and the guy called up the next day to
[00:35:28.893 --> 00:35:33.330] resume negotiations I can say, sorry I've already done that deal.
[00:35:33.330 --> 00:35:36.603] So, I was able to establish that I don't move on price.
[00:35:36.603 --> 00:35:41.161] And it worked for a while until, we, the guy and I became really good friends.
[00:35:41.161 --> 00:35:45.776] We ended up doing 300 deal together over a 20 year life span.
[00:35:45.776 --> 00:35:47.266] So, a lot of transactions.
[00:35:47.266 --> 00:35:51.487] About 50 deals or so into it, he said Joel, he
[00:35:51.487 --> 00:35:57.230] says, I just gotta tell you, I like to negotiate price.
[00:35:57.230 --> 00:35:59.340] I don't feel good, unless I can negotiate price.
[00:35:59.340 --> 00:36:01.740] So, if you want it to be a million dollars.
[00:36:01.740 --> 00:36:03.065] Tell me it's a million fifty.
[00:36:03.065 --> 00:36:06.590] [LAUGH] Just tell me it's a million fifty.
[00:36:06.590 --> 00:36:09.775] I'll come back with a million, and then we'll both feel good.
[00:36:09.775 --> 00:36:14.624] [LAUGH] And, so we negotiated that, the last 250 deals we did, I
[00:36:14.624 --> 00:36:19.250] would go in about five or 8% higher than what I would accept.
[00:36:19.250 --> 00:36:20.450] He would knock it down.
[00:36:20.450 --> 00:36:21.960] He'd feel good and I'd feel good.
[00:36:21.960 --> 00:36:26.610] So you, you, kind of going in and having sort of a, sort of
[00:36:26.610 --> 00:36:31.090] a reasonable back, a, a rule, what I'm calling ROR, our rules of the road.
[00:36:31.090 --> 00:36:36.460] If you gonna have serial negotiations with somebody, develop rules of the road.
[00:36:38.500 --> 00:36:40.890] Senior partner departure.
[00:36:40.890 --> 00:36:45.420] This is a situation, there was a billion dollar transaction.
[00:36:45.420 --> 00:36:46.840] So it's a big deal.
[00:36:46.840 --> 00:36:49.140] And this was 15 or 20 years ago.
[00:36:49.140 --> 00:36:51.320] So it's a very significant transaction.
[00:36:51.320 --> 00:36:53.380] And the partner came to me and said, you
[00:36:53.380 --> 00:36:58.010] know, I want to, let's agree going into this negotiation.
[00:36:58.010 --> 00:37:00.150] Let's agree on values.
[00:37:00.150 --> 00:37:02.520] Let's agree what these properties are worth.
[00:37:02.520 --> 00:37:04.750] And then we'll make the trade.
[00:37:04.750 --> 00:37:07.660] And on this particular case I thought, you know, the biggest
[00:37:07.660 --> 00:37:11.020] mistake we could make was, would be to agree on the values.
[00:37:11.020 --> 00:37:13.600] Let's disagree on the values.
[00:37:13.600 --> 00:37:16.970] So, you set up whatever you know, the properties better than I do.
[00:37:16.970 --> 00:37:20.220] You value them however you wish, and then I'll select.
[00:37:21.260 --> 00:37:24.250] And the very fact that we didn't agree on values.
[00:37:25.440 --> 00:37:29.770] Allowed me to select deals where I thought I was getting more than my fair share.
[00:37:29.770 --> 00:37:32.825] He then was able, because he said guys, he was fine
[00:37:32.825 --> 00:37:37.430] with the, with the deal, because he represented what the values were.
[00:37:37.430 --> 00:37:40.430] It was just applying the percentage to the values he'd set.
[00:37:40.430 --> 00:37:42.510] So we were able to get a transaction done.
[00:37:44.200 --> 00:37:44.750] My departure.
[00:37:44.750 --> 00:37:49.190] So I left the Crow organization with the reputation of being a conciliator.
[00:37:50.400 --> 00:37:52.170] With the reputation of being reasonable.
[00:37:52.170 --> 00:37:54.578] With the reputation of being a win-win dealer.
[00:37:54.578 --> 00:37:56.736] I'd settle all the litigation that crow
[00:37:56.736 --> 00:37:59.344] would had for 20 years, departing partures.
[00:37:59.344 --> 00:38:04.920] I was seen as somebody who was litigation averse.
[00:38:04.920 --> 00:38:08.390] And because that had become my brand, my negotiating
[00:38:08.390 --> 00:38:09.700] brand, when it came to that, they filed litigation.
[00:38:10.870 --> 00:38:14.210] Against me, realizing that he'll never fight.
[00:38:14.210 --> 00:38:16.090] This guy's such a pussy, such a
[00:38:16.090 --> 00:38:20.070] conciliator, he's such a giver, he'll make everything.
[00:38:20.070 --> 00:38:22.450] I really had no place to go.
[00:38:22.450 --> 00:38:24.330] I had set myself up with my brand.
[00:38:24.330 --> 00:38:26.693] So, I want, from that I want you to
[00:38:26.693 --> 00:38:30.455] think very carefully about the brand you want to have.
[00:38:30.455 --> 00:38:33.162] The last story is one that I think you'll remember.
[00:38:33.162 --> 00:38:34.549] >> So what happened?
[00:38:34.549 --> 00:38:36.777] >> We ended up in four years of litigation.
[00:38:36.777 --> 00:38:39.379] >> No [INAUDIBLE] >> So I now have a new brand.
[00:38:39.379 --> 00:38:42.150] [LAUGH] I'm now known as the ferret.
[00:38:43.480 --> 00:38:47.840] No, it's interesting, because I think what my brand has become is I
[00:38:47.840 --> 00:38:53.102] am somebody who is very reasonable, who will do win-win negotiations, but if you
[00:38:53.102 --> 00:38:56.858] get to the point where you cross me and my principles or if you
[00:38:56.858 --> 00:38:59.038] do something that I really think is
[00:38:59.038 --> 00:39:01.990] completely unfair then I become very stiff.
[00:39:01.990 --> 00:39:06.550] So, you don't want to get into litigation with me, but you don't need to.
[00:39:06.550 --> 00:39:08.739] So, that's, that's a better brand than the brand
[00:39:08.739 --> 00:39:11.450] I had before, which was the guy will never sue.
[00:39:11.450 --> 00:39:13.490] He will never get into litigation.
[00:39:13.490 --> 00:39:17.356] So, you really wanna think carefully, because that brand, and part
[00:39:17.356 --> 00:39:21.150] of my message, here is that there are no episodic negotiations.
[00:39:21.150 --> 00:39:23.680] You may think it's an episode.
[00:39:23.680 --> 00:39:27.450] You may think you're going in and having a one-off, deal with somebody.
[00:39:27.450 --> 00:39:30.655] That person talks to somebody else who talks to somebody else who talks to
[00:39:30.655 --> 00:39:34.240] somebody else, and pretty soon everything is we live in a very connected world.
[00:39:35.760 --> 00:39:36.860] So think carefully.
[00:39:36.860 --> 00:39:39.579] If you're doing a lot of negotiation for a
[00:39:39.579 --> 00:39:43.710] living, think very carefully about the brand you wanna have.
[00:39:43.710 --> 00:39:47.690] Now, I apologize to my students, former students
[00:39:47.690 --> 00:39:50.656] for this next one, because several of you
[00:39:50.656 --> 00:39:53.194] seen this, but I had a, [COUGH] a
[00:39:53.194 --> 00:39:56.948] negotiation with my daughter over this last topic.
[00:39:56.948 --> 00:39:59.142] So, I'm out here teaching at Standford.
[00:39:59.142 --> 00:40:02.578] And I come out for basically ten weeks, when I teach here.
[00:40:02.578 --> 00:40:06.470] So, she's back in another state, and we correspond by email.
[00:40:06.470 --> 00:40:08.670] I get back a couple of times, she and my wife get
[00:40:08.670 --> 00:40:11.410] out a couple of times, but we're basically away from each other.
[00:40:11.410 --> 00:40:15.838] So here I get this email from her.
[00:40:15.838 --> 00:40:18.950] Dear Dad, did you hear I'm getting a rat?
[00:40:18.950 --> 00:40:21.400] Won't that be cool?
[00:40:21.400 --> 00:40:24.070] The pet store lady said that you can train rats to fetch and stay.
[00:40:24.070 --> 00:40:26.930] I wanted to get mice, because they are cuter and don't have a
[00:40:26.930 --> 00:40:31.430] disgusting tail, but mice just run away, and they never become your friend.
[00:40:31.430 --> 00:40:36.355] Rats will sleep on you, and I'm sure dad you'll become great friends with my rats.
[00:40:36.355 --> 00:40:40.950] [LAUGH] I'm thinking of naming them Ritzy and Scraps.
[00:40:40.950 --> 00:40:42.430] Won't that be cute?
[00:40:42.430 --> 00:40:45.600] And you can even see them when they're tiny babies.
[00:40:45.600 --> 00:40:47.170] Take deep breaths if you're getting nervous.
[00:40:47.170 --> 00:40:50.294] [LAUGH] I will pay for them and the cage with my very own money.
[00:40:50.294 --> 00:40:54.540] All you and mom have to do is buy the food, which really doesn't cost much.
[00:40:54.540 --> 00:40:55.847] I've already done everything else.
[00:40:55.847 --> 00:40:58.549] I think I'm ready, it's okay, I can take care of them.
[00:40:58.549 --> 00:41:02.105] I've proven I can take care of animals, I even sweep up the cats barf.
[00:41:02.105 --> 00:41:03.327] >> [LAUGH].
[00:41:03.327 --> 00:41:05.351] >> I can handle it.
[00:41:05.351 --> 00:41:08.852] So, you can trust me to take to care of Ritzy and Scraps.
[00:41:08.852 --> 00:41:11.500] They already have names.
[00:41:11.500 --> 00:41:12.870] I hope you're doing well at Stanford.
[00:41:12.870 --> 00:41:14.930] Isn't this warm and fuzzy?
[00:41:14.930 --> 00:41:16.740] I'm doing well here, same normal things,
[00:41:19.250 --> 00:41:21.590] practicing soccer, whining to mom about getting rats.
[00:41:21.590 --> 00:41:24.471] Just, so you know, she already said yes.
[00:41:24.471 --> 00:41:26.950] [LAUGH] Is this a negotiator?
[00:41:26.950 --> 00:41:32.362] This 11 year old kid, I mean some of this stuff, when I ask who are the expert
[00:41:32.362 --> 00:41:37.969] negotiators, I promise you we are born knowing something about negotiation.
[00:41:37.969 --> 00:41:40.516] Just see you know, she oh, yeah, I'm sure she's
[00:41:40.516 --> 00:41:43.137] sick of the same conversations can I get a rat, mom?
[00:41:43.137 --> 00:41:46.390] Please, I'll do my practicing that's my secret in life.
[00:41:46.390 --> 00:41:48.536] Promise to do my practicing.
[00:41:48.536 --> 00:41:53.336] [UNKNOWN] So here's this, this is the initial volley.
[00:41:53.336 --> 00:41:56.200] This is the negotiating position.
[00:41:56.200 --> 00:41:58.700] She's kind of laid out her negotiating position.
[00:41:58.700 --> 00:42:04.685] So you're sitting out here, 1,500 miles away, thinking no way.
[00:42:04.685 --> 00:42:09.740] [LAUGH] She has crossed the barrier I'm unwilling to cross.
[00:42:09.740 --> 00:42:12.605] So, here's my response, and I want you to notice
[00:42:12.605 --> 00:42:15.960] this, because this is, this is a real life negotiation.
[00:42:15.960 --> 00:42:18.385] And I'm gonna have you predict how it came out.
[00:42:18.385 --> 00:42:20.735] >> [INAUDIBLE].
[00:42:20.735 --> 00:42:23.171] >> What's that?
[00:42:23.171 --> 00:42:27.160] [LAUGH] Good point.
[00:42:27.160 --> 00:42:29.430] Dear Elise are you nuts?
[00:42:29.430 --> 00:42:34.190] I have been killing rats at the house in Woodside they are not cute they're not
[00:42:34.190 --> 00:42:36.700] nice they are not controllable they stink they
[00:42:36.700 --> 00:42:40.030] eat everything, they make little black poops everywhere.
[00:42:40.030 --> 00:42:41.230] And I have to clean up the mess.
[00:42:41.230 --> 00:42:44.642] Just this week, I bought some decon, to put out where the rats live.
[00:42:44.642 --> 00:42:45.872] >> [LAUGH]
[00:42:45.872 --> 00:42:48.010] >> The next day I found a dead rat
[00:42:48.010 --> 00:42:50.130] near the pool, and another one trapped in the garage.
[00:42:50.130 --> 00:42:52.060] Just to be clear, how, about how I feel, I must
[00:42:52.060 --> 00:42:58.483] inform you, that we smashed it's head in with a [INAUDIBLE]
[00:42:58.483 --> 00:43:00.680] >> [LAUGH]
[00:43:00.680 --> 00:43:02.495] >> I'm a negotiator, come on.
[00:43:02.495 --> 00:43:05.840] [LAUGH] It was fat and ugly.
[00:43:05.840 --> 00:43:08.186] By the way, I think its name was something like Ritzy.
[00:43:08.186 --> 00:43:12.680] [LAUGH] In any event, one of the big reasons I was getting
[00:43:12.680 --> 00:43:15.800] so excited about coming home was to get away from the rats.
[00:43:17.120 --> 00:43:19.900] Now I may as well stay, huh?
[00:43:19.900 --> 00:43:20.735] See how hurt.
[00:43:20.735 --> 00:43:24.360] I'm just hurt, I'm appealing to this young daughter.
[00:43:25.458 --> 00:43:30.332] now, what would like next, a python, or how about some Ebola virus?
[00:43:30.332 --> 00:43:33.080] >> [LAUGH] >> Or maybe you could raise maggots.
[00:43:33.080 --> 00:43:35.890] Anyway, I still love you and miss you and will see you next week.
[00:43:35.890 --> 00:43:36.385] Love, Dad.
[00:43:36.385 --> 00:43:39.919] >> [LAUGH] >> So how did this negotiation come out?
[00:43:42.420 --> 00:43:43.810] Straight egg.
[00:43:43.810 --> 00:43:44.240] What's that.
[00:43:44.240 --> 00:43:45.280] >> He get's the rats.
[00:43:45.280 --> 00:43:46.400] >> She get's the rats exactly.
[00:43:48.490 --> 00:43:50.060] She got the rats.
[00:43:50.060 --> 00:43:54.067] Now why would an expert professional negotiator with
[00:43:54.067 --> 00:43:58.060] $10 billion worth of deals under my belt.
[00:43:58.060 --> 00:44:01.839] Given to this 11 year old kid on some stinking rats.
[00:44:01.839 --> 00:44:04.970] >> Imbalance of power.
[00:44:04.970 --> 00:44:08.820] >> [LAUGH] That's a great point.
[00:44:08.820 --> 00:44:12.850] Or besides your mom had already said yes, so real imbalance of power.
[00:44:14.570 --> 00:44:18.240] To me this is the difference between knowing the elephants and the ants.
[00:44:18.240 --> 00:44:20.510] You know, I was willing to lose a battle to win the war.
[00:44:21.680 --> 00:44:25.529] And the war, what I wanted, winning for me, defining winning for
[00:44:25.529 --> 00:44:29.379] me was raising a child who's responsible, who loves me, who will
[00:44:29.379 --> 00:44:32.539] listen to me on things that really do matter, and, so I
[00:44:32.539 --> 00:44:36.020] was really willing to take a kind of different view of this.
[00:44:36.020 --> 00:44:39.870] Now again, now, the really gratifying part of this story is.
[00:44:39.870 --> 00:44:43.882] In the end she gave the rats back to the pet store lady, after
[00:44:43.882 --> 00:44:48.632] the pet store lady had told her she would be feeding them to the snakes.
[00:44:48.632 --> 00:44:52.444] So she disliked the rats as much as I did in the
[00:44:52.444 --> 00:44:58.231] end, and she came away saying, dad you were right about the rats.
[00:44:58.231 --> 00:44:58.960] [COUGH] So now.
[00:44:58.960 --> 00:44:59.398] >> What was that.
[00:44:59.398 --> 00:45:01.197] [INAUDIBLE] change [INAUDIBLE].
[00:45:01.197 --> 00:45:03.759] >> she, I arrived home and the rats were there.
[00:45:03.759 --> 00:45:07.535] >> [LAUGH].
[00:45:07.535 --> 00:45:08.694] >> [INAUDIBLE].
[00:45:08.694 --> 00:45:08.967] >> Bothering [NOISE].
[00:45:08.967 --> 00:45:13.510] no, no, that was done, it's a done deal, mom had
[00:45:13.510 --> 00:45:18.497] already said yes [LAUGH] it was do you wanna hold them dad?
[00:45:18.497 --> 00:45:19.156] [LAUGH].
[00:45:19.156 --> 00:45:22.135] No I think I'll pass on that [LAUGH].
[00:45:22.135 --> 00:45:26.547] So, I think we've covered most of this, this idea of episotic
[00:45:26.547 --> 00:45:32.210] versus serial, think serial in your mind, as you think about your brand.
[00:45:32.210 --> 00:45:33.620] Outside versus inside.
[00:45:33.620 --> 00:45:37.390] This last was a very much of an inside negotiation.
[00:45:37.390 --> 00:45:41.120] You'll have negotiations with third parties, and with people who are
[00:45:41.120 --> 00:45:42.650] really close, whether they are
[00:45:42.650 --> 00:45:47.200] employees partners, brothers sisters children spouses.
[00:45:47.200 --> 00:45:49.910] The inside ones are by far the toughest.
[00:45:49.910 --> 00:45:52.190] Negotiations, they're the least forgiving and
[00:45:52.190 --> 00:45:54.680] they're the most important ones to lose.
[00:45:54.680 --> 00:45:57.656] So this idea that every negotiation is a competitive game
[00:45:57.656 --> 00:46:00.330] that you have to win, it really helps you get over.
[00:46:00.330 --> 00:46:03.260] The more inside negotiations you do in your life
[00:46:03.260 --> 00:46:05.530] the more that you realize you don't have to win.
[00:46:05.530 --> 00:46:09.000] Certainly not every deal point and you don't have to win every negotiation.
[00:46:09.000 --> 00:46:11.710] So don't think of it as a competitive game.
[00:46:11.710 --> 00:46:13.420] This idea about, jus lik, I just like this quote.
[00:46:13.420 --> 00:46:18.070] Don't wrestle with pigs, you get dirty and they enjoy it.
[00:46:18.070 --> 00:46:20.553] So be very careful who you negotiate with.
[00:46:20.553 --> 00:46:24.054] And that means generating options, that means always having
[00:46:24.054 --> 00:46:26.891] other people to talk with and to do business with.
[00:46:26.891 --> 00:46:30.353] If there's the worst thing in life, is to get in business with
[00:46:30.353 --> 00:46:34.625] people that don't have the same values you have, that you don't respect.
[00:46:34.625 --> 00:46:36.680] I mean, it is misery.
[00:46:36.680 --> 00:46:44.170] It's a different kind of misery from just about everything
[00:46:44.170 --> 00:46:46.035] you know, except being married to somebody who makes you miserable.
[00:46:46.035 --> 00:46:48.000] [COUGH], then this idea of being reputation building.
[00:46:48.000 --> 00:46:49.430] I've given you my examples of that.
[00:46:49.430 --> 00:46:49.970] But.
[00:46:49.970 --> 00:46:53.100] Here are some alternative reputations you have.
[00:46:53.100 --> 00:46:57.354] One is, I'm tough, I'm unbending the legal documents govern.
[00:46:57.354 --> 00:46:59.044] I've known a lot of people who are that way.
[00:46:59.044 --> 00:47:02.276] And often they are people who have a lot of money [INAUDIBLE]
[00:47:02.276 --> 00:47:06.061] and they really believe that's a really smart way to do business.
[00:47:06.061 --> 00:47:07.164] Guess what happens?
[00:47:07.164 --> 00:47:09.047] In the end they may not have a lot of
[00:47:09.047 --> 00:47:12.170] money they may not have the same position of power.
[00:47:12.170 --> 00:47:15.570] And they may not have a friend when things go against them.
[00:47:15.570 --> 00:47:16.580] Live by the sword, die by the sword.
[00:47:16.580 --> 00:47:20.230] You can be flexible, be, reopen, open to reworking the, the life company joint
[00:47:20.230 --> 00:47:28.200] venture partner I told you about who just said, take notes, Joe.
[00:47:28.200 --> 00:47:32.250] Turns out, he was one of the most flexible partners you could ever have.
[00:47:32.250 --> 00:47:34.400] So the documents were the documents were the documents.
[00:47:34.400 --> 00:47:37.890] He couldn't negotiate them, he didn't want you to negotiate them, just take notes.
[00:47:37.890 --> 00:47:41.211] But when it came to working out the problems of living
[00:47:41.211 --> 00:47:45.830] in the real world of doing business, he was extra ordinarily flexible.
[00:47:47.270 --> 00:47:48.730] And so I kept doing business with him.
[00:47:48.730 --> 00:47:53.015] I probably did 25 deals with him over my life in real estate.
[00:47:53.015 --> 00:47:56.182] Because he was such a great partner.
[00:47:56.182 --> 00:48:00.694] He was a tough negotiator documenter but he was a great partner.
[00:48:00.694 --> 00:48:06.272] You can have this, reputation being eager to make deals.
[00:48:06.272 --> 00:48:08.769] Where you just say I do a lot of singles and doubles.
[00:48:08.769 --> 00:48:09.724] I don't do home runs.
[00:48:09.724 --> 00:48:11.565] The other is that.
[00:48:11.565 --> 00:48:13.804] People, there are some people in the negotiating
[00:48:13.804 --> 00:48:15.520] world who just say I only do home runs.
[00:48:15.520 --> 00:48:18.394] If I don't, get a four bagger, if I don't hit a home run,
[00:48:18.394 --> 00:48:21.816] if I don't win the thing, it's, those are the only deals I'll do.
[00:48:21.816 --> 00:48:26.526] So you need to decide what your reputation is there.
[00:48:26.526 --> 00:48:29.382] We've talked about these last couple of the
[00:48:29.382 --> 00:48:32.500] last one is this Fishy Fisher and Yuri.
[00:48:32.500 --> 00:48:35.821] Trained problem solver and we'll talk for a second about Fisher and Yuri.
[00:48:35.821 --> 00:48:36.458] Yeah, comment?
[00:48:36.458 --> 00:48:40.813] [INAUDIBLE], [INAUDIBLE], we're talking about basically these
[00:48:40.813 --> 00:48:43.762] selector, that they, [INAUDIBLE], what do you do
[00:48:43.762 --> 00:48:46.994] when you're in the situation; where let's just
[00:48:46.994 --> 00:48:50.205] there's event that you need to associate with.
[00:48:50.205 --> 00:48:50.860] Mm-hm.
[00:48:50.860 --> 00:48:53.270] And they are, we really need their thing, there's.
[00:48:53.270 --> 00:48:55.190] There's not another alternative out there.
[00:48:55.190 --> 00:48:56.580] You don't agree with their values.
[00:48:56.580 --> 00:48:58.781] Yeah.
[00:48:58.781 --> 00:49:00.789] What do you do in that kind of situation?
[00:49:00.789 --> 00:49:03.417] In some cases you just have to suck it up and negotiate with them.
[00:49:03.417 --> 00:49:08.801] In some cases you can get another party in the organization you negotiate with.
[00:49:08.801 --> 00:49:11.198] In other cases you can talk to them and say okay, here's
[00:49:11.198 --> 00:49:13.960] where I think our conflict is coming, and get to a deeper level.
[00:49:14.990 --> 00:49:15.694] And talk with him about that.
[00:49:15.694 --> 00:49:19.741] I used to have a partner that would say to people you know we're
[00:49:19.741 --> 00:49:23.233] not making a deal on this what would it take to make a deal?
[00:49:23.233 --> 00:49:26.115] And that was effective in certain circumstances
[00:49:26.115 --> 00:49:28.011] you know what would it take to get
[00:49:28.011 --> 00:49:30.540] this relationship on a better footing or to
[00:49:30.540 --> 00:49:33.720] develop a more long lasting give take relationship?
[00:49:33.720 --> 00:49:37.020] and sometimes you can get that real with people.
[00:49:37.020 --> 00:49:41.570] My, my views going back to the very beginning is generate options so you
[00:49:41.570 --> 00:49:43.845] don't have one vendor that you really
[00:49:43.845 --> 00:49:47.230] rely on, or one alternative source of financing.
[00:49:47.230 --> 00:49:50.919] I mean, I like having a lot of options, so
[00:49:50.919 --> 00:49:54.624] and I, I realize that's a bit of a Pollyanna.
[00:49:54.624 --> 00:49:56.533] You can't always do that.
[00:49:56.533 --> 00:50:00.176] I mean we just did a deal with one of the companies I'm involved
[00:50:00.176 --> 00:50:05.242] in where they, they were about 40% of our business, they were really important.
[00:50:05.242 --> 00:50:07.811] We had to get that deal done.
[00:50:07.811 --> 00:50:11.288] So consequently we took notes and got the deal done.
[00:50:11.288 --> 00:50:12.383] So you gonna do some of that.
[00:50:12.383 --> 00:50:16.020] There's not a panacea to every negotiating problem.
[00:50:16.020 --> 00:50:18.380] You are gonna deal with difficult people.
[00:50:18.380 --> 00:50:19.900] You're gonna have win lose negotiations.
[00:50:19.900 --> 00:50:22.430] You are going to have some things that you dread.
[00:50:22.430 --> 00:50:25.740] But I'm just saying that you can nudge it's so that it a happier experience.
[00:50:25.740 --> 00:50:30.235] It is more of a win, win experience, and the better you choose party.
[00:50:30.235 --> 00:50:34.671] So here, here mindsets that I've got when I go into your shoes.
[00:50:34.671 --> 00:50:36.148] What time do we end Marcello?
[00:50:36.148 --> 00:50:36.820] Where did Marcello go?
[00:50:36.820 --> 00:50:37.884] 8:12.
[00:50:37.884 --> 00:50:38.942] 8:12?
[00:50:40.020 --> 00:50:40.692] So we have till 12.
[00:50:40.692 --> 00:50:44.294] Are you happy until then, or are people wanting to get out of here?
[00:50:44.294 --> 00:50:45.359] You're okay?
[00:50:45.359 --> 00:50:46.729] Well, let's talk a little bit about these.
[00:50:46.729 --> 00:50:49.807] And one of the con, one of the mindsets that I think
[00:50:49.807 --> 00:50:54.149] is a really good mindset is that a negotiation is just a conversation.
[00:50:55.210 --> 00:50:56.350] It's just an exchange.
[00:50:56.350 --> 00:50:57.886] You're good at conversations.
[00:50:57.886 --> 00:50:59.684] You talk to people all the time.
[00:50:59.684 --> 00:51:02.391] So, this idea of oh my gosh, we're going into a
[00:51:02.391 --> 00:51:07.760] room, we're closing the doors, we're sitting on opposite sides of tables.
[00:51:07.760 --> 00:51:12.010] You know, that feels a lot more threatening than, I'm just gonna talk.
[00:51:12.010 --> 00:51:14.103] About our various interests and try to
[00:51:14.103 --> 00:51:16.591] have a conversation to come up with something
[00:51:16.591 --> 00:51:19.734] that's mutually satisfying, so think of negotiations
[00:51:19.734 --> 00:51:22.156] as conversations and your good at it, think
[00:51:22.156 --> 00:51:24.644] of negotiations as a series we've mentioned
[00:51:24.644 --> 00:51:27.655] think that agreements as [INAUDIBLE] winning it's back
[00:51:27.655 --> 00:51:32.260] to this idea of what is winning, the idea is that your agreement should be durable.
[00:51:34.440 --> 00:51:37.529] There's no point in coming to an agreement, that
[00:51:37.529 --> 00:51:40.750] it terminates in a law suit six months later.
[00:51:40.750 --> 00:51:43.290] You've not negotiated a good agreement.
[00:51:43.290 --> 00:51:46.650] So you want them, there to be some elasticity.
[00:51:46.650 --> 00:51:49.480] Some sense, and usually that is a function of
[00:51:49.480 --> 00:51:53.400] how much trust you've developed with your opposite party.
[00:51:53.400 --> 00:51:57.090] If you've developed very high trust with your opposite party once
[00:51:57.090 --> 00:52:00.520] you come to an issue the first instinct isn't, oh my gosh.
[00:52:00.520 --> 00:52:01.860] Let's go to the documents.
[00:52:01.860 --> 00:52:03.190] What do the documents say?
[00:52:03.190 --> 00:52:09.420] Most of the good deals I've ever made have never once referred back to the documents.
[00:52:09.420 --> 00:52:11.356] Not once, and some of these things have
[00:52:11.356 --> 00:52:14.355] lasted 25 30 years,i mean, my whole business career.
[00:52:14.355 --> 00:52:18.235] We never ever once go to the documents.
[00:52:18.235 --> 00:52:19.141] Why?
[00:52:19.141 --> 00:52:21.221] Because we like and trust each other and these are
[00:52:21.221 --> 00:52:23.258] real issues and we sit down and talk it through.
[00:52:23.258 --> 00:52:25.459] So you want a durable agreement.
[00:52:25.459 --> 00:52:27.410] So that's, that's another mindset they have.
[00:52:27.410 --> 00:52:30.290] Another mindset is, is thinking win win.
[00:52:31.300 --> 00:52:35.150] In other words, to recognize that you're accountable to [INAUDIBLE].
[00:52:35.150 --> 00:52:36.280] A lot of times, people think is
[00:52:36.280 --> 00:52:38.730] the negotiator, they're only accountable to themselves.
[00:52:38.730 --> 00:52:40.490] I'm winning for me.
[00:52:40.490 --> 00:52:44.290] There are very rare negotiations where you don't have broad accountability.
[00:52:44.290 --> 00:52:48.940] It's to your employees, it's to the community, it's to shareholders.
[00:52:48.940 --> 00:52:49.994] it's to a board.
[00:52:49.994 --> 00:52:54.376] Sometimes this can be a very effective not in the room party.
[00:52:54.376 --> 00:52:57.001] That you can use to give you, you some breathing room to pause
[00:52:57.001 --> 00:52:58.699] and say, well, I can't, I wouldn't
[00:52:58.699 --> 00:53:00.830] feel right about this [INAUDIBLE] the community.
[00:53:00.830 --> 00:53:05.310] I don't really feel good about dumping this sludge into the river, you know?
[00:53:05.310 --> 00:53:06.660] I mean, you really have an accountability.
[00:53:06.660 --> 00:53:09.430] So this idea that there's an accountability outside
[00:53:09.430 --> 00:53:12.465] your own interest is a good mindset to have.
[00:53:12.465 --> 00:53:13.940] [COUGH] Watching your language.
[00:53:15.100 --> 00:53:19.317] I don't think it works to curse, scream,
[00:53:19.317 --> 00:53:24.603] swear, slam doors, walk out of rooms, even bluff.
[00:53:24.603 --> 00:53:28.585] I think bluffing is, a fools game cuz all you need to do
[00:53:28.585 --> 00:53:33.910] is bluff once and have it not happen and you have spent your reputation.
[00:53:33.910 --> 00:53:36.406] You are forever more seen as a bluffer.
[00:53:36.406 --> 00:53:39.836] So my, my view on that is just never bluff.
[00:53:39.836 --> 00:53:42.230] Never use, what I call high velocity words.
[00:53:43.770 --> 00:53:45.731] Just, you think of the words that just
[00:53:45.731 --> 00:53:49.720] sorta raise people's emotional tension and their temperature.
[00:53:49.720 --> 00:53:51.302] Just stay away from them.
[00:53:51.302 --> 00:53:53.796] And if somebody uses them on you, ignore it.
[00:53:53.796 --> 00:53:54.870] Don't let it work.
[00:53:54.870 --> 00:53:57.213] And you don't let your temperature rise.
[00:53:57.213 --> 00:54:02.276] So watch your language and watch What if you
[00:54:02.276 --> 00:54:05.128] are genuinely upset and you get frustrated you know you
[00:54:05.128 --> 00:54:07.422] are not doing it for effect and your not using
[00:54:07.422 --> 00:54:10.220] a technique that you try to control it all costs?
[00:54:10.220 --> 00:54:11.839] I think you should try to control it.
[00:54:11.839 --> 00:54:13.993] And, here's why.
[00:54:13.993 --> 00:54:18.094] You know, if you, and if part of it is you're setting a baseline, you know.
[00:54:18.094 --> 00:54:20.737] What, whatever your baseline is, it's the
[00:54:20.737 --> 00:54:23.805] variation from your baseline that will get affect.
[00:54:23.805 --> 00:54:31.210] So if I say to you, I will never agree to that, that's pretty powerful.
[00:54:31.210 --> 00:54:34.500] If you know me, if you've negotiated with me a lot of times,.
[00:54:34.500 --> 00:54:37.270] For me to say, I will never do that.
[00:54:37.270 --> 00:54:37.970] I mean, you really believe.
[00:54:37.970 --> 00:54:40.200] I've just screamed that out.
[00:54:40.200 --> 00:54:45.090] Whereas if I'm throwing things around and cursing and, you know, lot of histrionics.
[00:54:45.090 --> 00:54:47.100] I can shout, I'll never do that!
[00:54:47.100 --> 00:54:49.650] And you'll say, yeah, yeah, okay, he'll come back tomorrow.
[00:54:49.650 --> 00:54:52.030] So I think keeping the baseline.
[00:54:52.030 --> 00:54:55.350] Keeping the baseline really low is a very smart thing to do.
[00:54:55.350 --> 00:54:57.920] Plus it keeps your own blood pressure down.
[00:54:57.920 --> 00:54:58.990] I did walk out of it.
[00:54:58.990 --> 00:55:00.810] This billionaire dollar deal that I did out here.
[00:55:00.810 --> 00:55:03.930] Where we were swapping a billion dollars worth of property.
[00:55:03.930 --> 00:55:05.010] I sat with the partners.
[00:55:05.010 --> 00:55:07.780] There were six of them and one of me.
[00:55:07.780 --> 00:55:10.990] And the most senior of them just said something
[00:55:10.990 --> 00:55:14.720] that was just completely of the wall and unfair.
[00:55:14.720 --> 00:55:19.450] And I just stood up and said gentlemen, it's been a pleasure to be your
[00:55:19.450 --> 00:55:23.970] partner all these years I am so sad that it has to end this way.
[00:55:23.970 --> 00:55:27.190] I am catching my plain and I will be gone.
[00:55:27.190 --> 00:55:29.940] Give me a call in Dallas if you want to talk about this.
[00:55:29.940 --> 00:55:33.730] And, it was that simple before I could get to the airport.
[00:55:33.730 --> 00:55:37.003] I had a call from three of these partners to say, please come back,
[00:55:37.003 --> 00:55:40.870] we want to negotiate business, and it wasn't that I'd, I, I had gotten up.
[00:55:40.870 --> 00:55:43.188] I'd stood up when they said it, I'd left
[00:55:43.188 --> 00:55:45.784] the room, but my speech was really that calm.
[00:55:45.784 --> 00:55:50.462] And I think they took that as, oh my gosh he is serious.
[00:55:50.462 --> 00:55:52.530] He is really serious.
[00:55:52.530 --> 00:55:55.770] And that's the message, that I'm really serious.
[00:55:55.770 --> 00:55:57.710] That's the on that I want to get across,
[00:55:57.710 --> 00:56:00.380] not that I'm chapped and that I'm out of control.
[00:56:00.380 --> 00:56:02.694] because, people don't trust that as much.
[00:56:02.694 --> 00:56:05.608] in the end that idea of being trusted.
[00:56:05.608 --> 00:56:10.240] You know if you really want to be an effective negotiator be trusted.
[00:56:10.240 --> 00:56:12.230] if the other party can trust you.
[00:56:12.230 --> 00:56:14.220] Over the long run, you'll develop that brand.
[00:56:14.220 --> 00:56:18.350] And you'll develop durable agreements, high trust relationships,
[00:56:18.350 --> 00:56:23.370] creative solutions, relationships with others that you like, etc.
[00:56:23.370 --> 00:56:26.250] So, I'm just recommending it as a, different
[00:56:26.250 --> 00:56:28.991] mindset than a lot people have towards it.
[00:56:28.991 --> 00:56:29.515] Yeah.
[00:56:29.515 --> 00:56:30.536] [INAUDIBLE].
[00:56:30.536 --> 00:56:32.039] [COUGH].
[00:56:32.039 --> 00:56:35.900] North America and Wesson, I worked all over the world.
[00:56:35.900 --> 00:56:40.002] Getting angry may or may not work, but it's not a big surprise when it happens.
[00:56:40.002 --> 00:56:41.510] The rest of the world, I mean if
[00:56:41.510 --> 00:56:44.418] you're always calm, it translates across all cultures.
[00:56:44.418 --> 00:56:47.584] Yaah, yes, it's kind of a universal language.
[00:56:47.584 --> 00:56:49.822] Clarity.
[00:56:49.822 --> 00:56:52.680] Something in some cultures is just an absolute no no and you've lost...
[00:56:54.340 --> 00:56:55.300] We burned all your credibility.
[00:56:55.300 --> 00:56:56.100] You lose credibility.
[00:56:56.100 --> 00:56:58.100] Yeah, you're seen as an unstable person.
[00:56:58.100 --> 00:57:00.970] Here, people might or might not forgive you.
[00:57:00.970 --> 00:57:01.840] Depending on the industry.
[00:57:01.840 --> 00:57:02.900] Yeah.
[00:57:02.900 --> 00:57:06.770] Some industries are full of wild people [LAUGH].
[00:57:06.770 --> 00:57:07.210] Yeah?
[00:57:07.210 --> 00:57:13.530] We negotiate to an intermediary, an investment banker, an agent...
[00:57:13.530 --> 00:57:19.480] Or an attorney who's actually negotiating an agreement, would, would you
[00:57:19.480 --> 00:57:23.365] use this as a model for find, for selecting and intermediary?
[00:57:23.365 --> 00:57:26.720] Cuz that person can often have a tremendous impact on your brand
[00:57:26.720 --> 00:57:30.570] as well because they might act completely, and they're off on their own.
[00:57:30.570 --> 00:57:32.270] You don't really know exactly what they're doing either.
[00:57:32.270 --> 00:57:32.510] Neither.
[00:57:32.510 --> 00:57:36.170] I think you have to be very careful in who you select, cuz they carry your brand.
[00:57:36.170 --> 00:57:40.520] I've seen more attorneys foul up deals than actually facilitate deals.
[00:57:40.520 --> 00:57:46.480] In fact, I select my attorneys in terms of are they deal facilitators.
[00:57:46.480 --> 00:57:49.240] Are they dealmakers, problem solvers?
[00:57:49.240 --> 00:57:52.310] Or are they sort of egomaniacs who throw, who have to be
[00:57:52.310 --> 00:57:55.500] right on every deal point, who have to draft the toughest documents?
[00:57:55.500 --> 00:57:59.390] A lot of times what you'll do in deals is you'll get attorneys fighting.
[00:57:59.390 --> 00:58:00.300] And the attorneys'll fight.
[00:58:00.300 --> 00:58:03.150] And it'll de, destroy the deal and the relationship.
[00:58:03.150 --> 00:58:08.740] So, I number one is I try not to have very many intermediaries on the front line.
[00:58:08.740 --> 00:58:09.520] I don't like.
[00:58:09.520 --> 00:58:12.540] To have agents, brokers, investment
[00:58:12.540 --> 00:58:15.390] bankers, or attorneys negotiating my deals.
[00:58:15.390 --> 00:58:16.889] I like to establish a one on
[00:58:16.889 --> 00:58:20.100] one relationship with the other principal, in deals.
[00:58:20.100 --> 00:58:23.430] I really think that's the safest way to maintain your brand.
[00:58:23.430 --> 00:58:28.450] And it's the way to create uh,better relationships, to create better outcomes.
[00:58:28.450 --> 00:58:30.761] It's more work in the short run.
[00:58:30.761 --> 00:58:33.539] It's less work in the long run.
[00:58:33.539 --> 00:58:37.498] I think there is a reason that people use
[00:58:37.498 --> 00:58:42.540] these intermediaries and I think they can be valuable.
[00:58:42.540 --> 00:58:46.810] I think it's always smart to have somebody outside the room.
[00:58:46.810 --> 00:58:50.789] Because negotiations are these real time things where you're exchanging things back
[00:58:50.789 --> 00:58:54.000] and forth, back and forth, back and forth, and you can make mistakes
[00:58:54.000 --> 00:58:56.886] and it really helps to have somebody, whether it's a board, a
[00:58:56.886 --> 00:59:01.340] partner, an attorney, or whatever who can come in, refine, correct, smooth over.
[00:59:01.340 --> 00:59:04.171] So I like to use them in all those things a lot
[00:59:04.171 --> 00:59:07.723] of times I'll say I need to run this past my partners.
[00:59:07.723 --> 00:59:09.743] This makes sense to me but let me check with
[00:59:09.743 --> 00:59:12.536] the attorney or the tax council or my accountant on this.
[00:59:12.536 --> 00:59:15.860] So you know,I like to have a little bit of a backed on.
[00:59:15.860 --> 00:59:16.229] So, I use them that way.
[00:59:16.229 --> 00:59:18.171] But I never put them, my attorney will
[00:59:18.171 --> 00:59:20.549] associate with your attorney and make a deal.
[00:59:20.549 --> 00:59:23.085] I think it's very dangerous.
[00:59:23.085 --> 00:59:24.904] Not to say it doesn't work but, yeah.
[00:59:24.904 --> 00:59:30.171] I had this question regarding not, not really going
[00:59:30.171 --> 00:59:35.810] above or below the median as someone, I'm very emotive.
[00:59:35.810 --> 00:59:39.530] That's who I am and what,what I'm hearing is.
[00:59:39.530 --> 00:59:41.090] You know, poker face, try not to get
[00:59:41.090 --> 00:59:43.590] hooked into these things, try not to be emotional.
[00:59:43.590 --> 00:59:46.570] Which to me is really like, if you said, the
[00:59:46.570 --> 00:59:48.670] best way to negotiate is if you're six foot tall.
[00:59:48.670 --> 00:59:50.040] And I'm five feet tall.
[00:59:50.040 --> 00:59:50.870] Yeah.
[00:59:50.870 --> 00:59:53.270] So, that, to me it's like okay, that, I agree,
[00:59:53.270 --> 00:59:55.970] I can see how that would be effective, how do you,.
[00:59:55.970 --> 00:59:57.160] But you're just not six feet tall.
[00:59:57.160 --> 00:59:58.768] Yeah, I'm not six feet tall.
[00:59:58.768 --> 00:59:59.370] So how do I do that?
[00:59:59.370 --> 01:00:01.482] I think you start out by being yourself.
[01:00:01.482 --> 01:00:04.068] Authenticity is something that will be measured
[01:00:04.068 --> 01:00:06.597] by the opposing party, which it, which will.
[01:00:06.597 --> 01:00:07.292] [BLANK_AUDIO]
[01:00:07.292 --> 01:00:08.394] Go back to trust a lot.
[01:00:08.394 --> 01:00:12.800] I'm just saying that the, you can modulate.
[01:00:12.800 --> 01:00:15.440] You can, you can keep the swings from being
[01:00:15.440 --> 01:00:19.370] so wild and, and that will help you, you know?
[01:00:19.370 --> 01:00:22.526] Won't make you 6' tall, but it may make you 5'2".
[01:00:22.526 --> 01:00:24.169] >> So it's okay to [CROSSTALK].
[01:00:24.169 --> 01:00:26.360] >> I, I think you need to be yourself.
[01:00:26.360 --> 01:00:31.070] I mean I'm demonstrative too, I mean speak with my hands, I wander around.
[01:00:31.070 --> 01:00:32.580] I, I get excited about idea.
[01:00:32.580 --> 01:00:34.470] I mean it's who I am.
[01:00:34.470 --> 01:00:35.890] So I be, I am that.
[01:00:35.890 --> 01:00:38.893] But I just said there are certain things, there are certain
[01:00:38.893 --> 01:00:42.920] thresholds, that I don't wanna cross because I spend a lot.
[01:00:42.920 --> 01:00:45.260] If I crush those thresholds, I've spent something
[01:00:45.260 --> 01:00:47.180] that doesn't return to me what it's worth.
[01:00:47.180 --> 01:00:50.420] So, if you're all over the map, and around like that, you just need to
[01:00:50.420 --> 01:00:53.670] realize you're spending something that's pretty valuable and,
[01:00:53.670 --> 01:00:54.810] and you don't have any place to go.
[01:00:54.810 --> 01:00:58.680] You know, once you've cranked the volume up all the way, there's no place to go.
[01:00:58.680 --> 01:01:01.540] So, leave yourself a place to go and I, I think moderate it.
[01:01:01.540 --> 01:01:04.300] And the final one is be likeable.
[01:01:04.300 --> 01:01:08.060] And I know this is I mean you didn't come to Standford to hear be likeable.
[01:01:09.782 --> 01:01:15.017] But I, when I went through litigation I remember talking
[01:01:15.017 --> 01:01:20.790] with, I think it was opposing counsel after it was all over again.
[01:01:20.790 --> 01:01:26.202] And he said something like, you know, I wanted to dislike, I wanted to hate you.
[01:01:26.202 --> 01:01:32.480] I really wanted to be as angry at you as the plaintiff was.
[01:01:33.940 --> 01:01:38.300] He said, but I couldn't help, but kind of liking you, and he said, it, I
[01:01:38.300 --> 01:01:41.559] didn't wanted influencing, I'm a professional and I
[01:01:41.559 --> 01:01:44.020] did my job but it still had an impact.
[01:01:44.020 --> 01:01:45.784] So I talked to my attorney about it and he
[01:01:45.784 --> 01:01:48.860] says, you know, I've had the same experience where I've got.
[01:01:48.860 --> 01:01:51.834] And he'd, he'd, deposed Ivan Boesky, he, I mean you
[01:01:51.834 --> 01:01:54.409] go down the list, people he'd been through, a whole
[01:01:54.409 --> 01:01:56.697] bunch of them and he said, you know, certain of
[01:01:56.697 --> 01:01:59.900] them were really likeable scoundrels and it made a difference.
[01:01:59.900 --> 01:02:04.000] And others, you know, you just wanted to fry.
[01:02:04.000 --> 01:02:07.164] And so this idea, there is something in all,
[01:02:07.164 --> 01:02:11.583] even the most jaded professionally trained litigator who does
[01:02:11.583 --> 01:02:14.913] gladiating for, for a life, you know, says it
[01:02:14.913 --> 01:02:18.690] makes a difference if you like the other party.
[01:02:18.690 --> 01:02:22.010] So I think there is almost no upside in being a jerk,
[01:02:22.010 --> 01:02:24.919] in being a turkey, I just dont' think it gets you anywhere.
[01:02:25.970 --> 01:02:27.935] Well, we're about out of time, I well,
[01:02:27.935 --> 01:02:30.189] let's just see if we've got anymore of these.
[01:02:30.189 --> 01:02:32.550] We talked about agents, being of principle.
[01:02:32.550 --> 01:02:39.436] We've talked about lawyers as memorializers or agents, disputes.
[01:02:39.436 --> 01:02:46.706] You know, this is in the far end, or the formal end of negotiation.
[01:02:46.706 --> 01:02:49.694] Whether you mediate, arbitrate, or litigate.
[01:02:49.694 --> 01:02:51.710] I guess my advice on that is, they're all kind of bad outcomes.
[01:02:51.710 --> 01:02:53.310] And you really want to avoid, you
[01:02:53.310 --> 01:03:01.490] really want durable flexible agreements, and trust relationships.
[01:03:01.490 --> 01:03:04.640] If you have to get to these litigation and arbitration are
[01:03:04.640 --> 01:03:10.020] not that different in terms of, arbitration may be a little shorter
[01:03:11.090 --> 01:03:16.740] and a little less expensive, but you're still presenting information under rules
[01:03:16.740 --> 01:03:20.450] of evidence typically to a special master or rented judge or something.
[01:03:20.450 --> 01:03:23.260] So it's very much the same kinda thing.
[01:03:23.260 --> 01:03:24.250] Mediation.
[01:03:24.250 --> 01:03:26.810] That negotiation is a split the baby negotiation.
[01:03:26.810 --> 01:03:30.720] So if you're right, you're gonna lose half.
[01:03:32.240 --> 01:03:34.440] So I think you, you just want to be, so
[01:03:34.440 --> 01:03:38.060] this is again in this very sty stylis, formalized way.
[01:03:38.060 --> 01:03:42.630] The rules of those negotiations very much narrow your outcomes.
[01:03:42.630 --> 01:03:43.992] So, just be aware.
[01:03:43.992 --> 01:03:47.082] Implementing the agreement, flushing out
[01:03:47.082 --> 01:03:50.360] hidden agenda items, outbursts [INAUDIBLE].
[01:03:50.360 --> 01:03:52.150] We've kind of talked about all of those, I think.
[01:03:53.708 --> 01:03:54.460] So Fisher and Ury.
[01:03:56.400 --> 01:04:01.724] Has everybody in here read, how many of you read, Getting to Yes?
[01:04:01.724 --> 01:04:03.236] Only a few of you.
[01:04:03.236 --> 01:04:05.116] It may be so old that people don't read it.
[01:04:05.116 --> 01:04:07.723] It's still the classic book on negotiation.
[01:04:07.723 --> 01:04:11.290] I would recommend it to all of you who want to become a better negotiator.
[01:04:11.290 --> 01:04:13.980] Written in 1981 by Fisher and Ury, two Harvard lawyers.
[01:04:16.720 --> 01:04:18.870] And they talk about their negotiations in the salt talks.
[01:04:18.870 --> 01:04:22.912] And a lot of data on really sort of what works and what doesn't.
[01:04:22.912 --> 01:04:25.880] They wrote another book called Getting Past No.
[01:04:25.880 --> 01:04:29.760] So Getting to Yes is the first one, Getting Past No is the second one.
[01:04:29.760 --> 01:04:32.620] Actually the second one is much less read.
[01:04:32.620 --> 01:04:35.690] In fact is there anybody in here that's read Getting Passed?
[01:04:35.690 --> 01:04:36.660] Okay, great.
[01:04:36.660 --> 01:04:37.960] Not very many people have read it.
[01:04:37.960 --> 01:04:39.020] It's actually, I think, even a better more
[01:04:39.020 --> 01:04:42.340] insightful book, if you've done a lot of negotiating.
[01:04:42.340 --> 01:04:45.210] Those are two really sort of good practical
[01:04:45.210 --> 01:04:48.290] academic texts that give you a good map.
[01:04:48.290 --> 01:04:50.568] And I can usually tell when I'm negotiating
[01:04:50.568 --> 01:04:52.980] with somebody who has studied Ury and Fisher.
[01:04:52.980 --> 01:04:54.590] It's a different kind of a negotiation.
[01:04:54.590 --> 01:04:55.530] It's actually quite pleasant.
[01:04:57.160 --> 01:04:59.150] So here's the, if you don't want to
[01:04:59.150 --> 01:05:02.060] read it, [LAUGH] here's the Reader's Digest version.
[01:05:02.060 --> 01:05:03.680] I'm saving you time.
[01:05:03.680 --> 01:05:07.910] You thought you were wasting an hour with me, I'm gonna save you a couple of hours.
[01:05:07.910 --> 01:05:12.130] Basically, the idea is separate, so here are the four fundamentals.
[01:05:12.130 --> 01:05:15.030] Separate the people from the problem, which a lot of people don't do.
[01:05:15.030 --> 01:05:16.580] They merge them, you know?
[01:05:16.580 --> 01:05:19.310] The problem's thorny, therefore I don't like the people.
[01:05:19.310 --> 01:05:23.158] The people who have this issue that is brought before me, because I don't like
[01:05:23.158 --> 01:05:28.250] the issue or it's putting me in an awkward position, I also don't like those people.
[01:05:28.250 --> 01:05:30.060] And so, a lot of confusion, so they say
[01:05:30.060 --> 01:05:33.230] separate those two and focus on interest, not position.
[01:05:33.230 --> 01:05:35.390] Now, in other other words what would you like to see happen?
[01:05:35.390 --> 01:05:38.713] Not what positions are you going to take, is the other party gonna
[01:05:38.713 --> 01:05:41.493] take, because positions are not necessarily related
[01:05:41.493 --> 01:05:43.610] to what are really in your interest.
[01:05:43.610 --> 01:05:46.061] People express positions that may not be
[01:05:46.061 --> 01:05:49.580] the actual end point that reflects their interest.
[01:05:49.580 --> 01:05:52.770] Then invent options together for mutual gain where
[01:05:52.770 --> 01:05:55.880] you think outside the box you invent options.
[01:05:55.880 --> 01:05:58.160] And then insist if you can, this is the
[01:05:58.160 --> 01:06:01.660] hardest one for me, is figuring out objective criteria.
[01:06:01.660 --> 01:06:04.403] You know what, what would be a winning deal?
[01:06:04.403 --> 01:06:05.860] What would work?
[01:06:05.860 --> 01:06:09.340] And then assess your deal against these objective criteria.
[01:06:09.340 --> 01:06:12.120] That is the hardest one for me, but I've seen it work.
[01:06:12.120 --> 01:06:15.090] And then finally for me I'd say know your bartner.
[01:06:15.090 --> 01:06:17.865] Figure it out, write it out, know it going in
[01:06:17.865 --> 01:06:22.140] and my corollary to that is, calculate the other party's bartner.
[01:06:22.140 --> 01:06:24.410] So you really know, that it's not life or death.
[01:06:24.410 --> 01:06:28.750] There are alternatives and you'll be more likely to have successful negotiations.
[01:06:30.184 --> 01:06:35.880] Now I'm gonna show you there, these are, again more Fisher and Ury things.
[01:06:35.880 --> 01:06:39.410] But if you'll just, this is how they deal with some of this.
[01:06:39.410 --> 01:06:41.170] Dealing with problems and framing things.
[01:06:41.170 --> 01:06:44.370] So I'm gonna flash this slide up and one other slide
[01:06:44.370 --> 01:06:48.330] up, and then have you think about, what else this relates to.
[01:06:48.330 --> 01:06:52.815] You know, discuss each, don't blame the opponent see the opponents intentions, see
[01:06:52.815 --> 01:06:55.663] the situation, you know from their prospective,
[01:06:55.663 --> 01:06:57.960] give them a stake in the outcome.
[01:06:57.960 --> 01:07:01.640] You know, don't react to provocation, step away, don't
[01:07:01.640 --> 01:07:05.350] respond reflexively, be an active listener, agree when you can.
[01:07:05.350 --> 01:07:09.578] I used to have a friend that I negotiated, a guy that became a friend that
[01:07:09.578 --> 01:07:12.894] I negotiated with, who'd start out every negotiation
[01:07:12.894 --> 01:07:15.030] with all of the things we agreed on.
[01:07:17.126 --> 01:07:20.190] So the, you'd go through ten items and say, okay, we agree on this.
[01:07:20.190 --> 01:07:20.950] We agree on this.
[01:07:20.950 --> 01:07:23.750] And you got in this reflexive habit of just agreeing.
[01:07:23.750 --> 01:07:24.460] Okay, I agree to that.
[01:07:24.460 --> 01:07:25.460] That works.
[01:07:25.460 --> 01:07:26.310] I agree to that.
[01:07:26.310 --> 01:07:26.900] That works.
[01:07:26.900 --> 01:07:28.030] Okay, that's good.
[01:07:28.030 --> 01:07:31.070] And you'd get done to, then number 11 and 12 and 13, which were the
[01:07:33.590 --> 01:07:34.130] tough ones.
[01:07:34.130 --> 01:07:37.497] So, these are things that Ury and Fisher discuss.
[01:07:37.497 --> 01:07:39.222] And would it, you know?
[01:07:39.222 --> 01:07:41.685] I guess I'll just tell you, because we're out of time.
[01:07:41.685 --> 01:07:45.249] My take on this is, this is marriage.
[01:07:45.249 --> 01:07:48.087] [LAUGH] You know, this is how I've made a
[01:07:48.087 --> 01:07:52.831] marriage work for 35 years, is basically doing these things.
[01:07:52.831 --> 01:07:58.630] And, and most of the relationships you're in are subject to negotiation.
[01:07:58.630 --> 01:08:00.650] If you kind of listen to these best practices, your
[01:08:00.650 --> 01:08:04.220] life will work better, your relationships will work better, and
[01:08:04.220 --> 01:08:09.750] your conversations'll be happier, your agreements will be more durable,
[01:08:09.750 --> 01:08:12.810] and most of the time you'll feel like you won.
[01:08:12.810 --> 01:08:16.851] Most of the time you won't feel dirty, like you need to take a shower.
[01:08:16.851 --> 01:08:20.911] And negotiations won't be just eating your broccoli but will be
[01:08:20.911 --> 01:08:23.392] something that gives you life, let's
[01:08:23.392 --> 01:08:26.711] your express creativity and build relationships.
[01:08:26.711 --> 01:08:29.641] So, I'll hang around here after if any of you want
[01:08:29.641 --> 01:08:33.102] to discuss this or have any questions, but thank you very much.
[01:08:33.102 --> 01:08:38.244] [NOISE]