Transcript - Joel Peterson Stanford Negotiation Video

Transcript - Joel Peterson Stanford Negotiation Video

• Detected language: en (1.00)
• Duration: 4118.45 seconds

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It would be a little bit more of a class than a kind of a lecture presentation.

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I learned something about marketing because I was told that the title of this initially

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was, how to negotiate when you absolutely have to have the deal?

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Well, that is a great time.

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I mean, that's a title that you would come for.

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I mean, everybody would come to hear, how do you negotiate when you have to have the deal?

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You know, everybody wants to know how to do that.

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They asked me, you know, what were you teaching it?

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And I would say, don't get in that position, or you absolutely have to have the deal.

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So it would be a very short session.

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So I changed the session to the one that you signed up for, which is conducting effective.

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We go share a little more pedestrian title, a little less exciting, but I think we'll go over some things.

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That may influence the way you think about negotiations.

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So who in here likes to negotiate?

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Raise of hands.

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So that's maybe 20% of the class.

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Who just dreads negotiation?

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That's even a smaller person.

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So the rest of you are kind of indifferent.

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You'll do it.

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You know, you'll eat your broccoli if you have to, but you're not looking for it too.

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The negotiation is the vegetables of your business life.

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You'll do it.

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You know, it's good for you.

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You know, you have to do it, but you don't absolutely love it.

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So who, and let's just take a second on what, those of you who like it, why do you like it?

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What is it you like about it?

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Now the hands disappear.

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Yeah.

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Well, compared to my engineering field when I knew everything was right or wrong,

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black or white, in negotiations, everything's great, and nobody can say I'm wrong.

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So you feel better about yourself.

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You don't get any bad at it.

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You don't get any good credit.

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You know, you can say you could have been a better.

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Yeah.

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Right.

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Yeah.

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The reason I want to negotiate is that typically I have high expectations.

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I have one.

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I'm going to go to a winner.

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I'm going to get better at all the other sides.

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So you're going to improve your situation?

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The situation.

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Okay.

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So you negotiate to improve whatever situation you're involved with.

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In complex situations, it's just really the case that you can make a deal about some

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local negotiation.

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So I look at it as just as a means to the end and get into the end as kind of the goal.

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On the flip side, doing win-win deals is really a lot of fun.

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Okay.

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So you see it largely as eating your broccoli, but sometimes you do get to turn it into a

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a little bit.

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Oh, I can't think of it.

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First, George Bush, you made the comment about how you hated eating broccoli.

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So I actually like broccoli too.

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Yeah.

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Yeah.

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I think the win-win thing is fun.

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And it's also like a piece that's like putting it in a puzzle.

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I approach it as to get into the person.

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Why do I want to eat it at all?

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Did you have to make it work?

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And you look at the win-win.

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That's fun if you make it work.

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So win-win agreements are fun.

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And you can negotiate the higher the percentage of deals you can get there.

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win-win, the more you like it.

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The other.

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I think that you got opportunity for creativity.

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It's one of the most creative aspects of this.

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It does allow you to fashion solutions according to usually different kinds of facts, different

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fact situations.

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So you get to be, you get to express some creativity.

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Other things?

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Yeah.

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You understand better what they want, where they want to go, and you can disclose it

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so well.

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Yeah.

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And I'll bet you, those of you who said you didn't like negotiation saw it as a way of destroying

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relationships, of stressing out relationships.

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So a lot of it depends on, you know, what are you doing to relationships as you negotiate

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with other parties?

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How about those of you who didn't?

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Let's get some more things you don't like about negotiation.

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Say, and I can do without this.

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What do you not like?

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Yeah.

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This makes me very uncomfortable to think that I do not have enough information to get

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the most out of this negotiation.

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And more often than that, I just regret the results.

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Thinking I could have done better.

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Okay.

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So you look back on it and you say, shoot, I got taken.

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I didn't get as good a deal as I might have gotten.

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I lost other things you don't like about, yeah.

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I was the time hopefully the person on the other side is where R is in a television team

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you're dealing with.

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But do get the, what I call amateur, like if I pound on the table, that's an effect of

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a effect of it, that can get intellectually and emotionally tiresome, you know what?

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You can get abused in the negotiation.

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And there's a whole lot of issues around power and information.

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If there's a disparity in power, leverage, information, and you're dealing with a party

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who's going to use that and take advantage that you can go out of the room feeling abused.

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Yeah.

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Yeah.

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I actually met with Donald Trump in his office in New York about 20 years ago before he

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was a huge cheese.

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But he was, well, no, he still had the same hair.

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And actually he tried to sell me an interest in the Washington generals.

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You know the Washington generals.

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This was a USFL football team that had drafted Herschel Walker.

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And so he was very proud of that and he was trying to sell me an interest in that.

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And I didn't fall for it.

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So that's my qualification for teaching a class on negotiation.

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Actually my qualifications is I have negotiated billions of dollars of transactions over the years.

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And I was literally hundreds if not a thousand different kinds of transactions.

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I was in the real estate business for 20 years.

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And I was actually the chief financial officer of a big real estate company for about 10 years.

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So I was negotiating debt deals and equity deals.

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And then partnered to partners and solving litigation.

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And so my life was a diet of negotiation.

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Just solid diet of negotiations.

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And then when I got done with that I started buying companies and it became a different diet of negotiation.

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So I've seen a lot of different kinds of negotiations.

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I have experienced the feeling of looking forward to a day when I'm negotiating with great anticipation and really loving it because I like the people on the other side.

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I like trying to problem.

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So I like being creative.

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I like all those elements.

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And I also have looked at certain days of negotiating where I dread it.

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I cannot wait to get the day behind me.

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So there's nothing intrinsic about negotiation to say you should like it or not like it.

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I remember teaching a real estate class here at Stanford about 10 or 12 years ago.

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And asking the class roughly the same question.

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But I did it in the form of who of you likes to buy a new car.

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And that was the most highly correlated question with who likes to negotiate and who doesn't.

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There are some people who absolutely hate the process of buying a new car because it feels like you come out a little dirty.

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You don't have it's an uneven information, uneven power and whatever.

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So it can be a bad experience.

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Well, who here are expert negotiators? Raise of hand.

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Every hand should go up.

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Every hand in the room should go up.

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You all are here in life because you have been superb negotiators.

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You would not be.

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And what is negotiating negotiation is getting what you want at a price that's acceptable to you.

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So you have paid prices to be at this place in your life that you're happy with.

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So you are expert negotiators.

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And I want to ventilate that a little bit and let you really kind of peer into what it is that you've been so good at.

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But first of all, here's maybe a little bit of a map for you.

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Start thinking about the terrain of negotiation.

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All of the conversations you have in life.

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If you think broadly about it, everything that you've done has been a negotiation.

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For those of you who are married, you're negotiating all the time.

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With your spouse, with your children, in your job, you're negotiating all the time.

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In school, your neighbors.

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Conversations are in effect a give and take.

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And there's a give get transaction.

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And usually the more informal they are, the more successful people feel.

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When you do with friends and family, usually they feel more successful.

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Then you get into these sort of where we think about negotiations.

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Entrepreneur is in this area of stylized negotiations where there are agreements.

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There are certain things that we negotiate.

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We sit down at a table.

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Somebody takes notes.

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We write it up.

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And there are certain things that we trade off.

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And then finally, very formal negotiations.

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These are typically ones that are done in arbitration or litigation where there are rules of evidence.

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Whereas a very structured narrow thing.

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And that one is not a very fun one.

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Although I've now spent four years in litigation, I'm good enough.

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In fact, I had one attorney say that I was the best witness he had ever run into.

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And I started liking negotiation or litigation after that.

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This was an opposing attorney too.

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So you feel pretty good about that.

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So what makes for successful negotiations across all of those?

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I recognize so many people from my past in here.

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It's going to be hard not to cold call on Angie here, FA here.

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So what makes for successful negotiations?

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If you think about successful negotiations, what do you think about?

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I've just had a successful negotiation.

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What's your self-talk?

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Yeah.

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Is that the right expectation?

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Okay, your expectations.

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Your expectations.

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You've set them the right way going in.

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They've been met.

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Therefore you've achieved your objectives.

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That's a successful negotiation.

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Yeah.

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How do you find out how that is by the line?

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How that is something I should find for.

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And then you'll just get a strategy.

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Okay.

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So some of it is how you define the terrain, how you and the other party perceive it and

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then are you able to execute in that perceived terrain?

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Bonnie?

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I haven't had it.

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When you define what wind is on your perspective because you're happy.

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But I see when on the other side is that the residual effect after they walked out the room

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and as time goes on, that they're not upset and don't kind of undermine and negotiate whatever the result was.

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So they were happy too.

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Because you are thinking more broadly than a lot of business people think about negotiation.

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I mean, these are what I would call enlightened comments about negotiation.

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Here's what most business people are negotiating.

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This is the essence of most business agreements.

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These five things.

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So they're focused on getting the best price, getting the most attractive terms,

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making sure that whatever time frames for execution are deliverables, whatever are acceptable,

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making sure the warranties are in place.

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And then if things go wrong,

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they've got remedies.

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They may be legal remedies.

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They may be economic remedies.

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They're probably a combination of both.

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So most business negotiations, which is in this stylized category in the middle,

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is so focused on me getting what I want in these five areas.

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And people don't think more broadly than that.

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If people who do a lot of negotiating around these things talk about these techniques,

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does anybody not run into these before as sort of things that are taught in negotiation?

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Clies are any of these new to any of you surprising.

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The bathroom one is a commonly used technique.

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Feed the person a lot of water and a lot of food.

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And then just keep talking.

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Keep the pressure on.

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So using the bathroom breaks is a powerful.

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If you're using techniques, you know,

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what do I mean by plain?

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They've got a plain to catch.

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They're scheduled exactly.

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They've got to catch a plain.

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And so you just carry on then to go chase.

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You speak slowly.

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You make things drag out.

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You disagree at the last minute.

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Just as they're running for their planes.

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Oh, you do the Colombo thing.

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You know, one more thing.

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You know, if any of you've been subject to any of these,

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what does it feel like?

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You have to assess whether it's almost too incompetent

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or is it actual bad faith?

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And that can be difficult.

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And it's annoying to have the, even have that experience.

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Either case, what do you feel?

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You're dealing with an incompetent party or a bad actor.

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The question you were talking about is the work that you've created.

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The big shame?

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Yeah.

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Very few people don't recognize these.

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If you're on the other side, it's not like, oh my gosh, what is happening?

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I don't know.

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I don't understand.

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This is sure working on me.

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You know, most of the time you perceive immediately these techniques.

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And you resent them.

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You're angry about this.

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So in terms of techniques that people teach, you know,

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I think these are anti-successful agreement techniques.

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You may get a deal done, but you're unlikely to get a deal that is lasting

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enduring, flexible, where you build relationships,

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where you create solutions.

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But these are used all the time, mostly by investment bankers.

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I'm just kidding.

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Sorry.

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Sorry.

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I know.

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Could you turn the tape off up there?

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I have one other technique, which I've run into quite a lot of dealing with competitors,

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which is during a set of complex long, long negotiation,

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and of course, the months you've discovered that in the first of the

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supposedly good faith negotiation, the competitor, for example, has been actually

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promoting something completely different for talking to somebody else.

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And the explanation you get when you protest is, I'm very sorry.

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We had no idea that was going on.

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Yeah.

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The improvisation in the United States.

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Yeah.

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Or just innocent.

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You know, I had no idea.

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Or hope I got.

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Yeah.

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Yeah.

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Yeah.

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Which puts you on your heels, puts you at a disadvantage.

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Maybe there are others.

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Anybody in your experience, other obvious techniques that are being used to gain power.

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Yeah.

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John.

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We were locked in the room once.

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Yeah.

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I mean, it was the kind of amateur that he's acting early days and used to grow up.

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And we just climbed out the window.

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Oh.

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I don't know.

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There are a lot of interesting stories.

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There's another one.

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Yeah.

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Like, which.

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There's a developing in terms of having experience, having a kind of creative time where I was sitting across the table.

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The gentleman who was doing a spoke, at least, didn't claim to this book in any English.

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Yeah.

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And so I had a translator, fortunately.

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And so that was one kind of interesting barrier.

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Because I was pretty sure that he understood English and a variety of reasons.

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And a smoke was also another.

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It was an out of smoke, and like, you know, Stan smoke.

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And I tried my hardest to make sure that he didn't know that.

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Because that's certainly affected kind of the way.

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It helps how he wanted to spend in this four by eight room.

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Yeah.

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It was very interesting.

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So making things physically uncomfortable or getting a leg up through language.

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There's another way that I see language used in that is abusive language.

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You know, people that start dropping F bombs or shouting, you know, cursing at you, whatever.

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They believe they get a leg up.

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And in some ways, most of us kind of, we go a little bit on our heels when somebody starts cursing at us

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or they raise their voice or something.

00:17:11–00:17:18

I mean, as tough as you may be, if somebody starts doing that, there's something in the inner child of all of us that

00:17:18–00:17:21

recoils a little bit and is back on our heels a little.

00:17:21–00:17:24

Now it can cause you to come back in like manner.

00:17:24–00:17:29

It can cause you to get to that level yourself, which may or may not be a good thing.

00:17:29–00:17:37

So I had actually the opposite happens to me once where we were having issues and then you couldn't come to an agreement.

00:17:37–00:17:43

And then they came back and they were actually, you know, they could do more than what they were saying.

00:17:43–00:17:45

They gave me everything.

00:17:45–00:17:50

So they were treated with kindness and then they were coming back and changed it again.

00:17:50–00:17:54

So it was the opposite of using a abusive language.

00:17:54–00:17:58

So it's kind of the loop leg, you know, and yeah.

00:17:58–00:18:01

Where people use different techniques to deceive, Annie.

00:18:01–00:18:06

So do I have a feeling you're going to tell us ways to actually do this that aren't these ways.

00:18:06–00:18:11

But let's see these guys examples where you actually are faced with people like this on the other side of the table.

00:18:11–00:18:16

[민감정보 가능성이 있어 이 줄은 공개 페이지에서 숨김]

00:18:16–00:18:19

sort of feeling like this is the company I really want to buy.

00:18:19–00:18:22

Or this is the job that I really want to get.

00:18:22–00:18:23

Yeah.

00:18:23–00:18:26

And you don't really have as many options, but these people are actually coming at you with these techniques.

00:18:26–00:18:27

Yeah.

00:18:27–00:18:28

What would you advise us to do?

00:18:28–00:18:29

Well, let's have the group.

00:18:29–00:18:37

I'll give you the way I react to it, but anybody in the group, you know, somebody is using one or more of these on you.

00:18:37–00:18:38

Yeah.

00:18:38–00:18:41

So calling them on it is one really thing to say.

00:18:41–00:18:49

You know, I've actually done this in a litigation where the opposing attorney was deposing me.

00:18:49–00:18:54

And he stood up and got right in my face and started to shout at me and he said,

00:18:54–00:18:58

why did you do such and such?

00:18:58–00:19:00

And, you know, it really is off putting.

00:19:00–00:19:08

And all it shows in the transcript is why did you do such and such.

00:19:08–00:19:09

It's all it shows.

00:19:09–00:19:11

That's all it shows.

00:19:11–00:19:17

And if you answer the way you're feeling when somebody gets in your face and shouts at you in a cute and accused right away,

00:19:17–00:19:19

you say, well, you son of a guy, I'll tell you the reason.

00:19:19–00:19:21

You know, and you'll do it in a way that isn't effective.

00:19:21–00:19:25

The most effective thing that I found was exactly what you're saying.

00:19:25–00:19:28

I say, why are you standing up and raising your voice?

00:19:28–00:19:30

I mean, that goes on the record.

00:19:30–00:19:40

But it's so that's the most, you know, copy down way of doing exactly what you're saying is you really call them in a nice way.

00:19:40–00:19:42

Why are you raising your voice?

00:19:42–00:19:44

What makes you shout about that question?

00:19:44–00:19:45

Why are you standing up?

00:19:45–00:19:48

Why are you pacing the floor as you get all of it on the record?

00:19:48–00:19:53

Now, you don't need to get it on the record in a normal negotiation, but calling them on it is one thing.

00:19:53–00:19:55

What's another way that you could deal with that?

00:19:55–00:19:58

That's where I started to talk about it.

00:19:58–00:20:00

Questions are very effective.

00:20:00–00:20:03

You know, just asking, just posing questions.

00:20:03–00:20:12

You know, that's always a very inoffensive way of taking the volume level down, getting information, cooling people off, another way.

00:20:12–00:20:20

Why are you playing because if you're in this type of mode, the other person is not in good faith,

00:20:20–00:20:23

most of the notions we're going to be doing, you need a relationship.

00:20:23–00:20:27

The relationship is usually a lot more important than the actual ability to finally end up with a lot of cases.

00:20:27–00:20:29

So I mean, I think you do have to call a monitor.

00:20:29–00:20:31

You have to say, you know, what's your purpose here?

00:20:31–00:20:35

And you guys, if he's doing one and you're doing another, it doesn't make sense.

00:20:35–00:20:39

You guys have to be both wanting to deal and both wanting to best win win.

00:20:39–00:20:40

And he's a big hit-down.

00:20:40–00:20:43

He has such power and such an advantage.

00:20:43–00:20:50

And you really do need the deal that they get away with more, that it's tough to raise them to that level.

00:20:50–00:20:55

When there's such a disparity in terms of information or power, that it can be very tough.

00:20:55–00:20:59

I'll tell you what I try to do is make it completely ineffective.

00:20:59–00:21:02

Just make it so either I ignore it.

00:21:02–00:21:05

I just don't pay attention to what it is they're doing.

00:21:05–00:21:08

By that, I mean, I don't drink water.

00:21:08–00:21:14

I am able to out- my bladder is better than their bladder.

00:21:14–00:21:24

Or I will plan my trip with an extra night of hotel room and I'll have an extra flight out the next day.

00:21:24–00:21:28

So I'm not anxious about, I'll let them know I'm leaving at five o'clock tonight.

00:21:28–00:21:31

Oftentimes they'll push the thing up and I just don't sweat it.

00:21:31–00:21:32

We stay.

00:21:32–00:21:35

And I'm pretty soon to me it becomes a question.

00:21:35–00:21:37

Well, let's keep working.

00:21:37–00:21:39

I've missed my plane. Let's work.

00:21:39–00:21:42

It's 11 at night. No problem. I can keep working.

00:21:42–00:21:47

Well, I mean, you kind of make it so that the game that they've set up hurts them.

00:21:47–00:21:50

So they really pay the price for whatever game they say.

00:21:50–00:21:52

So make it ineffective.

00:21:52–00:22:00

So these techniques really can sometimes work marginally in the short run on some people,

00:22:00–00:22:03

not really very powerful long term techniques.

00:22:03–00:22:06

Now, if you look at textbook discussions of negotiation,

00:22:06–00:22:08

you run into these terms.

00:22:08–00:22:12

And I'm not going to talk about the, I want to talk really today about very practical,

00:22:12–00:22:14

real world situations.

00:22:14–00:22:16

But these are, this is the terminology.

00:22:16–00:22:17

You're right.

00:22:17–00:22:21

So, you know, some of you are going to take classes or have taken classes in negotiation.

00:22:21–00:22:28

These will not be unfamiliar terms to you in the lexicon of negotiation.

00:22:28–00:22:31

So here are some practical keys to successful negotiation.

00:22:31–00:22:34

And these will look just so simple minded, which is, in fact,

00:22:34–00:22:38

what most really practical things are born of experience.

00:22:38–00:22:41

But the first thing is negotiate with the right part.

00:22:41–00:22:45

I'm going to tell you a half a dozen stories here before we wrap up,

00:22:45–00:22:49

where you'll see how I learned these particular lessons, I think.

00:22:49–00:22:51

But get with the right party.

00:22:51–00:22:56

You would be amazed at how many negotiations go on with the wrong party,

00:22:56–00:23:01

with the unempowered lieutenant, with somebody who really is not the decision maker,

00:23:01–00:23:02

whatever.

00:23:02–00:23:04

So figure out who the right party is.

00:23:04–00:23:06

And are you talking with the right party?

00:23:06–00:23:09

Secondly, it's become a trust and negotiation.

00:23:09–00:23:12

And I put here that's a function of CCP.

00:23:12–00:23:17

And my students will recognize it as a function of character, competence, and power.

00:23:17–00:23:21

For somebody to be trusted, they have to be high character.

00:23:21–00:23:22

They have to be competent.

00:23:22–00:23:25

And they have to be empowered to make a decision.

00:23:25–00:23:30

So you want the right party for you to negotiate with is somebody you can trust.

00:23:30–00:23:34

The right party for them is that you must be also trusted.

00:23:34–00:23:41

So if you want to enter high quality negotiations getting high levels of trust based on character competence and empowerment

00:23:41–00:23:44

are really important things to assess.

00:23:44–00:23:46

Then know your own baton.

00:23:46–00:23:47

What's a baton?

00:23:47–00:23:50

In unison.

00:23:50–00:23:54

That's the alternative to negotiated agreement.

00:23:54–00:23:55

Okay.

00:23:55–00:24:01

This is a term that was developed by Fisher and Yuri in 1981, out of the Hartford negotiation study,

00:24:01–00:24:11

which they really found that if people could go into a negotiation with an idea of what is their best alternative to this negotiation working out successfully,

00:24:11–00:24:13

they came out with better end results.

00:24:13–00:24:16

You go in with far more confidence.

00:24:16–00:24:18

I've taken it to another level.

00:24:18–00:24:22

What I go into negotiations now is I figure out, I don't know it for sure,

00:24:22–00:24:26

but I try to assess what is the other party's baton.

00:24:26–00:24:32

So I really think hard about what is it they want to achieve and what are their options?

00:24:32–00:24:35

Because that really helps you kind of assess the whole thing.

00:24:35–00:24:38

And you're not just thinking my agenda, my agenda, my agenda, my agenda.

00:24:38–00:24:39

Here's what I want.

00:24:39–00:24:43

Price, term, remedies, war, and this is what I need.

00:24:43–00:24:46

And so many negotiators are going in with their own agenda.

00:24:46–00:24:50

We'll go in and think about what is the lay of the land for the other party?

00:24:50–00:24:53

And that helps.

00:24:53–00:24:55

We'll talk a little bit later about Fisher and Yuri's map,

00:24:55–00:25:00

but I think there are three or four suggestions that they make that are kind of their broad map.

00:25:00–00:25:02

They're really very helpful.

00:25:02–00:25:07

This certain difference between battles and wars, what we used to call the elephant ant,

00:25:07–00:25:10

some people don't know the elephants from the ants.

00:25:10–00:25:17

Have you ever negotiated with somebody for whom every deal point is something that they have to win?

00:25:17–00:25:20

You know, everything is competitive.

00:25:20–00:25:23

Everything that's brought up, they have to win every deal point.

00:25:23–00:25:24

I'm here to submit to do that.

00:25:24–00:25:26

That's a really dumb way to negotiate.

00:25:26–00:25:28

This is a given take.

00:25:28–00:25:31

If you're going to try to develop relationships the way Nicola said,

00:25:31–00:25:35

or if you're going to try to come out with creative solutions or whatever,

00:25:35–00:25:37

you really don't want this.

00:25:37–00:25:39

I have to win every deal point.

00:25:39–00:25:41

So know where the elephants are and where the ants are.

00:25:41–00:25:45

We're willing to lose some battles to win the war.

00:25:45–00:25:46

Yeah.

00:25:46–00:25:47

Rachel.

00:25:47–00:25:48

This isn't an awful point.

00:25:48–00:25:49

I've done the first place.

00:25:49–00:25:51

So isn't it going to be my advantage?

00:25:51–00:25:54

Just put points there that I don't feel so strongly about.

00:25:54–00:25:55

Yeah.

00:25:55–00:25:56

Wouldn't be a part of making the same thing.

00:25:56–00:25:57

They should be.

00:25:57–00:25:58

And you should be.

00:25:58–00:26:01

And really effective sort of win-win negotiations.

00:26:01–00:26:04

You share with what you're trying to achieve.

00:26:04–00:26:06

Lee Aikoka has a great line.

00:26:06–00:26:08

You know, he was the guy that turned around Chrysler.

00:26:08–00:26:11

And he said, you know, when I want to achieve something,

00:26:11–00:26:14

I tell the other party exactly what it is I'm trying to achieve

00:26:14–00:26:18

and what price I'm willing to a pay to achieve it.

00:26:18–00:26:21

And that's really kind of the starting point where it's sharing in

00:26:21–00:26:22

from this.

00:26:22–00:26:25

So there's a lot more sharing of information in that kind of a model of

00:26:25–00:26:26

negotiation.

00:26:26–00:26:29

It doesn't always, it's not always something you can do.

00:26:29–00:26:32

And then I, you know, getting back to these techniques,

00:26:32–00:26:34

I would say don't worry too much about taking.

00:26:34–00:26:36

She have to be aware of them.

00:26:36–00:26:38

You have to be, and it tells you something.

00:26:38–00:26:41

If somebody's using, I was thinking when somebody is shouting at me

00:26:41–00:26:46

or walking out of the room or throwing things, there's information in that.

00:26:46–00:26:50

It's like I had a partner one time in the real estate business who looked

00:26:50–00:26:53

at a joint venture document that was VISTIC.

00:26:53–00:26:55

And he looked at it and he picked it and he said,

00:26:55–00:26:57

can any document that's that thick?

00:26:57–00:26:59

There's something in it for me.

00:26:59–00:27:04

And in a way, anybody who's throwing things and screaming and

00:27:04–00:27:08

shouting and slamming doors or locking you in rooms or anything like that,

00:27:08–00:27:11

there's something in that for you.

00:27:11–00:27:13

You know, you can get the high moral ground.

00:27:13–00:27:15

You can at least get information.

00:27:15–00:27:17

So don't worry too much about them, but be aware of them.

00:27:17–00:27:19

And then really understand what the other party,

00:27:19–00:27:22

this is kind of back to the figuring the other person's bad.

00:27:22–00:27:24

But if the more you can understand their values,

00:27:24–00:27:27

and I'll tell you stories in a minute that illustrate each of these,

00:27:27–00:27:31

the more you can understand really what it is that drives them.

00:27:31–00:27:36

What's important to them, the more likely you are to craft a solution to things

00:27:36–00:27:41

that satisfies what it is that's important to them.

00:27:41–00:27:45

So here you've all seen this before.

00:27:45–00:27:47

Just to pause on it for a second,

00:27:47–00:27:53

those of you who dread negotiations probably have experienced some of this

00:27:53–00:27:56

win-lose experience.

00:27:56–00:27:59

Those of you who said you really enjoyed this.

00:27:59–00:28:04

probably experienced more of the left-hand column.

00:28:04–00:28:10

Okay, so here's seven situations that have sort of illustrated these points for me.

00:28:10–00:28:15

And I only tell you these not because I've had some unique negotiating experience,

00:28:15–00:28:19

but because you may recognize in some of these things your own experience,

00:28:19–00:28:24

you may be able to tie it into your own experience and internalize it in your own way.

00:28:24–00:28:27

So that really does belong to you.

00:28:27–00:28:33

The first one, I taught a negotiation session in the real estate course here at Stanford,

00:28:33–00:28:35

a number of years ago.

00:28:35–00:28:38

And I had a version one and a version two of this.

00:28:38–00:28:43

And version one, the instructions were, I want you all to have fun.

00:28:43–00:28:45

So this was the three-party negotiation.

00:28:45–00:28:46

There was a buyer.

00:28:46–00:28:50

There were two or three properties, a buyer, a seller, and a lender.

00:28:50–00:28:53

And they had to come up with a tripartite agreement.

00:28:53–00:28:58

And so everybody went off in these negotiating teams and made deals.

00:28:58–00:29:03

The instructions were have fun, be creative, learn everything you can about real estate and everything.

00:29:03–00:29:06

And then just report back on your experiences.

00:29:06–00:29:07

Well, here's what happened.

00:29:07–00:29:09

There were reasonable deals made.

00:29:09–00:29:10

They were made quickly.

00:29:10–00:29:13

They were relatively easy to understand and document.

00:29:13–00:29:15

And there was a lot of camaraderie.

00:29:15–00:29:19

People came out of it saying, man, this was a fun exercise.

00:29:19–00:29:20

We like each other.

00:29:20–00:29:22

Aren't Stanford MBAs cool.

00:29:22–00:29:25

I just really love my classmates.

00:29:25–00:29:26

So that was kind of the outcome.

00:29:26–00:29:28

So that was a negotiation 1.0.

00:29:28–00:29:31

So then we changed the instructions.

00:29:31–00:29:34

The objective is to win.

00:29:34–00:29:36

You're going into this negotiation.

00:29:36–00:29:37

The idea is you want to win.

00:29:37–00:29:39

Your grades are going to be influenced by it.

00:29:39–00:29:42

And the results are going to be published in rank order.

00:29:42–00:29:45

And you need to make a report on how you feel about it.

00:29:45–00:29:53

How would you guess the change in results was fewer deals were made?

00:29:53–00:29:55

They were made more slowly.

00:29:55–00:29:57

A lot more time was expanded.

00:29:57–00:29:58

I mean tons more time.

00:29:58–00:30:00

People said this negotiated an exercise.

00:30:00–00:30:04

They took longer and was tougher than anything they had done at Stanford.

00:30:04–00:30:10

People were frustrated and they hated their classmates.

00:30:10–00:30:15

They said, I will never do business with these turkeys again.

00:30:15–00:30:19

I had no idea these people were such jerks.

00:30:19–00:30:23

So it's fundamentally changed by the mindset.

00:30:23–00:30:24

And I said of the mindset.

00:30:24–00:30:26

It was my fault.

00:30:26–00:30:29

But the economic outcomes weren't any of it.

00:30:29–00:30:30

They were fewer.

00:30:30–00:30:31

There was somebody pointed out.

00:30:31–00:30:33

A lot more complex deals.

00:30:33–00:30:35

A lot of them were unworkable, undocumented,

00:30:35–00:30:39

unenforceable, and the personal relationship were strained.

00:30:39–00:30:42

So you can see by having this mindset, we've got to win.

00:30:42–00:30:44

And it was zero sum.

00:30:44–00:30:45

And it was defined.

00:30:45–00:30:48

I mean there were so few things in most business negotiations.

00:30:48–00:30:53

There was so little data that was price, terms, timeframes,

00:30:53–00:30:56

warranties, and remedies were about the only thing people could work with.

00:30:56–00:30:58

I mean they went in and just pummeled each other.

00:30:58–00:31:01

Just beat each other to bloody pulp.

00:31:01–00:31:05

So that's the first story.

00:31:05–00:31:08

And I'll let you draw your own conclusions from these.

00:31:08–00:31:11

The second one is when I was first starting in business,

00:31:11–00:31:14

I had a deal that I was working on in Asuka,

00:31:14–00:31:15

or they say,

00:31:15–00:31:17

Ahka, Spain.

00:31:17–00:31:18

Did I do that right?

00:31:18–00:31:19

Any of the Spanish speakers?

00:31:19–00:31:21

Ahka.

00:31:21–00:31:24

And we were going into a bank there to borrow money.

00:31:24–00:31:27

And we walked in and it was clear within a few minutes

00:31:27–00:31:29

that they really weren't quite expecting us there.

00:31:29–00:31:32

So they ushered us into this office with a guy that

00:31:32–00:31:35

said, oh well, you know, and so he sat down to listen to us.

00:31:35–00:31:40

And as we were sitting there negotiating over financing this office building,

00:31:40–00:31:44

two guys in white coats came in and they took the painting off the wall.

00:31:44–00:31:48

Then a few minutes later they came back in and took the credenza.

00:31:48–00:31:51

And then they unplugged the phone and walked out with the phone.

00:31:51–00:31:55

Pretty soon they came in and took the desk, put it on a dolly and went out with it.

00:31:55–00:31:59

We're sitting there in these chairs talking, and all of the furniture has been moved out.

00:31:59–00:32:04

Well, it turns out this guy was not really the person who had anything to do

00:32:04–00:32:05

with.

00:32:05–00:32:08

He was just a courtesy party who said, well these guys are here.

00:32:08–00:32:09

They're from the United States.

00:32:09–00:32:10

Make them feel good.

00:32:10–00:32:15

And so the negotiation went all this kind of, I will tell you my point on this.

00:32:15–00:32:18

It goes back to make sure you're negotiating with the right party.

00:32:18–00:32:21

We had absolutely the wrong, this guy could not have made any deal with us.

00:32:21–00:32:23

So whatever, but we didn't check it out.

00:32:23–00:32:28

So we sat there talking across an empty office about a deal that was never going to happen.

00:32:28–00:32:32

Well, that's an extreme example of something that we all do a lot of time.

00:32:32–00:32:38

We end up negotiating with parties without power, without the ability to make a decision.

00:32:38–00:32:40

So you really want to think that through.

00:32:40–00:32:44

The third one was also early on in my career.

00:32:44–00:32:49

I was a chief financial officer in my late 20s of a big company.

00:32:49–00:32:54

I was supposed to make a joint venture with a life insurance company.

00:32:54–00:33:01

And so I'd studied all the joint ventures that I figured out what I wanted on this deal and what a win-win.

00:33:01–00:33:04

I mean, I had all steeped in all these things.

00:33:04–00:33:09

And so I sat down with the very senior 50-ish life insurance executive.

00:33:09–00:33:11

And we started to go through the deal points.

00:33:11–00:33:13

And they were eight or ten of them.

00:33:13–00:33:16

And after I've been said no, we're not going to do that.

00:33:16–00:33:20

And about the eighth deal point, I rose from the ninth deal point and said,

00:33:20–00:33:22

we really need to have this one.

00:33:22–00:33:23

You've said no on eight of them.

00:33:23–00:33:25

And he said, Joel, sit down.

00:33:25–00:33:26

Just take notes.

00:33:26–00:33:30

Your job here is just to take notes.

00:33:30–00:33:33

We're not negotiating anything.

00:33:33–00:33:34

Just take notes.

00:33:34–00:33:36

We're the life company.

00:33:36–00:33:37

We've got all the money.

00:33:37–00:33:39

You're just the developer.

00:33:39–00:33:40

Take notes.

00:33:40–00:33:44

And so it was clear to me that what that negotiation was about.

00:33:44–00:33:49

That negotiation was not going to be one in that series of discussions.

00:33:49–00:33:56

But I was really going to just document it in a way that we had a chance to do our business.

00:33:56–00:33:59

And we had options in the future.

00:33:59–00:34:03

So that wasn't the only option that I had.

00:34:03–00:34:07

Limited partners.

00:34:07–00:34:12

I recall early on thinking that I wanted to develop a brand.

00:34:12–00:34:17

I wanted to be seen as a certain kind of negotiator.

00:34:17–00:34:25

And part of my brand was going to be that I would calculate exactly what a deal was worth.

00:34:25–00:34:28

And then I wouldn't budge on the price.

00:34:28–00:34:33

I wanted to be known as somebody who knew the value of what it was I was offering.

00:34:33–00:34:39

And so if I said, this is a million dollar investment, I didn't want to settle for $950,000.

00:34:39–00:34:42

I really wanted to say it's a million dollar.

00:34:42–00:34:46

And I guess if you want to trade two nickels for a dime, I'll do that.

00:34:46–00:34:49

But I'm not going to trade a dime for one nickel.

00:34:49–00:34:51

So I really wanted that to meet my brand.

00:34:51–00:34:55

Because I realized I was going to be in this business a long time and do hundreds of deals.

00:34:55–00:35:00

And negotiating with these limited partners, I became very stiff on this.

00:35:00–00:35:03

And it was only when I got options.

00:35:03–00:35:09

And what happened to me in this, in one case, was a guy said, well, I'm not going to do the deal.

00:35:09–00:35:12

I need to do the deal at 950,000, not a million.

00:35:12–00:35:18

I went out that night and called another limited partner investor group and said,

00:35:18–00:35:21

I'll tell you what, if you'll do this deal at a million dollars,

00:35:21–00:35:24

I can document the deal tonight.

00:35:24–00:35:27

And I can give you all these other things, but I need the agreement tonight.

00:35:27–00:35:32

So when the guy called up the next day to resume negotiations, I could say,

00:35:32–00:35:34

I'm sorry, I've already done that deal.

00:35:34–00:35:37

So I was able to establish that I don't move on price.

00:35:37–00:35:42

And it worked for a while until the guy and I became really good friends.

00:35:42–00:35:46

We ended up doing 300 deals together over a 20 year license.

00:35:46–00:35:48

So a lot of transaction.

00:35:48–00:35:50

About 50 deals are so into it.

00:35:50–00:35:56

He said, Joel, I just got to tell you, I like to negotiate price.

00:35:56–00:36:00

I don't feel good unless I can negotiate price.

00:36:00–00:36:05

So if you want it to be a million dollars, tell me it's a million 50.

00:36:05–00:36:07

Just tell me it's a million 50.

00:36:07–00:36:09

I'll come back with a million.

00:36:09–00:36:12

And then we'll both feel good.

00:36:12–00:36:17

So we negotiated that the last 250 deals we did, I would go in about

00:36:17–00:36:20

a year or eight percent higher than what I would accept.

00:36:20–00:36:21

He would knock it down.

00:36:21–00:36:23

He'd feel good and I'd feel good.

00:36:23–00:36:28

So you kind of going in and having sort of a sort of a reasonable,

00:36:28–00:36:32

what I'm calling ROR, a rules of the road.

00:36:32–00:36:35

If you're going to have serial negotiations with somebody,

00:36:35–00:36:39

develop rules of the road.

00:36:39–00:36:42

Senior partner departure.

00:36:42–00:36:46

This is a situation that was a billion dollar transaction.

00:36:46–00:36:47

So it was a big deal.

00:36:47–00:36:49

And this was 15 or 20 years ago.

00:36:49–00:36:52

It was a very significant transaction.

00:36:52–00:36:55

And the partner came to me and said, you know, I want to,

00:36:55–00:36:58

let's agree going into this negotiation.

00:36:58–00:37:00

Let's agree on values.

00:37:00–00:37:03

Let's agree what these properties are worth.

00:37:03–00:37:05

And then we'll make the trade.

00:37:05–00:37:07

And on this particular case, I thought, you know,

00:37:07–00:37:11

the biggest mistake we could make would be to agree on the values.

00:37:11–00:37:14

Let's disagree on the values.

00:37:14–00:37:17

So you set up whatever, you know the properties better than I do.

00:37:17–00:37:19

You value them however you wish.

00:37:19–00:37:21

And then I'll select.

00:37:21–00:37:26

And the very fact that we didn't agree on values allowed me

00:37:26–00:37:30

to select deals where I thought I was getting more than my fair share.

00:37:30–00:37:35

He then was able, because he set dies, he was fine with the deal.

00:37:35–00:37:37

Because he represented what the values were.

00:37:37–00:37:40

And it was just applying the percentage to the values he'd set.

00:37:40–00:37:44

So he was able to get a transaction done.

00:37:44–00:37:45

My departure.

00:37:45–00:37:50

So I left the co-organization with the reputation of being a conciliator,

00:37:50–00:37:55

with the reputation of being reasonable, with the reputation of being a win-win deal.

00:37:55–00:37:59

So all the litigation that Crowe had for 20 years, the parting partures.

00:37:59–00:38:03

I was seen as somebody who was litigation averse.

00:38:03–00:38:08

And because that had become my brand, my negotiating brand,

00:38:08–00:38:12

when it came to that, they filed litigation against me,

00:38:12–00:38:14

realizing that he'll never fight.

00:38:14–00:38:17

This guy's such a pussy, such a conciliator,

00:38:17–00:38:20

he's such a giver, and he'll make everything.

00:38:20–00:38:22

I really had no place to go.

00:38:22–00:38:25

I had set myself up with my brand.

00:38:25–00:38:30

So I want, from that I want you to think very carefully about the brand you want to have.

00:38:30–00:38:33

The last story is one that I think you'll remember.

00:38:33–00:38:37

We ended before years of litigation.

00:38:37–00:38:41

So I now have a new brand.

00:38:41–00:38:45

I'm now known as the ferret.

00:38:45–00:38:50

No, it's interesting because I think what my brand has become is,

00:38:50–00:38:54

I am somebody who is very reasonable who will do win-win negotiations.

00:38:54–00:38:58

But if you get to the point where you cross me and my principles

00:38:58–00:39:01

or if you do something that I really think is completely unfair

00:39:01–00:39:03

that I become very stiff.

00:39:03–00:39:07

So you don't want to get into litigation with me, but you don't need to.

00:39:07–00:39:10

So that's a better brand than the brand I had before,

00:39:10–00:39:12

which is the guy will never sue.

00:39:12–00:39:14

He will never get into litigation.

00:39:14–00:39:16

So you really want to think carefully because that brand,

00:39:16–00:39:22

and part of my message here is that there are no episodic negotiations.

00:39:22–00:39:24

You may think it's an episode.

00:39:24–00:39:28

You may think you're going in and having a one-off deal with somebody.

00:39:28–00:39:32

That person talks to somebody else who talks to somebody else.

00:39:32–00:39:36

And pretty soon everything is going to be living a very connected world.

00:39:36–00:39:37

So think carefully.

00:39:37–00:39:40

If you're doing a lot of negotiation for a living,

00:39:40–00:39:43

think very carefully about the brand you want to have.

00:39:43–00:39:47

Now I apologize to my students, former students,

00:39:47–00:39:50

for this next one because you've seen this,

00:39:50–00:39:57

but I had a negotiation with my daughter over this last topic.

00:39:57–00:39:59

So I'm not here teaching at Stanford.

00:39:59–00:40:03

And I come out for basically 10 weeks when I teach here.

00:40:03–00:40:06

And so she's back in another state and we correspond by email.

00:40:06–00:40:10

I get back a couple of times she and my wife get out a couple of times.

00:40:10–00:40:12

But we're basically away from each other.

00:40:12–00:40:15

So here I get this email from her.

00:40:15–00:40:17

Dear dad,

00:40:17–00:40:20

you hear that I'm getting a rat?

00:40:20–00:40:21

Won't that be cool?

00:40:21–00:40:22

The pet story,

00:40:22–00:40:25

he said that you can train rats to fetch and stay.

00:40:25–00:40:28

I wanted to get mice because they're cuter and don't have disgusting tail,

00:40:28–00:40:30

but mice just run away.

00:40:30–00:40:32

And they never become your friends.

00:40:32–00:40:34

Rats will sleep on you and I'm sure dad,

00:40:34–00:40:36

you'll become great friends with my rats.

00:40:36–00:40:41

I'm thinking of naming them ritzy and scraps.

00:40:41–00:40:43

Won't that be cute?

00:40:43–00:40:45

And you can even see them when they're tiny babies.

00:40:45–00:40:47

Take deep breaths if you're getting nervous.

00:40:47–00:40:51

I will pay for them and the cage with my very own money.

00:40:51–00:40:53

All you and mom have to do is buy the food,

00:40:53–00:40:55

which really doesn't cost much.

00:40:55–00:40:57

I've already done everything else.

00:40:57–00:40:59

I think I'm ready. It's okay. I can take care of them.

00:40:59–00:41:01

I've proven I can take care of animals.

00:41:01–00:41:03

I even sweep up the cat's barf.

00:41:03–00:41:06

I can handle it.

00:41:06–00:41:09

So you can trust me to take care of ritzy and scraps.

00:41:09–00:41:11

They're you of names.

00:41:11–00:41:14

I hope you're doing well at Stanford, isn't this warm?

00:41:14–00:41:16

And I'm doing well here.

00:41:16–00:41:17

Same normal things,

00:41:17–00:41:19

practicing soccer, winding to mom,

00:41:19–00:41:20

about getting rats.

00:41:20–00:41:23

Just so you know she already said yes.

00:41:23–00:41:26

Is this a negotiator?

00:41:26–00:41:29

This is 11 year old kid.

00:41:29–00:41:31

I mean, so some of this stuff,

00:41:31–00:41:33

when I ask her, who are the expert negotiators?

00:41:33–00:41:38

I promise you we are born knowing something about negotiations.

00:41:38–00:41:39

Just see a notion.

00:41:39–00:41:40

Oh yeah.

00:41:40–00:41:42

I'm sure she's sick of the same conversations.

00:41:42–00:41:43

Can I get a rat mom?

00:41:43–00:41:45

Please, I'll do my practicing.

00:41:45–00:41:47

[민감정보 가능성이 있어 이 줄은 공개 페이지에서 숨김]

00:41:47–00:41:49

I promise to do my practicing.

00:41:49–00:41:50

Love release.

00:41:50–00:41:51

So here's this.

00:41:51–00:41:54

This is the initial volley.

00:41:54–00:41:56

This is the negotiating position.

00:41:56–00:41:59

She's kind of laid out her negotiating position.

00:41:59–00:42:03

So you're sitting out here 1,500 miles away thinking,

00:42:03–00:42:07

no way.

00:42:07–00:42:08

She has crossed a barrier.

00:42:08–00:42:10

I'm unwilling to cross.

00:42:10–00:42:12

So here's my response.

00:42:12–00:42:15

And I want you to notice this because this is a real life

00:42:15–00:42:16

negotiation.

00:42:16–00:42:18

And I'm going to have you predict how it came out.

00:42:18–00:42:19

What's that?

00:42:19–00:42:24

Good point.

00:42:24–00:42:28

Dear Lease, are you nuts?

00:42:28–00:42:31

I've been killing rats at the house in Woodside.

00:42:31–00:42:32

They are not cute.

00:42:32–00:42:33

They're not nice.

00:42:33–00:42:34

They're not controllable.

00:42:34–00:42:35

They stink.

00:42:35–00:42:36

They eat everything.

00:42:36–00:42:38

They make little back poops everywhere.

00:42:38–00:42:40

And I have to clean up the mess.

00:42:40–00:42:44

Just this week I bought some decon to put out where the rats live.

00:42:44–00:42:49

The next day I found a dead rat near the pool and another one trapped

00:42:49–00:42:50

in the garage.

00:42:50–00:42:53

Just to be clear about how I feel, I must inform you that we smashed

00:42:53–00:43:01

it said in a picture.

00:43:01–00:43:02

I'm a negotiator.

00:43:02–00:43:03

Come on.

00:43:03–00:43:06

It was fat and ugly.

00:43:06–00:43:11

By the way, I think its name was something like Ritzy.

00:43:11–00:43:14

In any event, one of the big reasons I was getting so excited about

00:43:14–00:43:17

coming home was to get away from the rats out.

00:43:17–00:43:20

Now I may as well stay.

00:43:20–00:43:21

See how hurt?

00:43:21–00:43:22

I'm just hurt.

00:43:22–00:43:26

I'm appealing to this young daughter.

00:43:26–00:43:28

What would you like next?

00:43:28–00:43:31

A python or how about some Ebola virus?

00:43:31–00:43:33

Maybe you could raise maggots.

00:43:33–00:43:36

Anyway, I still love you and miss you and we'll see you next week.

00:43:36–00:43:38

We love that.

00:43:38–00:43:42

So how did this negotiation come out?

00:43:42–00:43:43

It's predict.

00:43:43–00:43:44

What's that?

00:43:44–00:43:45

She gets the rats.

00:43:45–00:43:48

She gets the rats exactly.

00:43:48–00:43:50

She got the rats.

00:43:50–00:43:55

Now why would an expert professional negotiator with $10 billion

00:43:55–00:44:00

worth of deals under my belt given to this 11 year old kid

00:44:00–00:44:02

on some stinkin rats?

00:44:02–00:44:04

It mounds the power.

00:44:04–00:44:05

Yeah.

00:44:05–00:44:08

It's a great point.

00:44:08–00:44:11

Besides her mom had already said yes.

00:44:11–00:44:14

So a really balanced power.

00:44:14–00:44:17

To me this is the difference between knowing the elephants in the

00:44:17–00:44:18

ants.

00:44:18–00:44:21

I was willing to lose a battle to win the war.

00:44:21–00:44:25

And the war, what I wanted, winning for me, defining winning for me

00:44:25–00:44:30

was raising a child who's responsible, who loves me, who will

00:44:30–00:44:33

listen to me on things that really do matter.

00:44:33–00:44:35

So I was really willing to kind of take a different,

00:44:35–00:44:38

part of this story.

00:44:38–00:44:43

And the end, she gave the rats back to the pet store lady.

00:44:43–00:44:46

After the pet store lady had told her that she would be feeding

00:44:46–00:44:48

them to the snakes.

00:44:48–00:44:51

So she disliked the rats as much as I did in the end.

00:44:51–00:44:56

And she came away saying, dad, you were right about the rats.

00:44:56–00:44:58

So now.

00:44:58–00:45:08

She arrived at home and the rats were there.

00:45:08–00:45:10

She said, father, you're good.

00:45:10–00:45:10

You're done.

00:45:10–00:45:12

It was a 10-year.

00:45:12–00:45:14

Mom had already said yes.

00:45:14–00:45:18

It was, do you want to hold them down?

00:45:18–00:45:22

No, I think I'll pass on that.

00:45:22–00:45:26

So I think we've covered most of these.

00:45:26–00:45:29

This idea of episodic versus serial.

00:45:29–00:45:32

Think serial in your mind as you think about your brand.

00:45:32–00:45:34

Outside versus inside.

00:45:34–00:45:37

This last was a very much of an inside negotiation.

00:45:37–00:45:41

You'll have negotiations with third parties and with people

00:45:41–00:45:44

who are really close to whether they're employees, partners,

00:45:44–00:45:47

brothers, sisters, children, spouses.

00:45:47–00:45:51

The inside ones are by far the toughest negotiations.

00:45:51–00:45:52

They're the least forgiving.

00:45:52–00:45:54

And they're the most important ones to lose.

00:45:54–00:45:58

So this idea that every negotiation is a competitive game that

00:45:58–00:45:59

you have to win.

00:45:59–00:46:03

It really helps you get over the more inside negotiations you do

00:46:03–00:46:06

in your life, the more that you realize you don't have to win,

00:46:06–00:46:09

certainly not every deal point and you don't have to win every negotiation.

00:46:09–00:46:12

So don't think of it as a competitive game.

00:46:12–00:46:16

This idea about, so I just like this quote, don't wrestle with pigs.

00:46:16–00:46:18

You get dirty and they enjoy it.

00:46:18–00:46:21

So be very careful who you negotiate with.

00:46:21–00:46:23

And that means generating options.

00:46:23–00:46:27

That means always having other people to talk with and to do business with.

00:46:27–00:46:31

It is the worst thing in life is to get in business with people

00:46:31–00:46:35

that don't have the same values you have that you don't respect.

00:46:35–00:46:37

I mean, it is misery.

00:46:37–00:46:40

It's a different kind of misery from just about everything.

00:46:40–00:46:44

You know, except being married to somebody who makes you miserable.

00:46:44–00:46:48

Then this idea of being reputation building.

00:46:48–00:46:50

I've given you my examples of that.

00:46:50–00:46:53

But here are some alternative reputations you have.

00:46:53–00:46:55

One is I'm tough.

00:46:55–00:46:58

I'm unbending the legal documents governed.

00:46:58–00:47:00

I've known a lot of people who are that way.

00:47:00–00:47:05

Often they're people who have a lot of money and a lot of attorneys.

00:47:05–00:47:08

And they really believe that's a smart way to do is guess what happens.

00:47:08–00:47:11

In the end, they may not have a lot of money.

00:47:11–00:47:13

They may not have the same position of power.

00:47:13–00:47:18

And they may not have a friend when things go against them.

00:47:18–00:47:20

Live by the sort, die by the sort.

00:47:20–00:47:21

You can be flexible.

00:47:21–00:47:26

Be reopen to reworking the life company joint venture partner I told you about.

00:47:26–00:47:28

Who just said take notes, Joel.

00:47:28–00:47:32

Turns out he was one of the most flexible partners you could ever have.

00:47:32–00:47:35

So the documents were the documents were the documents.

00:47:35–00:47:36

He couldn't negotiate them.

00:47:36–00:47:39

He didn't want you to negotiate and just take notes.

00:47:39–00:47:45

But when it came to working out the problems of living in the real world of doing business,

00:47:45–00:47:48

he was extraordinarily flexible.

00:47:48–00:47:50

And so I kept doing business with him.

00:47:50–00:47:54

I probably did 25 deals with him over my life in real estate.

00:47:54–00:47:57

Because he was such a great partner.

00:47:57–00:48:01

He was a tough negotiator, documentary, but he was a great partner.

00:48:01–00:48:07

You can have this reputation of being eager to make deals.

00:48:07–00:48:09

Where you just say I do a lot of singles and doubles.

00:48:09–00:48:10

I don't do home runs.

00:48:10–00:48:16

The other is that there are some people in the negotiating world who just say I only do home runs.

00:48:16–00:48:20

If I don't get a forebagger, if I don't hit a home run, if I don't win,

00:48:20–00:48:22

the thing that's the only deals I'll do.

00:48:22–00:48:26

So you need to decide what your reputation is there.

00:48:26–00:48:29

We've talked about these last couple.

00:48:29–00:48:34

The last one is this Fisher and Yuri trained problem solver.

00:48:34–00:48:37

We'll talk for a second about Fisher and Yuri.

00:48:37–00:48:38

Yeah, Connor.

00:48:38–00:48:44

I was talking about basically being selected about making a decision.

00:48:44–00:48:51

What do you do when you're in a situation where let's just say there is a vendor that you need to question at?

00:48:51–00:48:57

And you really need to think there's not another alternative out there.

00:48:57–00:48:59

You don't agree with their values.

00:48:59–00:49:02

What do you do in that kind of situation?

00:49:02–00:49:05

In some cases you just have to suck it up and negotiate with them.

00:49:05–00:49:08

You can get another party in the organization.

00:49:08–00:49:09

You negotiate with.

00:49:09–00:49:16

In other cases you can talk to them and say here's where I think our conflict is going to get to a deeper level and talk with them about that.

00:49:16–00:49:21

I used to know a partner that would say that people, you know, we're not making a deal on this.

00:49:21–00:49:23

What would it take to make a deal?

00:49:23–00:49:25

That was effective in certain circumstances.

00:49:25–00:49:34

What would it take to get this relationship on a better footing or to develop a more long lasting give take relationship?

00:49:34–00:49:37

And sometimes you can get that real with people.

00:49:37–00:49:42

My view is going back to the very beginning is generate options.

00:49:42–00:49:47

So you don't have one vendor that you really rely on or one alternative source of financing or one.

00:49:47–00:49:50

I mean I like having a lot of options.

00:49:50–00:49:55

So I realize that's a bit of a Pollyanna.

00:49:55–00:49:57

You can't always do that.

00:49:57–00:50:03

I mean we just did a deal on one of the companies I'm involved in where they were about 40% of our business.

00:50:03–00:50:06

They were really important.

00:50:06–00:50:08

We had to get that deal done.

00:50:08–00:50:12

So consequently we took notes and got the deal done.

00:50:12–00:50:13

So you're going to do some of that.

00:50:13–00:50:16

There is not a panacea to every negotiating problem.

00:50:16–00:50:18

You are going to deal with difficult people.

00:50:18–00:50:20

You're going to have win-lose negotiations.

00:50:20–00:50:22

You're going to have some things that you dread.

00:50:22–00:50:23

Whatever.

00:50:23–00:50:26

But I'm just saying you can nudge it so that it's a happier experience.

00:50:26–00:50:28

It's a more of a win-win experience.

00:50:28–00:50:30

And a better you choose party.

00:50:30–00:50:35

So here are mine sets that I've got when I go into negotiation.

00:50:35–00:50:36

What time do we end, Marcello?

00:50:36–00:50:38

Where do Marcello go?

00:50:38–00:50:39

At 12th.

00:50:39–00:50:41

So we have to deal with.

00:50:41–00:50:44

Are you happy until then or are people wanting to get out of here?

00:50:44–00:50:45

Okay.

00:50:45–00:50:47

Well let's talk a little bit about these.

00:50:47–00:50:52

And one of the mine sets that I think is a really good mindset is that

00:50:52–00:50:55

an negotiation is just a conversation.

00:50:55–00:50:56

It's just an exchange.

00:50:56–00:50:58

You're good at conversations.

00:50:58–00:51:00

You talk to people all the time.

00:51:00–00:51:03

So this idea of oh my gosh we're going into a room.

00:51:03–00:51:04

We're closing the doors.

00:51:04–00:51:07

We're sitting on opposite sides of tables.

00:51:07–00:51:12

You know that feels a lot more threatening than I'm just going to talk about our

00:51:12–00:51:17

various interests and try to have a conversation to come up with something that's

00:51:17–00:51:19

mutually satisfying.

00:51:19–00:51:22

So think of negotiations as conversations and you're good at.

00:51:22–00:51:25

Think of negotiations as a series we've mentioned.

00:51:25–00:51:30

Think that agreements, it's back to this idea of what is winning.

00:51:30–00:51:35

The idea is that your agreement should be durable.

00:51:35–00:51:40

There's no point in coming to an agreement that it terminates in a lawsuit six

00:51:40–00:51:41

months later.

00:51:41–00:51:43

You've not negotiated a good agreement.

00:51:43–00:51:46

So you want them to be some elasticity.

00:51:46–00:51:47

Some sense.

00:51:47–00:51:52

And usually that is a function of how much trust you've developed with your

00:51:52–00:51:53

opposite party.

00:51:53–00:51:58

If you've developed very high trust with your opposite party, once you come to an

00:51:58–00:52:02

issue, the first instinct isn't oh my gosh let's go to the documents.

00:52:02–00:52:03

What are the documents say?

00:52:03–00:52:09

Most of the good deals I've ever made have never once referred back to the

00:52:09–00:52:10

documents.

00:52:10–00:52:11

Not once.

00:52:11–00:52:13

And some of these things have lasted 25, 30 year.

00:52:13–00:52:15

I mean my whole business career.

00:52:15–00:52:19

We never ever once go to the documents.

00:52:19–00:52:20

Why?

00:52:20–00:52:22

Because we like and trust each other and these are real issues.

00:52:22–00:52:24

And we sit down and we talk it through.

00:52:24–00:52:26

So you want a durable agreement.

00:52:26–00:52:28

So that's another mindset to have.

00:52:28–00:52:31

Another mindset is this thinking win-win.

00:52:31–00:52:35

Another one is to recognize that you're accountable.

00:52:35–00:52:38

A lot of times people think as the negotiate, they're only accountable

00:52:38–00:52:39

themselves.

00:52:39–00:52:41

I'm winning for me.

00:52:41–00:52:45

They're very rare negotiations where you don't have broad accountability.

00:52:45–00:52:46

It's your employees.

00:52:46–00:52:48

It's to the community.

00:52:48–00:52:49

It's to shareholders.

00:52:49–00:52:50

It's to a board.

00:52:50–00:52:59

Sometimes this can be a very effective not in the room party that you can use to give you some breathing room to pause and say,

00:52:59–00:53:00

well I can't.

00:53:00–00:53:02

I wouldn't feel right about this because of either community.

00:53:02–00:53:06

I don't really feel good about dumping this sludge into the river.

00:53:06–00:53:08

You know, I mean you really have an account of it.

00:53:08–00:53:13

So this idea that there's an accountability outside your own interest is a good mindset to have.

00:53:13–00:53:23

Watching your language, I don't think it works to curse, scream, swear, slam doors, walk out of rooms.

00:53:23–00:53:25

Even bluff.

00:53:25–00:53:29

I think bluffing is a fool's game.

00:53:29–00:53:34

Because all you need to do is bluff once and have it not happen and you have spent your reputation.

00:53:34–00:53:37

You are forever more seen as a bluffer.

00:53:37–00:53:40

So my view on that is just never bluff.

00:53:40–00:53:43

Never use what I call high velocity words.

00:53:43–00:53:50

Just you think of the words that just sort of raise people's emotional attention and their temperature.

00:53:50–00:53:52

Just stay away from them.

00:53:52–00:53:54

And if somebody uses them on you, ignore it.

00:53:54–00:53:56

Don't let it work on you.

00:53:56–00:53:58

Don't let your temperature rise.

00:53:58–00:54:01

So watch your language and watch.

00:54:01–00:54:05

What if you're like an idiot said and you get frustrated?

00:54:05–00:54:07

You're not going to forget.

00:54:07–00:54:11

You're not going to be thinking that you try to control that at all costs.

00:54:11–00:54:13

I think you should try to control it.

00:54:13–00:54:15

And here's why.

00:54:15–00:54:19

And as part of it is you're setting a baseline.

00:54:19–00:54:24

Whatever your baseline is, it's the variation from your baseline that will get effect.

00:54:24–00:54:30

So if I say to you, I will never agree to that.

00:54:30–00:54:32

That's pretty powerful.

00:54:32–00:54:37

If you've negotiated with me a lot of times, for me to say, I will never do that.

00:54:37–00:54:40

I mean, you really believe, I've just screamed that out.

00:54:40–00:54:46

Whereas if I'm throwing things around and cursing and a lot of histrionics, I can shout

00:54:46–00:54:47

out never do that.

00:54:47–00:54:49

And you'll say, yeah, yeah, yeah, okay.

00:54:49–00:54:50

He'll come back tomorrow.

00:54:50–00:54:56

So I think keeping the baseline, keeping the baseline really low is a very smart thing to do.

00:54:56–00:54:58

Plus it keeps your own blood pressure down.

00:54:58–00:55:00

So I did walk out of it.

00:55:00–00:55:04

This billion dollar deal that I did out here, where we were swapping a billion dollars

00:55:04–00:55:05

with a property.

00:55:05–00:55:07

I sat with the partners in the room.

00:55:07–00:55:09

There were six of them and one of me.

00:55:09–00:55:14

And the most senior of them just said something that was just completely off the wall

00:55:14–00:55:16

and unfair.

00:55:16–00:55:17

And I just stood up.

00:55:17–00:55:21

And I said, gentlemen, it's been a pleasure to be your partner all these years.

00:55:21–00:55:24

I'm so sad that it has to end this way.

00:55:24–00:55:28

I'm catching my plane and I'll be gone.

00:55:28–00:55:31

Give me a call in Dallas if you want to talk about this.

00:55:31–00:55:32

It was that simple.

00:55:32–00:55:37

Before I could get to the airport, I had a call from three of these partners to say,

00:55:37–00:55:38

please come back.

00:55:38–00:55:39

We wanted to go shoot this.

00:55:39–00:55:41

And it wasn't that I had gotten up.

00:55:41–00:55:43

I stood up when they said it.

00:55:43–00:55:44

I'd left the room.

00:55:44–00:55:46

But my speech was really that calm.

00:55:46–00:55:51

And I think they took that as, oh my gosh, he is serious.

00:55:51–00:55:53

He is really serious.

00:55:53–00:55:56

And that's the message that I'm really serious.

00:55:56–00:55:58

That's the one I wanted to get across.

00:55:58–00:56:01

Not that I'm chapped and I'm out of control.

00:56:01–00:56:04

Because people don't trust that as much.

00:56:04–00:56:06

In the end, this idea of being trusted.

00:56:06–00:56:10

If you really want to be an effective negotiator, be trusted.

00:56:10–00:56:13

If the other party can trust you, over the long run,

00:56:13–00:56:16

you'll develop that brand and you'll develop durable agreements,

00:56:16–00:56:20

high-trust relationships, creative solutions,

00:56:20–00:56:24

relationships with others that you like, et cetera.

00:56:24–00:56:28

So I'm just recommending it as a different mindset than a lot of people have towards it.

00:56:28–00:56:29

Yeah.

00:56:29–00:56:31

I just want to hear it first out.

00:56:31–00:56:32

I say, oh, I'm really good.

00:56:32–00:56:35

You're in America and it's something you're less than Europe.

00:56:35–00:56:36

I work all in the world.

00:56:36–00:56:40

Getting aid remained, may not work, but it's not a big surprise.

00:56:40–00:56:41

What happens?

00:56:41–00:56:42

The rest of the world.

00:56:42–00:56:45

I mean, if you're always calm, it translates across all cultures.

00:56:45–00:56:46

Yeah.

00:56:46–00:56:47

Yeah.

00:56:47–00:56:48

It's kind of a universal language.

00:56:48–00:56:49

Clarity?

00:56:49–00:56:52

Looking over something, in some cultures,

00:56:52–00:56:53

is just I absolutely don't know.

00:56:53–00:56:55

And you've lost it completely.

00:56:55–00:56:56

You're very very very, very good.

00:56:56–00:56:59

Your student's an unstable person.

00:56:59–00:57:01

Oh, might or might not I forget you?

00:57:01–00:57:02

Depending on the industry.

00:57:02–00:57:03

Yeah.

00:57:03–00:57:08

Some industries are full of wild people.

00:57:08–00:57:09

Yeah.

00:57:09–00:57:12

We negotiate through an intermediary,

00:57:12–00:57:14

an investment banker, an agent,

00:57:14–00:57:19

and a attorney who's actually negotiating an agreement,

00:57:19–00:57:23

would you use this as a model for buying first,

00:57:23–00:57:24

selecting an intermediary?

00:57:24–00:57:26

Because that person can often have a tremendous impact

00:57:26–00:57:28

on your branch as well,

00:57:28–00:57:30

because they might act completely,

00:57:30–00:57:31

and they're off on their own.

00:57:31–00:57:33

You don't really know exactly what you need either.

00:57:33–00:57:35

I think you have to be very careful

00:57:35–00:57:37

in who you select, because they carry your brand.

00:57:37–00:57:41

I've seen more attorneys follow up deals

00:57:41–00:57:42

than actually facilitate deals.

00:57:42–00:57:45

In fact, I select my attorneys in terms of,

00:57:45–00:57:47

are they deal facilitators?

00:57:47–00:57:49

Are they deal makers problem solvers?

00:57:49–00:57:53

Or are they sort of Eagle Mediacs who have to be right

00:57:53–00:57:54

on every deal point?

00:57:54–00:57:56

We have to draft the toughest document.

00:57:56–00:57:57

A lot of times what you'll do in deals

00:57:57–00:57:59

is you'll get attorneys fighting.

00:57:59–00:58:00

And the attorneys will,

00:58:00–00:58:03

and it'll destroy the deal in the relationship.

00:58:03–00:58:08

So number one is I try not to have very many intermediaries

00:58:08–00:58:09

on the front line.

00:58:09–00:58:13

I don't like to have agents, brokers, investment bankers,

00:58:13–00:58:15

or attorneys negotiating my deals.

00:58:15–00:58:18

I like to establish a one-on-one relationship

00:58:18–00:58:20

with the other principal in deals.

00:58:20–00:58:24

I really think that's the safest way to maintain your brand,

00:58:24–00:58:27

and it's the way to create better relationships,

00:58:27–00:58:29

to create better outcomes.

00:58:29–00:58:31

It's more work in the short run.

00:58:31–00:58:33

It's less work in the long run.

00:58:33–00:58:38

I think there is a reason that people use these intermediaries,

00:58:42–00:58:44

and I think they can be valuable,

00:58:44–00:58:47

and I think it's always smart to have somebody outside the room,

00:58:47–00:58:50

because negotiations are these real-time things

00:58:50–00:58:51

where you're exchanging things back and forth,

00:58:51–00:58:53

back and forth, back and forth,

00:58:53–00:58:54

and you can make mistakes,

00:58:54–00:58:56

and it really helps to have somebody,

00:58:56–00:58:57

whether it's a board, a partner,

00:58:57–00:58:59

an attorney, or whatever,

00:58:59–00:59:02

who can come in, refine, correct, smooth over.

00:59:02–00:59:04

I don't like to use them in all those things.

00:59:04–00:59:05

A lot of times I'll say,

00:59:05–00:59:07

I need to run this by my partners, or I'll need to,

00:59:07–00:59:09

I'd be, this makes sense to me,

00:59:09–00:59:12

but let me check with the attorney or tax counsel,

00:59:12–00:59:13

or my accountant on this.

00:59:13–00:59:16

So I like to have a little bit of a background.

00:59:16–00:59:17

So I use them that way,

00:59:17–00:59:18

but I never put them and say,

00:59:18–00:59:20

my attorney will negotiate with your attorney

00:59:20–00:59:21

and make a deal.

00:59:21–00:59:23

That is very dangerous.

00:59:23–00:59:25

It's not to say it doesn't work, yeah.

00:59:25–00:59:27

Any questions regarding this idea of,

00:59:29–00:59:31

not really going above or below this time?

00:59:33–00:59:36

And as someone, I'm very emotive,

00:59:36–00:59:37

that's who I am,

00:59:37–00:59:40

and what I'm hearing is,

00:59:40–00:59:42

poker phase, try not to be hooked into these things,

00:59:42–00:59:44

try not to be emotional,

00:59:44–00:59:45

which to me is really like,

00:59:45–00:59:48

if you said, the best way to negotiate

00:59:48–00:59:50

is if you're six foot tall, and I'm five feet tall.

00:59:50–00:59:52

So that to me, it's like, okay,

00:59:52–00:59:56

I agree, I can see how that would be effective.

00:59:56–00:59:58

How should you just not six feet tall?

00:59:58–01:00:00

Yeah, I'm not six feet tall.

01:00:00–01:00:02

And I think you start out by being yourself.

01:00:02–01:00:04

Authenticity is something that will be measured

01:00:04–01:00:06

by the opposing party,

01:00:06–01:00:09

which will go back to trust a lot.

01:00:09–01:00:13

I'm just saying that you can modulate.

01:00:13–01:00:17

You can keep the swings from being so wild,

01:00:17–01:00:19

and that will help you.

01:00:19–01:00:21

It won't make you six feet tall,

01:00:21–01:00:23

but it may make you five foot too.

01:00:23–01:00:25

So either hand, go up and down.

01:00:25–01:00:26

I think you need to be yourself.

01:00:26–01:00:28

I mean, I'm demonstrative too.

01:00:28–01:00:30

I mean, I speak with my hands.

01:00:30–01:00:31

I wander around.

01:00:31–01:00:35

I get excited about, I mean, it's who I am.

01:00:35–01:00:38

So I am that, but I just say there are certain things.

01:00:38–01:00:41

There are certain thresholds that I don't want to cross,

01:00:41–01:00:43

because I spend a lot.

01:00:43–01:00:44

If I crush those thresholds,

01:00:44–01:00:47

I've spent something that doesn't return to me,

01:00:47–01:00:48

what it's worth.

01:00:48–01:00:50

So if you're all over the map around like that,

01:00:50–01:00:52

you just need to realize you're spending something

01:00:52–01:00:54

that's pretty valuable,

01:00:54–01:00:56

and you don't have any place to go.

01:00:56–01:00:57

Once you've cranked the volume up all the way,

01:00:57–01:00:59

there's no place to go.

01:00:59–01:01:00

So leave yourself a place to go.

01:01:00–01:01:02

And I think moderating,

01:01:02–01:01:04

that in the final one is be likable.

01:01:04–01:01:06

And I know this is,

01:01:06–01:01:09

I mean, you didn't come to Stanford to hear, be likable.

01:01:11–01:01:12

But when I went through litigation,

01:01:12–01:01:16

I remember talking with,

01:01:16–01:01:21

I think it was opposing counsel after it was all over again.

01:01:21–01:01:24

And he said something like, you know,

01:01:24–01:01:27

I wanted to hate you.

01:01:27–01:01:29

I really wanted to be as angry at you

01:01:29–01:01:33

as the plaintiff was.

01:01:34–01:01:36

He said, but I couldn't help,

01:01:36–01:01:39

but kind of liking you.

01:01:39–01:01:41

And he said, and he said, I didn't want it,

01:01:41–01:01:42

it influenced me on a professional,

01:01:42–01:01:43

and I did my job,

01:01:43–01:01:45

but it still had an impact.

01:01:45–01:01:46

So I talked to my attorney about it.

01:01:46–01:01:48

And he says, you know, I've had the same experience

01:01:48–01:01:49

where I've got,

01:01:49–01:01:52

and he'd deposed Ivan Boseki.

01:01:52–01:01:54

I mean, you go down the list.

01:01:54–01:01:55

People, he'd been through a whole bunch of them.

01:01:55–01:01:57

And he said, you know, certain of them

01:01:57–01:01:59

were really likable scoundrels.

01:01:59–01:02:01

And it made a difference.

01:02:01–01:02:04

And others, you know, you just wanted to fry.

01:02:04–01:02:06

And so this idea there is something,

01:02:06–01:02:09

you know, even the most jaded,

01:02:09–01:02:11

professionally trained litigator who does

01:02:11–01:02:15

gladiating for a life.

01:02:15–01:02:17

You know, says it makes a difference

01:02:17–01:02:18

if you like the other party.

01:02:18–01:02:21

So I think there is almost no upside

01:02:21–01:02:24

in being a jerk and being a turkey.

01:02:24–01:02:26

I just don't think it gets you anywhere.

01:02:26–01:02:27

Well, we're about out of time.

01:02:27–01:02:29

Well, let's just see if we've got any more of these.

01:02:30–01:02:35

We've talked about agents, being a principal.

01:02:35–01:02:38

We've talked about lawyers as memorializers or agents,

01:02:39–01:02:40

disputes.

01:02:44–01:02:45

You know, this is in the far end

01:02:45–01:02:47

of the formal end of negotiation

01:02:47–01:02:49

with the immediate arbitrator litigate.

01:02:51–01:02:56

I guess my advice on that is they're all kind of bad

01:02:56–01:02:58

outcomes and you really want to avoid,

01:02:58–01:03:00

you really want durable, flexible agreements

01:03:00–01:03:02

and trust relationships.

01:03:02–01:03:05

If you have to get to these litigation

01:03:05–01:03:08

and arbitration are not that different

01:03:08–01:03:11

in terms of arbitration may be a little shorter

01:03:11–01:03:12

and a little less expensive,

01:03:12–01:03:15

but you're still presenting information

01:03:15–01:03:17

under rules of evidence,

01:03:17–01:03:21

typically to a special master or a rented judge

01:03:21–01:03:22

or something.

01:03:22–01:03:23

So it's a very much the same kind of thing.

01:03:23–01:03:28

Mediation, that negotiation is a split the baby negotiation.

01:03:28–01:03:31

So if you're right, you're gonna lose half.

01:03:32–01:03:34

So I think you just want to be,

01:03:34–01:03:38

so this is again in this very stylized formalized way.

01:03:38–01:03:43

The rules of those negotiations very much narrow your outcomes.

01:03:43–01:03:45

So just be aware.

01:03:45–01:03:46

Implementing the agreement,

01:03:46–01:03:49

flushing out hidden agenda items outbursts

01:03:49–01:03:51

from the material that we've kind of talked about,

01:03:51–01:03:53

all of those I think.

01:03:54–01:03:55

So Fisher and Yuri,

01:03:57–01:03:58

is everybody in here red,

01:03:58–01:04:01

how many of you have read getting to yes?

01:04:02–01:04:04

Only a few of you.

01:04:04–01:04:06

But maybe so old that people don't read it.

01:04:06–01:04:08

It's still the classic book.

01:04:08–01:04:09

I'm gonna go,

01:04:09–01:04:10

I would recommend it to all of you.

01:04:10–01:04:12

We want to become a better negotiator.

01:04:12–01:04:15

We're written in 1981 by Fisher and Yuri,

01:04:15–01:04:17

two Harvard lawyers,

01:04:17–01:04:19

and they talk about their negotiation

01:04:19–01:04:22

and the salt talks and a lot of data

01:04:22–01:04:24

on really sort of what works and what doesn't.

01:04:24–01:04:27

They wrote another book called Getting Past Know.

01:04:27–01:04:29

So getting to yes is the first one,

01:04:29–01:04:30

getting past know is the second one.

01:04:30–01:04:32

Actually, the second one,

01:04:32–01:04:33

though much less red.

01:04:33–01:04:34

In fact, is there anybody in here

01:04:34–01:04:37

that's red getting past, okay, great.

01:04:37–01:04:38

Not very many people have read it.

01:04:38–01:04:40

It's actually I think even a better,

01:04:40–01:04:41

more insightful book.

01:04:41–01:04:42

If you've done a lot of negotiating,

01:04:42–01:04:47

those are two really sort of good, practical, academic texts

01:04:47–01:04:48

that give you a good map.

01:04:48–01:04:51

And I can usually tell when I'm negotiating with somebody

01:04:51–01:04:53

who has studied Yuri in Fisher.

01:04:53–01:04:55

It's a different kind of a negotiation.

01:04:55–01:04:56

It's actually quite pleasant.

01:04:57–01:05:00

So here's the, if you don't want to read it,

01:05:00–01:05:02

here's the reader's digest version.

01:05:02–01:05:04

Saving you time.

01:05:04–01:05:06

You thought you were wasting an hour with me.

01:05:06–01:05:08

I'm gonna save you a couple hours.

01:05:08–01:05:10

Basically, the idea is separate the,

01:05:10–01:05:12

so here are the four fundamentals.

01:05:12–01:05:14

Separate the people from the problem,

01:05:14–01:05:15

which a lot of people don't do.

01:05:15–01:05:16

They merge them.

01:05:16–01:05:18

You know, the problems thorny.

01:05:18–01:05:19

Therefore, I don't like the people.

01:05:19–01:05:23

The people who have this issue that has brought before me,

01:05:23–01:05:25

because I don't like the issue or it's putting me

01:05:25–01:05:26

in an awkward position.

01:05:26–01:05:28

I also don't like those people.

01:05:28–01:05:30

You know, so there's a lot of confusion.

01:05:30–01:05:31

So they say separate those two.

01:05:31–01:05:33

Then focus on interests, not position.

01:05:33–01:05:36

In other words, what would you like to see at it?

01:05:36–01:05:38

Not what position are you going to take?

01:05:38–01:05:39

Or is the other party gonna take?

01:05:39–01:05:42

Because positions are not necessarily related

01:05:42–01:05:44

to what are really in your interests.

01:05:44–01:05:48

People express positions that may not be the actual

01:05:48–01:05:50

endpoint that reflects their interests.

01:05:50–01:05:53

Then invent options together for mutual gain,

01:05:53–01:05:56

where you think outside the box, you invent options,

01:05:56–01:06:00

and then insist, if you can, this is the hardest one for me.

01:06:00–01:06:02

It's figuring out objective criteria.

01:06:02–01:06:05

You know what, what would be a winning deal?

01:06:05–01:06:06

What would work?

01:06:06–01:06:09

And then assess your deal against these objective criteria.

01:06:09–01:06:13

That is the hardest one for me, but I've seen it work.

01:06:13–01:06:14

And then finally for me, I'd say,

01:06:14–01:06:15

know your bat and that.

01:06:15–01:06:17

Figure it out, write it out.

01:06:17–01:06:20

Know what going in, and my corollary to that,

01:06:20–01:06:22

is calculate the other party's bat.

01:06:22–01:06:24

So you really know that it's not life or death.

01:06:24–01:06:27

There are alternatives, and you'll be more likely

01:06:27–01:06:29

to have successful negotiations.

01:06:31–01:06:34

Now, I'm gonna show you there, these are the, again,

01:06:34–01:06:36

more fissure and yurry things.

01:06:36–01:06:39

But if you'll just, this is how they deal

01:06:39–01:06:41

with some of these dealing with problems and framing things.

01:06:41–01:06:44

So I'm gonna flash this slide up and one other slide up.

01:06:45–01:06:49

And then have you think about what else this relates to.

01:06:49–01:06:52

You know, discuss each other, don't blame the opponent,

01:06:52–01:06:55

see the opponent's intentions, see the situation,

01:06:55–01:06:57

you know, from their perspective,

01:06:57–01:06:59

give them a stake in the outcome.

01:07:01–01:07:04

You know, don't react to provocation step away,

01:07:04–01:07:07

don't respond reflexively, be an active listener,

01:07:07–01:07:09

agree when you can.

01:07:09–01:07:10

I used to have a friend that I negotiated,

01:07:10–01:07:12

a guy that became a friend that I negotiated with,

01:07:12–01:07:14

who would start out every negotiation

01:07:14–01:07:17

with all of the things we agreed on.

01:07:17–01:07:19

So that you'd go through 10 items.

01:07:19–01:07:21

It's like, okay, we agree on this, we agree on that.

01:07:21–01:07:24

And you've got in this reflexive habit of just agree.

01:07:24–01:07:25

Okay, I agree to that.

01:07:25–01:07:26

That works, I agree to that.

01:07:26–01:07:28

That works, okay, that's good.

01:07:28–01:07:31

And you'd get down to then number 11 and 12 and 13,

01:07:31–01:07:33

which were the tough ones.

01:07:34–01:07:38

So these are things that yurry and fissure discuss.

01:07:38–01:07:41

So what, you know, I guess I'll just tell you

01:07:41–01:07:42

because we were out of time.

01:07:42–01:07:45

My take on this is marriage.

01:07:47–01:07:49

You know, this is how I've made a marriage work

01:07:49–01:07:53

for 35 years is basically doing these things.

01:07:53–01:07:57

And most of the relationships you're in

01:07:57–01:07:59

are subject to negotiation.

01:07:59–01:08:01

And if you kind of listen to these best practices,

01:08:01–01:08:04

your life will work better, your relationships will work better,

01:08:04–01:08:07

and your conversations will be happier,

01:08:07–01:08:09

your agreements will be more durable.

01:08:09–01:08:13

And most of the time, you'll feel like you won.

01:08:13–01:08:15

Most of the time you won't feel dirty,

01:08:15–01:08:17

like you need to take a shower.

01:08:18–01:08:21

And negotiations won't be just eating your broccoli.

01:08:21–01:08:23

That will be something that gives you life,

01:08:23–01:08:27

election express creativity, and build relationships.

01:08:27–01:08:31

So I'll hang around here after if any of you want

01:08:31–01:08:33

to discuss this or have any questions,

01:08:33–01:08:34

but thank you very much.