A Negotiating Strategy for the 21st Century

Stuart Diamond is a negotiation expert whose negotiation techniques are sought after by Fortune 500 companies. His book, “Getting More: How to Negotiate to Achieve Your Goals in the Real World,” is a New York Times bestseller. It explains his 12 negotiating techniques, which he developed both as a business consultant and as a professor at The Wharton School, where he teaches a popular class on negotiation. By his count he has taught 30,000 people in 45 countries over the course of 20 years. His negotiating techniques, he says during an interview, can be boiled down to this.

“Perception and emotions are much more important than power and logic.”

This might fly in the face of the way you negotiate. You probably think good ideas and having the upper hand are sound negotiating strategies. You would not be alone. Many negotiating experts do. Diamond says those things don’t hurt, but they’re not at the top of the list. According to Diamond, the other person is the most critical factor in any negotiation.

It sounds pie-in-the-sky – the kind of business strategy favored by the Whole Foods crowd – but the hardboiled executives who employ Diamond’s strategies have, by their count, saved their companies hundreds of millions of dollars. Being fully considerate of the other person in the negotiation can make or save you money and get you what you want from your boss, in your personal relationships and in the marketplace.

Do Diamond’s negotiating techniques work?

The real-life Ari Gold says they do.

 

The writers strike

In early 2008, three months into the Hollywood writers strike, super-agent Ari Emanuel – the guy Entourage’s Ari Gold is based on – arranged a phone call between Diamond and the guild’s chief negotiator, John Bowman, days before Bowman was to meet with the major studios. Anger clouded the negotiations, which had ground to a halt.

From “Getting More”:

“Make small talk,” I said. “Ask them, ‘Are you happy?’” They will not be happy, and they will admit it, I said. They may start blaming the Writers Guild. That’s okay, I told Bowman. “Commiserate with them,” I said. “Ask them, ‘If we had to start over again, what process would you like to see?”

Bowman was skeptical. I told him a negotiation is about the people … People like to give things to others who listen to them, who value them, who consult with them. I told him to get rid of the two confrontational New York garment district negotiators who had been working for the Guild and whose very presence drove laid-back Hollywood studio executives crazy.

Bowman agreed to take Diamond’s advice. Two days later, the parties resumed negotiations. Days later, they settled. Emanuel says Diamond’s negotiating process ended the writers’ strike.

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Stuart Diamond’s negotiating strategy

The process consists of 12 major negotiating strategies. Each gets its own chapter in the book, accompanied by examples from the personal and business lives of Diamond’s students. The strategies are listed below, with a broad single-sentence summary.

1. Goals are paramount

Decide what you want from the negotiation and do not deviate.

2. It’s about them

You are the least important person in the negotiation.

3. Make emotional payments

Do not let the other person become emotional or negotiation will cease.

4. Every situation is different

Nothing works all of the time.

5. Incremental is best

Do not ask for too much at once.

6. Trade things you value unequally

Find out what the other person values, and if it does not cost you much, give it to them in order to receive something you value more.

7. Find their standards

Hold a person or company accountable to their own standards.

8. Be transparent and constructive, not manipulative

When you deceive people, they eventually find out and no longer want to do business with you.

9. Always communicate, state the obvious, frame the vision

Bad negotiation suffers from a lack of clear communication.

10. Find the real problem and make it an opportunity

Problems are actually good for negotiation.

11. Embrace differences

Asking questions about differences will lead to trust and better agreements.

12. Prepare – make a list and practice with it

These strategies are part of a list that you can use when negotiating.

The central unifying theme: you will get what you want when the other person gets something he or she wants.

A controversial strategy

Many authors, academics and negotiators have a lot of money and time invested in their own strategies. Where Diamond emphasizes relationships, other experts emphasize power and/or the bottom line.

Professional negotiator Marty Salva says he agrees with Diamond that trading “wins” is a rational strategy that often leads to mutually better outcomes. He adds that “win-win” outcomes are more satisfying and durable than outcomes that result from power and leverage alone.

“However, I disagree that one can simply reduce negotiations to such approaches: e.g. ‘always pursue win-win’ or ‘trading gets you to a good outcome.’ These actions ‘can’ help get to a good outcome, but — at the wrong time or pursued as ‘ends in themselves’ — rarely lead to acceptable, let alone ‘good’ outcomes,” Salva said. “Power and leverage have a very real place in negotiation and very good and enduring outcomes can be achieved by power and leverage alone or in combination with win-win and trading.”

Negotiating expert and small business owner John Tinghitella is among those who agree completely with Diamond’s strategy.

“There are two objectives in any good negotiation,” Tinghitella said. “Number one, get the best deal for our side. Correspondingly, which is a competing objective, but is just as important as the first one, is expand and improve the relationship with the other side.”

Old-school negotiators believe in positional negotiating, which is the default setting of many bosses and businessmen.

“Positional negotiation is essentially ‘Buy low, sell high, collect early and pay late.’ It means ‘Beat the hell out of the other guy, get the best deal for yourself and don’t worry about him,’” Tinghitella said.

Diamond says “the big lie” is that power works. “It destroys relationships. You try to exert power over someone in a relationship with you and they’re going to remember. Power is essentially the use of emotional damage to people. Why would someone give you something, unless they’re forced to? They’re going to try to wriggle out as soon as they can.”

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Negotiating in life

Jim Vopelius is a vice president at Trident Risk Management, which provides technical and business consulting for the energy industry. He has used Diamond’s negotiating strategies to secure prime military housing when he was in the Navy as well as execute complicated drills with disagreeing parties onboard a submarine.

“Because of the experience that I’ve had with Stuart, a good set of what I do is just engrained in, whether you call it communications, whether you call it negotiation, whether you call it preparation, it’s really the same,” Vopelius said.

When Vopelius was a student in Diamond’s class, he was given an assignment to go to a store that does not normally negotiate and try to negotiate the price of a product. Best Buy’s employees laughed when Vopelius tried to negotiate the price of a stereo, which they said was firm. But none of the sales personnel could answer his questions about the stereos he was interested in buying.

Utilizing strategy No. 7 (find their standards) he spoke with a manager about the company’s mission, which is based on customer service and providing the right product for the consumer. Vopelius pointed out that the company was not providing the value in which it prides itself because its sales personnel could not tell him much about the stereos he liked.

You’ve already built expertise into your price, he told the manager, how can you expect me to make this purchase when you have not provided that value? Vopelius mentioned that he was free to leave and go to another store and pointed out that he was a young professional – the company’s target consumer – as well as an early adopter of technology. What are you going to do, he asked, to keep me as a customer? The manager gave him a 15 percent discount.

Another of Diamond’s students, financial advisor Craig Silverman, employed Diamond’s tactics to beat a casino.

On a Saturday night at the Tropicana Hotel and Casino in Atlantic City, Silverman was at the $10 blackjack table with a bunch of fellow “low rollers.” The outgoing pit boss said they could stay at the $10 minimum after the pit boss shift change. The new pit boss upped the minimum to $15.

“This 50 percent increase was too much for us weekend warriors, so I decided to build a coalition to try to change his mind,” Silverman said. “I went down the table and asked each person, one by one, if they wanted the minimum to stay at $10. All six said yes. They all agreed not to bet until the minimum was lowered back to $10.”

Twenty minutes passed. No one bet. The six low rollers just sat there. The pit boss became angry. Silverman was employing strategy No. 1 (goals are paramount).

“I asked the pit boss if he realized how much money he was losing,” Silverman said. “Ten more minutes passed. Finally, I went to find the original pit boss, who honored his pledge to keep the minimum at $10. The whole group was thrilled. The meaner pit boss left.”

These are just everyday examples. Every one of Diamond’s students seems to have dozens of them, from both their personal and business lives. These same negotiating tools are used by executives at companies such as Google and by the U.S. military in places such as Afghanistan.

Negotiators and pickup artists

If you know anything about pickup artistry – possibly through “The Game” or VH1’s The Pickup Artist or any of the more famous pickup artist books and gurus – some of these tactics will look familiar.

For instance, having a goal (such getting as phone number), making it all about them, making emotional payments, being incremental and so on. They’re all pickup tactics. Diamond acknowledges that his tactics can and have been used to meet women, but there is a difference between the Diamond Method and, say, the Mystery Method.

“The difference is that my book is transparent,” Diamond said. “It’s not manipulative. It’s not meant to hurt people. It’s not meant to take advantage of people. It’s meant to be honest and real.”

Getting started

Negotiation is unfamiliar territory for most people. Executives from powerful companies take Diamond’s seminars every year, because even they need to learn more about negotiating strategies. This is Diamond’s advice to those who want to start employing his negotiating strategies: “Figure out your goals. Then figure out the pictures in the heads of the other people, what they can actually do for you. Then readjust your goals, then give them something. For you to get something they have to get something. Life is about quid pro quo.”

(Joe Donatelli is a senior editor at Break Media who writes and edits for Made Man. He has written about How to Use LinkedIn to Get a Job, The Ways Dreams Help Your Brain and The Power of Smiling. You can contact him at jdonatelli[at]breakmedia.com.)

 

 

 

 

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