Negotiation and Persuasion
The assignment for week three during the first season was to negotiate the best price for ten items on the list given to each team. Obviously, negotiation is an important part of Donald Trump’s business, and he spends considerable time negotiating deals for himself and his companies. He even shared some of his thoughts on negotiating in his book, How to Get Rich. Because negotiating is so important, and it was the major focus of various Apprentice episodes, we will look more in depth at the skills and qualities for effective negotiating.
First, let us look at what negotiation is. It is not just trying to get something for the lowest price as we saw in week three, nor is it limited to the multi-million dollar deals that make Donald Trump famous. Negotiation occurs whenever people exchange ideas with the intention of changing relationships. Whether it is to achieve the approval, acquiescence, or action of someone else, negotiation depends on communication. When you look close, you will see you negotiate all day long, not just when doing business. Everything is negotiable. It is a basic process consisting of communicating back and forth to get what you want from others. It is reaching an agreement when you and the other party have shared and opposed interests. This section of the chapter will deal with skills and strategies you can use to communicate your negotiations more effectively and become a more successful negotiator in your business and personal life. The subject of negotiation could fill several volumes, so this chapter will look at the following skills:
· The art of persuasion
· Thorough Preparation
· Communication
· Closing the deal
The Art of Persuasion
The Godfather may be able to make people offers they “can’t refuse,” but for the rest of us persuasion will get us much further than force. The ability to influence people without threats, bribes, or manipulation will greatly assist in your negotiations. While negotiation involves reaching an agreement on price or specific terms of a contract, persuasion involves getting people to go along with your point of view or to see it your way. Good negotiators are also good persuaders. The skills go hand in hand. Persuasion, just like negotiation, involves much more than we can cover in this small section, so let us look at some of the personal characteristics you can develop to become more persuasive and charismatic.
Charisma is hard to define. It is the rare quality that makes people like you; makes them want to follow you, to be around you, to be influenced by you. Some people seem to ooze with it, while others could not seem to buy it if they were millionaires. Think of our most popular leaders and celebrities, Presidents like Ronald Reagan and John F. Kennedy had charisma. Actors like Arnold Schwarzenegger and Denzel Washington have charisma. The Apprentice star Donald Trump certainly has charisma. Charisma is the quality that makes people like you, and while a certain amount may be inherited, there are things you can learn and do to increase your charisma and by doing so become more persuasive.
One of the simplest ways to develop charisma is to treat each person you meet as the most important person you know. When it comes down to it, the person who you are dealing or communicating with is the most important person in your world at that time. So treat him or her like it! One of the easiest ways to gain cooperation is to be genuinely interested in the person you are communicating with. Greet people with animation and enthusiasm while showing a genuine interest in them. Continue to treat each and every person as the most important person you know, and you will not only develop more friends in life, but also loyalty from employees, loyalty from customers, and people discussing your charisma. People are our greatest resource, and people are what make the world go around. So treat people well, be genuinely interested in them, and you will reap many rewards in return.
Another very simple way to develop and increase charisma is to smile. In How To Win Friends & Influence People, Dale Carnegie wrote, “Charles Schwab told me his smile had been worth a million dollars. And he was probably understating the truth.” A smile says “I like you.” It is a universal gesture, and one of the first learned. Smile at a three month old baby and what does the baby do in return? Smiles back. There is an ancient Chinese proverb that says, “A man without a smiling face must not open a shop.”
Along with your smile, develop a handshake that is neither limp nor crushing. While Donald Trump may prefer the Asian custom of bowing over the handshake, you can bet when he shakes someone’s hand, it is firm and projects charisma. This is one of the reasons Sam was so awe struck when Trump shook his hand and wished him luck in week three of season one. A good, firm handshake, looking into the eyes of the person you are shaking hands, will go a long ways in establishing charisma.
Charisma is non-verbal, and that means looks matter. But if you were not blessed with good looks, all is not lost. There have been extremely charismatic and influential leaders that many would call ugly. The key to charisma is doing the best with what nature gave you. Everyone can take care of themselves and make sure their appearance is the best it can be.
Along with your charisma, develop a dynamite sense of humor. Even hostile people can be won over with the use of humor. A great sense of humor goes a long way toward persuading someone, and it can be used as a way to point out to the other person he is wrong without causing offense. The ability to laugh at ourselves and find humor in life goes a long ways toward making life more enjoyable. This in turn can decrease stress and prevent burnout. This does not mean you should be a stand-up comedian at all times, cracking jokes left and right. Do this and you will not be taken seriously, and you will have trouble developing the credibility of a person who takes things seriously. However, understanding humor, seeing the humor in life around you, and being a person with a great sense of humor will assist you in your persuasion of others.
The final point regarding persuasion is to increase your ability to remember names. Nothing is more important to people than a person’s name. Develop an ability to remember names, and you will increase your persuasive power tremendously.
Thorough Preparation
If there is one key to negotiation, preparation is it. You must prepare for success. Preparation is critical, because it provides for a solid negotiating foundation, and as it was pointed out in getting back to basics in Part Two: Business, a solid foundation is crucial. If you are properly prepared, you can approach a negotiation from a position of strength. If not, you may be caught with your pants down.
Preparation does not stop when the negotiation begins. You will continue throughout the process uncovering additional information that will assist in negotiating the deal that may not have been available earlier. That is what the next section on communication, especially listening, is all about. In addition, the issues you tackle on one negotiation may benefit you in future transactions, so preparation is lifelong and always building on what you have learned before. Do not cut corners with your preparation. It will provide advantages that far surpass the effort expended to prepare properly.
The reason preparation is so critical is that knowledge is power. Sure, we have all heard this, and it is true. Regardless of negotiation skills, the person with the most knowledge, the person who is prepared, will have the upper hand. Just like the soldier who checks his weapons and ammo before going to battle, the negotiator prepares by checking his data and ensuring he has the most accurate up-to-date information available. Do not be caught like the men of Versacorp, who were misinformed they must not buy gold late in the day and wasted their morning trying to negotiate their gold purchase when it would have been more effective to concentrate on the items with the larger margin.
Research all aspects of the negotiation beforehand. Identify items most important and learn all you can. Two of the most important areas are to know more about the subject matter than the person with whom you are negotiating and know as much about the person with whom you are negotiating as possible. If you know the person and what he or she wants out of the negotiation, you will be in a stronger position than if you begin without learning these things through proper preparation.
There are numerous places to find information. Talk to people you know; visit the library; search on-line; consult consumer reports; and so on. Remember value is in the eye of the beholder. Even after exhaustive research, you are the only person who can conclude the ultimate value a service or product holds for you. You must use your research and preparation to make the final decisions.
Do not commence negotiations until you are prepared. Starting prematurely will lesson your effectiveness, even if you are a master of impromptu. If someone attempts to start a negotiation before you are prepared, tell them you are not ready to discuss the issue yet and then just listen. Listening will help you become prepared. If they persist that you respond, again inform them you are not ready to negotiate and set a time when you will be able to respond. Be specific so the other side knows you are not just playing games and make sure you come through at the time you set. If you do not show the other side respect, and continuously put them off, your negotiations will not be as successful as they could be, not to mention the tarnishing of your reputation.
Communication
Earlier, we stated that negotiation is a basic process consisting of communicating back and forth to get what you want from others. Communicating is extremely important in negotiating. It requires you to express ideas clearly and listen intently. We will briefly look at both of these components to effective communication.
Communicate Clearly
The ability to communicate clearly, to express ideas so that the other party can understand, is an essential negotiating skill. Weak communication may sink the negotiating process, so improve your skills, so your negotiations do not falter.
Revealing your position at the earliest opportunity is not what I mean by being clear. It just means you should speak, write, or otherwise communicate so your intended audience understands the message you wish to convey. This sounds simple, but there are a lot of misunderstandings at the negotiating table. The key to clear communication is to think of what you want your listener to do, think, or feel as a result of the communication. Do not think of yourself and what you want to tell the listener. Think of the result you want your communication to achieve and how best to successfully obtain the desired result.
First be clear with yourself regarding what you want. Then present your ideas so the listener can understand. If your listener becomes lost, it is your responsibility to help them get back on track. Do not assume anything. Be sure your points are understood.
Listen
The second part of effective communicating is listening. This is one of the most underrated skills in negotiating. Successful negotiators spend more time listening than talking. Donald Trump pointed out in How to Get Rich, “If you walk into a negotiation and know nothing about the other party, let them talk, listen to their tone, observe their body language, and determine whether they really want to make a deal or just show you how smart they are.” Listening helps you prepare, and we have already discussed how important preparation is.
Listening is fundamental to negotiations, and not only that, good listening skills will improve your business life as well as your personal life. How many marriage problems have you heard of that started with, “He never listens to me,”? Not listening results in the other party feeling unimportant, and in business this can lead to losing the deal.
Active listening involves all the senses, and is the key to effective listening. You must take in everything the other party is communicating. This means both verbally and non-verbally. If the other person is not communicating clearly, you must assist them in opening up and communicating their ideas so you understand. Restate and paraphrase what you have heard to ensure the message you received is what the other party intended to communicate.
You cannot listen and talk at the same time, or at least not effectively, so know when to be quite and listen. Many deals are lost when someone keeps talking after discussion was necessary or desirable. Remember during week two of season one, Donald Trump told Nick to just be quite in the Boardroom. He had already told Nick he was not going to be fired that day, so he told him to sit quietly and not do anything to change his mind. To be successful, you must be a good listener. Work on this skill and you will open a door to more successful relationships and broader dimensions while negotiating.
Closing the Deal
One of the most powerful tools for winning a negotiation is the ability to walk away from the table without the deal. As Harvey Mackay wrote in Swim With The Sharks Without Being Eaten Alive, “Whether it’s a labor negotiation, an acquisition, or a real-estate deal, don’t deceive yourself into believing that just because it’s negotiable it has to be negotiated.” Deals seldom get worse when you walk away, so be prepared to walk and mean it. If you go back, it will be for better terms.
That is what this part is about, that moment when it all comes together and you close the deal. It is at this time that both parties have won. A good deal is one that is fair under all circumstances when it is made. A good deal, a win-win deal, is workable. This is very subjective, since each party must decide what a “win” is for them. Each party must assess if the deal is good or bad, and if both parties determine the deal is good, you will have a win-win situation and move toward closing. Win-win does not mean giving in, lowering your standards, or subordinating your goals. In simple negotiations, such as buying a car, win-win is finding the price that works for each of you. In more complicated negotiations, creativity sometimes must be called upon to find a win-win solution. The challenge is to find out what serves both sides, and this is not always easy. The great negotiator will think outside the box and come up with creative solutions to make the deal. Emphasize what both parties are gaining, not what they are losing, and look for the fair deal where both parties win. No, it is not always easy, but that is why those that can reach those solutions are rewarded accordingly.
Once both parties agree on enough terms to move forward with performance, the deal closes. For some, this can be as simple as saying you will do something for a certain price and shaking on it. For others, the deal is not closed until everything is committed to writing, and both parties have signed the agreement.
Oral agreements are generally enforceable, however, the law does require certain contracts be in writing. While contracts do not generally have to be in writing, problems are more likely to occur with oral agreements when disputes arise. With oral agreements, all you have are the parties’ memories, and you can bet your future life earnings those memories will differ greatly. Therefore, get it in writing and you will be better protected from potential disputes later. If it is an important matter, you will want to draft a contract that attempts to anticipate every possible scenario. It should set out each party’s rights, duties, obligations, and remedies if the contract should be broken. There are many portions of a contract, and you are strongly advised to seek the assistance of a competent attorney to assist you with all contract matters.
Once the negotiation is over, contract signed, and celebrating finished, review the process. Think of the negotiation and consider what could have been done differently, and what consequences may have occurred. This is a great way to improve your negotiation skills and build upon them for next time. In addition, ensure every agreement you enter is carried out in an ethical, timely, and honest manner. Do not forget that your word is your bond. Break it, and word will get around, and no one will negotiate with you in the future.
Trump
Time Out – The Art of the Deal
“Negotiation is a very very delicate art. Sometimes you have to be tough, sometimes you have to be as sweet as pie. You never know, it depends on who you’re dealing with. I’ve always said that negotiation is not really learned, it’s almost innate, it’s in the genes. A negotiator is born.” - Donald Trump from The Apprentice, season one, episode three.