Continuing the trend of writing to document everything I’m learning, this post will cover a few things I have learned about negotiating recently.
My impression of negotiating has changed a lot since August. I have been told my entire life that because of my background as a competitive athlete I am likely to have a knack for negotiating. Popular culture only impressed this upon me further with movies and TV shows celebrating winner take all negotiation scenes. However, what I learned this week is that negotiating is not like a competitive sport. In a competitive sport there is one winner. You either cross the finish line first or you lose. In a successful negotiation though, one person does not win while the other loses (though that can happen). Instead, both parties should feel as if they are walking away from the table better off than when they got to there.
I participated in two negotiations over the last few weeks. One resulted in a closed deal (albeit for a third party I was advising, not for myself or my company) and the other did not. Without publicly disclosing all of my super secret negotiating tactics (jkjk), here are a few things that I learned.
Communicate Synchronously Where Possible:
What I Did: Slack/Email
Why that Hurt: It was hard to interpret the tone of the person on the other end.
What I Should Have Done: I should have pushed for Zoom.
When getting emotional, pause and ask “What is my end goal here and what is their end goal?”:
What I Did: Every time the person I was negotiating with came back challenging something I had put forth I could feel myself getting annoyed. I adopted a competitive mindset as if it were me against them.
Why that Hurt: This was silly because in reality the two of us had the same goal. We both wanted to understand what the DMs priorities were and figure out if I could help address them. However, since I lost sight of that and got competitive, some of my responses were more defensive than collaborative, which didn’t inspire the other party to want to work with me.
What I should have done: I should have asked myself: “what is my goal and what is their goal?” In doing that, I would have remembered that our end goal was the same. Obviously this isn’t always true, but asking that question would have helped me reset the convo and allowed me to respond from a place of compassion and mutual understanding.
Evidence of Success: Interestingly, the deal that I won this week was one where I was a third party. As a result, I was able to look at it more objectively. I ended up winning that deal because as much as the involved party wanted to get defensive, I encouraged them to put the emotion aside, remind themselves of their end goal, and respond in a way that was conducive to teamwork rather than assigning blame.
Push to get to the DM or at least understand what precisely is important to them
What I Did: Communicated with the end user but not the end decision maker.
Why that Hurt: Imagine a 16 year old kid at a car dealership*. Odds are that the kid is going to see a Porsche and really want it. After all, all he cares about is looking cool and going fast. However, if I am the car salesman, it really doesn’t make any sense for me to negotiate with the 16 year old. At the end of the day, no matter how badly the kid wants the Porsche, his parents are the ones that are going to be shelling out for it, and odds are they are going to have a different set of concerns than the 16 year old. Point being, I addressed the concerns of the end user (the kid in this analogy) thinking I was doing great. However, since I didn’t convince the person with the checkbook (the parents in this example) I lost the deal.
What I should have done: If I couldn’t get in touch with the DM I should have at least done deep discovery on what they cared about.
Pick a Number and Stick to It :
What I Did: I set a number that I would not go below. I probably could have closed the deal at a lower number, but I opted to stick to my figure.
What I should have done: Exactly this. At some point it’s good to be willing to walk away. Closing the deal isn’t the only goal. It’s closing the deal at a price that both parties think fairly values the service/product being provided.
UNRELATED - Businesses and the Human Body
Packy McCormick had a great article a few weeks ago discussing the difference between science experiment products (AI, biotech, energy, chips, space etc.) vs social experiment products (web3, social media, and marketplaces). As a big fan analogies one of my big takeaways was that businesses and the human body have a lot in common. In his book, Lifespan author and Harvard Medical School professor David Sinclair discusses how to live longer. A core tenant of his thesis is that we must put our bodies under stress via things like exercise and fasting. Biologically speaking, the reason for this is that when our bodies are stressed our cells trade reproduction for repair. If we are constantly indulging in food and never exercising, our cells will reproduce constantly, but in doing so forego their responsibilities of monitoring and fighting disease. However, when we fast or workout, the cells "buckle down" and focus on repairing and maintaining themselves so that they can survive the uncertain times that our body has signaled are coming. I think the parallels are clear, but the point is that in biology and in business, periods of stress ultimately breed longevity and success because the require focus on what really matters.
*Note: I am not likening anyone to a 16 year old kid. I just think it’s a helpful analogy for people who aren’t familiar with negotiations.