There may be no more useful skill in life than knowing how to negotiate. From your career to your love life to simply getting your friends to agree on pizza toppings, everything will go a lot smoother when you understand how to nudge people towards an understanding.
You need some help from Martin Latz, founder of the Latz Negotiation Institute. Latz literally wrote the book on bargaining with his 2005 guide Gain the Edge!: Negotiating to Get What You Want. From advocating for Americans on the White House Advance Teams to his column on negotiation in the Arizona Republic to his classes as an adjunct professor of law for negotiation at Arizona State, Latz understands the art of barter.
I’ll link to your website if you help me learn how to negotiate.
There are five golden rules in my book, and I can give you the crash course rundown. The first rule is information is power. You want to know everything you can going in. There is this common error people make where they think they should negotiate instinctively somehow, or do it from the gut, but that’s absolutely wrong. If you go into a negotiation unprepared just thinking you can feel your way, you will not do well.
And this leads into the second rule, which is to maximize your leverage. You don’t just look at buying one car, you’re looking at buying several cars. You want to make sure you have multiple options on the table. It’s like having the opportunity to land your dream job. As much as you want it, you don’t want to fall in love with that one position. Keep your options open. What’s your plan B? That leads into rule three, which is that you want to use objective criteria. For example, if you are going in to negotiate on a car price, get a sense of what the larger market thinks is a good price for that car. See what people say about it online, see what they’ve paid. Get a good baseline for what your reasonable expectations should be.
Next is have an offer-concession strategy. Know what you’re willing to give up. The other party needs to have some of their needs met. And if you’ve done your background, step one, you know the things they need to be comfortable in this negotiation. Lastly, control the agenda. If you have a meeting, start off with the things you want to talk about, get people on the same page as you. Get them talking about the points that are important to you.
How are we negotiating wrong?
If people don’t understand their boundaries, they become bullies. Maybe they’re afraid of giving away too much. You have to understand what the other person needs too. I’ve seen so many good deals blown up because one person did not understand when they were going too far
This makes me think about the Republican debates, because Donald Trump has just been a master at controlling the agenda and keeping the attention on himself. And then there’s Jeb Bush looking like a bullied kid.
Part of the problem in that negotiation environment is to be perceived to be pushed around by Donald Trump. Several other candidates have also been perceived to be pushed around by him. The lesson there is, unless you stand up to those bullies regardless of whether you think you won, intellectually you won’t be viewed as having won. It isn’t until recently, at least on commentary I’ve seen, that Jeb has been comfortable engaging.
Who can we turn to to see a great negotiator? The Pelé of bargaining?
I can tell you about a couple of fantastic negotiators in history. Someone like James Baker, the former Secretary of State, was an excellent negotiator. George Mitchell, who brokered peace in Northern Ireland, was able to accomplish such great things internationally. Bill Clinton, who I actually used to work for, on an individual and personal level it’s just extraordinary how he connects with people. On the business side, I’d say former Phoenix Suns owner Jerry Colangelo. In 1968 he was 20 years old, he had a little bit of money in his pocket, and he had a goal to own the Phoenix Suns. When he negotiated his first contract with the owners he was so smart and he had such vision he knew to negotiate the right of first refusal if the team was put on the market. He got a bunch of business leaders in Phoenix to basically buy the team and install him as the general partner with equity interest. It was a 20-year-long negation between him and the business leaders in Phoenix who he took care of over the years.
Can you give me a recent, real world negotiation we could look at as an example of someone failing to use these tactics?
Highest-profile recent negotiation I’ve analyzed publicly is the Iran nuclear negotiations. I don’t think the United States and the Obama administration fully maximized our leverage. We could have, frankly should have, gotten a better deal. Obama was running for President talking about meeting the Iranians without preconditions. I think the Iranians perceived he desperately needed a deal. Having said that, the deal we finally did achieve was still better than the alternative, and it still should’ve been done. It’s better to have the deal than to have an Iran with a nuclear weapon.
Obama got a lot of criticism, even from liberals, for being a weak negotiator in his first term. What could he have done better?
In his first term he couldn’t have estimated the nature of the Republican opposition, and that’s a problem from a negotiation standpoint. I think he underestimated the partisan nature. This goes back to the first golden rule about the power of information. What strategic intelligence do I have about my counterparts? Obama in his first term underestimated the opposition. And then he had to negotiate to get anything done, or ignore them like he did with Obamacare. Remember, for months he tried to get a deal done with Republicans on health care. Ultimately he was unable to get Republican support.
Bottom line advice?
Just remember it’s crucial to get away from doing this instinctively, and get to doing your research. Whether it’s a personal negotiation or business negotiation. You need to do your homework. And I’m not just saying my book — there’s a lot of good stuff. There’s a classic book called Getting to Yes. That was written by my law school professor. Then another very interesting book that gets through the psychology dynamics is Influence: Science and Practice. That’s a fascinating book for sales and marketing.