From David Kahneman’s Thinking Fast and Slow: understand and manipulate System 1 (emotional brain) to manipulate System 2 (rational brain)
Life is all about negotiation: one side wants, the other side gives. Knowing how to negotiate gives you a massive edge
Be a Mirror
Good negotiators, going in, know they have to be ready for possible surprises; great negotiators aim to use their skills to reveal the surprises they are certain exist.
All about multiple hypotheses and gradually eliminate as we get more evidence
Question assumptions and try to explore as much as possible
Listening is all-important and much harder than we think: we are subject to selective hearing, get distracted
To ensure that you don’t get overwhelmed by your own brain trying to think of responses, simply put all your focus on the other person and their mind
Goal is to get the counterpart to talk about what they want so that you can identify the need
Don’t speed it up: the passage of time is one of the most valuable tools for a negotiator
It’s often easier and more effective to have a good demeanor and delivery rather than constantly think about what to say next
Three voices avaliable for negotiators: late-night DJ voice, positive/playful voice, and assertive voice (not that useful)
Should be mostly positive/playful with smiling: easygoing nature puts others at comfort and encourages collaboration with counterpart. Smile while you talk
Late-night DJ: deep, slow and calm voice with downward inflection which invites no response
Mirroring: copying each others behaviour and actions to comfort each other
For negotiation, just repeat the last three words
For this to be as effective as possible, you need to be quiet as soon as you deploy the mirror. Don’t explain anything, let the mirror do its work
Don’t Feel Their Pain, Label It
Cannot separate emotions from the negotiation because emotions are often the problem
Emotion should be labelled and used to influence the other party
This demands opening up senses, talking less and listening more
Empathy is all about paying attention to another person, asking what they are feeling, and making a commitment to understand their world. You are looking from their perspective
Tactical empathy also hears what is behind the emotions and actions. You need to recognize and verbalize your hypotheses on their emotions
Labeling is validating someone’s emotions by verbalizing it
Trick to spotting feelings is noticing changes in behaviour and body language to external questions
Verbalize: can be either a statement or a question. Starts off with ‘It sounds like’, ‘It seems like’, or ‘It looks like’
Don’t use ‘I’ because that places focus on you. Empathy should be about them
Be quiet and listen to response. Don’t follow up with useless questions
Labelling negatives diffuses the emotions, labelling positives reinforces. You need to address the underlying emotions, not the presenting emotions
Address the negative/positive dynamics as quickly as possible, especially when you made a mistake
Label the negative emotions and replace with a positive emotion instead
Grumpy grandpa: label emotion of loneliness and then replace with ‘We want to hear more about you’
Use the labels to strike at the heart of the matter, the underlying emotions. Don’t label the surface emotions
Accusation audit: listing every single accusation that your counterpart could say about you. Known as taking the sting out
Don’t sugar coat the bad. Say it as it is and then do an accusation audit
Beware ‘Yes’, Master ‘No’
Use the power of ‘No’ in negotiations: it offers an oasis of status quo and helps both parties eliminate what they don’t want
By saying ‘no’, you have protected yourself and also open to more possibilities ironically, so allow the counterpart the option of saying no. It perserves their autonomy
When someone responds ‘No’, either label the effect or ask solution-based questions
Three types of ‘Yes’: counterfeit, confirmation, commitment
Counterfeit: ‘Yes’ is an easy escape route and can get you more info
Confirmation: simple affirmation
Commitment: agreement to do something, the key to a deal
Great negotiators guide their counterpart to a decision that the negotiator wants, framing the decision as their own and ultimately giving the confirmatory ‘yes’
If you can satisfy the drives of feeling safe and in control, you can influence your counterpart’s mind and guide them to a decision they think they made themselves
This is illogical drives, so don’t argue them into a corner
Don’t be nice for the sake of being nice. Disingenous niceness can backfire
Don’t push for yes’s immedietely, it keeps them off balance. ‘No’ offers security so aim for No’s
’No’s slows down decision-making, allows the real issues to be brought out
Use No-oriented questions and follow-up with a question that puts the counterpart in the decision making spot. Hopefully, the No-oriented questions have influenced your counterpart to give you a favourable decision
Mis-label emotions to force a no and make counterpart pay attention
Ask for what counter part doesn’t want → much more productive than listing all want
Trigger the Two Words That Transform Negotiations
Behavioural Change Stairway Model (BCSM): active listening → empathy → rapport → influence → change
Real behavioural change only occurs through an approach called unconditional positive regard
Most of us expect positive rewards as highly conditional → create habit of hiding who we really are. Thus, any changes we say we will make due to some interaction is also highly conditional
Sweetest two words of negotiation: “That’s right”
These two words symbolize agreement. It doesn’t have to be those two words and it will most likely never happen in the beginning of a negotiation
Active listening arsenal:
Effective pauses: use it for emphasis and let counterpart talk it out
Minimal encouragers: ‘yes’, ‘uhuh’, or ‘I see’ → that’s it. Keep them talking
Mirroring
Labelling
Paraphrase
Summarize = paraphrase + labelling
”That’s right” allows adverseries to feel like they are agreeing on their own terms
”You’re right” is the worst answer because the person doesn’t own the conclusion and just wants you to leave them alone
Bend Their Reality
You always have leverage in any situation because things are rarely linear: people have irrational fears, blind spots, hidden needs and underdeveloped notions
Don’t split the difference because it quite often doesn’t appease other sides
No deal is better than a bad deal, so never settle for compromises. We compromise because it is easy, saves face and is safe
Most people in negotiation are driven by fear and desire to avoid pain
Use deadlines: it forces people to rush, which often creates a bad result for them
Similarly, don’t be stressed out by deadlines, because that makes us hostage to time. In the real world, deadlines are flexible and provide no real consequence
Increasing specifity of threats is an indication that consequences are coming soon. Early-stage threats have loopholes for counterparts to escape through, but as you stall and wait, these loopholes close and trap them in
Reveal your deadlines to force your counterpart to speed up
Realize that decisions are always emotional: even if you think you are rational, there is an emotional element to every decision. That’s why you can’t expect your counterpart to make ‘rational’ decisions because the emotional component between you and the counterpart is different
The most powerful word in negotiations: fair
Fairness creates emotional decisions: people are insulted to take an offer which is clearly beneficial regardless, countries pursue policies which are obviously bad in the long run but fair for them
People use the word ‘fair’ to destabilize the other side. To defend against it, ask them to go back to where you started being unfair
People use ‘fair’ to make you seem dense or dishonest (“We’re giving you a fair deal”). Counter through labelling and ask them how they are being fair
People use ‘fair’ in a positive and constructive manner by setting up negotiations immedietely as fair and allowing the other side to stop if its being unfair
Ideal aim in a negotiation is to make counterpart spill the emotional drivers and then frame your idea as the perfect solution
People are suspect to Prospect Theory: more willing to side for sure outcomes than probabilities even when the expected value is greater (certainty effect) and will take greater risks to avoid losses than gains (loss aversion)
It’s not enough show that you have solution; you need to show that they will lose something if they don’t abide
How to bend reality with prospect theory:
Anchor their emotions: Do an accusation audit to make them have low expectations and prepare them for loss aversion, then give a statement that incites loss aversion
Ex:// Voss used this with contractors. Gave an accusation audit about how he is a bad businessman, and then says “I want to give this offer to you before someone else”
Let the other guy go first…most of the time: you may not know what the other side is going to offer you and your thinking might be lower than what they are thinking. Let the other side give monetary anchors first
You can use this the other way too. If you anchor first and give an extreme anchor, anything mildly in the ball park (even if its bad for you) seems reasonable
Just remember that your reputation proceeds you, so use this wisely
Establish a range: this should be a ballpark in your favour with the higher number significantly higher
Pivot to nonmonetary terms: you can use these to bring down or bring up a deal, as nonmonetary items have different value for different people
Use odd numbers: extremely specific numbers (i.e. not ending in 0) seem extremely calculated, so people tend not to argue
Surprise with a gift: give an extreme anchor and then surprise → they are more likely to take up the extreme anchor
How to negotiate a salary:
Be pleasant on non-salary terms: use the non-monetary aspects of the job (eg. vacation) and pleasantly persist, they will usually reject but give a higher salary
Define success terms: what metrics would constitute a raise?
Spark interest in your success and gain mentor: make sure you let them know that you will act as a flesh-and-blood argument for boss’s performance. Ask: “What does it take to be successful here?”
Create the Illusion of Control
Turn everything into calibrated, open-ended questions
During negotiations, we tend to think in terms of reciprocity: if you give something, I will
Ask “how” questions, like “how do I know the hostage is ok?”
Engages help and is open-ended, so it doesn’t seem forced
We need to suspend unbelief and make the other person see your POV while using their own will and energy
Summarize → Ask an open-ended question → usually get some want/need → solve it
Best question: “How am I supposed to do that?”
How to make a calibrated question: no verbs, use 5W1H (especially what and how, sometimes why)
Why is taken accusatory across all cultures, so be careful. Use the defensiveness created by why to further the goal of the negotiation
Tone of voice is critical
Common questions: what about this is important to you, how can I help to make this better for you, how would you like me to proceed, what is it the brought us into this situation, how can we solve this problem, what is the objective, how am I supposed to do that
Self-control is critical
Bite your tongue (metaphorically) and breathe before you rush headfirst into anything. Don’t let your knee-jerk reactions get to you
Don’t engage in verbal attacks; disarm via calibrated questions
Without power in a conversation, we may feel like a hostage and we lash out
Guarantee Execution
Negotiators have to be architects and ensure that everyone is on board and that the right outcome is not only achieved, but executed
Calibrated ‘How’ questions buy time and put the onus on the counterpart, which can fluster them and cause them to make mistakes
’How am I supposed to do that’ is a very elegant way of saying no
’How’ also forces the counterpart to think about implementation, which will be a lot more likely if they think its their idea
Use ‘How will we know that we are on track?’ and ‘How will we address things if we go off track’. Summarize their answers to get ‘That’s right’ and you’re good
Don’t settle with ‘I’ll try’ or ‘You’re right’. Continue to ask calibrated questions
Always be aware of how the negotiations are affecting the counterpart’s team. If you make a decision that is not approved by everyone, it will fall apart
Ask: ‘How does this affect the rest of your team’ or ‘How on board are people not on this call’ or ‘What challenges do your colleagues see in this area’
Calibrated questions are extremely useful in countering aggresiveness and lying
Look at body language and tone. If they are not matching with what is being said, then the person is most likely lying to you
Use the rule of 3: get the counterpart to agree to the same thing three different times by using different tactics
Liars often use more words and are as third-person as possible in speech
The use of ‘my’, ‘I’ and other first-person pronouns is inversely related to the position of the person
Don’t just use the other person’s name, use your name as well. Humanize yourself
To say no: use how questions → ‘your offer is very generous, I’m sorry, but I can’t do that’ → downward inflection of ‘No’
Bargain Hard
Identify your own habits and intuition so that when it comes to use it, you will be well prepared
Three types of people in negotiation: accomadators, asserters, analysts
To be truly successful at negotiation, you need all three types and play to strengths
Analysts: methodical, dilligent, as much as time as it takes to get right. Have the DJ voice down, but sometimes comes off as cold and distant. Hates surprises
Hyper-sensitive to reciprocity and questions, so don’t immedietely come off with questions. Use data more and avoid surprises
To improve as an analyst: smile when you speak
Accomadator: most important thing in negotiation is relationship. Builds great rapport with others
Use calibrated questions to nudge them in the path of action rather than talk
As an accomadator: beware of excessive chitchat and voice objections when necessary
Assertive: believe time is money. Aggresive communication style and extremely candid. They think their opinions are more important
Dealing with assertives: use labelling and mirroring to make sure they know that you have understood them. ‘That’s right’ is crucial
As an assertive: watch your tone and use calibrated questions to prevent nasty tone
Don’t project your negotiation style on anothers. That’s why it is crucial to understand where they are coming from, as certain things may be interpreted differently (eg. silence)
You want the other person to first list the price. Welcome extreme anchors
Deflect the offer by using ‘How’ or redirect to the purpose of the exchange
If they ask you to name your price before you are ready, simply allude to what others would pay. Don’t reveal your cards immediately
Sponge up as much information as possible
Don’t fold. Keep pushing to your target. No deal is better than a bad deal
If the negotiation is drying up and the counterpart is becoming rigid, become the aggressor
Use anger strategically: channel it at the proposal, not the person. Don’t fake it
Use poise
Use why: use the format “Why did you do X” where X favours your position. Weird but works because it makes the counterpart work for you
Use ‘I’: use this sparingly, but if the counterpart is being productive, use ‘I’ to focus on yourself
To prevent emotional arguments, focus on the issue. The issue is the problem, not the person. Don’t create an enemy
Ackerman bargaining:
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Set your target price
Set first offer at 65%
Calculate raises of three decreasing increments (85%, 95%, 100%)
Use empathy methods to force the other side to list down their offer
Use precise, nonround numbers
On final offer, throw in non-monetary good to show that you’re at your limit
Use raises sparingly, only after extensive strategic empathy
Concessions make them feel good, regardless if its fair or not
Prepare rigorously: you fall to the highest level of preparation
Find the Black Swan
Black Swan theory: things happen that previously were though impossible, literally never imagined before (eg. guy takes people hostage for mere pleasure to kill)
In negotiations, the things that we don’t know that we don’t know are the black swans
Black swan events happen because our frame of references are off. We need to be flexible and adaptable and receptive to black swan information
Conventional questioning and research is meant to confirm the known knowns, not the black swans
We need to ask lots of questions, pay a lot of attention to verbal and non-verbal cues. More intense and intuitive
Black swans are useful because they multiply leverage (ability to inflict loss and withold gain)
Leverage is a emotional concept, because all it takes is someone to think that you have leverage for the effect to happen.
Has a lot of input, from time to competitions
The party who feels that they have more to lose if negotiations are closed are the ones with less leverage
Three types of leverage: positive, negative, normative
Positive: ability to withold or provide what counterpart wants
Negative: ability to make counterpart suffer. Label leverage for use, don’t threaten
Normative: use inconsistencies between beliefs and language for leverage
Dig into the life of your counterpart, their worldview, their beliefs. Use this for leverage
Helps make you seem similar to them
Use this to figure out the counterpart’s aspirations and draw a map of where they want to go
Use the leverage as reasons for asks
Listen with all your strength. Record your conversations and get second listeners
The myth of the crazy counterparts: we are not taking enough time to understand their worldview
Craziness cause by ill-information, constrained or other interests
How to unearth black swans:
Sit face-to-face with the counterpart
Observe unguarded moments: pay attention to beginning and ends of meetings as well as reaction to unexpected events
When it doesn’t make sense, there are cents to be made:
Use labels and calibrated questioning to tease out possible black swans
People are irrationally scared of negotiation. Embrace regular conflict
Prepare a Negotiation One Sheet
Goal: don’t do BATNA because it forces you to aim low. Think about best and worst case, but only write down best case on sheet
Summary: clearly describe the facts that led to the negotiation, allowing you to summmarize and pull a ‘that’s right’
Labels and accusation audit: Make a concise list of accusations they might make and turn them into labels
Calibrated Questions: prepare three to five questions to reveal motivations
Include questions that ask about the team if the decision is made by a committee
Include questions that satisfy non-monetary things (pride, esteem, …)
Include questions that unearth deal-killing issues and be prepared to label